The North Korean government has given an ultimatum to the South Korean government over the Kaesong Industrial Complex. The Industrial Complex, which is territorially located in North Korea, allows South Korean companies to setup factories and use North Korean citizens have employees. With the on-going development over North Korea’s nuclear ambition escalating as well as the joint military exercise participated by both United States and South Korea, North Korea’s diplomatic tone has been increasing over the month. North Korea is demanding that all contracts and obligations over the Industrial Complex be null and void. South Korean government has expressed regret over the North’s response.

This is a significant development in Korea, because the Industrial Complex is a critical symbol for both Korea to engage in economic matters under a peaceful, practical environment. It would be devastating for the peace progress in Korea if the Kaesong Industrial Complex is scrapped out. I doubt that will happen, because it would go against North Korea’s interest of gathering funds for whatever operation it has in mind. I think this is another attempt by North Korea to provoke the South in trying to shift the diplomatic bartering table in their own favor, but I think it would be harder to convince the South to easily cave in North Korean’s demands, because the elected conservative government in South Korea has a less friendly view of the North Korean government. For now, we can only monitor the situation and hope that it plays out for the best.