Trade Between North & South Korea at a Low Point

The Kaesong Industrial Zone (KIZ) was one of the prime economic projects designed to further inter-Korean economic cooperation, until it was closed down when both governments withdrew in early 2016. After its initial opening in 2004, more than 100 South Korean firms had set up shop in the complex situated in North Korea near the border to the South, employing over 50,000 North Korean workers. Though the shut-down is indefinite it wasn't planned to be permanent.

Relations between the Koreas soured over nuclear and missile tests the North conducted in January and February 2016, and the KIZ has been closed since. The below chart illustrates the effect of Kaesong being boarded up. Based on data published by the Bank of Korea, it shows the trade volume drop by a staggering 87.7 percent year-over-year, from being worth 2.7 billion dollars in 2015 to a meager 330 million dollars in 2016.

Kaesong had been closed for a few months before, during political tensions in 2013, explaining the previous drop in trade volume depicted in the chart. Though the current shut-down is indefinite, it wasn't planned to be permanent, by neither side. However, recent events, North Korea conducting further nuclear and rocket tests and the United Nations seeking to tighten economic sanctions against Pyongyang, make it seem unlikely that Kaesong will be back in business any time soon.