Government to Provide the North With 195.6 Billion Won in Rice Loans

The government held the 152nd inter-Korean exchange and cooperation consultation committee meeting, presided over by Unification Minister Chung Dong-young, on the afternoon of July 19 and decided to disburse food loans to North Korea worth up to $155 million (approximately 162.7 billion won) and related expenses worth 32.9 billion won from inter-Korean cooperation funds in a bid to provide the North with 500,000 tons of rice.

Kim Cheon-sik, the head of the inter-Korean exchange and cooperation bureau of the Ministry of Unification, stated, “The food aid will consist of 400,000 tons of domestic rice and 100,000 tons of foreign rice. The total expenses were estimated based on a price of $300 per ton.” He also explained, “The conditions of repayment for them are amortization in 20 years with a 10-year grace period at an annual interest rate of one percent.”

However, it was revealed that in fact, since the unit cost of local rice stands at about $1,800 per ton, the total costs required to offer rice loans to the North will amount to around 890 billion won. An official of the Unification Ministry said, “The other costs except for costs scheduled to be disbursed from inter-Korean cooperation funds will be filled by special accounts for grain management.”

The government plans to transport 100,000 tons of local rice by land, and 300,000 tons of local rice and 100,000 tons of foreign rice by sea, respectively. The local rice will be transported via Gyeongui and Donghae Lines roads to Gaesong and Goseong starting July 26. Transport by sea will commence starting July 30.

The government also decided to subsidize the costs for reunions of separated families by video link, slated for August 15, up to about 2.65 billion won from inter-Korean cooperation funds free of charge. On top of that, the government decided to offer up to about 1.25 billion won in a bid to support a project concerning the return of the Bukgwandaecheopbi (a monument to commemorate a victory during Japanese invasion of Korea in Joseon Dynasty) from Japan.

Meanwhile, an official of the Unification Ministry said, “On July 14, two days before Hyundai Group Chairwoman Hyun Jeong-eun and North Korean leader Kim Jong Il reached an agreement on tours of Mt. Baekdu, Hyundai Asan Corp. and the Korea National Tourism Organization (KNTO) jointly concluded an agreement on tours of Mt. Baekdu with the North’s Committee for Asia and Pacific Peace at Mt. Geumgang.”

He added, “The agreements on July 14 stipulate that tours of Mt. Baekdu will be offered more than twice within this year, and that Hyundai and KNTO will provide the materials for repairing roads around Mt. Baekdu to the North.”

taewon_ha@donga.com