Border closure to force half of Kaesong factories to stop output

SEOUL, March 16 (Yonhap) -- Inter-Korean tensions reached a critical point on
Monday as North Korea kept the border closed for a fourth day, highlighting
concerns about the safety and viability of doing business in the communist state.
More than 720 South Koreans remained stranded in an industrial complex in the
North Korean border town of Kaesong. Nearly half of about 90 factories there will
have to stop production if raw materials are not delivered by Monday, their South
Korean offices said.
Seoul officials say North Korea has given no explanation for its provocative
move. The North's first border closure a week ago was done in protest over an
ongoing military exercise between South Korea and the United States. Border
crossings resumed the next day and continued until last Thursday.
The Seoul government has repeatedly urged North Korea to reopen the border, but
with relations frozen, it has few options open to it.
"I believe it is very important that our firm principle that the Kaesong
industrial complex should be developed, regardless of the political, military and
security situation on the Korean Peninsula, should be ensured," Unification
Minister Hyun In-taek said in a meeting with South Korean managers of factories
in Kaesong on Sunday.
Seoul officials are reluctant to discuss sanctions against North Korea, such as
suspending wage payments for North Korean workers during the border closure or
even shutting down the complex, but say that they will consider all available
options.
"Our government does not want the Kaesong industrial complex project to be
impaired," the minister said.
The South Korean factory managers issued a statement demanding mutual efforts by
the South and North Korean governments to reopen the border.
The Kaesong industrial complex, an outcome of the first inter-Korean summit in
2000, is the last remaining reconciliatory project since damaged relations led to
the suspension of South Korean tours to North Korea's scenic and historic spots
last year.
Hundreds of people and vehicles cross the military demarcation line every day,
sending raw materials and bringing back products, mostly watches, clothes,
kitchenware, electronic equipment and other labor-intensive goods.
About 10 factories have already stopped production, and 30 others will do so if
the closure continues on Monday, their managers said.
North Korea has so far allowed only seven people to return -- three South Koreans
who had urgent personal businesses and four foreign nationals -- over the
weekend.
"We have to take raw materials and gas into Kaesong and bring back the end
products. Our buyers are at a loss. They may cut orders for us," Hwang Chul-hwan,
general manager for Magic Micro Co. that supplies LCD equipment to LG Electronics
Co., said.
hkim@yna.co.kr
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