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The Plum Tree Sacrificed for the Peach Tree
By Sung-han Kim

With a view to ensuring the long-term consolidation and survival of his regime, North Korean leader Kim Jong Un is pursuing the so-called Byungjin policy of simultaneously pursuing nuclear and economic development. His game plan is as follows: North Korea should 1) accelerate the miniaturization of nuclear warheads and ICBMs capable of hitting the mainland of the United States, while at the same time promoting the growing number of small markets throughout the country; 2) return to a “tactical” dialogue with the US and South Korea when North Korea suffers from international pressure; 3) resume nuclear and missile development when the pressure eases; 4) declare a moratorium on nuclear and missile tests right after North Korea has accomplished its strategic mission, the possession of nuclear ICBMs; and 5) come to the negotiating table and pretend to negotiate over denuclearization while consolidating the stability of the regime.

 

In this vein, North Korea’s fourth nuclear test on January 5 and its rocket launch on February 7 were yet more brazen acts to approach the end-state of Kim’s game plan. South Korea realizes that time is not on its side and that there is an urgent need to neutralize North Korea’s game plan. Following Pyongyang’s latest rocket launch, Seoul announced on February 10 that it would stop operating at the Kaesong Industrial Complex. The shock announcement prompted North Korea to expel all South Korean firms from the complex and freeze all assets there, shutting down the last symbol of cross-border economic co-operation. Pyongyang declared the complex a military-controlled area.

 

In retrospect, South Korean President Park Geun-hye had one thing in mind. She believes Kim will not give up his nuclear weapons program unless the security of his regime is seriously threatened. On February 16, Park said in the National Assembly, “South Korea will take stronger and more effective measures to make North Korea realize its nuclear ambitions will only result in accelerating the collapse of its regime,” which hinted at South Korea’s forthcoming aggressive drive to put the North into a corner.

 

Sacrificing the plum tree for the peach tree

 

The Kaesong Industrial Complex, which employed about 54,000 North Korean workers, was seen as one of the last symbols of co-operation between the two Koreas. At the same time, there was a problem that it was also the channel through which the North Korean government earned cash that might be underwriting North Korea’s nuclear weapons program.

 

The closing of the complex would deny North Korea upwards of US$120 million in hard currency annually. Given the estimated cost of US$850 million for a long-range missile test and the US$1.1 billion in annual costs for its nuclear program, the shuttering of Kaesong on its own is unlikely to have a significant impact on North Korea’s nuclear weapons program. But the US$120 million constitutes about 3.5 percent of North Korea’s annual exports, which is not exactly pocket money.

 

In fact, Park’s decision to close the complex was strategic rather than economic, in the sense that she showed her strong determination to bear the cost of the closure in order to induce the international community to take the North Korean nuclear issue more seriously. The sudden closure took a heavy toll on more than 120 South Korean firms whose production machinery, raw materials and finished products are still trapped in Kaesong. These assets are valued at US$663 million.

 

Still, the shutdown has delivered a strategic victory to South Korea. There is a Chinese essay, Thirty-Six Stratagems, that illustrates a series of stratagems used in war. It consists of six chapters entitled: Winning; Enemy Dealing; Attacking; Chaos; Proximate; and Desperate Stratagems. The first three chapters generally describe tactics for use in advantageous situations, whereas the final three contain stratagems more suitable for disadvantageous situations. Each chapter consists of six sub-chapters. The fifth sub-chapter in the second chapter concerns how to deal with enemy stratagems: “Sacrifice the plum tree to preserve the peach tree” (李代桃僵, Lǐ dài táo jiāng). In short, there are circumstances in which you must sacrifice your short-term objectives in order to gain long-term goals. This is the scapegoat strategy, in which someone else suffers the consequences so that the rest do not. Making this stratagem work can require a careful balancing act, and speed can be an important success factor in creating a sequence to allow you to rapidly gain the upper hand. In this instance, the South Korean government acted quickly to stop operations at the Kaesong complex.

