North Korea has declared it will seal its border with the South starting Dec. 1, after a recent escalation of tensions on the peninsula.
On Monday, Pyongyang notified Seoul that all tours to Gaesong, just 1.86 miles north of the demilitarized zone, will be closed. Travel permits for management personnel working at a South Korea-funded joint industrial complex, the icon of inter-Korean economic cooperation, are also to be reduced by half.
South Korean media has called the move another chapter in the impoverished North's history of brinksmanship. The aim, according to media reports, is to threaten the South's new conservative government and to draw the incoming U.S. administration into resuming nuclear talks.
Here's a Q&A primer on the ongoing story.
What's happening with international efforts to stop a nuclear North Korea?
Years of negotiations among six party talks – which include the two Koreas, the United States, China, Japan, and Russia – have been at a standstill. The next round is scheduled to resume in Beijing Dec. 8. Russia and North Korea have yet to confirm participation. Since reaching an agreement in September 2005 for Pyongyang to stop developing nuclear weapons in exchange for massive international aid, the talks have been on-and-off due to disagreements on details of verification protocol.
At the moment, the issue is whether North Korea should allow nuclear inspectors to take samples from the weapons-grade nuclear sites. The U.S. says it was part of the deal when it took North Korea off the terrorism blacklist last month, but Pyongyang disputes that. The communist North insists it will only allow field visits, document confirmation and interviews with technicians.
What's been happening to inter-Korean relations?
The two Koreas reached a historic agreement at the June 2000 summit to put behind confrontational hostility and work towards reconciliation and cooperation. Since then, human and economic exchanges have significantly increased, bringing a mood of hope for peace on the peninsula. Tourism projects, cultural exchanges, and business investment by the South have flourished despite international tensions over North Korea's nuclear program.
Aid and investment to the North by South Koreans had reached its peak during a decade of two previous left-wing administrations. A South Korean conglomerate Hyundai Asan has poured in $656 million into developing the Mt. Kumkang resort, northeast of the border. Another $2.28 billion was invested in an economic industrial complex spearheaded by Hyundai Asan and Korea Land Corporation. Almost 2 million South Korean tourists have visited Mt. Kumkang and more than 100,000 took a tour to Gaesong, contributing over $120 million to the North.
What exactly is the border like?
Since the end of the Korean War in 1953, the partition that separates both countries has become the world's most heavily fortified border. The demilitarized zone (DMZ) acts as a buffer which stretches 250 kilometers (154 miles) long and 4 kilometers (2.5 miles) wide. With no final peace treaty agreed, the two Koreas remain technically at war. The area is guarded by almost two million solders from both sides, equipped with mines, electric fences, and bunkers. Some 150,000 tourists, half of them foreigners, visit the border every year to glimpse the last frontier of the Cold War.
But during the past decade of North-South détente, new roads and rail networks have been built to open the military border to civilian traffic. About 12,000 to 18,000 South Koreans with permits have been passing through the border every month for tourism, business, humanitarian purposes and official visits. It is, however, a one-way street. The North does not allow its citizens to travel to the South.
Why does North Korea want to close the border?
On top of the exasperation with the current nuclear talks, this year North Korea has harshly criticized the South's new conservative government and its tougher stance.
On the civilian front, anti-North Korean interest groups have been sending tens of thousands of propaganda leaflets condemning the communist leader Kim Jong-Il, using huge helium balloons. The North Korean military last month threatened that if flyers continue it will "not only turn [the South] into sea of fire with our advanced preemptive strike, but will also make everything into rubble."
"North Koreans think that these leaflets could have been stopped by the authority of the South Korean government," said Paik Haksoon, a senior fellow at Sejong Institute. "They are thinking that it's time to teach South Korea a lesson."
Analysts in Seoul also point out that this is a test the incoming Obama administration. "They have always strived to deal directly with the U.S. They're trying to see what kind of reaction will come out of a new Washington team; whether it be talks, ignorance, or confrontation," according to Yun Duk-Min, at Institute of Foreign Affairs and National Security.
What does North Korea stand to lose by closing the border? The Gaesong Industrial Complex has been the symbol of inter-Korean economic cooperation. Currently almost 90 South Korean companies employ 33,000 North Korean low-wage laborers to produce goods such as shoes, watches, clothes, and kitchen tools. These laborers earn a minimum $70 per month, which some believe to be going straight into the pockets of the communist party.
The project was launched to utilize cheap North Korean land and labor with South Korean capital investment and technology. The $2.28 billion complex began in June 2003 and was expected to finish by end of 2010, employing more than half a million North Koreans with hotels, golf courses, and a "peace park." If successful, it is expected to generate about 12 percent of North Korea's total economic output.
Currently, 16,000 South Koreans are working at the complex. When the North announced that it was sealing the border, they exempted permits to half of current personnel necessary to manage the site.
"It may look like North Korea is sacrificing economic profits but actually from their part, the risk is acceptable in order to use brinksmanship for a greater return," said Yun Duk-min.
Jessica Kim, Qree Yon, and Youmi Kim contributed to this report.