hankyoreh

president of Sangha CM

By Choi Hyun-june, staff reporter

On the afternoon of Nov. 13, just after her summit with Russian President Vladimir Putin, President Park Geun-hye announced a plan for South Korean indirect investment in economic cooperation with North Korea. The plan would allow businesses like KORAIL, POSCO, and Hyundai Merchant Marine to take part in the Rajin-Hasan project, a joint North Korean-Russian effort.

At roughly the same time, Kim Se-byeong, the 63-year-old president of Sangha CM, was meeting customers as an insurance solicitor. Kim, who is part of the “first generation” of businessmen involved in inter-Korean economic cooperation efforts, was disturbed to hear the news.

“It’s ridiculous to see them giving preferential treatment to the big companies when they should be looking out for the SMEs,” he said. “The standards should be the same, at the very least. I can’t see how they can waive the terms of the May 24 measures just for the big companies.”

The May 24 measures brought inter-Korean trade to a complete halt in 2010 after the sinking of the ROKS Cheonan warship.

A trader for the last 25 years, Kim began importing bracken, mountain roots, straw mats, and rice straw from North Korea in 1999 for resale in South Korea. As soon as the green light was given for inter-Korean cooperation, he received Unification Ministry approval to negotiate with a North Korean partner in Dandong, just across the border in China.

Things went smoothly for the next decade through April 2010. Around 200 containers a year passed between Incheon in South Korea and Nampo in North Korea, with sales of around US$1 billion a year and a staff of about 20. Kim took pride in the contribution he saw himself as making to inter-Korean relations.

But in late May 2010, ten years of cooperation came to a sudden halt. Following the March 26 sinking of the Cheonan, then-President Lee Myung-bak suspended all exchange and cooperation with North Korea except for the Kaesong Industrial Complex.

“I thought it was a reasonable enough measure if it was necessary for the country, but I also expected them to give some suitable compensation to the businessmen, since they were not at fault,” said Kim, who identifies as a political moderate.

The compensation they did receive was meager. The Unification Ministry and Korea Exim Bank said they planned to offer project funding at just 2% interest to owners of businesses hurt by the May 24 measures.

But the conditions were stringent. Kim said he was turned down twice when he applied for bank loans. Indeed, Exim Bank figures show that just 283 of the 1,000 or so businesses involved in economic cooperation with North Korea had received loans from the special government fund as of January 2012.

Still, everyone expected things to blow over within a few months. The six months turned into a year, then three and a half. Hopes and anticipation gave way to despair. Things might have been better had the businessmen cashed out at the time, but most were too attached to their projects to do so.

Now, company presidents who once carried out million-dollar transactions are shunning each other - no one can afford to pay for drinks. This past March, Kim filed a business suspension with the local tax office and set up shop as an insurance solicitor.

Kim still hasn’t given up hope.

“Everything passes,” he said.

Despite the discrimination between SMEs and large corporations, he still expects the government to provide some respite from the May 24 measures to smaller businesses.

“It’s coming up on one year since Park Geun-hye took office as president, and there are a lot of issues waiting to be resolved in relations with North Korea, like the World Peace Park in the Demilitarized Zone,” he said. “I’m expecting the May 24 measures to lose effect by early next year at the latest.”

In Kim’s view, the Park administration should be taking a longer-term perspective on inter-Korean relations. “If you just look at the way things are now, inter-Korean relations seem like they’re going to be unsolvable for the next 50 to 100 years,” he said. “But in the longer view, these are just minor conflicts and frictions. In the end, North and South have to interact. They have to cooperate.”

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