 

This strategy also worked in Seoul’s consultation with the US about the deployment of the Terminal High Altitude Area Defense missile system (THAAD), which has given rise to security concerns in China. The Chinese government, after having engaged in lengthy consultations, decided to join the strong sanction regime drafted by the UN Security Council. China acted quickly after the shutdown of Kaesong, in contrast to its reaction to the nuclear and missile tests, when Beijing didn’t react quickly. Chinese Foreign Minister Wang Yi said North Korea’s nuclear test and long-range rocket launch violated UN resolutions and posed a serious challenge to the global regime on the nonproliferation of nuclear weapons. In the end, the UN Security Council adopted the sanctions resolution against North Korea with active Chinese support and commitment to sincere implementation of the resolution.

 

The sanctions will require all North Korean planes and ships carrying cargo to be inspected, which is major progress over previous sanctions that allowed nations to inspect planes and ships only when they had “reasonable grounds” to do so. In addition, the sanctions ban Pyongyang from exporting most of the country’s natural resources. Coal alone accounts for about US$1 billion in annual income. There are also many more exports. These are the toughest sanctions ever imposed by the Security Council. This would not have been possible if South Korea had not closed the Kaesong complex and sent a clear message to the US: This is the last chance for the international community to stop North Korea’s nuclear weapons program. South Korea had to close the complex (sacrifice the plum tree) since it called on the international community to adopt strong measures (preserve the peach tree) in response to North Korea’s nuclear and rocket tests.

 

Preventing a hostage crisis at Kaesong

 

In the past, South Korea has paid a high price to maintain the symbolism of improved inter-Korean ties. In 2009, Pyongyang turned South Koreans into hostages for a few days by preventing them from leaving the Kaesong industrial complex. The following year, when tensions were rising over the sinking of the South Korean Navy corvette Cheonan on March 26, 2010, the militaries of South Korea and the US developed scenarios on a possible hostage crisis at Kaesong.

 

The Kaesong complex was severely affected by North Korea’s decision to pull its workers out in April 2013 in protest over joint military exercises by South Korea and the US. On April 3, 2013, North Korea began to deny South Korean employees access to the Kaesong complex. This came as tensions began escalating rapidly between Seoul and Pyongyang. On April 8, North Korea recalled all 53,000 North Korean workers from the Kaesong complex, fully suspending its operations while 406 South Koreans remained at the complex after its effective closure. On April 17, North Korea prevented a delegation of 10 South Korean businessmen from delivering food and supplies to the 200 South Korean staff who remained in the industrial zone. On April 26, South Korea decided to withdraw all remaining staff, and on May 4, the last seven South Koreans left the Kaesong complex, which resulted in its complete shutdown.

 

On July 4, both countries agreed in principle that the Kaesong complex should be reopened, as tensions between the two sides began to subside. Six rounds of talks were held without a concrete agreement being reached. During the first week of August, North Korea reiterated that reopening the complex would serve both nations’ interests. On August 13, South Korea said it would start distributing insurance payments to businessmen in the complex, but also said it was open to new wording on the issue of joint control of Kaesong. The move, seen as precursor to formally closing the complex, sparked a seventh round of talks, which South Korea labeled as final. An official agreement to reopen the complex was reached and signed on August 15.

 

In light of the fact that the Park government is now ready to threaten the regime security of North Korea and the comprehensive and powerful provisions stipulated in UN Security Council Resolution 2270, tensions on the Korean Peninsula are likely to rise in the foreseeable future. On March 4, right after the passage of the resolution, Kim Jong Un stressed “the need to get the nuclear warheads deployed for national defense always on standby so as to be fired any moment.” Under these circumstances, the probability of North Korea taking South Koreans at Kaesong as hostages would have been very high. If the South Korean government had not closed the Kaesong complex, South Korean workers might have been held at the Kaesong site. North Korea could have threatened to kill them to prevent the Security Council from adopting some of the harshest sanctions ever against North Korea in response for Pyongyang’s January nuclear test and February long-range missile launch.

