Joint Operation of a Special Economic Zone by Enemies: The Case of Kaesong Industrial Complex


Walsh, John, “Joint Operation of a Special Economic Zone by Enemies: The Case of Kaesong Industrial Complex,” The International Journal of Nepalese Academy of Management, Vol.2, No.1 (2014), pp.80-92, available at:

I was able to pick up a hard copy from the editor Dr Dhruba Kumar Gautam during my recent trip to ICMC 2014 in Greater Noida.

Abstract: Special economic zones have become important means by which states can hope to enact various developmental goals. They are used in a wide variety of environments and situations and thus have evolved to meet the conditions in which they are expected to operate. However, joint operation by enemy states is a venture that has not been tried in this way before. The border between North and South Korea is one of the most intensely contested in the world; periodic outbreaks of violence have punctuated the sixty years since the Korean Civil War was calmed by a ceasefire. The increasing inequality across the border, as the South has become a successfully developed capitalist country and the North has regressed into poverty and hunger, acts as a further stimulant to disorder. To reduce tension and promote cooperation, the South Korean government proposed various joint cross-border economic ventures, the most persistent and successful of which has been the Kaesong Industrial Complex, involving Southern capital and know how and Northern labour and land. The venture has been successful in terms of employment generation and production volumes but it has been bedeviled by political and managerial problems. This paper takes a case study approach to the situation with a view to exploring the issues involved and how problems have been managed to date. The path ahead remains a precarious one.

Keywords: cross-border ventures, Kaesong Industrial Complex, Korea,


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