Skip to main content

North and South Korea reopen Kaesong Industrial Complex

By K.J. Kwon, CNN
September 16, 2013 -- Updated 1045 GMT (1845 HKT)
STORY HIGHLIGHTS
  • Kaesong Industrial Complex reopens Monday after five-month closure
  • All 123 companies operating in the zone experienced heavy losses
  • Two Koreas agreed to reopen with assurance it would no longer be "affected by political situation"

Seoul, South Korea (CNN) -- The joint industrial park, one of the key symbols of cooperation between North and South Korea, re-opened Monday after a five-month hiatus.

South Korean vehicles and freight trucks waited in traffic as they prepared to cross through customs and immigration into the North Korean city of Kaesong, where the industrial park sits.

Activity at the Kaesong Industrial Complex ground to a halt in April amid mounting tensions between the two neighbors. As tensions eased, intense negotiations to re-open the complex resumed after several false starts.

Choi Dong-jin, a South Korean who operates a jeans factory at Kaesong, expressed his relief as the shutters were finally lifted.

South Korean owners and workers wait in traffic to cross into Kaesong.
South Korean owners and workers wait in traffic to cross into Kaesong.
Is North Korea's economy working?
Will Kaesong return to normal?

"Words cannot describe how happy we were after we heard the news," Choi said.

All 123 companies operating in the zone experienced heavy losses after Kaesong's closure, and in Choi's case, the figure amounted to US$3 million.

"I've invested all of my capital in Kaesong. After the shutdown, we couldn't do any business," he told CNN from the small office in Seoul he'd been forced to operate from since April.

The Kaesong Industrial Complex, which is considered to be an important source of hard currency for North Korean leader Kim Jong Un's regime, sits just a few kilometers north of the DMZ, which divides the two Koreas.

Its closure followed a sustained escalation of tensions on the Korean peninsula, set off by North Korea's long-range rocket launch in December and an underground nuclear test in February. The subsequent tightening of sanctions announced by the U.N. Security Council resulted in increasingly menacing rhetoric from the North, who threatened to attack the South with a pre-emptive nuclear strike.

With South Korean workers and supplies barred from entering the region, the last remaining workers left Kaesong in May.

"The unexpected event happened and we couldn't keep our promises to our clients," Choi recalled. "We had our own losses, but the clients had their losses too. There was no contingency plan."

After several offers from Seoul to end the impasse, the two Koreas finally agreed to reopen Kaesong last week with an agreement that the industrial zone's operations would no longer be "affected by political situations under any circumstances."

But for some of the affected businesses, the damage may be difficult to reverse.

"Yes it is going to re-open, but the question is 'how long will it take to recover our company's credibility from the client?' Until we gain back their trust again, they won't request a large order," Choi said.

After it was opened in 2005, about US$2 billion worth of goods have been produced at Kaesong, according to the South Korean Unification Ministry, making it important to the North's ailing economy in particular. North Korean workers there earn an average of $134 per month, 45% of which are taken by North Korean authorities for various taxes.

ADVERTISEMENT
Part of complete coverage on
December 22, 2014 -- Updated 1327 GMT (2127 HKT)
North Korea warns the United States that U.S. "citadels" will be attacked, dwarfing the hacking attack on Sony that led to the cancellation of a comedy film's release.
December 22, 2014 -- Updated 0307 GMT (1107 HKT)
President Barack Obama says he doesn't consider North Korea's hack of Sony Pictures "an act of war."
December 20, 2014 -- Updated 2243 GMT (0643 HKT)
The U.S. has asked China for help battling North Korean hacking of American information systems, a senior administration official tells CNN.
December 19, 2014 -- Updated 2335 GMT (0735 HKT)
Alex Gladstein, director of institutional affairs at Human Rights Foundation, says he'd like "to disrupt North Korea and help end the Kim regime's monopoly of knowledge."
December 18, 2014 -- Updated 1543 GMT (2343 HKT)
North Korea's fury over the movie comedy "The Interview" appears to have taken the secretive state's oversensitivity to new extremes.
December 19, 2014 -- Updated 2336 GMT (0736 HKT)
CNN's Brian Todd looks into the possibility of whether North Korea received help from freelancers or other countries.
December 9, 2014 -- Updated 0157 GMT (0957 HKT)
A retired Silicon Valley executive and Korean War veteran was hauled off his plane at Pyongyang in 2013. Here's what happened next.
November 19, 2014 -- Updated 1057 GMT (1857 HKT)
A recent defector from North Korea tells of the harrowing escape into China via Chinese 'snakehead' gangs.
November 18, 2014 -- Updated 0039 GMT (0839 HKT)
CNN's Amara Walker speaks to a former North Korean prison guard about the abuses he witnessed and was forced to enact on prisoners.
November 18, 2014 -- Updated 0559 GMT (1359 HKT)
The chief of the Commission of Inquiry into North Korea's human rights says the world can no longer plead ignorance to the regime's offenses.
November 19, 2014 -- Updated 0034 GMT (0834 HKT)
Kim Jong Il's former bodyguard tells of the beatings and starvation he endured while imprisoned in the country's most notorious prison camp.
October 11, 2014 -- Updated 0543 GMT (1343 HKT)
Despite tense relations, China benefits from Kim Jong Un's rule in North Korea. David McKenzie explains.
September 15, 2014 -- Updated 0851 GMT (1651 HKT)
North Korea has "the world's most advantageous human rights system" and citizens have "priceless political integrity", the country declared.
ADVERTISEMENT