Monday, March 16, 2009

Kaesong Update - workers return home, but future unclear

Three days after shutting down the border, North Korea partially reopened the crossing Monday to let South Koreans stranded in a northern industrial zone head home.

But North Korea is not yet allowing South Koreans or cargo back across the border to the dozens of factories in Kaesong run by southern business managers, the South's Unification Ministry said.

The seemingly arbitrary border restrictions — the second in a week — have unnerved South Korean business owners who run factories in Kaesong and rely on trucking in raw goods from the South into the impoverished North to produce everything from watches and shoes to kitchenware and electronic goods.
Border closure puts Gaeseong firms at risk
Nine out of 10 South Korean firms operating in a joint industrial complex in the North will be forced to suspend production if Pyongyang maintains its closure of the inter-Korean border, a local survey said yesterday.

North Korea kept the border closed for the third consecutive day amid rising tensions over its planned rocket launch in April.
Cross-border delivery of goods and raw materials has been suspended and hundreds of South Korean workers remain stranded at the Gaeseong industrial complex, located just north of the border, putting South Korean firms there under increasing difficulty.
In a survey of 72 companies operating in Gaeseong, 94 percent, or 68 firms, said they would have to stop production if the closure continued for more than six days from Sunday, due to a limited supply of gas, food and other raw materials, a council of firms in the Gaeseong complex said.
More than 90 South Korean firms operate in the industrial complex, a major symbol of reconciliation and an outcome of the first inter-Korean summit in 2000. The current closure is the first the industrial complex has experienced since it opened in 2004.
In a meeting with heads of South Korean companies operating in Gaeseong yesterday, Unification Minister Hyun In-taek said the government had "stern" views about North Korea's latest border ban.
He added, however, that Seoul did not want to see the complex disrupted in any way.
"We have stern views toward (the ban), and as unification minister, I feel regretful that such a situation has occurred," Hyun said. Many of the firms have recently expressed mounting concerns about the security and stability of the complex.
The minister said the government remained committed to the principle that the Gaeseong project must be shielded from the political, military and security issues of the Korean Peninsula and continue to be properly developed.
Yoo Chang-keun, CEO of a plastics manufacturing firm in the complex and vice president of an association of businesses running factories in the border city, said that if the closure were extended, "an increasing number of companies could be dealt a heavy blow due to order cancellations amid rising uncertainties."
Production has nearly come to a halt, said Lee Kwang-yong, who manages an electronics company at the industrial park. His firm is counting on a shipment of material supplies by tomorrow.
Yoo expressed regret over North Korea's "holding the border city and workers hostage." He also called for swift action on the part of the Seoul government, saying it should "ensure the protection of nationals' property."
North Korea sealed off the crossing Friday for the second time in a week to protest a joint military exercise by South Korea and the United States.
The North yesterday allowed a South Korean man who suffers from a spinal illness to return South from a joint industrial complex in the North two days after it closed the border again, Seoul officials said.
"North Korea has accepted our request concerning the return of an employee who has been suffering from a spinal illness," an unnamed South Korean official said, adding that the 28-year-old worker would return via train later in the day.
North Korea had allowed one South Korean and four foreign nationals to return to the South on Saturday.
More than 760 South Koreans are working in the North, mostly at the Gaeseong Industrial Complex. About 420 of them were scheduled to return on Friday and Saturday.
Analysts believe North Korea has no intention to shut down the Gaeseong complex, which will further discourage foreign investors.
It will likely reopen the border when the Key Resolve and Foal Eagle military drill ends, said Hong Ihk-pyo with the Korea Institute for International Economic Policy in Seoul. North Korea views the annual drill as a rehearsal for war, while South Korea and the United States say it is purely defensive.
North Korean media made no mention of the border closure but continued denunciations of South Korean President Lee Myung-bak.
The Rodong Sinmun, which is the North's main newspaper and is published by the Workers' Party, said it was not a North Korean missile threat but Seoul's conservative government that was responsible for heightened tensions.
"The much ado made by the Lee group about 'threat from the north' is no more than sheer sophism," the paper said in a commentary. "The outbreak of a new war on the peninsula is now becoming a reality due to the puppet warmongers becoming reckless, bereft of any reason."


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