North Korean Economy Watch

Yonhap
4/24/2007

The South Korean government said Tuesday that it plans to invite U.S. companies to an investor relations (IR) gathering at the Kaesong industrial complex in North Korea this year.

The event, planned for October, will permit American businessmen to see firsthand the growth of the industrial park that is being built with South Korean capital, the Ministry of Commerce, Industry and Energy said.

The complex is one of the crowning achievements of the June 2000 summit meeting between the leaders of South and North Korea.

More than 20 South Korean companies are making shoes, clothing, watches and mechanical parts in the industrial park just north of the 248-kilometer-long demilitarized zone separating the two Koreas.

“The IR trip is not directly related to the recently agreed-upon free trade pact between South Korea and the United States,” said Hong Suk-woo, deputy minister for trade and investment.

Washington said it does not consider Kaesong part of South Korea and cannot extend preferential treatment to products made there.

In addition to the IR trip, the official said plans are under way to arrange one or two TV programs to be aired with English captions to provide information to foreign businessmen.

“The government is also considering a 24-hour English-language radio broadcasting that can provide timely information to foreign living in South Korea,” Hong said. China, Japan and Germany have such radio programs.

He said the ministry and related agencies plan to set up joint project teams to aggressively target specific companies for investment in the country.

“Government ministries, 16 regional administrations and the Korea Trade-Investment Promotion Agency will form teams that will work as one to attract investments,” he said.

The deputy minister said the 16 regional governments plan to set up three foreign corporate investment teams each by the end of the month so they can begin contacting prospective partners. Particular attention will be paid to attract investment in hightech areas including chemicals, electronics, semiconductors and machinery.

He said without going into details that some foreign companies have expressed interest in investing in South Korea.

Hong said the government expects foreign direct investment to reach $11 billion by the year’s end, roughly the same as last year’s $11.2 billion.

Daily NK
Kim Song A
4/24/2007

Will keeping the abandonment of Kaesung Industrial Complex in secret resolve anything?

It has been revealed that 4 out of 23 enterprises that were supposed to enter Kaesung Industrial Complex during the first rounds have abandoned their locations. Additionally, 4 other enterprises have placed their reservations on hold.

Since August 2005, there are only 7 companies which have commenced operations on the divided grounds of Kaesung Complex.

Of the remaining 8 enterprises which are undergoing the preparations for new constructions, 1~2 companies are considering renouncing their spots and are requesting that thorough investigations are made on Kaesung which now celebrates it’s 3rd anniversary.

In particular, affiliates of Kaesung have been carefully revealing the government’s recent strong ambition to complete the constructions for a 3,306 square km by the 30th of this month, initially a 1,750 square km, knowing that they could be severely affected.

However, the problem is that whenever these incidents occur, rather than finding ways to solve the issue, the government is wasting its efforts in keeping it a secret.

An employee working on Kaesung’s landscape revealed the following information in an interview with a reporter, “Supplementary areas are being designed. This is not advisable. It would be better to wait until the other constructions are complete.”

Despite contractors having to start construction within 6 months of signing a contract, it has now been 18 months and nothing has been begun, while fees for breach of contract are still being paid. No wonder enterprises have abandoned entering Kaesung Complex.

For the past 2 years, North Korea has had many opportunities to earn foreign currency through South Korean business and Kaesong. But the Korean government remains in futile and bewilderment.

Even today, South and North Korea have not been able to make complete amends regarding Kaesung Complex regarding work conditions, wages, entry and exit permits and inspections. Nonetheless, North Korea continues to make requests and one-sidedly takes action though the agreement has not yet been fulfilled.

The fact that North Korea has begun charging fees for issuing passports to long-term South Korean workers has still not been discussed, greatly caused by the government’s indolent preparatory measures.

Businesses are in a position where they cannot invest in Kaesung as know one knows what requests North Korea will make. Last week, 22 enterprises gathered in appeal against all the mishaps that had occurred and demanded that the government take action.

Above all, enterprises and NGO’s argue that North Korea must change its attitude towards the economic agreement. North Korea’s mentality is limited to “sucking the gains,” which has caused companies to leave the region, despite the advantages and the development potential of the Kaesung.

Furthermore, entrepreneurs argue that no matter how many laws are placed regarding Kaesung, North Korea will never change.

