Grand National Party Press Briefing
30 June 2000 Vol.1, No.5
PRESS BRIEFING
Contact: Jaewook Jeon, Aide on Diplomatic and Foreign Press Affairs
[6/28/00] The Policy Committee of the GNP issued the following statement outlining how South-North economic cooperation should proceed. Mr. Lee Han-Koo, Chairman of the Policy Committee on Economic Affairs, prepared the original Korean text on which this summary is based.
Guidelines for Successful South-North Economic Cooperation
In a nutshell, economic cooperation with North Korea must:
* Be pursued in a balanced manner lest the two economies should end up together at a lower common point;
* Aim to benefit the entire North Korean population, not its ruling elite;
* Be pursued on the basis of a long-term perspective as long as the burden does not overweigh our ability to bear it.
Infrastructure investment in particular would produce beneficial results only if pursued upon verification of North Korea’s readiness to open its doors, alleviate military tension and improve human rights situation.
1. Means should be controlled in view of essential ends.
Inter-governmental economic cooperation has, among its goals, the promotion of reform and opening in North Korea. Accordingly, the speed of such cooperation should be controlled in consideration of the pace of change in the North.
2. Infrastructure investment projects to aid the North should be evaluated by the same criteria as those in the South itself.
3. Pursuit of major projects should be subject to approval by the National Assembly.
Success of South-North cooperation hinges on securing transparency and consistency. To do so, projects falling into the following categories must receive approval by the legislature:
1) Any project involving a cash payment in excess of $500,000;
2) Any project involving internationally recognized leading-edge technology;
3) Any project that may enhance North Korea’s military capability;
4) Any project that involves payment guarantees by the government, government-controlled banks and public enterprises; and
5) Any project initiated by and co-managed with the North presumably for the common good on both sides.
To secure transparency, back-room transactions with the North should be made punishable by law. The government must regularly report to the National Assembly the progress of South-North economic cooperation in general as well as the progress of specific projects that are subject to approval by the legislature. Policy must be adjusted according to the reported pace of progress.
4. South-North exchanges should be pursued in an orderly manner.
Cooperative projects should be preceded by sufficient feasibility studies and should not produce fiscal deficits to such an extent as to undermine foreign investors’ confidence in our economy. During early stages of joint projects, management control should be securely in our hand and gradually shared with the Northern partners as they become better acquainted with the market economy.
In the short term, our operation should be within the parameters of our ability to raise money for the South-North Economic Cooperation Fund. In the medium and the long term, investment would be allowed to grow rapidly, provided that North Korea normalizes relations with Japan and the US and that it establishes and smoothly implements a legal and institutional framework to support the opening of its economy.
5. Projects should be economically viable.
The GNP understands that economic cooperation with the North amounts, in essence, to humanitarian aid. To maintain this humanitarian purpose requires that transparency in the use of our aid be established through regular inspection by the National Assembly. Purely private initiatives are, of course, outside the purview of the legislative oversight.
Economic cooperation initiated by the government should focus on investment in infrastructure and aim to maximize efficiency, given budgetary constraints. Any such investments—for instance, in motorways, railroads and telephone networks—should be made only after a wide range of human and material exchanges has been realized. Gratuitous provision of aid is unacceptable.
The GNP maintains that reciprocity should be the guide in economic cooperation with the North. We do not insist on exact equivalence in the values and contents of economic exchanges; rather, our position is that aid should be linked to such issues as tension reduction, reunion of separated families and human rights improvement. These reciprocal measures and our aid should be simultaneously, not sequentially, implemented.
Even when a ROK government-sponsored project executed in North Korea is presumed to bring significant efficiency gains for the South, it must be carefully questioned whether the project is as beneficial as similar investments in the South itself. If the answer is in the negative, the project, to proceed, would have be proven to give important non-economic advantages such as tension reduction and human rights improvement.
The South-North Economic Cooperation Fund needs to be expanded, but its disbursal should be strictly subject to approval by the National Assembly.
To promote private sector-initiated economic cooperation, a South-North joint committee on economic affairs needs to be launched to discuss such prerequisite issues as North Korea’s economic management, attitude toward Southern firms, labor management system and the institutional framework for promoting investment—including investment guarantees, prevention of double taxation, arbitration of commercial disputes and personal safety guarantees.
We oppose providing our private firms investing in the North with better tax and financial incentives than available in the South, unless such offers significantly advances public interest or facilitates domestic industrial adjustment.
In conducting business in the North, the private firm must be free to pursue its economic interests. If the government, to achieve its own goals, coerces the private firm to modify business decisions, concerned officials should be made punishable by law.
We believe that the financial health of the investing firm is crucial for success in South-North cooperation. Therefore, we propose that excessively leveraged firms should not be allowed to participate.
