This piece has been updated to inlucde new polling numbers from Realmeter on the closure of Kaesong.
The decision by South Korea’s Park Geun-Hye to shutter the Kaesong Industrial Complex (KIC) was long in coming. The KIC, an industrial park located in North Korea just across the DMZ brought low-wage North Korean labor to manufacture products for South Korean companies, employing over 45,000 workers in more than 100 South Korea-owned businesses. For years, as the United Nations, the United States, Japan, and South Korea itself pursued sanctions against the North, South Korea continued to pump money into North Korea via the KIC. Earlier this week, South Korea’s Minister of Unification Hong Yong-pyo made a surprise announcement that South Korea would be unilaterally shuttering Kaesong.
Moreover, he did so in unusually clear terms. Not only did Hong lay out exactly how much money North Korea received since KIC’s inception—$560 million since 2004 and $120 million just last year— he also noted that the money appeared to have been diverted into the North’s nuclear program. That last bit of information could prove to be very, very important.
Along the lines of the argument made by Joshua Stanton here, it appears to be an admission that South Korea violated UN sanctions. If that is indeed the case, the possibility of ever reopening the KIC is remote. The question then becomes: why was South Korea so frank in its admission? Minister Hong could have easily announced the South’s withdrawal from the industrial park without the specifics.
The shutdown was an important step for South Korea to take to show the international community that it is serious in taking steps to deal with North Korea, but it is domestic politics which inspired the honesty.
In April, South Korea will hold nation-wide elections for the National Assembly. Currently, the president’s conservative party holds a majority, and her party generally takes a harder line on North Korea. The progressive minority parties, on the other hand, take a much more engagement-oriented approach. Thus, it is to be expected that progressive candidates would argue vehemently that it was a mistake to close the KIC and that it should be re-opened as soon as possible. Indeed, in the most recent polling conducted by RealMeter, more than 80 percent of the main opposition party is opposed to the closing of the industrial park. Kaesong is the last vestige of intra-Korean cooperation, and it was a project started under the presidency of Kim Dae-Jung, one of the true giants of progressive politics in South Korea.
But with Minister Hong’s statement, that line of argument is now closed. Advocating for the re-opening of the KIC, with the government having already stated that those funds were used by North Korea to help develop nuclear weapons, is implicitly an argument to allow South Korean money to continue to flow into the North’s weapons program. That is a proposition that the South Korean public is unlikely to accept.
The South Korean public is not overly thrilled by engagement with the North. In a 2014 survey, the South Korean public preferred a hard line stance taken by South Korea toward North Korea. With current events, it is unlikely that the public has reversed course. In that same survey, just 23 percent favored resuming economic aid to North Korea. While the latter point is not a 1:1 correlation with Kaesong, it does help to illustrate that the South Korean public is leaving behind the idea that they must help North Korea because they share the same ethncity. Instead, they are starting to look for return on investment.
In the case of Kaesong, the supposed goodwill and economic return—which was minimal in the South’s economy overall—was always in short supply. The realities of the political and security consequences are now clear, and the Kaesong experiment is over. In its shuttering, President Park was able to get a win abroad and it may very well help to secure a win at home in April.
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