A Seoul-funded industrial estate in North Korea is opening up to foreign investors next month.

Hyundai Asan, the developer of the complex in the border city of Kaesong, says it will start receiving applications from foreign companies in April.

The industrial park combines Southern technology with low-cost labour from the North.

The company claims it is also a peace building project; one step to reunification on the Korean peninsular.
But not everyone sees it this way.

Rebecca Henschke paid the controversial project a visit.

Kaesong Industrial Park, the future of the Korean peninsular, is the message of this promotional film.

Hyundai-Asan opened this business complex in 2004 on nearly three thousand square metres of barren land just outside Kaesong city in North Korea.

Currently there are 23 South Korean factories here, employing about 11 thousand North Korean workers.

This is just the beginning, claims Kim Dong Keun,, the director of the Kaesong Industrial Park.

“We will promote Kaesong industrial complex as the most promising investment opportunity and the hub of economic co-operation manufacturing in North East Asia. I know your political concerns but I believe that inter-Korean relations like this will ease the tension and bring about peace,�

There are grand plans for this capitalist complex, inside communist North Korea.

In a small room, the final model plan is explained by Yugin Me, the public relations officer and a graduate of International Relations from Pyongyang University.

“This is the commercial zone that will house a lot of high storey buildings; hotels, exhibition halls and training centers. It will be a world class industrial zone. You can see a lake will be built here for flood control and for entertainment. The residential zone of 800 hectares will house about 3,000 South Koreans,�

This is the first place where Koreans from the South and North work side-by-side in harmony, she adds.

We are taken into one of the factories where North Korean female workers are sewing clothes. They have all completed high school and have been selected to work here by the State.

In the corner is a modern clothing shop selling what they are making.
Other factories here produce watches, shoes and electrical wires.

The North Korean workers earn 57.50 US dollars each a month. 7.50 is taken as tax, so they are earning just above what the UN describes as slavery wages, 2 US dollars a day.

Kim Dong Keun, Director here is very confused when I point this out.

“When did that kind of system get decided or determined? In China just ten years ago the minimum wage was fewer than 3 dollars a day. How about in Africa, Vietnam or any other poorcountry? I think you misunderstand the wage system in the world,”

However, the nearly 800 South Korean employees are paid a higher wage for the same job.

In one of the factories, one of the South Korean workers tells me he is happy to work here; he is given better wages than in the South.
He adds that he feels comfortable working with people from the North but is just not allowed to talk about politics or economics.

As we move around no one is talking at all. It’s all production line work.

Following the 13th of February Agreement on the North Korean nuclear program, Hyundai Asan is opening up this space to foreign countries.
The plan is to build some 3,000 factories by 2024.

However, Seoul still has to solve a dispute with Washington over demands that goods produced here should be recognized as made in South Korea.

“North Korea is designated by the US as a trouble country but the goods here must be seen as South Korean because one-hundred percent of the material is from the South; we want the same tariff import system as companies from the South.�

Another shadow hangs over this complex, the North Korean dictatorship and its reported nuclear weapons.

The major Opposition Party in Seoul wants the complex shut down. Jaewan Bahk is the Chief Secretary for the President of the Grand National Opposition Party.

“The money is directly flowing to the dictatorship regime and the project is heavily subsidized by the South Korean government. We must use a carrot and stick approach - not just a carrot approach with North Korea,�

Kaesong and the Mount Kumgang tourist complex have made almost one billion dollars— including huge down-payments for the North.
The GNP concerns are shared by many North Korean defectors now living in Seoul. Kisung Kim is a defector who wants to see the Kim Jong-il regime collapse.

He tells me the current engagement policy is a grave mistake and that his people are suffering.

“The Sunshine policy has only supported and prolonged the Kim Jong ill regime and made defectors lives harder. The South should listen to the North Korean defectors we are the only ones that really know what needs to be done to help our people… the Sunshine policy is not helping them. Opening up information channels and telling them about an alternative life will.