For Koreas, business park remains a neutral zone

These are not the best of times to be stuck on the wrong side of the DMZ.

Yet hundreds of South Koreans still commute north of the border to an industrial park that once symbolized brotherly love between an estranged people and is now a pawn in a dangerous quarrel over the March 26 sinking of a South Korean patrol ship.

“This is like children struggling to read the mind of their parents who are about to divorce,” said Lee Im-dong, director of the corporate council for the Kaesong industrial park, who on a recent afternoon was fielding phone calls from nervous factory owners and employees.

After South Korean President Lee Myung-bak pointed to overwhelming evidence that a North Korean torpedo had sunk the navy ship, he suspended almost all trade with North Korea and banned its ships from South Korean shipping lanes, prompting the government in Pyongyang to ban South Koreans from its territory.

But against all odds, the Kaesong industrial park has been limping along through the crisis — with neither side wanting to pull the plug.

“To close Kaesong would mean completely cutting off ties between the Koreas, and that would be the starting point for military tension to build up,” said Lim Eul-chul, a scholar at South Korea’s Kyungnam University who has written a book on Kaesong.

The industrial park opened in 2004, during a giddy period in which Koreans were celebrating the restoration of railroad lines and roads across the DMZ, the expansion of tourism and cultural exchanges. When the first products, steel saucepans, rolled off the assembly lines at Kaesong, South Koreans bought up all 1,000 of them in two days at a Seoul department store in a burst of enthusiasm about the rapprochement.

The numbers change daily, but as of early this month, 818 South Koreans were still working alongside roughly 43,000 North Koreans. Despite the supposed ban on North Korean products, South Korea recently accepted delivery of 20 tons of peeled garlic as well as $17,000 worth of clothing and $250,000 of electrical sockets.

Lim, who is in touch with many workers and managers, says that on a human level, relations between the Koreans at Kaesong are not as hostile as one might imagine. He paraphrased North Korean bureaucrats whispering to South Koreans, “We hate Lee Myung-bak’s government but not you as people.”

The South Koreans at Kaesong either commute — downtown Seoul is only 30 miles away — or live for up to two weeks at a time in dormitories attached to the factories. There they can watch South Korean television and make telephone calls home, although they have no access to the Internet.

Since the recent crisis erupted, the South Korean government has ordered Kaesong’s factory owners to reduce their staffing, fearful of what might happen if the war of words were to erupt into an actual war.

South Korean Defense Minister Kim Tae-young said during parliamentary committee meetings last month that there was a “a great possibility” that South Korean workers could be taken hostage by the North Koreans.

To South Korean factory owners, the idea is preposterous.

“People who have never been to Kaesong and who are only watching the television news keep asking our employees, ‘Are you guys all right?’ ” said Park Yoon-gyu, president of South Korean menswear manufacturer Fine Renown, which has operated out of Kaesong since 2008.

“We South Koreans and North Koreans have become very close to each other,” he said. “Yesterday’s enemies are today’s friends.”

But a South Korean worker who spoke anonymously to the conservative Chosun Ilbo newspaper gave a less sanguine account of the atmosphere at Kaesong. He said that armed North Korean soldiers had been seen inside the compound, despite rules forbidding their presence.

The man also said that North Korean employees were stealing food, office supplies and toilet paper, and even grass seeds from a newly planted lawn, apparently following official orders to take whatever they could from South Korean companies.

Both North and South Korea have substantial amounts of money at stake in Kaesong, which lies just south of the 38th parallel — where the peninsula was divided at the end of World War II — but changed hands during the Korean War.

Kaesong is home to 120 South Korean factories, each of which required an investment of as much as $8 million, according to scholar Lim. For cash-starved North Korea, Kaesong is one of the dwindling sources of hard currency. The North Korean workers receive monthly salaries of $70 to $80, of which all but about $20 goes to the government.

Even in the crisis, the industrial park could help defuse tensions. South Korea hasn’t followed through on its threat to resume propaganda broadcasts at the DMZ, in part out of concern about what might happen to workers at Kaesong. Loudspeakers have been installed at 11 locations but remain quiet — for now, at least.

Times staff writer Demick reported from Seoul and Beijing. Park is a news assistant in The Times’ Seoul Bureau.