1. Summary
1. Summary
South and North Korea held a groundbreaking ceremony June 30 marking the beginning of construction for the Gaesung Industrial Complex in North Korea. The ceremony took place off one section of the temporary utility road connecting the two Koreas through the complex site. Some 300 representatives from the two sides attended the ceremony, which was arranged by civilian businesses involved in the construction project.
Of the 119 South Korean delegates present, 64 came from Hyundai Asan Group, 24 from the political and industrial sectors, and 12 from the government. A group of 19 reporters was also present.
Representing the North were some 100 officials, including Ri Jong-hyok, deputy commissioner of the Asia-Pacific Peace Committee, and Choi Hyeon-gu, deputy director of the Central Special-zone Development Agency, along with over 100 local citizens.
According to the layout of the construction plan, the complex will sprawl over Gaeseong City and the Panmun-gun area involving 20 million pyong of land. The complex facilities will sit on the plot of 8 million pyong of land, with some 12 million pyong of milieu cities (including Gaesung City). The construction will proceed in three principal stages.
The groundbreaking ceremony on June 30 kicked off the first stage of construction work, which will be conducted over a stretch of one million pyong of land.
2. History
Hyundai Asan of South Korea and the Asia Pacific Peace Committee of North Korea first signed a Development Agreement for the Gaeseong Industrial Complex on August 20, 2000.
To accommodate the project, the North promulgated the Law Governing the Gaesung Industrial District on November 27, 2002.
It was on May 23, 2003, at the 5th Inter-Korean Economic Cooperation Promotion Committee meeting that the two Koreas agreed to hold the groundbreaking ceremony for the industrial complex in late June.
On June 29, 2003, the North announced two subordinate decrees of the Law Governing the Gaeseong Industrial District: titled "Development Regulations for the Gaeseong Industrial District, and Guidelines for Business Start-ups and Management Operations at the Gaegseong Industrial District.
The groundbreaking ceremony took place on June 30, 2003.
3. Significance
The construction of the Gaeseong Industrial Complex is an economic cooperation project that will bring together the technologies of the South and the labor and rich resources of the North for mutual benefit.
Once built, the complex is expected to serve as a test case of inter-Korean economic cooperation and will eventually become a hub of inter-Korean economic activities. Along with the on-going railroad/highway construction works to re-link the two Koreas, the construction of the Gaeseong complex is an essential part of a larger project that is aimed at developing an inter-Korean economic entity.
The geographic features of the complex (an hour's drive from Seoul and located in the vicinity of Gaesung City) point to the complex's strong potentials to grow as a logistical hub of inter-Korean economic activities.
The complex will also provide an important breakthrough for the small/medium businesses in the South, which have been suffering from chronic labor shortages. For this reason, the government plans to continue to support the industrial complex construction project.
Specifically, the government plans to ensure that the Gaesung complex will provide the South Korean businesses with the kind of business-friendly environment that offers South Korean industrial standards, especially in the areas of infrastructure facility, office/factory rental rates, the wage levels, labor/management relations and taxes.
To proceed with the first stage construction work, the two Koreas will continue to cooperate in terms of follow-up procedures that will include construction measurement projects and the signing of a principal construction contract.
