Seoul, Feb 12 (IANS) Seoul on Friday announced a package of assistance measures to support South Korean companies forced out of a factory park run jointly with North Korea.
The South Korean government plans to extend loans and defer taxes and utility bills for companies having run factories at the Kaesong Industrial Zone as part of efforts to minimise possible damage after the shutdown of the complex, Xinhua news agency reported.
Pyongyang on Thursday expelled all South Koreans working there to operate factories in North Korea’s border town of Kaesong, shutting down the factory park and freezing all South Korean assets.
The decision came a day after Seoul’s announcement to suspend operations in Kaesong as part of punitive measures against North Korea for its Sunday rocket launch and the fourth nuclear test on January 6.
The 124 South Korean companies are expected to be hit hardest by the shutdown as they will be unable to meet the deadline for goods delivery, resulting in a credibility crisis with clients. All finished products, manufactured in Kaesong, had to be left there due to Pyongyang’s freezing of all assets.
Seoul will defer taxes for one year and utility bills for nine months for the companies, while providing financial assistance to employers who maintain their work force from Kaesong for as long as six months.