South Korea Pulls Out of Joint Industrial Complex in North Korea

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South Korea Pulls Out of

Joint Industrial Complex in

North Korea

Posted 1 May 2013 0:48 GMT

Written byLee Yoo Eun

A nearly decade-old, jointly run industrial complex in North Korea, a place often referred as “last bastion of hope” [ko] for Korean reunification, is on the verge of a shutdown.

The South Korean government has ordered the withdrawal of South Korean workers from the Kaesong Industrial Complex, almost emptying the park by April 29, 2013 and leaving only seven workers behind to negotiate unpaid wages for North Korean workers.

The Kaesong Industrial Complex of North Korea is a special collaborative venture with South Korea which began operating in 2004. North Korea offers South Korean companies with cheap labor and inexpensive land, and South Korean companies, in return, provides basic infrastructure, raw materiel and the capital to run the site and most importantly, employ North Korean workers and pay them with the precious foreign currency. 

Model Industrial Complex (factories) in Kaesong Industrial Area, North Korea, Image by User Mimura, Uploaded in Wikipedia (CC 3.0)

Until this most recent flare-up of tensions between the Koreas, business has thrived in the complex despite moments of cross-border conflict. As of early 2013, 53,000 North Korean employees in the complex collected around $90 million a year in wages, an important source of income for the impoverished North.

But the shutdown is a terrible financial blow for the South, as well. The South Korean government estimates [ko] the loss caused by the end of operations will be around one trillion Korean won (about 902 million United States dollars), while the companies involved claim [ko] it could surpass ten trillion won (about 9.02 billion US dollars).

South Korean hawks have flooded the Web welcoming the news of the country's withdrawal from the industrial complex, while others lamented the loss of the cooperative effort between North and South.

Some net users pointed out the shutdown means more than financial consequences:

@tenelux: 개성공단 피해액이 최대 10조원이 될 수도 있다고[...] 게다가 그 자리에 장사정포 다시 들어서면 안보리스크도 올라갈테고.

@tenelux: The loss of companies in the Kaesong Complex can amount to 10 trillion Korean won [...] Worse, what if that space is replaced with long-range missiles? It will only increase the national security risk.

@histopian: 개성공단은 북한군을 15km 후퇴시켰고, 남한 체제를 부러워하고 학습하는 5만 여 명의 북한 노동자를 만들었습니다. 경제적 손익과 별도로, 군사적 손익도 따져 봐야 할 겁니다. http://www.nocutnews.co.kr/Show.asp?IDX=2479596 …

@histopian: By building Kaesong Complex, the North’s army [in the region] moved 15 kilometers to the north [from their previous frontline]. The complex, furthermore, has made 50,000 North Korean workers think highly of South Korea’s [free-market economic] system and be willing to learn about it. Apart from pure economic profits aside, the military benefits should not be ignored. [link to related news article]

This particular tweet [ko] highlighting the significance of the Kaesong Complex has been retweeted more than 280 times:

@jiksseol: 개성공단은 상품만 찍어내 온 게 아니다. 이는 평화의 공장이자 숨쉬는 기념탑이고, 남북 사이 가장 현실적인 완충지대였다[...]

@jiksseol: Kaesong Industrial Complex is more than a place where they churn out products. It is where peace was made and it was a living monument of peace, and one of the most realistic buffer zones between two Koreas.

Intense verbal conflicts erupted online between hawkish conservatives and progressives who support the “Sunshine Policy” that made Kaesong possible in the first place. Under this policy, South Korea gave various economic aids to the North, so that “sunshine” would create a wedge between the North Korean regime and its people and eventually lead to reform from the inside. Conservatives lashed out at the North for politicizing the venture for years and even pointed the finger at the former South Korean president who initiated the venture. Since the Complex's opening in 2004, operations have intermittently halted as the North uses it to express its displeasure with the South by refusing South Koreans entry to the Complex:

@cosmicgag: 그리고 개성공단은 평화유지를 위한 남북 채널이라고 사기치는데 그래서 북괴가 대포 쏘고 마사일 쏠때 개성공단 통해서 알려줬나? 개그는 개그맨이 하는거지.. 진보팔이, 종북들은 정신 좀 차려야죠.

