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S. Korea Says Teetering North-South Factory Zone Can Be Saved


South Korean officials are scrambling to preserve a highly symbolic joint industrial project in the North Korean city of Kaesong. North Korea put the project in jeopardy recently when it discarded the zone's governing contracts. But South Korea says there is still room to talk.

South Korean Unification Minister Hyun In-taek acknowledged Monday that the Kaesong Industrial Complex is in a precarious position. He says the Kaesong complex is now in a time of crisis, but that the South Korean government will make every effort to ensure its stable development.

Previous South Korean administrations have celebrated the Kaesong zone as a crown jewel of the so-called "sunshine" or "engagement" policy, which sought to win North Korea's trust and friendship through heavy aid and investment. South Korean companies have used more than 30,000 inexpensive North Korean laborers in the zone to produce basic consumer products from sneakers to cosmetics.

However, the Kaesong zone and a related South Korean tourism project in the North have been severely challenged during the administration of conservative South Korean President Lee Myung-bak, who took office early last year. North Korea refers to Lee as a "traitor" for his delay in implementing agreements to spend billions of South Korean public money on the North. Mr. Lee says he wants to see more progress in getting rid of North Korea's nuclear weapons before spending that kind of money.

In the past two months, North Korea has launched a long range rocket, pulled out of multinational nuclear disarmament talks and warned of a second nuclear weapons test. It has ejected international inspectors, and vowed to restart its production of nuclear weapons.

It has also detained a South Korean executive who works at the Kaesong zone for more than a month with no outside contact. And on Friday, the North announced it was unilaterally discarding all contracts that govern South Korean payments for the usage of the zone.

South Korea says it will not tolerate being dictated Kaesong wage and leasing terms unilaterally from Pyongyang. North Korea has refused a formal offer for talks on the issue from Seoul, and describes any dialogue with the South as useless. Still , Unification Minister Hyun says the South will keep trying.

He says Seoul plans to make another offer for inter-Korean talks regarding the industrial park.

For now, South Korean officials publicly rule out shutting the doors on the Kaesong complex. However, the ongoing legal vacuum and lingering concerns about South Korean worker safety in the zone are raising serious questions about the project's longer-term viability.

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