Easing tensions

DW: The industrial park Kaesong has been closed for over two months now. Now Pyongyang has offered talks with Seoul about opening the park back up. Was this a surprising gesture?

Eric Ballbach: I wasn't surprised by it. A long-term closure does not seem likely. For one, it is a profitable project for both North and South Korea, though for the South, it does not make that much of a difference compared to the rest of its foreign trade. But there are over 120 small and medium-sized South Korean companies that produce their products there.

Economic growth will legitimize the North Korean government's power. They started out by placing emphasis on building up their military and have achieved this with their latest rocket launch and nuclear test, which also got the military behind the new leadership. Nonetheless, it is surely the case that it is even more important for Kim Jong Un and his leadership to develop the economy than it was for his father and grandfather before him. So that needs to be taken into account regarding the recent developments, i.e. the visit to China, talks with Japan, and now these positive signs being sent to South Korea.

I think there are basically two political styles in North Korea. The one focuses on autonomy - the one we have seen of late. And now the leadership is switching over to an influence-maximizing kind of politics. North Korea wants to have some say in its own development and will most likely now focus on economic issues.

How harmful has the closure of Kaesong been to North Korea's economy?

Comprehensive cooperation with the South is a real dilemma for the North. There has always been the risk that this could destabilize the regime. Since 2008 / 2009 and especially after the sinking of the South Korean corvette "Cheonan" in 2010, one could see that economic trans-Korean cooperation outside of Kaesong decreased. North Korea has been able to compensate for that by strengthening ties with China. For Pyongyang that is less of a danger, but it will not be enough on its own. As long as the regime does not see Kaesong as a danger to the regime, it will surely continue to exist.

For the South Koreans, Kaesong is a special organizational structure, because there are a number of different parties involved. Hyundai is a large investor, there are the 123 firms including insurance companies. Different interests have developed from these different kinds of companies, which put pressure on the government to resume production as soon as possible. So when it comes to Kaesong, two complementary strategies - North and South - come together.

Is it clear how much money has been lost since the closure of Kaesong?

That is not really clear because it is not certain whether the companies at Kaesong have had to continue paying rent for the facilities during the last two months or not. The information on that varies. The loss has certainly been noticeable. But for North Korea, the 53,000 unemployed people are more important than the financial loss. Many North Koreans were employed by the South Korean companies at the industrial park, some of them were brought from far away to work at Kaesong. Initially that was a precarious issue for Pyongyang: How does a region which has weak structures in place to begin with, deal with 53,000 suddenly unemployed people? It is a dangerous situation and I think that the regime saw it as a bigger threat than continued cooperation with the South.

In addition to economic issues, it is said the talks will also be about resuming family gatherings between North and South Koreans, something that has been put on hold for the past five years.

Exactly. That was the surprising bit. But it is obvious that the North wants to win back some support from the South. And the humanitarian aspect is something that North Korea's new leadership under President Park Geun-hye has been emphasizing. Park announced an idea to separate humanitarian from political issues; to give humanitarian aid, even if political security issues remain uncertain.

That is the biggest difference compared to the previous administration under Lee Myung-bak, which put the nuclear issue ahead of humanitarian ones. But now the question will surely be to what extent Seoul will insist on an apology for the sinking of the "Cheonan" and the shelling of the South Korean island Yeonpyeong at the end of 2010. The question how South Korea wants to define itself will also be pivotal. Will it see itself as a party that can play a key role in solving the nuclear issue and accordingly place this above trans-Korean ties?

If this were the case, it would also be difficult because Pyongyang sees the issue as a bilateral issue with the US and only allows Seoul a limited amount of influence. So that will be another important question: whether and to what extent the new South Korean administration will be willing to promote North-South ties should Pyongyang not agree to a complete denuclearization. And I think it is improbable that North Korea will completely scrap its nuclear program. If it did, it would be putting an end to Kim Jong Il's "historic legacy."

Eric J. Ballbach is a research associate at the Insititute of Korean Studies at the Freie Universität in Berlin.

Interview conducted by Esther Felden