@cosmicgag: Some people falsely claim that Kaesong has been a [good] communication channel between the two Koreas that maintained peace. But think what the North did so far: did they warn us about their shelling and missile launch via Kaesong Complex? [No.] Don't kid yourself. It is not funny at all. You progressive scammers and pro-North people need to wake up.

@gvoice01: 개성공단은 평화의고리가 아니라 인질이고 볼모였지. 문제의 시작이 북이거늘[...]

@gvoice01: Kaesong Industrial Complex has been never been “the bridge to peace”, but rather the hostage [held by the North]. Every problem has originated from North Korea.

The mainstream media's use of the word “hostage” in its characterization of any South Korean worker in the Kaesong Complex has fueled accusations of biased, sensational reporting. Actually, the workers who actually stayed at the Complex said [ko] their stay was not unusual, with plenty of water and food no physical threats from North Korean side whatsoever. Some net users chimed in:

@sh4corea: 보수언론, 개성공단 기사 모두 엉터리. ‘돈벌이수단 폐쇄못해’ ‘인질우려’? 북한, 직원 한명 붙잡지 않았다. 정부의 인질구출작전? 정부와 언론이 합작으로 ‘007영화’ 시나리오 썼다. 개성공단, 스파이영화·소설 소재 아니다[...]

@sh4corea: Conservative media’s coverage on the Kaesong Complex is all sham. They claim that the North “held [South Korean] workers hostage” since they “cannot let go of the cash cow”, but actually the North did not ask, not even one worker, to stay. [Some media outlet's headline read] “The government pulled off the hostage-rescue operation”. It is a far-fetched 007 story co-written by the media and the government. Kaesong is not a subject of spy novel or movie.

As South Korean companies in the Kaesong Complex are facing near bankruptcy by the current crisis, some of them are planning to file a lawsuit against the government for their astronomical financial loss. Discussions formed around how to understand the case — whether to treat it as an ordinary civil loss in need of government help, or a damage inflicted by the government itself:

@murutukus: 개성공단 업체들이 정부 상대로 소송을 걸게 되면 그 판결은 과연 어떻게 되는 건가.. 정부의 대북 정책 변화에 따른 피해니까 이게 보상이 되는 건지 배상이 되는건지.

@murutukus: When companies in the complex file a lawsuit against the government, how should the court treat this case? Since it was damage done by the change of the government’s North Korean policy, should it be treated as “compensation” or “reparation“

Written by Lee Yoo Eun Posted 1 May 2013 0:48 GMT

http://globalvoicesonline.org/2013/05/01/south-korea-pulls-out-of-joint-industrial-complex-in-north-korea/

Kaesong is a window into another world for North Korea

If Pyongyang does not relent in its sabre rattling it will destroy the one symbol of co-operation between the North and South

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• Sokeel Park
• guardian.co.uk, Friday 5 April 2013 19.07 BST
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The roadblocks are raised at the entrance to Kaesong, on the South Korean side. Photograph: Ahn Young-joon/AP

North Korea has repeatedly barred South Korean managers from the Kaesong industrial complex, a joint industrial park just north of the demilitarised zone.

But this is not just the latest rhetorical threat in a tense game of high politics: if Pyongyang does not relent, it will jeopardise the livelihoods of 54,000 North Korean workers and a decade-old symbol of inter-Korean co-operation.

The effects of such developments at the ground level of North Korean society are not often considered by the outside world, but they could be more important in the long term than the current crisis in international politics.

