Closure of Kaesong Industrial Complex Takes its Toll
John Kim, March 8, 2016, 7:12 a.m.
The North Korean border town of Kaesong is suffering economic hardship a month after South Korea closed the jointly operated industrial complex there. Out of the city's 200,000 souls, many thousands had been employed in the Kaesong Industrial Complex. Government and North Korean sources say the loss of their jobs has had a devastating impact on all aspects of life there.
The former light industry workers in the city have been mobilized to work in ginseng plantations and food processing factories, while laborers from other parts of the North have been sent home. One North Korean source who exports products manufactured in Kaesong, said, "I recently visited Kaesong and the biggest change I noticed was that the bustling downtown traffic has disappeared."
North Korean authorities ban outsiders from entering Kaesong but allow a few unofficial visits in order to maintain the supply of goods. Kaesong is also suffering from a water shortage since the utilities that South Korea used to supply to the industrial complex were partly diverted to the town.
North Korean authorities appear to be having a huge problem trying to reassign the 54,000 workers who had been employed in the complex. But there are not enough jobs in Kaesong to absorb all the redundant workers.
"Even before the closure North Korea often mobilized workers to fix roads and tend crops around Kaesong, and this has apparently become a full-time project recently," a government source here said.
North Korean authorities have apparently stepped up indoctrination programs to persuade disgruntled workers that South Korea alone is at fault for the closure. Some defectors accuse the North of selling the raw materials and finished products South Korean companies had to leave behind when North Korea expelled them on Feb. 11 after Seoul announced the closure. But the South Korean government says the rumors are unconfirmed.
Concerns are mounting among the South Korean businesses that used to operate in the complex. During a temporary closure in 2013, the water and electricity supply from the South continued, recalls Kim Seo-jin, a representative for the companies at the complex, and companies were able to spirit out most of their finished products. But this time the closure was so abrupt than many had to leave goods behind, and found themselves with half-finished products and nowhere to complete or sell them. Seo said many products "probably spoiled" because the electricity has been cut off. "But the biggest problem is the uncertainty," he added.