Factories running as usual in Gaeseong industrial park

Inter-Korean cooperation expected to expand if Western-educated Kim’s son takes power


News of North Korean leader Kim Jong-il’s death had no immediate impact on the joint industrial park just north of the inter-Korean border Monday, but observers are wary of temporary setbacks in production during the official mourning period.

Once Kim’s Swiss-educated heir Jong-un firms up his control over the government, however, inter-Korean trade and economic collaboration are expected to expand in the long term.

“Unless the death of Kim Jong-il leads to major disorder in North Korean society, the Gaeseong industrial complex is likely to remain unaffected,” said Shim Nam-seop, an inter-Korean trade expert at the Institute for International Trade under the Korea International Trade Association.

“When Kim Jong-un, who has studied abroad, fully takes over, Pyongyang will shift towards opening up its economy, which means greater exchanges with South Korea.”

Shim noted that the North has repeatedly expressed a strong will to increase the number of North Korean workers in Gaeseong even at times of inter-Korean crises such as the North’s attacks on a South Korean warship and Yeonpyeong Island last year.

A hundred and twenty-three South Korean companies including Romanson and apparel company Shinwon run factories in the Gaeseong industrial park, the only remaining economic cooperation project between the two Koreas.

North Korean workers at the factories in Gaeseong went home early at 3 p.m. Monday upon the North’s request, but are to come to work as usual Tuesday, Seoul’s Unification Ministry spokesperson Choi Boh-seon said, citing a North Korean official.

The ministry on Monday banned South Koreans’ visits to the North, with the exception of the industrial complex.

South Korean staff returning home from Gaeseong on Monday afternoon said the North Korean employees were greatly shocked at the news of Kim’s death.

Most North Korean workers gathered around 2 p.m. to mourn his death and went home early, according to a South Korean employee.

"We are preparing to run the factory as usual tomorrow, but we don’t know for certain whether there might be some impediment in production," an official of a company operating in Gaeseong said.

Kim Ki-mun, chief of the Korea Federation of Small and Medium Business, said companies in Gaeseong were expected to do business normally, although there is the possibility of tighter control on entrance to the complex.

“I don’t think there will be a major commotion in the Gaeseong industrial park,” said Kim, who is also the chief executive of Romanson, a South Korean watchmaker that runs a factory in Gaeseong.

“Our companies were not seriously hurt when there was major news in North Korea in the past such as the nuclear tests.”

Kim had visited the Gaeseong complex last month with 14 vice chairmen of the federation.

Companies in Gaeseong called on Kim to take steps to ease their shortage of funds and manpower, prompting him to deliver their requests to South Korean government officials, according to Kim.

“The federation will keep watching the situation and do our best to assist the companies,” he said.

An official of a company that entered the complex five years ago said if the North Korean regime’s instability intensifies, it could deal a blow to the South Korean firms in Gaeseong in the short-term.


By Kim So-hyun (sophie@heraldcorp.com)