North Korea approves foreign delegation visit to Kaesong

SEOUL (AFP) - North Korea has agreed to a South Korean proposal to show a foreign delegation around a jointly run industrial park that recently re-opened after military tensions caused a five-month closure, officials said on Friday.

The rare cross-border trip by about 30 foreigners is scheduled for Dec 19 and comes as Seoul tightens its watch on Pyongyang following the execution of leader Kim Jong Un's uncle, Jang Song Thaek.

The North on Friday announced the execution of Jang, who had been seen as Kim's political regent and the country's unofficial number two, branding him a "traitor for all ages".

But North Korea has set aside its internal issues to approve the trip proposed by Seoul, the South's Unification Ministry said.

Kaesong, which lies 10km inside the North, was established in 2004 as a symbol of inter-Korean cooperation.

But Pyongyang effectively shut down the complex in April by withdrawing its 53,000-strong workforce during a sharp and extended spike in military tensions that followed the North's third nuclear test in February.

The two Koreas agreed in September to resume operations, but talks on reforming the way Kaesong is managed have shown little progress.

South Korea has been pushing hard for overseas involvement in the joint industrial zone, believing the presence of foreign firms would make it harder for Pyongyang to shut down the complex in the future.

The foreign delegation includes vice ministers from the world's 20 leading economies as well as officials from the International Monetary Fund and the Asian Development Bank who will visit Seoul for a conference next week, said the South's Unification Ministry.

"It will contribute to the globalisation of the Kaesong industrial park," ministry spokesman Kim Eyi Do told reporters.

South Korean firms setting up in Kaesong get cheap, Korean-language labour, as well as preferential loans and tax breaks from the government which also effectively underwrites their investment.

Seoul is considering "sweetener" legislation that would offer some of the same perks extended to domestic firms, like tax breaks and state-backed insurance against closure of the complex.

But the real barrier remains the huge potential for instability due to the total incompatibility of the two countries that operate Kaesong.