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Will China, other countries show interest in Gaeseong Industrial Complex?

The road to Gaeseong in North Korea remains closed in Paju, Gyeonggi Province, in this April 2013 photo. Korea Times file
The road to Gaeseong in North Korea remains closed in Paju, Gyeonggi Province, in this April 2013 photo. Korea Times file

By Do Je-hae

Some experts call for companies from China, Russia and other countries to do business in North Korea's Gaeseong Industrial Complex, to prevent the symbol of inter-Korean economic cooperation from being shut down whenever inter-Korean relations go sour.

It has been five years since the industrial complex in the North Korean border city was closed abruptly Feb. 10, 2016, during the Park Geun-hye administration, to protest North Korea's nuclear tests. The complex remains closed, despite calls from the businesses that took part in the project to reopen it. The Ministry of Unification has said this week that Seoul will continue to seek the reopening of the complex within the framework of international sanctions against North Korea.

Pro-engagement experts have stressed that globalizing inter-Korean economic cooperation could be effective by making the two Koreas accountable not only to each other, but also toward a host of other countries with which they have normal diplomatic relations and trade commitments or security cooperation.

During an online international forum hosted Feb. 18 by the Gaeseong Industrial District Foundation, former Unification Minister Jeong Se-hyun proposed the "globalization" of the complex through investments from other countries such as China and Southeast Asia, as a way to ensure its sustainability regardless of the political situation surrounding the two Koreas.

North and South Korea are seeking bilateral cooperation with China and Russia, and both countries have stated a clear interest in promoting economic cooperation with Seoul and Pyongyang. Therefore, some analysts are eyeing the prospect that their overlapping security and economic interests could be harnessed to facilitate a multilateral format for engaging North Korea economically, and thereby promoting regional peace and prosperity.

"Opening Gaeseong to foreign participation would be the way to restore it, to revive the dream of the complex as a really productive zone. It is conceivable that Chinese enterprises might be interested at some stage. It's also possible that Russian and other foreign interests might look into the idea," said Donald Kirk, a columnist on Korean Peninsula Affairs. "Opening Gaeseong to foreign investment presents possibilities that need to be explored from the economic, diplomatic and military viewpoints, though we may not know the answers for some time."

Heads of businesses that operated in Gaeseong Industrial Complex hold a rally in front of Cheong Wa Dae, Feb. 9, to call for reopening of the complex. Yonhap
Heads of businesses that operated in Gaeseong Industrial Complex hold a rally in front of Cheong Wa Dae, Feb. 9, to call for reopening of the complex. Yonhap

Others underlined that Pyongyang needs to respect the rule of law to attract foreign investment.

"It is worthwhile mapping out economic projects that would provide incentives for North Korea to transform its relations with the world. But not only has Pyongyang gone in the wrong direction on denuclearization for sanctions relief, it has also not respected the rule of law to attract investment," said Leif-Eric Easley, associate professor of International Studies at Ewha Womans University in Seoul.

"For firms from other countries to participate in the Gaeseong Industrial Complex, North Korea would need to raise its labor standards and allow workers to receive their wages, abide by business contracts and not seize foreign assets, and permit Gaeseong to become more freely linked both internationally and with the rest of North Korea."

Some experts remained negative about the possibility of reopening the complex. "I hope Gaeseong stays closed, as it feeds Kim Jong-un's despotic regime much-needed hard currency. We should instead be tightening the screws wherever we can," said Sean King, senior vice president at Park Strategies. "Russia, and some Southeast Asian countries unfortunately do business with North Korea. Hence it wouldn't surprise me if companies from these countries and/or the Russian government itself somehow got involved with Gaeseong. The companies would be doing it to save costs and to tap a potential new market."


The road to Gaeseong in North Korea remains closed in Paju, Gyeonggi Province, in this April 2013 photo. Korea Times file
The road to Gaeseong in North Korea remains closed in Paju, Gyeonggi Province, in this April 2013 photo. Korea Times file

By Do Je-hae

Some experts call for companies from China, Russia and other countries to do business in North Korea's Gaeseong Industrial Complex, to prevent the symbol of inter-Korean economic cooperation from being shut down whenever inter-Korean relations go sour.

It has been five years since the industrial complex in the North Korean border city was closed abruptly Feb. 10, 2016, during the Park Geun-hye administration, to protest North Korea's nuclear tests. The complex remains closed, despite calls from the businesses that took part in the project to reopen it. The Ministry of Unification has said this week that Seoul will continue to seek the reopening of the complex within the framework of international sanctions against North Korea.

Pro-engagement experts have stressed that globalizing inter-Korean economic cooperation could be effective by making the two Koreas accountable not only to each other, but also toward a host of other countries with which they have normal diplomatic relations and trade commitments or security cooperation.

During an online international forum hosted Feb. 18 by the Gaeseong Industrial District Foundation, former Unification Minister Jeong Se-hyun proposed the "globalization" of the complex through investments from other countries such as China and Southeast Asia, as a way to ensure its sustainability regardless of the political situation surrounding the two Koreas.

North and South Korea are seeking bilateral cooperation with China and Russia, and both countries have stated a clear interest in promoting economic cooperation with Seoul and Pyongyang. Therefore, some analysts are eyeing the prospect that their overlapping security and economic interests could be harnessed to facilitate a multilateral format for engaging North Korea economically, and thereby promoting regional peace and prosperity.

"Opening Gaeseong to foreign participation would be the way to restore it, to revive the dream of the complex as a really productive zone. It is conceivable that Chinese enterprises might be interested at some stage. It's also possible that Russian and other foreign interests might look into the idea," said Donald Kirk, a columnist on Korean Peninsula Affairs. "Opening Gaeseong to foreign investment presents possibilities that need to be explored from the economic, diplomatic and military viewpoints, though we may not know the answers for some time."

Heads of businesses that operated in Gaeseong Industrial Complex hold a rally in front of Cheong Wa Dae, Feb. 9, to call for reopening of the complex. Yonhap
Heads of businesses that operated in Gaeseong Industrial Complex hold a rally in front of Cheong Wa Dae, Feb. 9, to call for reopening of the complex. Yonhap

Others underlined that Pyongyang needs to respect the rule of law to attract foreign investment.

"It is worthwhile mapping out economic projects that would provide incentives for North Korea to transform its relations with the world. But not only has Pyongyang gone in the wrong direction on denuclearization for sanctions relief, it has also not respected the rule of law to attract investment," said Leif-Eric Easley, associate professor of International Studies at Ewha Womans University in Seoul.

"For firms from other countries to participate in the Gaeseong Industrial Complex, North Korea would need to raise its labor standards and allow workers to receive their wages, abide by business contracts and not seize foreign assets, and permit Gaeseong to become more freely linked both internationally and with the rest of North Korea."

Some experts remained negative about the possibility of reopening the complex. "I hope Gaeseong stays closed, as it feeds Kim Jong-un's despotic regime much-needed hard currency. We should instead be tightening the screws wherever we can," said Sean King, senior vice president at Park Strategies. "Russia, and some Southeast Asian countries unfortunately do business with North Korea. Hence it wouldn't surprise me if companies from these countries and/or the Russian government itself somehow got involved with Gaeseong. The companies would be doing it to save costs and to tap a potential new market."


Do Je-hae jhdo@koreatimes.co.kr


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