[Focus] Presidential press conference: questions & answers

President Kim Dae-Jung voiced his will to promote political stability and implement reforms during a New Year`s conference for the local and foreign press at Cheong Wa Dae, Thursday. Following is an excerpt from the meeting.--Ed.

MBC: You spoke with the honorary president of the United Liberal Democrats (ULD) on restoring the coalition between your ruling Millennium Democratic Party (MDP) and the ULD a few days ago. You also spoke to him about the presidential election in December 2002. Will give us your views on these topics? Also, you previously sought to strengthen the government, but political discord was the only outcome. What is your view of prospects for strengthening government?

Pres. Kim: We did discuss the (next) presidential election in our talks, which were aimed at restoring the coalition between the MDP and ULD. I think now is the time for all of us to concentrate on the economic recovery and stabilize the economy and society.

Kookmin Ilbo: An investigation into the misappropriation of funds by the Agency for National Security Planning (NSP) - now the National Intelligence Service is now underway. What do you think are the chances that the investigation could also involve Lee Hoi-Chang, president of the Grand National Party (GNP), and former president Kim Young-Sam?

Kim: The prosecution is conducting a proper investigation. I think it is not right even for the President to intervene in such matters. I must decline to discuss it now.

SBS: The opposition party is strongly resisting the investigation. It presented its estimate of the scale of the alleged Presidential slush fund and demanded details of this fund. It has also requested that you provide details of the size of your political funds and that the prosecution thoroughly investigates your party¡¯s election campaign funds, including those used for the April 11 general elections last year. What do you think of this?

Kim: I will say two things. The prosecution is now investigating a criminal act of misappropriating state budget funds. Nobody should divert the focus to other matters. I have said that I did not do anything illegal in the course of raising political funds during the five years of the previous regime. I said the same thing during the (1997) presidential election period. During its inspection of state affairs, the National Assembly questioned witnesses over an allegation that I hid hundreds of millions of won during the election, and the ruling party voted against tracing my bank accounts. I think they (GNP) are repeating an outdated request. I think (their claims) do not deserve mention. To repeat what I`ve said, I¡¯ve never received political funds illegally. If the allegations were true, I would not be in this place right now.

Hankyoreh Shinmun: People are very critical of the atmosphere of extreme confrontation between the ruling and opposition parties. Do you have any plans to meet again with GNP president Lee Hoi-Chang? You also said that you would realize the "politics of co-survival¡¯¡¯ with the opposition party this year. What are your concrete plans, if any, to improve relations with the opposition party?

Kim: There has been no change from my past assertion that I will maintain a cooperative relationship with the opposition party. A person who becomes President should seek cooperation from the opposition party if he is determined to serve successfully. However, I have not received any cooperation from the opposition party, and have actually been severely criticized by them. There were many difficulties. I¡¯d like to restore good relations with the opposition party and get along with them. Toward this end, there are some principles, namely democratic principles, legal principles and the principle of respecting each other, which we should strive to maintain. In my opposition days, I kept these principles. I sought understanding of the then rival party in advance about 97 percent of all bills and motions. I cooperated with and supported the ruling party on such issues as political stability, stabilization of the people¡¯s livelihood and inter-Korean relations. The President should make efforts to realize fair politics.

Seoul Economic Daily: I will ask about economic problems. As the economic situation has recently worsened, even the middle-class, not to mention working people, has suffered serious pain. The restructuring and the economic revitalization measures now being propelled by the people¡¯s government reportedly conflict with each other. How does the government plan to harmonize them? At the same time, please outline the government¡¯s plans to improve the financial sector.

Kim: That is a very important question. Restructuring is the basis of my plans and it should be carried out first. The economic measures are complementary ones. It is through surgery that a doctor tries to save the life of a seriously ill patient. But pain-killing drugs and nutrients are the means to help that patient reduce his or her pain and recover good health. So, both restructuring and economic recovery efforts are needed. As you know, the government is intervening in some area of the financial sector. Now all financial institutions are becoming transparent. And things that don`t fit with the market economy have disappeared. Our financial structure has become healthier. Financial institutions are going all-out to become world-class, with some coming under holding companies through mergers and others becoming financially healthy. In line with this, we are pushing ahead with computerization and restructuring. There are many foreign companies in this country. The value added per person at foreign banks here is about 100 million won. But, it is just 50 million won or below for Korean banks. We should rectify this. Accordingly, the Financial Supervisory Service is requested to help move things in the right direction.

