In conciliation, Koreas to restart shuttered joint factory

Political showmanship aside, there's $2 billion in revenue on the line.
Written by Andrew Nusca, Contributor

It's the latest in the on-again, off-again relations between two countries that used to be one.

North and South Korea agreed today to reopen the Kaesong industrial complex, the last sign of cooperation between the two countries, after it was abruptly shut down in April.

That was when the North blocked South Korean workers from entering the shared facility, located in North Korea's third largest city, just a few miles from the countries' shared, militarized border. The political showmanship put at risk more than $2 billion in annual revenue for both countries, according to some estimates.

The countries gave no date for the reopening.

Even when operational, the facility was hardly all sunshine and shooting stars.

The Independent's Hyung-Jin Kim explains:

Kaesong's lack of internet and mobile connections frustrated South Korean factory managers who relied on landline phones and faxes to communicate with the South. North Korea has a domestic mobile phone service and intranet which are walled off from global networks.

North Korea has been trying to attract foreign investors in other free economic zones but no major progress has been reported. It is uncertain whether any foreign companies would be willing to brave Kaesong. The park's reputation has been tainted by the four-month shutdown, which caused losses for the South Korean companies with assembly lines at the complex.

It's all about leverage. For wealthy South Korea, it's about diplomatic relations more than anything else; for reclusive North Korea, it's a way to leverage the South's economic successes without collaborating on a more intimate level.

As late as last week, South Korea threatened to pull out of the deal entirely. Within the hour, North Korea said it would reopen the complex.

About 53,000 people worked at the facility, which opened in 2004.

Photo: A satellite image of permanent light fixtures on and around the Korean peninsula, using data from 1994 to 1995. North Korea is outlined. (NASA/NOAA)

This post was originally published on Smartplanet.com

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