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Kaesong Plants Will Create 830,000 Jobs
The Kaesong Industrial Complex, under development in North Korea, could create as many as 829,000 jobs over the next decade, the Bank of Korea (BOK) estimated on Sunday.
The central bank said the industrial park in Kaesong, on the northern side of the Demilitarized Zone (DMZ), would create 104,000 jobs for the South and 725,000 for the North over the next 10 years.
The BOK forecast that job creation will be active from 2008 or 2009 as it will take around nine years to complete the construction.
In addition, South Korea will be able to generate 24.4 trillion won in economic value added in 2012 from the Kaesong complex, equivalent to 3.4 percent of the gross national income (GNI) last year, the BOK said.
In 2012, North Korea will be able to generate $600 million from the inter-Korean complex, 3.3 percent of its GNI last year, the BOK added. ``The North will see its revenue from the park reach $2.28 billion in 2021.''
The BOK made the prediction on the assumption that 19,000 South Korean companies are to be housed in the industrial park for the next eight years. ``It depends on the South's capability to create manufacturing start-ups,'' it reported.
If Southern companies run factories in Kaesong after closing down their operations in the South, however, the Southern economy may see a temporary loss of jobs and production, the BOK predicted.
The BOK said many South Korean companies will invest in Kaesong only when they find the northern complex more attractive than China.
At the Kaesong Industrial Complex, wage levels will stay at $57.5 a month, lower than those in China, they said. ``Land prices are also very reasonable, and the highest level of corporate tax will be just 14 percent,'' they said.
BOK Governor Park Seung stressed the need for deepening cooperation with the North. In his recent speech in New York, Park recommended that South Korean firms relocate their labor-intensive industrial facilities not just to the Kaesong Industrial Complex but throughout North Korea.''
He expects a growing number of South Korean firms to take full advantage of low wages and other attractive business conditions in the North. Park said the Kaesong project is a small but meaningful step toward a possible reunification.