Regarding Kaesung, the South Korean government urges that “This is the future of small-medium sized businesses and the key to connecting the South and North for a peace industry.” Regardless, entrepreneurs contend that they will be unable to make any profits and argue that the “slogan is great but the content empty.”

While disregarding the concerns that “South Korea has been caught by North Korea” and hence is immobilized in the Kaesung’s preliminary measure, the South Korean government has arrived at this point. Though it is hard to make assumptions as Kaesung is still in its early stages.

However, the future of a unified Kaesung complex looks bleak as we are continuously faced with a situation where even work instructions are divided. The government should stop praising Kaesung as “hope” but realize and create another plan for entrepreneurs to be at ease and focus on business.

Star Bulletin
Jim Borg
4/23/2007

The Mount Kumgang project has become a place of spiritual if not political reconnection

Amid ongoing international tensions, North Korea has embraced Western-style tourism at its most famous natural attraction, Mount Kumgang.

Thousands of Korean and foreign tourists flock each month to a modern resort under development by South Korea’s Hyundai Asan Corp., which paid $1 billion for exclusive rights to the business.

After $400 million in additional expenditures since 1998, Hyundai Asan has created not only a tourism hub, but the epicenter for reunification efforts on the peninsula.

“Through the Kumgang tourism business, the reconciliation process has begun between the North and the South,” says Young-Hyun Kim, the company’s on-site general managing director.

Star-Bulletin reporter Jim Borg visited the stunning locale last week as part of a journalism exchange sponsored by the East-West Center and the Korea Press Foundation.

MOUNT KUMGANG, North Korea »

Mist rose from the high mountain pool under the thundering waters of Kuryong Falls, adding to the chilly dampness of the day.

Four hours after an unsmiling North Korean soldier scrutinized our passports and waved us on, we stood at the top of a trail traveled each month by thousands of tourists from both sides of the border, all in search of a spiritual reconnection with their ancestral land.

On a divided peninsula technically still at war, Mount Kumgang has become part of a bold experiment in rapprochement. As their political leaders stagger toward the stated goal of reunification, North and South Korea have carved a modern resort out of this imposing landscape along the Sea of Japan.

Despite international tensions over North Korea’s nuclear program and missile launches last July, South Korea’s Hyundai Asan Corp. is pressing ahead with plans to develop this 922-square-mile expanse a short drive north of the Demilitarized Zone.

Already in place are three multistory hotels, a beach lodge for families, 34 single-family cabins, camping facilities, four North Korean restaurants, six South Korean restaurants, duty-free shops, convenience stores, a hot-spring spa, shows featuring acrobats and folk music, and stone-paved trails punctuated by snack tables. A swimming beach adjoins the floating Hotel Haekumgang in nearby Kosung Bay.

A railway links the two countries here. North Korea, for obscure reasons, has yet to green-light the trains, and border stations remain eerily empty, but Hyundai Asan’s Ha-Jung “Dan” Byun expresses confidence that that hurdle will be cleared soon.

“Everything is connected,” he says. “Everything is ready. What we are waiting for is the final confirmation between the two governments.”

Byun, general manager for planning and foreign investor relations, greeted U.S. reporters visiting Mount Kumgang last week as part of a program sponsored by the East-West Center. This is the first time that the Korea-United States Journalism Exchange, now in its third year, has sent reporters into North Korea.

One of the lessons that emerged is that business interests seem to be succeeding where diplomacy has often failed.

Hyundai Asan, an enterprise separate from the automotive and shipbuilding giants, paid $1 billion to North Korea for exclusive business rights at Mount Kumgang and, farther west, the Kaesong Industrial Complex, where South Korean technology meets cheap North Korean labor.

Scandal clouded the early years of the association, when corruption and embezzlement charges presumably prompted the company’s chairman, Chung Mong-hun, to commit suicide in 2003 by leaping from his 12th-floor office in Seoul. Asked whether Hyundai Asan’s largesse could be viewed as helping to finance North Korea’s weapons programs, Byun said the firm believes the lump sum payments in 1999-2000 were used for economic revitalization.

But even elsewhere along the Demilitarized Zone, a remnant of the 1950-53 Korean War, conflict has bred commerce, drawing tourists to souvenir shops and a carnival park called Peace Land. Tourists and South Korean schoolchildren are taken by tram into a tunnel dug under the DMZ by the North Koreans and discovered in 1978.

