By JUN KWANWOO
SEOUL: South Korea’s government said yesterday its rare summit with North Korea paved the way for a huge Northeast Asian market as it played down the cost of massive joint projects agreed in Pyongyang.
Last week’s summit declaration calls for an expanded Seoul-funded industrial park in the North’s border city of Kaesong, a new joint economic development zone around Haeju on the North’s west coast, a regular cross-border freight train service and a variety of other developments.
The projects “will accelerate the construction of an inter-Korean economic community” on the divided peninsula which suffered a bloody 1950-1953 war, president Roh Moo-Hyun said in a speech read to parliament.
“A synergic mixture of peace and economic cooperation will then be established, paving the ground for a huge market in Northeast Asia,” Roh, who met the North’s leader Kim Jong-Il in only the second-ever inter-Korean summit, said.
The joint projects would create new investment opportunities for the South and fuel economic growth in the communist North, he said.
The declaration also envisages a joint fishing ground along the disputed sea border off Haeju and direct cross-border access for civilian ships using the city’s port.
Defence ministers from the two sides will meet in Pyongyang next month to work out details. The sea border was the scene of bloody naval clashes in 1999 and 2002.
“The basic idea is to establish ‘a golden triangular belt’ which will link Haeju, Kaesong and Incheon all together,” Moon Chung-In, ambassador for international security affairs at the foreign ministry, told reporters.
“It is a concept of trying to turn high tension into peace ... by holding military talks for an economic purpose and building mutual trust.”
Economic officials played down the cost to the South of the projects, which the private Hyundai Research Institute last week estimated at around US$11 billion.
The government says private firms will bear most of the cost.
North Korea’s economy is crumbling after decades of rigid state direction and sanctions. New projects will call for massive investment in roads, railways, power lines and other infrastructure.
“We will pursue inter-Korean economic projects within the range that our fiscal situation can handle,” vice-finance minister Lim Young-Rok told a radio programme.
“We do not anticipate that there is a need to worry about huge financial costs.”
Budget minister Chang Byoung-Wan told a separate programme Seoul had earmarked US$995 million for inter-Korean economic cooperation next year, plus US$430 million as an extra fund.
“The funds will be sufficient to cover costs for the economic projects of next year,” Chang said, declining to project how much will be needed.
He said details should be fixed at inter-Korean prime ministerial talks next month and follow-up meetings.
Following the summit, Roh’s popularity rating soared 10 points to 43%. But the opposition candidate still remains way ahead in the race to elect his successor, polls showed yesterday.
The opinion poll by Hankook Ilbo newspaper also said some 74% of respondents in the Oct 6 survey described the summit as fruitful while 21% were negative.
Critics accused both Roh and Kim of calling the summit to try to dent the prospects of the conservative opposition Grand National Party in the presidential election in December.
Roh cannot stand again but wants to secure a liberal successor to continue his “sunshine” engagement policy with the North. The GNP has said it will continue engagement but takes a generally firmer line with the North. – AFP