South Korean firms hope North-South complex will reopen

South Korean investors in the Kaesong complex, a joint North-South endeavor shuttered in 2016, hope thawing tensions surrounding the Winter Olympics could lead to a revival of the industrial park. 

First Look

When South Korean businessman Park Nam-suh was forced to abandon his factory in a North Korean industrial complex two years ago, he thought his business was finished. Now, he dares to hope.

The Kaesong complex, funded by South Korean firms and manned by workers from the North, shut in 2016 after the South accused North Korea of taking workers' wages to fund its arms program.

But now South Korea is in the mood to reengage with its old enemy, using its first Winter Olympics this month to attempt a thaw in relations – and giving Mr. Park and other former investors in Kaesong some hope that the industrial park can be revived.

"I hope the Olympics will be a turning point in achieving inter-Korean peace and speeding up the reopening of the Kaesong complex. It should be," said Park whose factory produced plastic toys, clothes hangers, and cups.

He was one of 124 former Kaesong factory owners who set up a booth at South Korea's Olympics venue of Pyeongchang this week, screening videos to passersby and featuring the slogan: "We need to go back."

At its height, Kaesong employed 55,000 North Korean workers in South Korean-owned factories, turning out toys to textiles for markets in the South and supplying the North with hard currency.

South Korea withdrew because it said the North was taking workers's wages, paid by the South Korean firms operating there, and using the money to fund its nuclear and missile programs.

The group of factory owners plan to ask the government in Seoul for permission to visit the North after the Olympics as part of their lobbying effort to reopen Kaesong.

Upon Kaesong's closure, the North seized their factories, refusing to allow them to retrieve their equipment and stocks, but some of the businessmen blame the South for their losses.

They had profited at Kaesong, using cheap Korean-speaking labor close to South Korean markets – a rare example of North-South cooperation since the two sides ended their 1950-53 war.

The group's leader, Shin Han-yong, whose Kaesong plant made fishing nets, said it had been tough for owners since the complex closed, with their assets stranded inside the North.

"We have had unbearable pain to survive for the past two years," Mr. Shin said.

An official from South Korea's Unification Ministry told Reuters that now was not the time to discuss reopening Kaesong and that talks could only begin when "the North Korean nuclear issue has to some extent entered a phase of a resolution."

For Shin, that stance means that improved relations between North Korea and the United States would also be critical.

"We cautiously expect it may be possible to reopen the factory within this year, should the Olympics lead to the improvement of relations between two Koreas and between North Korea and US," he said.

Prospects for renewing commercial ties with the North could be brighter in tourism, with the ministry suggesting it is more open to discussing a resumption of tours to the North's scenic Mt. Kumkang. Tours there were halted a decade ago after a South Korean tourist was shot by a North Korean guard.

"We see Mt. Kumkang tours as a project which has an importance for inter-Korean relations," the ministry said, adding talks could begin when the security of tourists were guaranteed and conditions on nuclear and other issues met.

That would be good news for Kim Ik-soo, who operates a small supermarket at the border town of Goseong, once a gateway for tourists visiting Mt. Kumkang.

Mr. Kim said buses carrying up to 3,000 tourists a day used to pass by before the tours ended, enabling his business to thrive. Now, his supermarket sees four or five customers a day.

But he is not getting his hopes up, mindful that North Korea's participation in the Pyeongchang Games could spring some unpleasant surprises for an otherwise promising detente.

"I hope inter-Korean relations will improve but the question is what North Korea will do during the Olympics," he said. "It may be plotting something behind the scenes. Who knows?"

Park, the businessman who dreams of restarting his plastics factory at Kaesong, said Seoul's decision to quit the complex was "nonsense" and an over-reaction.

Park said that when Kaesong closed in 2016, he had sent his staff in a car there to bring back plastic molds and raw materials worth millions of dollars, but North Korea only allowed them to take back "personal belongings."

"My staff came back to South Korea in an empty car.... I was heartbroken by the losses, but I was also heartbroken as much because I was not able to say goodbye to North Korean workers who have shared joys and tears for eight years."

This story was reported by Reuters.