N. Korea must keep promises for Kaesong complex to succeed: official

SEOUL, Oct. 16 (Yonhap) -- North Korea must keep promises made in the past if progressive development of the inter-Korean factory park in Kaesong is to be achieved, a government official said Wednesday.

The unification ministry official said it is important for Pyongyang to realize that keeping promises is critical for building trust that can become a starting point for sustainable cross-border relations. The insider, who requested anonymity, said Kaesong must be transformed into an industrial hub where common sense and international standards are applicable.

"Seoul is committed to persistently meeting such goals, and will act firmly to unreasonable actions taken by Pyongyang," he stressed. He did not elaborate on what resolute actions could be taken.

The remarks were made a day after the North responded to Seoul's message saying that the planned investor relations (IR) event for foreign companies should be postponed. The gathering for businesses interested in setting up operations at the Kaesong Industrial Complex was originally set for Oct. 31.

Seoul had originally sent a statement to the North late last week calling for the IR event to be put on hold until overall conditions improve. It cited the lack of progress in key areas such as changes to rules for government communication, Internet connectivity, customs inspections and the movement of people to and from Kaesong.

Reforming various rules in the running of Kaesong had been a key factor in the agreement reached in August that set the stage for the reopening of Kaesong on Sept. 16. All operations at the complex located just north of the demilitarized zone were shut down in early April.

The North had agreed to make changes that would enable the special economic zone to be truly competitive on the global market during the long-drawn negotiating process, yet it has been less willing to engage in talks when South Korean companies resumed operations there.

Relations experienced a low ebb after Pyongyang detonated it third nuclear device in February, but they seemed to have improved with the agreement to reopen Kaesong. They again turned sour after the North unilaterally postponed a family reunion event for people separated by the 1950-53 Korean War. The North then started turning up its verbal attacks against Seoul and South Korean President Park Geun-hye.

The cooling of relations, meanwhile, has raised anxieties for local companies with factories in Kaesong, who have complained that they were not receiving the kind of orders that existed before the shutdown.

The complex that started churning out products in late 2004 produced US$469.5 million worth of goods last year. It has 123 South Korean companies and hired over 53,000 North Korean workers. At present, 118 companies are back on-line employing 44,000 workers.

Businessmen claimed that the complex was operating at 40-50 percent of full capacity and not 80 percent as reported by the unification ministry.

"With a drop in orders there are even companies considering halting operations at Kaesong," one source argued.

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