Kaesong Industrial Complex Part I: Introduction

A Case Study on Globalization's Reach into North Korea

Since the beginning of this year, I have been collecting information on the Kaesong Industrial Complex, which lies just across the North Korean border from South Korea near the city of Panmunjom (see map). The park is an economic experiment between the two Koreas, initiated first as an idea around 2000 during the presidency of Kim Dae-Jung, the founder of the infamous "Sunshine Policy" towards North Korea.

My primary curiosity in Kaesong began when I became interested in the role of supply chain logistics in "shrinking the Gap," a subject I have admittedly been drum-beating on a regular basis but which to me is an exciting area for discussion. In terms of the phenomenon itself, the subject is not new. But the purposeful and conscious application of supply chain logistics in the areas of economic development in post-conflict/post-disaster scenarios, combined with its parallel application in terms of political, security and people flows seems relatively unchartered. I base this on having been educated by three of the top supply chain professors in the United States--Dr. David Closs (Michigan State), Dr. Don Bowersox (Michigan State), and Dr. Joe Cavinato (Thunderbird). If anywhere, this type of conscious application is occuring most inside America's military institutions and in the private sector by the world's top logistics-capable firms.

But these activities are somewhat siloed in the sense that the private sector will do its best covering economic flows and the military its best handling security flows. Coordination arrives ad hoc to cover the delivery of humanitarian aid (where public and private sector seem to be increasingly in convergence), while political flows are seen as a separate responsibility for governments to handle, and people flows managed by a bureacracy of non-standardized, governmental processes.

Thus, especially in today's underdeveloped countries (the "Gap"), there are significant lag times across the four flows depending on their context. Even where sequencing of flows and their stages of progress is necessary, in the above siloed phenomenon, there is no integrating system to manage what sequence is best, at what timing, and in what location. This type of scenario is a set-up for setbacks, repeated mistakes and high probabilities of failure--all in all leading to a prolonged state of underdevelopment. That is of course assuming there are any connectivity flows at all! As we see in the case of North Korea, it is a country seeing very little of the four flows of connectivity (i.e. globalization), and at very low quality levels when it does.

And yet, there is this seeming anamoly of Kaesong.

My purpose for this case study is to deeply explore the Kaesong project utilizing the FAR Matrix. This will involve analyzing Kaesong's current status in terms of economic, political, security and people flows and dissecting each flow by supply chain architecture: physical, financial, informational, relational and innovational. Finally, based on this analysis, I believe we can come to some conclusion on whether the project is currently successful as a "Gap shrinker," and speculate on its future.

This will be a somewhat ambitious and tedious task, but a useful and interesting process nonetheless.

NOTES: All sources, unless linked in text, will be listed at the end of the case study for further reference. 

Comments

[hi hi]

nice bio