Peace Land is a short drive from Seoul, up a highway where billboard-type advertising masks barricades rigged with explosives to stop invading tanks.

South Koreans seem at ease with this dichotomy, taking North Korean anti-U.S. rhetoric and military posturing in stride in an atmosphere of care-free prosperity.

THE BEDROCK for North Korea’s burgeoning tourism is a collection of crags that seem to reach skyward like fingers pressed in prayer. Mile-high Birobong Peak caps this Yosemite-esque experience.

The brochure for Mount Kumgang shows colorful photos in every season, but even in a chilly drizzle the three-hour trek was breathtaking. A river spilled down the narrow canyon to collect in crystal green pools.

“The water is pure and clear,” observed Yong-Sik Im, 41, who came to the mountain with 31 other residents of Namgu village. He recalled singing a song about Mount Kumgang as a schoolboy and always longed to visit.

South Korean hikers here are essentially pilgrims.

At Kumgang they see harmonious manifestations of heaven, earth and water, symbolized on the national flag. The mountain’s yin-yang mix of strength and fluidity has even inspired some movements in the Korean martial art of tae kwon do.

Byun said most South Koreans hope to visit this spot at least once before they die. More than 1.4 million have come since 1998, with a highway route open since 2003.

The site has also been used for meetings arranged by the Red Cross between family members separated by the border. Special accommodations for those families are due to open next year.

THE NORTH KOREAN security guards and snack vendors we met along the trail were polite, if cool, and talked little about their lifestyles except to say they are satisfied.

The exception was one particularly articulate female worker, obviously briefed on the six-nation nuclear talks and other current events, who criticized the United States for aggression. At least one North Korean said the United States deserved the Sept. 11, 2001, attacks because of chronic warmongering.

Most of the North Korean workers, including the waitresses at the Okryukwan restaurant, where lunch was served after the hike, refused to be photographed. But over this caution hovered a palpable aura of promise.

Maybe it arises from the $400 million that Hyundai Asan has already spent on development above the $1 billion for rights.

About 1,500 people make a living here: 95 with Hyundai Asan, another 162 with other South Korean companies, about 780 North Koreans and 450 ethnic Koreans recruited by the North Koreans in China.

But don’t try to spend your South Korean currency in the North Korean shops.

Only U.S. dollars are accepted.

Korea Herald
4/23/2007

South Korea and the United States have agreed not to apply International Labor Organization regulations to an inter-Korean industrial park in North Korea’s border city of Gaeseong, a South Korean lawmaker claimed yesterday.

Kim Won-woong, head of the National Assembly’s unification, foreign affairs and trade committee, said the Gaeseong industrial park is certain to remain an exception to the ILO’s labor rules, paving the ground for Seoul and Washington to designate Gaeseong as an “outward processing zone” (OPZ) on the Korean peninsula.

Gaeseong, located just north of the inter-Korean border, currently houses 23 manufacturing plants, which combine South Korea’s capital with North Korea’s cheap labor.

Under an FTA deal concluded at the beginning of this month, South Korea and the United States agreed to set up a joint OPZ review committee that will identify areas in North Korea that might be designated as OPZs and consider their qualifications if they meet the necessary criteria, including labor and wage practices. But the labor sector was expected to pose a dilemma as North Korea is not a member of the ILO, which stipulates three basic labor rights, namely the right to unionize, collective bargaining and industrial action.

“South Korea and the United States agreed to consider North Korea’s non-ILO member status and unique labor circumstances in the designation of OPZs in the communist state,” said Kim, citing a document he obtained from the Foreign Affairs and Trade Ministry.

In related news, the two Koreas agreed yesterday at the 13th economic cooperation talks in Pyongyang to continue discussing how to fortify the operations at the industrial complex from next month.

Gaeseong park is considered a signature inter-Korean project symbolizing the efforts of expanding exchanges.

South Korea, under the engagement policy of President Roh Moo-hyun, aims to gradually open up North Korea towards market economy for an eventual reform.

Yonhap
4/22/2007

South and North Korea on Sunday agreed to conduct test runs of cross-border railways next month and make efforts to ensure a military guarantee for their safe operations.

