hankyoreh

Paju

By Kim Kyu-won, staff reporter

Sparks from the month-long exchange of intense rhetoric and military threats between North and South Korea are spreading over the Kaesong Industrial Complex. The question now is whether things will cool a bit in April, which brings the biggest holiday on the North Korean calendar with Kim Il-sung’s birthday on the 15th.

The Corporate Association of Kaesong Industrial Complex (CAKIC), an association of South Korean tenant businesses headed by Han Jae-gwon, held an emergency press conference on Mar. 31 to ask political leaders to help the complex and inter-Korean relations by avoiding “wasteful political disputes.”

“If the Kaesong Complex is closed, 123 South Korean businesses inside and countless partner companies will suffer, and about 15,000 people will be unemployed,” the members said.

The companies’ concerns arose after a statement the day before by a spokesperson for North Korea’s Central Special Zone Development Guidance General Bureau, who said, “If there are any attempts to compromise our dignity in the slightest, we will feel no compunction about blocking and closing the [Kaesong] industrial zone.” Another “special government, party, and group statement” on Mar. 31 said that North and South Korea were “entering a wartime situation as of this moment.”

Though things are tense between the militaries on both sides, the situation looks unlikely to degenerate to the point where the complex would be closed. Doing so would cause huge economic damages for both sides. For the South Korean side, 123 small businesses get to employ 50,000 North Korean workers at low wages of US$100-150 a month. Figures from 2012 suggest the losses from a shutdown would amount to some US$469.5 million. It would also bring a complete halt to inter-Korean trade, over 99% of which comes from the complex.

The Kaesong complex is also the last bulwark of inter-Korean relations. The civilian hotline of the complex’s management committee replaced the government hotline on March 27 after the latter was cut off. The complex also buffers against the possibility of a military clash on the western front. Perhaps in recognition of this, the South Korean government reacted very cautiously to North Korea’s threat to shut it down, saying it had “not changed our position in favor of keeping the Kaesong Complex in stable operation.”

North Korea also benefits economically from the complex. Those 50,000 workers earn a total of US$80 million each year. Some hint of where North Korea stands on this could be found in their sensitive reaction last February to Seoul saying it planned to step up inspections on items carried into the complex.

After a turbulent March, there is some chance that the situation will cool down in April. One favorable omen is the fact that April 15 is founding leader Kim Il-sung’s birthday, the biggest holiday of the year for North Korea. A meeting of the Supreme People’s Assembly - Pyongyang’s equivalent to the National Assembly - is also scheduled for the 1st. Meanwhile, Seoul could also take steps to keep the conflict under control. Already, President Park Geun-hye and Unification Minister Ryoo Kihl-jae have been low-key in their response to the hard-line rhetoric coming from Pyongyang.

But potential pitfalls remain. Sometime next week, USFK is reportedly planning - at South Korea’s request - to bring in more state-of-the-art weaponry to its joint exercises with South Korea, adding to the B-52 strategic bombers, nuclear submarines, and B-2 stealth bombers already in use.

Meanwhile, the Foal Eagle exercises, which gave North Korea the pretext for its own show of force, are set to continue through the end of the month. Pyongyang may also take umbrage with remarks made at a Saenuri Party (NFP) workshop on Mar. 30 by Defense Minister Kim Kwan-jin, who said South Korea would respond to a North Korean provocation by “mobilizing mainland US military strength to take care of it in one move.”

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