Imagining the Catastrophic Consequences of a New War in Korea

27 09 2017

New War in Korea(Leonid Petrov for Daily Telegraph, 23 September 2017) The 1953 Armistice Agreement brought a sustainable halt to the Korean War, but has never ended it. Nor did it transform into a peace regime. During the last sixty four years the North and South Koreans live in the conditions of neither-war-nor-peace, which has certain advantages and downsides for both regimes separated by the Demilitarised Zone.

For the communist government in the North, the continuing war provides legitimacy and consolidates the masses around the Leader, who does not need to justify his power or explain the economic woes. For the export-oriented economy and steadily democratising society of South Korea, the continuing war against communism provides broad international sympathy, which is translated into the staunch security alliance and economic cooperation with the US. Any change (intentional or inadvertent) in the current balance of power or threat on the peninsula would lead to immediate re-adjustment or re-balancing of the equilibrium.

Military provocations of the North, does not matter how grave or audacious (i.e. 1968 guerrilla attack on the Blue House in Seoul, 1968 the USS Pueblo incident, 1976 Axe Murder Incident, 2002 naval clashes in the West Sea, the 2010 ROK corvette Cheonan sinking or Yeonpyeong Island shelling), have never led to the resumption of war. Similarly, peace and reconciliation-oriented initiatives (i.e. the 1972 Joint North-South Korean Communiqué, the 1991 Joint Declaration of South and North Korea on the Denuclearization of the Korean Peninsula, or the 2000 North–South Joint Declaration) inevitably end with a bitter disappointment. It seems that both Koreas are destined to live in the perpetual fear of war without really experiencing it.

Regional neighbours find this situation annoying but acceptable because the reunification of Korea can be potentially dangerous for some and advantageous for others. The Cold War mentality persists in Northeast Asia and dictates to its leaders to exercise caution in any decisions related to the Korean peninsula, which is known to be the regional balancer. After the WWII, Korea was divided by the great powers for a good reason – to separate the communist bloc from the capitalist democracies. Seventy years later, Korea still serves as a buffer zone which separates the economic interests of China and Russia-dominated Northeast Asia from the US-dominated Pacific Rim.

Should any of the actors start changing the equilibrium in Korea, the stabilising forces of reasoning and good judgement will inevitably return the situation to the original and steady balance of threat. Neither the UN intervention in Korea nor the Chinese counterattack in 1950 could help Koreans to reunify their country. Similarly, North Korea’s progress in building their nuclear and rocket deterrent (independently from what is promised by the alliance with China) will be counterbalanced by the return of US-owned nuclear weapons to South Korea or by the resumption of Seoul’s indigenous nuclear program, which was abandoned in the 1970s. When the balance of threat is restored, a temporary period of improved inter-Korean and DPRK-US relations will follow. Peaceful or hostile co-existence in Korea serves the interests of the ruling elites in both Koreas and benefits their foreign partners too.

Imagining the catastrophic consequences of a new war in Korea is pointless because everyone (in Pyongyang and Seoul, Washington and Moscow, Beijing and Tokyo) understands the risks associated with imminent nuclear retaliation. After the 2006 nuclear test North Korea is a fully-fledged nuclear power and what was previously possible (or at least hypothetically imaginable) with regards to a military action against Pyongyang is simply out of question these days. Whether Washington admits the reality or continues to produce the self-deceitful blandishments of a surgical strike against North Korea, a new hot war in Korea is not feasible simply because it serves no ones’ interest.

First, it would be suicidal for the aggressor and equally catastrophic for the victim of aggression. Second, when the nuclear dust settles the presumed victor would not know what to do with the trophy. The Kim dynasty would not survive another war for unification. Democratically elected government in Seoul would not know how to rule the third of its (newly acquired) population who is not familiar with the concept self-organisation. The cost of damaged physical infrastructure rebuilding will be dwarfed by the long-term expenditures required for maintaining social order in the conquered territories, re-education and lustration of the captured population. Survivors would prefer to seek refuge in a third country out of fear for revenge and reprisals. The exodus of Korean reunification is not something that regional neighbours are ready to welcome or absorb. It will take years and trillions of dollars before Korea can recover after the shock of violent unification.

