Kaesong Complex Development Sparks Optimism in Two Koreas


South and North Korea reached a deal on the 7th of July to reopen the jointly run Kaesong Industrial Complex to symbolize the relations between Seoul and Pyongyang.

However, a few months and six rounds of talks later, the two countries are still at a deadlock, with South Korea proposing a final round of talks aimed at restarting Kaesong Industrial Zone’s business operations.

Although North Korean authorities are still to respond to South Korea’s proposal for this seventh round of talks, South Korea’s political parties have expressed hope that business will be reopened soon.

The deadlock between the two nations originates from Seoul’s insistence that Pyongyang must confirm not to close down operations again. In order to validate this, Seoul’s unification minister has demanded a written guarantee from Pyongyang.

Kaesong Industrial Zone has been closed since April, when North Korea withdrew its workers, following tensions as a result of military exercises between the United Stated and South Korea in response to North Korea’s nuclear testing in February.

This situation has lead to large economic losses for both North and South Korea earlier this year, something that South Korea is hoping to prevent by encouraging Pyongyang to guarantee a unilateral closure in the future. Sources estimate this loss to be nearing $1 billion.

Besides being an important soure of income for both North and South Korea, Kaesong Industrial has been vital symbol of cooperation between North and South Korea since it opened in 2004. It lies about 10 kilometres (or 6 miles) into North Korea, and latest data indicate that 123 South Korean manufacturers employ 53,000 North Koreans at the Industrial Zone, all of which were pulled out in April.

The owners of South Korean companies within Kaesong are extremely discontent about the situation – as they not only want a guarantee from North Korea that business will never cease again. They also want to ensure that if this situation occurs again they are going to be compensated by the South Korean government.

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