Seoul says it shut the Kaesong complex in response to the North’s recent long-range rocket launch to keep its impoverished neighbor from using the money factories provided to fund its nuclear and missile programs.
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The North’s announcement came as Seoul ordered a complete shutdown of the industrial park; the last remaining symbol of inter-Korean reconciliation, as part of its strong measures to punish North Korea for a series of provocations.
Anti-North Korean activists hold banners and shout slogans as they protest the latest nuclear test a … The ministry hasn’t provided a detailed explanation on why it suspects money generated from Kaesong was channeled to North Korea’s nuclear weapons and missile projects.
Analysts believe that North Korea’s annual nationwide electricity output would only be enough to power Seoul, the South Korean capital of 10 million, for less than four months.
“South Korea and the United States have said the drills will be on an even larger scale than usual which is sure to meet a big backlash from North Korea”, said Chang. Deploying THAAD in South Korea “will not help maintain regional peace and stability, nor will it lead to a proper settlement of the current situation”, Hua cautioned.
The U.S. Senate has voted to tighten sanctions on North Korea, while Japan has also announced new sanctions on the Stalinist nation.
On Friday, the South shut off water and energy supply to the Kaesong complex, situated 10km north of the Korean demilitarized zone, in reprisal for the deportation of some 300 South Korean workers and its takeover by the North Korean military on Thursday. Seoul’s Defense Ministry would only say that its military has been on high alert since the North’s nuclear test last month.
On Thursday night, the 280 South Korean workers who had been at the park crossed the border into South Korea, several hours after a deadline set by the North passed.
“Unpardonable is the puppet group’s act of totally suspending the operation in (Kaesong), finding fault with the DPRK’s H-bomb test and launch of a satellite”, the North’s Committee for Peaceful Reunification of Korea stated.
South Korean Unification Minister Hong Yong-pyo told a news conference that North Korea’s action to freeze the assets was “illegal” and warned the North not to do anything to damage the property of South Korean companies.
About 124 South Korean companies operate factories in Kaesong, and employ more than 53,000 North Korean workers, at an annual cost of $100 million, providing a source of badly needed hard currency for the impoverished North.
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The closure of Kaesong heightens geopolitical risk for South Korea and is credit-negative for its sovereign rating, though the country’s robust alliance with the US plus China’s influence should limit the risk of a direct conflict on the peninsula, Steffen Dyck, Moody’s Investors Service analyst, said today in an email.
