S. Korea offers North talks, with warning

SOUTH KOREA: South Korea on Thursday formally offered North Korea talks on suspended operations at their joint Kaesong industrial zone, and hinted it might pull out entirely if Pyongyang declines.

The South said it was offering working-level talks to resolve the impasse over Kaesong, a rare symbol of inter-Korean cooperation that has become the most notable victim of escalating military tensions on the Korean peninsula.

But the offer came with an ultimatum of unspecified “significant measures” if Pyongyang fails to accept the proposal within 24 hours. “There is no change on our stance to support the stable operation and improvement” of Kaesong, Unification Ministry Spokesman Kim Hyung-Seok said.

“But we cannot let this situation continue as it is,” he added. “If North Korea rejects our proposal... we have no choice but to take significant measures.” Kim did not elaborate on what steps might be taken, but the ultimatum suggested South Korea was considering a permanent withdrawal from the zone, which normally employs 53,000 workers at 123 South Korean companies.

The talks proposed by Seoul would be between the respective heads of the North and South committees that oversee Kaesong operations.

The proposal came a day after Seoul announced pan-governmental action to help firms with factories in Kaesong deal with liquidity problems caused by lost production and the cancellation of orders.

Established in 2004 and lying 10 kilometres (six miles) inside North Korea, Kaesong is a crucial hard currency source for the impoverished North, through taxes and revenues, and from its cut of the workers' wages.

The project was born out the “Sunshine Policy” of inter-Korean conciliation initiated in the late 1990s by South Korean President Kim Dae-Jung which led to a historic summit with North Korean leader Kim Jong-Il in 2000. It operates as a collaborative economic development zone that hosts South Korean companies attracted by its source of cheap, educated, skilled labour.

Turnover in 2012 was reported at $469.5 million, with accumulated turnover since 2004 standing at $1.98 billion.

The Korean peninsula was already engulfed in a cycle of escalating tensions -- triggered by the North's nuclear test in February -- when Pyongyang decided on April 3 to block all South Korean access to Kaesong.

AFP