I find it hard to feel sorry for this businesses that knew what they were getting themselves into in order to take advantage of near slave labor to make profits. Their gamble ultimately did not pay off so why should the South Korean taxpayer be on the hook to completely bail them out of their losses?:
Chung Ki-seop (L), a joint head of an emergency committee for 124 South Korean firms that once operated in Kaesong, speaks in a special meeting with Rep. Woo Sang-ho (2nd from L), floor leader of the main opposition Democratic Party, held in Seoul on Jan. 12, 2017. (Yonhap)
It will have been a year since they were forced to leave their workplace in North Korea’s border town of Kaesong this week, but nearly half of the firms that were once celebrated as symbols of reconciliation with the communist North are now struggling just to stay alive.
The 124 South Korean firms were told by their own government to leave the joint industrial complex a year ago Friday.
The unexpected shutdown of the joint complex followed a series of military provocations from the North that included a nuclear test in January 2016. (……..)
He said the total damage suffered by all 124 firms came to at least 1.5 trillion won (US$1.31 billion).
The amount includes some 840 billion won in fixed and floating assets left behind in Kaesong, such as equipment and raw materials, as well as 150 billion won the firms had to pay in penalties or damage to their contractors and buyers for breached contracts.
Their combined losses stemming from reduced sales also came to 314.7 billion won in 2016 alone, the committee said.
The government, however, has compensated them 483.8 billion won, only 32 percent of the damage suffered by the firms, it added.
“The government has only provided some 359 billion won in compensation for investment assets in Kaesong and 125 billion won for floating assets, but refuses to provide any support for loss of business, the penalties the firms had to pay or any other damage stemming from the shutdown,” an official from the emergency committee said, speaking on the condition of anonymity. [Yonhap]
” Their gamble ultimately did not pay off so why should the South Korean taxpayer be on the hook to completely bail them out of their losses?:”
Exactly. Fuck these guys. You pays your money, and you takes your chances. They were blinded by $$$$$$ and disregarded that they were entering into business in f-ing NORTH KOREA. Schmucks.
ChickenHead
7 years ago
Hmmm.
I always thought about the Kaesong project from the other end.
It was a first step in a soft unification of Korea… socializing North Korean workers… or preparing them for the coming exploitation by South Korean companies… depending on how you want to look at it.
It allowed more manufacturing profits to stay in South Korea rather than be fully moved to Chinese factories.
It gave some South Korean government leverage (failed) against North Korea.
It served as a source of intel on North Korean thoughts and trends.
These were all beneficial to the South Korean government and South Korea.
With that in mind, it seems some consideration should be given to the companies which helped to further South Korean public goals through privatized risk.
I am not well informed about the business details… what promises and expectations of risk were established… but off the top of my head, Kaesong seems beneficial to Korea and should not be discouraged.
The bean counters can determine if this is true or not.
@Chickenhead, I don’t think the benefits you mention in regards to Kaesong is worth the money going to help fund the Kim regime’s nuclear and missile programs.
The workers at Kaesong were reportedly highly controlled and not able to move around the country so the intel value would be very limited to the Kaesong area. Most of the money they were making were going to the Kim regime so it wasn’t like a big economic boost to the lower class was happening. Whatever leverage Kaesong gave the ROK was obviously not all the great considering the Kim regime was not too concerned about letting it shutdown.
Finally Kaesong made it hard for the world to take sanctions seriously when the ROK is using near slave labor provided by the North Koreans.
ChickenHead
7 years ago
I see.
I have no strong knowledge or opinion.
But I sure want some industry up there to keep everyone busy in the event of a collapse.
A flood of hungry North Koreans coming south will be a massive disruption.
” Their gamble ultimately did not pay off so why should the South Korean taxpayer be on the hook to completely bail them out of their losses?:”
Exactly. Fuck these guys. You pays your money, and you takes your chances. They were blinded by $$$$$$ and disregarded that they were entering into business in f-ing NORTH KOREA. Schmucks.
Hmmm.
I always thought about the Kaesong project from the other end.
It was a first step in a soft unification of Korea… socializing North Korean workers… or preparing them for the coming exploitation by South Korean companies… depending on how you want to look at it.
It allowed more manufacturing profits to stay in South Korea rather than be fully moved to Chinese factories.
It gave some South Korean government leverage (failed) against North Korea.
It served as a source of intel on North Korean thoughts and trends.
These were all beneficial to the South Korean government and South Korea.
With that in mind, it seems some consideration should be given to the companies which helped to further South Korean public goals through privatized risk.
I am not well informed about the business details… what promises and expectations of risk were established… but off the top of my head, Kaesong seems beneficial to Korea and should not be discouraged.
The bean counters can determine if this is true or not.
@Chickenhead, I don’t think the benefits you mention in regards to Kaesong is worth the money going to help fund the Kim regime’s nuclear and missile programs.
The workers at Kaesong were reportedly highly controlled and not able to move around the country so the intel value would be very limited to the Kaesong area. Most of the money they were making were going to the Kim regime so it wasn’t like a big economic boost to the lower class was happening. Whatever leverage Kaesong gave the ROK was obviously not all the great considering the Kim regime was not too concerned about letting it shutdown.
Finally Kaesong made it hard for the world to take sanctions seriously when the ROK is using near slave labor provided by the North Koreans.
I see.
I have no strong knowledge or opinion.
But I sure want some industry up there to keep everyone busy in the event of a collapse.
A flood of hungry North Koreans coming south will be a massive disruption.