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[REPORTER'S DIARY]Consult Before Spending Funds

Published: 05 Jan. 2003, 17:13

"Who said the government will support the Mount Kumgang tours with money from the inter-Korean cooperation fund? Nothing has been decided, yet," a working-level official of the Ministry of Unification said in response to complaining phone calls Monday after the Hyundai Group and Pyongyang reportedly agreed on plans to revive the ailing tour business. Many people criticized the administration, which has long argued that the collusion between business and government must be ended, for trying to pour tax money into a troubled private business.

The government is evading from a direct answer to the question by saying only that providing government funding to the Mount Kumgang tours requires careful review. But based on the comments coming from senior government officials, it seems to have already made the decision to supply the funds. Last week, while Pyongyang and the Hyundai Group were engaged in negotiations, a government official mentioned that the inter-Korean cooperation fund could pay the expense, roughly 60 billion won ($46.7 million), to build roads if the North accepted the proposal for an overland tour route.

Immediately after the agreement between the North and Hyundai, another government official said, "First the government will induce companies to invest and see how financial institutions will react if loans are sought by the Hyundai Group. If the conditions are not favorable, then the government will consider using the cooperation fund." Under the current circumstances, private companies and banks are not likely to be interested in pouring money into the troubled business, so the government seemed to be preparing its justification for using tax money in advance. Since the establishment of the inter-Korean cooperation fund in 1990, the government used a total of 1.12 trillion won from the fund to finance various projects to support the North, including the light water nuclear power plants. Yet, it has never asked the people's opinion on this matter by obtaining National Assembly approval of its plans. The government announcement last September that it would send 500,000 ton grain (100.8 billion won worth) to the North was made without obtaining any national consensus. Seoul has already allocated 165.8 billion won from the cooperation fund to reopen the Kyongui Line, the rail link connecting Seoul and the city of Shinuiju on the North Korea-China border, and has already spent 32.2 billion won of the allocated funds. But construction is currently suspended.

The Mount Kumgang tour business has a symbolic meaning for inter-Korean reconciliation because the program, in a way, provided a breakthrough in changing South-North relations from acute confrontation to reconciliation. Therefore, there are many Koreans who want the business to continue. But the government's way of handling the cooperation fund is being criticised by experts. They say that the government should end its policy to date of ignoring the people's opinion. Instead, the government should explain the need for using the fund in detail and seek the cooperation of the people and the opposition party. The inter-Korean cooperation fund is tax money, and belongs to our people.

The writer is a reporter of the JoongAng Ilbo.

by Lee Young-jong