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| The Gaeseong Industrial Complex, an inter-Korean factory park just two hours from Seoul, had served as a testing ground for unification since operations began there in 2004. / Courtesy of The Korea Times |
By Choi Sung-jin
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| Choi Dong-jin |
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| Kim Yong-hwan |
The next day, the Ministry of Unification turned down requests from businesspeople to visit the inter-Korean factory park in North Korea, to check their facilities and equipment.
"The monsoon season will be here soon, rusting and spoiling the machinery there," said Chung Ki-seop, chief of the emergency committee to deal with the operational suspension of the complex. "If the government turns the joint industrial park into worthless junk, so will go the relationship between the two Koreas."
Few might have been in more despair and anger by the sudden shutdown of the GIC than Choi Dong-jin, CEO of Daemyung Withus, a small firm that makes jeans and other casual clothing.
"I started as a sewer worker upon graduating from high school in 1977, and have since done all I could do to start my own company and successfully run it," said Choi, 58. "My four decades of struggle came to nothing almost overnight."
When Choi decided to do business in the GIC, many opposed the move citing political risks. But Choi trusted the government's pledge that it would never close the GIC no matter what happens between the Koreas. "Besides, I took some pride in my contribution, however small, to rebuilding ties between the two Koreas," he said. "I was dead wrong and my friends were right, and my biggest mistake was to trust my own government."
Choi said he suffered financial losses approaching 10 billion won ($8.3 million), including his investment in the plant and equipment, and raw materials — fabrics and half-finished clothing — which he failed to bring back to South Korea because the government made the unilateral move on Feb. 10, the final day of the lunar New Year holiday, with almost no prior notice.
Choi and 122 other owners of businesses that operated in the GIC have decided to refuse to accept the Park Geun-hye administration's policy package announced on May 31, aimed to compensate part of their losses.
The GIC companies reported a combined total of 944.6 billion won ($787 million) in losses but the government confirmed only 777.9 billion won through a separate calculation by accountants it hired. The emergency committee claims the compensation amounts to only 65.3 percent what the government has confirmed and 53.8 percent of the reported amount.
"Our position is that the government should make up for all the losses incurred by its policy change," said Chung, the committee head. "It's a shame the officials have set different compensation ratios by dividing companies into insured and uninsured ones, while none of the firms were operating in the GIC against the government's policy."
Political and economic watchers familiar with the GIC since its launch in 2004 also say the government's compensation package could result in a schism among the 123 businesses and thousands of their suppliers, depending on when they moved into the South-North industrial park.
Choi, the CEO of a jeans company, could not agree more.
"Frankly, the companies that started business in the GIC along with its completion in 2004 have earned money under the full support of the liberal governments," he said. "The situation has become quite different for those which moved into there since the conservative Lee Myung-bak administration took power in 2008."
For instance, he said, the Lee administration supplied barely two-thirds of the North Korean workers requested by the businesses that moved into the GIC after 2008.
"South Korea was supposed to fill the labor shortage by recruiting workers living farther from Gaeseong and building a dormitory to solve their commuting problems. But the Lee administration was reluctant to expand the inter-Korean project and reneged on the construction of the dorm," Choi said. "No sooner had we late starters reached a breakeven point by overcoming all these handicaps than the Park administration shut it down. It was nothing less than a bolt out of the blue sky."
Even more pitiful are their employees.
"Workers at state enterprises who lost their jobs during the 1997-98 Asian financial crisis received two years' wages as compensation," said Kim Yong-hwan, chief of the council of the GIC workers. "We, the laborers in Gaeseong, always thought ourselves as little different from state workers hired by private firms, worrying about personal safety according to the ups and downs in the inter-Korean atmosphere and going home once every two weeks at most."
Nevertheless, the workers' council reduced their compensation demands to one year's salary but the government halved it further to six months' salary, Kim said, adding that most of about 1,000 workers are in their 50s and 60s, unable to find jobs elsewhere even if they try.
"And they need money now more than in any phases of their lives with children in college or at marriage age," Kim said. "Six months later, most of them will have almost no income with their livelihoods broken up and scattered by the abrupt government action."
President Park stressed her move was inevitable, saying, "It didn't make sense if South Korea had tried to suffer no losses and done nothing" about the North's nuclear and missile provocations. That meant the move was for demonstrating to other countries, mostly China, that South Korea meant business.
Experts had warned, however, against the "suicidal action," which would give up the final diplomatic leverage in dealing with the North while exerting little if any influence on China. The northeastern Chinese provinces might have been rather pleased that they could relocate some of the North Korean workers to their plants in Sino-Korean border areas.
Some government officials have said North Korea could have diverted the hard cash earned by workers in Gaeseong to help finance its nuclear program. There are at least two logical problems in their assertion, experts point out: first, the cash income, barely 1 percent of the North's GDP, cannot affect the pursuit of the regime's supreme goal. Second, if the officials are right, the Park administration has also helped North Korea over the past three years.
Conservatives, in Korea and America, never welcomed the birth of the South-North industrial park upon its inception 12 years ago, with some U.S. officials taking issue with its products' place of origin rule. Yet there had been no stoppage of its operations, not even during the two naval battles in the West Sea, until North Korea suspended it for nearly six months in 2013 complaining about the South Korea-U.S. joint military exercises.
The Park administration is said to have set this country back decades in many areas, including democracy. If it shuts down the GIC for good, it will have degenerated the inter-Korean relationship to two decades ago.
Business owners and employees who worked in Gaeseong recalled how the South and North Koreans overcame their initial sense of difference to realize that they were all Koreans. "It was a small testing ground of reunification," they said in unison, noting that 54,000 North Korean workers there had come to understand what capitalism was like, and liked it.
"I have left and lost everything in Gaeseong," said CEO Choi. "But our government will have left behind and lost 54,000 ‘new' South Koreans and many more potential South Koreans there."
On Wednesday, the main opposition Minjoo Party of Korea issued a statement on the occasion of the 16th anniversary of the 2000 summit between the Koreas, calling for the government to reopen the GIC after talks with North Korea. Rep. Yoon Hu-duk compared the GIC to a child in the Hebrew Bible, claimed by two women and put to the judgment of King Solomon. "In its 21st century version in Korea, the real mother (the South Korean government) is killing her own baby," he said.
Most other Koreans are saying Seoul must save it while there is still time to do so.
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