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(LEAD) Gov't to offer 66 bln won in compensation for Kaesong firms

2017/11/10 11:22

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(ATTN: UPDATES throughout with details; CHANGES headline; ADDS photo)

SEOUL, Nov. 10 (Yonhap) -- South Korea said Friday it will expand compensation for hundreds of domestic companies with huge losses stemming from investments in inter-Korean projects suspended due to political tension.

The government plans to offer 66 billion won (US$59 million) to the 124 firms that operated factories at the Kaseong Industrial Complex and around 140 subcontractors, according to the Unification Ministry.

"The measure is meant to fulfill the state responsibility for those companies which have suffered from unexpected business setbacks due to a shift in the government's policy decisions," the ministry said in a statement.

It has already been doling out 517.3 billion won in reparations for the firms in a decision made shortly after the shutdown of the industrial zone early last year. At that time, the conservative Park Geun-hye administration abruptly closed the complex, once a token of inter-Korean economic cooperation, in response to the North's fourth nuclear test.

In this file photo, truck-loaded goods are transported out of the Kaesong Industrial Complex after the 2016 decision by South Korea to shut it down. (Yonhap) In this file photo, truck-loaded goods are transported out of the Kaesong Industrial Complex after the 2016 decision by South Korea to shut it down. (Yonhap)

An association of local firms, mostly manufacturing such labor-intensive goods as clothes and utensils, claimed that it incurred more than 1.5 trillion won in losses.

Based on its own survey, however, the government put the estimated damage at 786.1 billion won.

With the additional support, the ministry said, 74.2 percent of the damage will be covered. It added there will no further state compensation.

The ministry also announced plans to help local companies, involved in other inter-Korean business projects, that have suffered losses from the 2008 halt to the Mount Kumgang tour program and the 2010 bilateral economic sanctions on Pyongyang, known as the May 24th Measure.

It would mark the government's first direct financial support for those businesses.

"We have to conduct a related survey. But it's estimated that more than 900 of about 1,000 companies with inter-Korean businesses will be eligible for the assistance," a ministry official said.

They suffered setbacks following Seoul's halt of the Mount Kumgang tour program in 2008 after the killing of a South Korean tourist by a North Korean soldier. The May 24th Measure was introduced in the wake of the North's deadly torpedo attack on a South Korean warship near the Yellow Sea maritime border in 2010.

This file photo shows the Kaesong Industrial Complex, the now-shuttered inter-Korean factory zone in North Korea's border city of Kaesong. (Yonhap) This file photo shows the Kaesong Industrial Complex, the now-shuttered inter-Korean factory zone in North Korea's border city of Kaesong. (Yonhap)

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