[INSIGHT]A helping hand or a handout?

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[INSIGHT]A helping hand or a handout?

There is an old saying that says if you give a man a fish, he will eat, but if you give him a fishing pole, he can support himself. Mother Teresa, the Roman Catholic nun who worked among the poor in the slums of Calcutta, seemed to be tired of hearing that; she remarked that the poor who have enough strength left to go fishing should be given the equipment. The controversy over what comes first, fish or a fishing rod, seems to be a way for economists to kill time, but there may be some real-life applications. What, for example, does North Korea need - fish or a fishing rod?

The JoongAng llbo ran a series of articles saying that 1 percent of the South's national budget should be earmarked for aid to the North. Readers' response to the proposal was wide-ranging, from support to accusations that the newspaper was a nest of communists. One percent of the budget is 1 trillion won ($770 million). Taking into account that the government spent trillions of won for saving bankrupt firms and selling failed banks, 1 trillion won for the North may not be such a heavy burden, and it could be a good long-term investment if it helps the North's economy grow and prosper, increasing trade between the two areas.

The readers were mostly focused on the question of whether to give additional support rather than on the amount of the support. People want a clear definition of the justification and the procedures for the aid, and they have a point. The problem was not the aid itself but the government's failure to explain the projects. Hence the complaints and outrage about Seoul's "unconditional" support of Pyeongyang.

The Kim Dae-jung administration supplied about 400 billion won worth of goods, including 220 billion won in rice and fertilizer, from 1998 to 2001. Frankly, that's not very much money. Maybe officials in the North are startled at the argument going on down here about the government's "unreasonable kindness." The North may even feel bitter about the South's implicit pledges to provide more support made before the North-South summit and before President Kim was awarded the Nobel Peace Prize. Those promises have not been kept.

The beneficiary also has problems. The Mount Geumgang project does not require much investment from the North, nor does it pose a threat of contaminating the region with capitalism. The South financed the lease of the two cruise ships and the construction of the dock. The tour itself is monotonous and boring; it consists of eating, sleeping and walking. The project draws people from here because South Koreans want a glimpse of a nation ruled under a different structure and because of the deep longing of North Koreans who fled south to set foot on their land one last time before they die. Now with the curious and the sentimental satisfied, the tours will have to be ended because the project is losing money. The demise of the tours lies not in sabotage of anti-communists or neglect by the government, but because they make no economic sense. To resume the tours the North will have to take action. It should devise measures to lure South Koreans, perhaps such as the opening of a land route to Geumgang and the designation of special tourist zones.

There is one thing to be aware of. For the government to replace Hyundai Asan as the tour operator could give rise to many problems. The government seems to be putting political considerations ahead of economic feasibility. That is nothing more than a stubborn determination to make the project fail all over again. At the beginning of the project, Hyundai Asan was granted exclusive rights to conduct tours there, and the Korea National Tourism Organization repaid Hyundai's arrears last year. But the project still was left with a deficit of 600 billion won. The government created a bad precedent of bailing out a private company, which could cause more problems in the future if North and South Korean firms that start up new projects in the future believe that Seoul will fund their mistakes. The tour business, subsidized by the government, is not a project aimed at the North, but a project aimed at South Koreans. There are many skeptics who wonder how far the government can go with such tinkering.

If the tours cannot survive on their own, the business should be changed to make it economically feasible. Mount Geumgang tours as a peace initiative have fulfilled their duty; the tours may resume in the future or other areas may be developed. Mount Geumgang is not the ultimate goal of North-South interchanges.

Spending 1 percent of our budget on the North is reasonable if it is invested in economically feasible projects. Here is the fishing rod; it is economic cooperation between the South and the North.


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The writer is an editorial writer of the JoongAng Ilbo.

by Joseph W. Chung

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