MONETARY INCENTIVES

Did South Korea just pay a $7.3 million ransom to reopen Kaesong?

July 29, 2013
July 29, 2013

When dealing with the hermit kingdom, sometimes you need a little cash to seal the deal. South Korea announced on Sunday that it would give $7.3 million in humanitarian aid to its northern neighbor. On the same day, Seoul proposed a final round of talks over the reopening of the Kaesong Industrial Complex, a jointly operated factory zone inside North Korea that was shuttered when Pyongyang began its most recent bout of nationalistic defiance.

On Friday a sixth round of talks reached a point of angry frustration (and even a light physical scuffle) as the two sides struggled to iron out a guarantee that North Korea wouldn’t once again unilaterally pull out of Kaesong again as it did in April.

While North Korea badly needs Kaesong’s income, Seoul is growing increasingly desperate to fulfill the demands of its angry factory managers and companies, whose abandoned equipment is beginning to rust in North Korea’s monsoon rains. South Korean unification minister Ryoo Kihl Jae said on Sunday that if the North failed to cooperate, the South would be forced “to make an important decision to protect our businesses.”

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