North Korea lifts ban on South Korean workers at joint industrial complex

The Kaesong Industrial Complex, shuttered earlier this year, is one of the only areas of cooperation between rivals North and South Korea.

Lee Jin-man/AP
South Korean workers and owners who run factories in the stalled Kaesong industrial complex stage a rally insisting the normalize the operation of the industrial complex at the Imjingak Pavilion near the border village of Panmunjom, which has separated the two Koreas since the Korean War, in Paju, north of Seoul, South Korea, Wednesday, Aug. 7, 2013.

• A summary of global news reports.

After months of failed negotiations and halted operations, North Korea has lifted the ban on South Koreans entering Kaesong Industrial Complex and will hold talks with its southern counterpart over the resumption of activities there. The North’s offer to negotiate comes just in time – South Korea was on the cusp of shuttering the plant for good.

The potential reopening of the complex, which symbolized the last vestige of inter-Korean activity, may portend the softening of relations between the two rivals after a year of tensions driven by the North’s nuclear ambitions.

North Korea’s offer to restart talks over Kaesong, following six failed attempts between April and July, was readily accepted by the South, reports South Korean Yonhap news agency. 

The Ministry of Unification said that the North's offer to hold working-level talks on Aug. 14, which would be the seventh round following the failure of the previous six, can be viewed in a positive light.

"Seoul views the latest talks proposal as the North responding to repeated calls for dialogue from Seoul," ministry spokesman Kim Hyung-suk said. "We hope the North will engage in dialogue in an earnest manner that can contribute to the constructive growth of the complex."

According to the Associated Press, North Korea’s decision to ban South Korean managers and its subsequent withdrawal of workers from the plant was in response to annual US-South Korea military exercises and fresh United Nations sanctions against the North following a nuclear test in February.

The North's announcement came only an hour after South Korea stated it would begin insurance payments to many of the companies locked out of Kaesong, a move widely speculated to spell the end of the joint industrial endeavor.

Officials in Seoul say they are optimistic about the upcoming talks. “We hope that the coming talks should settle issues and produce reasonable ways to normalize the Kaesong industrial complex constructively,” said unification ministry spokesman Kim Hyung-seok.

But there is still doubt as to whether Pyongyang will agree to the South’s demand that it guarantee to not repeat its sudden and costly suspension of work at the complex, writes The Wall Street Journal.

The Kaesong Industrial Complex, opened in 2004, is the only last example of inter-Korean cooperation left from a series of joint projects that were initiated when the two countries enjoyed a period of détente, according to The New York Times. In Seoul, it was the period of "the Sunshine Policy."

Eventually, South Korean firms provided the infrastructure and employed 53,000 North Korean workers to produce consumer goods for the market, whose value in 2012 alone was estimated to be around $470 million.

The talks may also mark a turnaround in relations between the two countries, writes the Times. North Korea’s most powerful ally, China, has been pushing Pyongyang towards moderation. Moreover, the North is in dire need of cash, as the sanctions and closure of Kaesong have taken their toll on currency reserves.

Kaesong Industrial Complex generates about $100 million in revenues for North Korea every year, reports Bloomberg. “North Korea probably couldn’t ignore the fact the park is a cash cow and feeds not only the 53,000 workers there but also their family members,” Yoo Ho Yeol, a North Korea professor at Korea University, told Bloomberg. 

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