[Column] Korea, China, Japan must work together

It is true that Korea, Japan and China have yet to wipe out the relationship of mutual distrust between the injurer and the victim that was formed in the course of wars and colonialism generated from Japan`s imperialism.

Moreover, since the late 20th century, Japan, the front-runner of economic development and industrialization, and Korea, chaser of Japan, has not been smoothly developed as to brush out mutual distrust in their mutual economic relations due to persisting industrial and trade imbalances between the two countries.

On the other hand, China, which pursued drastic economic reform under slogan of a socialist market economy, has maintained a clear-cut negative stance toward the systematization of the three-way economic cooperation until recently.

For these reasons, the three nations have failed to conclude bilateral or regional pacts on their own, despite global expansion of regional cooperation with the launching of the European Union and North America Free Trade Agreement, for instance.

Nonetheless, it is clear that Korea, Japan and China have come to take more positive attitudes toward regional economic cooperation, since they experienced directly or indirectly financial crises and its spreading process in Asia as a whole.

For a good example, leaders of the three nations got together on the sideline of the ASEAN-plus three meeting held in Manila in November 1999, and they agreed to seek measures for regional economic cooperation at the non-governmental level.

In the face of this change, the writer offered a proposition that Seoul, Tokyo and Beijing hold regular talks among the three nation¡¯s finance ministers. Thereby the three nations can address through the exchanges of their views such crucial problems as coordination and consultation on macroeconomic policies, the exchanges of information regarding finance-related policies and flow of short-term capital funds, in order to minimize the potential for the outbreak of a new financial crisis and the feasibility of its spreading.

The writer attended an international conference on the Northeast Asian economic cooperation forum held in Honolulu for three days July 31-Aug. 2. At the meeting, the participants mainly discussed ways of expanding the now urgently needed social overhead capital for the development of infrastructural facilities such as roads, harbors and communications, that must be addressed in order to attract much-needed private capital funds for the regional development in the Northeast Asian countries.

Of a particular note, the participants had lively discussions about the establishment of the Northeast Asian development bank to help the Asian nations form a social overhead fund.

The proposal for the establishment of the aforementioned bank is based on the assumption that such a regional bank is necessary for the development in the region through the following formula. The mobilization of social overhead capital funds through the procurement of public funds to be provided by the existing World Bank, the Asian Development Bank and other international financial institutions, and Japan and other countries in the region, and from the international markets to procure more than US$5 billion per year to fill gaps between the expected amount of public and private funds.

The proposed Northeast Asian Bank also is needed for the growth and development of the North Korean economy and inter-Korean unification in the long run.

Northeast Asian countries have both abundant natural resources and superior manpower. Since there are high cross-supplementation relations in terms of the industrialization process and resource holdings, Korea, Japan and China will be able to put into reality the unlimited potential power for the growth before long, if they continue to promote close cooperation. To this end, the three nations, before anything else, must endeavor to dispel their mutual distrust and to build a future-oriented mutual confidence.

The writer believes that the establishment of the Northeast Asian development bank is part of this endeavor. The proposed bank could become a vital framework for attaining the common goal of sustained development and prosperity in Northeast Asia, if Korea, Japan and China cooperate with one another, hand in hand.

In particular, Japan needs to take the initiative in creating the bank with a sense of responsibility for erasing the scars of history and for building up mutual confidence. At the same time, the three countries should display wisdom for developing a common existence and coprosperity with neighboring nations. There are options for friends and neighbors, but there is no room for choosing the neighboring countries, regardless of their willingness.

Dr.SaKong Il/ Chairman & CEO of Institute for Global Economics