South Korea Pulls Out of Joint Industrial Complex in North Korea

A nearly decade-old, jointly run industrial complex in North Korea, a place often referred as “last bastion of hope” [ko] for Korean reunification, is on the verge of a shutdown.

The South Korean government has ordered the withdrawal of South Korean workers from the Kaesong Industrial Complex, almost emptying the park by April 29, 2013 and leaving only seven workers behind to negotiate unpaid wages for North Korean workers.

The Kaesong Industrial Complex of North Korea is a special collaborative venture with South Korea which began operating in 2004. North Korea offers South Korean companies with cheap labor and inexpensive land, and South Korean companies, in return, provides basic infrastructure, raw materiel and the capital to run the site and most importantly, employ North Korean workers and pay them with the precious foreign currency. 

Model Industrial Complex (factories) in Kaesong Industrial Area, North Korea

Model Industrial Complex (factories) in Kaesong Industrial Area, North Korea, Image by User Mimura, Uploaded in Wikipedia (CC 3.0)

Until this most recent flare-up of tensions between the Koreas, business has thrived in the complex despite moments of cross-border conflict. As of early 2013, 53,000 North Korean employees in the complex collected around $90 million a year in wages, an important source of income for the impoverished North.

But the shutdown is a terrible financial blow for the South, as well. The South Korean government estimates [ko] the loss caused by the end of operations will be around one trillion Korean won (about 902 million United States dollars), while the companies involved claim [ko] it could surpass ten trillion won (about 9.02 billion US dollars).

South Korean hawks have flooded the Web welcoming the news of the country's withdrawal from the industrial complex, while others lamented the loss of the cooperative effort between North and South.

Some net users pointed out the shutdown means more than financial consequences:

@tenelux: 개성공단 피해액이 최대 10조원이 될 수도 있다고[…] 게다가 그 자리에 장사정포 다시 들어서면 안보리스크도 올라갈테고.

@tenelux: The loss of companies in the Kaesong Complex can amount to 10 trillion Korean won […] Worse, what if that space is replaced with long-range missiles? It will only increase the national security risk.

@histopian: 개성공단은 북한군을 15km 후퇴시켰고, 남한 체제를 부러워하고 학습하는 5만 여 명의 북한 노동자를 만들었습니다. 경제적 손익과 별도로, 군사적 손익도 따져 봐야 할 겁니다. …

@histopian: By building Kaesong Complex, the North’s army [in the region] moved 15 kilometers to the north [from their previous frontline]. The complex, furthermore, has made 50,000 North Korean workers think highly of South Korea’s [free-market economic] system and be willing to learn about it. Apart from pure economic profits aside, the military benefits should not be ignored. [link to related news article]

This particular tweet [ko] highlighting the significance of the Kaesong Complex has been retweeted more than 280 times:

@jiksseol: 개성공단은 상품만 찍어내 온 게 아니다. 이는 평화의 공장이자 숨쉬는 기념탑이고, 남북 사이 가장 현실적인 완충지대였다[…]

@jiksseol: Kaesong Industrial Complex is more than a place where they churn out products. It is where peace was made and it was a living monument of peace, and one of the most realistic buffer zones between two Koreas.

Intense verbal conflicts erupted online between hawkish conservatives and progressives who support the “Sunshine Policy” that made Kaesong possible in the first place. Under this policy, South Korea gave various economic aids to the North, so that “sunshine” would create a wedge between the North Korean regime and its people and eventually lead to reform from the inside. Conservatives lashed out at the North for politicizing the venture for years and even pointed the finger at the former South Korean president who initiated the venture. Since the Complex's opening in 2004, operations have intermittently halted as the North uses it to express its displeasure with the South by refusing South Koreans entry to the Complex:

@cosmicgag: 그리고 개성공단은 평화유지를 위한 남북 채널이라고 사기치는데 그래서 북괴가 대포 쏘고 마사일 쏠때 개성공단 통해서 알려줬나? 개그는 개그맨이 하는거지.. 진보팔이, 종북들은 정신 좀 차려야죠.

@cosmicgag: Some people falsely claim that Kaesong has been a [good] communication channel between the two Koreas that maintained peace. But think what the North did so far: did they warn us about their shelling and missile launch via Kaesong Complex? [No.] Don't kid yourself. It is not funny at all. You progressive scammers and pro-North people need to wake up.

@gvoice01: 개성공단은 평화의고리가 아니라 인질이고 볼모였지. 문제의 시작이 북이거늘[…]

@gvoice01: Kaesong Industrial Complex has been never been “the bridge to peace”, but rather the hostage [held by the North]. Every problem has originated from North Korea.

The mainstream media's use of the word “hostage” in its characterization of any South Korean worker in the Kaesong Complex has fueled accusations of biased, sensational reporting. Actually, the workers who actually stayed at the Complex said [ko] their stay was not unusual, with plenty of water and food no physical threats from North Korean side whatsoever. Some net users chimed in:

@sh4corea: 보수언론, 개성공단 기사 모두 엉터리. ‘돈벌이수단 폐쇄못해’ ‘인질우려’? 북한, 직원 한명 붙잡지 않았다. 정부의 인질구출작전? 정부와 언론이 합작으로 ‘007영화’ 시나리오 썼다. 개성공단, 스파이영화·소설 소재 아니다[…]

@sh4corea: Conservative media’s coverage on the Kaesong Complex is all sham. They claim that the North “held [South Korean] workers hostage” since they “cannot let go of the cash cow”, but actually the North did not ask, not even one worker, to stay. [Some media outlet's headline read] “The government pulled off the hostage-rescue operation”. It is a far-fetched 007 story co-written by the media and the government. Kaesong is not a subject of spy novel or movie.

As South Korean companies in the Kaesong Complex are facing near bankruptcy by the current crisis, some of them are planning to file a lawsuit against the government for their astronomical financial loss. Discussions formed around how to understand the case — whether to treat it as an ordinary civil loss in need of government help, or a damage inflicted by the government itself:

@murutukus: 개성공단 업체들이 정부 상대로 소송을 걸게 되면 그 판결은 과연 어떻게 되는 건가.. 정부의 대북 정책 변화에 따른 피해니까 이게 보상이 되는 건지 배상이 되는건지.

@murutukus: When companies in the complex file a lawsuit against the government, how should the court treat this case? Since it was damage done by the change of the government’s North Korean policy, should it be treated as “compensation” or “reparation

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