select languages
Business_titleIndustryEconomyMarketlmenu_bottom
FocusFocus Focus
mostview_topstock
mostview_bottom
latestnewslatestnews RSS
Market
Home > Business > Market
(News Focus) Pullout of S. Korean personnel from Kaesong severs all inter-Korean ties
By Lee Joon-seung
SEOUL, May 3 (Yonhap) -- The complete withdrawal of South Korean personnel from the joint industrial zone of Kaesong marks the severing of all cross-border ties that had been painstakingly forged over several decades, fueling uncertainty at a time of heightened tensions on the Korean Peninsula, analysts said Friday.

   The four vehicles carrying seven people that arrived at the Customs, Immigration and Quarantine office in Paju, about 50 kilometers northwest of Seoul, represent the end of 15 years of permanent presence of South Koreans in the communist country.

  



The last personnel from the Kaesong Industrial District Management Committee were originally expected to return home on Monday, but were held up due to the need to settle outstanding accounts, such as wages for North Korean workers, on behalf of local companies.

   It also means the temporary closure of the last remaining symbol of inter-Korea cooperation and exchange that began with the first tours to Mount Kumgang in 1998 and was bolstered by the historic summit between the leaders of the two countries in June 2000. The summit laid the foundation for the Kaesong Industrial Complex.

   Tours to the mountain resort were halted in 2008 after the shooting death of a South Korean tourist by a North Korean guard. The unilateral withdrawal of the 53,000 laborers by Pyongyang on April 9, which halted all production at the factories run by 123 companies, has fueled worries that the fate of Kaesong will follow that of Mount Kumgang.

   South Korea's unification ministry announced last Friday that all remaining personnel at the Kaesong Industrial Complex had been told to return home because Pyongyang repeatedly snubbed requests for talks to permit normal operations at the special industrial zone located just north of the demilitarized zone (DMZ).

   The decision comes in the wake of near-daily saber-rattling by North Korea after it conducted its third nuclear test on Feb. 12 in defiance of warnings issued by the international community. The North has been particularly enraged by annual joint South Korea-U.S. military exercises that began in early March and will continue through the end of April.

   Observers said that with the return of the South Korean workers, there is no longer any real link between the two Koreas. Kaesong and the many private phone lines maintained by companies there acted as a communication line with Seoul following the North's move to cut all military and Red Cross hotlines. It marks the first time since 1971 that all telephone links have been disconnected.

   "In effect, there is no way for the two sides to talk to each other now," Choi Jong-kun, professor of political science at Seoul's Yonsei University said.

   Lim Eul-chul, a research professor at Kyungnam University, added what is more worrisome is that the level of trust between the two sides has hit such a low level that it could take a considerable amount of time to repair.

   A senior official at Cheong Wa Dae, South Korea's presidential office, on the other hand, said Seoul remains committed to the reopening of the complex, adding the incumbent Park Geun-hye administration will stick to its South-North trust-building process.

   Park, who took office two months ago, made clear she will break the vicious cycle of the North ratcheting up tensions so it can bully neighbors into giving it aid.

   "We don't think change will come easily, but there is an underlying belief in the need to set new guidelines and principles in dealing with the North," the official, who declined to be identified, said.

   Related to the withdrawal of all South Korean personnel, many North Korean watchers expressed concern that while Pyongyang may not move immediately to confiscate assets left behind or build military installations in and around the complex, there is no guarantee the country's policymakers will refrain from such actions down the line.

   The policy bureau of the North's National Defense Committee (NDC) last week issued a statement threatening to take final and decisive action against Kaesong if the South pursued its provocations.

   The NDC did not elaborate on what action it would take, yet it could mean Pyongyang may confiscate assets of the 123 companies in Kaesong as they did at the Mount Kumgang resort. South Korea had built hotels, amusement facilities and a golf course at the resort on the North's east coast.

   "North Korea knows the significance of Kaesong and probably understands what repercussions may follow if it makes rash decisions," said Cho Bong-hyun, an analyst at the IBK Economic Research Institute. He predicted that depending on whats actions are taken, Pyongyang may find itself hard pressed to draw in foreign investments.

   Local media also pointed out that the North will no longer receive US$90 million in hard currency that was paid to its workers every year. This, they said, may be a blow to the country that has very little to sell abroad other than various minerals.

   They added that the sudden unemployment of North Korean laborers may pose social and economic problems. Counting family members and associated businesses, up to 250,000 may be hurt if the complex remains closed.




On the other hand, Yoo Chang-geun, vice chairman of the Kaesong Industrial Complex Companies Association, said Seoul must do more to engage the North in talks so the joint economic zone can be opened once more, because its own losses are significant.

   "If you count all the companies that did business with the factories at Kaesong, at least 6,500 will be hurt," the entrepreneur said.

   Estimates of losses vary although they may range from as low as 2 trillion won (US$1.8 billion) to as high as 6 trillion won. The complex cost South Korea around 950 billion won to build.

   The government, meanwhile, said that it will do all it can to help the local companies affected to stay afloat by offering emergency liquidity injections and offering waivers on loan repayments and utility payments.

   The country set up a special task force to help companies earlier in the day, with assistance across all levels of government being reviewed.

   yonngong@yna.co.kr
(END)
HOMEtop