hankyoreh

May 17.

The Kaesong Industrial Complex has experienced ultra fast growth since the pilot site was launched in December 2004.

Its production has since increased 251.4 million dollars, or 17 times its first year production figures of 14.9 million dollars. The trade related Kaesong Complex amounted to 808.4 million dollars in 2008, which consisted of 44.4 percent of the total inter-Korea trade in the same year.

As of April, there were 104 companies that were operating their factories in Kaesong that had hired approximately 40 thousand North Korean workers. Approximately 100 companies received land use permits, and 33 companies are in the midst of constructing their factories there.

However, the factories in Kaesong are now showing a sluggish growth rate with the worsening of inter-Korean relations. From January to March, the growth rate of trade related to Kaesong was only 0.6 percent.

If the Kaesong Industrial Complex closes, it would be a considerable burden to both Koreas. North Korea would lose 34 million dollars in wages per year and approximately 40 thousand jobs. If support personnel who work in Kaesong were included, the damage estimates would be higher. The potential negative effect on global investments in North Korea could serve as another factor.

The damages for South Korea will not be insignificant either. Company damages for factories in Kaesong would range from 1.36 trillion won to 6 trillion won. Furthermore, the ripple effect to inter-Korean trade cannot be estimated.

Please direct questions or comments to [englishhani@hani.co.kr]