Despite its menacing rhetoric, North Korea is unlikely to move first to shut down the inter-Korean joint industrial park in Gaeseong, which would fatally harm investor confidence and further worsen its economic isolation, experts said.

As Seoul decided to withdraw all of its citizens from the complex on Friday following Pyongyang’s rejection of dialogue, the park, the last remaining symbol of cross-border cooperation, appeared to be edging closer to its end.

“Among its major special economic zones, the Gaeseong park is the only reliable source of hard currency. Plus, North Korea can’t rely too much on China economically as their bilateral relations have seriously deteriorated,” said Ahn Chan-il, the director of the World North Korea Research Center.

“For now, it is a psychological tug-of-war between the two Koreas, which I believe could calm down after July 27 when their major political and military events end.”

July 27 marks the 60th anniversary of the signing of the armistice agreement that ended the Korean War.

Koh Yoo-hwan, a North Korea expert at Dongguk University, noted the war of nerves over the complex came at a time when Pyongyang was testing the new Seoul government.

“For both Koreas, it is a tough decision to close the complex given that its shutdown is tantamount to the severance of crucial economic ties. That is, in fact, the last political card for both,” he said.

“As the tug-of-war is between Pyongyang and a new government in Seoul, it would be better to say the North is doing all this to set up a new bilateral relationship (beneficial to its interest).”

Saturday’s statement by the Bureau for Central Guidance to the Development of the Special Zone, North Korea’s agency in charge of the park, hinted Pyongyang did not want to see its closure.

“The fate of the Gaeseong complex is hanging in the balance. As the group of puppets (in the South) is moving in a provocative direction, its fate grows precarious,” the statement said.

But given the unpredictable nature of the Stalinist regime, Seoul cannot rule out the possibility that the cash-strapped North could make irrational policy decisions over the industrial complex from which it rakes in more than $90 million each year.

The North has so far been shifting the blame to the South for the suspension of the factories of the 123 South Korean enterprises, which came as some 53,000 North Koreans did not come to work on April 9.

The buck-passing seems to be part of efforts not to give an impression to its potential investors that the North was a rule-breaker and unreliable economic partner.

“If it is first to shut down the complex, the North would have to suffer a serious blow to international credibility. North Korean leaders are well aware of that, and would seriously consider that factor,” said Cho Bong-hyun, a senior researcher at the Industrial Bank of Korea.

“That is why it keeps blaming Seoul for all the problems. Hawkish military brass would be leaning toward the shutdown while dovish civilians would consider these economic factors. It may depend on how North Korean leader Kim Jong-un balances between the two groups.”

Some experts warned Pyongyang could scrap the bilateral accords over the operation of the complex; freeze or confiscate South Korean firms’ properties; and unilaterally use them for other civilian or military purposes.

Some observers said the North could take unilateral action as it did with regard to South Korean tour facilities at the Mount Geumgangsan resort on its east coast.

After the North shot dead a South Korean tourist who strayed into an off-limits zone in July 2008, Seoul halted the tour program and demanded comprehensive safety measures. Pyongyang did not respond to the demand, and froze and confiscated the facilities.

Total South Korean investment at the 3.3 million-square-meter complex amounts to some 949.5 billion won ($855 million).

Kim Heung-kwang, a former professor in the North and representative of the group North Korea Intellectuals Solidarity, said that the North, after all, wanted Seoul to give in to its pressure and offer an attractive deal to end the stalemate.

But Kim stressed from the ongoing conflict, Pyongyang might be able to grasp what Seoul’s President Park Geun-hye’s peninsular trust-building process means.

“North Korea might have realized that the president is not the only decision maker or one that does all the politics. It may be learning what democratic decision making is about,” he said.

“It also needs to understand that trust is forged when both sides make joint efforts to build it. It is not just one side bowing to the other side’s pressure and offering concessions.”

By Song Sang-ho (sshluck@heraldcorp.com)