 

Ending a model for foreign slave labor

 

North Korean workers at Kaesong were not paid properly. South Korea’s Unification Ministry said, “The wages for the North Korean workers and other fees were paid in cash in US dollars to the North Korean authorities and not to the workers. This is believed to be channeled in the same way as other foreign currency it earned.” This means 54,000 North Korean workers at the Kaesong complex saw little of the US$160 they were paid on average a month, given that they received only 30 percent of that amount in the form of vouchers to buy food and other basic goods. They were able to get a taste of life in the South and make a living, since they were in fact living in the North, where the average wage of other workers is a lot lower than those at the complex. Had they lived overseas, they would not have been able to make a living with wages of that amount.

 

The Kaesong complex encouraged Pyongyang to expand this kind of distorted model of labor exploitation to other countries. North Korea has sent tens of thousands of its own people to 16 countries around the world to work in severe conditions that amount to modern slavery. Some 50,000 North Korean laborers are currently stationed in countries across Asia, the Middle East, Europe and Africa — with a high percentage in Russia and China — where they work with inadequate food, minimal time off and monthly pay of only US$120 to US$150. They work primarily in the mining, construction and logging industries, assigned to perform the more dangerous tasks.

 

A serious problem is that the North Korean government turns a profit from these activities. The forced labor of its people brings in between US$1.2 billion and US$2.3 billion each year. Employers pay Pyongyang a premium in exchange for the cheap labor it provides. Or the employer provides the North Korean government with a paycheck so that the state’s field officers take the premium and give a slavery paycheck to the North Korean workers. Marzuki Darusman, who is the UN’s Special Rapporteur on the human rights situation in North Korea, maintains that the matter should be tried in the International Criminal Court.

 

The Kaesong industrial complex was a “decent” model because the living standards of the North Korean workers were much better than other North Korean workers overseas. But there was also built-in exploitation, in which the Pyongyang government took the premium and the workers did not get what they deserved. North Korea then exported the Kaesong model to other countries since it could do so with impunity, which has created a situation of serious human rights violations. In this sense, the closure of Kaesong could be a turning point for the international community, putting on to the table the issue of North Korean forced foreign labor and raising the possibility of addressing the problem in a systematic manner.

 

Kaesong could be reopened if North Korea changes

 

Whether the Kaesong industrial complex will remain closed or will be reopened depends on North Korea. As long as the Kim Jong Un regime continues to pursue its nuclear weapons program, operations at the complex will never be resumed. If the regime shows its intention to denuclearize and takes meaningful measures such as a verified freezing or dismantlement of its nuclear weapons program, the reopening of the Kaesong complex could be put on the table at inter-Korean talks.

 

Now, however, is not the right time for us to talk about how to reopen the Kaesong complex. South Korea and the international community should focus their attention and energy on regime transformation, if not regime change, in North Korea. Regime transformation means changing the behavior of Kim’s regime by threatening its security, which it values more than its national security. Rather than falling into a nostalgia for the good old days of the Kaesong industrial complex, we need to concentrate our efforts on getting the North Korean regime at last to denuclearize.

 

Sung-han Kim is a professor of International Relations at the Graduate School of International Studies, Korea University. He served as a Vice Minister of Foreign Affairs and Trade in 2012-2013. He can reached at ksunghan@korea.ac.kr.

Back to Issue
    South Korea reacted to North Korea’s latest nuclear test and missile launch with a bold decision to close the Kaesong Industrial Complex, the only remaining symbol of inter-Korean co-operation. It thereby inflicted short-term pain on some of its own businesses in the cause of the long-term goal of pushing Pyongyang to denuclearize. In the words of an old Chinese proverb, sacrificing the plum tree for the peach tree. It was the right decision.
    Published: Mar 25, 2016
    About the author

    Sung-han Kim is a professor of International Relations at the Graduate School of International Studies, Korea University. He served as a Vice Minister of Foreign Affairs and Trade in 2012-2013. He can reached at ksunghan@korea.ac.kr.

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