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But communications woes in Korean industrial complex a stumbling blockIT IS an odd site for an industrial complex: To reach it, you drive through checkpoints manned by armed infantry and over the world's most heavily fortified frontier, with its "dragon's teeth" tank traps, fortified observation posts and acres of minefields.自存倉It is an odd place to do business. It has no Internet access, nor are cellphones permitted; the complex's sole bank conducts transactions by fax.But the Kaesong Industrial Complex, just a few minutes' drive north of the inter-Korean border, itself an hour's drive from Seoul, is vital for South Korea. It represents the capitalist South's only economic bridgehead in the impoverished North Korea.Established in 2003, it covers 3.3 million sq m and is occupied by 123 small South Korean factories which employ some 53,000 North Koreans, working for about US$160 (S$200) per month.It has weathered multiple political storms - nuclear tests, shellings, sinkings - but was closed amid inter-Korean tensions in April. After negotiations, it reopened on Sept 16.On Thursday, some 30 delegates to the Group of 20 conference in Seoul, comprising government officials, central bankers and diplomats, made a rare visit to the zone, which is now hoping to lure investment from beyond the two Koreas.On the same day, the two Koreas held talks in Kaesong on the complex's globalisation. A South Korean official said there are plans under way for a joint North-South seminar for foreign firms.Beyond the North Korean customs office and inside its fenced-off perimeter, the complex's four-lane roads are largely empty: Blue-uniformed North Korean traffic police at intersections stand idle.Against a backdrop of barren, snow-covered hills, reflecting chilly inter-Korean relations, the South Korean-built buildings are modern if utilitarian. There are no power outages; Seoul supplies the electricity, via cables that straddle the 4km-wide demilitarised zone.South Korean Hong Yang Ho, who chairs the zone's management committee, was upbeat.In a spiffy presentation, he outlined the benefits of investing in the zone: affordable plant, skilled labour, tax benefits, low logistics cost, even South Korean government funding.Delegates were then shown products made here - clothes, shoes, underwear, make-up compacts, rice cookers, watches - before visiting a water purification facility and two firms.Some tenants clearly see it as a mission. ShinWon, a clothing company, has built a church in the complex - though it is used for fashion shows and concerts. Its spokesman offered delegates a prayer, asserting that the complex "had not been built by humans, but by God".The factories of ShinWon and Samduk Stafild, a sports shoe maker, were brightly lit and well appointed. Hundreds of North Korean workers were busy sewing.Most were camera-shy and declined to speak. But one of them, Ms 迷你倉ee Yang Hee, said there had been no fallout from Pyongyang, where the regime's No. 2 leader was executed last week. "Regarding Jang Song Thaek, it's his own problem," she said. "The people of North Korea are good, and they are doing their best."Cultural differences are minimal. "Since we are the same folk, we are able to communicate in Korean and are very comfortable," said Mr Kim Chun Lim, an affable North Korean official.But South Korean staff say they have minimal contact with Northern workers, who are bused in daily from the nearby city of Kaesong. Southerners and Northerners eat in separate canteens. They fraternise only during coffee breaks and discuss only "light" topics.Still, some delegates were cautiously hopeful. "What we saw in Europe after World War II was that economic integration can solve political challenges," said Italian think-tank director Domenico Lombardi. "That might be the lesson Korea can draw."Mr Hong said foreign firms had voiced concerns over lengthy customs clearance and communications issues, with visits having to be requested three days in advance and there being no Internet or mobile phone access.While ongoing negotiations with the North have yielded some progress on the issues of customs and visits, there was none on communications.The complex covers only 40 per cent of its total land area; at full capacity, it would host 250 companies and 120,000 workers. Current Kaesong firms are largely low-tech and labour-intensive. South Korea's flagships are not represented. Samsung Electronics declined to discuss Kaesong, calling it a "political" issue, and Hyundai Motor said the park did not fit its business portfolio.With South Korean investment static, it is unclear if foreign companies will leap in.Given that it was launched purely as a North-South initiative, it was unsurprising there has been no foreign interest so far, said Mr Christoph Heider, secretary-general of the European Chamber of Commerce in Seoul.But he added that some firms, including a German shoemaker, had been interested in outsourcing some production to Kaesong.Risk consultants see little attraction. "Kaesong's recent closure underlines that the park is a hostage to volatile relations, UN and US sanctions on North Korea make compliance costs onerous and Kaesong's cheap labour raises reputational risks," said Mr Kit Dawnay, a China-based analyst with Aegis Defence Services."The industrial park is essentially a Korean initiative with strategic goals; Why choose Kaesong when you could go to Ho Chi Minh City or Shenzhen?"But others see Kaesong's value as a change agent in the isolated society. "There is an 'information effect' from Kaesong," said Mr Park So Keel of Liberty in North Korea, a non-governmental organisation assisting North Korean defectors. "It is having a long-term effect which I think increases change in North Korea."andrewcsalmon@yahoo.co.ukmini storage