Pullout of S. Korean Workers to Begin From Gaesong

In the wake of North Korea’s threat to cut off inter-Korean exchanges from Monday, the South Korean government has started to pull out South Koreans from the joint industrial complex in Gaesong and consider how to compensate businesses operating in the complex.

Seoul yesterday formed a task force comprising working-level officials at the Unification Ministry and began preparing for the withdrawal of South Korean staff as demanded by the North.

Unification Ministry spokesman Kim Ho-nyoun told reporters, “The safety of the people working and staying at the complex is the top priority. The Gaesong Industrial District Management Committee and companies whose staff were requested to leave the complex by the North are now in talks with the North on the number of personnel to be pulled out and the schedule.”

As of yesterday, 1,592 South Koreans were in the North Korean border city, including 38 workers on the management committee; 750 staff at 88 small manufacturers; 50 volunteers at 13 community work facilities; 201 workers employed by nine construction companies; and 553 staff at Hyundai Asan Corp. and other partner companies.

If the government complies with the North’s demand, some 500 South Korean workers will be pulled out from the complex, leaving behind 750 staff at manufacturers.

In a related move, the ministry and the Small and Medium Business Administration are seeking to assess the damage to businesses operating in Gaesong and respond to a growingly hostile North Korea.

The ministry will hold an advisory committee meeting of North Korean experts Dec. 8 on handling the issue.

Measures under consideration are encouraging companies at the complex to join a damage compensation program; introducing a collective purchase system to cope with a cut in orders from partner companies; and providing liquidity to prevent a credit crunch, according to ministry officials.

The damage compensation program will require the government to absorb 90 percent of the losses (up to 10 billion won or 6.7 million U.S. dollars) stemming from the North’s breach of contracts or expropriation of investment funds if companies sign up for the program for a fee.

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