SEOUL – The future of the Kaesong complex is looking more and more bleak. A symbol of the sunshine policy implemented by South Korean President Kim Dae-jung in the late 1990s, this industrial complex located in North Korea and jointly run by Seoul and Pyongyang is now in imminent danger.
It seems more and more unlikely that production, which was halted by Pyongyang on April 9, will start back up. While maintaining her official objective of creating a relationship of trust, South Korean President Park Geun-hye has refused to compromise on the issue. In her mind, to concede anything would be to reward Pyongyang for what she considers a policy of provocation.
On May 14, Park asked if it was possible for the South Korean companies working on the Kaesong site to retrieve their assets. Pyongyang refused, calling the proposal a “cunning subterfuge.”
Meanwhile, according to Japanese daily newspaper Asahi Shimbun, North Korea has contacted the authorities of Dandong, a city in the Chinese border province of Liaoning, to see if any companies would be interested in employing the 53,000 Koreans who work at the Kaesong industrial park.
Kaesong yields $90 million a year in benefits for Pyongyang. But on the other hand, according to some observers, it could actually prove more lucrative to transfer its workers to Chinese factories. This would indicate that the definitive closure of the site is not completely off the table, even if, according to Moon Chung-in from the East Asia Foundation, the future of Kaesong remains “a good indicator of the level of trust between Pyongyang and Seoul.”
For the some 1,000 South Koreans employed by the 123 companies of the site, the site’s closure will be devastating. Even if it didn’t meet its objective of attracting 1,000 companies by 2012, “this project was like a small reunification,” says Yoo Chang-geun, president of SJ Tech (a company manufacturing components for microprocessors), who is also the president of the association of Kaesong companies.
“We ate from the same rice pot”
SJ Tech joined the party for economic reasons. “China had reached its limit in regard to costs,” explains Yoo. “We saw Kaesong as an opportunity.” The project, launched in 2002, was stalled after heightened tensions with the U.S. when George W. Bush included North Korea in its “Axis of Evil.” A final agreement was signed in 2004. “North Korean authorities were impatient,” remembers Yoo. “They had already picked out a site.” The problem was there was nothing – no water, no electricity – on the site. SJ Tech and 14 other companies jumped in anyway. The first factories were built at the end of 2004.
Kaesong’s debut was marked by many misunderstandings, mistrust and functioning problems. “Every single request had to be sent to Pyongyang,” recalls Yoo. “At the beginning, you had to wait three months for a response. We wanted to install an IT center and an R&D center. We asked for graduates from the best universities, like the Kim Il-sung University in Pyongyang.” But the people they picked “knew nothing about computers,” says Lee Gyu-yong, head of human resources in Kaesong for SJ Tech. “They had never worked on a computer before.”
The company decided to find a solution. They created a successful IT training center. When the company closed in April, SJ Tech had 460 high-level North Korean employees, and was responsible for 20% of Kaesong's output.
Things improved for the workers too, despite the constant monitoring and constraints of working in a facility under high surveillance. “Discussions about politics were banned, so was eating with or sleeping in the same room as the North Koreans,” says Lee, who lived in the complex for nine years. He was allowed to go back to his family in South Korea every two weeks. “No Internet, no cell phones. If we wanted to contact anyone, we only had a fixed phone line and a fax.”
People bonded anyway. “We ate from the same rice pot,” says Lee, quoting a traditional Korean saying about sharing and solidarity. After spending 60 years apart, both sides re-discovered their common values – such as respect for the elderly. “One of the employees who was 80 years old sometimes stayed on the site when everyone else went back to South Korea. I used to worry about his health but every time, a guard would promise that he'd check on him from time to time. And he did.”
The South Korean workers left Kaesong with a heavy heart last month. One of them even hid in the complex in an attempt to stay on. “I lived nine years in Kaesong,” says Lee. “If I wasn’t allowed to go back there, I would really be heartbroken.” Yoo adds: “By building other Kaesongs, we would facilitate the pacific reunification of the peninsula.”