North Korea recalls its workers at factory jointly run with South Korea

April 6, 2013: South Korean vehicles arrive back from the North Korean city of Kaesong at Unification Bridge in Paju, South Korea. (AP)

SEOUL, South Korea – North Korea said Monday it will recall 51,000 North Korean workers and suspend operations at a factory complex it has jointly run with South Korea, moving closer to severing its last economic link with its rival as tensions escalate.

The statement from Kim Yang Gon, secretary of a key decision-making body, the Central Committee of the Workers' Party of Korea, did not say what would happen to the 475 South Korean managers still at the Kaesong industrial complex.

The statement comes amid weeks of North Korean war threats and other efforts to punish South Korea and the U.S. for ongoing joint military drills. North Korea is also angry over the U.S.-led push for U.N. sanctions over its Feb. 12 nuclear test.

The complex combines cheap North Korean labor and South Korean know-how and technology. It is the last remaining inter-Korean rapprochement project from previous eras of cooperation.

North Korea closed the border to northbound South Korean managers and cargo last week, though managers already there were allowed to stay. About a dozen of the more than 120 South Korean companies at Kaesong have already shut down because they can no longer get needed supplies.

"The zone is now in the grip of a serious crisis," Kim said, according to state media. He said it "has been reduced to a theater of confrontation with fellow countrymen and military provocation, quite contrary to its original nature and mission."

"It is a tragedy that the industrial zone which should serve purposes of national reconciliation, unity, peace and reunification has been reduced to a theatre of confrontation between compatriots and war against the North," Kim said in remarks carried by the Korean Central News Agency.

The complex combines cheap North Korean labor and South Korean know-how and technology. Most of the employees at Kaesong are women. The complex is the biggest provider of jobs in Kaesong, the country's third-largest city. Shoes and clothing make up 70 percent of the goods produced; the rest are largely chemical and electrical products.

Kaesong is a rare source of foreign cash for North Korea. South Korea's Unification Ministry estimates that North Korean workers in Kaesong received $80 million in salary in 2012.

North Korea objects to portrayals in the South of the zone being crucial to the impoverished country's finances. Kim said North Korea "gets few economic benefits from the zone while the south side largely benefits from it."

North Korea has unnerved the international community by orchestrating an escalating campaign of bombast in recent weeks. It has threatened to fire nuclear missiles at the U.S. and claiming it had scrapped the 1953 armistice that ended fighting in the Korean War.

The threats against the United States are widely dismissed as hyperbole -- analysts say they've seen no evidence North Korea can build a warhead small enough to put on a missile that could hit the U.S. mainland. A direct attack on the U.S. or its allies would result in retaliation that would threaten the existence of the ruling Kim family in Pyongyang. But there are fears the North could launch a smaller-scale attack. Pyongyang recently suggested that foreign diplomats based there leave the country by April 10.

In the 16 months young leader Kim Jong Un has led the authoritarian nation, he also has conducted a nuclear test and launched two long-range rockets, though only one was successful. North Korea said the rockets were satellite missions, but the U.S., South Korea and others say they were a covert test of banned ballistic missile technology.