Kaesong Industrial Complex Experiment In Harmony

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The joint North Korea/South Korea industrial park, once the symbol of potential inter-Korean harmony, could become victim to the current crisis over the sinking of a South Korean naval ship. Hundreds of workers from South Korea go to work in North Korea, while thousands of workers from North Korea go to work in South Korean factories.

DEBORAH AMOS, host:

It may come as something of a surprise that every day, hundreds of workers from South Korea go to work in North Korea, and thousands of workers from North Korea go to jobs in South Korean factories. All this takes place in Kaesong Industrial Complex in North Korea, just across the border from South Korea. It's an experiment in building harmony between the two Koreas. But in the current crisis, it is coming under severe strain, as NPR's Mike Shuster reports.

(Soundbite of whistle blowing)

MIKE SHUSTER: The daily commute to North Korea is a long one. Hundreds of workers and managers from South Korea gather here, just on the south side of the border from Seoul. It's at least an hour's drive.

They come in cars and trucks. They cross the demilitarized zone and head for the offices and factories of the Kaesong Industrial Complex just a couple of miles away. Most of them will return to homes in South Korea at the end of the work day.

Yu Jay Jong(ph) is a 58-year-old construction manager who has been working inside North Korea for more than seven years. Right now, he says there is no new construction underway, and the factories are operating at far-from-full capacity.

Mr. YU JAY JONG (Construction Manager): (Through translator) All the processes are frozen right now. There is a low workforce, and the buildings are not constructed as planned.

SHUSTER: Are you worried there could be war?

Mr. JONG: (Through translator) I don't want to think about it. It shouldn't happen. So far, I haven't felt anything like that.

SHUSTER: The Kaesong Industrial Complex is the dream of the leaders of one of South Korea's largest corporations, Hyundai Asan - part of the Hyundai group, but separate from the automobile manufacturer. Hyundai Asan began the Kaesong project seven years ago. Some 120 South Korean companies built and operate the factories. They produce mostly textiles, clothing and footwear.

The North Koreans get paid in hard currency. The South Korean companies get cheap labor. And the goods that are produced help to sustain those companies and their hundreds of thousands of additional workers in South Korea. Hyundai Asan believes business can be most effective at bringing the two Koreas together. Their view is reflected in videos they've created to market their approach.

(Soundbite of marketing video)

Unidentified Man: The Kaesong Industrial Complex was the beginning of the two Koreas' collaboration for mutual prosperity, connecting the land and the people, streaming into a dry land, and creating hope in this severed nation.

SHUSTER: In the standoff over North Korea's sinking of the South Korean naval vessel Cheonan, the Kaesong Industrial Complex is one of the few contacts North and South have maintained, but it hasn't been easy. North Korea has withheld much of the manpower the factories need to operate. South Korea has ordered some of its personnel out. The complex is still operating, but at a dramatically reduced capacity.

Ju Tong Wan(ph) is a 45-year-old truck driver for a company called Peace Shoes. It's right there in English on his small truck: Peace Shoes. Ju is concerned about the drop in production, but he doesn't think the worst will happen.

Mr. JU TONG WAN (Truck Driver): (Through translator) I'm not scared. For us who actually work here, we don't feel such a danger. Well, I can even say that it's peaceful.

SHUSTER: Not everyone associated with the project is as confident. Kaesong's corporate association represents the investors in companies that are active in the project. Lee Eem Dong(ph) is its director. He says tensions are high right now. South Korea is threatening to send propaganda leaflets across the border by balloon and to blare anti-North Korean broadcasts by loud speaker. If the project collapses, he says, it could affect up to 200,000 jobs in South Korea, as well as the 40,000 North Koreas currently working at the factories, and possibly worse.

Mr. LEE EEM DONG (Director, Kaesong's Corporate Association): (Through translator) We just hope that our workers in Kaesong and also the North Korean workers be safe. Closing off the Kaesong Complex means war.

SHUSTER: That may explain why the complex is still operating, despite the threats from both sides, says Lee Sang-Hyun, director of security studies at the Sejong Institute. Kaesong is too valuable to walk away from.

Dr. LEE SANG-HYUN (Security Studies, Sejong Institute): Kaesong is kind of a symbolic achievement. So I think South Korea does not want for closing unilaterally.

SHUSTER: South Korea's President Lee Myung-bak has threatened to do just that: close the park unilaterally. And so the Kaesong Industrial Complex may be the most important bellwether in the current crisis. As long as it remains opened, it is unlikely the worst will happen. If it closes, that's another matter.

Mike Shuster, NPR News, Seoul.

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