News / Asia

    North Korea Would Lose Millions by Closing Kaesong

    South Korean vehicles return from the inter-Korean Kaesong Industrial Complex in North Korea to the Customs, Immigration and Quarantine office in the South, just south of the demilitarized zone separating the two Koreas in Paju, north of Seoul, April 30, South Korean vehicles return from the inter-Korean Kaesong Industrial Complex in North Korea to the Customs, Immigration and Quarantine office in the South, just south of the demilitarized zone separating the two Koreas in Paju, north of Seoul, April 30,
    x
    South Korean vehicles return from the inter-Korean Kaesong Industrial Complex in North Korea to the Customs, Immigration and Quarantine office in the South, just south of the demilitarized zone separating the two Koreas in Paju, north of Seoul, April 30,
    South Korean vehicles return from the inter-Korean Kaesong Industrial Complex in North Korea to the Customs, Immigration and Quarantine office in the South, just south of the demilitarized zone separating the two Koreas in Paju, north of Seoul, April 30,
    VOA News
    North Korea stands to lose tens of millions of dollars a year if it closes the Kaesong industrial complex, a key source of hard currency for its troubled economy.

    The eight-year-old factory complex that Pyongyang jointly operates with South Korea is the last remaining direct economic tie between the two Koreas.  

    The 123 South Korean companies at the facility, 10 kilometers north of the demilitarized zone separating North and South, employ 53,000 North Koreans, with the communist government taking a significant portion of the workers' salaries of about $110 a month.

    The Washington D.C.-based Peterson Institute for International Economics estimates the zone yields the North about $90 million a year in wages, rents, fees and taxes - in hard cash.

    Former U.S. State Department official Mitchell Reiss said he doubts North Korea intends to permanently close the facility.

    "I think the zone is too important for them to shut down permanently, but as a tactic I think they tried to make a move since their previous moves had not succeeded in intimidating South Korea, the United States and others," he said.

    Reiss said South Korean President Park Geun-hye's tough response to Pyongyang's brinksmanship surprised the North Koreans.

    "I think what happened is that they were taken a little bit by surprise when President Park decided not to play this game, but in fact, to escalate and end it by withdrawing all of the South Korean workers," he said.

    Reiss described the potential economic impact on South Korea for closing the facility as minimal.

    Seoul's total estimated investment in the zone is about $840 million, with $350 million of that in infrastructure and the remainder in the factories and equipment. The South would be forced to write this off in the event of a permanent closure.

    The Peterson Institute says the costs would be larger, however, citing estimates as high as $5.5 billion, resulting from the potential bankruptcies of South Korean companies located in the zone.

    Last year Kaesong produced $470 million worth of textiles, automotive parts and wiring for household appliances.  

    About 800 South Koreans worked at the complex, but earlier this month North Korea blocked further South Korean access to it, which forced some of the companies to suspend their operations when they could no longer transport fuel, food and raw materials from South Korea.

    The North has previously closed the crossing, but in the past has reopened it after a few days.

    You May Like

    Video Democrats Clinton, Kaine Offer 'Very Different Vision' Than Trump

    In a jab at Trump, Clinton says her team wants to 'build bridges, not walls'; Obama Hails Kaine's record; Trump calls Kaine a 'job-killer'

    Turkey Wants Pakistan to Close Down institutions, Businesses Linked to Gulen

    Thousands of Pakistani students are enrolled in Gulen's commercial network of around two dozen institutions operating in Pakistan for over two decades

    AU Passport A Work in Progress

    Who will get the passport and what the benefits are still need to be worked out

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movementi
    X
    July 22, 2016 11:49 AM
    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.

    Special Report

    Adrift The Invisible African Diaspora