Inter-Korean Cooperation in Special Economic Zones: Developments and Perspectives

Abstract

Already in 1998 then South Korean President Kim Dae-Jung had articulated the new “Sunshine Policy ” calling for peaceful coexistence of the two nations, including the prospect of aid and bilateral economic cooperation as well as a long-term unification proposal (Ahrens, 2003, p. 53). The historic summit between Kim Dae-jung and Kim Jong-il in June 2000 gave additional hope for a gradual and peaceful integration of both the Koreas (Kim, 2003, p. 118). Consequently, political contact between the two Koreas evolved and various cooperative projects were initiated. Two Special Economic Zones (SEZs) have been established in North Korea close to the border with the South: the Kaesong Industrial Complex (KIC) and the Mt. Kumgang Resort. These SEZs have to be mentioned as the core of the current Korean economic cooperation (Lim and Lim, 2006, pp. 48–49). In contrast to the two other SEZs in North Korea, the Rajin-Sonbong and the Sinuiju SEZ, these two were quite successful during the “Sunshine” period (2000–2007) and hope is still high. But since the 2008 inauguration of the new administration in South Korea, North–South relations have deteriorated dramatically. The Lee Myung-Bak government tied further cooperation to demonstrable steps toward ending the North’s nuclear weapons program . Previous progress made began to unravel further when the Mount Kumgang Special Tourism Zone was closed in the summer of 2008 after North Korean guards shot and killed a South Korean tourist and after the imprisonment of a South Korean staff member in the Kaesong Industrial Complex by North Korea in the spring of 2009.