Leading South Korean presidential candidate Moon Jae-in has pledged a significant expansion of the Kaesong Industrial Complex if elected, speaking on Thursday on the occasion of one year since the complete shutdown of the joint operation facilities.
Moon, the former leader of the main opposition Minjoo Party of Korea, said the losses of the companies should be “immediately” compensated and the KIC should be reopened, describing the suspension as an “absurd decision.”
“Kaesong Industrial Complex is a small form of unification. It was a successful model of inter-Korean economic cooperation, a breakthrough for small and medium enterprises, and the breath of the South Korean economy which reached the limit,” Moon said on his official Facebook account.
“It (the industrial complex) was the last safety valve that prevented a decisive disruption in inter-Korean relations.”
Moon argued that the profits made by the South were “hundreds of times larger” than those of the North, saying the South paid wages to around 50,000 workers, but there were 200 South Korean companies along with 5,000 subcontractors.
Moon said, if elected, he would “expand the Kaesong Industrial Complex to 20 million Pyeong (66,115,702.5 m2)”, a move which would grow the industrial complex to twenty times its current size. The South’s Ministry of Unification (MoU) confirmed to NK News on Friday that the complex has currently an area of a million Pyeong (3,300,000 m2).
The candidate argued the South could “spread the market economy system to the North” and “show the superiority of its system” through the operation of the industrial complex.
Moon argued that the South “should improve the South – North relations” while “imposing sanctions against the North along with the international community.”
“We can’t resolve the North Korean nuclear issue by completely severing exchange,” Moon said. “The administrations of Lee Myung-bak and Park Geun-hye made the North depend more on China by cutting off relations…”
The South Korean government on Friday dismissed the possibility of reopening the complex.
“Our political and internal situations may have changed a little bit. But the North’s grave situation didn’t change at all, but it is getting worse,” MoU spokesman Jeong Joon-hee told reporters during a regular news briefing. “Therefore, I believe that it is less likely to change [our stance on sanctions] to be flexible in the current situation.”
The MoU argued that the full-scale shutdown of the industrial complex was a “decisive factor in bringing strong pressure from the international community” such as UN Security Council (UNSC) Resolutions 2270 and 2321, as well as strengthened unilateral sanctions from countries such as the U.S., Japan, European Union (EU) and Australia.
“The amount of cash funneled from the Kaesong Industrial Complex [to the North], one hundred million dollars, is quite large,” Jeong said. “It is sufficient for us to assume that the North’s nuclear and missile developments are harshly affected by it (suspension).”
Joshua Stanton, a Washington, D.C.-based attorney and author of the One Free Korea blog, said Moon’s proposal would run contrary to UNSC resolutions.
“Resolution 2321, paragraph 32, bans public and private support for trade with North Korea, ‘including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade,’” Stanton told NK News. “Does he really think anyone will invest in Kaesong without those subsidies, which the U.N. has since prohibited?”
The operation of the KIC is a “flagrant violation of UNSC Resolution 1718, 8(d)”, Stanton added, pointing to the South Korean MoU‘s admission that cash flowing into the North through the industrial complex was used to upgrade its nuclear weapons and long-range missiles.
On February 10, 2016, the MoU said that the total amount of cash that funneled to the North through the industrial complex was “616 billion won (560 million dollars), with 132 billion won (120 million dollars) in cash having flowed into North Korea last year alone.”
The MoU later retracted some of these remarks.
Stanton also argued that resumption of cooperation at KIC could make the U.S. and the South lose momentum in putting pressure on North Korea.
“How can South Korea ask other countries to follow the U.N. sanctions it would be violating if it reopens Kaesong?” Stanton said. “Reopening Kaesong would also deprive the U.S. of credibility to demand that China, or African or Middle Eastern states, follow the resolutions when our own ally is also violating them.”
Featured Image: Kaesong Industrial District Management Committee
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