Massive special loans for firms in Kaesong

By Park Sae-jin Posted : February 25, 2016, 10:55 Updated : February 25, 2016, 10:55

South Korean government officials wait in an office to support firms in Kaesong.[Photo by Yoo Dae-gil]


South Korea decided Thursday to extend 550 billion won (445 million US dollars) in special low-interest loans to firms kicked out of a suspended inter-Korean industrial zone.

The decision was approved by a special government task team under the prime minister's office, which also agreed to extend the maturity date of outstanding loans to South Korean firms doing business at the Kaesong joint industrial complex.

The suspension of operations at Kaesong, a symbol of inter-Korean cooperation and reconciliation, followed soaring cross-border tension over North Korea's nuclear and long-range rocket tests.

South Korea has shut the complex down to cut off North Korea's remaining source of hard currency, accusing the nuclear-armed country of stepping up nuclear and missile programs despite repeated warnings from the international community.

The industrial estate, which lies just 10 kilometers (six miles) over the border in the North, hosts about 120 South Korean firms employing some 53,000 North Korean workers.

Kaesong is a key earner for the cash-strapped North. The hard currency wages are kept by the state, which passes on a fraction in local currency to the workers.

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