11-07-2025
Burned once, business owners demand safeguards before inter-Korean projects resume
A coalition of business owners previously engaged in inter-Korean economic cooperation — and compelled to withdraw from it abruptly — urged Seoul on Friday to establish legal safeguards for businesspeople before resuming any cross-border projects.
The Federation of Inter-Korean Economic Cooperation Organizations — composed of businesspeople who were forced to wind down operations amid deteriorating inter-Korean relations — emphasized the need to protect businesspeople from abrupt, involuntary shutdowns and collateral damage.
The group held a news conference in front of the presidential office in Yongsan at a juncture when the Lee Jae-myung administration has expressed its intent to restore inter-Korean ties, raising hopes for a revival of inter-Korean economic cooperation.
'Laws must be enacted to ensure that all inter-Korean exchanges and economic cooperation are protected within a legal framework and can proceed securely, without being shaken by changes in government or political shifts,' the group said during a news conference.
'If such institutional protections are not ensured, who would again be able to invest in or commit to inter-Korean economic cooperation? The situation where citizens go bankrupt, lose their jobs overnight and end up on the streets due to decisions made by the state must never be repeated.'
The federation is specifically composed of businesspeople who had long been involved in inter-Korean economic cooperation, including those who operated businesses in coordination with North Korea or participated in tourism to Mount Kumgang.
However, 123 South Korean companies that ran factories at the now-shuttered Kaesong Industrial Complex were not part of the group.
Around 1,000 businesses operated across the border in North Korea — including in industrial zones such as the Sinuiju Special Economic Zone and about 50 linked to the Mount Kumgang project. Today, fewer than 350 of those businesses can still be contacted, according to the group.
The Lee Myung-bak administration announced the so-called 'May 24 Measures' on May 24, 2010, suspending all inter-Korean exchanges and economic cooperation — except for the Kaesong Industrial Complex. The measures were imposed in response to North Korea's deadly sinking of the South Korean warship Cheonan in March 2010.
In July 2008, the Lee Myung-bak administration suspended all tours to Mount Kumgang after a South Korean tourist was shot and killed by a North Korean soldier at the Mount Kumgang resort earlier that month.
The group stressed that businesspeople compelled to withdraw have received insufficient compensation from the South Korean government for the losses incurred due to its decision to suspend inter-Korean cooperation projects.
As for compensation, companies operating within North Korea's special economic zones and those involved in the Mount Kumgang tourism project received only about 45 percent of their fixed asset investments — much less than what business owners at the Kaesong Industrial Complex received.
'Many businesspeople who lost their livelihoods and jobs overnight have since faced suicide, family breakdowns and corporate bankruptcies, leaving them unable to recover to this day,' the group said.
Meanwhile, the Korea Federation of Small and Medium Business on Friday expressed hope for the potential resumption of inter-Korean economic cooperation in light of the Lee administration's commitment to establishing peace on the Korean Peninsula and normalizing inter-Korean relations.
'Because the Kaesong Industrial Complex shares a common language and is geographically close, it offers a more favorable environment for small and medium-sized enterprises than overseas expansion, particularly in terms of collaboration and production,' the KBIZ said in a statement.
'We hope that the Kaesong Industrial Complex will resume operations as soon as possible. The SME community will actively cooperate with the government to restart and revitalize inter-Korean economic cooperation.'
