Although North Korea barred South Koreans from the Kaesong plant this past Wednesday, few analysts suspected that Pyongyang would shutter the plant — which generates foreign currency for the authoritarian government — even temporarily.
North Korea might eventually reopen the facility, six miles north of the demilitarized border. But South Korean businesses could be wary about returning to an area that Pyongyang has described as a “theater of confrontation” — one that operates on the political whims of its leadership.
At least once before, in 2009, the North barricaded the plant for several days. But the decision Monday marked a new step and underscored unease as officials throughout Asia and in Washington try to predict — and prepare for — what North Korea will do next.
On Monday, South Korea’s unification minister, Ryoo Kihl-jae, told parliament that he had “detected” signs of an upcoming underground nuclear blast at the North’s mountainous test site. But Ryoo, the South’s top official for North Korea policy, later backtracked from his comment, and a South Korean Defense Ministry spokesman said there is no indication that a nuclear test is imminent.
The contradictory assessments came after a major South Korean daily newspaper reported increased personnel and vehicles at the North’s test site. Security analysts cautioned that South Korean assessments of the North are unreliable and said the North could be trying to create a misleading sense of crisis, knowing that foreign nations routinely study satellite images of the test site.
South Korean officials said previously that the North might launch a midrange missile this week. Pyongyang has tried in recent years to build up its nuclear and rocket programs, hoping to reliably produce miniature nuclear bombs that can be mounted on long-range missiles capable of flying halfway around the world. Although the North threatened last month to launch a preemptive nuclear strike against the United States, analysts say it does not have the technical capability to do so.
Still, a South Korean Defense Ministry spokesman said Seoul is on particular guard for some kind of provocation in the next several days. Pyongyang has warned embassies that it cannot ensure their safety beyond Wednesday. And on Monday, North Korea celebrates the symbolically important birthday of its late founder, Kim Il Sung, whom it calls the “eternal president.”
“Based on those facts, we think we have to closely monitor” the coming days, said the spokesman, Kim Min-seok.
Even if North Korea launches a missile or tests a bomb to mark the elder Kim’s birthday, “it’s hard to imagine that everything we have witnessed has simply been Pyongyang’s schedule all along,” Rory Medcalf, director of the international security program at the Sydney-based Lowy Institute, said in an e-mail. “Instead, it sometimes seems like a woefully improvised stream of belligerent words and destabilizing deeds.”
The North said nothing Monday about an upcoming nuclear test. It blamed the temporary closure of Kaesong on the conservative South Korean government. Some government leaders in Seoul, the North pointed out, had spoken in recent days about worst-case scenarios at the industrial plant, such as the North holding South Korean workers hostage.
“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.