Jan. 24 (UPI) — North Korea could provide suitable opportunities for medium-size South Korean enterprises, business leaders in the South said Wednesday.
Park Sung-taek, chairman of the Korea Federation of Small and Medium Business, said at a panel discussion in Seoul the South’s struggling small firms could get a fresh start north of the demilitarized zone, if they can find the right business partners, News 1 reported.
“North Korea is developing a market economy system,” Park said. “We [in the South] need to look at North Korea from a new perspective, not as a supplier of only cheap labor but as a business partner who provides mutual benefits.”
Park said providing various avenues of economic cooperation, then reaping positive results, would encourage other medium-size South Korean firms to follow, according to the report.
Lee Jae-ho, a head of research at Korea Small Business Institute, agreed and said inter-Korea economic cooperation must develop a new business model that reaches beyond that of the Kaesong Industrial Complex in North Korea, where South Korean executives invested in factories where North Korea supplied local labor.
Lee said the North’s regions are specialized zones of industry; while the border city of Sinuiju facing China has a relatively developed information technology sector, in Kaesong, machinery production is making advancements.
As inter-Korea engagement has increased since 2018, South Korean business executives have been turning their attention to potential opportunities in the undeveloped North.
South Korean growth has slowed as its economy matured, and smaller firms that do not have the clout of Samsung or LG Corp., have been struggling to compete.
A recent hike in the minimum wage also hurt smaller businesses coping with higher labor costs.
South Korea has not restarted any major projects with the North, however. Factories at Kaesong remain shuttered and executives have been declined visits.