The association said any potential losses stemming from compensation to their customers and the stoppage of their operations was not included in the tally.
South Koreans see shuttered industrial complex as key in denuclearization effort
According to the association, 49 companies largely rely on their factories in the industrial park for their production. When the industrial park was closed in for days, South Korean firms reported a combined loss of 1. The companies, however, claim the actual damage will be greater considering the loss of business partners and credibility. The complex, which opened in , had served as a major revenue source for the cash-strapped North, while South Korea had benefited from cheap but skilled North Korean labor. South Korea has cut off power and water supplies to a factory park in North Korea, officials said Friday, a day after the North deported all South Korean workers there and ordered a military takeover of the complex that had been the last major symbol of cooperation between the rivals.
At about 10 p. The South Korean firms operating in the complex sent one truck each to Gaeseong to bring to the South their finished products, production materials, equipment and other belongings, while Seoul authorities vowed to try their utmost to minimize possible damages to firms. An additional South Koreans entered the complex to prepare for the suspension of factory operations. North Korea said on Thursday that it would freeze all South Korean assets at a joint industrial complex the South shut down to retaliate for a recent nuclear test and a rocket launch by the North.
It also ordered all South Korean managers in the factory park in the North Korean town of Kaesong expelled by 5 p. The North said it would sever all communication across the border after the last of the South Koreans left. In addition, it said it was shutting down the only cross-border highway open between the two Koreas.
The road has linked South Korea with the factory park since , when it began operations just over the western inter-Korean border. The zone will return to the control of the North Korean military, it said. The Kaesong complex began as a pilot project to combine South Korean manufacturing skills with cheap North Korean labor.
Eventually, more than 45, North Koreans worked for South Korean-owned factories there. Closing Kaesong now snuffs out what remains of North-South cooperation and closes a window through which some North Koreans could get a taste of life in the south, Lankov said. Labeled a special administrative industrial region of North Korea, Kaesong operated as a collaborative economic development zone that hosts South Korean companies attracted by its access to cheap labor.
Kaesong is only six miles inside North Korea, with direct rail and highway access to the south. The industrial park has been controversial in South Korea, as some conservative South Koreans argue that it extends a lifeline to the North Korean leadership, undermining United Nations sanctions. In , North Korea pulled its 53, workers from the plant in a show of strength during an earlier time of rising tensions between the two nations.
While the earlier closure did not last, the closure announced Wednesday looks set to become permanent. North Korea has pushed ahead with the extremely provocative act of launching a long-range missile on the heels of its 4th nuclear test, showing disregard for the repeated warnings of the international community and the suffering of its people.
Notwithstanding international efforts to deter North Korea from developing its nuclear capabilities and long-range missiles,. North Korea has declared that it would follow up on its recent provocations with additional nuclear tests and missile launches, thereby not even showing the slightest intent to forgo the development of its nuclear and missile capabilities. We have also made every effort to move the Gaeseong Industrial Complex forward under the position that it should be developed in conformity with international norms.
To date, the total amount of cash that flowed into North Korea through the Gaeseong Industrial Complex is billion won million dollars , with billion won million dollars in cash having flowed into North Korea last year alone, and the Government and the private sector have invested a total of 1. 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.
This tramples on the efforts of the Korean Government and the businesses that have set up shop in the Gaeseong Industrial Complex, and puts at risk the lives and safety of the Korean people. We have notified the North Korean authorities of this decision and called on them to extend such cooperation as is rendered necessary by the complete shutdown of the Gaeseong Industrial Complex, including the safe return of our citizens. The Government will move expeditiously forward with all steps to ensure the safe return of our citizens, and will set up a Government Task Force under the Office for Government Policy Coordination to provide the necessary whole-of-government assistance to our businesses.
Kaesong is an important source of income for Pyongyang. Those payments are made directly to the regime, which is then charged with paying the workers themselves, a system that critics say allows the regime to pocket most of the money. South and North Korea have reached an agreement on the land use fee amount for South Korean firms operating a joint industrial park across the border, the Unification Ministry announced Thursday. A total of South Korean firms are running factories with about 54, North Koreans working in them.
Kaesong has served as a major revenue source for the cash-strapped North, while South Korea has benefited from cheap but skilled North Korean labor.