The South also agreed to provide 400,000 tons of rice to the impoverished North in late May, but the accord reached by the two sides did not include a commitment by North Korea to take steps toward dismantlement of its nuclear programs, said pool reports from Pyongyang, the venue of the talks.

The Koreas announced a 10-point agreement on test runs of cross-border railways, rice aid and expanded economic cooperation after they engaged in marathon talks. The four-day talks stretched into an extra day as the two sides failed to thrash out differences by the deadline.

“The two Koreas will hold working-level talks to discuss operations of cross-border railways in Kaesong on April 27-28,” the agreement said. They agreed to make efforts to secure a military security guarantee prior to conducting the test runs on May 17.

The security issue was a main sticking point as South Korean officials contended that the test runs will be “meaningless” if there is no safety guarantee on the part of the North Korean military.

In May 2006, North Korea abruptly called off the scheduled test runs under apparent pressure from its hard-line military.

The two sides were originally scheduled to issue a joint press statement at 2 p.m. on Saturday, but they held a series of overnight negotiations to settle remaining differences and work out the wording for a final draft of a joint statement.

On Thursday, the North Korean delegation stormed out of the conference room to protest the South’s call for the North’s quick implementation of a denuclearization agreement, but talks resumed later as scheduled.

“During the talks, we made clear that it will be difficult to provide rice unless North Korea acts to fulfill the Feb. 13 agreement,” Chin Dong-soo, chief of the South Korean delegation, said in a press briefing held in Pyongyang after the announcement of the agreement.

South Korea also agreed to provide raw materials to the North to help it produce clothing, footwear and soap in June in return for its natural resources. A South Korean delegation will visit envisioned development sites in the North that month. Working-level negotiations on this issue will be held in the North Korean border city of Kaesong on May 2-4.

Shortly after the North conducted missile tests in July, the South suspended food and fertilizer aid. But fertilizer aid was resumed in late March, a few weeks after the two sides agreed to repair their strained ties.

During the talks, the North called for receiving raw materials from the South in exchange for providing its natural resources “close to the time when railway test runs are conducted,” the pool reports said.

But the South made clear that it will provide the North with US$80 million worth of raw materials only after the two sides conduct the test runs.

The reconnection of severed train lines was one of the tangible inter-Korean rapprochement projects agreed upon following the historic summit between then South Korean President Kim Dae-jung and North Korean leader Kim Jong-il in 2000.

The tracks, one line cutting across the western section of the border and the other crossing the eastern side, were completed and set to undergo test runs. A set of parallel roads has been in use since 2005 for South Koreans traveling to the North.

In 2005, South Korea agreed to offer raw materials to the North to help it produce clothing, footwear and soap starting in 2006. In return, the North was to provide the South with minerals, such as zinc and magnesite, after mines were developed with South Korean investments guaranteed by Pyongyang.

But the economic accord was not implemented as North Korea cancelled the test runs of the railways last May.

The pool reports said the South pushed to include the use of overland transportation in a clause of the agreement, but the two sides failed to see eye-to-eye on the issue. They agreed to hold talks in Kaesong to discuss ways of advancing into third countries in the field of natural resource development.

The next economic cooperation meeting will be held in the South in July 2007, and the two Koreas agreed to reach an agreement on the prevention of flooding in shared areas near the Imjin River and implement it after exchanging a document in early May.

The latest inter-Korean agreement came just a week after the communist nation failed to meet the April 14 deadline to shut down and seal its nuclear facilities under a six-nation agreement signed in Beijing in February.

North Korea has said it would take the first steps toward nuclear dismantlement as soon as it confirms the release of its funds frozen in a Macau bank since September 2005.

Macau’s financial authorities unblocked the North’s US$25 million in Banco Delta Asia, but the deadline passed with no word from the North on whether it has confirmed the release of the funds or when it will start implementing the initial steps.

Under the Feb. 13 agreement, North Korea pledged to shut down its main nuclear reactor and allow U.N. inspectors back into the country within 60 days. In return, North Korea would receive aid equal to 50,000 tons of heavy fuel oil from South Korea.

The U.S. promised to resolve the financial issue within 30 days, but failed to do so because of technical complications.

