South Korea's finance minister on Sunday pledged all-out support for South Korean companies operating in a joint industrial park with North Korea that was shut down last week following a series of military provocations from the communist North, including a nuclear test.
"The government is working to come up with measures for the firms who are feared to suffer a great loss due to the suspension of their operations at Kaesong industrial park," Finance Minister Yoo Il-ho said in a special meeting aimed at discussing support measures for Kaesong firms.
Pyongyang expelled all 124 South Korean firms from the joint industrial park in Kaesong on Thursday, two days after Seoul announced its own decision to at least temporarily shut down the industrial complex in response to the North's recent nuclear test followed by the launch of a satellite that many believe was a disguise for a long-range missile test.
Sunday's meeting was attended by a number of ranking government officials, including Trade Minister Joo Hyung-hwan and Finance Services Commission Chairman Yim Jong-yong, as well as the heads of various economic organizations, such as the Federation of Korean Industries and the Korea Chamber of Commerce and Industry.
Yoo, who is double-hatted as deputy prime minister for economy, said the government's support measures will include an extension of maturity on outstanding loans to the Kaesong firms, as well as emergency relief funds to both companies and their South Korean employees.
He, however, noted government measures alone will not be enough to make up for the heavy losses they are expected to face.
"The entire business circle must help as a whole. Now is the time for all members of the business circle to exercise their spirit of friendship and mutual help so the Kaesong firms can stand on their own feet again at the earliest date possible," he told the meeting, according to the Ministry of Strategy and Finance.
When the industrial park was closed for 160 days in 2013 in North Korea's protest against a joint military exercise between South Korean and U.S. forces here, the South Korean firms reported a combined loss of 1.05 trillion won (US$869 million).
The firms claim their damage will only be greater this time considering the sheer growth of their business operations over the years.
The joint industrial park in Kaesong, just north of the inter-Korean border in the communist North, opened in 2004 under an agreement reached at the first-ever inter-Korean summit between then South Korean President Kim Dae-jung and the late North Korean leader Kim Jong-il in Pyongyang in 2000.
With some 54,000 North Korean workers on payrolls before last week's shutdown, the once symbol of reconciliation between the divided Koreas has often been considered a cash cow for the impoverished North.
The South Korean government again pointed out that much of the money earned by North Korean workers may have been funneled to the North Korean regime while offering reasons for its decision to pull out of the joint complex last week.
"The operation of the complex should not be used for North Korea's development of weapons of mass destruction at a time when the international community is pushing for tougher sanctions against the North," a unification ministry official said while speaking on condition of anonymity.
Meanwhile, the finance minister said the impact from the shutdown of the Kaesong complex on the local economy will likely remain minimal.
"As of now, the economic impact of the so-called North Korean risks seen in the North's launch of a long-range missile and shutdown of the Kaesong industrial complex remains limited," he was quoted as saying.
"Still, the government is handling the current situation with the utmost care as changes in the global economy and financial market are extremely hard to predict," Yoo added.
The two Koreas technically remain at war since the 1950-53 Korean War ended only with an armistice, not a peace treaty.
Source: Yonhap news