[Aju News DB]
South Korea on Wednesday announced the shutdown of an inter-Korean joint industrial zone near the border in retaliation for North Korea's dauntless push for nuclear and missile programs.
The suspension of operations at the Kaesong industrial complex, a symbol of inter-Korean cooperation and reconciliation, comes as cross-border tension runs high over North Korea's recent long-range rocket launch which followed its nuclear test on January 6.
South Korean Unification Minister Hong Yong-pyo said the move is aimed at cutting off North Korea's remaining source of hard currency.
"Special steps" such as the shutdown of Kaesong were inevitable to punish North Korea, Hong said, accusing the nuclear-armed country of stepping up nuclear and missile programs despite repeated warnings from the international community.
"Our government has decided to suspend the operation of the Kaesong industrial complex ... to stop North Korea from funneling money generated in Kaesong into development of nuclear weapons and missiles any more," he said in a televised statement.
Without saying when the complex can be reopened, Hong said the withdrawal of South Koreans from Kaesong would be completed within days.
The inter-Korean industrial estate, which lies just 10 kilometers (six miles) over the border in the North, hosts about 120 South Korean firms employing some 53,000 North Korean workers.
Kaesong is a key earner for the cash-strapped North. The hard currency wages are kept by the state, which passes on a fraction -- in local currency -- to the workers.
So far more than one trillion won (833 million US dollars) has been invested in the complex while North Korea has earned a total of 616 billion won, Hong said.
The South Korean companies in Kaesong get cheap labor as well as preferential loans and tax breaks from the government.
Kaesong opened in 2004 and has generally managed to ride out repeated inter-Korea crises, even when every other avenue of cooperation was closed off.
The glaring exception came in 2013, when Pyongyang effectively shut down the zone for five months by withdrawing its workers.
The shutdown will cause minor damage to South Korea's economy in consideration of $469 million in annual production South Korean firms produced in the complex in 2014.
For North Korea, the impact will be bigger because it will have to take care of more than 50,000 jobless workers and their families. The shutdown also comes as North Korea is trying to raise funds for its experimental economic zones.
The Unification Ministry said the South Korean firms in Kaesong had suffered a combined loss of 707 billion won in 2013.
아주경제 임장원 기자 = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
