Closing Kaesong Industrial Complex Would Hit N.Korea Hard

North Korea earns some US$33.52 million a year from the Kaesong Industrial Complex, making the inter-Korean joint venture a significant cash cow for the impoverished country.

If, as seems increasingly likely, the industrial park is closed, the simple economic loss from stopping operations is not the only blow the North will suffer. Experts speculate the closure could also cause social and political problems following an explosion of discontent by North Koreans who lose their jobs at a time when they are already suffering a food shortage.

About 38,000 North Korean workers and their families would be immediately affected. "Assuming each North Korean worker has about four family members, roughly 150,000 North Koreans are living off the industrial park. That figure isn't negligible," a south Korean official said Sunday.

When package tours to Mt. Kumgang were suspended in the aftermath of the fatal shooting of a South Korean tourist last year, most of the 1,200 North Koreans working in hotels and restaurants, as tour guides and in facilities maintenance in the mountain resort lost their stable jobs. There, too, discontent is apparently brewing.

"North Korea has announced a plan to open the gates to 'a powerful and prosperous nation' in 2012," a North Korea expert said. "But if the North goes so far as to close the golden-goose industrial park in a situation where it can't even properly distribute food rations, the repercussions will be significant."

Some North Korean refugees are saying there could be riots if the Kaesong industrial park is closed. Prof. Cho Dong-ho of Ewha Womans University said, "Currently, North Koreans seem to be in a panic and the authorities' orders are not heeded."