The Kaesong Industrial Complex, which opened at the end of 2004, was largely financed by the South with the idea of increasing economic co-operation and trust between the two Koreas.
Located 10 kilometres inside the North, just across the demilitarised zone from South Korea, Kaesong has major symbolic value for both North and South.
It houses over 120 companies making goods including shoes, clothing, textiles and car parts, which are all taken to the South by road and rail for sale or export.
The zone is a financial lifeline for the North. Since the complex opened it is calculated that Pyongyang has earned the equivalent of 1.56 billion euros from it. It is believed to account for 40 percent of the dollars that come into the North.
The Unification Ministry in Seoul says more than 53,000 workers from the North are employed there along with nearly 800 South Koreans.
The wages of the North Koreans are paid directly to the Pyongyang government – the equivalent of 62 million euros last year.
Companies with plants in Kaesong say their customers are already expressing nervousness about future orders. Its permanent closure would deal a death blow to the one remaining example of cooperation between the two Koreas.
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