The withdrawal of South Koreans from the joint industrial park in Gaeseong would leave the two Koreas with no means of official bilateral communications, further dampening the prospects of reconciliation.

The absence of regular contact channels would augment challenges to the Seoul government, which has sought dialogue-based trust building to mend fences with the reclusive state, experts said.

For North Korea, the suspension of the complex has reaffirmed that the unruly state was not a reliable and predictable business partner, dealing a blow to its efforts to attract foreign investments to shore up its debilitated economy.

Last month, Pyongyang cut the only inter-Korean military communication channel on the western frontline, apparently in an angry response to the South Korea-U.S. annual military drills.

After that, the decade-old park, a symbol of cross-border cooperation, was the only area for bilateral exchanges and communication. It had been kept alive despite a series of political conflicts, which were prompted by the North’s provocations including nuclear and missile tests.

The factories of the 123 South Korean firms stopped operating on April 9 when some 53,000 North Korean workers did not come to work under the directive of Pyongyang, which has expressed displeasure over the South Korean media criticizing it for cashing in on the complex while churning out war threats against Seoul.

Experts said that given the withdrawal is not a complete shutdown of the complex, there would be still some chance to turn things around particularly after the South Korea and U.S. end their joint military drills on Tuesday.

“North Korea would not move first to shutdown the park and invite all the criticism for that. It would be rather cautious about the next step,” said Chang Yong-seok, senior researcher at the Institute for Peace and Unification Studies of Seoul National University.

“After the end of the allied exercise, Seoul needs to closely watch how the North would move (to turn things around).”

Chang, however, raised concerns that Seoul could not rule out the possibility that the communist state could move to militarize the Gaeseong complex and further escalate tensions as it previously threatened to do so.

“This is the reason why Seoul needs to be cautious about its next step,” he said.

Some momentum for thawing inter-Korean relations could also be forged after the summit talks between South Korean President Park Geun-hye and U.S. President Barack Obama, which are scheduled to take place in Washington on May 7.

Park is expected to unveil her vision for peace and cooperation on the peninsula and in Northeast Asia, which would include more detailed policy plans to handle the North.

Huh Moon-young, a senior fellow at the state-run Korea Institute for National Unification said Seoul should take a comprehensive, broad approach to resolve issues surrounding North Korea, rather than focusing on the current stalemate over the park.

“Without just focusing on the Gaeseong issues, Seoul should reshape a strategy and vision for overall peninsular peace and the peace for Northeast Asia. Focusing only on it would not help the wide range of issues facing Korea and the region,” he said.

“Even if the resumption of operations at the complex was delayed, Seoul should look for a mid- or long-term strategy that would bring all in the right direction of peace and stability.”

By Song Sang-ho
(sshluck@heraldcorp.com)