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South Korea to halt work at joint industrial park with North Korea

Published 10/02/2016

The Kaesong industrial complex at the Korea border (AP)
The Kaesong industrial complex at the Korea border (AP)

South Korea has said it will suspend operations at a joint industrial park with North Korea in response to the North's recent rocket launch, the first time in the park's decade of operation that Seoul has halted work.

The move comes after North Korea on Sunday launched a long-range rocket considered by others as a banned missile technology test.

South Korean unification minister Hong Yong-pyo said the suspension of operations at Kaesong would stop the North from using hard currency from the industrial complex to develop nuclear and missile technology.

He said at a news conference that the park had provided 616 billion won (£355 million) of cash to North Korea since it broke ground in 2003.

The park is the last major co-operation project between the rivals.

Seoul will provide financial compensation to companies that operate at Kaesong, Mr Hong said, and will begin pulling South Koreans from the park on Thursday.

Combining South Korean initiative, capital and technology with the North's cheap labour, the park has been seen as a test case for reunification. Last year, 124 South Korean companies hired 54,000 North Korean workers to produce socks, wristwatches and other goods.

South Korea's government and companies invested more than a trillion won (£577 million) to pave roads and erect buildings in the zone, which lies in a guarded, gated complex on the outskirts of Kaesong, North Korea's third-largest city.

South Korean companies in Kaesong survived during past periods of tension that led to the suspension of other inter-Korean projects. A major interruption to the park's operation happened in 2013 when North Korea pulled out its workers in protest at South Korea's joint military drills with the US.

Meanwhile, Japan has announced it will impose new sanctions on North Korea to protest at the rocket launch.

The sanctions will include expanded restrictions on travel between the two countries and a complete ban on visits by North Korean ships to Japanese ports, chief cabinet secretary Yoshihide Suga said at a news conference.

He said the sanctions would be approved by the cabinet, and would require legislative changes in parliament.

The US is also considering more stringent sanctions on North Korea.

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