Even a peaceful unification is likely to pose threat to Korea’s neighbours. The windfall of natural resources and economical labour force, if combined with advanced technologies and nationalism-driven investments, will help Korea outperform the industrial powerhouse of Japan and enter into open competition with China. A narrow but strategically located Russo-Korean border corridor will link the European markets and Siberian oil with Korean industrial producers. An underwater tunnel, once completed between Korean and Japan, will undermine the Sino-American duopoly and link the peninsula with the islands.

If the North and South are unified, the presence of US troops will be questioned not only in Korea but in Japan as well. US security alliance structures across the Pacific will crumble, followed by economic and technological withdrawal from the region. Even the new Cold War against China and Russia won’t help Washington to prevent the major rollback of American influence in Asia and the Pacific. Russia and China, as well, upon losing the common adversary will need to resume competition and power struggle for regional hegemony. Thus, the unification of Korea will open a new era of regional tensions, which nobody is really prepared to endure.

Korea today, however divided and problematic, is a capstone of regional peace and stability which must not be touched by political adventurists. The balance of Northeast Asian regional security architecture has been hinging on the 1953 Armistice Agreement, which proved to be sold and robust enough to survive many international conflicts. Even the acquisition of nuclear armaments by North Korea is not going to change the inter-Korean relations or Koreans’ relations with neighbours. However, if North Korea is deliberately targeted or attacked and destroyed, as has been threatened from the UN podium, that would trigger the processes far beyond of our imagination and control and inevitably lead to tectonic shifts in politics, security and economy of the region, which collectively produces and consumes approximately 19% of the global Gross Domestic Product. Surely, nobody will play with fire when so much is at stake.

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If China falls out with North Korea, then Russia will step in

27 04 2017

Pyongyang-MoscowKirsty Needham (Sydney Morning Herlad, Beijing, 24 APRIL 2017)

Chinese President Xi Jinping has told his US counterpart Donald Trump that Beijing opposes any action on the Korean Peninsula that goes against UN Security Council resolutions.

The phone call between the two leaders came as Chinese media reported on a rift between Beijing and Pyongyang, with North Korean state media criticising China as “dancing to the tune of the US”…

The US has repeatedly urged China to use its economic clout to put pressure on North Korea to abandon its nuclear program, warning that if China cannot produce a solution, the US may act alone.

Mr Xi told Mr Trump the international situation was changing rapidly and it was important the US and China maintain close contact, Chinese state media reported.

“Xi Jinping stressed that China is firmly against any behaviours that violate the UN Security Council’s resolution, at the same time it hopes all parties concerned maintain restraint, avoid doing anything intensifying the peninsula situation,” CCTV reported.

Asked about the North Korean media attack, a Chinese Foreign Ministry spokesman said: “China’s position is consistent and clear and the relevant party should be very clear about that.”

Chinese experts are saying cutting oil would be the toughest sanction China could impose – it was last done in 2003 for just three days.

North Korea’s mining industry would be severely hit if China cut energy supply to the regime.

The front page of North Korea’s Rodong Sinmun newspaper on Monday praised the DPRK’s mining industry as self-reliant, exceeding capacity and “smashing the enemies’ sanctions”.

Kim Jong-un sent congratulations to a magnesite mine – a mineral that is exempt from UN sanctions. North Korea has the world’s second largest deposits of magnesite, a raw material listed as “critical” by the US and the European Union and a key component in smartphones and aircraft. China has the world’s largest deposits.

Leonid Petrov, an ANU fellow, says China is buying other rare earth minerals that are vital for high-technology products at half price from North Korea. He says if relations between Pyongyang and Beijing continue to deteriorate, Pyongyang could cut off sales to China and find new export markets elsewhere.

“If China falls out with North Korea, then Russia will step in. North Korea allows China and Russia to compete for concessions and ports and fishing,” he said.

See the full article here…





How the Hell does North Korea Manage to Earn Foreign Exchange?

