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Tale of Two Countries: the Two Koreas

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There are dates that go down in history and some will be remembered as landmark signals of changing times. Russia has the upper hand in Syria. The USA is not as gung-ho as they might have led the rest of the world to believe about starting another war. Russia and China have both given lessons of a preaching-tone on the way that theNational Security Agency has eavesdropped on the world and the Obama administration has gone haywire on giving secret information to the Israelis so that they too can exploit it. What has happened to the world? Now, one other date will probably go down in memory as a historic change of our times. That date will be today, Monday September 16thand the reopening of the joint North and South Korean industrial zone that has reopened its operations in Kaesongfive months after been closed down due to military tensions between both sides.

  • In 2010 the sinking of a naval vessel that belonged to the South (that the latter blamed on its arch rival the North) created issues between both parties.
  • The military tensions came to a head when a South Korean tourist was shot dead.

At one time, it was the common belief that crushing your enemies was the only way in a dog-eat-dog world to do business. Reduce them to jittering rubble and pound them into dust to be scattered and forgotten was how business used to get done in the past. That was before the world realized that enemies are a good source of business themselves and if we want to be global rather than selling in our back-yard, you have to wear the smile of hypocrisy sometimes to sell to the people you hate.

The two Koreas’ tale is one such story; living in each other’s backyard and for decades keeping them at bay. Now they have got their acts together and are almost moving in with each other. Oscar Wilde once said ‘always forgive your enemies, nothing annoys them so much’. How very true. I am certain there are a few people we would all like to annoy just as much.


Kaesong Industrial Complex: the Two Koreas

Kaesong

So, maybe the re-opening of the border and the industrial zone inKaesong is the forgiveness to the other side that will crush the opponent or it’s a world gone mad in which North Korea has come to realize that it needs its neighbor and vice-versa.

  • Since April Kaesong has been a ghost town, devoid of the hordes of Koreans working there.
  • There were 53, 000 North Korean workers back then until they were pulled out.
  • Today, 820 South Koreans (businessmen and workers) crossed over the border again and it’s a clear sign of thawing in the relations in the on-going tale between the two countries.
  • There are 123 companies from South Korea that manufacture in Kaesong, making household goods and appliances.
  • That brings in about $2 billion per year in terms of trade for the North.
  • It also pays roughly $80 million in wages for North Koreans too.

Wages

But, it should be remembered that wages are paid to the North Korean state and in good organized and centralized fashion, it’s the state that pays the workers after taking its hefty cut.

  • Statistics on minimum wages or average salaries are not issued by the North-Korean state, but analysts have made estimates (based upon reports of foreign visitors, for example).
  • Wages in North Korean stood at between 50 and 100 won per month in the 1980s.
  • Most people earned about 70 wan on average.
  • By 2000, that had reached an average of 100 wan per month.
  • 100 wan works out to roughly 0.0924 US Dollars.
  • 100 wan is the average salary of an unskilled worker in North Korea.
  • A party official would earn two to three times that amount.
  • This is the official estimated salary that the state provides the people with along with rations to live on.
  • But, many North Koreans work outside of the state sector in order to earn more than the basic subsistence amount that is provided.
  • It is possible (according to reports) that some may earn today about $30 per month if they have influence in North Korea.
  • Just having a small shop will bring in some $100 per month.
  • Businessmen that are involved in manufacturing and that won workshops may have incomes of up to $500 per month.

However this is only true for a very small percentage of the population. It is also impossible to obtain anything more than an estimate and the figures cannot be proved for certain.   

Unification or Unity

After the opening of Kaesong today once again, North Korea stated via the state-run news agency KCNA: “The Korean peninsula's peace and peaceful reunification is our republic's consistent and firm stance”. Kaesong has long been seen as a showcase for the perfect reason to reunite the two Koreas. The South provides its know-how and its technological prowess, while the North provides the slave labor to manufacture that. Kaesong has existed for a decade now and was launched in 2003. It was South Korea that provided the financing.

The South Korean Ministry of Unification has been attempting to bring both sides into a close dialogue since 1998, promoting trade exchanges and negotiations for cooperation. The Ministry was downsized in the wake of the financial crisis in 2008. The target would be the unification of the two nations, which might seem highly unlikely both in the past and still today.

But, if the two parties actually work more closely together, then that would be a step in the right direction. Unite them perhaps not; become more liberal in their reactions towards and trade with each other is a different matter. Working together and tying the two countries in a common project such as Kaesong will inevitably lead to greater trust, which will in turn open North Korea to the rest of the world.

Cutting off trade between the two countries would mean forgoing $230 million imports that are ordered by the South from the North. The North also provides $50-million worth of textiles for the South. Being stopped from using South Korean waters would also mean that merchant and cargo ships from North Korea would have to make detours, involving increased use of fuel and therefore would result in greater costs that the poverty-stricken North already wouldn’t be able to put up with. Both sides have everything to gain.

Just last spring North Korea made threats that it would attack South Korea and also the USA (preemptive nuclear attacks). But, the North has been out of business for so long and isolated economically that it has no idea of how to do business. It is hardly known for its skills in diplomacy.

Threatening trade partners and then backing down and carrying on as usual means that people are wary of the volatility of the North and that’s bad for business. Kaesong should have held a fair to attract foreign investors inOctober this year. Some are doubtful of wishing to invest in a country that has a high-rate of volatility and for which it is almost impossible to determine what road they will be taking in the next few months and years. But, there are some, the most adventurous perhaps, that have taken the plunge into North Korea (notably the Netherlands).

The scene of the two Koreas is straight out of the Charles Dickens novel, a Tale of Two Cities. North Korea and South Korea have spent the past decades living a life of antagonistic difference that has unfurled an acrimonious and until-now ceaseless hatred between the two countries, where there has been an illusionary belief that each side was better than the other: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair”. Both have believed that they had the best of times in their own country. Both believed that it was the worst of times over the border for the others. Today that has changed and the epoch of belief is the idea that working together can only be beneficial to both North and South Korea. It may certainly be an epoch of incredulity not only for the Koreans but for the rest of the world.

What on earth will the world think of two arch-enemies that will be working together in a like-minded route to prosperity together? 

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