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First pullout from inter-Korean industrial park raises concerns
SEOUL, June 9 (Yonhap) -- The withdrawal of a South Korean company from an inter-Korean industrial park triggered concerns Tuesday that it may be only the beginning of a greater exodus amid damaged cross-border relations coupled with global economic gloom.
Sskin Net, a leather clothing company, notified the Kaesong Industrial Complex Management Committee in Seoul on Monday that it will withdraw factory equipment from the park in the North's border town of Kaesong, citing concerns about the safety of its employees and a decrease in sales. The withdrawal was the first since the joint venture opened in 2004.
| Viet Nam is not very far away, full of sewing machine operators. |
The firm's owner, Kim Yong-gyu, said North Korea's detention of a South Korean worker employed at the joint park was the biggest factor in his decision. "We used to have five workers stay there to manage the factory, but now we manage with only two," Kim Yong-gu, who opened his factory at Kaesong in 2007, said over the telephone. "Even if the possibility (of such detention) is just 0.1 percent, I feel it would be a crime to send my employees there."
Businesses operating at the joint park say their anxiety has considerably risen since the detention of an engineer from Hyundai Asan Corp. on March 30. North Korea has refused to allow access to the worker, identified only by his family name Yu, saying an investigation was underway on charges of "maliciously slandering" the North's political system.
| It's important, when abroad, to abide by local law and custom, and not attempt to seduce the locals to think outside the barbed wire-lined box. |
The Kaesong joint venture, just an hour's drive from Seoul, hosts 106 South Korean firms producing clothes, kitchenware, electronic equipment and other labor-intensive goods. More than 40,000 North Koreans are employed there. Once hailed a win-win idea for the North's frail economy and the South's small firms, the venture now faces an uncertain future. After a government-level meeting ended without a breakthrough in April, North Korea issued a statement declaring all contracts governing the joint park "null and void." It said the North will unilaterally raise wages and set land fees and that South Korean firms should leave if they can't accept the new terms.
Officials of the two Koreas are set to meet again at the joint park on Thursday, but there are few signs for a breakthrough.
The Kaesong Industrial Council that represents the firms investing in the zone dismissed the emerging concern that there may be more pullouts. "It's true that there's anxiety, but I don't think all of the businesses need to be disturbed by a single company's withdrawal," Yoo Chang-geun, vice chairman of the council and owner of SJ Tech Co., an electronic equipment firm, said.
| Racial patriotism only goes so far, Mr. Yoo. Likewise South Korea's laudable attempt to cushion North Korea's eventual reunification with the south. |
Government data suggests political tensions are already weighing heavy on business performance. Combined overseas shipments out of Kaesong park were US$7.15 million in the January-April period, down 56 percent from $16.27 million during the same period a year ago, according to data from the Unification Ministry. The companies' output also slipped 6.6 percent from last year's $79.83 million to $74.54 million, despite the increase in the number of firms at the joint park from 72 to 106.
Posted by: Steve White 2009-06-09 |
