Unification Ministry officially calls it quits on Kaesong Industrial Complex

The Kaesong Industrial Complex — a longtime symbol of inter-Korean economic cooperation and reconciliation efforts — is set to be officially shuttered, the Unification Ministry announced on Thursday.

The Kaesong Industrial Complex as seen from South Korean side of the border on Dec. 18. [YONHAP]

The Kaesong Industrial Complex — a longtime symbol of inter-Korean economic cooperation and reconciliation efforts — is set to be officially shuttered, the Unification Ministry announced on Thursday.

In its news release, the ministry said it plans to dissolve the public foundation that supports operations at the Kaesong Industrial Complex, citing the low likelihood of the zone’s reopening and the high costs of maintaining the foundation.

The Unification Ministry said that the foundation’s expenditure from 2017 to 2023 totaled 58.4 billion won ($44.7 million) and that the National Assembly had called for reductions in the foundation’s operating costs every year.

The ministry noted that the foundation had lost its raison d’être as the number of claims filed by companies that had invested or built plants in the Kaesong Industrial Complex decreased from 1,181 in just 2016 — the last year that the zone was in operation — to a mere 97 for the five years between 2018 and 2023.

The ministry also said the chances of the zone reopening were very low due to the North’s continued and increasing unauthorized use of South Korean-built production facilities and infrastructure, despite the ministry’s repeated requests that it stop doing so.

But the ministry said that support for companies that had invested in the zone would be maintained through different channels, albeit on a much-reduced scale.

The Kaesong Industrial Complex opened in 2004 as one of two physical projects born from the so-called Sunshine Policy pursued by the Kim Dae-jung and Roh Moo-hyun administrations, the other being the Mount Kumgang tourism resort on the eastern coast.

The resort closed in 2008 after the North Korean military fatally shot a South Korean tourist whom the regime claimed had entered a restricted area, but the industrial zone carried on until 2016, when the South withdrew all of its workers from the site after the North carried out a rocket launch.

The Unification Ministry on Thursday also accused the North of trying to divide South Korean society with threats and false information ahead of the general election scheduled to take place in April.

North Korean leader Kim Jong-un declared at a year-end meeting of the ruling Workers’ Party that his regime would no longer seek reconciliation with the South or treat it as a partner in unification.

His powerful sister, Kim Yo-jong, issued a statement on Tuesday blasting South Korean President Yoon Suk Yeol for a New Year's Day speech that included a plan to build a more robust deterrence system with the United States to counter North Korean threats.

“With the year-end party plenary meeting and Kim Yo-jong's statement, North Korea is trying to drive up tensions on the Korean Peninsula and fracture our society,” a ministry official told reporters on condition of anonymity.

The ministry noted that the North’s propaganda machine is currently playing up internal strife in South Korea by using old photos to exaggerate protests in Seoul.

Seoul’s National Intelligence Service said last month that there is a high possibility that North Korea could conduct “provocative” military acts to influence the major elections scheduled to take place this year in South Korea and the United States.

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]