Biz Complex Companies Complain Over N.K.’s Saber Rattling

“With buyers canceling orders and raw materials and funds running short, companies operating in the Gaesong industrial complex are feeling the impact of North Korea’s threat,” said Moon Chang-sup, head of the business association of the complex located in the North Korean border city.

Business operators in the complex urged the government yesterday to act decisively at a meeting with South Korean Unification Minister Kim Ha-joong. They said that to remove the uncertainty over the facility’s fate, Seoul must show its firm determination to facilitate inter-Korean business cooperation by actions, not words.

Representatives from 25 companies, who wore grave faces throughout the meeting, pleaded for help while complaining about the government’s lukewarm response.

Other executives are said to have postponed meetings with buyers to attend the talks, underscoring the severity of the situation.

One CEO said he was notified yesterday by a credit guarantee agency that his request for liquidity funds was withheld. “I need to supply raw materials right now to produce goods for next year,” he said.

Another whose business is mainly at the complex after closing a factory in China said, “Since factories are like living organisms, even a one-day closure brings a lot of problems. But I have no choice but to stop operations due to a partner company’s refusal to send raw materials.”

“We’ve never have felt threatened like this before,” yet another businessman said. “The situation is graver than when North Korea conducted a nuclear test and launched missiles. As China and Taiwan separate politics from economic issues, we hope South and North Korea do the same.”

A company representative whose factory began operation in November last year said he has a deluge of calls from clients on if he can finish their orders on time. “Persuasion is not enough to assure them,” he said. “A decline in orders means the end of business.”

Another CEO stressed the gravity of the situation, recounting what North Korean Lt. Gen. Kim Yong Chol asked him when Kim came for an inspection Thursday last week.

“Unlike at other companies, Kim stayed at mine for 45 minutes and said, ‘Why don’t you move to the South? How long it will take to move? We will recover the land because it belongs to the military,’” he said.

Despite the North’s nuclear test and missile launches, South Korea has come up with no fundamental solutions to the problem, said another company representative, adding, “Calm responses don’t solve problems. The government should devise clear countermeasures to prevent a repeat.”

“The government says it is doing its best. In the eyes of businesses here at the complex, however, the government’s efforts are so insufficient, it seems to have waited for such moves from North Korea,” said another CEO.

The business representatives urged Seoul to come up with practical solutions by the end of this month.

To this, Unification Minister Kim said, “Some demand that the government respond to the North’s threat with firm determination. The government is always supporting you, so we hope for no overreaction to the situation.”

jameshuh@donga.com