Korea Times
Jung Sung-ki
4/20/2007

A National Assembly panel Friday approved a bill to give full-fledged support to domestic firms operating in the inter-Korean industrial park in the North Korean border city of Kaesong under South Korean law.

The Assembly’s Unification, Foreign Affairs and Trade Committee endorsed the bill under which South Korean companies in the Kaesong complex are to receive financial support from the government.

Under the bill, companies concerned will get government funds for infrastructure in the industrial zone and be subject to tax reduction in case of investment in the North.

South Korean insurance acts and other labor-related laws will cover employees under the bills.

The complex is a symbol of the South’s engagement policy toward the North and cross-border reconciliation, along with the South-led tourism program at Mt. Kumgang in North Korea.

About 20 South Korean firms are operating in the joint complex employing more than 13,000 North Korean workers.

Chosun Ilbo
4/18/2007
 
The inter-Korean Kaesong Industrial Complex in North Korea, now in its second year, is in trouble due to “unreasonable” demands from Pyongyang, South Korean companies there say.

North Korea late last year suggested that South Korea pay North Korean workers according to their academic background. “North Korea demanded that we pay four-year college graduates 30 percent more and two-year college graduates 10 percent more than high school graduates, depending on their type of work,” a businessman said. As of last year, North Korean workers in the industrial complex got an average monthly salary of US$67, including overtime.

But businesspeople in the complex said the demand ignores realities. “Most of the workers at the Kaesong Industrial Complex are doing menial jobs, so staff with a higher academic background are not necessarily more productive,” one said. “Moreover, if we should introduce the system, the North Korean authorities would inevitably intervene in the hiring process. Our autonomy in personnel management and governance structure could suffer.”

Some 13,000 North Koreans work at the Kaesong complex. Four-year college graduates and two-year college graduates account for about 10 percent of them. A South Korean government official said, “If we introduce this system, businesspeople say their spending on wages will rise by about 4-10 percent.” Seoul wants to continue negotiations with the North. Pyongyang, which takes most of the workers’ salaries, is already demanding considerable fees for issuing permits to South Korean businesspeople and officials who want to stay for extended periods.

Even if the fee and wage issues are resolved, nobody knows what requests North Korea will make next. Kim Kyu-chul, the chairman of civic group Citizen’s Solidarity for Inter-Korean Economic Cooperation, said Tuesday, “We’re not sure if the free trade agreement with the U.S. will recognize products made at the Kaesong Industrial Complex. And the productivity there is not high due to various regulations. If there are wage hikes, South Korean businesses there will suffer.”

Korea Times
Lee Jin-woo
4/17/2007

North Korea has urged South Korean manufacturers at the inter-Korean Kaesong Industrial Complex in the North to increase wages for some of the workers there, Unification Ministry officials said Tuesday.

The North demanded a 30 percent wage hike for university graduates working at the complex and a 10 percent salary increase for two-year college graduates, the officials said.

They said Pyongyang called for the different salaries to be dependant on a worker’s job and position.

As of Monday, a total of 13,032 North Koreans work at the complex. Some 10.6 percent and 11 percent of them graduated from universities and two-year colleges, respectively.

“Given the number of highly educated North Korean workers, approximately a four percent wage hike is expected this year,’’ an executive of a South Korean company at the Kaesong site said.

“Besides, we still face much difficulty in exporting goods especially to the United States due to the country of origin of the goods being the DPRK,’’ he said. DPRK stands for the North’s official name _ the Democratic People’s Republic of Korea.

Under the regulations on management of the Kaesong complex, which was agreed upon between the two Koreas in 2003, North Korean workers have been paid $57.50, a quite sizable amount by North Korean standards, per month, regardless of their position _ plus overtime pay.

The current regulations allow a five percent wage increase annually, but the North has not officially requested any wage hike until now.

Seoul and Washington have sought ways to pay North Korean workers directly not by paying North Korean authorities, which have a distinctive social and employment system.

Meanwhile, the North has demanded that South Korean visitors or residents at the Kaesong site, just north of the Demilitarized Zone (DMZ), pay registration fees.

The ministry has withheld the exact amount of money that Pyongyang has demanded, only saying there is a gap between the two sides.

But South Korean companies at the site are worried about the increasing financial burden due to such changes.

