Sudden Death of Chung Likely to Damage North-South Economic Programs

Chairman of Hyundai Asan Chung Mong-hun suddenly committed a suicide. His sudden death is likely to damage the economic cooperation programs between the two Koreas to a considerable degree, which has sustained the creaky relationship between the two even in the middle of the building tension on the Korean peninsula over North Korea`s nuclear ambition.

Three pillars of the economic cooperation are: Mt. Kumkang tourism, development of Kaesung Industrial Complex, and connection of the Kyungwon railroad line and the East Cost line. Among the three, the last is initiated by the South Korean government, leaving the rest two dependent upon the will of late chairman Chung.

Experts predict that the economic program is unlikely to come back to its normal orbit until someone emerges to take place of late Chung. They further believe that it is highly likely that the program will be normalized not in terms of historical meaning, but in terms of pursuance of profits. In addition, his death will blow a more confusion to the North than the South Korean government.

▽ Absence of Chung = Cho Myung-chul, a researcher at the Korea Institute for International Economic Policy, predicts, "Chairman Chung, the biggest shareholder of Hyundai Asan, has pushed for the economic cooperation programs. With the central figure gone for good, it seems unavoidable that the programs have to be modified to a considerable degree."

Unification Minister Jeong Se-hyun said, in an interview with KBS Radio, “The economic cooperation programs of Hyundai Asan have been pursued not just by an individual, but by the government. His death, therefore, will not affect the programs much." What he meant is that Korea Tourism Corporation and Korea Land Development Corporation have participated in Mt. Kumkang tourism and development of Kaesung Industrial Complex. Thus, the two could function as a cushion again his death.

▽ Confusion in the North = North Korea is notorious for its fastidiousness in selecting a partner for an enterprise. In other words, before a prospective partner successfully pass through a series of tests, it would not talk in honest.

Korea University Profession Nam Sung-wook, an expert on North Korea, said, "A couple of individuals like Hyundai Asan president Kim are emerging as a substitute for Chung. But none of them is a shareholder who could make financial decision. Thus, North Korea must be in agony over whom to take as its partner."

It was known later that North Korea planned to exchange an agreement with the South on August 6th, and announce its bold measures to open itself to the investment by South Korean entrepreneurs.

▽ Profit v. Historic meaning = A South Korean official of the Unification Ministry evaluated, "The economic cooperation programs are business in nature. Thus, it is hard to deny its entrepreneurial side of generating profits. Still, it is a business that contains more of the historic meaning," indicating that the cooperation projects have been carried out more for historic purposes than for entrepreneurial purposes.

Chung`s death seems likely to serve as an opportunity to correct the misconceived goal of the programs.

A stock analysis predicts, "Hyundai shares plummeted yesterday with the one-man leader gone away. In the future, Hyundai Asan will face a severe difficulty in raising funds for the cooperation program. The management is likely to act more conscious of the shareholders. Thus, the future of it will be targeted at generating more profits that making historic benchmarks."

Seung-Ryun Kim srkim@donga.com