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396608
Thu, 02/11/2016 - 02:38
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Inter-Korean ties to face strains over Kaesong complex closure: experts

SEOUL, Feb. 10 (Yonhap) -- The outlook for South and North Korea's relations will remain murky as South Korea has made a bold move in suspending a joint industrial park in the North in response to Pyongyang's nuclear and missile provocations, analysts said. South Korea said Wednesday that it has decided to "completely" shut down the Kaesong Industrial Complex in the North's border city of the same name, the last remaining symbol of inter-Korean reconciliation. Seoul's move is aimed at cutting off North Korea's source of hard currency as the international community is pushing for stronger sanctions against North Korea's nuclear test on Jan. 6 and a long-range rocket launch earlier this week. Analysts said North Korea is highly likely to protest against South Korea's decision or pass the buck to the South over icy inter-Korean ties, expressing concerns about an extension of the confrontational mode. "If the complex, the only remaining symbol of inter-Korean cooperation, halts its operation, inter-Korean relations cannot help facing severe strains," said Cheong Seong-chang, a senior researcher at the Sejong Institute. "There is a possibility that North Korea could carry out other types of provocations." Seoul-Pyongyang relations had undergone a short-lived conciliatory mood last year following their rare deal in August on easing military tension. But the North's latest nuke and missile provocations have completely changed the shape of regional security, inviting strong international condemnation. A total of 124 South Korean companies are operating in the zone, some 50 kilometers northwest of Seoul, employing more than 54,000 North Korean workers to produce labor-intensive goods, such as clothes and utensils. The complex, opened in 2004, has served as a major revenue source for the cash-strapped North, while South Korea has benefited from cheap but skilled North Korean labor. The South Korean firms annually provide about US$100 million in total to North Korean workers for wages. The value of production made at the complex reached $515.5 million in the first 11 months of last year, compared with $470 million for the whole year of 2014, according to the Unification Ministry. "North Korea is likely to strongly demand the South to resume the operation of the factory zone or ban the movement of goods by South Korean firms into the South," said Yang Moo-jin, a professor at the University of North Korean Studies. Yang said the North is expected to insist that Seoul has violated the 2013 inter-Korean agreement on the complex. In April 2013, the North shut down the complex for about four months, citing what it called heightened tensions sparked by a military drill between Seoul and Washington. In February of that year, the North conducted its third nuclear test. When the two Koreas decided to reopen it, they agreed that a shutdown should not be repeated and the operation should not be affected by political situations under any circumstances. "The North may seize facilities being invested in by South Korean firms and call for indemnity to recoup damages," said Chang Yong-seok, a researcher at the Seoul National University Institute for Peace and Unification Studies. Some experts said that South Korea appears to be too hasty in using the last remaining card for putting pressure on North Korea. "Given the Kaesong complex is the last channel for inter-Korean reconciliation, it would be better for South Korea to take a more prudent approach toward it," said Kim Yong-hyun, a professor of North Korean studies at Dongguk University. sooyeon@yna.co.kr (END)

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