In the landmark free trade accord struck between the governments of South Korea and the U.S. on April 2, the two sides agreed to deal with the issue of recognizing Kaesong products as South Korean goods as part of OPZ (outward processing zone) talks in the future.

Unlike South Korean officials who have been positive about the future negotiations on the Kaesong goods, U.S. negotiators remain calm over the issue.

Of 39 South Korean companies at the joint complex, 22 have been operating under a pilot project.

Joong Ang Daily
Seo Ji-eun
4/17/2007

Hyundai Asan also plans to offer ‘doctor fish,’ which eat dead skin, at the Mount Kumgang spa.

Hyundai Asan Co. said yesterday it will launch a call taxi service at Mount Kumgang in North Korea on Friday to allow better tourist access to the scenic mountain area.

The van-sized taxis will run from the lodging facilities in the neighborhood of Onjeonggak rest area, where restaurants and souvenir shops are located, to Guryeong Falls and Manmulsang, an area with a number of unique rocks and cliffs.

Hyundai Asan, the exclusive operator of inter-Korean businesses, said taxi charges will be similar to the rate applied to van-sized call taxis in Seoul, except paid in dollars. The basic fare will be $5 for the initial distance of 4 kilometers and $1 per additional 800 meters.

Currently, shuttle buses are the sole means of transportation, but these operate only during designated hours and to designated places. An increasing demand for private transportation motivated Hyundai to execute the taxi plan, according to the company spokesman.

Tourists will only have to ask Hyundai Asan employees in any of the districts in the Mount Kumgang area to use the taxis, which will be driven by ethnic Koreans living across the Yalu River in Northwest China, often called joseonjok. The drivers of the buses currently running at the North Korean resort area are also joseonjok.

Hyundai Asan also said it will release doctor fish, a species of fish known to feed on dead skin, at the Mount Kumgang spa. The fish are in the midst of the quarantine process and will be unveiled to tourists by late this month. Using the fish at the spa will cost $10, according to Hyundai Asan.

Hankyoreh
Lee Yong-in
4/16/2007

The Gaeseong (Kaesong) Industrial Complex is a gauge of conditions on the Korean peninsula. Operations there were nearly stopped outright in the wake of the North Korean nuclear and missile tests. Yet now, thanks to the February 13 agreement on the North’s denuclearization forged at the six-party talks as well as the South Korea-U.S. free trade agreement (FTA), operations have picked up at the industrial park.

In particular, the FTA negotiations have brought the industrial complex new interest from around the world. The agreement reached opened up the possibility of products manufactured at Gaeseong being exported to the U.S ., albeit only after the North meets certain conditions. Whether or not Gaeseong goes beyond spurring North-South economic cooperation and becomes a pillar for peace in East Asia remains to be seen.

The Hankyoreh went on location from March 27 to 30 to take a closer look.

GAESEONG INDUSTRIAL COMPLEX – March 29, 6:45 a.m. Before the dawn clears, the rush to work begins. At the intersection that divides the factory buildings, three or four buses stop in front of a sign reading “Gaeseong Industrial Zone” and North Korean workers pour out. There are approximately 80-100 workers on each bus. Shown to the press for the first time since operations began two years ago, the scene resembles the crowded morning commute on Seoul subway line No. 2.

The clothes worn by the female workers are similar to those worn by the women in Pyongyang, as witnessed during a visit last October. Some even wear the long coats now fashionable in the South. Yellow, pink and checkered, the clothes they wear are of all colors and patterns. Wearing makeup and linking elbows as they walked, their smiling faces were as graceful as the flowers of fall. The streets and buildings were sparkling, as well. The chromatic coloring of the complex contrasts clearly with that of the achromatic Guro Digital Complex in the early 1990s in Seoul.

There are more than 1,200 North Korean laborers working in the 22 factories that have so far set up shop at Gaeseong during the complex’s preliminary and first stages. Ninety percent of them commute to work by bus. As the start of operations nears at 7:10 a.m., the workers flood the sidewalks and streets before entering their respective factories. Their paces were hurried and nimble.

“Welcome! I’m glad you’re here!” Four South Korean employees greet the North Korean workers at the gate to Shinwon’s factory. Regardless of rain and snow, they have been there to give their morning greetings to the workers. Among them stands director Hwang U-seung, who recalled “I was most happy when the North Korean workers expressed their gratitude to me for greeting them here every morning.”

