Fri, Apr 26, 2013 - Page 1 News List

S Korea delivers talks ultimatum to North on Kaesong

24 HOURS:South Korea did not specify what steps it would take if the North did not respond, but it would likely close the zone the North needs for currency


South Korea yesterday gave North Korea 24 hours to agree to formal talks to restart operations at their joint Kaesong industrial zone, warning of “significant measures” if Pyongyang declines.

It was a rare ultimatum from the South, which is more used to being on the receiving end of such warnings, and reflected Seoul’s growing impatience with the costly impasse over Kaesong.

The South Korean Ministry of Unification did not specify the measures to be taken, but there was a clear suggestion it might consider a permanent withdrawal from the zone, which normally employs about 53,000 workers at 123 South Korean firms.

A rare symbol of inter-Korean cooperation, Kaesong has become the most notable victim of escalating military tensions on the Korean Peninsula.

“There is no change on our stance to support the stable operation and improvement” of Kaesong, ministry spokesman Kim Hyung-seok said.

“But we cannot let this situation continue as it is,” he added. “If North Korea rejects our proposal ... we have no choice but to take significant measures.”

The talks proposed by Seoul would be between the respective heads of the North and South management committees that oversee Kaesong operations.

Established in 2004 and lying 10km inside North Korea, Kaesong is a crucial hard currency source for the impoverished North, through taxes and revenues, and from its cut of the workers’ wages.

The project was born out of the “Sunshine Policy” of inter-Korean conciliation initiated in the late 1990s by then-South Korean president Kim Dae-jung, which led to a historic summit with then-North Korean leader Kim Jong-il in 2000.

It operates as a collaborative economic development zone that hosts South Korean companies attracted by its source of cheap, educated, skilled labor.

Turnover last year was reported at US$469.5 million, with accumulated turnover since 2004 standing at US$1.98 billion.

The Korean Peninsula was already engulfed in a cycle of escalating tensions — triggered by the North’s nuclear test in February — when Pyongyang decided on April 3 to block all South Korean access to Kaesong.

Angered by the South Korean defense minister’s remarks on the existence of a “military” contingency plan to protect South Korean staff in Kaesong, the North then pulled out its entire workforce on April 9 and suspended operations.

Since then, it has denied repeated requests to send food and other supplies to South Koreans who opted to remain in the zone to maintain their non-running production lines.

The association that represents the interests of the South Korean firms in Kaesong said it hoped the working-level talks would begin “as soon as possible.”

In a statement, the association said the initial agreement establishing Kaesong committed both sides to keep the zone going for 50 years.

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