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North Korea Stops Entry to Industrial Zone

By DailyForex.com Team
The DailyForex.com team is comprised of analysts and researchers from around the world who watch the market throughout the day to provide you with unique perspectives and helpful analysis that can help improve your Forex trading.

In a move that is bound to have repercussions, North Korea prevented workers from the South from entering a jointly run industrial park today. Workers are being stopped from entering the Gaeseong zone for the first time since 2009. But hundreds of South Korean will be granted permission to return home, allaying fears they could have been held hostage.

The joint factory zone earns $2 billion a year in trade for South Korea and generates about $100 million profit annually. Kim Jong Un’s regime makes quadruple that amount. According to a South Korean Unification Ministry spokesman, North Korea may shut the park entirely in response to recent flights over the Korean peninsula by U.S. stealth bombers. Approximately 200,000 North Koreans, including workers and their families, depend on the Gaeseong industrial zone for income and South Korean companies pay a total of more than $80 million a year in wages to workers in the zone.

South Korea's Yonhap news agency reported that more than 800 South Koreans were forced to stay overnight in the park, just north of the world's most heavily armed border. The ministry later were told that 46 workers would return by 5 p.m. with the remainder staying there.

Tensions between the U.S. and North Korea have been accelerating over the last few years and reached their highest in February 2010 when North Korea detonated a nuclear weapon and Un blamed U.S.-South Korea military drills that have been run in the area for bringing the region to the brink of war. In March 2009, almost 700 South Koreans were stranded in Gaeseong after the North temporarily severed communications and suspended cross-border movement to protest the same annual U.S.-South Korea military drills that were taking place.

In order to keep tensions from escalating further between the U.S. and South Korea, the complex will not be entirely shut down at the moment. Some factories in the Industrial Park are still operating including a suspended nuclear reactor.
Lee Eun-haeng who runs an apparel firm in Kaesong told Reuters that if the industrial park closed down entirely, any trust between the North and South that has developed over the years would fall apart. “We're going to end up taking the damage from this on the southern side of the border,” he noted. Lee's business employs 600 North Koreans who earn $130 on average a month.

North Korea threatened a nuclear strike on the United States and missile attacks on its Pacific bases after fresh U.N. sanctions were imposed for the country's third nuclear weapons test in February. Washington has responded by bolstering its forces in the region.

There was a sense of foreboding among the hundreds of South Koreans waiting to get in on Wednesday that Kaesong would be closed permanently, dealing a death blow to the one remaining example of cooperation between the two Koreas.

DailyForex.com Team
About DailyForex.com Team
The DailyForex.com team is comprised of analysts and researchers from around the world who watch the market throughout the day to provide you with unique perspectives and helpful analysis that can help improve your Forex trading.
 

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