North Korea looked to ratchet up already elevated tensions on the Korean peninsula still further yesterday, firing a pair of short-range missiles and announcing the liquidation of all remaining South Korean assets on its territory.
The moves were a direct response to unilateral sanctions announced by South Korea this week to punish the North for its January nuclear test and last month's long-range rocket launch.
Military tensions have been on the rise ever since the January test - the fourth nuclear device North Korea has detonated in defiance of United Nations resolutions.
The UN Security Council responded with tough, new sanctions, which Pyongyang condemned as a "gangster-like" provocation orchestrated by the United States.
The North also reacted furiously this week to the start of large-scale South Korea-US military drills. It threatened pre-emptive nuclear strikes against both Seoul and the US mainland.
The asset seizure announced yesterday referred to two now-shuttered joint projects, the Mt Kumgang tourism resort and the Kaesong joint industrial complex.
"We will completely liquidate all assets of South Korean firms and related institutions left behind in our region," the Committee for the Peaceful Reunification of Korea said in statement carried by the North's official KCNA news agency. "From this time on, we nullify all agreements adopted by North and South Korea on economic co-operation and exchange programmes."
The South suspended operations at the Seoul-funded Kaesong industrial complex last month, saying money Pyongyang made from the venture was going towards its nuclear weapons programme.
The announcement prompted the North to expel all South Koreans from the estate and freeze all assets there, shutting down the last symbol of cross-border economic co-operation.
An association representing the more than 120 firms operating factories in Kaesong, which lies just across the North Korean border, estimated the value of the assets left behind at 820 billion won ($1 billion).
The head of the association, Jeong Gi Seob, described the liquidation order as "outrageous".
"No one can liquidate private assets unilaterally. I appeal to both the South and the North to consider the companies' interests and allow us to come to the North and wrap things up," Jeong told AFP.
Mt Kumgang was the first major inter-Korean co-operation project, and thousands of South Koreans visited the Seoul-funded resort between 1998 and 2008. The South suspended the tours in 2008 after a North Korean soldier shot dead a female tourist from the South who strayed into a restricted zone.
Earlier yesterday, the North fired a pair of short-range ballistic missiles into the sea off its eastern coast. Short-range missile launches are a regular and relatively low-level item on North Korea's long list of provocative gestures, and one it often employs to register annoyance.
It fired six high-calibre rockets into the sea a week ago just hours after the UN Security Council adopted its new sanctions package, which included the toughest measures imposed on Pyongyang to date over its nuclear weapons programme.
On Wednesday North Korean leader Kim Jong Un said his scientists had successfully miniaturised thermo-nuclear warheads to place on a ballistic missile to create a "true" deterrent.
Collaboration zone
• Kaesong Industrial park opened in 2004 as a special administrative industrial region of North Korea, operated as a collaborative economic development zone hosting South Korean companies attracted by its source of cheap, educated, skilled labour.
• This year 124 South Korean companies were operating in Kaesong, nearly 60 per cent of them textile units, along with machinery electronics and chemical manufacturers. They employed more than 54,000 North Korean workers, while about 800 South Korean managerial staff worked in Kaesong on a regular basis.
• The South Korean Government and companies have invested a total of US$852 million ($1.28 billion) in the zone. Kaesong has been a vital hard currency source for Pyongyang. North Korean workers there earn an average monthly salary of about US$150.
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