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Economics of the Kaesong Industrial Complex

Korea's Economy
About Korea's Economy

Korea’s Economy is KEI’s annual journal publication dedicated to the key issues of the day for the Korean economy. Articles in Korea’s Economy are designed to give the casual, but informed reader insight into issues related to Korea’s markets and financial institutions, economic reform, economic relations with the wider world, and North Korea. It is published jointly each year with the Korea Institute for International Economic Policy.

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Economics of the Kaesong Industrial Complex
Published May 25, 2011
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Worldwide interest has been focusing on the Korean peninsula recently. The security situation on the Korean peninsula, which went from bad to worse after the North Korean nuclear test in October 2006, is now stabilizing after the agreement among the participants at the six-party talks on 13 February of this year. There is now a growing expectation of a normalization of relations between the United States and North Korea. Meanwhile, the South Korea–North Korea relationship is running before the wind. There was a call to stop economic cooperation between South Korea and North Korea after the North Korean nuclear test. Some conservatives have claimed that the cash paid to North Korea through the development of the Kaesong industrial complex is flowing to North Korea’s army. In some ways, these allegations do make sense because the two Koreas are still technically in the status of a cease-fire, and 1.8 million soldiers are standing face-to-face across the 155-milelong Demilitarized Zone (DMZ). However, these fears and tensions can be alleviated by visiting and investigating the reality of the Kaesong industrial complex.

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