As I think about Kaesong, a few things come to mind. The obvious one as most speculate is that this is part of the ongoing strategy to support the regime's blackmail diplomacy and just another step in ratcheting up tensions to try to force the hand of the ROKG and influence the USG.
Another possibility (however slight) might be that the regime is following the precedent of Kumgangsan (Diamond Mountains) -the tourism center built by Hyundai and later "confiscated" by the regime who now runs tours there, mostly for Chinese and other foreigners. Perhaps the regime thinks that the South has sufficiently developed the Kaesong Industrial Complex and the north believes it is time to operate it on its own to make its profits and cut out the "middlemen" of South Korean businesses (I can see Kim Jong-un's sycophantic advisers telling him this). They will of course be in for a rude surprise when they find that they cannot run the factories as effectively and efficiently as South Korean businessmen because they will have to revert to operating on Juche economic policies and not good business practices.
Another possibility (even less likely) is that perhaps they will want to contract the complex to the Chinese to run it. I think that is less likely because Chinese businesses are losing money in the northern border areas because of north Korean "business practices."
The last thought is that perhaps the north has had too many of its people exposed to outside information. This is something we have often discussed; e.g., the north will do business with the outside world until there is too much exposure of its population to contaminated ideas (and ideals) at which time it will cut off those business contacts. We may be at the point where the north is fearing that there is just too much exposure and influence. Certainly the thousands of north Korean workers at Kaesong will never ever return to their original homes and will never have contact (or be "released back into") the "general population" (attempted prison reference pun intended). If the regime does fear that it has reached the limit of exposure to external information that could be a sign that it perceives a greater likelihood for internal unrest and that it must crack down and prevent the external information from spreading. Of course with the increased information getting in through defector organizations and the proliferation of South Korean DVDs as well as connectivity through cell phones and even limited internet access could make this moot as well. But again it could be an indicator or the regime's assessment of potential internal problems. If this is in fact a reason for the recent actions, then it is another indicator of the importance of mounting a comprehensive psychological operations campaign against both the second tier leadership and the general population to prepare them psychologically for what comes next after the regime goes away.
South Korea to Pull Remaining Workers From the North
Published: April 26, 2013
SEOUL, South Korea — South Korea said on Friday that it was pulling out the 175 remaining factory managers from a jointly operated industrial park in North Korea, deepening doubts over the survival of the only remaining symbol of cooperation between the two countries amid a tense standoff over the North’s nuclear program.
- North Korea Issues Threat at Ceremony for Military (April 26, 2013)
- South Korea and U.S. Fail to Reach Deal on Nuclear Energy (April 25, 2013)
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Once billed as an important experiment for Korean reunification, the factory complex across the border at Kaesong exposed North Korea to capitalism, pairing the South’s manufacturing skills with cheap North Korean labor. At the time it was opened in 2004, the park was revolutionary; to build it, the two Koreas breached one of the world’s most heavily fortified frontiers, pushing back military encampments, clearing mines and constructing a cross-border road and rail line.
The decision to effectively close the 123 factories there is an indication of how fraught relations between the two nations have become in recent months. The South had preserved the Kaesong complex even when it cut off all other trade ties with the North after the sinking of one of its warships in 2010. That episode killed 46 sailors, and the South blamed the North. North Korea had also continued its support of the plant, which provided badly needed hard currency, through previous diplomatic crises.
“The Kaesong complex fell victim to a war of nerves between the new leaders of both Koreas, who don’t want to be seen as weak,” said Kim Yong-hyun, a professor of North Korean studies at Dongguk University in Seoul.
North Korea had already removed its 53,000 workers this month as part of an escalation of threats after the United Nations imposed sanctions to punish the North for its nuclear test in February. The North’s leaders cited the danger of war that it said was posed by joint South Korean-United States military drills. It also blocked supplies and personnel from the South, forcing all the factories to stop production. Most South Korean managers already at the plant returned home, but some stayed in the hope that relations would improve.
The decision to withdraw the managers came hours after North Korea rejected the South’s proposal for talks on the park’s future. South Korea said the situation was becoming untenable because the North was no longer letting food and medicine be shipped to the site.
“To protect our citizens, we have made an inevitable decision to bring all of them home,” Unification Minister Ryoo Kihl-jae, South Korea’s point man on the North, said in a nationally televised statement.
The decision reflected President Park Geun-hye’s determination not to succumb to what she called North Korea’s tactic of using provocations and pressure to extract concessions — a move the impoverished country was accused of using successfully in the past to secure major shipments of aid. On Friday, Ms. Park told her cabinet ministers that she had no intention of “waiting forever” for North Korea to change its mind over the factory complex.
The managers are expected to begin leaving on Saturday.
So far, neither country has publicly said that it wants to shut the complex permanently. But the countries’ tit-for-tat moves have deepened doubts that the factories would resume operations anytime soon.
South Korea’s leaders have liked to point to the complex’s continuing operations to assuage foreign investors who might have second thoughts about investing in their country because of military tensions with the North. It is unclear how investors will react; the announcement was made after the stock market closed.
(Continued at the link below)