KOREA FOCUS

"Being the council head, I can`t say I regret myself. But these days, it`s so really…”

 

Kim Hak-kwon, 63, chairman of the Kaesong Industrial Council, stopped talking at mid-sentence. I asked him again, “Do you mean you regret having decided to invest in the Kaesong Industrial Complex?” He replied, “Due to the North`s latest measures, South Korean companies at the industrial park have lost their business partners and suffered damage. My factory also suffered a huge loss. But, in my position as representative of all investors in the complex, I shouldn`t say, ‘I shouldn`t have invested at the time.` This isn`t yet the time to say everything in my mind. I have to see how the wind blows from this side and that. And I don`t want to get mixed up politically.”

 

The deep wrinkles on his face and his uncouth speech and manner suggest that he has gone though many things in his life. He started his business with his wife`s wedding gifts, a loan of five million won (some US$4,000 dollars by the current exchange rate) and five employees. It was 33 years ago at a rented factory of 8 pyeong (some 25 square meters) in Garibong-dong, western Seoul. He survived. His company, Jaeyoung Solutec, has won recognition as a manufacturer of precision molded products and component materials. The company`s annual exports amount to US$100 million. Two days before the North abruptly announced “nullifying all regulations and contracts regarding land rental fees, wages and taxes,” Kim assumed chairmanship of the council representing 104 South Korean resident firms of the inter-Korean industrial park.

 

 

A. I am optimistic. Honestly speaking, I feel heavy burden for my position.

 

A. That's right. The situation has not improved but has just returned to the status quo.

 

A. No, such an incident shouldn`t happen again.

 

 

A. Another such incident and everything will be over. South Korean resident companies are already experiencing enormous hardship and pain. It will take much time to make their business partners return. All this is the result of a single incident, and if such a thing happens ever again, the complex itself will have to be closed. Nothing like that should happen again.

 

 

A. The governments of both sides should systemically guarantee its safe operations. Business activities have been stalled due to political problems between South and North Korea. Who should take the blame? Individual companies? I believe the two governments should take the responsibility.

 

A. Companies should take responsibility if the losses occurred due to poor management. But they said the authorities of both sides will guarantee a safe business environment under mutual agreement. We invested because we trusted them.

 

 

A. I don`t want to get mixed up politically. I just want to say that the North insisted “they were not able to offer the privileges because the earlier summit agreements between the two sides were not recognized.”

 

 

A. North Korea violated the principles of international transactions by unilaterally delivering such a notice. Therefore, I held a press conference to publicly call for the North to withdraw its measures. I told them about the reality faced by South Korean businesses in the industrial park. Honestly, though, I was worried about possible disadvantage that my factory might have to suffer.

 

 

A. I received a letter around mid-June through my government, which said, “We are running the Kaesong Industrial Complex as a national project. We have given you privileged treatment with low rental fees and the lowest wages in the world. Why do you intervene?” The letter also said, “The situation has reached this point because the authorities of your side have not implemented the joint declaration of June 15, 2000. Speak to your government if you have anything to complain about.” And it warned that “special measures will have to be taken in case you make such an ‘impure demand` once again.”

 

 

A. You may see the situation from that perspective. But I don`t see it so critically. With these problems successfully resolved, Kaesong can serve as a channel for inter-Korean economic cooperation.

 

 

A. Politicians may have their own views and we can think differently as businessmen. I earnestly wish that political problems will not interfere with the Kaesong Industrial Complex by all means. What we want is the separation of politics and economy.

 

A. There can be such criticism from the viewpoint of national security. But politics and economy have been separated in relations between China and Taiwan in spite of the serious political and military conflict the two sides have gone through. Look at China and Taiwan these days. We must resolve conflict through economy when politics can`t do.

 

 

A. Orders have declined or stopped due to uncertain prospects. I once thought if this situation persists, we may also have to withdraw. But we couldn`t leave unconditionally when there were no government measures to cope with the situation.

 

 

A. It`s unthinkable for countries to take hostage while engaging in business under mutual investment agreements. I wasn`t anxious in this regard. When the North fired missiles, conducted nuclear tests and placed the industrial park under their control, I told my staff to “withdraw if you find this situation burdensome.” But everyone said they would “stay and take care of things.” All of our six staffers there stayed.