19 04 2017

Kaesong Industrial Park - workers(Charis Chang, 2017.04.18, www.news.com.au) From the outside North Korea looks like an impoverished state cut off from the rest of the world. But during its weekend procession, the isolated regime managed to put on an impressive display of its rockets and military strength, in defiance of growing American warnings about its military capability.

While many have the impression of North Korea being a poor country that can’t feed its own people, Leonid Petrov told news.com.au that it had large stockpiles of natural resources that it used to fund its weapons research.

“North Korea is a mountainous country that has huge natural resources including deposits of high quality coal, gold, silver, uranium, iron ore and rare earth metals,” said Dr Petrov, a visiting fellow at the Australian National University College of Asia and the Pacific.

He said North Korea had exported its minerals to allies such as China and the Soviet Union for decades until the collapse of the communist bloc. Since then it had been more proactive in international trade, although the tightening of sanctions has seen its export ability curtailed recently.

Dr Petrov said China in particular had maintained trade in North Korea and was keen to keep a monopoly on its rare earth metal trade.
“So China buys everything North Korea is prepared to offer (of its rare earth metals),” he said. These metals are important because they are used the production of many 21st century products like mobile phones, computers, LCD screens and cars.

Another way that North Korea earns its money is by exporting its workers to China, Russia, the Middle East, Eastern Europe and South East Asia. In fact there were no visa requirements between North Korea and Malaysia until early this year, when tens of thousands of North Korean workers were deported following the assassination of North Korean president Kim Jong-un’s older brother Kim Jong-nam.

“Tens of thousands of North Koreans are sent overseas to work in restaurants, construction sites, as vegetable growers and builders of monuments in places like Africa,” Dr Petrov said.

“Dictatorships like big projects and North Korea can offer them labour to build big monuments, highways and airports.” Dr Petrov said the “lion’s share” of the worker’s wages went to the North Korean government.

North Korea also welcomes foreign investment. The Egyptians have invested in the country’s telecommunications network, concrete factories and construction industries, while the Chinese are keen on fishery resources, the mining industry and have developed a network of supermarkets selling Chinese-made consumerables.

Previously North Korea also benefited from co-operation with South Korea, which invested hundreds of millions into the Mt Kumgang resort where South Koreans and foreign visitors could stay and go mountain climbing. The Kaesong Industrial Park, which produced goods using South Korean know-how and North Korean labour, also gave it a financial boost until it was shut down last year following North Korea’s fourth nuclear test.

Dr Petrov said until last year China was also providing North Korea with other resources it needed such as crude oil and petroleum at “friendly prices” or possibly even for free.
It’s this type of trade that the Trump administration and the Australian government wants to block.

“They’re keen to see China stifling North Korea to death and causing the economic collapse of North Korea’s economy, which is unrealistic,” Dr Petrov said.

He said China sacrificed more than 250,000 soldiers during the Korean War to support the North Korean government. “It’s wishful thinking that China would just turn the tap off and allow the North Korean regime to implode.

“China understands that this would cause chaos in North Korea, the absorption of North Korea into South Korea and the subsequent advance of American troops to the Chinese border.

“So China is not going to allow the economic collapse of North Korea.” Dr Petrov said China was more likely to demonstrate its anger through ceasing economic co-operation temporarily, such as when it suspended the importation of coal after the assassination of Kim Jong-nam. “It bites but is not deadly,” he said.

But Dr Petrov said these types of actions were probably not going to be effective in curbing North Korea’s ambitions as it could always turn to Russia to help. “If China ceases economic co-operation, then Russia steps in and will continue doing the same,” he said.

“North Korea knows that well and plays off Russia against China, allowing Moscow and Beijing to compete for concessions on North Korea’s mining industry, fisheries and port facilities.” Russia is interested in North Korea because it sees it as a good market for Russian gas, oil and electricity. Russia believes North Korea could also potentially open the corridor for the export of energy to South Korea.

It sees North Korea as part of a potential transport corridor stretching from South Korea to Europe, via Russia’s Trans-Siberian Railway. “Russia is not interested in the collapse of North Korea but the stability and co-operation with North Korea,” Dr Petrov said.

