See More on Facebook

Diplomacy, Economics

Barriers still exist to Korean economic cooperation

Reality bites for hopes of peninsular economic cooperation.


Written by

Updated: August 8, 2018

The possibility that the long-reclusive North Korea may open up its market for extensive development is likely to act as hopeful momentum for South Korea’s economy, which has stalled in slow growth and sluggish employment.

Despite all the alluring factors, however, rosy promises of the inter-Korean economic cooperation are still far from guaranteed, mostly due to an uncertain outlook for Pyongyang’s denuclearization, observers pointed out.

Shares related to North Korea’s development, which had peaked in the wake of the inter-Korean summit in late April and US-North Korea summit in May, have continued to budge upward, albeit at a slower pace, according to local securities experts.

Among them was Hyundai Engineering & Construction, which has seen a steady climb in stock value since last week, pivoting on Hyundai Group chairperson Hyun Jeong-eon’s visit to Kumgangsan in the North to attend a private commemorative ceremony of her late husband Chung Mong-hun.

Having carried out some 710 billion won ($631 million) in infrastructure projects in North Korea in the past, the builder is deemed a key indicator in inter-Korean relations.

Closing at 58,200 won on Tuesday, the company’s stock price still remains far from its record-high 79,100 won in late May, but its uptrend has rekindled hopes on the resumption of the Kumgangsan tour program – one of its top revenue-making businesses in the North Korean region.

“Now that the short-term revenue gains from the series of summits in April-May have trailed off, it is the railway and road construction businesses that are likely to grab investors’ attention,” said Choi Seok-won, head of the SK Securities Research Center.

“Once the foundation for initial infrastructure is laid, companies related to gas pipes and other energy supplies are expected to rise as the next-step beneficiaries.”

Looking forward to the possibility of the North’s market opening, state-run banks and other financial institutions have been bustling to launch or expand inter-Korean economic cooperation teams or North Korea research centers.

“North Korea has advanced information technology but lacks the necessary system, especially in the financial sector,” said Cho Bong-hyun, research head for North Korean affairs at Industrial Bank of Korea’s Economic Research Center.

“Mobile banking may be the key factor for the North’s reform, which is why banks need to take pre-emptive preparatory steps.”

The expert also underlined the abundant natural resources in the underdeveloped communist region — estimated at a total value of 4,000 trillion won — and some 5,000 South Korean companies involved in the inter-Korean Kaesong industrial park.

But while the stock market and financial sector maintained optimism, the government remained more cautious on the prospects of advanced inter-Korean economic ties, especially in the latest context of Pyongyang’s continued engagement in military development.

A recently revealed confidential United Nations report claimed the reclusive regime is continuing to develop nuclear and missile programs in spite of incumbent international sanctions. It also asserted that the North has been transferring coal by sea, circumventing sanctions.

Cheong Wa Dae refrained from commenting on the given contents, in an apparent show of prudence concerning delicate inter-Korean ties.

“It seems inappropriate for the government to mention the details of a report that is not yet officially published,” said presidential spokesman Kim Eui-kyeom.

Overseas observers, on the other hand, have been more outspoken on calling out Pyongyang’s liability on denuclearization and halting ongoing economic talks.

“North Korea has done nothing to deserve the lifting of these sanctions. These are not flexible and we should not make them flexible,” Joshua Stanton, attorney and founder of OneFreeKorea.com, said in an interview with Voice of America.

Bruce Klingner, a researcher at Heritage Foundation, pointed out that Seoul’s government is exerting too much effort in the premature agenda of economic cooperation, while priority agenda items such as denuclearization measures have yet to take shape.

It was amid such persisting uncertainties that US Secretary of State Mike Pompeo, during his visit to Singapore for a regional security forum, criticized North Korea for violating UN sanctions.

The top official also reportedly said in a phone call with Seoul’s Unification Minister Cho Myoung-gyon in late July that “sanctions must be maintained” until solid confirmation of the North’s complete denuclearization.

Separately from its stern stance concerning the sanctions, however, the UN’s Security Council also adopted new guidelines Monday seeking to unblock humanitarian aid for North Korea.



Enjoyed this story? Share it.


The Korea Herald
About the Author: The Korea Herald is the nation’s largest English-language daily and the country’s sole member of the Asia News Network.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Diplomacy, Economics

Pyongyang confirms ready to resume talks, but gives conditions

Foreign minister confuses lawmakers on whether North Korean leader’s letter to Trump was different to one already made public. The long-stalled US-North Korea working level talks on denuclearization could take place soon, a senior North Korea official signaled in a statement carried by the Korean Central News Agency on Monday that also set out conditions for the resumption of dialogue. The director general of the North Korean Foreign Ministry’s department of American affairs said working-level talks will likely take place in a few weeks. He said the two countries may forge closer relations or hostility depend on what Washington brings to the table. But he also set out a number of conditions.


