A Calm Approach to NK's Openning Up Is Needed

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A Calm Approach to NK's Openning Up Is Needed

Thanks to the recent agreement to hold a South-North Korea summit meeting, trade between the North and South as well as the Economic Development and Cooperation Fund, used to aid the North, which have both long remained stagnent, have gained some momentum. Business circles are rushing to make informal contacts, and the governmental administration is also busy trying to come up with follow-up measures.

However, the cooperation fund cannot be established simply by will. Before jumping into the field of cooperative projects, thorough preparation and the steps for mid and long term projects must be planned. Statements like 'Business with North, at last' or 'Demand for mass employment just around the corner' can be seen as reckless.

Even more worrisome is that the governement itself is actually starting many of the high flying expections, announcing the extension of the SOC (Social Overhead Capital) project. By announcing to aid the North with fertilizer, coal, and labour right after the surprising announcement of the summit, the government seems to be exhibiting too much excitiment.

There is a lot to be done before the South Korean interests can start moving into North Korea. Resolving the electrical shortage in the North is just one issue waiting for us. The building of roads, railways and harbors are expected to be started as soons as the North reaches an agreement with our giant chaebol groups, but the problem of securing adequate funds will still remain.

Above all things, the establishment of a treaty for investment guarantees, prevention of double taxation, and taxation of the South and North trade secotor must come first. The task of securing a cooperative fund to aid the North is even more challenging. Even if we have the Economic Delvelopment and Cooperation Fund (ECDF) and Inter-Korean Economic Cooperation Fund ready, the budget is far from adequate, and when it comes time for foreign governments and interantional organization to help the North, it will be the South Korean government that must stand to guarantee the deal.

by Yoo Young-gu

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