hankyoreh

Gaeseong (Kaesong) Industrial Complex, that last entrenchment of inter-Korean cooperation, is under siege. On November 12, North Korean military told South Korean authorities that it is going to strictly limit passage by land across the Military Demarcation Line. The industrial park is not going to have its doors immediately shut, but the situation is serious, in which we cannot exclude the possibility of, depending how the North-South relationship goes from here, South Korean companies withdrawing from Gaeseong and a complete severing of inter-Korean relations.

The Gaeseong Industrial Complex has long been a successful experimental model in mutual prosperity. According to October’s headcount, some 83 South Korean companies are in the city that was the capital Korea during the Goryeo dynasty (918-1392) and employ 1,236 Southerners and 33,688 Northerners. In terms of value, it has produced US$459.99 million between January 2005 and September of this year.

The North would have to give up jobs and an estimated US$35 million in foreign currency every year if the industrial complex shuts down. One high-ranking South Korean government official noted that Gaeseong is a “symbol” of the North’s stance on international business, and its closing “would be a blow to international confidence in Pyongyang and to its attempt to normalize relations with the incoming American administration.” Also damaged would be North Korean National Defence Commission Chairman Kim Jong-il’s authority, since on the North’s side, it was he who decided to get the Gaeseong experiment going. Ironically, these issues form the basis for the hopeful expectation that the North is not going to go so far as to shut it all down.

The problem, however, is that the losses for the South would be quite severe if the place was actually shut down to be able to place all its hopes in those assumptions. The South would have to say goodbye to billions of won in cash spent on building the industrial complex, and companies leaving Gaeseong would lose 200 billion won in investments. Even calculating the strategic and security loss would not be easy.

“A perceived ‘Korea risk’ could lead to a decline in foreign investment and hurt South Korea’s international credit rating,” said Cheong Wook-sik of the Peace Network. “The damage for the South would be incalculable if the North ends up positioning a long-range artillery division in the Gaeseong Industrial Complex.”

Professor Yang Moo-jin of the University of North Korean Studies said the South Korean government is “reckless for vaguely waiting around” when, “from the North’s perspective on preserving itself, economic loss is something it can deal with.”

“The very reason the North has chosen the possibility of closing Gaeseong is to pressure the South without creating any negative synergy with President-elect Obama,” said Yang. “It has chosen not to fire any missiles or cause any provocations along the Northern Limit Line” in the West Sea.

In related news, the South Korean Unification Ministry plans to resume support, through the Inter-Korean Cooperation Fund, for private humanitarian groups that work with North Korea, having withheld such support since the shooting death of a South Korean tourist at Mount Geumgang (Kumgang). Private groups are pursuing a humanitarian aid effort worth between one and two billion won, and, as of November 14, the idea is being considered by Seoul’s Inter-Korean Exchange and Cooperation Promotion Consultative Meeting.

Yang Moo-jin of the University of North Korean Studies said the South Korean government is “reckless for vaguely waiting around” when, “from the North’s perspective on preserving itself, economic loss is something it can deal with.”

“This is something that was being worked on before the North said it was going to restrict access across the Military Demarcation Line,” said one ministry official, though some observers speculate that the South Korean government might be moving forward despite recent developments for the sake of “situation management,” this in addition to the proposal to provide the North with material and equipment for establishing a military communications line.

Please direct questions or comments to [englishhani@hani.co.kr]