Prolonged Suspension of 'Nambuk Gyeonghyeop'... "Fading Companies Demand a Way to Survive"

Suspension of Geumgangsan Tourism, 5·24 Measures, and Closure of Kaesong Industrial Complex
"Invested Trusting the Nation, but Massive Losses Due to Government Policy"
Only 20% Remain Among 1,400 Companies... "Remaining Ones Also in Suspension"

Kim Ki-chang, Chairman of the Korean Peninsula Trade and Investment Association, is demanding compensation for damages caused by the prolonged suspension of inter-Korean economic cooperation at a press conference in front of the Ministry of Unification in Jongno-gu, Seoul, on the morning of the 18th. Photo by Jang Hee-jun junh@

[Asia Economy Reporter Jang Hee-jun] Businesspeople who invested in inter-Korean projects such as Kumgangsan tourism and the Kaesong Industrial Complex have come forward to demand compensation for damages caused by the prolonged suspension of inter-Korean economic cooperation.

The Korea Peninsula Trade and Investment Association and related inter-Korean cooperation organizations held a press conference on the morning of the 18th in front of the Ministry of Unification in Jongno-gu, Seoul, urging the government and the National Assembly to enact a special law for loan forgiveness, full compensation of investments, and damage compensation resulting from the prolonged suspension of economic cooperation.

Kim Ki-chang, chairman of the Korea Peninsula Trade and Investment Association, stated, "If innocent citizens have suffered property damage or lost their way due to decisions made by the state, the government must naturally take responsibility and provide appropriate compensation. If the damages caused by the suspension of economic cooperation between the South and the North are not resolved reasonably, who would participate in economic cooperation when it resumes someday?"

Companies involved in economic cooperation participated in inter-Korean projects trusting the economic vision and government promises, but they suffered damages due to policies of successive governments, including the suspension of Kumgangsan tourism in 2008, the May 24 measures in 2010, and the closure of the Kaesong Industrial Complex in 2016. They argue that the state must take responsibility for these damages.

Previously, Kumgangsan tourism was fully suspended the day after July 2008, when South Korean tourist Park Wang-ja was shot and killed by a North Korean soldier. The May 24 measures were sanctions implemented during the Lee Myung-bak administration in 2010 following the Cheonan ship sinking incident, which halted inter-Korean trade and cut off all support, including humanitarian aid. Regarding the Kaesong Industrial Complex, the Park Geun-hye administration announced a full suspension in February 2016 in response to North Korea’s fourth nuclear test and successive long-range rocket launches.

The Korea Peninsula Trade and Investment Association and organizations related to inter-Korean economic cooperation held a press conference on the morning of the 18th in front of the Ministry of Unification in Jongno-gu, Seoul, demanding compensation from the government and the National Assembly for damages caused by the prolonged suspension of economic cooperation. Photo by Heejun Jang junh@

Above all, unlike companies in the Kaesong Industrial Complex, the Kumgangsan tourism project started without an insurance system in place. The association and economic cooperation companies argue that since insurance was fundamentally unavailable, the government’s policy to compensate only 45% of the confirmed investment losses for uninsured companies, similar to those in Kaesong Industrial Complex, is problematic.

Jung Tae-won, co-representative of the Korea Peninsula Trade and Investment Association, told reporters right after the press conference, "Among the approximately 1,400 companies that participated in inter-Korean economic cooperation, less than 20% are barely surviving, and most of those are just shells. This is because they cannot even close their businesses before repaying loan interest, including to the Export-Import Bank."

According to the association, 14 years have passed since the suspension of Kumgangsan tourism, and many first-generation economic cooperation operators are now over 60 years old. Even when trying to gather these companies, it is difficult to contact more than 100 out of the 1,400 companies as they have scattered. Especially since most are small businesses, they are suffering huge losses and debts due to the indefinite suspension of economic cooperation.

The press conference also pointed out that the current government has not established a clear stance on economic cooperation since its inauguration.

Choi Yo-sik, chairman of the Kumgangsan Investment Companies Association and standing committee chairman of the association, said, "We have sent official letters requesting multiple meetings with Minister of Unification Kwon Young-se, but there has been no response even after five months in office. We plan to proceed with legislative work for damage compensation with the National Assembly by December and are even considering a head-shaving protest."