hankyoreh

The inter-Korean joint liaison office in Kaesong. (provided by the Ministry of Unification)

On Sept. 14, the owners of tenant companies at the Kaesong Industrial Complex attended the opening ceremony of the inter-Korean liaison office, which was held inside the complex. This was the owners’ first visit to the complex in two years and seven months, since the government of former president Park Geun-hye fully shut it down in Feb. 2016.

In addition, the South Korean government announced that it would be providing 122.8 billion won (about US$110 million) in financial aid to 95 companies involved in inter-Korean economic cooperation and trade that suffered losses because of the halting of tourism to Mt. Kumgang in July 2008 and sanctions against North Korea imposed on May 24, 2010, or the May 24 Measures.

While the current sanctions on the North prevent large-scale economic cooperation projects from being launched for now, these measures appear to be aimed at making it clear, both domestically and abroad, that the government is committed to economic cooperation leading up to the inter-Korean summit in Pyongyang while also shoring up the collapsed foundation for economic cooperation.

The list of South Koreans who attended the opening ceremony of the liaison office, which was announced by the Unification Ministry on Sept. 13, includes Shin Han-yong, chairman of the Corporate Association of Kaesong Industrial Complex, and Chung Gi-seop, the association’s vice chairman. Other names on the list are Kim Jin-hyang, chairman of the board of the Kaesong Industrial Complex Aid Foundation, and Chun Won-geun, the foundation’s auditor.

This is a notable change, since the government has rejected no fewer than six applications submitted by Kaesong business owners since the complex was shut down to visit the North in order to inspect factory facilities and materials.

Responding to a reporter’s question, a senior official from the Unification Ministry said that the business owners did not have any other plans – such as visiting their factories at the complex – aside from attending the opening of the liaison office.

The opening ceremony “is unrelated to reopening the Kaesong Complex. My understanding is that they were invited because of their connection to the Kaesong Complex, where [the opening ceremony] is being held,” the official said.

“The thought that I’ll be returning to the complex after two years and seven months leaves me feeling numb. I hope that the government will proactively try to persuade the US to allow the complex to be reopened soon,” Chung Gi-seop said during a phone call with the Hankyoreh.

Upon learning that the trip to the opening ceremony on Sept. 14 would not include a chance to assess the factories, Chung said, “The government is making a mistake when it prevents us from checking and assessing our assets as we would like to do.”

While the Kaesong Complex business owners didn’t step inside their factories, there is a good possibility that they discussed the matter with North Korean officials during the opening ceremony.

On Sept. 13, the day before the opening of the liaison office and five days before the inter-Korean summit in Pyongyang, the South Korean government announced that the Inter-Korea Exchange and Cooperation Promotion Council had resolved to have the Inter-Korean Cooperation Fund pay 122.8 billion won (about US$110 million) in financial aid to companies that were engaged in inter-Korean economic cooperation and trade and doing business at Mt. Kumgang.

This amounts to 31 percent of the total losses (395.7 billion won [US$353.32 million]) found by a fact-finding investigation by the Corporate Support Review and Assessment Board, which the government set up at the end of last year. The companies that are eligible for this financial aid are companies involved with tourism to Mt. Kumgang, companies engaged in economic cooperation that had invested in facilities in areas other than the Kaesong Complex and trade companies with more than US$10,000 in yearly commercial sales during the two years before the May 24 Measures were instituted. The government has already been compensating tenant companies at the Kaesong Complex for their losses.

“The state is responsible for providing aid to companies that suffered difficulties because of abrupt changes of policy [by the previous government],” the Unification Ministry said in regard to this financial aid.

“Our expectation is that helping companies involved in economic cooperation normalize their business operations will provide them with the impetus to participate in economic cooperation down the road, when the conditions for that are in place.”

By Lee Je-hun, senior staff writer, and Noh Ji-won, staff reporter

Please direct comments or questions to [english@hani.co.kr]