Following the agreement reached in August between South and North Korea to reopen the jointly operated Kaesong industrial estate on the border between the two uneasy neighbours, the thaw has started. The first cars and trucks crossed the border on September 16 carrying more than 800 South Korean managers, and raw materials for the factories.
The break in production that resulted from North Korea’s last nuclear test and international reaction to it lasted 166 days but now the signs are that things will return to normal. In fact the resumption of production could augur a more productive future. The North Korean authorities have extended a tax exemption to the South Korean owned factories to assist them to recoup the many millions of dollars lost during the shut down. And negotiations between the governments may resulting the complex being more secure from political tension in future, attracting some international investment.
The first task to face South Korean managers will be inspection of the production lines to assess how long it will take to get them running again. Kaesong started operation in 2004, using South Korean expertise and low-cost North Korean labour. In 2012 it produced $470 million worth of goods, including textiles, shoes and electronic components.
