Aug. 7 (Bloomberg) -- North and South Korea agreed to resume talks on reopening on the Gaeseong industrial complex, a crucial source of hard currency for Kim Jong Un’s regime, two weeks after similar negotiations collapsed.
The South accepted North Korea’s offer of working-level talks at Gaeseong to be held Aug. 14, Unification Ministry spokesman Kim Hyung Suk told reporters in Seoul. Along with the offer, made in a statement carried by the official Korean Central News Agency, North Korea said it would send its workers back into Gaeseong.
South Korea had repeatedly warned it will make a “grave decision” on the future of Gaeseong if North Korea didn’t respond to what it called its final offer on July 29 for talks on resuming operations at the complex. The North withdrew its workers from Gaeseong in April amid heightened tension following tightened United Nations sanctions over its nuclear program and U.S.-South Korean military drills.
“North Korea probably couldn’t ignore the fact the park is a cash cow and feeds not only the 53,000 workers there but also their family members,” said Yoo Ho Yeol, a North Korea professor at Korea University.
Talks on reopening Gaeseong collapsed last month after the two sides failed to agree on a way to prevent future closures. North Korea earned $100 million each year from the zone, according to Yang Moo Jin, a professor at the University of North Korean Studies in Seoul.
“We expect a sincere and forward-looking attitude from North Korea,” the Unification Ministry’s Kim said.
The offer for talks came less than two hours after South Korea said it will pay 109 companies with operations at Gaeseong 280.9 billion won ($250 million) in exchange for 90 percent of their assets in the North. It wasn’t clear if there was any link between the two announcements.
North Korea said earlier this year that nuclear and economic development were the regime’s top priorities. North Korea’s economy is about one-fortieth the size of South Korea’s and the country relies on China for diplomatic and economic support. Chronic food insecurity and malnutrition affect about two-thirds of the country’s 24 million people, according to a UN assessment last year.
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