Two Koreas Offer Glimpse Of Joint Industrial Zone

Despite concerns about North Korea's nuclear intentions, both countries show off sprawling facility to would-be foreign investors.

KAESONG, North Korea (AP) - The two Koreas showed off their landmark joint industrial zone to potential foreign investors Thursday, despite concerns North Korea could be planning its first long-range missile launch in almost eight years.

Executives from about 80 foreign or foreign-invested companies based in South Korea toured factories at the two-year-old Kaesong Industrial Complex located just north of the heavily fortified demilitarized zone separating the countries.

The industrial park is a symbol of inter-Korean reconciliation, set in motion by a historic summit between their leaders in 2000. It combines South Korean technology and management expertise with North Korea's cheap, abundant labor.

Officials in the zone stayed on message, emphasizing the vision of the two Koreas putting politics aside and working together. South Korean officials said a possible missile launch wasn't a big concern, while North Koreans tended to stick to standard slogans.

''Our company, we just (want to) make money, we don't worry about politics,'' said Kwon Soon-jin, a South Korean and general manager at SD Trading Co., a South Korean company making athletic shoes in the zone and employing North Korean labor.

The foreign executives mostly appeared to take a wait-and-see attitude, using the trip as a chance to catch a glimpse of North Korea.

''Down the track, maybe there's potential to do business here,'' said Seoul-based Charles Henry, president of Tupperware Korea. ''I think it's some distance off.''

North Korea, which since 2002 has embarked on limited economic reforms and encouraged trade with China and South Korea, has at the same time flexed its muscles, deflecting international efforts to end its nuclear programs and pursuing development of a long-range missile.

Tensions have heightened this week, amid apparent preparations by the North to test what analysts think may be an advanced version of its Taepodong missile launched over Japan in 1998, and which could be capable of reaching the United States. North Korea said at the time it was a satellite.

North Korean officials sent to act as interpreters and guides for the visitors parried queries about the missile issue.

''We are a peaceful country,'' Chang Mi Son, wearing a white dress with a badge depicting North Korea's founding father Kim Il Sung, said in fluent English. ''We want peace.''

Officials had considered delaying the trip over the missile issue, said Yoon Man-joon, president and CEO of Hyundai Asan Corp., the South Korean company spearheading business in North Korea.

''However, we concluded that our continuous process'' of inter-Korean projects ''would be of help to reduce the tension surrounding the Korean Peninsula,'' Yoon told participants in Seoul before the trip.

The capitalist, highly developed South is betting that the Kaesong project will encourage further economic reform in its communist rival and make easier eventual unification for the countries, divided since the end of the Korean War in 1953.

The site sits on 1,100 hectares (2,720 acres) surrounded by hills, farmland and a few ramshackle hamlets that highlight the poverty of the North, where decades of Stalinist-style management have left it economically weak but militarily formidable.

Though the zone, located within the city of Kaesong, has yet to attract major companies, it has had a dramatic effect on inter-Korean trade, which in 2005 topped US$1 billion (euro791 million) for the first time, boosted by a quadrupling of trade at Kaesong.

About 6,000 North Koreans work for about a dozen South Korean companies in the enclave, assembling goods including shoes, cosmetic cases and clothing for export to the South. One of them is a joint venture with a Japanese company.

''For the region, these attempts to heal wounds are certainly important,'' said Pietro A. Doran, chairman of Seoul-based investment fund Doran Capital Partners, who traveled to Kaesong.

The workers earn a monthly minimum wage of about US$50 (euro40), of which 30 percent is deducted for a North Korea-run social welfare fund for workers.

South Korea's Unification Ministry and Hyundai Asan envision up to 2,000 firms filling the sprawling park by 2012.

The project has led to a dispute between South Korea and the United States after the U.S. envoy on North Korean human rights, Jay Lefkowitz, recently raised concerns about alleged ill-treatment of workers.

Lefkowitz may visit the enclave next month, U.S. Ambassador to South Korea Alexander Vershbow said last week after a trip to the site.

South Korea wants to include goods made at Kaesong in a free trade agreement being negotiated between Seoul and Washington. U.S. officials oppose the idea.

Officials from some South Korean companies, foreign diplomats based in Seoul and journalists also participatted in the one-day trip.

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