Three years ago, the Kaesong development project got shut down in a war of words between the two countries on the Korean peninsula. That showdown with North Korea got so bad that at one point the Kim regime trapped South Korean managers within the complex. In response to actions by Pyongyang in launching a satellite and testing another nuclear device, Seoul has ordered operations at Kaesong to cease, accusing the Kim regime of using its proceeds to fund its nuclear-weapons development:
As protest actions go, this one has a real sting to it. Pyongyang has been buried in sanctions that limit its access to hard currency, so the Kaesong project offered a rare chance for legitimate cash acquisition. According to the Washington Post, that brought in over a half-billion dollars over the life of the project, and $120 million last year alone. The move will sting the South a bit, too:
The zone, where North Koreans worked in South Korean-owned factories, opened during a period of engagement and and was originally championed as a way to improve the North’s economy — with a long-range goal of minimizing the gap between the countries if they are eventually reunified. The South Korean government and private companies invested about $1 billion in the industrial zone, which had about 124 companies mostly in light manufacturing, such as clothing and electronics. About 54,000 North Koreans were employed there, with the South paying their wages directly to the regime.
But the Unification Ministry statement said the international community needed to come up with a “vigorous response” to a recent nuclear test and rocket launch that “exacts a price for North Korea’s misguided actions, as well as extraordinary measures that compel North Korea to give up its nuclear capabilities and change its ways.” …
“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 long-range missiles,” the ministry said. As a result, President Park Geun-hye’s government in Seoul said it had “completely shut down” the complex.
Pardon the observation, but this has a whiff of Captain Louis Renault to it. What, pray tell, did Seoul believe Pyongyang would do with the cash — especially since they paid it directly to the regime? This isn’t the first ballistic-missile launch conducted by the DPRK, nor is it the first nuclear test. They reopened Kaesong not long after their citizens had been all but hostaged in the crisis, so it’s not as if anyone could rationally claim to be shocked, shocked at the intentions or actions of the Kim regime.
For its part, North Korea has reacted with all the aplomb and poise one would expect:
North Korea said it was kicking out all South Koreans from the jointly run Kaesong industrial zone on Thursday, calling the South’s move to suspend operations, in retaliation for Sunday’s rocket launch by the North, a “declaration of war”.
The North declared the industrial park, run by the rivals as a symbol of cooperation for more than a decade, a military control zone, the agency that handles its ties with Seoul said, according to the official KCNA news agency. …
“Unpardonable is the puppet group’s act of totally suspending the operation in (Kaesong), finding fault with the DPRK’s H-bomb test and launch of a satellite,” the North’s Committee for the Peaceful Reunification of Korea said, referring to South Korea.
How long will this fight last? Keep it in this perspective: North Korea desperately needs hard cash, and South Korea needs to keep a close eye on the North. The same needs drove both sides back to the table the last time, although in this case Seoul might want the cash flow to dry up a while longer to make the point stick a little more. But if they do reopen Kaesong, the South cannot offer up much credible outrage as to where all that hard cash goes. It’s either going to make the weapons that Kim Jong-un plans to use for their destruction (and Japan’s and ours, in Kim’s fevered imaginings), or to pleasure Kim and his close cronies. Those are the only two choices, and they’re not mutually exclusive, either.