South Korea’s Ministry of Unification (MoU) said on Wednesday that the government will temporarily close down the Kaesong Industrial Complex (KIC), in response to North Korea’s recent nuclear test and satellite launch.
The closure will go into effect from today, according to the South Korean government.
“Until now, about 616 billion Korean won (about $516 million) have flowed into North Korea via the KIC, with 132 billion won alone last year. It is crucial for South Korea to actively get involved in sanctions while the international community discusses tougher sanctions (on North Korea) for violating UN resolutions and pushing forward with a nuclear test and missile launch,” a statement from the Ministry of Unification reads.
Earlier today Minister Hong Yong-pyo met with 20 KIC employees to discuss the shutdown. A source present at the discussions who wished to remain anonymous called the situation at the facility “abysmal.”
“I don’t even know what they are trying to do … They told us to come to the meeting by 2 p.m. today, but it seems like Blue House already made their decision and the meeting was just held as the formality to pass the Blue House’s judgment,” the source said, before adding that few details on compensation for the closure were given.
During an emergency session at the National Assembly on Monday, Hong had said closing the KIC was under consideration.
“We are reviewing several methods for severely punishing North Korea, leading the country to denuclearize itself … including the KIC, at this moment.”
The closure marks a significant step beyond previous plans from the the Ministry of Unification (MoU) to downsize the number of South Koreans at the KIC – at first to 650, then to just 500. While the exact number of South Korean workers at the KIC prior to the announcement had not been released, a Yonhap News article from last January indicated that 808 Korean workers were at the facility.
“I spoke (of closing down the KIC) as tensions are rising … and South Koreans’ security is at risk,” Hong said during a question and answer session with lawmakers on Monday.
“We are focusing on pressuring North Korea with the international community’s help to lead change in the country.”
It was not the first time closing the KIC had been considered. In 2009, former President Lee Myung-bak threatened to shut down the project during a U.S. press conference a month after the North’s second nuclear test, saying that “North Korean workers will lose their jobs … if the Kaesong Industrial Complex were to close.”
In 2013, during a joint U.S.-ROK training exercise, it was North Korea who threatened to close the facility, withdrawing all of their workers and vowing to review shutting down the KIC depending “on the South Korean government’s attitude.”
But an expert said that the North would bear the economic brunt of a non operational KIC.
“The closure of the KIC will be damaging to the North Korean economy,” Jung Eun-lee at Kyungsang University told NK News.
“North Korean exports depend to a great degree on selling their natural resources to China. The price of resources has been dropping, making income from KIC very important for North Korea to balance out its losses from the drop in the price.”
The news comes as South Korean Foreign Minister Yun Byung-se visited UN headquarters in New York and met with Secretary General Ban Ki-moon, requesting tougher sanctions against North Korea, according to YTN.
Featured image: Wikimedia Commons
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