Watch Kaesong

UPDATE (15 JAN): With North Korea’s shelling of Yeonpyeong Island, and the South’s vow of a stronger response, the key to judging Seoul’s seriousness was once again the industrial park at Kaesong. Despite some tough talk and South Korean artillery drills in the days and weeks after the incident, Kaesong continued to operate. By the new year, just 6 weeks after the shelling, tensions had cooled, attentions had drifted, and a resumption of the 6-Party Talks was once again under discussion.


UPDATE: On 23 June, the South Korean Unification Minister said his Ministry is putting together a W100,000,000,000 [$84,000,000 U.S.] fund for damages suffered by South Korean companies with operations in Kaesong. The availability of this type of fund makes it easier for the South to pull out of the complex, should the powers that be so decide. Definitely an indicator worth continued monitoring.


Want to know how events are going to play out on the Korean peninsula now that the South has blamed the North for sinking the Cheonan? Watch what happens with the Kaesong industrial complex. When the South first blamed the North, both sides threatened to shut down the complex, but in recent days, emotions seem to have cooled.

The South has continued to send workers and managers across the DMZ into Kaesong, a policy that was up in the air as recently as last week. For its part, the North has continued to allow the Southerners to cross into Kaesong, plus stopped focusing its rhetoric on closing down the complex. Instead, the North appears to have decided to keep the cash coming by keeping the complex open.

If both countries continue down this path, talking and acting tough, but leaving Kaesong open, then the chance of outright war declines dramatically, likely only occurring through miscalculation. If Kaesong closes however, it’s a strong indicator that at least one side is planning military action, having already given up on the last significant tie that connects the two countries. If you see the South order all of its citizens out of the North, get ready.

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