As the time of dividing among interested companies the remaining 530,000 pyeong site of the first project draws near (one pyeong is 3.3 square meters), the commute to work promises to become only more complicated. The reason is that after the end of the first stage of development – around the first half of next year – some 7,000 to 10,000 North Korean workers will take up work at the site.

Currently, it is logistically impractical to transport over 10,000 workers every morning by the current 49 buses to meet the start of operations, which is between 7:10 and 8:10 a.m. In particular, in order to meet the 7:10 bell, the women workers must wake up between 4:30 and 5 a.m. so as to make breakfast, walk 20 minutes to the city bus stop, and ride the bus for 20-30 minutes to work.

The Gaeseong Industrial District Management Committee is rushing to find a solution to the commuting problem. There is a plan to build housing within the complex so that 20,000-40,000 workers can commute by foot. Furthermore, if the two Koreas restore the railway line between Seoul and Pyongyang, a project currently being discussed, there is also talk of adding a special commuter train between the workers’ lodgings and Gaesong on the line. In addition, negotiations are underway with the industries present over purchasing more buses or increasing bicycle use.

March 28, 10:00 a.m. The Gaeseong management committee grew hectic. Word came that former Minister of Unification Jeong Dong-yeong’s entourage would arrive in one to two minutes. This reporter jumped into a car so that he would not disturb Minister Jeong’s visit, and drove over to a factory built by the South Korean shoemaker Racere, where he took turns experiencing the work of a typical Gaeseong laborer.

At the factory, seven North Korean workers, their work clothing on and their sleeves rolled up, were gluing the soles of shoes. This reporter also changed into the work clothes and rolled his sleeves up.

After a glance of encouragement from the North Korean laborers, I started to apply glue to the shoes, as well. I was nervous and embarrassed due to my misapplication of the glue. Smiling, the North Korean forewoman Kim Gyeong-sun (45) said, “It looks easy, but it’s really difficult. That’s why newcomers have to be strictly trained.” Kim then taught me in detail the method of holding the brush, the amount of glue to use, and the way of coating the bottoms of the shoes. As if taking on the role of teacher, an animated expression danced across her face.

But after about 30 minutes, the brushes began to harden. Noticing this, a laborer brought me a new brush. “It is a bad brush that is hindering you work,” the North Korean teased, smiling. Asked whether two of the workers had boyfriends, one worker responded, “you think I’d want to marry so soon?” At this, coworkers Jo Jeong-hui and Kim Eun-gyeong, both 19, grinned widely.

As the atmosphere became lighter, Kim Gyeong-sun began bragging about her children. Her 20-year-old eldest son was in the military, and her second son, 18, was studying hard at a mining college, she reported. Aware that their mother was working at Gaeseong, they expressed their support for her “good work.” Asked whether her salary was sufficient to get by, she responded, “More than the money, I feel pride at the fact that North and South are working together.” A model answer, to be sure.

At 12, the lunch bell rang. As she was leaving, a worker offered to make me into “an honorary worker” there, urging me to come back to visit often.

March 28, noon. I joined for lunch the workers of a factory built by South Korean shoe maker Racere. After finishing the meal, I peeked at the North Korean cafeteria. The North Korean workers seem to bring their own rice to supplement the soup provided. When Gaeseong first opened, the North Korean workers were reluctant to visits by the Southerners in their cafeteria during lunchtime. But as the months passed, the atmosphere changed. Now, the South Koreans who sometimes pay a visit to the North Korean cafeteria are now met with warm greetings by the workers.

March 28, 5:00 p.m. The Shinwon workers head home after a day of work. At one corner of the factory, there is a “general meeting” where production totals are compared with goals. The North Koreans are used to performing such checks two to three times a day. The workers change into their regular clothes and sign out using their personal ID cards. As they scan their cards, a picture of them as well as their personal information flashes on the monitor. Those working into the evening gather for a simple supper of ramen and rice in the cafeteria.

At seven in the evening, twilight comes to Gaeseong Industrial Complex, which glows beneath the stars. Nearly all of the factories keep their lights bright, and the streetlamps gently light up the surroundings. Those working into the night that day numbered over 6,000, just about half of the entire Gaeseong workforce.