When tomorrow comes, the Kaesong Industrial Complex will have been closed for three months. The possibility of a solution to outstanding problems seems remote. Rather, the main concern at this stage is when the complex will be technically irretrievable; most business owners believe this will be the case by the middle of July.
There had been the slim possibility of a solution to the Kaesong issue when the two Koreas agreed to meet in Seoul in mid-June. However, in the end that false dawn did more harm than good, as the blame game that has followed the failure of talks has driven the two Koreas further and further apart.
Minister of Unification Ryoo Kihl Jae asserted in a recent press conference, “If South and North are unable to reach an understanding, then the result will be the same whether we reopen the Kaesong Industrial Complex or not.” In other words, the South Korean government is looking to the longer term, in spite of the short-term crisis that has enveloped Kaesong.
North Korea mentioned in the run up to the failed inter-Korean dialogue that both the reopening of a tourist resort at Mt. Geumgang and the Kaesong Industrial Complex ought to be on the agenda for the planned ministerial meeting, but since the talks collapsed they have taken to attacking South Korea, striving to brand it the sole responsible party. This is a repeat of the situation surrounding the Mt. Geumgang resort, which was ultimately expropriated by North Korea following a great deal of angry rhetoric.
In the meantime, a committee made up of Kaesong enterprises has announced that if Seoul does not accept their application to visit the North by the 3rd then they will issue a final declaration. Aside from the political pressure such a move is designed to put on the South Korean government, one source explained that this is because “once we get to mid-July, the majority of businesses will be de facto completely shut down anyway.”
One Kaesong firm manager expanded on that statement in a phone interview with Daily NK, saying, “If there had been a solution within a month and a half or so, it may have been possible to normalize the factory. Now, however, the supplies and machines have all rusted and clearly will have become useless.” He added, “I don’t think they’re even thinking about reopening the complex. Just thinking about it makes me unbelievably angry.”
To make matters worse, Korea’s rainy season, which began days ago, means that power to the complex may have to be cut to ensure that transformers there do not explode. If so, goods kept in cold storage are sure to go bad.
Most Kaesong firms appear to have abandoned hope of seeing the complex reopen already. Of ninety-six firms registered for economic cooperation insurance, sixty-five have already made claims against it. Two out of three businesses are in real financial difficulties. The widespread belief is that the countdown to complete closure has begun.