Corporate Gangs Who Could Profit From Trade With North Korea

-Source-The New Republic-

South Koreans so far have responded with overwhelming optimism to Donald Trump’s June 12 summit in Singapore with North Korean leader Kim Jong Un. Buoyed by hopes of rapprochement with their northern neighbor, about 66 percent of South Korean respondents view the summit favorably. Moreover, President Moon Jae-in, who had pressed hard for peace in the months leading up to the summit, now enjoys a 76 percent approval rating and his Democratic Party so thoroughly swept last week’s by-elections that two opposition party leaders have since resigned.

As with any restoration of relations, there are likely to be economic benefits. But one potential hazard of economic integration with North Korea, though rarely talked about in the United States, is that through premature sanctions relief and economic partnerships between Seoul and Pyongyang, the summit could vastly empower South Korea’s family-run conglomerates, or chaebol. Chaebol are authoritarian militaristic groups often led by criminals who mistreat their employees—corporate North Koreas with a thin veneer of respectability. They wield vast power in South Korean society, and their leaders are almost never punished for their crimes.

Samsung chairman Lee Kun-hee was convicted in 1996 of bribing politicians and in 2008 of tax evasion. Kim Seung-youn, the chairman of the Hanwha conglomerate built around an original explosives company, was convicted in 2007 of beating several people with a steel pipe. All three instances ended with presidential pardons. Kim was later jailed for embezzlement in 2012, but released months later. Lee’s son, Lee Jae-yong, was sentenced in 2017 to five years for bribing the former president, but was also released months later.

These cases are characteristic of chaebol power, and once the door to North Korean development is reopened, these entities will be able to secure deals beyond the reach of the South’s poorly enforced corporate governance laws. Such partnerships will naturally empower the North Korean system with an inflow of chaebol money, while allowing chaebol to thrive in a region with virtually no corporate oversight, in turn enhancing their ability back home to influence public opinion, bribe judges and prosecutors, and generally bend the South Korean legal system to their will. Read more