North Korea to expel South Koreans, freeze assets at factory
North Korea said it was expelling South Koreans from a jointly run industrial park and severing a military hotline between the two countries, a day after the government in Seoul announced its withdrawal from the site to punish Kim Jong Un for his recent nuclear test and long-range rocket launch.
The North Korea army is taking control of the Gaeseong industrial complex and freezing the assets of the more than 120 South Korean companies operating there, the official Korean Central News Agency reported Thursday. The army is also sealing off the land route from the factory park to the nearby demilitarized zone that has separated the countries since the end of their civil war more than six decades ago, KCNA said.
South Korea announced the withdrawal of its companies from Gaeseong on Wednesday, saying the move would deprive North Korea of cash for its weapons programs after Pyongyang followed a nuclear test in January with a long-range rocket launch on Feb. 7. Set up during a period of detente in the early 2000s, Gaeseong has been one of the biggest sources of hard currency for the isolated regime, with the salaries of 54,000 North Korean workers paid in U.S. dollars directly to Pyongyang.
"The south Korean puppet group will experience what disastrous and painful consequences will be entailed by its action," the Committee for the Peaceful Reunification of Korea said Thursday in a statement carried by KCNA. The committee said that President Park Geun Hye was "a fool" for ending operations at the complex, which was the last vestige of economic cooperation between the two countries, calling the suspension "a dangerous declaration of war."
Gaeseong provided 616 billion won ($514 million) in cash to North Korea since operations began more than a decade ago, including 132 billion won last year, South Korea's Unification Minister Hong Yong Pyo said Wednesday. The government in Seoul and private citizens have also invested more than 1 trillion won in the project, he said.
"The relations between the two Koreas will remain extremely sour for some time," Kim Soo Am, a research fellow at the Korea Institute for National Unification, said by phone after the North Korean announcement. "Once Gaeseong turns into a military area, it will be hard for the industrial complex to reopen as North Korea will be requesting strong compensations."
About 200 South Koreans are believed to be affected by the expulsions. All South Korean property except private belongings will be frozen and managed by a committee of Gaeseong residents, the North Korean committee said. All North Korean workers will be withdrawn from the factory park as well, it said. The military hotline, symbol of efforts to ratchet down tensions between the two countries, will be disconnected, KCNA said.
Cotton Club, an underwear maker, said three of its employees were in the complex and were unsure of their whereabouts. SNG, an apparel maker, said two employees were still at Gaeseong and it didn't have estimates on inventories on site. Mansun Corporation, a winter jacket maker, said there was "not that small" amount of inventory remaining in the complex.