The latest developments surrounding the Kaesong Industrial Complex show how risky a reconciliatory policy toward the rogue regime in North Korea is.

The industrial park in the North Korean border city of Kaesong -- shut down since February last year -- has emerged as a hot topic in the wake of a report last week that the North has been secretly running at least 19 textile factories there.

The report by Radio Free Asia followed news reports in August that about 100 vehicles that had been used by South Korean firms operating in the joint industrial park disappeared.

After the RFA report, it is clear that North Korea makes no secret of its illegal use of the facilities and equipment left by South Korean firms.

A North Korean propaganda outlet argued that “it’s nobody’s business” what it does at the industrial zone, which it said is under its sovereignty. More preposterous is that it vowed to run the factories in the zone “more actively.” This indicates that the North intends to operate more of the production facilities and equipment left by 124 South Korean firms.

That is an unabashed, blatant violation of inter-Korean agreements and international norms. All the basic production facilities, including power lines, and equipment were installed by the Seoul government and the southern firms, with the North providing only the land and workers.

The 2006 inter-Korean investment guarantee agreement bans nationalization or seizure of investment assets in each other’s territory. Like other agreements with the North, the investment guarantee accord has only become a sheet of worthless paper.

The complex started operating in 2004 -- along with the opening of the North Korean mountain Geumgangsan to South Korean tourists -- as follow-up projects to the first-ever inter-Korean summit between South Korean President Kim Dae-jung and North Korean leader Kim Jong-il in 2000.

But the symbols of the inter-Korean reconciliation failed to live up to expectations. The Geumgangsan tour was halted in the wake of a North Korean guard’s shooting to death of a South Korean visitor in 2008.

The Kaesong industrial park had first been shut down for 166 days in 2013 amid tension heightened by the North’s third nuclear test in February that year.
Citing the annual South Korea-US joint military exercises, the Pyongyang government unilaterally withdrew North Korean workers from the Kaesong factories and banned South Korean staffers and supplies. The current situation should remind South Korean government officials and proprietors of the Kaesong factories that they should have known better than believing that there would not be another closure.

The South Korean government’s decision to withdraw from the industrial park early last year was inevitable and appropriate, as it was linked to the UN-led international sanctions against the North which conducted its fourth nuclear test.

It was no secret that a considerable portion of wages paid to North Korean workers by South Korean businesses went to government coffers and that could violate sanctions aimed at curbing finances for the North’s weapons of mass destruction programs like nuclear and missile development.

Now the problem for the South Korean government and companies is that they can do little about North Korea’s unilateral acts. With the tension over the North’s nuclear and missile provocations running at the highest level in decades, there is little possibility of resuming normal operations of the Kaesong park anytime soon.

All in all, the case of the Kaesong complex affirms that it is an illusion to seek to separate politics and security from economy when dealing with a regime like the one in Pyongyang. We are paying dearly to learn this simple lesson.