Even other countries have had a hard time enforcing sanctions against North Korea.
A United Nations expert team released a report last month that found North Korea had managed to avoid sanctions by using Chinese front companies and other foreign entities to disguise where its goods were coming from. Last year it managed to continue its export of banned minerals and also has access to international banking.

Part of the problem is how different countries interpret what is banned by the sanctions.
One example was highlighted after Austrian ski equipment was found at the luxury Masik ski resort in North Korea. Austria later said it didn’t think ski lifts were included in the European Union’s definition of luxury goods prohibited from being sold to North Korea.

An Australian brand of ski clothing was even manufactured at the Taedonggang Clothing Factory in Pyongsong from 2014, but the company said it was not aware of the problem until after production had been completed and shipped to retail customers. It took two years for the company to sever its production line.

When asked how the conflict with North Korea could be resolved, Dr Petrov said: “Stop the war, end the conflict, reconcile and co-operate”. Dr Petrov believes that North Korea had a chance for survival if it could resume co-operation with South Korea, and this could happen if South Korea changed leadership at its May 9 presidential election.

He said co-operation did happen during the 10 years of the Sunshine policy that encouraged interaction and economic assistance between the two countries from 1998 to 2008, but the US actions were very important.
He said North Korea initially froze its nuclear program according to an agreement made when Bill Clinton was president but his successor George Bush scrapped this, which forced North Korea to resume its program.

See the full article here… 





Korean Peninsula Looks More Divided than Ever

21 03 2016

Kaesong Industrial Park closing(AFP, Daily Mail, 12 February 2016) North and South Korea’s perennially volatile relations seem headed for a new and potentially dangerous low, with all official lines of communication cut off and a host of tension-raising issues on the near horizon.

The two rivals, who have remained technically at war over the past six decades, have faced and weathered numerous crises in the past, but the current situation feels particularly grim in the wake of the North’s recent nuclear test and long-range rocket launch.

Any hope of compromise or dialogue seems to have been indefinitely shelved, with a leader in Pyongyang confirming an unwavering commitment to nuclear weapons development, and a counterpart in Seoul determined to react firmly — and proactively — to any North Korean provocation.

And the standoff is taking on wider Cold War-like dimensions, with the divisions between the main parties to the North Korean nuclear issue — China and Russia on one side, the US, South Korea and Japan on the other — increasingly stark and antagonistic.

The new mood on the divided peninsula played out this week in the effective termination of the sole remaining North-South cooperation project — the Kaesong joint industrial zone lying 10 kilometres (six miles) over the border in North Korea.

– A talisman for ties –

Despite its obvious vulnerabilities, Kaesong had taken on a talismanic image by riding out pretty much every inter-Korean crisis thrown up since it opened for business in 2004.

“In a way, it’s a miracle it lasted that long,” said Leonid Petrov, an expert on North Korea at the Australian National University.

But on Wednesday, Seoul announced it was suspending all operations of the 124 South Korean companies in Kaesong, and yesterday Pyongyang responded by expelling all the firms’ managers and freezing their factories’ assets.

The North placed the complex under military control, while the South cut off all power and water supplies.

“I don’t see any way back for Kaesong now,” Petrov said. “It’s gone too far and there’s no real will in the North or South to work it out.”

Kaesong was born out of the “sunshine” reconciliation policy of the late 1990s.

One of the roles initially envisaged by Seoul was of Kaesong as a beachhead for market reforms in North Korea that would spread from the complex and expose tens of thousands to the outside world’s way of doing business.

Although that vision never materialised, some analysts still mourned its demise for closing a small but crucial open door on the world’s most heavily-militarised border.

– ‘Great leap backwards’ –

“With no Kaesong, South and North Koreans will no longer be in contact anywhere on a regular basis. That is a great leap backwards,” Aidan Foster-Carter, a Korea expert based in Britain, wrote for the NK News website.

