N.K. Seeks to Attract Foreign Investment at Gaesung and Mt. Geumgan Areas

A groundbreaking ceremony for the Gaesung Industrial Complex will be held at 11:00 a.m. Monday, with about 120 South Koreans and some 200 North Koreans present, Hyundai Asan reported on Sunday.

The ceremony comes about three years after Chung Mong-hun, chairman of Hyundai Asan, and North Korean National Defense Commission Chairman Kim Jong-il agreed on August 9, 2000 to build an inter-Korean industrial park spanning 66 million to 132 million sq. meters. The ceremony will last 25 minutes, including speeches by Chung Mong-hun and president of the state-run Korea Land Corporation (KOLAND) Kim Jin-ho, a congratulatory message of the head of the North Korean delegation, and a ground breaking ceremony. The South Korean delegation will return to Seoul in the afternoon after having a luncheon in the southernmost city and touring Seonjukgyo Bridge and Gaesung museum.

The Gaesung Industrial Complex project foresees an industrial park on 26.4 million sq. meters of land and a city surrounding the park, spanning 39.6 million sq. meters, in a city 70 kilometers north of Seoul and 170 kilometers south of Pyongyang. The project was initiated by KOLAND with Hyundai Asan in charge of construction work. In the first stage, the industrial park will be built on 3.3 million sq. meters of land by 2007 and some 300 textile, garment, and electronics companies will move in.

After the groundbreaking ceremony, Hyundai Asan and KOLAND plan to build a temporary office and begin surveying the 3.3 million sq. meters of land. By the end of the year, development plans and basic designs will be completed and construction work and distribution to prospective companies who will move into the complex will start in earnest in the first half of next year.

Gaesung Industrial Complex is not for processed trade but for exporters. It is of significance because it is the first inter-Korean economic cooperation project. If the first phase of the project is completed successfully, the second and third phases for technology-intensive light and heavy industries and high technology industries as well as foreign companies will also move in. Hyundai Asan predicts that by 2010, when the third phase of the project is completed, about 2000 companies will move into the complex, creating about 150,000 new jobs.

Experts point out that there is a lot to do in advance of the project, such as establishing regulations related to entering and leaving the North, residence issues, as well as labor laws and taxes. The inter-Korean accord for economic cooperation on investment guarantees, avoidance of double taxation, settlement of commercial disputes and clearance of accounts should pass a plenary session of the National Assembly and should also be ratified by the Supreme People’s Assembly of North Korea.

smhong@donga.com