6. Cooperation with four big powers is necessary.
We propose the establishment of an international body named “Program for Developing North Korea.” With the US, Japan, China and Russia participating, the organization will support South-North economic cooperation by helping to raise funds internationally, to set investment priorities and to provide investment guarantees.
Payment guarantees for North Korea can be considered only if progresses are made in its rapprochement with Japan and the US—in missile talks, for instance—and if it becomes more accommodating to external capital.
For infrastructure investment in the North, priority should be given to internationally cooperative arrangements rather than independent initiatives by the government or our private firms.
[6/25/00] Mr. Lee Hoi-Chang released a statement marking the fiftieth anniversary of the Korean War. Much of the planned commemoration on this day was suppressed by the government apparently not to irritate Pyongyang. Emphatically honouring our disappointed veterans and war-dead, Mr. Lee stresses the need to keep up vigilance to prevent another tragedy.
Marking the Fiftieth Anniversary of the Korean War
Today marks the fiftieth anniversary of the Korean War. We pay our heartfelt tribute to those patriots and fallen soldiers who died fighting valiantly against Communist aggression. We also solemnly remember the soldiers from the Unites States and fifteen other friendly nations who sacrificed their lives in this far-away land defending the freedom of the Republic of Korea. To their families, we give our deepest sympathy and gratitude. Without their sacrifice and devotion, the Republic of Korea as we know today would not exist. The freedom and prosperity that we now enjoy are the fruit of the blood they shed.
In retrospect, the Korean War was the first major conflict of the Cold War, and created a momentum that eventually led to the disintegration of the intense bipolar confrontation between the Western and Easter blocs. To our nation, it was a historically unprecedented tragedy involving terrible fratricide. Through this catastrophe, however, we have gained an appreciation of the preciousness of freedom, the pricelessness of human rights and the importance of national security.
The War has yet to come to an end, after half a century since its beginning. Military tension between the South and the North still continues, and the task of securing lasting peace on the Korean peninsula remains an unsolved agenda for the future. Families separated due to the War do not even know whether their members are alive or not. Our soldiers, who fought for the country and were taken prisoners, have not been returned to the embrace of their beloved families even now, fifty years later.
We have belatedly set the groundwork for peaceful coexistence, reconciliation and cooperation, as a result of the first summit meeting between the South and the North since the nation’s division. However, the problem is implementation. Until now, there have been not a few instances where South-North agreements have been rendered meaningless overnight. Peace on the peninsula will not be secured simply because a South-North joint declaration has been issued. Only when the contents of the declaration are clearly implemented one after another, will peace gradually start to take root. In this respect, we have, through the summit, just taken the first step towards putting an end to the Korean War and realizing lasting peace on the Korean peninsula.
Today we are marking the fiftieth anniversary of the Korean War amid the atmosphere of reconciliation fostered in the wake of the summit meeting. Perhaps because of the current sentiment, a tacit perception is forming in the society that the Korean War is simply a chapter of history to be buried under. We must not perceive the War, the greatest tragedy in our national history, as something that we would rather soon forget or as an obstacle to overcoming national division. We ought to realize that without a cool-headed soul searching effort to review why our nation has been split into South and North for more than half a century, and why we have had to endure the painful separation of families and the miserable tribulation of national division, any of our blueprints for the future will be stillborn.
We must keep up our guard against recurrence of a tragedy like the Korean War by establishing our firm commitment to national security and military readiness. Our combined defense forces, built on the basis of Korea-US alliance, have been the backbone of our security and the maintenance of peace on the Korean peninsula. This fact will not change in the days ahead.
Above all else, the urgent tasks facing us are the reduction of military tension between the South and the North and the transformation of the unstable current armistice structure into a solid one of peace. Under the present circumstance where the South and the North confront each other with massive forces, any exploration of genuine peace and security rings hollow. We should try to build confidence and gradually ease tension by implementing feasible measures one by one.
We welcome the agreement at the South-North summit to solve the issue of separated families but insist that the solution must not end up as a one-time public relations event. An institutional mechanism should be put in place with all of separated families as beneficiaries and driven forth on a continued basis. By all means, and as urgently as possible, we must also resolve the problems of our prisoners of war and civilian abductees who have not been returned to their families. At the same time, the government must never neglect remembering the great deeds of our fallen patriots and veterans and upholding their honor. The government must make maximum efforts to provide proper compensation and honorable treatment to them and their families. We must not forget even for a moment that we owe our present freedom and prosperity to their valor and devotion.
On this fiftieth anniversary of the Korean War, we need to pause and contemplate the meaning of that war. To do so is particularly meaningful in the present context as a new South-North relationship unfolds after the first-ever summit meeting. We must remember that the democracy we enjoy today is the fruit of the sacrifice and devotion of untold number of people. We must not fail to realize that our precious freedom and democracy are not to be given up for anything else, and that to defend them is our solemn mission for our nation and history.