North Korea agrees to restart Kaesong Industrial Complex

After months of negotiations, North Korea has agreed to reopen a jointly-run industrial park that has been a bellwether for North-South relations.

In the middle of North Korea’s bluster this year, Pyongyang threatened that it was readying its military for war and issued warnings about how unhappy it was with South Korea and the US, even going so far as to cut a critical Korea-Korea phone line.

Still, analysts pointed out that we’d been there before.

The move to watch for, many said, was any sudden closure of a jointly run industrial complex just across the border in North Korea. The Kaesong industrial park is staffed by both North and South Koreans and is an economic boon to both and the biggest symbol of cooperation between them. Since it was opened in 2004, the North had never shut it down, despite tensions.

So as long as Kaesong was running, the thinking went, all of North Korea’s rhetoric could be considered just that.  

But when North Korea barred South Korean workers from coming across the border to work and then eventually shut down the industrial park in April, it took many analysts by surprise and ratcheted tensions to a new high. One analyst the Monitor spoke with said North Korea’s young leader was trying to make a point, and predicted the factory would only be temporarily shut.

“I think it has something to do with comments by Western and South Korean observers who say that North Korea wouldn’t give up the Kaesong Complex no matter what, that North Korea needs the business too much. They took that as kind of insulting to their leadership,” says Moon Chung-in, a professor at Yonsei University, in Seoul.

More from Reuters: 

SEOUL, Aug 14 (Reuters) - Rivals North and South Korea agreed on Wednesday to restart their troubled joint industrial park after a series of talks on the fate of the last symbol of economic cooperation, raising hopes of possible improvement in political ties.

A joint statement said the two sides had agreed to work together to get the Kaesong industrial zone, inside North Korea and just a few miles from the heavily armed border, up and running again and prevent another shutdown.

It did not give a date.

South Korean President Park Geun-hye welcomed the decision, saying she hoped "today's talks will be the beginning of a new start of South and North Korea relations," media said.

North Korea pulled its 53,000 workers out of the park at the height of tensions between the two sides in April, with the North threatening the United States and the South with nuclear attack.

Reclusive North Korea, for which Kaesong has been a rare source of hard currency, and the South, one of the richest countries in the world, are technically still at war as their 1950-53 civil conflict ended not in a treaty but a mere truce.

"South and North guarantee the industrial zone's normal operation ... without influence of any kind from the political situation," the statement said, noting that they would jointly hold an overseas investors' event.

Since it opened in 2004, the Kaesong complex has generated roughly $90 million annually in wages paid directly to the North's state agency that manages the zone.

The companies had no oversight on how much was paid to the workers, most of whom were women on assembly lines.

Earlier this year, North Korea threatened nuclear strikes against the South and the United States after the United Nations tightened sanctions against it for conducting its third nuclear test in February.

The reopening of Kaesong is seen as addressing the political interests of the democratic South and the economic interests of the North that is so poor it can't feed its people.

 (Reporting by Ju-min Park; Editing by Nick Macfie)