- The Washington Times - Monday, June 30, 2003

KAESONG, North Korea (AP) — In a farm field less than a mile behind the world’s most heavily armed border, Pyongyang and Seoul broke ground yesterday for a joint industrial park, a symbol of reconciliation despite tension over the former’s nuclear activities.

North and South Korea hope to build the park in Kaesong, an ancient Korean capital just north of the demilitarized zone. The DMZ was created to separate the two Koreas at the end of the 1950-53 Korean War.

Five buses carrying 120 South Korean government officials and businessmen arrived for the ceremony to the site, where they hope to create an industrial park providing investors from their country with cheap labor and North Korea with badly needed cash.

For all the pomp, the industrial zone is vulnerable to the North’s inexperience with capitalism and to political tensions. Pyongyang is suspected of developing nuclear weapons, and the United States is considering economic pressure to force the North to give up its ambitions.

“Many factories will rise from this field, and workers of both Koreas will work together and sweat together,” said Kim Jin-ho, president of the South’s government-run Korea Land Corp., which is in charge of building the park.

Lying 43 miles north of Seoul, Kaesong will be linked to the South Korean capital by a cross-border railway and road under construction. A temporary dirt road now runs through the mine-strewn DMZ.

Communist North Korea is an unattractive place to invest, owing to its isolation, political uncertainty, decrepit infrastructure and lack of legal guarantees. Yet, 900 South Korean businesses, many of them textile and clothing makers, have applied for spots in the industrial zone, hoping to get a foothold in an untapped market and benefit from cheap labor.

North Korea says it will promote light and high-tech industries at Kaesong. Investors will receive tax cuts and other benefits, but are required to build infrastructure.

Many details, however, have yet to be worked out, and construction is not expected to begin until next year.

In the first phase of the industrial zone, the South Korean government and the Hyundai corporation will invest $184 million to develop 3.5 million square feet for about 300 businesses by 2007.

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