Kaesong and the Choco Pie economy

Kaesong is an industrial city that lies just north of the 38th parallel, presently part of North Korea. Since 2004 Kaesong has been the sight of an industrial complex where 123 South Korean companies produce a variety of goods.  The complex is a win-win proposition for both Koreas.  For South Korean companies there are about 53,000 North Korean employees who are well educated, skilled, speak Korean fluently, and provide cheap labor (about $110/month according to one source).  For North Korea the complex is a source of much needed foreign currency.

But let's step back in history.   Kaesong has not always been the industrial link between North and South Korea.  Way back in 919 it was the capital of all of Korea.  Jump ahead to 1950 and the start of the Korean War.  Kaesong was an entry point into South Korea during the initial invasion.  Five Methodist Missionaries and one German citizen were caught off guard in Kaesong and became part of what has been called "the long march" when they were captured by North Korea and became prisoners of war forced to walk for months through bitter cold winter and near starvation, to a prison camp in China.

Kaesong was the only Korean city to change sides.  Originally a South Korean city, it fell north of the 38th parallel division and was claimed by the north after the war.

Jump ahead again to 2011 when a new Kaesong issue developed.  South Korean companies were giving their workers Choco Pies during break time but not all companies gave workers the same number of the popular chocolate marshmallow cookie treat.  This caused an outcry.  Workers had developed the habit of selling at least some of their now famous Choco Pies on the North Korean black market, thereby boosting their family income.  The North Korean government considered Choco Pies a symbol of capitalism and attempted to have them banned from Kaesong.  Needless to say that was not a popular idea and the distribution of Choco Pies continued.

Fast forward to April 2013 when hostilities between the two Koreas resulted in the unilateral decision  by North Korea to close the industrial complex at Kaesong.  Despite six talks to resolve the issues, the industrial complex remains closed.  Imagine the consternation of the Kaesong workers at the collapse of their Choco Pie economy.  The North Korea government has had no choice but to separate the workers and send the to distant corners of the country where they cannot regroup (or so my sources tell me).

The future of the Kaesong industrial complex and the Choco Pie economy remain to be seen.  Meanwhile Choco Pie withdrawal has become a growing problem in the villages and towns just north of the 38th parallel.