Chang Yong-Seok, a senior researcher at the Institute for Peace and Unification Studies at Seoul National University, said one of Kaesong’s most important contributions had been to help keep inter-Korean rivalries in check.

“The Koreas both had a stake in Kaesong so they were able to restrain each other in some ways, but now that has all gone out the window,” Chang said.

The space for communication between Seoul and Pyongyang shrank further on Thursday, when the North announced it was cutting the last two remaining communication hotlines with the South.

The hotlines themselves have never been used for conversational diplomacy, but they were key to setting up meetings where such discussions could take place.

The severing of all contacts comes ahead of a period when crisis-control talks could be most needed.

– Tensions ahead –

North Korea will likely react strongly to whatever sanctions the UN Security Council eventually agrees to impose over its nuclear test and rocket launch.

Then in March, South Korean and the United States will kick off a series of annual military drills that the North views as rehearsals for invasion and which always see a spike in tensions.

Pyongyang’s claims of provocation over the exercises should be especially shrill this time, as Seoul and Washington also begin talks on deploying an advanced US missile shield in South Korea.

“South Korea and the US have said the drills will be on an even larger scale than usual which is sure to meet a big backlash from North Korea,” said Chang.

“So, with all this, I think we’re going to see tensions running at a level incomparable to previous years,” he added.





Isolated Kim Relies on Old North Korea Tensions Playbook

28 08 2015

One Korea_One enormous challenge (By Sam Kim and David Tweed, Bloomberg News, August 25, 2015) SEOUL, South Korea — North Korean leader Kim Jong Un’s military standoff against South Korea, with his threats to annihilate the government in Seoul, was not just about the loudspeakers blasting propaganda and K-pop tunes over the demilitarized zone.

Rather, the events that took tensions on the peninsula to their highest level since the aftermath of North Korea’s nuclear test in early 2013 reflected Kim’s efforts to control how ties between countries in North Asia are evolving.

The young dictator, who came to power in late 2011, is looking isolated. Kim’s nuclear ambitions and his unwillingness to take guidance from Beijing have irritated China and strained ties with Pyongyang’s traditional ally. South Korean President Park Geun-hye enjoys a rapport with President Xi Jinping and is inching toward improved ties with Japan.

Faced with a dilapidated economy and drought at home, and potentially pressured by senior officers in his military to show some mettle, Kim resorted to an old North Korean playbook — pick a fight to force concessions from South Korea on trade and aid. It’s also a warning to Park against taking North Korea lightly in her dealings with China, Japan and the United States, all of whom have urged Kim to abandon his nuclear weapons program.

“This is more than a loudspeaker issue,” said Zhang Baohui, director of the Center for Asian Pacific Studies at Lingnan University in Hong Kong. “In the end this could be Kim’s outreach strategy. Maybe they think the South hasn’t been responding enough, so provoked a crisis to get to this stage.”

The stakes are high for Kim. He has a series of upcoming anniversaries where he must prove he’s worthy of commanding North Korea’s 1.2 million troops. Economic woes facing his 24 million people are unlikely to ease soon, while North Korea’s increasingly porous border with China means ordinary people have greater access to electronics and news of life outside the reclusive country.

In the end, both leaders gave some ground after days of high-level talks among negotiators at a border village — and both can probably claim a victory. The regime in Pyongyang agreed to lift its “semi-state of war” and expressed regret over landmine blasts that maimed two South Korean soldiers, while Seoul said it’d stop the propaganda broadcasts.

Risks remain, and Kim faces the challenge of a more strident Park in the face of any further provocations.

“The question is will the dialog stick? That will be harder because there is going to be some kind of crisis that tests this in relative short order,” said John Delury, a political science professor at Yonsei University in Seoul, citing the potential for skirmishes on the maritime border or over the demarcation line.

Since Park’s government said last week it traded fire with North Korea across the demilitarized zone, her approval rating has risen. Even as the tensions roiled South Korea’s financial markets she said Monday she would not stop pressuring Kim.

“The broadcasts play to particular parts of her support base, particularly the Christian right and the nationalist right,” said Tessa Morris-Suzuki, a professor of Asian affairs at the Australian National University in Canberra, of the South Korean leader who passes the half-way mark of her five-year tenure on Tuesday.

