Gov’t ups aid for firms investing in NorthThe Moon Jae-in administration said Friday it will boost assistance to South Korean investors in now-defunct inter-Korean economic projects such as tours to Mount Kumgang in order to make up losses caused by political decisions of the last two conservative administrations.
“The government prepared a plan to assist the companies invested in inter-Korean joint ventures and the Kaesong Industrial Complex for hardships caused by abrupt policy changes made in the past,” Vice Minister of Unification Chun Hae-sung said. “We decided to do so in order to fulfill the government’s responsibility.”
Chun dismissed speculation that the move signals the Moon administration’s resumption of economic exchanges with the North.
Over the past years, a series of economic sanctions were imposed on the North in return for deadly attacks and security threats. The Park Geun-hye administration shut down the Kaesong Industrial Complex in February 2016 to punish the North for its fourth nuclear test and the launch of a long-range ballistic missile. The Lee Myung-bak administration suspended Mount Kumgang tours in 2008 after the killing of a visiting South Korean tourist and imposed other restrictions after the sinking of the Cheonan warship in 2010.
According to the Ministry of Unification, 66 billion won ($59 million) will be offered to 174 firms that operated factories in the Kaesong Industrial Complex. The amount is on top of 517.3 billion won offered by the Park administration last year.
With the upcoming aid, about 74.2 percent of the government-estimated damages suffered by the companies will be covered, the ministry said.
The ministry also said the government will offer financial assistance to companies that suffered losses on investments in other inter-Korean economic projects shut down by the Lee administration.
That will be the first direct assistance for companies that suffered losses outside the Kaesong Industrial Complex. Until now, special loans were offered to them, but no direct financial aid.
The government will conduct a survey of those companies to make an assessment of the damages suffered. About 900 out of 1,000 companies that invested in inter-Korean projects are expected to receive money.
According to the ministry, the same standards used to compensate Kaesong Industrial Complex investors will be used. Up to 3.5 billion won per company will be offered for losses in investments, and up to 7 billion won will be paid per company for losses in liquid assets.
The government will use the Inter-Korean Cooperation Fund to finance the aid. The Unification Ministry will hold a meeting to approve the usage of the fund before the end of this month.
The government said the program will be the final assistance package. No additional compensation will be offered.
Investors were split over the plan. Those who operated factories in the Kaesong Industrial Complex told Yonhap News Agency that the plan was disappointing.
Companies that invested in Mount Kumgang tours and other projects said they will accept the aid for now, although they are not satisfied.
BY SER MYO-JA [firstname.lastname@example.org]