’The industrial complex South Korea built for its small and medium-sized business enterprises in North Korea in 2003 is at a crossroads between its survival as a model of inter-Korean cooperation and its demise as a victim of escalating cross-border military tension. An entry ban imposed by Pyongyang on South Korean commuters has posed one of the greatest threats to the Gaeseong complex’s survival since its construction.

On Wednesday, Pyongyang started to ban the entry of South Korean commuters and vehicles carrying fabrics and other intermediate materials for use in the complex. It followed its earlier threat to shut down the complex if the South attempted “to do any damage to our dignity.” But it should realize what it was doing was little different from killing a goose laying golden eggs.

The North Korean threat followed a South Korean news outlet’s claim that earnings from the complex were finding their way into the pockets of North Korea’s young leader Kim Jong-un. The entry ban was one of the actions Pyongyang had been taking in response to the U.S.-led U.N. sanctions against its third nuclear test on Feb. 11 and a South Korean-U.S. joint military exercise Key Resolve last month. Another recent action Pyongyang took in this regard was a decision to reactivate its nuclear reactor as part of its atomic weapons program.

True, it was not the first time for Pyongyang to close its border to South Korean commuters and vehicles. In addition to putting temporary restrictions on the operation of the industrial complex in protest of South Korea’s denunciation of the nuclear weapons program in 2008, Pyongyang banned border crossings on three occasions during the 12-day Key Resolve military maneuvers in March 2009.

Many Pyongyang watchers predict the North will eventually lift the ban on border crossings as it did in 2009. But there is no guarantee that inter-Korean relations will get back to normal anytime soon, making it possible for the South Korean corporations to conduct their business as usual in the industrial complex. Bilateral relations turned so confrontational that China summoned the Beijing-based South and North Korean ambassadors to its Foreign Ministry earlier in the week to advise self-restraint to both Seoul and Pyongyang.

Of course, the poverty-ridden North would have more to lose than the prosperous South if the industrial complex were to be shut down. The 123 corporations operating in the industrial complex, including 72 clothing manufacturers, have 53,000 North Koreans on their payrolls. The earnings from the industrial complex, $86 million each year, are no small amount for the North that does not have many comparable or better sources of hard currency.

The impact the closure of the industrial complex would have on the South Korean economy would be anything but negligible. It would force many of the 123 corporations out of business, be it temporarily or permanently, resulting in laying off as many as 15,000. But South Korea would better absorb that such losses than the North, given its economy is incomparably stronger.

Moreover, South Korea apparently considered the idea of abandoning the complex when the North engaged in unprovoked hostilities in 2010. In what appeared to be a first step in this regard, it banned new investments in the industrial complex in May 2010 when North Korea was confirmed to have torpedoed a South Korean corvette two months earlier and imposed a temporary ban on border crossings when the North bombarded a South Korean island in the sea off its west coast in November.

As South Korea says, the safety of hundreds of South Korean factory managers remaining in the industrial complex must be its primary concern. What each of the corporations needs to do now is withdraw all factory managers but the minimum needed for emergency operations.

North Korea, which currently permits their exit, will have to keep itself from entertaining the idea of taking them hostage under any circumstances, because that would mean triggering a war. The South Korean defense minister said he was ready to take military measures if their security was threatened.

It goes without saying that one of the best options available to both sides is to heed the Chinese advice for self-restraint and have a cooling-off period. What they need to do is calm down, put their ego aside and bring the complex back to normal operations. Isn’t it too valuable a model of inter-Korean cooperation to sacrifice?