NKorea silences factories it ran with South, as Seoul decries endless cycle of provocation

A factory complex that is North Korea's last major economic link with South Korea was a virtual ghost town Tuesday after Pyongyang suspended its operations and recalled all 53,000 of its workers as part of its recent war-like posturing.

The work stoppage at the Kaesong industrial complex, the biggest employer in the North's third-biggest city and a source of much-needed hard currency, shows that Pyongyang is willing to hurt its own shaky economy in order to display its anger with South Korea and the United States.

Only a few hundred South Korean managers remained at the facility, which has been run for the past decade with cheap North Korean labor and South Korean capital and know-how. The managers have not been forced to leave the complex, located just north of the Demilitarized Zone.

One manager said that he and his colleagues are subsisting on instant noodles but planned to stay and watch over company equipment as long as their food lasted. Some of those who chose to leave were seen departing in cars overloaded with finished products.

The pull-out is part of a torrent of provocations and threats Pyongyang has unleashed at Seoul and Washington in recent weeks. The North is angry at U.N. sanctions punishing it for its third nuclear test on Feb. 12, as well as joint military exercises between the U.S. and South Korea that the allies call routine but that Pyongyang sees as preparation for an invasion.

In what's seen as the latest attempt to stoke fear, North Korea on Tuesday urged all foreign companies and tourists in South Korea to evacuate because it says the rival Koreas are on the verge of nuclear war. Analysts see a direct attack on Seoul as extremely unlikely.

South Korean President Park Geun-hye, who has sought to re-engage North Korea with dialogue and aid since taking office in February, expressed exasperation Tuesday with what she called the "endless vicious cycle" of Seoul answering Pyongyang's hostile behavior with compromise, only to get more hostility.

U.S. and South Korean defense officials have said they've seen nothing to indicate that Pyongyang is preparing for a major military action. But they have raised their defense postures, and so has Japan, which deployed PAC-3 missile interceptors in key locations around Tokyo on Tuesday as a precaution against possible North Korean ballistic missile tests.

Analysts say North Korea's rhetoric and actions are intended to force Pyongyang-friendly policies in South Korea and Washington and to boost domestic loyalty for Kim Jong Un, the country's young and still relatively untested leader.

Pyongyang said Monday it would recall all North Korean workers from Kaesong and would decide later whether to shut it down for good. Shutting it permanently would sacrifice jobs in a poverty stricken nation that according to the U.S. State Department has a per capita GDP of just $1,800 per year.

Even the suspension is costing North Korea money, and not just in the short term. The pull-out has left South Korean companies unable to fill orders, raised fears of bankruptcies and is likely to make others think twice about investing in North Korea.

"I deeply regret having entered Kaesong," Yoo Byung-ki, president of BK Electronics Co., said from Seoul. He said both North and South Korea hurt companies in the jointly run complex whenever the countries' relationship went sour.

"All orders got canceled. My clients must be worried. Even if they give us new orders, they will not give us all the orders they used to give," said Yoo, whose company supplies electronic components to consumer electronics companies.

Park expressed disappointment at the suspension of operations at Kaesong, and echoed the warning that it would only scare foreign investors away from North Korea.

"North Korea should stop doing wrong behavior and make a right choice for the future of the Korean nation," Park said at the start of a regular Cabinet Council meeting, according to a South Korean media pool report posted on her office's website.

The Kaesong complex is the last symbol of inter-Korean rapprochement projects from previous eras of cooperation. Other projects such as reunions of families separated by war and tours to a scenic North Korean mountain stopped in recent years.

Even before Monday's announcement, Pyongyang had been allowing operations at the Kaesong complex to wither. Last month it cut the communications with South Korea that had helped regulate border crossings at Kaesong, and last week it barred South Korean workers and cargo from entering North Korea.

Operations had continued and South Koreans already at Kaesong were allowed to stay, but dwindling personnel and supplies had forced about a dozen companies to stop operating at Kaesong before North Koreans were told to stop working there.

North Korea briefly restricted the heavily fortified border crossing at Kaesong in 2009, but manufacturers fear the current closure could last longer.

South Korea's Unification Ministry, which is responsible for relations with the North, said 75 South Koreans at the complex were set to come home Tuesday, leaving about 400.

The more than 120 South Korean companies operating at Kaesong urged North Korea to quickly normalize operations.

"If this situation continues, companies will face the risk of going bankrupt," said Yoo Chang-geun, a vice president of the Corporate Association of Gaesong Industrial Complex.

After an emergency meeting Tuesday in Seoul, representatives of the companies said in a joint statement that they hope to send a delegation of small- and medium-sized companies to North Korea in hopes of reopening the complex. The statement also appealed to South Korea to take a "mature, embracing posture" and work out all available measures to help normalize Kaesong's operations.


Lee reported from Seoul. AP writers Hyung-jin Kim in Seoul and Eric Talmadge in Tokyo contributed to this report.