On the same day Kim marks the day of “Songun,” a military-first philosophy chartered by his late father Kim Jong Il. In less than two months he’ll celebrate the 70th anniversary of the founding of the Workers’ Party as he seeks to promote himself as a shrewd politician and tough military tactician.

“This is a very important commemorative year for Kim Jong Un,” Lee Sung-yoon, a professor of Korean studies at Tufts University, said by email. “The young Kim has a compelling need to mark it with a bang, as he did in 2012 on the 100th anniversary of his grandfather’s birthday, when North Korea was miraculously to become a powerful and prosperous country.”

Kim can’t afford to look weak. Since taking power he’s conducted a series of purges to root out potential threats.

“His spate of high-level executions shows a high degree of frustration that his policies are not being implemented to his satisfaction,” Patrick Cronin, senior adviser for the Asia- Pacific Security Program at the Center for a New American Security in Washington, said in an email.

The country is suffering chronic food shortages. North Korea said earlier this year it had been in the worst drought in a hundred years and the United Nations said in June that was worsening food-security concerns in the country.

“They’re facing a poor harvest, so this could be a way to divert people’s attention to patriotism and jingoism that wouldn’t be necessary had there been plentiful crops,” said Leonid Petrov, a visiting fellow at the Australian National University in Canberra. “Kim knows he cannot offer much to his population other than superficial window dressing. He has to use the same methods his father and grandfather did.”





Koreas agree to further talks, inspect joint factory

9 07 2013

North-South-Korea-factory-talks_2013.07.08(By Steven Borowiec, The Christian Science Monitor, 8 July 2013) After 16 hours of negotiation North Korea agreed in principle to normalize operations at the inter-Korean industrial complex, which has been idle for nearly three months.

North Korea met over the weekend with South Korea on its side of Panmunjom Peace Village, taking steps to normalize operations at the jointly-maintained Kaesong Industrial park – an idled symbol of inter-Korean economic cooperation.

North Korea agreed to permit businessmen to visit the complex Wednesday to check out the facilities that have been idle since April, when North Korea blocked South Korean workers from entering the complex and then pulled out some 53,000 of its own workers. The two Koreas are planning to hold talks Wednesday about restarting business at Kaesong.

Analysts say that for North Korea, restarting operations at Kaesong could be less important than using the negotiations to extract larger forms of support from South Korea.

“The regime in North Korea wants to appear cooperative while working for something more substantial from South Korea, something like unconditional aid and investment,” says Leonid Petrov, a researcher in Korean studies at the Australian National University. “Aid, sponsorship, charity – those are the things they’re most interested in.”

In fact, says Dr. Petrov, domestic media reported that North Korea has dispatched its workers in provinces away from the complex, which indicates that perhaps it doesn’t plan to resume operations there in the near future.

More than 120 South Korean companies once operated at Kaesong, which opened in 2004 as a project to pair South Korean manufacturers with inexpensive North Korean labor. South Korean companies paid workers wages that were high by North Korean standards. In 2012, the industrial park, largely seen as an achievement in inter-Korea ties, produced $470 million worth of goods and earned North Korea about $80 million in workers’ wages, according to South Korea’s Ministry of Unification.

Before the talks, North Korea gave permission to South Korean businessmen to visit the complex, but the Park Geun-hye government in Seoul insisted that inter-Korean exchange go through the government, not through private groups or individuals.

On June 9, the Koreas held working-level talks, the first inter-Korean talks for two years. Those were meant to be preliminary discussions ahead of minister level talks that were scheduled for later that week, but the second talks were called off after Seoul and Pyongyang couldn’t agree on the rank of the delegation leaders.

In the first few months of this year, North Korea was exceptionally hostile with its rhetoric, making violent threats against Seoul and Washington. Analysts say the more conciliatory approach seen in this weekend’s agreement to allow visits is part of a typical pattern of behavior where Pyongyang alternates threats with moves toward rapprochement.

