Contributor: Aziz Maamoody Yücel, David Moon, Un- Sun Yoon FB 09 Faculty of Linguistics, Cultures, and Arts Course: North and South Korean Economy Professor: Prof. Seiwan Kim June 17, 2013

1. Introduction 2. Founding 3. Production 4. Transport 5. Administration 6. KIC during the crisis 7. Criticism 8. Future Prospects

Establishment was decided in May 2003 Construction started in June 2003 Hyundai Asan prepared the “Master plan” concept Pilot phase: 2004 with 15 companies Park opened in Dec. 2004, but isn’t still finished yet:  plans haven’t been completely fulfilled

Establishment was decided in May 2003 Construction started in June 2003 Hyundai Asan prepared the “Master plan” concept Pilot phase: 2004 with 15 companies Park opened in Dec. 2014, but isn’t still finished yet:  plans haven’t been completely fulfilled

Purposes: Cooperation Stability in the region Further projects Option for NK to reform & liberalize its economy Business advantages

SK small and medium sized companies: cheap and flexible Human Resources gov't backed political insurance gov't support through providing infrastructure gov't support through providing loans with below-market interest rates

KIC South Korea North Korea Hyundai Asan Improvements in: international competitive advantage political leverage on NK political and regional stability Improvements in: international competitive advantage political leverage on NK political and regional stability influx of foreign currency (USD) fighting unemployment possibility to gain technological know-how influx of foreign currency (USD) fighting unemployment possibility to gain technological know-how made a 50-year lease on the entire KIC Area  all companies have to pay Hyundai Asan for use made a 50-year lease on the entire KIC Area  all companies have to pay Hyundai Asan for use

rail: KIC is served by Korean State Railway Pyongbu Line from Panmun Stn. KORAIL has access via Gyeongui Line Agreement to re-establish freight services was made in 2007 Closest SK Station is Dorasan Station which has also road access

Road: limited access available for workers from the South via South Korea National Route 1 to DMZ and then into Kaesong via Asian Highway 1

Air: closest NK airport is Sohung South Airport however no South-bound flights closest SK airports are  Gimpo Intl' Airport  Incheon Intl' Airport (both: road access to KIC)

Administrative Committee: has been established in October 2004 is responsible for the administration of the companies and production in KIC has got also the function of the South Korean consulate in KIC

in 2007 the South Korean gov‘t gave financial support to the companies for electricity and other basic facilities in KIC in June 2007 a transmission tower has been built, which supplies KW per unit for free from SK in September 2007 and until April 2008 basic facilities like water supply and waste treatment has been provided

other Facilities: there are various stores for every demand SK-Won are not accepted: only US-Dollars only for SK worker

Sinking of the SK destroyer Cheonan in March 2010: since May 23 SK government stopped the aid, trade and bilateral cooperation, with the exception of KIC NK government closed the Administrative Committee Shelling of Yeonpyeong-Island in Nov 23, 2010: entry into KIC has been stopped, only entry into SK was allowed  many companies in KIC lost sale contracts or had to take back the products

April 3 entry into KIC has been stopped, only entry into SK was allowed April 8 the NK government withdraw the NK workers from KIC April 25 every SK workers came back to SK May 4 the KIC has been officially closed since June 8 the NK and SK government negotiate about KIC

the average wage of a NK worker: $ (1/5 of the SK minimum wage) the wages don’t go to the workers directly, the NK government receives the money after discounting of the social contribution cost and the exaggerated exchange rate of the US-Dollar,  there is not enough money left for the workers besides the workers don’t get money, instead they get a kind of coupon

We think: Park won’t be definitively closed  KIC survived from a closure (New SK gov’t; NK nuclear test; Inter-Korean tensions 2010) Both countries are seeking profits & advantages  NK needs the money  SK has already invested enormously; insurance payments could accrue SK has further plans (expand KIC, train connection to China)

by Hyundai Asan

Internet sources: industrial-complex html Article: ‘The Kaesong North-South Korean Industrial’ Complex by the Congressional Research Service

Internet sources: -kaesong-nordkorea-beendet-den-wandel-durch-handel- a html 개성공업지구 Books: A history of Korea: From Antiquity to the Present by Michael J. Seth