South Korea urges North to hold dialogue on Kaesong zone

SEOUL (AFP) - South Korea on Thursday called for negotiations with North Korea on the future of the Kaesong joint industrial zone, which Pyongyang has threatened to shut down permanently after suspending operations.

"Normalisation of the Kaesong industrial complex must be solved through dialogue," the South's Unification Minister Ryoo Kihl Jae told reporters.

"I urge North Korea to come to the dialogue table."

Pyongyang announced the withdrawal of its 53,000 workers and the suspension of operations at Kaesong at the beginning of the week, as military tensions on the Korean peninsula soared.

A rare symbol of cross-border economic cooperation, Kaesong is a crucial source of hard currency for the impoverished North, through taxes and revenues, and from its cut of the workers' wages.

There are 123 South Korean companies operating in Kaesong, which lies 10km inside North Korea.

Turnover in 2012 was reported at US$469.5 million (S$581 million), with accumulated turnover since 2004 standing at US$1.98 billion.

South Korea's new President Park Geun Hye described the suspension of operations as "very disappointing" but Pyongyang on Thursday said her administration was personally responsible.

"Needless to say Kaesong industrial district will cease to exist should the Park Geun Hye regime continue pursuing confrontation," a spokesman for the North's Bureau for Central Guidance to the Development of the Special Zone said.

"The current powerholder in the South can never be able to shake off responsibility for having Kaesong, which survived even the traitor Lee Myung Bak's term in office, all but closed."

During her presidential campaign, Ms Park had said she would be more flexible in dealing with the North than her predecessor Lee, who took a hardline stance towards Pyongyang.

But the North's recent nuclear tensions sparked a cycle of escalating tensions that have put rapprochement on the far back burner.

The bureau spokesman said South Korean "warmongering" had been responsible for the decision to shut Kaesong.

Pyongyang had been incensed by Defence Minister Kim Kwan Jin's remarks that the South had a "military" contingency plan to ensure the safety of its people working in the zone.

It was also angered by South Korean media and analysts saying that the North would not dare to close Kaesong - a crucial source of hard currency for the impoverished state.

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