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UNCLASSIFIEDThursday, 13 November, 2008Summary:
 
This product provides a summary of events derived from Open Sources on thecurrent status of the Kaesong Industrial Complex (KIC) and the Kaesong City tours. Itcovers recent activity by North Korea from its threats to shut down the KIC and itsannouncement of the closure of its overland border with South Korea effective 01 Dec.
 
Please direct your questions and comments to MAJ Steve Sin, Chief, USFK J2 OSINT: DSN –(315) 725-5045, Commercial – +82-2-7915-5045, or Email –CIOCCAOSINT@us.army.mil
Information contained in this document is entirely derived from unclassified, open source, information. This product is based exclusively on the content and behavior of selected media and has not been coordinated with other US Government components.This report may contain copyrighted material. Copying and dissemination is prohibited without permission of the copyright owners.
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USFK J2 Korea Open Source ReportCurrent Status:
North Korea announced on 12 Nov that it would close its overlandborder with South Korea beginning 01 Dec. This comes after months of harsh rhetoricand threats to close down the KIC if the South Korean government failed to halt thespread of leaflets from the south into the north. The north labels the leaflets as a smearcampaign directed at its leader Kim Jong Il and warns it could lead to a militaryconfrontation.
Kaesong Industrial Complex Background:
A ground-breaking ceremony was held inKaesong on June 30 for the construction of the KIC, one of the biggest inter-Koreaneconomic projects. Planners intended the KIC to be not only a model of inter-Koreaneconomic cooperation but also to contribute to the economic growth of the North and theSouth. The KIC is run by aSouth Koreancommittee that has a fifty-year lease whichbegan in 2004. The park is expected to be complete in 2012, covering 25 square milesand employing 700,000 people. According to Yonhap News, 83 South Korean firms areoperating in Kaesong employing approximately 35,000 North Korean workers.
 Kaesong City Tours:
The city of Kaesong is a historically significant site for bothKoreas. It served as the capital of the Koryo dynasty from 918 - 1392. The majortourist attraction is the many historic monuments from that era that have survived and itis not surprising that history teachers form a large part of the visitors.
The Current Problem
: Groups of North Korean human rights campaigners anddefectors have launched hundreds of thousands of balloon-borne leaflets into NorthKorea. The leaflets describe North Korean leader Kim Jong Il as a "devilish killer whoviews his people only as slaves." They say Kim Jong Il is the sole reason for NorthKorea's hunger and poverty. They also include information on the failing health of Kimand outline his family tree, which includes many children by different women; somethingfrowned upon in conservative North Korea.North Korea angrily decries the leaflets as a smear campaign against leader Kim Jong-Iland has asked the south to put an end to the distribution of the leaflets, but theycontinue. The continued release of the leaflets has put a strain on already tense relationsand resulted in the north threatening the expulsion of South Korean workers and theclosure of the KIC. On 12 Nov, North Korea announced it will close the overland borderbetween the two countries on 01 Dec, thus setting the stage for making good on theirthreats.
North Korea Threatens Closure of KIC:
North Korea has called the leaflet campaign“psychological warfare,” and “a smear campaign against Kim Jong Il.” It says the failureof the South Korean government to halt the spread of the leaflets amounts to tacitapproval and has threatened to expel all South Koreans and shut down the KIC, severall ties with the south, and warns that it risks provoking military confrontation.North Korea began its current spate of threats during a meeting of military officials fromthe two Koreas in Panmunjom on 02 Oct. This was the first inter-Korean militarydialogue since the Lee Myong Bak administration came into power. The meeting lastedonly two hours and ended without any significant progress after the North's delegates
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USFK J2 Korea Open Source Report
warned of "grave consequences" for Seoul's spreading of propaganda leaflets.
 
Pyongyang's delegation stated the consequences could include the barring of SouthKoreans from the North through the inter-Korean border and the eviction of all SouthKoreans from the KIC as well as the South Koreans from the Mount Geumgang resort inthe east.Five days after a release of leaflets on 10 Oct, the
Rodong Sinmun 
, a newspaperpublished by the North's ruling Workers' Party, carried a commentary with a new threat,"If the group of traitors keeps to the road of reckless confrontation with the DPRK (NorthKorea), defaming its dignity despite its repeated warnings, this will compel it to make acrucial decision including the total freeze of the North-South relations.” Leaflets wereagain released on 27 Oct and again on 05 Nov, each release followed by renewedthreats from the north.
North Korea Takes Action:
On 09 Nov, a five-member delegation, led by LieutenantGeneral Kim Yong-Chol, top policy maker at the National Defense Commission chairedby leader Kim Jong-Il, conducted an unprecedented inspection of the KIC, collectinginformation on infrastructure and South Korean firms there. South Korean managersreported "They asked some odd questions. They asked, for example, how long it wouldtake for us to pull out," and “They did not show an amicable attitude either, saying theydid not visit there just to give out business cards and they had nothing to talk about.”
 
South Korean Reactions:
 
Seoul has asked the groups to refrain from sendingpropaganda leaflets in an apparent gesture to placate the north; however the groupshave continued sending the leaflets. Although the two Koreas agreed to ceasepropaganda activities in high-level military talks held in 2004, South Korea states itdoes not have the power to prohibit private citizens from releasing the leaflets.The South's Unification Ministry, which handles inter-Korean relations, played down thethreats, saying they do not reflect North Korea's official position. Experts on North Koreaopined that the threats are “based on the assumption that South Korea will get so scaredthat it will somehow find a way to stop the civic groups from floating their balloonscontaining anti-Pyongyang leaflets.” However, a former South Korean unification ministersaid “North Korea is likely to act on its threat to partially evict South Korean firms fromthe inter-Korean joint industrial complex and Seoul needs to have measures ready forsuch developments.”
 
Present:
On 12 Nov, citing South Korea’s failure to stop the leaflets and its failure toadhere to the 2000 and 2007 agreements (declarations on eventual peacefulreunification, confidence-building measures, economic cooperation, and a permanentpeace mechanism), North Korea announced “we officially inform the south side that theactual crucial measure taken by the Korean People’s Army to strictly restrict and cut offall the overland passages through the Military Demarcation Line will take effect fromDecember 1 as the first step in connection with the above-said development” and “Thesouth Korean puppet authorities should never forget that the present inter-Koreanrelations are at the crucial crossroads of existence and total severance.”
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