Archive for the ‘Special Economic Zones (Established before 2013)’ Category

American visits Kumgang

Thursday, May 4th, 2006

From the Korea Times:

Rising dramatically from the East Sea, Mt. Kumgang _ about 20 miles (32 km) north of the Demilitarized Zone (DMZ) in North Korea _ is considered by most to be the most scenic area on the Korean Peninsula. The Japanese colonists even built a direct railway line to the area for sightseeing.

I didn’t comprehend the gravity of my excursion to Mt. Kumgang with my colleagues until the South Korean military escort pulled off the side of the road for our caravan of buses at the south end of the DMZ. We crossed the four-kilometer desolate and barbed-wire covered expanse, and picked up the North Korean military escort on the other side. As we approached North Korean immigration, a soldier goose-stepped into the road in front of the bus and held out a red flag to signal the buses to stop.

Upon entering North Korea the stark change in landscape was surprising. Unique clusters of rock formations rose up from flat, treeless, sandy plains. Looming dramatically and endlessly in the distance was the epitome of all Asian mountain images _ Mt. Kumgang.

But other changes were evident, too. The area was quite rural, with small, weathered clusters of traditional Korean homes that may in fact have been quite old. Instead of cars, there were pedestrians on dusty trails, bicycles instead of motorbikes and horse-pulled carts instead of trucks.

Citizens worked the fields with their bare hands and oxen pulled plows. My immigration stamp said “Choson,’’ the name by which North Korea refers to itself and the name of the Korean Kingdom that ruled the peninsula from 1392 until 1910. I had in fact stepped back to that time.

More striking still was the abundance of North Korean soldiers _ along the road, in the farm fields and on the sides of hills. They were stationed at every road and dirt path intersecting the tourist road, which was entirely separated from the rest of the world by continuous fences. Checkpoints were everywhere, both along our road and the ordinary North Korean roads.

The North Korean hotel and park workers were shy, modest, and polite with noticeably different accents and intonation. They often gazed at me innocently, with curiosity about the presence of a Caucasian American. In one conversation a woman who knew surprisingly little about other places in North Korea mentioned that it was her dream to go to Pyongyang.

“Why haven’t you been there?” my colleague asked.

She responded with three reasons: not enough money to travel; poor conditions of transportation making it a difficult journey; and difficulty in acquiring permission to travel.

Despite her having one of the more coveted jobs in North Korea, the 200-kilometer journey from Mt. Kumgang to Pyongyang was fundamentally impossible.

 

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US criticizes Kaesong investment

Tuesday, May 2nd, 2006

From the Joong Ang Daily:

Jay Lefkowitz, Washington’s special envoy on North Korean human rights, has continued to criticize the working conditions for North Korean laborers at the Kaesong Industrial Complex, where South Korean companies have located plants.

On the surface, wages and working conditions are the main issue, but experts say there is a more fundamental difference between Seoul and Washington on economic support for the North and on human rights issues there.

In an essay in the Wall Street Journal’s weekend edition, Mr. Lefkowitz said daily wages for North Koreans at the complex were less than $2. That appears to be correct; the monthly minimum wage at the complex is $57, including a 30 percent commission to the government. But because companies at the site pay those wages to a North Korean labor service provider, it is not known how much, if any, of the wages actually find their way into workers’ pockets.

There are currently, 6,850 North Korean workers at the complex; the number will go up by about a fifth this month.

The Unification Ministry here was outraged by Mr. Lefkowitz’s comments, especially by a reference to “slave labor.” The minister, Lee Jong-seok, said on Sunday that he wasn’t sure whether Mr. Lefkowitz was trying to improve human rights in the North or hamper them.

Seoul has put human rights issues in North Korea on the back burner, angering many conservatives here, arguing that the best way to improve rights was by economic development of the North, assisted by massive amounts of economic assistance from South Korea. 

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DPRK soldiers sneaking into Kumgang for treatment

Monday, May 1st, 2006

From the Korea Times:

A head doctor of Hyundai Asan Hospital in the Kumgang tourist area, which was set up to deal with emergency cases among South Korean tourists, told Unification Minister Lee Jong-seok that North Korean soldiers sometimes sneak into the hospital.

Their commander has apparently ordered them to stay away from the South Korean tourist districts, but still the ordinary soldiers come to get better medical treatment, he said.

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Kaesong Complex Continues to Grow

Wednesday, April 26th, 2006

According to Yonhap:

The number of North Korean workers at a South Korean-run industrial complex in the North Korean border city of Kaesong rose 22 percent every month over the past one and a half years, the South’s Unification Ministry said Wednesday.  Production increased 36 percent every month due largely to a rise in the number of South Korean factories operating in the complex, according to the ministry.

As of Friday, a total of 6,859 North Korean workers, including 1,047 construction workers, were registered at the complex.

“Some North Korean workers even took annual leaves after their work period was more than one year old. So far, about 120 workers used their annual leaves,” said Go Gyeong-bin, the director general of the Kaesong industrial complex project office at the ministry.

In November 2004, several South Korean companies hired 255 North Korean workers when they moved into the complex at its opening.

The complex, still in its pilot stage, is now home to 11 South Korean companies that produce garments, kitchenware and shoes.

Go said four of them, such as apparel maker Shinwon Co. and socks manufacturer Sunghwa, sent a total of 53 North Korean workers to China for technical training.

“Since the first product was made in December 2004, the total output has amounted to US$27.46 million, which means a monthly average rise of 36 percent. In particular, production exceeded $5 million in March, a 40 percent rise from February,” he said.

