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Last South Koreans leave factory in North Korea

The last seven South Koreans stationed at a jointly run factory park in North Korea pulled out Friday, silencing the complex for the first time since it was launched nine years ago in a seemingly distant era of reconciliation.

The complex in the town of Kaesong, just north of the Koreas' heavily fortified border, was the rivals' only remaining symbol of rapprochement. It had employed more than 53,000 North Korean workers and hundreds of South Korean managers until last month, when Pyongyang started gradually blocking its operations.

The last seven South Koreans left after negotiating taxes and the back salaries of North Korean workers. Their departure leaves the Koreas with virtually no official communication channel.

It also could spell the end of an experiment that many saw as a bridge between the divided Koreas that was meant to help pave the way for a future unified Korea by proving that workers from two polar opposite economic systems could collaborate. Through both liberal and conservative governments in Seoul, Kaesong survived past tensions, including attacks blamed on North Korea in 2010 that killed 50 South Koreans.

A former South Korean official who headed the group that negotiated with the North on wages said he repeatedly called for the resumption of operations at Kaesong during the talks. Hong Yang-ho told reporters he expected future discussions but didn't elaborate.

The withdrawal removes one of the last points of contact between the Koreas, which are still technically in a state of war because the 1950-53 Korean War ended with a cease-fire, not a peace treaty. Seoul had used phone lines connected to a South Korean-run management office at Kaesong to exchange messages with North Korea.

Some analysts said the pullout worsens already serious mistrust between Seoul and Pyongyang and raises long-term fears that a miscalculation could lead to armed conflict if the rivals can't improve ties.

Two vehicles carrying $13 million in U.S. dollars _ to cover wages for the North Korean workers and taxes _ crossed the border at around the time the seven South Koreans returned, according to Seoul's Unification Ministry, which is responsible for ties between the rivals. The South Koreans delivering the money have returned.

As tensions between the countries soared early last month, North Korea suspended operations at Kaesong, barring South Korean factory managers and trucks carrying supplies from entering the park. It later withdrew the North Koreans working at 123 South Korean companies in Kaesong's special economic zone.

Amid a weekslong torrent of threats, including North Korean warnings of impending nuclear and missile strikes, the Kaesong shutdown was the country's most significant expression of anger over South Korean-U.S. military drills that ended Tuesday and U.N. sanctions imposed last month over a February nuclear test, North Korea's third. The North has somewhat eased that warlike rhetoric of late and shown tentative signs of willingness to talk.

Kaesong, which had nearly 800 South Korean managers working there in 2012, combined South Korean knowhow and technology with cheap North Korean labor. The South Korean businessmen who built factories there expressed pride that their work could serve as a stepping stone to an eventual unified Korea.

It was one of several cooperation projects by North Korea and past liberal governments in Seoul, including tours to a scenic North Korean mountain and reunions of families separated by war. All stalled in recent years because of rising tension.

“Most recent North Korean propaganda and actions appear to be driven by the fear of a potential sudden collapse in legitimacy of the Kim family dynasty,” Patrick Cronin, an analyst with the Washington-based Center for a New American Security, said in an email. “Pyongyang may have thought Seoul would pay more money to keep Kaesong open, but it also thought it was time to close a leading source of outside information into the North.”

North Korea never forced South Korean managers to leave, but they gradually left on their own as their supplies dwindled. South Korea began withdrawing its remaining nationals from Kaesong nearly a week ago, after Pyongyang rejected a demand for dialogue.

“The uncertainty about inter-Korean ties has now increased a lot,” said Lim Eul Chul, a professor at South Korea's Kyungnam University. “Trust between South and North Korea has plunged to a level where the countries are finding it difficult to restore ties.”

Lim said the complex will likely be closed permanently, although the Koreas could try to reach out to each other in the future through other channels. He said that if ties don't get better, long-term chances for inter-Korean armed conflict caused by a misjudgment or some minor problem will increase.

Another analyst, however, said there may still be hope for Kaesong.

Cheong Seong-chang at the private Sejong Institute said the two Koreas will eventually hold talks to resume operations in coming weeks. He noted that a major source of North Korean anger, the South Korean-U.S. military drills, finished Tuesday. North Korea calls those annual drills preparation for a northward invasion.

The agenda for talks could include other issues like South Korean humanitarian assistance to the North, Cheong said.

During its outburst of threats against Seoul and Washington, North Korea cut off phone and fax hotlines with South Korea and the American-led U.N. Command. The only communication lines remaining between the Koreas are used exclusively for aviation.

Seoul on Thursday announced that it has set up 300 billion won ($273 million) in emergency funds to help South Korean firms affected by the Kaesong shutdown. 

When the complex opened, Seoul offered an insurance program to the Kaesong firms through a state-owned bank. It's meant to compensate up to 7 billion won ($6.4 million), depending on the firms' investment, in the event of a shutdown lasting more than one month. However, 27 companies out of the 123 at Kaesong did not sign up; some questioned its usefulness and how the compensation is determined.

On Friday, the firms that operated at Kaesong urged immediate talks between the governments and asked both sides to protect their assets. The companies also renewed a request that North Korea allow them to visit Kaesong to retrieve supplies and products and to repair facilities. Past requests have been denied. (AP)