Seoul seeks int¡¯l aid for N. Korea

Amid thawing relations between South and North Korea, the South Korean government is nimble-footed in raising financial resources needed for North Korea`s economic reconstruction.

Currently, the government is considering whether to attract investment in North Korea through its membership in international financial organizations, to form consortiums jointly with Japan and the United States to aid North Korea and to establish a multinational fund for investment in North Korea.

Minister of Finance and Economy Jin Nyum said at a meeting with representatives of national and private economic research institutes August 24 that it is desirable to form an international consortium, in which Japan and the United States participate, to assist North Korea. In this process, the United States and other advanced countries must take the lead, he said.

Jin recalled that advanced countries created International Economic Consultative Organization of Korea (IECOK) in late 1960s to help South Korea`s economic development for financial aid and consultations, noting that the same tactic can be applied to North Korea`s economic development.

Earlier, Jin talked about the need for creating a Northeast Asian development fund for aid to North Korea, saying that it is necessary to form an international fund among Korea and foreign countries to help North Korea build economic infrastructures.

In addition, Jin said that the South¡¯s government would try hard to help North Korea join international organizations such as the International Monetary Fund, World Bank and Asian Development Bank.

The reason that the government is paying close attention to North Korea`s economic reconstruction program is that South Korea alone cannot provide the enormous amount of money required for North Korea`s economic development.

Considering the fact the investment cannot be collected in a short period of time, any massive financial aid to North Korea by South Korea would stagger the South¡¯s economy, which is in recovery from the shock of a foreign exchange crisis. The Bank of Korea speculated that North Korea could attract up to US$4.5 billion if it joins international organizations.

The question is that the interests of advanced countries that could participate in North Korean development consortium are conflicting, so the effort must be accompanied by normalization of relations between North Korea and industrialized nations such as Japan, the United States and the European Union.

An Ministry of Finance and Economy official said that investment in North Korea by foreign capital requires changes in North Korea`s foreign policy and approval by the International Monetary Fund and other international organizations, with North Korea`s membership as prerequisite.

In this connection, this year`s International Monetary Funds- International Bank for Reconstruction and Development (IMF-IBRD) annual meetings in Prague at the end of September would be a chance to monitor the changes in recognition about North Korea`s economic reconstruction efforts by the international financial world, according to experts.