North Korea is using factories and equipment in the shuttered inter-Korean Kaesong Industrial Complex to develop a new industrial base in the city, independent of South Korea, government officials in the North told Radio Free Asia.
The de-facto nationalization of the complex is yet another move by the North Korean leadership to distance itself from Seoul. Since the new year, Pyongyang has officially redefined the South as its main enemy, ended all economic cooperation, and begun scrubbing all references to reunification.
“The Central Committee has given an order to develop a new industrial base at the Kaesong Industrial Complex,” an official from Pyongyang told RFA Korean on condition of anonymity for security reasons.
Located just north of the demilitarized zone that divides the Korean peninsula, the complex opened in 2004, marrying South Korean capital and technology with cheap North Korean labor.
But it was shuttered in 2016, shortly after North Korea’s fourth nuclear test, and cannot be reopened until the U.S. and UN lift sanctions on the North.
Since the closure, North Korean companies have secretly used factories and equipment left behind by South Korean companies in Kaesong on several occasions, but now they are being ordered to do so as part of an official policy.
Not all of the industry will stay in Kaesong; officials confirmed that authorities have approved the relocation of facilities that produce tires, rice cookers and shoes to nearby counties.
North Korea is pushing ahead with its newly adopted “20x10 plan” to revitalize the economy in 20 counties per year over the next 10 years. Assuming control of the complex will significantly reduce costs associated with the plan, but is a clear violation of the Kaesong Industrial Zone Act.
“[North Korea] has secretly made use of some facilities in the Kaesong Industrial Complex without South Korea’s approval,” the official said. “Now, [we will] move the facilities in each factory of the Kaesong Industrial Complex to a newly renovated local industrial base and operate officially.”
Authorities demolished a small garment factory and are scaling up a larger factory that will be placed under the jurisdiction of the Kaesong City Local Industrial Bureau, he said.
The reorganization is bad news for business owners who were hoping to use the equipment in Kaesong for themselves this year, an official in the northwestern province of North Pyongan told RFA on condition of anonymity to speak freely.
“Before the pandemic, powerful trading companies received orders from China and planned to use sewing machines and cutting equipment left behind by South Korea in the Kaesong Industrial Complex under the pretext of earning foreign currency for the government,” he said. “But now, they won’t be able to do so.”
The organization of the new industrial base in Kaesong should be complete within the year, the North Pyongan official said.
“The Central Party renovated and expanded the clothing and footwear factories in the Kaesong Industrial Complex to develop them into a light industrial base,” he said. “This measure appears aimed at eliminating the complex, which is South Korea’s property, and intentionally redeveloping it as our own, as we have now defined South Korea as our primary enemy.”
Translated by Claire S. Lee. Edited by Eugene Whong.