“North Korea usually comes out swinging in the first half of the year, then in the second half launches a kind of peace offensive,” says Sung-yoon Lee, assistant professor of Korean studies at the Fletcher School of Law and Diplomacy, Tufts University. “It was preordained that North Korea would want to talk about restarting the [Kaesong] complex now.”

Coming into this weekend’s negotiations, South Korea said it would seek a written guarantee from North Korea that Pyongyang would never again unilaterally shut down the complex. Analysts see this as a potential stumbling block in Wednesday’s scheduled talks; North Korea may object to making any promises about what it will do regarding facilities that are in its territory.





North Korea closing Kaesong complex after worker recall

8 04 2013

North Korean workers at the South-owned Shinwon clothes company in Kaesong industrial park(by Tania Branigan, The Guardian, 8 April 2013) North Korea has said it will recall more than 50,000 workers from the industrial park it runs with the South and consider shutting it permanently, spelling an end to inter-Korean co-operation. Pyongyang has engaged in weeks of angry rhetoric in response to a UN security council resolution expanding sanctions following its third nuclear test and to ongoing joint exercises by South Korean and US forces.

But analysts noted that while the latest move by Pyongyang was substantive, it was also a non-military one made amid concerns that the North might be planning another missile or nuclear test. The Kaesong industrial complex has been a much-needed source of income for the impoverished North and a cheap source of workers for labour-intensive South Korean firms.

The statement from a senior party Workers’ party official, carried by the KCNA state news agency, warned that operations would be suspended while the future of Kaesong was reviewed. “The zone is now in the grip of a serious crisis,” Kim Yang Gon said. “It is a tragedy that the industrial zone, which should serve purposes of national reconciliation, unity, peace and reunification, has been reduced to a theatre of confrontation between compatriots and war against the North.”

He did not mention the 475 South Korean managers still at Kaesong. The North has prevented personnel and supplies from entering from the South since last week. According to Associated Press, about a dozen of more than 120 South Korean companies at Kaesong have halted production owing to lack of supplies.

“The temporary suspension is likely to become the final sigh of the sunshine policy as we knew it,” said Leonid Petrov, an expert on the North at Australian National University. “It’s understandable that as they proclaimed war it would be inconsistent with the desire to produce sneakers and LCDs at the same time … North Korea is sending a strong message to prove that money means nothing for the regime and its nuclear missile programmes are not for sale and not negotiable.”

Seoul’s policy of free-flowing aid and engagement was ended by South Korea’s previous president, Lee Myung-bak, who took office in 2008. Petrov argued future attempts at co-operation would have to start from scratch, adding: “It is unlikely it will happen under Park Geun-hye given the conservative origins of her party. “Many people blamed the sunshine policy for being ineffective, but that’s not correct: it was too successful for its time. It achieved a lot but was too dangerous for the North and too expensive for the South.”

James Hoare, the former British chargé d’affaires in Pyongyang, said: “It may be that among the military there are those who never liked [Kaesong] and saw it as a Trojan horse. It may be they’ve decided they won’t carry on with it, but they could still row backwards. It is not militarily threatening. It’s a gesture which to me looks foolish from the North Korean point of view, but it isn’t firing rockets or doing a nuclear test.” He pointed out that attempts at engagement with the North had often stumbled, from the early 1970s onwards. But he added: “It’s very unfortunate for the workers, who will lose their wages and other perks.”

Stephan Haggard of the Washington-bade Peterson Institute, an expert on North Korean economics, wrote last year: “For North Korea, [Kaesong] is a cash cow that even hardliners have been loath to push the way of the Mount Kumgang project. Since 2004, total wage payments for North Korean workers in the KIC has totalled $245.7m, rising from $380,000 in 2004 … to $45.93m in the first half of 2012. For Pyongyang, even hardliners can see that this is a no-brainer.”

One possibility is that the North believes it must threaten a clearly valuable asset to send the message that it is serious in its stance. Another possibility mooted by experts is that it could hope to expropriate the factories and hand them over to members of the elite, bolstering domestic support for the regime.