South Korea’s Ministry of Unification (MOU) admitted on Thursday that there was no evidence to back the former government of Park Geun-hye’s claims that wages paid to workers at the Kaesong Industrial Complex (KIC) had been diverted to fund the development of weapons of mass destruction in North Korea.
The MOU was responding to an investigation by a group of nine civilian experts that it had tasked with analyzing the former government’s North Korea policy amid concern from figures in the current administration that the shut-down of Kaesong had been ordered abruptly without proper evidence.
“It is verified that the closure [of Kaesong] was decided by the president’s unilateral verbal order without discussions or consultations at the official decision-making level,” the report said in a translated excerpt carried by Yonhap News Agency.
As a result of ousted President Park’s order, the complex was shut down in a way that went beyond the law, the report said, noting that security crises such as the one preceding it – Pyongyang’s fourth nuclear test and the launch of a satellite in January and February 2016 – could not justify the unilateral nature of the decision.
“This hampers the legitimacy of the government’s decision and limits Seoul’s future stance over the resumption of the Kaesong complex,” the report said, adding that Seoul should find a way to re-open the Kaesong complex “if certain conditions are met due to changes in the global political landscape …”
The complex was shut down in a way that went beyond the law
The report also said the MOU had been used politically by South Korea’s spy service when it controversially announced the arrival of 12 female North Korean workers in April 2016 and high-level defector Thae Yong-ho.
“The ministry passively made the announcement at the request of Seoul’s spy agency. It has been identified that the ministry was not even well aware of intelligence details,” Im Seong-taek, a lawyer and panel member said in remarks carried by Yonhap.
As a result of the reports findings, which come following significant u-turns in broader MOU policy during the past 12 months, the ministry said it “accepts the report … in a humble manner,” conceding that “not enough opinions were gathered and proper procedures not taken in the process of formulating and implementing major policies.”
Despite the report’s findings, it appears extremely unlikely that Seoul would be able to justify a re-opening of the Kaesong complex anytime soon because the significantly expanded scope of United Nations sanctions on North Korea would prohibit such a venture.
Furthermore, any push to re-open the complex would stand at odds with the current direction of U.S. policy under President Trump, potentially adding major tension to Seoul’s alliance with Washington.
As a result, it appears Seoul would find it difficult to justify any reversal of its decision, meaning the closure is likely to be permanent.
“Kaesong was the final vestige of inter-Korean cooperation,” said Andray Abrahamian, a fellow at the CSIS Pacific Forum.
“Given that the park has been shut down unilaterally by both sides, I think it shouldn’t be resurrected, though I was a supporter of the project initially,” he said.
As a result, Seoul “should look into more diverse, less compartmentalized ways to engage North Koreans and the North Korean economy,” he said.
It appears extremely unlikely that Seoul would be able to justify a re-opening of the Kaesong complex anytime soon
But from a South Korean domestic perspective, the ongoing closure will not have much impact on the minds of most citizens, said Christopher Green, a Ph.D. candidate at the University of Leiden.
“Polling suggests that most voters are against reopening the Kaesong Industrial Complex, even those who are not necessarily opposed to engagement with North Korea in other areas,” he said.
“That won’t change until North Korea takes a more convivial political approach to its southern neighbor, which won’t be soon.”
However, Fyodor Tertitskiy, an NK Pro analyst, said that while the decision to shut-down the complex was a “permanent” one from Seoul, “reopening of the complex would likely remain the condition for reanimating any of the other inter-Korean projects, such as South Korean tourism to the Kumgang mountains or Kaesong itself.”
As a result, it’s possible some parts of the South Korean government – those most interested in inter-Korean rapprochement – will use the report to push for a re-opening of the complex, even though cash generated there might support Pyongyang’s nuclear and ballistic missile aims.
CASH IS FUNGIBLE
While the report said there is no evidence that Kaesong did support North Korea’s WMD programs, critics of the complex have long argued that, because cash is fungible, it would have always been possible for Pyongyang to use part of the revenue to fund its sanctioned military activities.
But despite the report’s findings, analysts disagreed about the applicability of such thinking when it came to the Kaesong complex.
“Cash is fungible, but governments aren’t monolithic; at best, they are a collection of fiefdoms fighting over access to resources,” said Christopher Green.
“There isn’t a massive pile of cash in Kim Jong Un’s office that he dispenses to ministers and department heads according to his whim, [and] non-essential North Korean government ministries and other state agencies are largely unfunded.”
As a result, Green said it would be important to determine which branch of the North Korean government received payments from South Korean authorities for the Kaesong complex.
“It is perfectly possible that money earned in Kaesong went into accounts that paid for missile and nuclear R&D, but I’ve seen no evidence of it,” Green said. “I think that at a bare minimum it is the duty of a government to give evidence for the decisions it takes, which inevitably create winners and losers.”
There isn’t a massive pile of cash in Kim Jong Un’s office that he dispenses to ministers and department heads according to his whim
But Abrahamian said that while “the DPRK economy is a diffuse place and is less centralized than most people realize,” more should have been done to monitor the revenue flows.
“Given the sensitivity of the Kaesong project, profits would have been closer to central [DPRK] control than most other joint ventures in other places.”
As a result of the murky nature of North Korea’s accounting, John Lee, a North Korea observer who writes regularly for NK News, said any interest in re-opening the complex would have to be accompanied by increased clarity about what the revenue is used for.
“As long as South Korea cannot ‘ensure,’ aka declare without a shadow of a doubt that no money was used for missile development, Kaesong was in violation of UN resolutions,” he said. “The Moon administration [would] reopen Kaesong at its own risk.”
However, Tertitskiy said North Korean WMD development would have occurred regardless of the existence of the Kaesong revenues.
“Thus, I fully support its reopening as not only would it breach the iron curtain and expose more North Koreans to outside influence, but would help the workers to live a better life,” he said.
Following a turbulent year for inter-Korean relations and rapid changes of MOU policy following the election of Moon Jae-in, the report’s findings that the ministry had not been allowed to play a proper role in inter-Korean policy-making and had been used by the spy service inappropriately suggests it is in a precarious position.
What, then, does the nature of the Kaesong shut-down order say about the mechanics of inter-Korean policymaking as far as the MOU is concerned?
“It tells me both that the Blue House had an authoritarian streak under Park Geun-hye and that the Ministry of Unification had little power, even to the point of being stripped of its main source of institutional leverage and practical intelligence about contemporary North Korea by Blue House decree,” said Green.
No government ministry has been buffeted around and seen such swings in fortune as the MOU
However, the situation was emblematic of a much bigger problem, Green said, being that too much power resides in the South Korean presidency.
“Improve the balance of power between branches of government, and you may well improve outcomes,” he said.
Yet Green noted that the MOU would always struggle to maintain its status because it is “far too dependent on inter-Korean relations.”
“When North Korea is perceived as a threat, people stop thinking in terms of engagement,” he said. “Which makes sense; the closure of Kaesong might well have been the right decision, even though it was arrived at in an anti-democratic fashion.”
Abrahamian said that the situation followed a trend of decreasing MOU relevance over multiple administrations in South Korea.
“The MOU went from being a politically weak ministry, to a significant one under the Sunshine era, to [being] nearly eliminated under Lee Myung Bak, to [being] relegated to something of a domestic ‘unification-PR’ ministry under Park,” he said.
“No government ministry has been buffeted around and seen such swings in fortune as this one.”
Edited by Bryan Betts
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