Inter-Korean economic projects stalled
The currently shuttered Gaeseong Industrial Complex in the North / Yonhap
By Kim Bo-eun
Inter-Korean exchanges continue after leaders of the South and North met in April and signed an agreement to promote cooperation and peace. Due to lack of progress in North Korea's denuclearization, however, sanctions imposed on Pyongyang by the U.N. Security Council (UNSC) and individual states remain intact, barring inter-Korean economic projects from kicking off.
North Korea has not taken any verifiable denuclearization measures since its leader Kim Jong-un's historic summit with U.S. President Donald Trump in June.
But Pyongyang wants economic cooperation, as the North Korean leader established economic development as the country's greatest priority this year. The South Korean government's stance is that it wants to begin economic cooperation with the North at the earliest possible date.
The main inter-Korean economic projects conducted so far are the joint industrial complex in the North's city of Gaeseong, and tours to Mount Geumgang in the North. The Gaeseong complex, built on North Korean land and employing North Korean workers while incorporating the South's capital and technology, was shut down in February 2016 due to North Korea's nuclear and missile tests. Tours to Mount Geumgang were halted after North Korean soldiers in 2008 shot dead a South Korean tourist who wandered into an off-limits zone.
A new project devises connecting the transportation infrastructure along the Koreas' east and west coasts. However, all projects, including old and new ones, are barred as sanctions ban foreign currency from flowing into the North.
Yet the Koreas are currently taking steps to prepare for the projects, inviting disapproval from the U.S. that leads the UNSC sanctions on the North.
Readying for economic projects
Amid the North's calls for economic cooperation, the South is engaging in preparations.
The North's ruling Workers' Party's mouthpiece, the Rodong Sinmun, implied in its July 31 edition that tours to Mount Geumgang and the operation of the Gaeseong complex should be resumed. “Mount Geumgang is the pride of our people and therefore our people should enjoy its scenery,” it said.
South Korea wants economic cooperation with the North, so it appears to be torn over how to align its position with the U.S. while making efforts to keep the momentum of dialogue and exchanges with the North alive.
The unification ministry recently deferred approval for 153 officials of businesses involved with the Gaeseong complex. However, it approved Hyundai Group Chairwoman Hyeon Jeong-eun's visit to the North. Hyundai Asan, the group's affiliate, is in charge of the tours to Mount Geumgang.
Hyun's visit last week raised speculations that preparations were being made for economic cooperation with the North. The government stated Hyeon's visit was to attend a memorial ceremony for her husband, former Hyundai Group Chairman Chung Mong-hun, who was in charge of developing tourism at Mount Geumgang.
Upon her return, Hyeon said she expects tours to Mount Geumgang to be resumed within the year.
Meanwhile, the South and North are also inspecting railways in the North and seeking to conduct studies on connecting the railways with those in the South.
Concerns
While preparations for inter-Korean projects are ongoing, it appears there is a growing sense of concern on the part of the U.S.
Regarding the issue of resuming tours to Mount Geumgang, the U.S. department of state said recently sanctions will remain effective until North Korea takes concrete denuclearization steps.
Mark Lambert, the U.S. state department's Acting Deputy Assistant Secretary for Korea, visited Seoul last month to meet with officials of Hyundai Asan and businesses involved with the Gaeseong complex. He is seen to have emphasized to them that economic cooperation cannot take place until sanctions are lifted.
The South Korean government states the ongoing preparations are taking place without violating sanctions.
“We are pushing for economic projects within the framework of adhering to the sanctions,” unification ministry spokesman Baik Tae-hyun said.
“The only exceptions that have been granted were for humanitarian projects or to enhance communication between the Koreas. We are only seeking to make preparations for Mount Geumgang tours, the Gaeseong complex and railway projects to the extent that they do not breach sanctions,” he said.
“The South Korean government appears to be in a dilemma as it wants to cooperate with the North to improve relations, but the U.S. is showing disapproval,” Handong University professor Park Won-gon said.
Inter-Korean exchanges
In the meantime, the South can only go ahead with exchange projects as stated in the Panmunjeom Declaration reached at the inter-Korean summit in April.
Even in these cases, the issue of sanctions arises. South Korea has sought and gotten exceptions for sanctions for a number of inter-Korean cooperation efforts.
The government consulted with the U.N. and received approval for an exception to sanctions when a military communication line was between the Koreas was connected. It is in the process of discussing with the U.S. the issue of bringing a generator and other necessary equipment into the North for a joint liaison office that will open this month, for an exception to be applied to U.S.-imposed sanctions.
A delegation of South Korean youth football teams and local government and company officials are in the North for an international youth football tournament taking place this week. However, due to sanctions, the South Korean government has agreed to pay for accommodation expenses after the sanctions are lifted.
“There are concerns the sanctions could undergo disarray due to these efforts,” Park said.
U.S. Ambassador to South Korea Harry Harris in a recent media roundtable said inter-Korean exchanges and denuclearization should go together, and stated the need for Seoul and Washington to be “synchronized” on the matter.
Putting further weight on the current situation is confirmation that South Korean importers brought in North Korean coal that is banned from being procured by U.N. member states, according to UNSC sanctions. The U.S. has refrained from taking issue with the matter, but there have been concerns that sanctions could be placed on South Korean firms involved in importing North Korean coal.
The North is continuing to pressure the South, comprising its delegation to the high-level talks at Panmunjeom on Monday with officials in charge of railway and economic cooperation.
The North's propaganda media Uriminzokkiri on Sunday urged the South to make “sincere efforts” to improve relations with the North, as stated in the Panmunjeom Declaration.
It said the Koreas have not seen proper fruition in carrying out reached agreements due to “the U.S.' sanctions scheme and the South going along with it.”
“The South's stance is that it will only engage in efforts that do not entail costs,” it said.