Korea Times: Some analysts point out that the flow of stock prices control public sentiment. Recently, stock prices have shown signs of stabilization. Would you comment on the government¡¯s stand on the matter and on stock market boosting measures?

Kim: I felt heartbroken when I heard the news that investors had suffered about 100 trillion won in losses. First, the stock market should be activated. There is no royal road to do so. There is only the right path. To activate the stock market, enterprises should be activated. Second, all enterprises should have competitive power. Those that lost their competitiveness should be ousted from the business world. The Korean stock market tends to be controlled by the market psychology. Our people have been pushing ahead with specialization at the fastest pace in the world. The 21st century is the era of specialization. The world has been impressed by the rapid changes in Korea. We should pursue an information-oriented society and adopt the can-do spirit. A professor said, ¡°The economy is psychology. If you adopt the can-do spirit, the economy is sure to go well.¡± According to a survey of foreign enterprises in Korea, they are hopeful about the outlook for the Korean economy. We should revive the stock market by taking or the favorable view of foreigners on the Korean economy and faithfully carry out reform of the four major sectors at optimum speed.

Hankook Ilbo: There are pros and cons related to the MDP lawmakers` transfer to the ULD. What is your view of this issue? Was the change demanded by the ULD as a pre-requisite to restoring the coalition partnership with the MDP?

Kim: The MDP lawmakers` move to the ULD was unprecedented and not desirable. For that matter, we left ourselves open to criticism from the general public. But the opposition party is not in a position to criticize it. The opposition party contends that the lawmakers` change of party affiliation runs counter to the will of the people, as expressed in the general elections. As a result of the general elections, the ULD won 17 parliamentary seats, but this does not mean that the party is non-existent. Second, the reality is that if the ULD joins forces with the opposition Grand National Party, our combined forces will allow us to control the legislature. And if the ULD unites with the MDP, the two will win on the floor. This means that the splinter ULD can exercise a decisive vote. In many countries, in order to respect a minority opinion, the right to form a floor negotiation group is given to a party with at least 10 legislators. Third, the MDP and the ULD submitted a law revision calling for changing the quorum for a floor body, but the plan was aborted due to the GNP`s objections. Fourth, didn`t the opposition GNP (former ruling party) do the same thing with another (opposition) party when it was in power? Was it right for them (GNP) to snatch away other party lawmakers in order to destroy the rival party? The people won`t tolerate any such activities to destroy state governance. The people are entitled to criticize the MDP. The GNP may well dwell on whether it is in a position to do so. Peace Radio System: In the South-North Korean relationship, there are both merits and demerits, with some criticizing that the government was dragged around by the North and some others` censuring the government for its unilateral aid. What is your response to these viewpoints? And what are prospects for inter-Korean relations this year in connection with North Korean Defense Commission Chairman Kim Jong-Il`s planned visit to Seoul?

Kim: In my opinion, we have not been pushed around by the North or applied pressure on the North. We have received more from the North than what we gave it. Inter-Korean tensions have been significantly reduced since the Korean War (195-1953). If you heard North Korean leader Kim`s New Year`s message, there were no acrimonious words about Seoul. The North is openly insisting that the two Koreas must cooperate with each other. It is expected that the family-reunion programs will make great progress and that the projects to reconnect the Kyongui(Seoul-Shinuiju) railway and the construction of the Kaesong Industrial Complex will be carried out. Social and cultural exchanges between the two Koreas are picking up. What we have conceded to Pyongyang are decisions on the timing and place of bilateral talks. That is not so important. In short, neither South Korea nor North Korea holds sway. We don`t provide any economic assistance without parliamentary approval. The National Assembly already endorsed 5-billion won in spending on North Korean aid. This will require a contribution of 10,000 won per capita. The rest of the North Korean aid has been covered by the private sector. If the North succeeds in fostering economic recovery, the South`s financial burden would be lightened after the national unification. Then, the South will find it comfortable to deal with the North. We will do our best to promote inter-Korean reconciliation and cooperation. North Korean leader Kim`s Seoul visit is expected to be realized as planned.

