65T Won Inter-Korean Investment Plan

It is reported that for the purpose of activating inter-Korean economic cooperation project, the Korea Development Bank (KDB) planned a fund-raising scheme of 65 trillion won last year and reported this to the government.

According to the administration inspection data released by GNP lawmaker Lim Tae-hee, the Ministry of Finance and Economy asked the KDB to take charge of the fund raising scheme and said, “If inter-Korean economic cooperation projects gets in full swing after the resettlement of North Korea’s nuclear problem, it is expected that the required financial resources will increase consequently.”

In accordance with it, the bank framed a fund raising proposal last October, promoting the inter Korean cooperation projects in a medium and long-term plan.

This report suggested to invest a total of 65.02 trillion won and divided its economic cooperation plan into three steps, such as the foundation stage (2006-2007), the take-off stage (2008-2010) and finally, the rapid growth stage after 2011.

The report estimated that the fund would be spent in five different fields, including social overhead capital (SOC) construction, the Gaesong Industrial Complex, Mount Geumgang tourism, aid for energy, and aid for the North’s industry normalization.

As for ways to raise 65 trillion won, the report suggested several potential proposals, including an increased taxation plan, issuing special bonds, issuing lotteries and establishing specific purpose corporations.

Lawmaker Lim pointed out, “The government was still working on this project: appeasing North Korea by providing “carrots,” while the threat of its nuclear program was escalating on the peninsula at that time.”

jarrett@donga.com