As long as this North Korean border factory stays open, nuclear armageddon is unlikely

March 29, 2013
March 29, 2013

Tensions on the Korean peninsula are getting uncomfortably high. On Thursday the US sent two nuclear-capable stealth B-2 bombers on a flyover of South Korea as a show of force. North Korean’s boyish leader Kim Jong-un has ramped up his aggression in response, putting the country’s missile facilities on standby and releasing photos showing him discussing military strikes with his generals. (The photos were taken in front of charts unsubtly titled “U.S. Mainland Strike Plan.” NK News also noted that Kim has a shiny new iMac.)

With new reports suggesting that North Korea is planning to test a long-range missile that might be capable of reaching Guam or Hawaii—not to mention Tokyo or Seoul—it would be tempting to get really freaked out about now. But there is at least one reason not to despair quite yet: The factory complex just north of the DMZ that is operated by South Korean companies is still open.

The Kaesong industrial park is a crucial source of foreign currency for the Kim regime. According to Reuters, it generates $2 billion a year in trade. And as such it has remained open even after North Korea’s more symbolic escalations, like calling an end to the Korean War armistice and the severing of the country’s telephone link with South Korea. Even after those phones went down, managers at Kaesong were still able to communicate with their coworkers south of the DMZ.

Some 123 South Korean firms manage 50,000 North Korean workers at the factories, not that there’s much interaction between the two groups. The FT reported this month that “capitalist and communist Koreans eat lunch separately, and when the northerners go home through the army checkpoint each night, the southerners go by themselves to a karaoke room in a shipping container, their only source of entertainment.”

The North Korean’s wages of about $57 per worker per month, totaling about $80 million a year, are paid directly to their government. As long as those wages keep flowing, it’s safe to say that war is not imminent.

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