Economists imagine a connected peninsula

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Economists imagine a connected peninsula

Economists from South Korea and the United States are optimistic about business opportunities as the latest summit between the two Koreas kicks off in Pyongyang.

The Korea International Trade Association (KITA), a local lobbying group, and the Center for Strategic and International Studies (CSIS), a U.S. think tank, jointly hosted a conference on Tuesday dubbed “Reconnect Asia” in Gwanghwamun, central Seoul, to discuss the possible impact of inter-Korean business on Asia.

“Connecting railways and roads between South and North Korea is one of the major items to be discussed at the summit meeting,” said Kim Young-joo, Chairman of KITA during his opening remarks at the conference. “The connection will be a starting point for a physical connection with Asia and help Korean companies expand their presence in the Eurasian markets.”

Na Hee-seung, president of the Korea Railroad Research Institute, added that a Trans-Korea Railway would be a new growth engine for the Korean Peninsula.

Representatives from Korea’s major logistics companies CJ Logistics and Hyundai Glovis also anticipate positive business opportunities from a transport network that connects the Korean peninsula with China and Europe once railways are connected between the two Koreas.

A so-called northern transport network, a hypothetical route that connects the Trans-Korea Railway with tracks across China, Mongolia and Siberia, is expected to enable goods from Korea to be delivered directly to Europe by land, reducing logistics time and costs.

However, economic sanctions on the North are still in place and likely will remain until denuclearization. A researcher from CSIS said it will be hard to pursue inter-Korean businesses unless the North announces full denuclearization.

Na said the Koreas should find ways to cooperate step by step as denuclearization and the lifting of sanctions are likely to happen slowly.

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