By The Korea Herald
September 17, 2019

Diplomacy, Economics

President blames China for ‘suppressing Taiwan int’l space’

The Solomon Islands is the latest country to not recognise Taiwan. President Tsai Ing-wen (蔡英文) strongly condemned Solomon Islands’ decision to establish diplomatic relations with China in a major statement released on Monday. The president blamed China for using “financial and political pressure to suppress Taiwan’s international space” and called Beijing’s action “a threat,” but also a “brazen challenge and detriment to the international order.” Taiwan’s attitude towards its diplomatic allies has been one of sincere friendship, she said, stressing that Taiwan spares “no effort” and treats allies with “sincerity.” In the face of China’s alleged interference, however, she added that “we will not stand to be threatened, nor will we be subjected to ceaseless demands.” The president also stressed that Taiwan will not engage in “dollar diplomacy” with China


By ANN Members
September 17, 2019

Diplomacy, Economics

Rohingyas inside Myanmar still facing genocide threat: UN report

The report outlines a grim future for 600,000 or so Rohingya still trapped in Myanmar. Around 600,000 Rohingyas remaining inside Myanmar face systematic persecution and live under the threat of genocide, said the Independent International Fact-Finding Mission on Myanmar in a new report published today. “The threat of genocide continues for the Rohingyas remaining in Myanmar,” said Marzuki Darusman, chair of the Fact-Finding Mission. The Mission, which was formed by the UN Human Rights Council in March 2017, last year said its investigation had found “genocidal acts” in Myanmar’s “clearance operations” in 2017 that killed thousands and caused more than 740,000 Rohingyas to flee to Bangladesh. “Myanmar is failing in its obligation to prevent genocide, to investigate genocide and to enact effective legislation criminalizing and punishing genocide,” Darusman said.


By Daily Star
September 17, 2019

Diplomacy, Economics

‘War with India a possibility’, Imran Khan says

The comments come weeks after a Pakistani minister had reportedly predicted a ‘full-blown war between Pakistan and India likely to occur in the month of October or November’. Days after Pakistan Foreign Minister Shah Mehmood Qureshi said that the possibility of an “accidental war” with India over the Kashmir issue cannot be ruled out, its Prime Minister Imran Khan said that he “absolutely believes” in such a consequence. While speaking to news channel Al Jazeera, Imran Khan raised the issue of Kashmir and said that there is a possibility of a conventional war with India that could go beyond the subcontinent. “So that’s why we have approached the United Nations, we are approaching every international forum, that they must act right now,” he said, adding that he “absolutely” believes war with India could be a possibility. “…this is a potential disaster that would go way be


By The Statesman
September 17, 2019

Diplomacy, Economics

Pakistan and India face common threats, climate change is the biggest one

Collective action may just be what is needed to secure the lives and livelihoods of future generations. Climate change is no longer limited to books or scientific papers; it is a reality knocking on our doors. Longer, sweltering summers bringing in record-breaking heat to South Asia are just one example. The harshest of conditions have yet to come, and the entire region is woefully unprepared to meet the challenges. While they may seem isolated, increasing instances of extreme weather are harbingers of a major climate shift for South Asia. Unlike transnational challenges like security and trade, climate change cannot be deterred by conventional methods or unilateral initiatives. Instead, synchronised common action is the viable way forward for sustainable progress to mitigate the impacts of climate change. Let’s look at some of the common environmental challenges facing Pakistan


By Dawn
September 17, 2019

Diplomacy, Economics

Japanese beef exports to U.S. set to expand

The total is due to exceed 2018’s record of 421 tons. Japan and the United States have agreed to scrap a 200-ton annual low-tariff quota for Japanese beef exports under a new bilateral trade agreement reached in principle, The Yomiuri Shimbun has learned. Under the agreement, Japanese beef would be subject to a different low-tariff quota, opening up the possibility of exports to the United States to expand significantly. With the popularity of Japanese beef in the United States rising amid a boom in Japanese cuisine, exports would be expected to increase further going forward. A low-tariff quota of 200 tons per year is currently in place for beef imported from Japan to the United States. A tariff of 4.4 U.S. cents (about ¥5) per kilogram is levied on exports within the quota. Depending on the price of beef, this can represent a tariff rate of


By The Japan News
September 16, 2019