Businesses Expect Summit to Reduce Economic Risks

Businesses Expect Summit to Reduce Economic Risks

By Cho Jin-seo
Staff Reporter
Korea Times

Leading business lobby groups and conglomerates welcomed the sudden announcement of a second inter-Korean summit and hoped that the talks will produce meaningful results in opening more business opportunities in North Korea.
Five major business organizations said the summit will help South and North Korea strengthen their economic cooperation, particularly in the Gaeseong Industrial Complex. They also hoped that regular train services between the two Koreas will start and South Korean firms will be allowed to participate in developing natural resources in the North.
``We hope the summit will open a new phase in the South-North relationship,'' the Federation of Korean Industries said in a statement. ``If this summit succeeds in bringing peace to Korea, it will reduce the geopolitical risk in investing in the peninsula and will enliven the economy.''
``This summit is expected to give a new impetus to the Gaeseong industrial complex,'' said the Korean Federation of Small and Medium Business whose members include companies operating in the industrial zone. ``We hope that the two Koreas will make progress in other projects, including the reconnection of cross-border railway and road links.''
Big firms, however, responded less enthusiastically than they did seven years ago, when former President Kim Dae-jung met his North Korean counterpart Kim Jong-il in Pyongyang.
Samsung, LG, Hyundai Motor and SK praised the announcement of the second summit on Wednesday in brief statements to the media that they did not elaborate on.
``We have no plans or anything regarding the summit at this moment,'' an LG spokesman said.
One of the most enthusiastic firms was Hyundai Asan, the operator of inter-Korean tour programs.
``Together with the smooth progress of the six-nation talks, the South-North summit will greatly improve our business environment. We expect that it will spur the Geumgangsan tourism project and the Gaeseong Industrial Complex project,'' the firm said.
Businesses were far more cheerful when the two countries had their first summit meeting in 2000. LG Group Chairman Koo Bon-moo, Samsung Electronics Vice Chairman Yun Jong-yong, then Hyundai Group Chairman Chung Mong-hun and SK Group Chairman Son Kil-seung joined President Kim's entourage to Pyongyang. Lee Kun-hee, the Samsung Group chairman, also had a private meeting with President Kim in Seoul regarding inter-Korea cooperation issues though he didn't cross the border.
The first meeting didn't bring much benefits to the conglomerates' businesses and it actually became a curse for some. Chung, the Hyundai chairman, committed suicide in 2003 after he was indicted for his alleged role in paying the North millions of dollars in return for the summit.
Samsung Electronics and LG Electronics began to give subcontract orders to North Korean firms after 2000. But their production volumes are insignificant and the contracts are rather symbolic deals, the firms have said.
indizio@koreatimes.co.kr

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NKorea set to get major investment pledges at summit - report
08.09.07, 11:40 PM ET
SEOUL (Thomson Financial) - South Korea is likely to offer North Korea major long-term investment in its crumbling infrastructure at their summit late this month, the Korea Times reported Friday.
The package proposal will probably include providing electricity, renovating the Kaesong-Pyongyang highway, upgrading Nampo port and setting up a fertiliser plant, the newspaper quoted unidentified officials as saying.
President Roh Moo-Hyun will meet North Korean leader Kim Jong-Il on August 28-30 in Pyongyang in only the second-ever summit between the communist North and the capitalist South.
Seoul's Unification Ministry, which handles relations with the North, in February drew up a list of possible major joint projects. Seoul will likely offer to go ahead with some of these at the meeting, the report said.
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