[EDITORIALS]‘Special nature’ indeedNorth Korea is said to have asked Lotte Tours for $10 million worth fertilizer and other material in return for the right to operate Kaesong tours. It is also said that the North wanted a $150 entrance fee to Kaesong per person as it asked Hyundai Asan. The North made clear that it would not deal with Hyundai Asan on the Kaesong tour rights.
It is not clear whether the abrupt change is a reaction against the replacement of Kim Yoon-kyu, former vice chairman of Hyundai Asan, or a business tactic to increase the revenue from tourism by shaking down South Korean businesses. Either way, it’s not a good sign. With Hyundai Asan, which had been authorized by the government to operate pilot tours to Kaesong, the North has already conducted three of them. It actually picked Hyundai as a partner for the project. The whole thing is confusing because the North suddenly wants to change business partners from Hyundai to Lotte on the pretext of Hyundai’s personnel moves. There is no guarantee that the new partner won’t be thrown away as well, and then who will trust North Korea? That would damage the development of inter-Korean cooperation on the private business level.
The North’s sudden change in attitude is also a serious problem for the government. It is not yet known whether Lotte Tours will accept the North’s demands and sign a contract. If it does and applies for a permit, problems will arise. Article 17 of the Inter-Korea Exchange and Cooperation Act says concerning North Korea business permits: “There should be no possibility of creating serious competition with existing cooperation projects.” That is likely to raise a controversy about whether the government can grant a permit to Lotte Tours instead of Hyundai, which had the right to operate pilot tours.
Our businesses must be able to participate in inter-Korean projects more effectively and transparently. First of all, the standard for government intervention should be clearer. It sometimes meddles in business affairs under the pretext of “the special nature of inter-Korean projects,” and then takes a hands-off attitude, saying “economy and politics must be separated.” The pattern of focusing on certain businesses and people and rewarding the North for projects must change too. Then government and business can avoid being swept into disarray because of a North Korean change of tactics.