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Posted : 2009-03-16 18:20
Updated : 2009-03-16 18:20

Tension on Borders

Everyone Is Loser in Inter-Korean Chicken Game

Watching North Korea play with the inter-Korean industrial complex, Pyongyang doesn't seem ready yet to close it for good. Whatever the intentions of the North Korean leadership, however, Gaeseong Industrial Complex could become a place in name only before long if the North Korean government continues to use it as a hostage whenever tension rises on the Korean Peninsula.

And the day of its virtual shutdown could come far earlier than Pyongyang thinks. The North allowed South Koreans stranded in the industrial zone over the weekend to head home Monday, but did not permit people or cargo to cross the border to go back to the factories in the North Korean city, hindering their normal operations.

If this situation continues for just three or four days, most of the 90-odd South Korean factories there will likely be forced to stop operations, as they don't have raw materials to last for more than a week. Some South Korean managers are already reporting cancellation of orders from their buyers who are not sure about the delivery of goods on time. The communist party officials may not know, but restarting factories after a temporary shutdown is little short of rebuilding them.

It is true that cheap, high-quality North Korean labor provides lots of competitive edge, but no amount of cost merits could make up for frequent production stoppages or security risks. Pyongyang might want to restrict the free travel of people and cargo until Friday, when the Korea-U.S. joint military drill ends, as a show of its displeasure, but a weeklong setback might be enough to make many executives in the South disillusioned with their operations there.

Moreover, South Korean public sentiment will no longer regard the project ― largely symbolic for Seoul, but a substantive source of hard cash for Pyongyang ― favorably.

If North Korean leader Kim Jong-il wants to demonstrate that he can live without the annual $30-million income from Gaeseong (or more than $1 billion considering the gap of 36 times in economic power between the two Koreas), he is making mistakes on two points. Firstly, Gaeseong's eventual failure will make it hard for the North to start a similar venture with other countries, even including its biggest ally, China.

Secondly, Pyongyang, which has criticized the Lee Myung-bak administration for violating inter-Korean summit accords, will have committed similar violations, including its own laws on the Gaeseong project, which will leave the isolationist regime with little moral superiority in this regard over its South Korean counterpart, while providing ample ammunition for conservative hard-liners in the South who oppose inter-Korean reconciliation.

The North's inflexibility, bordering on self-injury, might be the only thing that conceals the South's no less foolish policy of sticking to petty one-upmanship. The Lee administration has repeatedly shown it has neither the dialogue channel nor diplomatic leverage in breaking the deadlock in inter-Korean relationship.

President Lee said ― incorrectly and indiscreetly ― the South-North relations could withstand a year of strain after six decades of tranquility. Actually, the inter-Korean relations have always been on thin ice, except for a relatively brief thaw between 2000 and 2007, and are now at their lowest in decades.

No one can be a winner in the inter-Korean chicken game, and it is natural that the side which strained the relationship should be the first to come forth to solve it.

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