North Korea lifts factory ban, raises hope for regional amity

North Korea says it is lifting a ban on operations at a jointly run factory park shuttered since Pyongyang pulled out its 53,000 workers in April amid tensions with South Korea.

Rivals North Korea and South Korea still in talks to resume production at Kaesong complex

About 500 owners and workers gathered for a rally insisting the South Korean government and North Korean authorities normalize the operation of the joint Kaesong industrial complex. (Lee Jin-man/Associated Press)

North Korea said it is lifting a ban on operations at a jointly run factory park shuttered since Pyongyang pulled out its 53,000 workers in April amid tensions with South Korea. The rival nations have agreed to meet next week for talks meant to restart operations.

The agreement revives hope for the resumption of production at the Kaesong complex, the last remaining symbol of inter-Korean co-operation from an earlier period of detente. The industrial park combined South Korean initiative, capital and technology with cheap North Korean labour. It was also a rare source of hard currency for North Korea, though the economically depressed country chafed at suggestions that it needed the money Kaesong generated.

North Korea is estimated to have received $80 million US in workers' salaries in 2012, an average of $127 a month per person, according to reports from South Korea’s Unification Ministry, which handles relations with North Korea.

Kaesong industrial complex in North Korea is seen from Dora Observation Post near the border village of Panmunjom, that has separated the two Koreas since the Korean War. (Lee Jin-man/Associated Press)

North Korea banned South Korean managers from crossing the border to their jobs in Kaesong and then withdrew its workers from the park during a torrent of warlike threats it made in March and April, including vows of nuclear strikes on Washington and Seoul. Pyongyang said it was angry over annual U.S.-South Korean military drills and UN sanctions over North Korea's February nuclear test — the country's third such test since 2006.

North Korea said it would lift its ban on operations at the complex, including restrictions on the entry of South Korean managers. But the two countries must reach a formal accord on their differences before production can resume, and six past meetings on the park's fate remained deadlocked.

A statement by the North's Committee for the Peaceful Reunification of Korea, which is responsible for dealings with Seoul, appeared to accept South Korea’s demand that North Korea won't unilaterally close the industrial complex, just north of the heavily armed border, should tensions between the rivals rise again.

South Korean businesses with operations at Kaesong welcomed the development. The park had survived previous periods of tension between the rivals, including attacks blamed on Pyongyang that killed 50 South Koreans in 2010, and the shutdown of other big co-operation projects

For South Korea, Asia's fourth-largest economy, the complex was more than a business opportunity and a source of cheap labour — it was a symbol representing the possibility of eventual unification. Before April, the Kaesong industrial complex was the only place for South Korean entrepreneurs to collaborate with North Korean workers.

In Washington, U.S. State Department spokeswoman Jen Psaki said the U.S. remains in close contact with the South Korean government and is closely monitoring the situation. "We certainly support improved inter-Korean relations," she told reporters.