The government is keeping tabs on demands to lift its three-year-old blanket sanctions that virtually halted all inter-Korean economic exchange, and weighing actions it can take, Unification Minister Ryoo Kihl-jae said.

Replying to questions raised by lawmakers on the ban that went into effect in 2010, he said Friday the government is aware of the conflicting views on this critical matter.

“Seoul is looking into the issue carefully, but public opinion is clearly divided on sanctions,” he said.

Following the North’s torpedoing of one of the South’s warships near the western sea border, South Korea imposed the so-called May

24 sanctions, barring all commercial and personnel exchanges with the exception of an inter-Korean factory park in Gaeseong.

The minister, however, said that there are various considerations to check before taking any step on this matter and that Seoul needs to weigh all variables.

On the ban’s impact on the normalization of the inter-Korean factory park in Kaesang, he conceded that in order for the industrial complex to become internationally competitive, easing restrictions to travel and new investments are key.

He said as long as the ban is in place, South Korean companies will be barred from investing in Gaeseong, although this rule does not apply to foreign firms.

At present, there are only 123 South Korean companies with factories at the Gaeseong Industrial Complex. In the past foreign companies had shown interest in investing in the special business zone, but this did not bear fruit.

On the policymaker’s remarks, the ministry added that while everything is being considered, no immediate plans exist to lift sanctions at present. It said for any headway to be made the North must apologize for its actions and take responsible measures. It also pointed out internationalization will take time and the government will examine options at its disposal when the time comes for companies to make new investments.

Related to the need to provide more leeway to hard-pressed companies who have factories in the joint business venture, Ryoo said that companies need to pay back the 176.1 billion won ($165.6 million) in insurance payment they received.

He said that while 59 companies that received insurance money must abide by the insurance policy rules, the government is looking into other ways to permit these companies to receive favors on existing and new loans.

“He said that there is a need to stick to principle in regards to the insurance policy issue,” he said.

The remarks come as many businessmen who met lawmakers on Wednesday asked for help on the insurance money repayment issue.

They said with a lack of orders from buyers, the Gaeseong complex as a whole is operating at just 50 percent of capacity instead of 80 percent claimed by the government.

Ryoo said that despite demands to restart tours to the Mount Geumgangsan resort on the east coast, such a move requires the North making firm assurances not to harm South Korean tourists in the future. All operations were halted when a North Korean guard shot and killed a South Korean tourist in 2008.

Regarding calls to engage the North in dialogue, the policymaker said that Seoul does not have any plans to send a special envoy to the North.

Meanwhile, on the fallouts the sweeping sanctions have had on cross-border cooperation, a lawmaker claimed South Korea has suffered huge economic losses so far.

Citing a report by the private Hyundai Research Institute think tank, Rep. Jung Cheong-rae of the main opposition Democratic Party claimed the sanctions have caused 9.4 trillion won in direct damages to the South Korean economy.

Seoul’s losses are four times greater than the 2.4 trillion won in damages estimated for North Korea, he claimed.

According to Jung, South Korea lost 4.59 trillion won in missed trade with the North, with a further 3.44 trillion won in damages coming from limits to expansion imposed on the Gaeseong Industrial Complex.

Another 1.25 trillion won and 35 billion won in losses were incurred due to the halt in all tourism to the Mount Geumgangsan resort and Gaeseong city, respectively, with 100 billion won being lost due to South Korean planes being forced to take a more circuitous route around North Korean airspace.

The lawmaker added that if all missed economic opportunities are tallied, indirect damages to South Korea soar to 27.2 trillion won.

“Roughly a third of all companies that traded with the North have cut back or halted operations (because of the sanctions),” Jung said.

There is a pressing need to lift the sanctions and come up with fundamental policies to help the South Korean companies, which are generally small and medium-sized companies, he said.

The DP has persistently called for the lifting of sanctions, but the ruling Saenuri Party and the government of President Park Geun-hye have been reluctant to take such a step since the North has not accepted responsibility for the sinking of the warship or pledged to not engage in such provocations in the future. (Yonhap News)