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NORTH KOREA NEWSLETTER NO. 265 (June 6, 2013)

2013/06/06 10:30

*** TOPIC OF THE WEEK (Part 2)

Kaesong Complex Normalization Iffy amid Frayed Inter-Korean Relations

SEOUL (Yonhap) -- Two months had passed since the suspension of the inter-Korean industrial complex in the North's border city of Kaesong as of June 3. But the normalization of the complex remains in doubt in the face of strained relations between the two Koreas.

With operations at the complex having been halted for more than 60 days, the risk of the industrial complex being shut down for good is growing. The shuttering of the complex could have consequences not only for the 123 South Korean companies with factories in the border town but South-North ties as a whole, they said.

Representatives from Kaesong companies claimed that if they leave their machinery and production materials unattended for too long, it could become very hard to resume operations down the line.

"Companies are worried that the onset of the monsoon season will damage machinery and spoil production materials," a representative of the Kaesong Industrial Complex Companies Association that represents the local businessmen said.

The factory zone, which was a symbol of economic cooperation between the two Koreas, came to a screeching halt on April 9 when Pyongyang ordered all 53,000 laborers hired by South Korean companies not to report to work.

On April 3, the North barred South Korean personnel and cargo from entering the complex located just north of the demilitarized zone that separates the two Koreas. In response, Seoul pulled out its own people on May 3, temporally shutting down the business park that started churning out products in late 2004.

"At present, there is little chance of headway being made because of differences in how the rivals want to proceed," said a local North Korean watcher.

He pointed out that Seoul has been insisting on working-level talks by government officials to deal with all outstanding issues, but this offer has been spurned by the North in favor of talks with private organizations and businessmen from Kaesong.

The South has brushed off these proposals as a ploy to fuel internal discord and effectively banned all such meetings.

The expert, who did not wished to be identified, said the North may be sending a sign that it wants to engage in dialogue, which is a change from it previous position of ratcheting up tensions on the Korean Peninsula by detonating its third nuclear device and threatening to launch pre-emptive nuclear strikes against South Korea and the United States.

The Ministry of Unification effectively said on several occasions in late May it will not allow South Korean businessmen or civic group activists from the South Korean Committee for the Joint Implementation of the June 15 Summit Declaration to meet with North Koreans.

The declaration reached at the historic summit meeting in 2000 is viewed as the start of rapprochement between the two countries and permitted the establishment of the Kaesong complex.

"Under present circumstances, there can be no progress being made without working-level talks," Unification Minister Ryoo Kihl-jae told reporters on May 29.

He stressed that the North's past practice of upping tensions to win concession from opponents will not work this time, and made clear the new Park Geun-hye administration is not pressed for time on the Kaesong issue.

The policymaker hinted that since Seoul's commitment to expanding operations at Kaesong is firm, it will ask the North for safeguards that will prevent unilateral halting of operations in the future.

In response, North Korea condemned South Korea's unification minister on June 2 for his criticism of Pyongyang's offer for civilian-level dialogue and repeated calls for South Korean factory owners to visit the now-suspended inter-Korean industrial complex in the North.

"We have shown every good faith to resume the operation of the Kaesong complex and return it to normal," the North said in a statement posted on its main propaganda website, Uriminzokkiri. Insulting the proposal for dialogue is "a shameless sophistry and perversity," it said.

"The South Korean government should not mislead the essence of the problem and distort the truth, and take the right path by squarely facing the public sentiment and going with the flow," the commentary said, reiterating its will to resume talks upon the South Korean businessmen's visit there.

The joint industrial complex, opened in 2004, ground to a halt in early April when North Korea unilaterally withdrew all of its 53,000 workers hired by 123 small-sized South Korean plants operating there.

South Korea has since proposed working government talks to discuss ways to reopen the complex, but North Korea has turned them down, demanding that Seoul first address more fundamental issues, including joint military exercises with the U.S.

On future prospects, Yang Moo-jin, political science professor at the University of North Korean Studies, said South Korea's insistence on safeguards for Kaesong will probably not be accepted by the North. Such a development will keep meaningful dialogue from taking place and can raise the possibility of the complex being shut down completely.

On the other hand, other experts said that since neither Seoul nor Pyongyang want the complex to be closed down permanently, some sort of compromise may be reached.

They said the planned summit meeting between U.S. President Barack Obama and Chinese leader Xi Jinping set for early June as well as the South Korea-China summit set for later in the month, can influence stalled inter-Korean exchanges.

Related to the industrial complex, the unification ministry's spokesman Kim Hyung-suk said earlier in the day that it has received estimates of damages from 58 of the Kaesong companies.

He said once the tallies all come in, Seoul will use the data as reference to provide "customized" assistance to businesses that have been hurt by the shutdown.

The official added Seoul has already provided 45.4 billion won (US$40.3 million) worth of financial assistance to 63 companies from the inter-Korean cooperation fund, and plans to give more assistance in the future.

(END)