North And South Korea Economic Cooperation Mode To Explore

The emergence of a new era following the end of the Cold War requires both Koreas to implement new approaches toward each other. Since the adoption of Korea's"7.7"doctrine, both Koreas have gradually increased interaction. Due to South Korea's unification policies linking politics and economics as well as the lack of a mature investment environment in North Korea, there has not yet been significant progress in inter-Korean economic cooperation. Since Kim Dae-jung's administration adopted the"Sun Shine"policy, emphasizing the separation between politics and economics, both sides have increased interaction. The most important aspect to date inter-Korean negotiations has been economic. The Kim Dae-Jung and Roh Moo-Hyun administrations believed economic cooperation would lead North Korea to more openness in its interactions with South Korea. However, domestic policies aimed at increasing interaction with North Korea are controversial as to the benefits, if any, they would provide to South Korea.Kaesong Industrial Complex(KIC) is the centerpiece of inter-Korea economic cooperation, for it promotes the cross-border exchange of personnel, technology, and capital. KIC project serves both geopolitical and economic purposes. Geopolitically, it provides a channel for rapprochement between North and South Korea, a bridge for communication, a method of defusing tensions, and a way to expose North Koreans to different ways of doing business. Economically, KIC provides small and medium-sized South Korean firms with a low-cost supply of labor for manufacturing products. Concurrently, North Korea improves its dismal economy by boosting foreign investment.In order to implement KIC project successfully, there are several obstacles in need of resolution. These obstacles include the'Export Control'issue, the original place of KIC products, and communication delays and barriers, involving customs and transportation.