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Inter-Korean Economic Cooperation Criticized

Posted October. 04, 2007 07:56,   


A research report released yesterday said that inter-Korean economic cooperation is being implemented recklessly without consideration for financing planning. It also said that economic cooperation has become more like unilateral aid and failed to forestall Pyongyang’s nuclear and missile ambitions.

The Construction and Economy Research Institute of Korea said in the report on ways to expand cooperation in the construction field on the occasion of the inter-Korean summit, “The basic principle of inter-Korean economic cooperation is that corporations should take the lead and shoulder more responsibility.

Rash project without consideration of economic conditions-

The research institute criticized in the report that, “Policies related to inter-Korean economic cooperation have been so heavily affected by situational factors that the government rashly pushed forward with cooperation projects without considering various economic factors.”

It also went on to say, “The government’s mid-to-long-term strategy is nothing more than a list of projects, lacking full consideration of priorities and financing planning,” adding, “We need to fully review their feasibility through the participation of related corporations.”

According to the report, the government decided to increase the budget for inter-Korean economic cooperation each year in its mid-term financial plan from 2006 to 2010, to 1.485 trillion won in 2008, 1.2678 trillion won in 2009, and 1.4568 trillion won in 2010.

Regarding the plan, the report said, “There is a concern about a possible shortage of budget money if energy development, infrastructure building, or social overhead capital assistance aid to the North starts in full swing.”

In particular, it stressed that, “Economic cooperation with the North is expected to stir controversy in the future as not many people are supporting the project because of the perception that unilateral assistance did not prevent the North from developing nuclear weapons or launching missiles.”

North Korean should normalize its diplomatic relations first-

The report emphasized that, “The urgent precondition for successful economic cooperation is the North’s normalization of diplomatic relations through integration into the international community.”

That means that the North’s integration in the international community will reduce the risk of the South’s projects with the North, which will, in turn, induce the voluntary participation of South Korean construction companies in various projects in the North.

To that end, it said, “The government should support Pyongyang to be a member of international financial organizations and sign trade agreements with the U.S. and Japan,” adding, “In the long term, the North should be a member of the World Trade Organization.”

Moreover, it said, “The strategy for cooperation in the construction area should be drawn up according to the priority areas set by the two governments.” It proposed the two Koreas should prioritize development of the North’s electricity infrastructure and resources; revitalize the Gaesong Industrial Complex and the Geumgangsan tour projects; expand inter-Korean logistics routes; develop the North’s ports; develop the North’s tourism products; and jointly develop the DMZ area.