Kaesong Industrial Region

The Kaesong Industrial Region is a special administrative region, and special economic zone in North Korea near the city of Kaesong. It is bordered on the north by the province of Hwanghae- pukto and on the south by the Gyeonggi Province in South Korea.

History

The region was created on 13 November 2002 by elimination of the district P'anmun ( P'anmun -gun; 판문군 ;板 门 郡) and part of the city of Kaesong ( Kaesong -si; 개성시 ;开 城市) of the special administrative region Kaesong, a 1955 to 2003 by the government in Pyongyang centrally administered municipality.

In early April 2013, came to international tensions and the closure of the Special Economic Zone. The staff of South Korea's entry was first prohibited, and shortly afterwards the whole complex with its about 53,000 North Korean workers was closed. In mid-August of the same year, both states agreed after several rounds of negotiations on the reopening of the industrial area. It had been closed to the Special Economic Zone, according to the South Korean Ministry of Unification, a five-point comprehensive agreement.

Economy and infrastructure

The center of activity in the 66 -square-kilometer industrial region forms the Kaesong Industrial Park. After the 5th Inner Korean talks on 23 May 2003 establishing a customs free zone, it was decided to free trade in the area. As an investor could, as in the tourist area of ​​Kumgang -san, obtained Hyundai Motor Company.

The Kaesong Industrial Region, located at the newly constructed road and rail link between Pyongyang and Seoul is divided into residential and tourist areas, and the actual industrial park where 54,000 North Koreans work for 123 South Korean companies. The amount invested by the South Korean side a total of 800 million dollars.

There have been located to take advantage of the in the region comparatively low labor costs for competitive production for the markets in North and South Korea and the People's Republic of China, especially labor-intensive and energy-efficient small to medium-sized companies.

2012 were produced in the value of 470 million dollars. Were produced including textiles, clothing, home appliances and auto parts.

The labor costs of the North Korean workers are on average $ 130 a month. The North Korean government receives through taxes and royalties approximately 100 million dollars foreign exchange. The minimum wage for North Korean workers in this industrial complex has been raised annually in 5 - percent increments since 2007 and is since August 2012 at $ 67.005. Negotiations lead the South Korean Committee for the management of the industrial zone and the North Korean central to the development of special zones.

Criticism

The project is partially been criticized by South Korean sources, because the wage of 57.50 U.S. dollars a month (as of approximately August 2009) is not paid directly to the workers, but to the North Korean government. These draw on social benefits from $ 22.50, and the rest will be paid to the official, but in practice significantly overvalued exchange rate of one dollar to 143 won converted to the workers. The conservative South Korean Chosun Ilbo newspaper calculated from a monthly wage of less than two U.S. dollars.

In addition, the crisis has shown to the North Korean nuclear weapons program, on what uncertain ground stood the investments made there. So there are mainly from conservative circles the requirement to terminate the cooperation with North Korea on this point.