Pyongyang, North Korea -- North Korea said Thursday that it had final approval to launch "merciless" military strikes on the United States and had yet to allow South Korean workers to enter a joint industrial complex in the North.
In the latest escalation of the weeks-long crisis, the North Korean army said Thursday morning in Korea, which was Wednesday afternoon in Washington, that it could strike the United States with the possible use of "cutting-edge" nuclear weapons, according to a statement published by the official KCNA news agency.
Although the United States does not believe North Korea has the ability to launch a nuclear-armed missile, the North's closure of the Kaseong industrial park is actually "a very serious development, and a serious heightening of the crisis level on the Korean Peninsula," said Park Young Ho, senior research fellow at the Korea Institute for National Unification in Seoul.
Considered a cash cow for the isolated regime in the North, as its clothing and other factories earn badly needed foreign currency for Pyongyang, Kaseong had remained open despite ever more bellicose rhetoric from the North, and war drills by South Korea and its ally the United States.
"Both South Korea and the United States see North Korea's threatening action only as rhetoric, but now North Korea took a real action, as they had promised, so that South Korea will feel threatened," he said.
Pyongyang hopes to pressure Seoul into ending the cycle of action and reaction, Park said.
"The spiral of crisis will continue for the time being, but I don't feel it will go to extremes, I don't expect military action," he said. Other analysts are less sanguine.
"The Kaesong factory park has been the last stronghold of detente between the Koreas," said Hong Soon Jik, a North Korea researcher at the Seoul-based Hyundai Research Institute.
He said tension between the Koreas could escalate further over Kaesong because Seoul may react with its own punitive response, and Pyongyang will then hit back with another move.
The Kaesong industrial park started producing goods in 2004 and has been an unusual point of cooperation in an otherwise hostile relationship between the Koreas, whose three-year war ended in 1953 with an armistice. Its continued operation even through past episodes of high tension has reassured foreign multinationals that another Korean War is unlikely and their investments in prosperous dynamic South Korea are safe.
The Kaesong zone provides jobs for more than 50,000 North Koreans. The last major disruption at the park amid tensions over U.S.-South Korean military drills in 2009 lasted just three days.
Seoul's Unification Ministry spokesman Kim Hyung Suk said Pyongyang was allowing South Koreans to return home from Kaesong. About 33 workers among about 860 South Koreans at Kaesong returned Wednesday. But Kim said about 480 South Koreans who had planned to travel to the park Wednesday were being refused entry.
About 120 South Korean companies operate factories in Kaesong, which produced $470 million of goods such as clocks, clothing and shoes last year that are trucked back to the South for export to other countries. The industrial park is crucial for the small businesses that operate there to take advantage of North Korea's low wages but not important for the South Korean economy overall.
It has more significance to cash-strapped North Korea given, according to the South Korean government, wages for North Korean workers totaled an estimated $81 million last year.
Barring entry to South Koreans is a "slap in the face" after the South Korean government recently extended medical aid to the North, said Lee Choon Kun, a North Korea researcher at the Korea Economic Research Institute, a Seoul-based think tank. "I see this as a start for more provocative actions," he said.
"The North has made too many threats not to stop short of any real action."
Kaesong, initially conceived as a test case for reunification and reconciliation, also provides an irksome reminder for Pyongyang that what it lacks the South has in abundance: material prosperity. An enormous gap emerged between the two Koreas in the decades after the Korean War as the South embraced a form of state-directed capitalism while the North adhered to communist central planning.
Every morning, North Korean workers commute to the complex on the edge of Kaesong on South Korean-made Hyundai buses. Once inside the gates of the complex, it's a world apart. The paved streets and sidewalks are marked with South Korean traffic signals and signs, and the parking lots are filled with the Hyundai, Samsung and KIA cars driven by South Korean managers.
In the rest of the Korean Peninsula, it is illegal for Koreans from the North and South to interact without government permission. But inside Kaesong, North Korean workers work side by side with South Korean managers, discussing orders and mapping out production.
On Tuesday, a senior South Korean government official said Seoul has a contingency plan for its citizens in Kaesong. But he said the government hoped the tension would not lead to a shutdown of the complex. He spoke on condition of anonymity, saying he was not authorized to speak publicly to the media.