LOANS FOR INTER-KOREAN ECONOMIC PROJECTS

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Businesses that had participated in the inter-Korean economic cooperation projects borrowed more than 300 billion won from the government. But 80% of those loans haven't been paid back. The businesses claim that the prolonged suspension of inter-Korean projects has rendered it difficult even to pay off the interests.

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This man identified only by his surname Kim had once operated a restaurant in the Mount Kumgang Tourism Zone for roughly two years. Since the death of South Korean tourist Park Wang-ja who was shot to death in 2008, Kim had to indefinitely leave the restaurant where he had put in all of his savings.

[Soundbite] Kim(Ran restaurant in Mt. Kumgangsan Tourism Zone) : "Since Mt. Kumgangsan closed down, there was nothing I could do in S. Korea. I couldn’t take out a loan, so I borrowed money from an acquaintance."

To pay back the debt with a loan, he borrowed some 480 million won in special loans from the government. Since he had no income, however, his private loans mounted to the point where he found it difficult to pay even the interest. Businesses that had participated in the inter-Korean economic cooperation project took out special loans of roughly 340 billion won from the government over five rounds. But only 22% of that sum has been repaid. Most of the 465 businesses haven't been able to pay back even half the loans and are barely paying back interests. Sixty-six businesses are even overdue in interest payment.

[Soundbite] Kim Ki-chang(Ran manufacturing business at Kaesong Industrial Complex) : "Some became paralyzed after having a stroke and some went bankrupt. Who would want to work with N. Korea again? What did we do wrong?"

As the suspension of inter-Korean projects drags on, business owners who had been in their 40s and 50s have grown too old to run their companies. The loan repayment issue is a big weight on both the government and the businesses.

[Soundbite] Rep. Yun Ho-jung(Foreign Affairs and Unification Committee, Nat’l Assembly) : "As the inter-Korean relations remain severed, the damage is directed at the businesses that had participated in inter-Korean cooperation projects. The gov’t should provide these businesses with satisfactory measures."

Previously, the government had covered between 45 and 90% of the assets owned by the businesses that had operated in the Mount Kumgang Tourism Zone and the Kaesong Industrial Complex. But the businesses are demanding additional compensation, claiming that their assets were not properly evaluated.