Financing Inter-Korean Economic Cooperation

Ministry of Planning and Budget Jang Byeong-wan said yesterday, “We will finance infrastructure building and humanitarian assistance in North Korea and receive investment from businesses, public corporations, and the international community for economic cooperation with the North.”

Minister Jang made the comment on a radio program aired yesterday morning after saying, “It is too soon to disclose the exact amount of capital that will be sent after the inter-Korean summit. The size of the financing will be decided after specifics of inter-Korean projects are decided.”

He said, “About 910 billion won has been set aside for inter-Korean economic cooperation in next year’s budget. We also allocated 430 billion won in reserve capital in case more is required,” adding, “With the capital, we can handle demand for next year.”

He also said, “We are not considering collecting any object taxes to finance inter-Korean economic projects. Issuing bonds could provide additional financing, depending on the size and speed of the projects. But we will make sure that the projects are carried out within our budget.”

He added, “Some say that the defense budget will be cut once a permanent peace is established on the Korean peninsula, but it is too soon to reduce that budget and use the savings to finance joint economic projects between the two Koreas.”

Meanwhile, Finance Minister Kwon O-kyu convened a meeting of senior-level officials to explain the outcome of the inter-Korean summit. He said at the meeting, “We will be able to carry out projects which are not included in the joint declaration, such as development of fishery and natural resources in the East Sea by consulting with North Korea.”

He also said, “A large part of inter-Korean economic projects will be done by the private sector, while public financing will be required for building infrastructure, including highways and railroads.”

In his keynote speech at a seminar titled “Inter-Korean Maritime and Fisheries Cooperation” held that day at Lotte Hotel in Seoul, Minister of Maritime Affairs and Fisheries Kang Moo-hyeon said, “We will work to include fishery issues in the North Korean part of the East Sea and the development of Najin Port in an inter-Korean prime ministers’ meeting and joint economic cooperation committee.”

Kang explained, “It is regrettable that these issues were not discussed in the joint declaration. But we’ll be able to reach an agreement on problems in the future, as the two leaders agreed on the core principles of pending West Sea issues.”

higgledy@donga.com