The public was recently reminded of the difficulties and limitations of the Kaesong Industrial Complex, located north of the Korean Demilitarized Zone (DMZ). The expansion of the complex is no longer viable, even if the two states reconcile and inter-Korean economic cooperation is resumed. Therefore, a new strategy is needed. The focus of the new strategy should be to promote a completely new form of economic cooperation near the DMZ, one in which South Korea’s control, authority, and influence over the facility is ensured.
In order to carry out this new economic plan, it is imperative to devise new policies toward North Korea, which currently demands the normalization and reinvigoration of inter-Korean economic cooperation, including the Kaesong Industrial Complex and Mount Kumgang Tourist Region. In other words, the center of the new industrial complex should be located south of the DMZ, forming a region shaped like a bottle pointing south that stretches down from the north side of the border. While the Kaesong Industrial Complex represented South Korea’s advancement into North Korea through technology and capital, the new complex would invite North Korea to export its labor force to South Korea, creating a mutually beneficial paradigm through which the economic goals of both countries could be met.
The new complex would also contribute to securing the flow of mineral resources from North Korea into the South, eventually resulting in a rich, sustained economic partnership between the two states that would greatly stimulate the national growth of South Korea. Currently, the mineral resources of the South are being depleted, whereas North Korea lacks the expertise to exploit its mineral resources for purposes beyond foreign currency acquisition.
Foreign countries such as China and the European Union are competing to find ways of securing North Korea’s resources, while South Korea is struggling with yet another period of worsening relations with the North. A total of 31 mining operations have been set up by foreign entities in North Korea, 26 of which are now owned by Chinese companies. Concerns are now rising over the increasing possibility of North Korea falling victim to exploitation by international corporations for its resources and raw materials, as an increasing number of foreign companies are being permitted to enter the North to acquire minerals. This could lead to a situation where South Korea ends up buying North Korean resources from other countries. China, in particular, is already taking advantage of the economic sanctions against North Korea by buying North Korean resources at low prices and selling them back to the North at inflated prices, to which North Korea has expressed its discontent.
It is important to ensure that North Korea’s resources are utilized within the borders of the Korean Peninsula. This can be achieved by establishing the new industrial complex a little closer to South Korean territory, thereby facilitating inter-Korean economic cooperation. South Korea would pay the North a fair price for its resources and seek ways of using them to develop and manufacture higher value-added products, and pay North Korea for the use of its workforce. Lastly, the manufactured goods would be sold back to North Korea at a reasonable price. Such triple benefits of inter-Korean economic cooperation should motivate North Korea to permit the establishment of such an industrial complex in the DMZ.
The project would also prove to be a huge win and a step toward coexistence for South Korea as well, across the domains of economic growth, unification, and the Presidential Committee on Balanced National Development . The report assessed the potential benefits of a new industrial complex near the DMZ and devised a structural plan for the establishment of the complex as a new model of inter-Korean economic cooperation capable of overcoming the limits of the Kaesong Industrial Complex. This report aims to explain the potential benefits of a new industrial complex intrinsically different from any of the past models for such complexes, which focused only on the capital and technology of the South and the labor force of the North. The new complex, which would be established in a region shaped like a bottle pointing South through the DMZ, essentially straddling the border, would offer both states direct access to the facility and foster economic cooperation based on the abundance of North Korea’s mineral resources.
- 북한 지하자원을 활용한 DMZ/접경지역 남북 산업단지 조성방안(A plan to establish a new inter-Korean industrial complex along the DMZ based on the mineral resources of North Korea)
- 손기웅; 최수영; 최경수
북한 지하자원을 활용한 DMZ/접경지역 남북 산업단지 조성방안(A plan to establish a new inter-Korean industrial complex along the DMZ based on the mineral resources of North Korea)
|Series Title; No||정책연구시리즈 / 13-01|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Territorial Development < National Land Development|