North Korea holds seven South Korean factory managers until Kaesong bills are paid

In this undated photo released by the Korean Central News Agency and distributed Sunday, Jan. 27, 2013 in Tokyo by the Korea News Service, North Korean leader Kim Jong Un attends a consultative meeting with officials in the fields of state security and foreign affairs at undisclosed location in North Korea. Kim convened top security and foreign affairs officials and ordered them to take "substantial and high-profile important state measures," state media said Sunday, Jan. 27, 2013 fueling speculation that he plans to push forward with a threat to explode a nuclear device in defiance of the United Nations. (AP Photo/Korean Central News Agency via Korea News Service) JAPAN OUT UNTIL 14 DAYS AFTER THE DAY OF TRANSMISSION
“Now yous can’t leave.” (AP Photo/Korean Central News Agency)

North Korea wasn’t content with just shutting down the Kaesong industrial complex, once a symbol of cooperation with South Korea and the source of much-needed trade, foreign exchange and expertise—it’s also holding seven South Korean managers hostage until $7.2 million worth of overdue wages, telecom bills and taxes are paid.

“We do not consider them at risk but we will be closely watching until all of them are back,” A South Korean government official told Reuters. South Korean business losses due to the closure may exceed 1 trillion won ($900 million), Prime Minister Chung Hong-won told parliament. Negotiations about returning the seven managers along with South Korean industrial equipment are continuing.

South Korea’s Hankyoreh newspaper reported that 96 of the 123 most small firms operating in Kaesong had purchased “inter-Korean economic cooperation insurance” which protects them in the event of a North Korean pull-out from the project. The uninsured firms may still receive some government assistance.

As Quartz reported yesterday, Kim Jong-un may have been closed Kaesong because it was too successful, making North Koreans feel affinity for the South. President Park Geun-hye, for one, doesn’t sound like she is interested in doing business with Pyongyang any time soon: “Now who on the planet wants to invest in North Korea in a situation where each other’s agreement comes to nothing in an instant?”

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