Although the North Korean regime tries to limit the contaminative effects of special economic zones (for instance by placing them at the extremities of the country), such enclaves do serve as a conduit for external information and ideas into North Korean society. Through dozens of interviews with North Korean refugees, I have learned how a growing number of ordinary North Koreans are learning about the Kaesong Industrial Complex, and the effect this is having.

The easiest way for most North Koreans to find out what is happening in other parts of the country remains word of mouth. Joo, a recent defector from Chongjin, recalled that people in her home town would say: "Even though words have no feet, they travel a thousand miles." She now realises that South Koreans have the same saying, but also that "the gossip network is much less important and less active here, because everyone can get information from the television or internet. I was surprised that a lot of people don't know their next-door neighbour here.

She said: "In North Korea everybody does, and those human networks are important for getting useful information, because people have learned to not pay attention to the government's reports."

This gossip network carries news from Kaesong in the south-west all the way to the north-eastern regions where many North Korean refugees come from. There, they hear stories from brothers and uncles who return from military service in frontline areas close to Kaesong. The workers in the complex also have relatives all over the country, and information spreads quickly through those family contacts. Then there are informal business networks. For instance, one woman told me that doctors from her hospital would go to Kaesong to buy South Korean medicine – known to be far superior to North Korean medicine – to sell at a premium to wealthy patients. Some refugees had even directly met people who worked at the complex. By no means have all North Koreans heard about the Kaesong Industrial Complex though; less than half of those interviewed over the past two years knew about it when they were still in the country. However, more recent defectors are more likely to have heard about it, suggesting that awareness is spreading.

For those in the know, the Kaesong Industrial Complex can provide an important counterpoint to the regime's propaganda. For instance, refugees report knowing of Kaesong as a place where South Korean businesses have come in to employ North Korean workers, and manufacture goods of a higher quality than any North Korean factory could produce. The workers there are also known to be paid high wages, and even though 90% of their pay goes to the regime, their take-home pay still amounts to a lot of money.

One young refugee told me that as soon as she heard about the Kaesong, Industrial Complex she was intensely jealous of her compatriots who got to work for South Korean firms, "because South Koreans live so well, so it must be good for those North Korean workers, too".

The effects of 54,000 North Korean citizens being directly employed by South Korean companies is also raising the economy of the whole area of Kaesong. One of my interviewees related that a friend had moved from Kaesong to the north when she got married. After several years she visited her hometown and returned filled with regret that she had ever left.

The relative economic advancement of South Korea has been an open secret in North Korea for several years, such that refugees claim that "the only ones who don't know that South Korea is richer are newborn babies".

Joo herself had heard about the Kaesong Industrial Complex through South Korean and US radio broadcasts that her family would secretly listen to at night. She recounts taking great comfort in the knowledge that underneath all the fighting and rhetoric between the governments, there was a place where Koreans from North and South were working together, in a "small-scale reunified community". She worries that if it closes now, it will be a big loss to both North and South Korea.

At this stage it is impossible to know whether Pyongyang will push on and force the closure of the complex or whether they will relent, satisfied that it has convinced Seoul to take its threats seriously.They may calculate that the South Korean firms that depend on Kaesong will lobby the government to improve relations, including making concessions.

Domestically, however, if the Kaesong Industrial Complex were to close, the regime's broken economic system would have no means to suddenly absorb and provide a living to 54,000 formerly privileged workers and their families, even without counting the loss of funds to the regime.

In broader society too, North Koreans are increasingly learning to look past propaganda and blame the regime for their hardship. Even though the repression is still too effective to allow public expression‎ of anti-regime sentiment, the long-term consequences would probably be detrimentalfor the regime.

When it comes to North Korea, everything is viewed through the framework of high politics, which actually plays to Pyongyang's strengths. But just like any other country, if you ignore local politics, you only see half the picture.

• Sokeel Park is research director for Liberty in North Korea, an international organisation that works for NorthKorean refugees. www.libertyinnorthkorea.org

http://www.guardian.co.uk/world/2013/apr/05/kaesong-window-world-north-korea