One-fourth of S. Korean SMEs would not do biz in N. Korea after reunification: survey

SEOUL, July 1 (Yonhap) -- A quarter of South Korean small- and medium-sized enterprises (SMEs) have no interest in doing business in North Korea should the two sides reunify, a survey showed Friday, pointing to lingering uncertainties over economic cooperation with the communist state.
According to the survey by the Seoul-based IBK Economic Research Institute, 25.6 percent of South Korean SMEs ruled out doing business in North Korea in the event of reunification while 56.4 percent said they would decide depending on the circumstances. Another 12.8 percent said they had some intention of doing business there while 5.1 percent indicated a high level of interest.
The cautious attitude reflects local businesses' concerns about operating in a country that currently has limited political and economic exchanges with South Korea following Pyongyang's two deadly attacks against Seoul last year. The two sides are also currently at odds over the handling of South Korean assets at a North Korean mountain resort used for joint tour programs until the shooting death of a South Korean tourist in 2008.
The survey, conducted on 230 South Korean SMEs in March, showed that 55.6 percent of the respondents considered reunification to be somewhat or highly important, but only 1.7 percent were preparing for the possibility. A vast majority, or 71.6 percent, said they were not making any preparations, with 1.7 percent having no plans to do so.
On the positive effects of reunification, 34.5 percent picked the opportunity to use North Korea's workforce, while 20.6 percent looked forward to a larger market size. On the negative side, 44.8 percent feared the enormous cost of reunification, followed by social and economic confusion (38.8 percent).
"If we are to make the most of such a huge opportunity as reunification, SMEs need to draw up their own strategies and the government needs to seek supportive policies that will create a new business environment," said Cho Bong-hyun, a research fellow at the institute.
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