North Korea is to suspend operations at a factory complex it has jointly run with South Korea, pulling out more than 53,000 workers and moving closer to severing its last economic link with its neighbour as tensions escalate.
The Kaesong industrial complex just north of the Demilitarized Zone is the biggest employer in North Korea’s third-largest city. Shutting it down, even temporarily, would show that the destitute country is willing to hurt its own economy to display its anger with South Korea and the United States.
Pyongyang’s move follows weeks of threatening rhetoric and provocation aimed at Seoul and Washington following United Nations sanctions punishing the North for its third nuclear test, on 12 February. In recent days, there have also been worries in Seoul of an even larger provocation from Pyongyang, including another possible nuclear test or rocket launch.
Analysts say that the point of the threats and possible future provocations isn’t a full-scale war, but an effort to force new, Pyongyang-friendly policies in South Korea and the US and to boost domestic loyalty for Kim Jong-un, the country’s young, still relatively untested leader.
The statement about Kaesong yesterday came from Kim Yang Gon, secretary of the Central Committee of the Workers’ Party of Korea. It did not say what would happen to the 475 South Korean managers still at the complex.
A South Korean manager at Kaesong said he had heard nothing from the North Korean government. He said: “North Korean workers left work as they usually do. We’ll know tomorrow whether they will come to work.”
North Korea had asked South Korean managers to say when they intended to leave by Wednesday; the manager said he did not know whether he and his South Korean colleagues now will be forced to leave.
Mr Kim’s statement said North Korea will consider whether to close the complex permanently. It said “how the situation will develop in the days ahead will entirely depend on the attitude” of South Korean authorities.
Yoo Ho-yeol, a North Korea expert at Korea University in Seoul, said the North probably will close the park.
He said: “North Korea will wait to see what kind of message we will send … but there is no message that we can send.”
Mr Yoo said he expects the South Korean managers will be deported, Pyongyang will convert the park for military use, and the fates of the North Korean workers and their families will not be considered.
“It’s a wrong decision but they won’t change it because it’s not their top priority,” he said.
South Korea’s unification ministry, which is responsible for relations with the North, issued a statement saying South Korea will act “calmly and firmly” and will make its best efforts to secure the safety of South Koreans at Kaesong.
The Kaesong complex is the last remaining symbol of inter-Korean rapprochement projects. Other programmes, such as reunion of families separated by war and tours to a scenic North Korean mountain, stalled amid confrontation between the rival Koreas in recent years.
Last month, North Korea cut the communications link with South Korea that had helped regulate border crossings at Kaesong, and last week it barred South Korean workers and cargo from entering North Korea. Operations continued and South Koreans already at Kaesong were allowed to stay, but dwindling personnel and supplies had forced about a dozen of the more than 120 firms operating at Kaesong to close by Sunday.
North Korea also briefly restricted the heavily fortified border crossing at Kaesong in 2009, but manufacturers fear the current closure could last longer.
Mr Kim said in remarks carried by the official North Korean Central News Agency that Kaesong “has been reduced to a theatre of confrontation.”
South Korea’s unification ministry estimates 53,000 North Korean workers in Kaesong received the equivalent of $80 million in salary in 2012, an average of $127 a month. It said Kaesong accounted for nearly all two-way trade between the Koreas. Cross-border trade, including supplies entering Kaesong and finished products coming out, approached $2 billion annually.
North Korea objects to portrayals in the South of the zone being crucial to the impoverished country’s finances. Mr Kim said North Korea “gets few economic benefits from the zone”.
The North has also expressed outrage over South Korean discussion of military rescue plans if Pyongyang held the complex’s managers hostage.