Gaesong Industrial Complex Development Project
ROK Ministry of Unification
2004-04-20
1. Outline and Significance
o Gaesong Industrial Complex development is a three-stage project for developing a total of 20million pyong, or 66million square meters (8million pyong for an industrial complex, 12million pyong for the host city) of land in Gaesong to accommodate South Korean enterprises. This economic cooperation project will enhance economic benefits of both South and North Korea.
- The South is now promoting the first stage development construction on 1million pyong of land and construction of a model complex on 10,000 pyong (33,000 square meters) of land within the industrial complex.
o Gaesong Industrial Complex project will create a win-win situation where the South and the North can further promote inter-Korean economic cooperation by combining the South's advanced technology and capital with the North's cheap labor force.
- Facing difficulties in their business operations due to weakening competitiveness, many medium- and small-sized South Korean companies are showing great interest in Gaesong Industrial Complex to recover their competitiveness.
* An estimated 1,500 ~ 1,600 companies have expressed their interests in moving into the Gaesong Industrial Complex.
- The complex will secure its competitiveness in terms of leasing cost (below 150,000 won per pyong), wage (57.5 dollar per month), autonomous labor management, and location (one-hour distance from Seoul).
o Taking into account economic efficiency, the government will implement the complex building project as scheduled. At the same time, it will
- persuade the North that resolution of the nuclear issue is a prerequisite for the construction of the Gaesong Industrial Complex
- seek ways to utilize the complex construction project as an opportunity to resolve North Korea's nuclear issue and ease military tension.
2. Progress
o Hyundai and Asia Pacific Peace Committee signed the development agreement on developing a total of 20million pyong (66million square meters) of land (August 22, 2000)
o The North promulgated the 'Laws on Gaesong Industrial Complex' (November 27, 2002)
o The ground breaking ceremony for the first stage of Gaesong Industrial Complex was held (June 30, 2003)
o The ground breaking ceremony for Development Office was held (December 11, 2003)
o The South and the North signed the 'Agreement on Transit in Gaesong and Mt. Geumgang area' (January 29, 2004)
o The South and the North signed the land leasing contract (April 13, 2004)
3. Timetable
o April, 2004
- The government will approve the cooperation project
- The South will embark on the lot development construction for the first development stage of the Gaesong Industrial Complex and the model complex.
o May ~ June
- The model complex will be parcelled out
- The management institution will be established
- The lot development construction will be completed
- Inter-Korean Economic Cooperation Consultative Office will be opened
- The South and the North will start consultation on electricity and telecommunication businesses
o Second half of 2004
- Lots of the first stage of the Gaesong Industrial Complex will be parcelled out
- Businesses will move into the model complex
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