The two sides launched talks over the issue again in late They are currently using about 25 percent of the 1 million square meter land. The operation of the complex has been affected by the ups and downs of inter-Korean ties. In April , the North abruptly suspended the operation of the complex for about five months, citing inter-Korean tensions. South and North Korea have been sharply divided over how much South Korean firms operating at a joint industrial park in the North should pay for land use, government officials said Monday. The two Koreas are in talks over the payment by South Korean firms over land use fees at Kaesong Industrial Complex where about 54, North Koreans are working, according to the officials at the Unification Ministry.
It has served as a major revenue source for the cash-strapped North, while South Korea has utilized cheap but skilled North Korean laborers. The South has been exempted from land use fees for a decade, but the measure is set to expire this year. On Nov. Unification Minister Hong Yong-pyo said Tuesday that an inter-Korean deal struck earlier in the day marks the first time that North Korea had expressed regret over its provocations. The agreement also came as good news to South Korean firms currently doing business at the inter-Korean industrial complex in the North Korean border town of Kaesong.
The South Korean companies operate factories at the industrial park, the last remaining symbol of inter-Korean reconciliation, employing about 54, North Korean workers. The north and the south agreed to hold talks between their authorities in Pyongyang or Seoul at an early date to improve the north-south ties and have multi-faceted dialogue and negotiations in the future.
The south side will stop all loudspeaker propaganda broadcasts along the MDL from , August 25 unless an abnormal case occurs. The north and the south agreed to arrange reunions of separated families and relatives from the north and the south on the occasion of the Harvest Moon Day this year and continue to hold such reunions in the future, too and to have a Red Cross working contact for it early in September. However, with the ink barely dried, a new round of escalating conflict between the Koreas is affecting operations at the KIC….
South Korea said Friday it will limit the entry of its nationals into a joint industrial park in North Korea following the exchange of artillery fire between the two sides. The Unification Ministry said it will only permit South Korean businessmen directly involved in the operation of factories at the Kaesong Industrial Park to enter the complex.
No damage was reported. A total of South Korean small and medium-size enterprises operate factories at the industrial park, the last remaining symbol of inter-Korean reconciliation. About 54, North Koreans work there. The ministry said it has taken measures to ensure the safety of South Koreans who are temporarily staying in the North. Read the full story here: S. Korea to partially ban entry into joint industrial park Yonhap North Korea has skipped Kaesong liaison office meetings for eight weeks Thursday, April 18th, Benjamin Katzeff Silberstein Reports Yonhap : North Korea skipped a weekly meeting of the co-chiefs of an inter-Korean liaison office for the eighth straight week on Friday, deepening concerns about slumping cross-border exchanges amid stalled denuclearization negotiations between the U.
North Korea restarts work at Kaesong industrial complex - Business Insider
Hyundai Asan has the most riding on the prospect of a peaceful peninsula. Now the industrial park has been closed there is no trade left, the ministry said. UPDATE 5 : Seoul cuts off power supplies to factory park in North Korea AP South Korea has cut off power and water supplies to a factory park in North Korea, officials said Friday, a day after the North deported all South Korean workers there and ordered a military takeover of the complex that had been the last major symbol of cooperation between the rivals.
Kaesong has been closed before. Notwithstanding international efforts to deter North Korea from developing its nuclear capabilities and long-range missiles, North Korea has declared that it would follow up on its recent provocations with additional nuclear tests and missile launches, thereby not even showing the slightest intent to forgo the development of its nuclear and missile capabilities.
How bad is the Kaesong shutdown for the North Korean Economy? Naturally, this is bad news for the North Korean economy.
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But how bad exactly? Specifically, this meant the creation of residential areas, hospitals, shopping centers, and even a proposed theme park to attract tourists.
The Kaesong industrial park is run by a South Korean committee that has a year lease that began in Hyundai Asan , a division of South Korean conglomerate Hyundai , has been hired by Pyongyang to develop the land. The zone faces a number of obstacles. Among the most pressing are U. In May , Pyongyang announced it unilaterally scrapped wage and rent agreements at the industrial park.
In September , a visit to North Korea by the Hyundai Group chairwoman led to a resolution to the North's demands, with mild wage increases and no change in land rents. In , the Ministry of Unification was informed that 8 of the current companies had received a tax collection notice. The notices were made by a unilateral decision by North Korea. Green Doctors, an NGO founded in Busan in January , received official government permission to open a hospital in the region in Since then, it has provided medical treatment to the workers at Kaesong until the closure of the complex.
