S Korea to build industrial complex in N Korea

SEOUL - A North Korean industrial complex for South Korean firms is expected to generate US$600 million annually for Pyongyang in value added after its completion, South Korea's central bank said.

The 28-million-square-meter complex, to be completed in 2011, will also create 730,000 jobs in the North by 2012, according to a report released by the Bank of Korea (BOK) on Sunday.

The BOK added that the complex in the border town of Kaesong would generate 24.4 trillion won (US$21 billion) in value added and 83.9 trillion won worth of output in South Korea after completion.

The complex will also create 100,000 new jobs in South Korea by 2012, it said.

The BOK added that the complex will have a positive influence on the economies of the two Koreas, even during the construction process.

The complex is being built in three phases. The first phase of construction is expected to be finished by the end of 2006, with the second phase to be completed in 2010.

It estimated that 84,000 jobs will be created in North Korea after the first phase of completion, or from 2007. The number is expected to increase to 194,000 after the second phase is finished.

In South Korea, the complex is to generate 9.4 trillion won worth of output and 2.7 trillion won in value added annually after the first phase of completion, the BOK said.

In 2010, it will generate 21.7 trillion won in output and 6.1 trillion won in value added in South Korea, it said.

The complex, being built by South Korea's Hyundai Asan and the state-run Korea Land Corp, is one of the most prominent symbols of inter-Korean reconciliation, which was set in motion by the first-ever summit of the leaders of the two countries in 2000.

Located only a few kilometers from the truce village of Panmunjom, the complex is to be used by hundreds of South Korean garment manufacturers and other labor-intensive companies that want to relocate facilities there to use cheap but skilled North Korean labor.
The industrial complex will later be linked with a cross-border railway being built by the two Koreas.

(Asia Pulse/Yonhap)