Some analysts say the tension of recent weeks, at a level not seen in two decades, has levied a clear and long-lasting toll on relations between the two Koreas, even if both sides manage to avoid armed conflict and ratchet down hostility.
The North’s decision to bar South Korean workers from the Kaesong Industrial Complex, a symbol of cooperation, has all but dashed South Korean business sentiment to invest further in the authoritarian state, executives and analysts say. Such resistance makes it far harder for new South Korean President Park Geun-hye to spur economic cooperation with the North, even if she wanted to.
Park took office in February having laid out a “trust-building” strategy with the North in which the South would provide humanitarian aid and small-scale economic projects to rebuild frayed ties, then add bigger investments if the North behaved in good faith. Park’s plan could still work, but analysts say that is unlikely; the North, they say, wants acceptance as a nuclear state and the removal of international sanctions before it agrees to major engagement.
“Those are like poison pills,” said Daniel Pinkston, a Seoul-based North Korea expert at the International Crisis Group. “The [trust-building] offer still applies — Park is not withdrawing it. If North Korea is willing to engage, she’ll reciprocate. But everything depends on the North’s stance.”
Hopes for inter-Korean relations have been progressively downsized in recent years. Back-to-back liberal presidents from 1998 to 2008 offered the grandest vision, known as the Sunshine Policy. They hoped business deals and back-and-forth travel would push broader capitalist reforms in the North — something that never took root. The following president, Lee Myung-bak, quickly yanked away much of the aid and investment, but even his strategy had a glimmer of optimism: He promised full cooperation with the North if it denuclearized, a move he thought possible. Park, by contrast, dwells far less on weapons, which the North says are its “nation’s life” and not up for negotiation.
Reality ‘is frustrating’
But for all the North’s decisions in recent weeks, including its renewed effort to produce fissile material at the Yongbyon nuclear site, nothing has damaged inter-Korean relations more than the barricade of the Kaesong Industrial Complex.
Located six miles north of the border, Kaesong was launched in 2004 as a place where the two Koreas could work side-by-side, with management, technology and supplies coming from the South and labor coming from the North. Its operator, Hyundai Asan, a subsidiary of the South Korean conglomerate, once called the facility a “new dream of co-prosperity,” and its promotional pamphlets show a master plan with three golf courses, a theme park and restaurants.
Several years ago, a small group of executives who invested in Kaesong chatted casually of even more grandiose plans: eventually, 10 Kaesong-like facilities in the North, employing a total of 5 million — one-fifth of the country.
“That was our vision,” said Song Ki-suk, a former executive at an automobile components company that went into Kaesong.
The reality, Song said, “is frustrating.”
Today, Kaesong is a grid of gray factories. Ninety percent of the master plan is undeveloped, and investment was frozen when North Korea launched a pair of attacks on the South in 2010. Business executives there say they are at the whims of North Korea’s 30-year-old ruler, Kim Jong Un, who on Wednesday barred South Koreans from entering the plant, perhaps as a political show of force.
The barricade has potentially fatal implications for the companies at the plant, who are prevented from distributing products to customers.
“Even if North Korea reopens Kaesong, they’ve already lost credibility,” said Song, a professor at Kyungmin University in northern Seoul. “People would be concerned about investing in North Korea again, because they’ve seen the risk.”
The failed rapprochement with North Korea could also hasten a shift in the South’s national mind-set.
Unification has for decades stood as an unquestioned national goal — taught in school textbooks and promoted in government-funded advertisement campaigns — but younger generations increasingly worry that a union with the North would do more harm than good. Only about one in five teenagers thinks unification is essential, compared with three in five adults nationwide.
Older generations remember the Korean War and in some cases have relatives in the North. Younger South Koreans remember their neighbor only as it exists now: remote, economically backward and figuring into their lives as a low-level threat.
“I don’t think we’re at a point where the hope of unification could be completely swept aside,” said Abraham Kim, vice president of the Korea Economic Institute. “But if we go on this path [of tension] for another couple generations, the idea of it will certainly erode.”
Yoonjung Seo contributed to this report.