“How the situation will develop in the days ahead will entirely depend on the attitude of the South Korean authorities,” said the North’s official Korean Central News Agency, in a quote attributed to Kim Yang Gon, secretary of the Central Committee of the Workers’ Party of Korea, who visited Kaesong on Monday.
The statement suggested that the North is seeking political concessions from or dialogue with Seoul. But Ryoo, the South’s unification minister, said, “Kaesong should not be used by either Korea to gain an advantage,” adding that “now is not the time for dialogue.”
Kaesong, which began operations in 2004, pairs about 50,000 low-cost North Korean workers with 123 small- and medium-size South Korean companies. The complex matters disproportionately to the North, helping to offset the country’s heavy reliance on China for trade, key resources and foreign currency.
The North Korean government collects a bulk of the salary from Kaesong’s workers — between $2 and $3 per day. But even so, those employees have relatively good living standards compared with other North Koreans. Their South Korean employers provide two meals and up to three snacks daily, executives say.
By shuttering Kaesong, the North deals a blow to a nearby city of 200,000 that depends entirely on the factory for its economic survival.
North Koreans are banned from political dissent or questioning government policies, but activists said Monday that the North’s decision could spur some show of anger or frustration. Those who worked at Kaesong have firsthand knowledge about the relative wealth of their capitalist neighbor.
“The North Korean economic system just can’t suddenly absorb [50,000] workers and all the family members that were relying on that,” said Sokeel Park, director of research and strategy for Liberty in North Korea, an international group that works with defectors. “Losing that many jobs in any economy would be a huge thing, and here even more so. . . . I think this is a strategic mistake in the long term for the North Korean regime.”
South Korea’s economy has reacted negatively to the mounting uncertainty, with the benchmark KOSPI index sliding in recent days on fears that the North could launch an attack.
Kaesong produces a range of items, including clothing and automotive parts. In recent days, South Korean company executives had been hoping to continue operations even amid the blockade. When the North first barred entrance to South Koreans last week, more than 800 South Koreans were already at the plant. Most elected to stay — although those who wished to go home were free to do so. As of Monday, nearly 500 were still at the plant. The North’s statement about Kaesong did not say what would happen to those workers.
Yoonjung Seo contributed to this report.