South Koreans Debate Who Would Lose More from Kaesong Closure

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While North Korea continues to prevent South Koreans from entering the Kaesong Industrial Complex, media in South Korea are debating who would suffer more from a closure of the facility.

A recent statement from the association of South Korean companies who have invested in the complex says that they have been ordered to pull out by April 10, putting the future of the joint North-South project into doubt to a degree not seen since it was briefly shuttered in March of 2009. Shutting down the factories in Kaesong would mean the end of eight years of economic cooperation and the legacy of Presidents Kim Dae-jung and Roh Moo-hyun‘s Sunshine Policy.

Trucks carrying South Korean workers leave the Kaesong industrial complex on the afternoon of April 4th

Trucks carrying South Korean workers leave the Kaesong industrial complex on the afternoon of April 4th

While a majority of online commentary believes North Korea needs the complex more than South Korea does, netizens also expressed the fear that South Koreans leaving would mean that the Chinese would take over the factories and facilities. A similar situation arose with the tourist attractions at Mount Kumgang.

From Money Today:

Who would be hurt more by a closure of the Kaesong Complex, North or South?

Following North Korea’s unprecedented threat to close the Kaesong Industrial Region, North and South Korean governments are engaged in a standoff over the fate of the influential economic zone.

In response to claims by the South Korean government that closing the plant would mean a significant setback in the North’s effort to obtain American dollars, North Korea has pointed out the economic danger to the South Korean companies who have invested in the industrial zone. As it now stands, both North and South have taken Kaesong hostage in a growing power struggle.

A spokesperson for the North’s Kaesong Industrial District Development Committee presented the possibility that they would close Kaesong during a statement on the afternoon of March 30th, “The survival of the the South Korean companies invested in the Kaesong Industrial Zone is at stake. The bankruptcy of these companies and the ensuing unemployment of their workers must be considered and all concerned do their utmost to refrain from closing Kaesong.”

The spokesperson added, “it is not us but rather our gang of enemies and their small and medium sized companies that are benefiting from the Kaesong district.” He threatened that closing the Kaesong Industrial Zone would be a direct blow at South Korean small and medium companies located in the area.

South Korean trucks return across the border from Kaesong

South Korean trucks return across the border from Kaesong

It is obvious that the closure of the zone and the ensuing end to all economic activity would inflict significant damage on the 123 South Korean companies who have relocated to the area and their affiliates. In particular, all of the workers at these companies would have to find another place to work.

In regards to the threat of unemployment for the workers at Kaesong, the association for South Korean firms located in the zone called a press conference on the 30th, during which they made the statement, “closure of the Kaesong Industrial Zone would damage the 123 companies and their many affiliated companies and force their 15,000 workers into unemployment.”

A specialist on North Korea who requested anonymity analyzed the statement by the North Korean authorities, “closure of the Kaesong complex would inevitably lead to difficulties for the smaller companies which have invested in the area since they lack the funds to cover any loss of production…North Korea intends to highlight this weakness and thereby put pressure on the South Korean government.”

On the opposite side, the South Korean government is seeking to highlight the North’s reliance on Kaesong as a large source of U.S. dollars. If North Korea closes Kaesong, payments to the North Koreans who work in the area factories would cease. North Korea uses these wages as a source of foreign currency.

The South Korean government and experts estimate that North Korea reaps $90 million, (roughly ₩100.1 billion) every year from the wages to North Korean workers at Kaesong. This estimate is based on the fact that, as of January 2013, 53,397 North Koreans are working in the Kaesong industrial complex for an average wage of $144 a month.

A senior South Korean government official commented that, “while the likelihood of North Korea closing Kaesong is relatively very low, it is increasing. However, considering the contribution that the complex, the only collaborative economic project between North and South, makes to North Korea’s budget, a sudden closure would have a severe impact on them.”

Comments from Daum:

장산곶매:

It will be taken over by the Chinese, just like Mount Kumgang

하림천사:

It was like this around 1950… Those crazy warmongers boasted they can push northwards, have their lunch in Pyongyang and be at the Tumen River by dinner time, all with Syngman Rhee‘s support..As soon as the war actually began, the South Korean troops made a false radio broadcast about marching to the north, and they blew up the bridges over the Han River. Then they escaped to Daejeon and Busan… Millions of our countrymen died in the war..History repeats itself…

냥이싫어해:

Closing Kaesong would only bankrupt the small and medium companies, so our government shrugs and looks away. It would mean blocking a source of cash to the North Koreans which would have a much stronger effect.

악녀에전설:

This is the state of the great and terrible North Korea, they gain at most $90 million, not even the price of an F-15. This should be enough to shame those people who go on and on about the great strength of the North Korean military.

별을 따는 아이:

It’s obvious, we would both suffer

협객:

Kaesong is the product of Kim Dae-jung’s efforts, is he to blame? Or should we blame the Lee Myung-bak administration, which didn’t push forward with DJ’s Sunshine Policy?… In the end, it looks like Kim Dae-jung was at fault. While it is obvious that the provocations started after the Grand National Party (Saenuri Party) took power, the Democratic Party’s North Korea policies lacked any basis in law and their disagreements with the Saenuris have resulted in pitiful offerings to the North Koreans. Now it’s all coming back to bite them in the ass!

