| Seoul to raise insurance payouts for losses at Kaesong |
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By Tony Chang SEOUL May 22 (Yonhap) -- The South Korean government decided Friday to raise the maximum insurance payout for companies operating in an inter-Korean industrial complex to reassure businesses after Pyongyang annulled all contracts governing the venture. Pyongyang announced last week it was invalidating contracts with South Korea on the operation of the Kaesong industrial park. Opened in 2004 as a symbol of reconciliation and funded by Seoul, the complex located in a North Korean town just north of the heavily fortified border faces its biggest crisis yet. More than 40,000 North Koreans work at Kaesong for 106 South Korean firms, producing items such as garments, kitchenware and watches at the complex that combines the capitalist South's technology with the North's cheap land and labor. The South Korean Unification Ministry said in a statement that the government has decided to raise the maximum payment for "economic cooperation insurance" to 7 billion won (US$5.6 million), up from the current 5 billion won. The insurance covers companies' facilities investments in case of an abrupt shutdown of the complex. The date for the changes to go into effect will be determined following coordination with related government agencies, the ministry said. The ministry also said it plans to revise the insurance regulation so companies will be eligible for payment one month after closing. Currently, they become eligible after three months. The decision came amid increasing calls by conservatives in the South for the government to prepare to pull out of the joint park if the North unilaterally revises the contracts. In a parliament meeting, Unification Minister Hyun In-taek reasserted that his government is not considering withdrawal, but will continue to press for dialogue with Pyongyang to resolve the dispute. "The South and the North should cooperate for the stable development of the Kaesong industrial complex and resolve all issues through dialogue," Hyun told lawmakers. The government also decided to provide 2.36 billion won to build a new inter-Korean logistics management system to efficiently manage the flow of goods across the border. The Kaesong complex, just an hour's drive from Seoul, is the last surviving reconciliatory project between the two Koreas. All tourism programs to the North's attractions were suspended last year due to unraveling political relations.
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http://english.yonhapnews.co.kr/northkorea/2009/05/22/0401000000AEN20090522006500315.HTML
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