SEOUL — Mineral water from North Korea's famed Mt. Kumgang hit South Korean store shelves this month. But it was a long trip.
Since the idea was conceived in 1994, a Seoul firm has been arm-twisted by the North Koreans into building a $6-million local railroad line and has seen the project delayed a year by an electricity shortage.
"If it had been up to me, I never would have made the decision to enter North Korea," said Oh Byung Kwon, executive director of Taechang Co., the Seoul firm.
Indeed, doing business in the North can be a monumental, unprofitable headache. But that hasn't discouraged South Korean managers and officials from dusting off old business plans and mapping out new economic strategies in anticipation of the two nations' historic summit next week, which will spotlight the experience of companies in the South, such as Taechang and IMRI Co., a maker of computer monitors.
Increased trade and investment links would be the earliest and most dramatic evidence of detente, if it does ensue on the troubled peninsula, as some optimists believe will be the case.
Despite the enormous hurdles in the short term, better business ties between the two Koreas make real sense in the long term, experts say.
Reducing the military threat along the demilitarized zone would benefit almost everyone--and marrying Southern capital, technology and know-how with Northern resources and cheap, Korean-speaking labor promises to spur competitiveness on both sides of the border.
South Korea's Samsung conglomerate, for one, said it will invest more than $500 million over the next decade if conditions are satisfactory. Shifting production to a lower-cost base close to home, with well-trained workers who share the same heritage and language, offers enormous potential, said Young Hwa Park, executive vice president of Samsung in charge of its North Korean electronics assembly operations.
"I hope the summit succeeds," he said. "It's only the start of a long, long road."
Only a few hundred South Korean companies have made the effort over the last decade. And few others harbor many illusions. The divided peninsula has seen its share of false starts.
And even if political barriers come down, the economic hurdles are daunting: starving workers; an almost complete lack of infrastructure; a dysfunctional banking system; and shortages of almost everything.
