Gaesong Plans Moving Forward Again

The distribution of the development area of Gaesong Industrial Complex, which was originally planned for June but postponed for an indefinite period, will be resumed on October 15.

This is two months earlier than predictions that the distribution will be delayed until the end of this year, or the beginning of next year. The area of distribution has decreased from the 240,000 pyeong previously arranged to 120,000 pyeong.

Bae Guk-yeol, head of the Gaesong Industry Distribution Department at the Korea Land Corporation, who is in charge of the distribution, said in a telephone conversation with Dong-A Ilbo, “We are conferring with government authorities to start the distribution as early as possible, and at the latest, the explanation meet and distribution will start around October 15. The specific schedule will be finalized next week.”

About the decrease of area, Bae explained, “After the North Korean missile launch, the South-North relationship has become tense, with increasing discomfort between investors. As a result, we have decided to distribute only 120,000 pyeong at the present time.”

Concerning this, a source inside Hyundai Asan Corporation, the business undertaking the development of Gaesong, revealed, “With worsening South-North relations and North Korea-U.S.A. relations, the Korea Land Corporation and government are fearing land will remain unsold. If the image of the Gaesong International Free Economic Zone is damaged due to land remaining unsold, it could give a negative influence on the economic cooperation of the South and North. That is the reason the distribution area has been decreased.”

Out of the 120,000-pyeong area to be distributed, 30,000 pyeong will be used as apartment-type factory site, and 90,000 pyeong will be used for general factory land. 29 businesses will move into the general factory land.

Currently, the government and Land Corporation are hoping at least 40 out of the hundreds of enterprises that have been showing interest in Gaesong will subscribe for the distribution.

However, with the possibility that North Korea-U.S.A. relations will get worse on the long run, and U.S.A. questioning the opacity of the Gaesong industry, it seems difficult for investors to dissolve their uneasiness.

Bae added, “If the North Korea-U.S.A. relations are recovered, the remaining 120,000 pyeong will be distributed by the end of this year; if not, it will be distributed early next year.”

sunshade@donga.com