Don’t Sweat the Closure of Kaesong
Image Credit: Wikicommons

Don’t Sweat the Closure of Kaesong


It increasingly looks like the inter-Korean Kaesong industrial zone is closed for good.

President Park Geun-Hye of South Korea inadvertently indicated her low opinion of investing in North Korea, and even Chinese investors have been shaken down and extorted in North Korea. Although a potent symbol of inter-Korean cooperation, in practice the zone became a cash-cow for a Pyongyang elite unwilling to adopt even the most basic business norms. So don’t mourn its passing too much.

The zone was set-up during the Sunshine Policy period (1998-2007) when leftist South Korean administrations adopted a North Korean policy of unprecedented cooperation. Politically, Kaesong and its sister project, the resort at Mt. Kumgang, were intended to achieve three objectives: to 1) lead to some liberal-capitalist spill-over in the North, 2) expose regular North Koreans (the workers in the area) to regular South Koreans (the managers and staff), and 3) generally provide some inter-Korean cooperation that might hopefully reduce larger tensions. Economically, of course, the South Korean firms that operated in these zones benefitted from the low labor costs, but that was never the primary reason for the complex. And they were relentless criticized for exploiting semi-slave labor.

Broadly speaking, the politics behind this outreach followed liberal explanations for the Soviet Union’s changes in the 1980s: the Helsinki Accords and Conference on Security and Cooperation in Europe opened the USSR to the outside world, and the inflowing liberalism slowly changed attitudes that eventually helped wind-down the Cold War. Unfortunately, none of this seems to be working in the North Korean case.

The Kumgang resort was closed after a South Korean tourist was shot in 2008 by Northern guards. Kaesong has been a geopolitical football for years. Neither seemed to lead to much spill-over. Instead, North Korea basically sealed off both facilities, managing them as enclave economies with tight controls. No capitalist-liberalizing influences seemed to have been allowed to spread. Semi-private Northern industries have not sprung up around the Kaesong zone, for instance, and the Northern workers in these areas are checked and proofed by the government. Nor did the zones seem to cool tensions between the North and South; instead Kaesong got instrumentalized in those tensions – as in this current crisis.

It is true that there are many private grey markets in North Korea, especially in the north. But they come from semi-legal-but-widely-tolerated interactions with China and border merchants, not from Kaesong/Kumgang. One might portray Kaesong as the catalyst for North Korea’s partial marketization, but most of the analyst community would likely argue that the Northern black/grey markets sprung up out of necessity when the state distribution system broke down in the 1990s, causing famine. Since then, the state has been unwilling or unable, or both, to crack down on them.

Finally, it is completely unknowable, unfortunately, how much psychological liberalization there has been; that is, whether the everyday exposure and interaction of North and South Koreans in Kaesong has created a ‘gestalt shift’ in those North Koreans regarding South Korea. Ideally, these changed North Koreans would then share their stories of normal, friendly, and healthy South Koreans with their family and friends. One might then see some moderation in North Korea bubbling up from below over the years to come. Andrei Lankov particularly is well-known for making this sort of argument for long-term change in North Korea.


[...] The following was originally published at the Diplomat here. [...]

May 16, 2013 at 03:15

Seriously, 537 words?  Why not just sumbit a monograph?

TV Monitor
May 13, 2013 at 06:21

@ Sly Reference

The closure of Kaesung has nothing to do with Bush The Son administration. The current ROK administration is hardliners who believe in the regime collapse of Kim regime as the only realistic and vbiable answer to the North Korean problem, and wants to cut off all the flow of money into North Korea while doubling up on the anti-Kim Dynasty propaganda war.

Likewise the Kim regime also felt threatened by the continuous influx of Southern goods and ideas into North Korea via the Kaesung Industrial Zone, and wanted to eliminate this threat. Both sides basically agreed that it was in their best interests to shut Kaesung down, to stop the influx of negative ideas for the Kim Regime and to stop the influx of dollars into North Korea for Park's hardliner adminstration. 


May 11, 2013 at 01:58

Not much. North Korea has operated on a steady ebb and flow of opening closing, talking and threatening for the past half century. Gestures from the United States and South Korea have had minimal bearing on the ultimate results of North Korean policy in one direction or the other.

Glen Salo
May 11, 2013 at 00:53

North Korea is a riddle wrapped in a mystery inside an enigma: but perhaps there is a key… to view its future direction.  That key is contained in Marxist dogma.

In Anti-Dühring, in discussing the Franco-German war of 1870-1871, Engels made the following observation:

[T]his war [the Franco-German War] compelled all continental powers to introduce in a stricter form the Prussian Landwehr system [militia in addition to regular army], and with it a military burden which must bring them to ruin within a few years.  The army has become the main purpose of the state, and an end in itself; the peoples are there only to provide soldiers and feed them.  But this militarism also bears within it the seed of its own destruction.  Competition among the individual state forces them, on the one hand, to spend more money each year on the army, navy, artillery, etc., thus more and more hastening their financial collapse; and, on the other hand, to resort to universal compulsory military service more and more extensively, thus in the long run making the whole people familiar with the use of arms, and therefore enabling them at a given moment to make their will prevail against the warlords in command.  And this moment will arrive as soon as the mass of the people—town and country workers and peasants—will have a will.  At this point the armies of the princes become transformed into armies of the people; the machine refuses to work and militarism collapses by the dialectics on its own evolution.   (Marx-Engels, Collected Works (International Publishers 1987), Vol. 25, p. 158).

North Korea’s Songun or “military first” policy has become the main purpose of the state, an end in itself.  The Korean Workers Party no longer controls the military but is controlled by it—violating Mao’s dictum.  “Political power grows from the barrel of a gun.  And the party must control the gun.”  Now the gun controls the party and everything else.

However, North Korea’s effort to compete militarily against South Korea, the United States and pretty much everyone else… has in fact caused its financial collapse.    Moreover, the complete militarization of the population clearly make the people familiar with the use of arms, enabling them to turn against the regime—as soon as the mass of the people will have a will.  

Our policies should be to do everything possible to enable the Korean people to have a will… To will a self is to become a self (Nietzche).    The North Korean people are intelligent, hard-working and their lives being made unnecessarily difficult by a group of militarists whose only aim is ultimately to protect their own status—at the expense of the people.   

People are people; and as Abraham Lincoln said:

"You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time."

This is the information age.  Our policy objective and task is to inform the North Korean people through any and all means available of the reality of the world at large and how their own government is fooling them.  The Korean people will free themselves.  


Sly Reference
May 10, 2013 at 13:56

Sure, the Sunshine Policy failed, but how much of that was because of the Bush administration basically undermining it from the moment they entered office? You can debate how much the American administration matters in inter-Korean relations, but you cannot realistically argue that the influence is negligable.

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