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Businessmen Worry that N. Korea Is Unprepared for Further Economic Cooperation

Businessmen Worry that N. Korea Is Unprepared for Further Economic Cooperation

Posted October. 06, 2007 05:39,   

한국어

The government and the private sector are showing different opinions on the plan to expand South-North economic cooperation. The plan was agreed to by the heads of both North Korea and South Korea in the summit held in Pyongyang.

After the plan was announced, the government, public companies, and private companies that are greatly influenced by the government came up with various measures. However, private conglomerates are showing caution.

Some businesspeople who joined the Summit said, “I got the impression that North Korea does not have specific measures planned for cooperation,” and there are concerns that the Participatory Government is rushing recklessly into agreements with the North.

North Korea unprepared-

Chairman Kim Ki-mun of the Korea Federation of Small and Medium Business who visited the North as a special aide said to the press on October 5, “There were informal discussions for each business area. However, it did not feel like much of a conference, perhaps because the North is not used to having them. It was not very satisfactory.”

The Chairman added, “At first, people from the North seemed to be troubled, not knowing what to do in the discussion. They looked quite confused. All the other elements usually needed in a discussion were there, but they seemed a bit awkward, and were slow to respond.”

Governor Kim Chang-lok of the Korea Development Bank also euphemized North Korea’s lack of preparation. He said, “I wanted to find out how commercial banks get approval for business in the North. However, North Korea apparently could not find someone to answer these kinds of questions.”

The governor met with Director Kim from the Foreign Trade Bank of DPRK. However, some pointed out that the director, as a working-level official, was not an appropriate counterpart for the governor of government-run bank.

-The government and public companies rushed to plan follow-up measures-

The government, public companies, and private companies, greatly influenced by the government, came up with follow-up measures related to economic cooperation on October 5.

Prime Minister Kwon O-kyu explained, “We discussed the oil field development in the summit, and the Joint Committee on South-North Economic Cooperation will talk about it further with the North.”

The Korea Land Corporation will begin research for second phase businesses in the Gaesong Industrial Complex next month. The Korea Resources Corporation also decided to dispatch a research team to the North to explore minerals.

CEO Nam Sang-tae of Daewoo Shipbuilding and Marine Engineering Co. Ltd. said, “We will invest in the construction of a shipbuilding factory near Hamgyong Province.” The Korea Development Bank and Korea Asset Management Corporation are large shareholders of the company.

An official of a private economic institute pointed out, “Furthering economic cooperation is desirable. However, there are doubts whether the economic feasibilities have been carefully assessed when I look at the flood of follow-up measures. A rash decision to expand investment in the North could greatly burden the next administration and the people.”

Private companies are uncertain about investing in the North-

The North is asking large investments, but the private sector is passive. Only Hyeon Jeong-eun, CEO of Hyundai Group, made a comment on it, saying, “People will be able to visit Mount Baekdu by next April.”

Yoon Jong-yong, vice chairman of Samsung Electronics, said in a press release on October 5, “We will review new areas to invest in when the North is ready with related systems and measures. Additionally, a guarantee of communication means, transportation, and customs clearances, and expanded infrastructure is required.”

Chung Mong-koo, chairman of Hyundai Motors, Koo Bon-moo, chairman of LG Group, and Chey Tae-won, chairman of SK Group, all refrained from commenting on economic cooperation.

Kim Seung-yu, chairman of Hana Financial Group, voiced concerns, saying, “If the issues of Trading with the Enemy Act or the State Sponsors of Terrorism are not addressed, the international settlement system cannot be used. If things go wrong, something like the Banco Delta Asia issue might arise.”