[SEOUL] South Korea said Wednesday it would suspend operations at a jointly-run industrial park in North Korea to punish Pyongyang for its latest rocket launch and nuclear test.
It was the first time Seoul had suspended operations at the Kaesong estate since it was opened in 2004 as a symbol of cross-border reconciliation.
"We have decided to stop all operations at the Kaesong industrial complex so that... our investment in the complex would not be used by the North to fund its nuclear and missile development," Hong Yong-Pyo, Seoul's unification minister in charge of cross-border affairs, told a press conference.
The Seoul-funded estate, just across the border in North Korea, has been a source of precious hard currency for the isolated and impoverished North since its opening.
It currently hosts 124 South Korean companies that operate factories there and employ some 53,000 North Korean workers.
South Korea's government and companies over the years have invested more than one trillion won (US$837 million) in the project, Hong said, adding some of the money appears to have been used to fund Pyongyang's widely-condemned nuclear weapon and missile programmes.
"All our support and efforts... were taken advantage of by the North to develop its nuclear weapons and missile programmes," he said.
All South Korean managers currently working at the site, totalling 184 as of Wednesday, would be summoned back home, Hong said, adding Seoul had notified the North of the decision.
"We ask for people's understanding about our decision, which was inevitable given the grave situation on the Korean peninsula," he said.
The vibrant industrial complex has remained largely immune to turbulent inter-Korean relations.
The only exception came in 2013 during a period of heightened cross-border tensions when Pyongyang effectively shut down the zone for five months by withdrawing its workers.
Seoul imposed partial restrictions on entry to the complex last month following the North's shock nuclear test on January 6.
Pyongyang followed up with a long-range rocket launch on Sunday.