Mick Hartley

The Kaesong Industrial Zone has only just re-opened, and already the North Koreans are planning Mark 2:

North Korea has agreed with an international consortium to develop a new high-tech district in Kaesong, close to the newly-reopened industrial zone it operates with the South, state media said Friday.

The jointly-run Kaesong industrial zone was shut in April amid high cross-border tensions. Seoul and Pyongyang agreed last month to reopen the park, but relations have since soured again.

The North's announcement of a new international deal came after South Korea said Monday it had postponed a planned investment road show aimed at drumming up foreign interest in Kaesong.

Seoul said the move reflected a recent downturn in relations and slow progress at talks aimed at resuming full operations at the complex.

Pyongyang's Korean Central News Agency (KCNA) said the North had reached an agreement on building a "high-tech development district" in Kaesong with a consortium of East Asian and Middle Eastern companies including Singapore's Jurong Consultants and OKP Holdings, and Hong Kong's P&T Architects & Engineers Ltd.

"They will soon enter the implementation phase of the project", it said, adding that the consortium also agreed to enter a joint venture with the North to build a highway linking Pyongyang's airport to the city.

South Korea's Unification Ministry spokesman said it had no official comment, but stressed the project had "nothing to do with the existing Kaesong zone".

The firms named by KCNA were also tight-lipped about their participation.

OKP Holdings said its involvement was "in the preliminary stages", while Jurong and P&T both declined to comment….

North Korea effectively shut down Kaesong, which lies 10 kilometres (six miles) on its side of the border, when it withdrew its 53,000 workers from the complex in April.

As military tensions eased, Seoul and Pyongyang agreed last month to reopen the industrial park, but relations have since soured again, with the North railing against what it sees as the South's "hostility".

South Korea has been pressing for foreign investment in Kaesong, believing the presence of overseas firms would make it harder for Pyongyang to shut down the complex in the future.

But many experts question who would be attracted by a project run by two countries that are still technically at war.

And why would anyone be attracted to a project which will be subject to the whims of an insane dictatorial system which could close the whole thing down at any time in a fit of pique at some supposed slight?

The answer, of course, is economics: the investing companies are getting a compliant workforce at a dirt cheap price. What they don't yet realise is that any agreement with Pyongyang, any guarantees, will prove in the end to be worthless.

On the one hand the whole business stinks. The workforce is, effectively, slave labour, paid off with choco pies. The money is pocketed by the regime to finance their self-aggrandising schemes and to strengthen the military. And they have another hostage to fortune that they won't hesitate to use come the next show-down.

And yet….and yet….there is that contact with another system; that chance of contamination from the impure capitalist wind. If the regime needs to employ three security personnel for every five workers, surely at some point the whole thing will – to use the appropriate Marxist terminology – collapse under the weight of its own contradictions.