SEOUL: North Korean workers failed to report to work yesterday at the joint Kaesong industrial zone with South Korea after Pyongyang suspended operations, upping the pressure on Seoul in an escalating military crisis.
“As of now, no North Korean workers have reported to work this morning,” said a spokeswoman for the South’s Unification Ministry.
North Korea announced it was taking the unprecedented step of temporarily shutting Kaesong down on Monday, following a tour of the zone by senior ruling party official Kim Yang-Gon.
Some 53,000 North Koreans work for the 123 South Korean companies set up in Kaesong, which was established in 2004 and lies 10 kilometres inside North Korea.
After pulling out the workforce and temporarily suspending operations, Pyongyang will “examine the issue of whether it will allow its existence or close it,” Kim said.
A rare symbol of cross-border economic cooperation, Kaesong is a crucial hard currency source for the impoverished North, through taxes and revenues, and from its cut of the 53,000 workers’ wages.
Turnover in 2012 was reported at 469.5 million, with accumulated turnover since 2004 standing at 1.98 billion.
The complex has never been closed before, and Pyongyang’s move reflects the depth of the current crisis on the Korean peninsula, which has otherwise been more notable for rhetorical mud-slinging than substantive action.
South Korean President Park Geun-Hye said the North’s action was “very disappointing” and displayed a total disregard for investment norms that would haunt Pyongyang in the future.
“If North Korea, under the full eyes of the international community, breaches international rules and promises like this, then there will be no country or company which will invest in North Korea,” Park said.
Pyongyang has blocked South Korean access to Kaesong since Wednesday, forcing 13 South Korean firms to halt production.
Yu Chang-Geun, vice president of the association representing the South Korean companies, said operations would have to be normalised swiftly to prevent permanent collateral damage.
“All firms have reached their limit. If things go on like this, all of us would face bankruptcy,” Yu said.
South Korean stocks were trading flat yesterday, with analysts saying the situation in Kaesong had already been factored in.
The US State Department said permanent closure of the complex would be ‘regrettable’.
Announcing the suspension of operations, Kim Yang-Gon said Kaesong’s future was entirely dependent on “the attitude of the South Korean authorities”.
The North has indicated that South Korean media reports that it would never dare close Kaesong had affronted Pyongyang’s ‘dignity’.
It also took particular exception to comments by the South’s defence minister last week that Seoul had a ‘military’ contingency plan to ensure the safety of its citizens in Kaesong.
More than 300 South Koreans have left Kaesong and returned to the South since North Korea banned access last week.
Of the 475 remaining, the Unification Ministry said 77 had signed up to leave on yesterday. — AFP