Is Hostage-Taking North Korea’s New Business Model?

This should do wonders for North Korea’s foreign direct investment:

North Korea told South Korea on Monday it put a South Korean worker at the joint industrial zone of Kaesong under probe on suspicion of violating relevant regulations, South Korea’s Unification Ministry said. North Korea sent a notice to South Korea, saying the South Korean worker, detained at around 11:50 a.m., has criticized the North’s political system, ministry spokesperson Lee Jong Joo said at a press briefing. [Kyodo News]

I now strongly doubt that Kaesong can ever recover from North Korea’s actions over the last year, and I wonder if anyone has ever added up the total cost of the Kaesong experiment: the infrastructure, the subsidies, equipment, advertising and promotion, and payments to workers regime officials. One wonders how this ponzi scheme compares to, say, Madoff’s.

North Korea claims that the arrested manager was trying to “corrupt” and “cajole” a North Korean woman into defectng. No actual evidence is offered to either support or refute that claim, but the Chosun Ilbo’s anonymous analysts doubt it:

Observers say it is improbable that a staffer with Hyundai Asan, which has been Pyongyang’s main South Korean business partner for years, intentionally made remarks that would irritate the North at a time when it is imminently launching what the West believes is a ballistic missile.

A researcher with a South Korean government-funded think tank said it is more likely the North is holding the man hostage, much in the way it has arrested two U.S. journalists for on charges of spying. [Chosun Ilbo]

No doubt, a confession will be forthcoming. I’d expect the same for the two imprisoned U.S. journalists who will soon face what passes for a trial in North Korea. North Korea’s seizure of a South Korean man lengthens the odds that three foreigners all coincidentally happened to transgress against the North just before a planned missile test. A new North Korean strategy — one that would constitute international terrorism — appears to be emerging.

President Bush announced the removal of North Korea’s removal from the list of state sponsors of terrorism on June 26, 2008. Discuss among yourselves.