Amid suggestions from all sides for what should be discussed at the inter-Korean summit that starts Tuesday, businesses have been short of ideas. They say it is too early to propose concrete measures for inter-Korean economic cooperation because North Korea lacks both the infrastructure and the institutional and legal framework to protect South Korean investment there. Some say putting any detailed economic projects on the table would be pointless since it is unclear what suggestions or demands North Korea will make. Some businesses are also wary of joining any inter-Korean economic collaboration since that could damage their global reputation. As a result, Korea’s four leading conglomerates are taking a wait-and-see attitude.
Steelmaker POSCO, for one, could import North Korean iron ore and take part in forestation in the North to secure carbon credit. But some critics say those projects are not likely to bring about substantive economic benefit for the South, pointing out that POSCO considers North Korean iron ore unfit for manufacturing steel since it had only 30 to 35 percent of iron three years ago. Forestation, meanwhile, is “just an idea”, the company says. Then there is Hyundai steel, which some government official have said is taking steps to import North Korean limestone for a steel mill which will go into operation in 2010. But Hyundai Steel denies that, saying government-run corporations overstated the prospects for Hyundai Steel to import North Korean limestone. The company says it could indeed use Chinese or North Korean rather than South Korean limestone, but the key is a stable supply.
During the summit, South Korea’s delegation will visit the West Sea Barrage, an automobile assembly plant in Pyongyang and the Kaesong Industrial Complex, and there will also be meetings between private businesspeople from North and South. Business circles see those as a useful opportunity for Korean businesses. A Samsung Group staffer said, “North Korea is highly likely to ask South Korean businesses to make investment in any form.” But an executive with one of the four major conglomerates said, “North Korea’s private economic leaders are invariably government officials, so we don’t have any great expectations.”