North and South Korea Agree on Talks about Kaesong Industrial Zone

On Thursday, North Korea delivered a proposal to Seoul via KCNA, the state-run news agency expressing the openness of the regime to talk about the Kaesong Industrial Zone (KIZ). The Unification Ministry of South Korea has responded with a positive view of the proposal. The statement released is attributed to the Committee for the Peaceful Reunification of Korea in Pyongyang. It clearly states that once South Korea agrees to talks the hotlines that were cut would then be reconnected.

Pyongyang’s openness to discuss urgent matters with Seoul and the South’s acceptance is in accordance with the preparations of the United States and China for a summit where North Korea is expected to be part of the agenda.

An opportunity to build trust

The Unification Ministry is hopeful that this talk would serve as an opportunity to build trust between the two nations. After discussions are held, the schedule and agenda will be announced promptly. Observers are cautioning against the possible hurdles that both parties could be facing in setting down the agenda for the KIZ talks.

Resumption of factory and mountain resort operations

The proposal specifically states that talks between North and South Korean officials be held in order to resume KIZ operations as soon as possible as well as the tours on Mt. Kumgang resort. The resort is another joint project between the two neighboring countries. It was closed after an incident in 2008 involving the fatal shooting of a tourist from South Korea by a guard from the North.

A symbol of cooperation

The Kaesong Industrial Zone opened about 10 years ago and has served as a symbol of cooperation between North and South Korea. It is financed mostly by South Korea. Business owners pay yearly wages amounting to US$80 million to factory workers. The jointly-run area is also a prime source of revenue for Pyongyang. The operations of the industrial complex located within the DPRK were suspended when the tensions in the peninsula escalated in the past few months.

At the height of the crisis

At the wake of North Korea’s nuclear testing on February 12, Pyongyang pulled out workers in the factories in early April. From then on 120 manufacturers from South Korea located within the complex with some 53,000 North Korean employees had to cease their operations. Last May, all the South Korean managers left the complex as well.

North Koreans are employed in what are mostly factories that manufacture goods that are exported to South Korea. In 2012 the complex was the biggest inter-Korean trade contributor. The total production of the zone amounted to an estimated US$470 million that year alone.

Initial invitation to businessmen

Last month, North Korea declared that it planned to invite businessmen from the neighboring country for talks on the resumption of business operations at the KIZ. But that proposal did not work well for South Korea. Officials in Seoul insisted that government talks need to be held.

Pyongyang has given Seoul the prerogative to choose the venue and the time. Ryoo Kihl-jae, South Korean Unification Minister offered that the talks be held in Seoul in the 12th of June.

Photo Credit: Model factories in the Kaesong Industrial Area inside the DPRK