46 Kaesong Firms Call for Equipment Relocation

A group of high-tech manufacturing enterprises with facilities in the Kaesong Industrial Complex (KIC) has demanded to be allowed to transfer manufacturing facilities and equipment to South Korea or third-country locations before it becomes unusable.

An emergency committee comprised of the enterprises issued the demand earlier today, marking the three-month anniversary of productive activity in the KIC ceasing.

Of 123 enterprises operating in the Kaesong zone, 46 are machinery and electronics firms, and, as such, their investments in facilities are comparatively larger than others, and their technical facilities more expensive.

Kim Hak Kwon, one of the joint heads of the emergency committee, explained, “On a number of occasions, we urged to be allowed to send the minimum personnel to North Korea to maintain the equipment we invested in. However, the two Koreas did not even give us this request, so we have no choice but to make this decision.”

“Companies can survive and hold to business deals with their buyers only if they relocate their equipment,” he asserted.

The committee thus called upon the South Korean authorities act to swiftly reach a conclusion as to whether it wishes to close the KIC or restart it, rather than lingering in the middle. It demanded also that North Korea take essential measures on military communications and equipment issues.

However, in light of last month’s failed inter-Korean dialogue and the blame game that has followed, it won’t be easy for North or South Korea to accept the committee’s requests.

The South Korean government’s official position is to pursue restarting the KIC, but given the low possibility of North Korea accepting Seoul’s preconditions for such a step (no repeat of the current closure, etc.), it seems unlikely that this will take place in the current inter-Korean environment. Of course, accepting the committee’s request would also represent a major step toward complete closure of the KIC, a decision that puts an unwanted burden on the administration of President Park Geun Hye.

From a political perspective, the current state of affairs is also useful to North Korea, which seeks to incite “South-South conflict” inside South Korea, in this case between the South Korea government and enterprises in the KIC, many of which are in growing financial trouble.