Time: I would like to ask about the prospective relations between the Seoul government and the incoming U.S. administration of George W. Bush. It is known that the Bush administration is expected to take a hard line policy toward Pyongyang. And it supports the National Missile Defense (MND) system. In connection with the next U.S. administration`s prospective policy shift, the Seoul government may need to readjust its relationship with the U.S. What is your view on the question, especially regarding bilateral trade and other exchanges?

Kim: There are no outstanding problems in Korea-U.S. trade relations. And there is nothing that cannot be resolved. Since president-elect Bush is an advocate of free trade, Korea should benefit. As far as we know, the Bush administration is in favor of the sunshine policy of engagement with the North. Basically, Washington acknowledges that the South-North Korean question should be addressed by the two parties concerned. However, it is necessary for the two Koreas and the U.S. to cooperate with one another in order to ensure the successful development of inter-Korean relations. Seoul and Washington will have to jointly deal with Pyongyang through dialogue. Also required is tripartite cooperation among Korea, the U.S. and Japan in this regard. I`d like to meet with president-elect Bush in the near future.

AFP: Since the mid-June inter-Korean summit, there have been any developments in bilateral relations. Assuming that the leadership changes in the two Koreas, will the existing basis for bilateral reconciliation and cooperation be maintained?

Kim: I am not in a position to talk about the replacement of the current leader in the North. Within the framework of popular support, I will push ahead with the inter-Korean programs. I will never promote any policies without the people`s consent or seek only to achieve a positive political legacy.

Korea Economic Daily: I have another question about the economy. The government forecast that the economy would begin to recover from the second half of this year. On what grounds do you make such a prediction?

Kim: I saw some corporate managers speaking on TV and they were not at all pessimistic about the economy. They said that the government will only have to carry out thorough reforms in the nation¡¯s four major sectors and the business circle will take care of other things. They have a faith in the government. And as they asked, the government will push for thorough reforms in the four major sectors and not be daunted by some its opponents. I believe that it is the only way to help the nation achieve greater economic power. As the government is resolute in its reform plans, I expect that people will also regain faith in the economy and revive their spending. As you know, an appropriate level of spending is necessary to rehabilitate the economy.

Maeil Business News: How do you plan to proceed with mergers among healthy banks following a recent one between Kookmin Bank and H&CB? And when do you expect the project will be completed? In addition, some people say that KDB¡¯s acquisition of corporate bonds is a favor to certain companies and would delay restructuring in the corporate sector. What do you think of such criticism?

Kim: Kookmin Bank and H&CB have merged. And chances are high that six other commercial banks will be placed under financial holding companies after receiving public funds. I think that restructuring of the financial sector has been progressing smoothly. Banks without competitiveness will not survive. The finance and economy minister will explain this in detail.

Finance-economy minister: Before answering your question, I first would like to say that I feel heavily responsible for the current situation as a top economic regulator. A huge amount of corporate bonds were issued amid the economic crisis in 1997 and they mature this year. This means the maturity of corporate bonds equivalent to more than 15 percent of the nation¡¯s gross domestic product. As banks mostly purchase national bonds, companies are facing difficulties in financing. If the government does not overcome the financial crunch, it will lead to the paralysis of financial markets and the contraction of the real economy. The government agonized over the problem for a long time and decided to introduce the system for this year alone on the condition that the concerned companies would carry out thorough self-reform efforts. The KDB will take over the bonds at the market interest rate according to their credit ratings. I hope that you will understand the measure was an unavoidable choice to remove market jitters and help the nation ride out the current woes.

Hokkaido Shimbun: North Korea is demanding a power supply from South Korea. But it is true that some South Koreans are opposed to the idea. Are you planning to encourage opponents to offer the aid? On what conditions would you offer the power supply? What if the North demands the power supply in return for the Seoul visit by North Korean leader Kim Jong-Il?

Kim: First of all, there will be no conditions attached to the Seoul visit by Kim Jong-Il. If he visits the South, we will discuss peace on the Korean Peninsula. That could not be a precondition for the power supply. Second, the supply will be made on a private level. I expect Kim to come to Seoul with no conditions, just like when I visited the North. The supply on a governmental level will be made on a limited basis. As the power aid presents a lot of technical problems, both sides need to review the problems first and then do what they need to do later. The issue should begin to be discussed from now.