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THE WORLD'S STRANGEST INDUSTRIAL ZONE

Editor's note: Ian's report from Korea for tonight's broadcast will not air tonight as previously noted here. We will re-post this blog when his piece is rescheduled.

It must be the world's strangest industrial zone - a zone where cell phones and western newspapers aren't allowed, but described by its supporters as a blueprint for a unified Korea.

Reaching the Kaesong Industrial Complex isn't easy, since it sits just the other side of the world's most fortified border, the rather inappropriately named demilitarized zone (DMZ), separating the two Koreas. A dedicated road has been laid across the DMZ, passing through four fences - two on the southern side, two on the north, the gates manned by soldiers from the opposing armies. The road itself is fenced in, the land on either side littered with mines, watchtowers and bunkers. Yet everyday around 300 vehicles make the journey, servicing the rapidly expanding complex beyond.


"We had a bit of a slowdown last year after the North exploded a nuclear device," explained a cheerful Kim Dong Keun, chairman of the management committee of the complex, and one of 500 South Koreans working there. "Now things are really moving again. It's a mini-unification!"

It's supposed to be a marriage of South Korean technical and industrial know-how with North Korean low-cost labor. The workers are from the North; the bosses from the South. More than twenty companies from the south have so far begun operations here, making mostly consumer goods, including sports shoes, clothes, cosmetics, handbags and watches.

"Costs are even lower than in China," said Hwang Woo Seung, the beaming President of Shinwon, a clothing factory where 830 North Koreans, supervised by nine from the south, were sewing traditional Korean dresses in a large, clean and well-lit building in the center of the complex.

Not that the South Korean companies can choose their workers. They put in a request through the North Korean government, which supplies them, bussing the workers into the complex every day from the nearby city of Kaesong, where nobody from the south is allowed.

Mr. Hwang says he has no complaints about the quality of the workforce, saying they are hardworking and disciplined.
The monthly pay - around $70 per worker - isn't paid directly to the workers, but to North Korean Government, an arrangement that has been criticized by Washington. The companies insist the workers do get paid "after deductions," though
Seoul-based Peter Beck of the International Crisis Group believes the take-home pay is more like $10 per month, the Government paying them in local currency at an artificial exchange rate.

"Still," he says, "that's probably as good if not better than they would get in a North Korean factory."

I tried to speak to several of the North Korean workers. They were reluctant to talk about how they got the jobs or whether they get all their pay. Though they did seem pleased to be there.

"My family is very proud of me working here," said one.
Another told me: "My friends are really envious."

On the surface, that didn't give too much away. But it was remarkable for what they didn't say. There was no mention of the benevolence of the Dear Leader, the answer to almost any question during my three previous visits to the North.
There are 12,000 North Koreans, mostly women, working in the complex, which is surrounded by a tall green fence. There are plans for a massive expansion, Mr. Kim of the management committee talking of more than 300,000 workers. Land is being cleared. It is a hive of activity, in rather stark contrast to the drab villages just beyond the fence.

"Do not film those villages," one of our guides told us, "or all your tapes will be taken away."

Our closely supervised tour also took in the fire station, a bank and an electronics factory. The North Korean workers all religiously wore lapel badges with the image of Kim Il-Song, the founder of North Korea, who, though dead, remains President.
The Complex now wants to attract foreign investors.

What if the North's leader Kim Jong-Il slams the gate shut, I asked.

"We have investment guarantees," replied Mr. Kim of the management committee. "No need to worry."

The Complex has also been a bone of contention between South Korea and the United States during negotiations for a free trade agreement, now signed. Seoul wanted the Kaesong products included under the deal. For now the two governments have agreed to disagree, though the South Korean authorities believe that if there is further progress in the nuclear talks, Washington will
throw it's door open to goods from the complex.

According to Peter Beck of the ICG, the complex also poses a dilemma to the North's famously paranoid leaders, who only recently expelled aid workers it feared were "contaminating" its people.

"This is the ultimate dictator's dilemma. If the North doesn't open up then conditions will get worse and worse for its people. But if it does open up and conditions get better, that will create rising expectations."

Though they are mostly segregated, contacts between North and South Koreans in the complex are growing. It is a rather surreal world, but one that does perhaps give some hope to those beyond the fence.