Facts about Kaesong joint industrial estate in North Korea
South Korea announced on Wednesday it would completely shut down all operations at a jointly run industrial park in North Korea to punish Pyongyang for its latest rocket launch and nuclear test. The move marks the first time Seoul has shuttered the Kaesong estate since it opened in 2004. Here are some key facts about Kaesong: WHAT IS KAESONG? Kaesong is formally labelled as a special administrative industrial region of North Korea. It is operated as a collaborative economic development zone that hosts South Korean companies attracted by its source of cheap, educated, skilled labour. Kaesong was born out the "Sunshine Policy" of inter-Korean conciliation initiated in the late 1990s by South Korean President Kim Dae-Jung which led to a historic summit with North Korean leader Kim Jong-Il in 2000. Established in 2004, the Seoul-funded zone was the last surviving example of substantive inter-Korean cooperation, after contacts between Seoul and Pyongyang were frozen in 2010. WHERE IS IT? Kaesong lies 10 kilometres (six miles) inside North Korea, with direct road and rail access to the South. Hundreds of South Korean managers and other workers pass through the border crossing leading to Kaesong every day. Their names are transmitted in advance to the North Korean side, which then gives the go ahead for them to cross. WHO WORKS THERE AND WHAT DO THEY DO? There are currently 124 South Korean companies operating in Kaesong, nearly 60 percent of them textile units, along with machinery electronics and chemical manufacturers. They employ more than 54,000 North Korean workers, while about 800 South Korean managerial staff work in Kaesong on a regular basis. HOW SUCCESSFUL HAS IT BEEN? The South Korean government and companies have invested a total of $852 million in the zone. After a slow start, they reported an average operating profit for the first time in 2011. Turnover in 2014 was reported at $470 million, with accumulated turnover from 2004 to 2014 standing at $2.66 billion. WHY IS IT SO IMPORTANT TO NORTH KOREA? Kaesong is a vital hard currency source for Pyongyang. North Korean workers there earn an average monthly salary of about $150. In 2012, the North sent tax notices to eight of the companies who had been based their the longest, demanding tax payments of amounting to $160,000.