물고기밥:

There’s unemployment in South Korea too, Kim Dae-Jung and Roh Moo-hyun went North to hand out wads of cash. Great job guys, they turned the cash into nukes

요즘:

And it was supposed to be a buffer zone…

Bonjour:

Is our country full of commies? Why did we move heaven and earth to make a source of cash for the North? And then why are we getting threatened with it? Just close up shop and come home.

달콤한태양:

It’s just a life support machine for that bastard pig, Kim Jong Un

자작나무:

North Korea has no serious intention to close Kaseong, actually it is just the opposite. This is a signal that they would like to end things peacefully before the complex is closed! you’ve got to read between the lines!

jgh9302:

This is all the fault of Kim Dae-jung and Roh Moo-hyun. I’m at a complete loss, they wanted to have better economic relations with a country that was still declaring war on them, now they made this

엑스맨:

Close the place and say goodbye to the reds. What’s wrong with us leaving first? It pisses me off to see us making empty threats all the time

만부기:

Biting the hand that feeds them

쥬얼리드:

Thanks to DJ making that industrial complex we can’t do anything. Since so many of our companies have set up shop there, our hands are tied…If we had just not opened the complex in the first place the North Koreans would have already surrendered..We gave them a life support machine, what a joke. North Koreans are not the kind of people to be taken in by the Sunshine Policy. DJ just had his eyes set on that Nobel prize, now we have to deal with this mess

Nikel:

While I agree with the spirit of the Sunshine Policy, its implementation was all screwed up. If you wanted to help the north, build the factories and the power plants in the south and hire North Koreans to cross the border and work here. Then we would have been holding the reins and had been able to do as we wanted.

짱:

Of course we would come off worse if the complex closes. How much did we spend on the facilties in Kaesong? North Korea didn’t invest anything in the place. And if we leave, the Chinese will just come in and use our facilities

제인:

Kim Dae-jung knew this would happen when he made Kaesong. He was the architect of our hostage crisis.

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  • A Gawd Dang Mongolian

    In a country like South Korea, it’ll hurt. It will hurt but it can easily bounce back from such a thing.

    North Korea, I doubt they’ll be able to recover as quickly or as completely. Course the Dear Marshall will pretend like it doesn’t even affect them at all…

  • bultak23

    the crooks in pyongyang just steal most of the wages of these slaves… all to fund their orgies, cognac parties, drug factories, and weapons.

  • iluvnk

    Anyone else notice, in the first picture, the CHRYSLER Sebring on the road in the background!? Bizarre!

    • iluvnk

      make that the second picture!

  • commander

    North Korea’s denial of access to the last remnant of South-North cooperation for South Korean enterpreneurs and workers is not motivated by economic gains, but by political considerations, in a move that is unlikely to be lifted in the short term.

    Many experts, domestic and international, have pointed to the smooth running of the factory park as evidence showing North Korea’s increasingly inflammayory threats is theatrical belligerence aimed at extracting more economic concessiona from Washington and Seoul.

    North Korean watchers also note the unlikelihood of the North’s threats materializing despite the rhetoric reaching a higer level than previously, citing the military retaliation capability by the U.S.-South Korea combined forces.

    In an international power game where a country’s reputation is critical and a nation’s declared pledges cannot be easily taken back, remarks to the effect that the hetmatic country’s rhetoric is nothing but a bluff inevitably invite the isolated country to add credence to its word with a tension-heightening move.

    From this perspective, the South argument that the Gaeseung move will incur more losses to the destitute country than it will do to Seoul will not bought by the leadership in Pyongyang.

    That claim might push the reclusive country to gear up for a further threatening move to demonstrate its imperviousness against the cut off of what many observers describe as the prcious source of hard currency for the North’s fledging leader, Kim Jong-un, who follow his father’s steps in rallying allegiance from the military brass with luxuries.

    To de-escalate tension on the Korean Peninsula, I think a heretofore unusually silent China ‘s prudent mediation for both sides is an imperative.

    The vicious cycle of provocations by the North and harsh countermeasures from Washington and Seoul in an escalating back and forth will only be conducive to plunging Northeast Asia into a flashing point in the prospect of a single misstep or miscalculation culminating an irreversible apoclypse.

  • Brett

    Who would lose more? That’s the important thing to talk about? Both lose, no one wins in this situation.

    • Ruaraidh

      That’s international conflict diplomacy for you.

  • commander

    Conservative vernacular dailies advocate hardline North Korea policy, by saying a policy of appeasement only serve to sustain the communiat dictatorship.

    But regarding the North’s blocking access to the industrial complex, they appear to be inconsistent with the existing policy line.

    If economic gains for the leadership in Pyonyang from the joint project in the border city, as they argue, is crucial for running the regime, why do conservative papers not argue for the closure of the factory park? They have long lashed out at financial and humanitarian aid for the stalinist nation as the oppsotie of what it intended: Keeping the poverty-stricken country alive.

    The blocking measure by the North displays the inconsistency in policy adovcated by conservatives.

  • agentX

    The company owners should have known better than to rely on the generosity of the North. The Kim dynasty has been anything but reliably stable. They choose to climb into the dragon’s mouth to clean its teeth. They shouldn’t be surprised when the mouth closes.

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