The doctors who work there received no salary. In May , following the sinking of the ROKS Cheonan and South Korea's response, North Korea severed ties with South Korea and shut its Consultative Office,  however existing activities in the zone maintained production activities,  and transport and telephones to South Korea were operating normally. This came as tensions began escalating rapidly between Seoul and Pyongyang.
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On 17 April, North Korea barred a delegation of 10 South Korean businessmen from delivering food and supplies to the South Korean staff who remained in the industrial zone. On 4 July, both countries agreed in principle that the Kaesong Industrial Park should be reopened, as tensions between the two began to cool.
The Kaesong Industrial Complex: Setting the Stage for a Successful Second Act
The move, seen as precursor to formally closing the region, sparked a seventh round of talks which South Korea label as "final". The agreement included provisions designed to ensure against a similar shutdown in the future. A joint committee was formed to determine if compensation will be provided for economic losses caused by the shutdown. On 13 September, before the reopening of Kaesong Industrial region, the two governments held a subcommittee meeting to iron out additional issues regarding entrance, legal stay, communication, customs and passing.
On 16 September, Kaesong was reopened after five months. On 10 February , in response to a rocket launch by the DPRK , South Korea announced that it would, for the first time, halt operations in the region commenting on the launch to be a disguised ballistic missile test. Seoul said all operations at the complex would halt, to stop the North using its investment "to fund its nuclear and missile development".
The next day, the North announced it was expelling all South Korean workers and said it would freeze all South Korean assets and equipment at the jointly run factory park.
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On Thursday, 11 February, a few minutes before midnight, the South announced it had shut off the supply of electricity and water into Kaesong that supplied the factory zone. In South Korean domestic politics, there were two opposing viewpoints toward the closure - while the Saenuri Party argued for the closure, stating that it was one and the only means to end North Korea's provocation, two other parties, The Minjoo Party and the People's Party , objecting to Saenuri, asserted that more communication is needed and that the closure would only escalate tensions in the Korean peninsula.
The Saenuri Party, the ruling party at the time, said during the announcement of Kaesong Industrial Region's closure, "North Korea conducted the 4th nuclear test and rocket launch regardless of persistent warnings from the South Korean government and the international society. Communication and persuasion, or the 'carrots,' do not work anymore. We need more powerful sanctions on North Korea.
On the other hand, The Minjoo Party and People's Party, which were the opposition parties, counter-argued that North Korea has never stopped its provocation even during its Arduous March, or the North Korean famine , emphasizing that a simple closure would never bar North Korea from testing nuclear weapons and launching missiles. They also say that the Kaesong Industrial Region was the last hope for peaceful resolution to everlasting tensions between the South and the North, but now that it is closed, South Korean citizens' fear over national defense will intensify.
In December , an expert panel investigating the decision to close the park found that there was no evidence that North Korea had diverted wages to fund its nuclear program. The head of the panel Kim Jong-soo said, "The presidential office inserted the wage-diversion argument as major grounds, yet without concrete information, sufficient evidence and consultations with related agencies, mainly citing defector testimonies that lack objectivity and credibility.
This impairs the decision's legitimacy and could constrain our ground over a future restart of the complex, while hampering the companies' rights to protect their assets due to the hasty pullout process. On 10 October , South Korea resumed supplying water to the region. There is rail access to South Korea operated by Korail via the Gyeongui Line but it is not known what restrictions apply. An agreement to re-establish rail freight services was made in November The closest station in South Korea is Dorasan Station , from which road access can be taken.
The route between the two highways is a paved road and part of the AH1 network. There are no connecting roads en route and a turnaround is available only in the South before entering the North. Access to the road is closed if there are restrictions from checkpoints upon entering the DMZ. There is no option of air travel available from Kaesong to the South. The closest airports in the South are Gimpo International Airport and Incheon International Airport , from which road access can be taken to the industrial region. From Wikipedia, the free encyclopedia.
Further information: Korean crisis. North Korea portal. Yonhap News Agency. Retrieved 12 May Retrieved 8 April The Express. Retrieved 16 August Retrieved The New York Times. BBC News. Towards a Northeast Asian security community implications for Korea's growth and economic development. Retrieved on Korea withdraws demand for steep wage hike at joint park".