The Kaesong industrial complex, located just north of the demilitarized zone dividing the two Koreas, 60 kilometers, or a one-hour drive from Seoul, is the flagship project for inter-Korean cooperation, combining South Korean capital and expertise with the North’s cheap land and labor.

The North Koreans work with about 300 South Koreans in Kaesong.

South Korea hopes to promote the Kaesong complex as a role model for inter-Korean economic partnership, while officials in Washington express concern over its possible negative impact on the multilateral efforts to end North Korea’s nuclear weapons program.

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North Korean Economics Presentations at KEI

Tuesday, April 18th, 2006

Economic Reform and SEZ as Survival Strategy of DPRK
PDF: Deok Ryong Yoon.pdf
Deok Ryong Yoon

Introduction to & implications of Gaesong Industrial Complex Project
PDF: kaesong.faqs.pdf
Ministry of Unification

Gaeseong Industrial complex: Past, Present and Future
PDF: Dong-geun Kim.pdf
Speech by Dong-geun Kim, Chairman of Gaeseong Industrial District Management Committee

Gaeseong Industrial Complex : Frequently Asked Questions (FAQs)
PDF: kaesong.faqs1.pdf
Ministry of Unification, ROK

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Kaesong workers subject to “Income Taxes”?

Friday, April 14th, 2006

From the Daily NK:

Workers in the Kaesong Industrial Complex are officially paid $57.50/month.

North Korean workers only receive 4500W ($1.5/month) after various deductions. So North Korean workers only take 2.6% of their wage home. This is still twice of the wage of normal North Korean workers, so they are satisfied.

North Korean workers in Kaesong Industrial Complex might not recognize that this is a problem. They are used to obeying the government. 

I would not be happy paying 97.4% income tax.  I try to avoid getting out of my relatively low American taxes as it is.   I would not work (above ground)…unless I was really hungry.
 

 

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Is the Kaesong Industrial zone a Human Rights Issue?

Thursday, April 13th, 2006

Discussion from the Korea Times:

“Yes” Reasons:
-Prolonging the life of the Kim Jong-il regime at the expense of its people
-The North cheats its own workers by not giving them their full pay. There are no unions in Kaesong Industrial Park and workers are expected to work unpaid overtime regularly
“No” Reasons:
-Mini-Marshall Plan
-Workers there earn $58 per month and work under excellent conditions and are much better off than North Korean workers elsewhere.

Other factoids:
Kim Dong-Keun, president of the complex’s Industrial Management Committee said “The North Korean workers are very diligent with high manual skills. Their productivity level is on average 80 percent that of their South Korean counterparts.”

A manager at Hyundai claimed, “Workers’ income at the complex is about 5-10% that of South Korean workers, which is much more than North Koreans generally earn. And they work under better conditions, too”

 

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Kaesong, US technology, trade with villages

Thursday, April 6th, 2006

From the Asia Times

The only currency used in the complex is the US dollar.

No foreign investors have yet signed up for the zone

Washington requires high-tech products destined for North Korea that include US intellectual property to undergo stringent export controls. This has irritated many in the South – particularly after the process delayed the transfer of telecommunications equipment. It also appears highly unlikely that Kaesong-built products will be included in a free-trade agreement between Seoul and Washington that is under negotiation.

Officials of the complex say they have assisted local villagers with heating briquettes and rice, but there is otherwise neither trade nor contact across the fence, indicating that the experience of capitalism is strictly insulated. This assumption is buttressed by relations inside the complex: despite talk of inter-Korean fraternity, social contact between Northern and Southern workers is non-existent.

While the railways between the two Koreas were reconnected in early 2004, theoretically linking Seoul and Sinuiju on North Korea’s Chinese border, it is uncertain when trains will start to run through Kaesong.

“There will be talks on opening the line in July, but it is not certain,” said a South Korean official at Dorasan Station, a giant steel-and-glass edifice on the southern side of the border. The lack of rail transport complicates his firm’s logistics costs, said Stafild’s Moon, whose head office is on the south coast of the peninsula, in Busan.
 

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Raijin back in the news

Thursday, March 30th, 2006

This story from the Daily NK has an update on whats happening at Raijin as well as a history of the area:

Read whole story here:

In December 1991, Rajin and Seunbong cities were declared “Free Trade Economic Regions”, Rajin Port was planned to be expanded according to a 3-stage development scheme. The first stage consisted of infrastructure construction such as railroads, roads, and ports.  In the ten years since, the budgetary outlays have been insufficient.

In 1996, the Committee for Promoting NK Foreign Economic Cooperation published a report, “Reality and Outlook for Rajin- Sunbong Free Trade Economic Regions.” According to the report, the Rajin Port should first build capacity for large-sized containers.  In stage two, its loading-handling capacity should be improved from 300 million tons to 1,700 million tons.  The third stage, beginning in 2010, the port should have the capacity to manage 100 million tons.

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Kaeson Training Facility

Thursday, March 23rd, 2006

From the Washington Times:

South Korea plans to open a job training center in the North to improve the skills of North Koreans who work in South Korean-owned companies. 

The training center, to open in June, each year will offer training in 13 areas of work to 4,000 employees of midsized companies, the state-funded Human Resources Development Service of Korea said in a statement.

“The center will conduct job training and supply a quality workforce to our companies which will move in the Kaesong Industrial Complex,” it said.

South Korea’s government has allocated $16.4 million to construct the training center in the industrial zone, The Korea Herald reported Thursday. 

Currently, 11 South Korean companies employ 6,000 North Korean workers and 600 South Korean workers in the zone, according to the Ministry of Labor.

The ministry expects that some 300 firms will eventually recruit 90,000 North Korean workers when the first-stage development of the inter-Korean complex is completed in 2007, the newspaper reported.

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