It’s been ten days since North Korea executed its ‘December 1st measures,’ which includethe restriction and blockage of overland passage through the inter-Korean border by South Koreans. The negative effects of the move are slowly spreading to various areas involving inter-Korean exchanges, such as the Gaeseong industrial park business, Seoul’s humanitarian aid to the North, and social and cultural exchanges. With further details, here’s Dr. Dong Yong-seung from the Samsung Economic Research Institute.

North Korea limited overland passage across the military demarcation line, beginning December 1. In another hard-line move, the North seeks to cut off all authorities-level contact with the South. As a result, South Korean tours to the historic city of Gaeseong came to a halt, and the operation of the cross-border Gyeong-eui rail service stopped. Also, the two sides are not allowed to conduct material and human exchanges through the land border any more. And last but not least, the inter-Korean joint industrial park in Gaeseong has hit a further snag, since North Korea imposed tougher border controls to restrict the hours and number of South Koreans passing through the North, with only half or fewer South Korean businesspeople now allowed to enter Gaeseong.

When North Korea announced the ‘December 1st measures,’it promised to guarantee the business activities of companies at theGaeseong industrial complex. Nevertheless, the inter-Korean business venture, which comprises a significant part of bilateral economic cooperation, is now mired in great difficulty due to North Korea’s strict passage restriction. In more detail, only a limited number of South Koreans are allowed to enter Gaeseong each day, and the number of one-way entry per day is slashed to 6 from the previous 19. As a result, some South Korean firms doing business at the industrial complex are scrambling for entry permission by the Unification Ministry, as though they were hoarding goods.

About 1,500 South Koreans used to stay in the industrial complex, but the number is now reduced to 880. It means that companies have difficulty controlling North Korean laborers working there,which will inevitably cause lower productivity. Buyers are scaling back orders for goods manufactured at the complex, due to the mounting worries about their future. A decline in new orders will result in decreasing production and oversupply of workers, creating a vicious circle of managerial difficulty.

Many are now wondering if the companies operating facilities at the industrial complex will be able to receive compensation for their potential losses. They have suffered an estimated lossof 110 billion dollars in sales for three months since September. They have requested the government compensate them for the deteriorating sales triggered by worsening ties with North Korea, and will soon take relevant actions. And the problem doesn’t end there. Many North Korea watchers think the communist nation may even shut down the industrial complex in a bid to deal a more serious political and economic blow to South Korea, even at the risk of its own economic loss.

Given North Korea’s strong measures and hostile attitude toward the South, it isn’t impossible for the North to close the Gaeseong industrial park. It is obvious that the Stalinist nation is dealing with the Gaeseong issue politically, pressuring and even threatening to shut down the complex at any time. Pyongyang may go to the extreme, unless its demand is accepted.

North Korea used to earn 70 million dollars annually from the South Korean tours to Gaeseong and Mt. Geumgang and the wage income of North Korean workers at the Gaeseong industrial park. For the North Korean economy, that isn’t a small figure at all, since the amount is equivalent to eight percent of the nation’s total exports. But it doesn’t seem that North Korea has any alternatives to make up for the revenue. So then, why does the North continue to pressure Seoul, even giving up on the guaranteed profits?

North Korea urges Seoul to respect the agreements reached at two previous inter-Korean summits and implement them. And it also asks South Korea to inherit the pro-North Korea policy upheld by the two previous liberal governments. North Korea argues that it has permitted South Koreans to enter its territorybecause the three major joint programs—the Gaesoneg industrial park business and the two tour projects involving Gaeseong and Mt. Geumgang—are carried out in the North. It also claims it is South Korea that benefits from the joint projects. The North blames the South for not having acted in favor of North Korea despite the benefits, so it is now taking the benefits backfrom the South. Behind the move, however, I think North Korea seeks to prevent various baneful effects from spreading through its society. Unlike the previous Seoul governments, the current Lee Myung-bak administration attaches importance to strict principles and North Korea’s change. The North is attempting to block Seoul’s new politics from affecting its communist regime.

Dr. Dong explains South Koreans need to note that North Korea employs its own standards, different from those of South Korea when handling inter-Korean issues. That’s why the North’s radial choiceappears to be strange and unreasonable to South Koreans. The North has secured economic profits through tourism fees and laborers’ wage income, even running the risk of being exposed to potential side effects, but it doesn’t want to endure the negative impact any longer. 20 years have passed since South and North Korea initiated economic cooperation. But frustratingly enough, the official dialogue channels between the two sides are now shut down completely. Dr. Dong explains.

I imagine both South and North Korea have accumulated lots of experiences and lessons in the course of engaging in economic cooperation for the past twenty years. I’d like to question what exactly ‘economic cooperation’ means, though. Cooperation should be conducted under the principle of reciprocity and mutual respect and assistance. Given this, I don’t think it’s appropriate to use the expression, ‘economic cooperation,’ when it comes to inter-Korean ties. North Korea’s change is essential to carry out joint programs in a more proper way and advance bilateral relations. I think both sides are in the process of adjusting their respective positions. It’s important for them to endure and get pastthe grueling process smoothly.

Unification Ministry spokesman Kim Ho-nyeon said in a regular briefing last week that various humanitarian and exchange projects between the two Koreas were still underway in Pyongyang, even after ‘the December 1st measures.’ It’s a relief that private-level exchanges have been carried out steadily, though in a decreasing way. Here’s hoping the Seoul government’s policy of mutual benefits and common prosperity will elicit a change from North Korea very soon. 　 [Interview] ‘Unification Asiad Park’ Opens in Busan
It was below freezing and snowing in Busan on December 7. At 2:00 in the afternoon, a big festival was held in the Saha District of the southeastern port city. Kicking off with a cheerful song, this is the completion ceremony of the Unification Asiad Park. Back in September of 2002, Busan hosted the Asian Games, a sports festival dedicated to promoting friendship between Asian nations and world peace. A number of people both from home and abroad swarmed to the nation’s second largest city, and particularly eye-catching were guests from North Korea. Dramatically, delegations from South and North Korea entered the stadium together during the opening ceremony, and South Korean people showed special attention to the cheering squad from North Korea. The ‘Unification Asiad Park’ was created here in Busan to remember the joyous and meaningful moments when the South and the North rooted together. Here’s Kim Tae-mun, an official of the Saha District Office.

The North Korean ship, Mangyeongbong, which carried the North Korean cheering delegation, remained anchored right here at Dadaepo port when the 2002 Asian Games were held in Busan. Containing Busan citizens’wish for peaceful unification, this park has been built with a goal of boosting exchanges between Asian nations and developing the city into one of Asia’s major hubs.

According to Mr. Kim, the park isn’t very big. But the 33,000-square-meter park accommodates many interesting things to see, including the 10-meter high monument shaping like the torch of the 2002 Asiad, the flag featuring a blue Korean Peninsula on a white background, the ‘Wall of Reunions’ where handprints are marked, and various sports facilities. The park’s establishment was far from easy. Officials had difficulty securing a sufficient budget, and the park project was on the verge of cancelation due to unstable inter-Korean relations. But fortunately, after many ups and downs, they were eventually able to open the park. Officials say this park is just the beginning. They plan to create a music fountain here in the Dadaepo beach resort. They will also expand the riverside roads to ease the traffic in the region. The park will hopefully be loved and remembered forever as one of the top tourist attractions in Busan, and contribute to advancing the reunification of Korea, as well.