[THE INVESTOR] Chiefs of South Korea’s three biggest conglomerates -- Samsung, SK and LG -- will join President Moon Jae-in’s visit to Pyongyang this week as part of the 52-member presidential business delegation for the third inter-Korean talks this year, Cheong Wa Dae confirmed on Sept.16.
The list of business delegates includes Samsung Electronics Vice Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won and LG Group Chairman Koo Kwang-mo, all of whom hold absolute authority to make investment decisions for their respective groups.
This is the first time that a member of the ownership family of Samsung, the country’s top conglomerate, will head to the North.
Chung Eui-sun, executive vice chairman and heir apparent of Hyundai Motor Group declined the invitation, citing a scheduled meeting with US Commerce Secretary Wilbur Ross and other business meetings. In his place, Kim Yong-hwan, vice chairman of Hyundai Motor Group, will join the delegation.
In response to a question of the legitimacy of including Samsung heir Lee Jae-yong, who is one of the key defendants in the bribery scandal involving the previous president, Cheong Wa Dae said it is a totally separate matter.
“As all know, the (former) chiefs of the four groups joined the past Pyongyang visits in 2000 and 2007,” said Im Jong-seok, chief presidential secretary during a briefing. “I think the economy could bring further peace after the denuclearization goes smoothly, businesses have been preparing a lot for this, and the chiefs of the large companies had visited Pyongyang for the past two summits.”
Lee Byung-tae, a business management professor at Korea Advanced Institute of Science and Technology, noted the need to take a prudent approach in terms of economic cooperation without the due environment.
“The current government tends to exert all efforts into achieving its political goals ... with the North Korean sanctions intact, and without any legal reviews, there is no room for the companies to act.”
The upcoming summit between the South and North is focused on not only denuclearization, but also a shared vision on establishing a “new economy map” for the Korean Peninsula, according to Cheong Wa Dae.
While there, the South Korean business leaders could join in on tours of major industrial facilities in the North, according to industry forecasts.
Due to international sanctions on the North, South Korean conglomerates pulled out their operations in the North in 2010, aside from the Kaesong industrial park that mainly involved smaller firms. Kaesong was shuttered in 2016.
Samsung previously operated processing projects for TVs, fixed-line phones and textiles in Pyongyang, from 1999 until 2010. LG had also operated an assembly project for TVs in the North from 1996 to 2009.
“What we could suggest for South-North economic cooperation isn’t yet certain,” said an industry insider. “It takes a lot of risks for the Korean companies operating globally to think of business in the North due to the existing sanctions.”
Other business delegates of the 2018 summit include: Choi Jeong-woo, chairman of Posco; SoCar CEO Lee Jae-woong; Shin Han-yong, chairman of the Corporate Association of Kaesong Industrial Complex; Oh Young-sik, president of Korea Railroad Corporation; Ahn Young-bae, president of Korea Tourism Organization; Kim Jong-gap, president of Korea Electric Power Corporation; and Lee Dong-geol, chairman of Korea Development Bank.
The business delegation is scheduled to meet with Ri Yong-nam, the deputy prime minister for economy of North Korea, according to an agreement made by working-level officials of the two Koreas.
But the details of such meetings could change later, Im said.
By Song Su-hyun (firstname.lastname@example.org)