SOUTH KOREA ending industrial partnership as penalty.
SEOUL, South Korea — South Korean workers this morning began shutting down a jointly run industrial park in North Korea, a move that will end, at least temporarily, the Koreas’ last major cooperation project to punish the North for a recent nuclear test and rocket launch.
“An extraordinary measure is needed to force North Korea to give up its nuclear arms,” South Korean Unification Minister Hong Yong Pyo told reporters Wednesday. The government did not want companies and funds for the Kaesong factory park used for North Korea’s nuclear and missile development, Hong said.
The Unification Ministry, which is responsible for relations with North Korea, said in a statement that the government had “decided to completely shut down” the park. It notified North Korean authorities of the decision and asked them to help ensure the safe return of South Korean citizens from Kaesong.
There was no immediate reaction to the move from North Korea. Seoul said that North Korean workers did not report to work at Kaesong this morning.
It was unclear how long the shutdown at Kaesong would last.
China provides most of North Korea’s energy and food imports and has repeatedly rejected tough sanctions like banning oil shipments to the country for fear of destabilizing the regime and triggering a flood of refugees across the countries’ shared border.
Seoul’s withdrawal from Kaesong will affect more than 120 South Korean companies employing about 54,000 North Korean workers at the complex that sits just north of the heavily armed border.
Kaesong has long been viewed as a source of hard currency for the isolated government in Pyongyang. North Korea has received $560 million in cash since the complex began in the early 2000s, including nearly $110 million last year alone, Hong said.
“It appears that such funds have not been used to pave the way to peace as the international community had hoped, but rather to upgrade its nuclear weapons and longrange missiles,” he said.
South Korea’s government and private citizens have invested more than $852 million, he said.
A Kaesong business group quickly protested the move to pull out, saying the announcement gave companies little time to minimize losses.
“There are hundreds of thousands of South Korean workers and families who rely on the Kaesong park for their living,” said Lee Eun Haeng, chairman of Ilsung Leports, which produces fashion goods at the park. “They have become jobless overnight.”
South Korea’s Finance Ministry said the government will provide financial compensation to companies that operate at the park.
South Korea’s plan shows President Park Geun-hye’s patience is running out despite her hopes for eventual unification. In 2014, less than a year after taking office, she said that reuniting the countries would be an “economic bonanza” for the combined 75 million population on the peninsula.
The industrial park served as a testing ground for a unified Korean economy by merging South Korean knowhow and capital with North Korea’s cheap labor. Companies operating there have mostly produced labor-intensive goods, including Romanson Co., a watch maker; Shinwon Corp., a clothing manufacturer; and Good People Co., an underwear maker.
The Kaesong complex started production in 2004 and has survived periodic tensions linked to nuclear and missile tests by North Korea. In 2013, Pyongyang withdrew its workers for months after its third nuclear test, returning them after the countries agreed on steps to improve ties, including reunions of families separated by the 1950-53 Korean War.