Koreas to expand economic cooperation
Friday, 5 October 2007
SEOUL, South Korea, Oct 4 (AP): North and South Korea agreed Thursday to expand economic cooperation that has flourished this decade in line with greatly reduced political tensions on their divided peninsula.
The two countries said that they would establish a new special economic zone on their western sea border, accelerate development of an existing industrial park in the North, cooperate in shipping and establish a joint fishing area in disputed waters.
The announcement was included in a joint declaration issued by South Korean President Roh Moo-hyun and North Korean leader Kim Jong Il at the end of their three-day summit meeting in Pyongyang.
Business ties between the Koreas have developed dramatically in the past decade, particularly since the first inter-Korea summit in 2000, which helped soften decades of distrust between enemies who fought the 1950-53 Korean War.
This week's meeting was just the second ever between leaders of the two countries.
Bilateral trade, while still small at $1.35 billion last year, tripled from 2000 to 2006, mostly as a result of the jointly operated Kaesong Industrial Complex that began operating in 2004 on the northern side of the two countries' heavily armed border.
Despite reduced tensions, the countries face a huge gap in prosperity resulting from their more than half-century of political division and pursuit of opposing economic systems - free market capitalism in the South and communism in the North.
The progress announced Thursday is "quite important," said Huang Yiping, Hong Kong-based chief Asia economist for Citi and who visited the North last year.
"The question now is how they are going to implement it given that the government is on the way out," he said, referring to Roh, whose five-year term as president ends in February.
Huang said that while a new government probably wouldn't reject the new steps toward economic cooperation, "we are not certain whether it will be implemented rigorously."
Lee Myung-bak, the former head of Hyundai Engineering & Construction Co and the conservative opposition presidential candidate leading in the polls, has also advocated helping the North rebuild its impoverished economy.
But his party opposed the summit and was the only major South Korean political group to not send a representative in Roh's entourage, saying it was inappropriate for a leader with such little time left in office to embark on such a trip.
According to the joint declaration, North and South Korea also agreed to begin regular cargo train service between border points near Kaesong and to construct joint shipyards at two ports in the North, including one at Nampo near Pyongyang.
The two sides also agreed to promote cooperation in agriculture, health, medicine and environmental protection and said they would upgrade the joint body that oversees economic relations from a committee to a commission at the deputy prime minister level.
Nam Sung-wook, a North Korea expert at Korea University, said that the economic cooperation deals could cost South Korea as much as $500 million.
Roh, who has called for the two sides to create what he calls an "economic community" on the Korean peninsula, was to visit the Kaesong complex later Thursday on his way back to Seoul.
Roh was accompanied on the trip to North Korea by some of South Korea's top business executives, including Hyundai Motor Corp Chairman Chung Mong-koo, Samsung Electronics Co Vice Chairman Yun Jong-yong and Lee Ku-taek, chairman of steelmaker Posco.
The two countries said that they would establish a new special economic zone on their western sea border, accelerate development of an existing industrial park in the North, cooperate in shipping and establish a joint fishing area in disputed waters.
The announcement was included in a joint declaration issued by South Korean President Roh Moo-hyun and North Korean leader Kim Jong Il at the end of their three-day summit meeting in Pyongyang.
Business ties between the Koreas have developed dramatically in the past decade, particularly since the first inter-Korea summit in 2000, which helped soften decades of distrust between enemies who fought the 1950-53 Korean War.
This week's meeting was just the second ever between leaders of the two countries.
Bilateral trade, while still small at $1.35 billion last year, tripled from 2000 to 2006, mostly as a result of the jointly operated Kaesong Industrial Complex that began operating in 2004 on the northern side of the two countries' heavily armed border.
Despite reduced tensions, the countries face a huge gap in prosperity resulting from their more than half-century of political division and pursuit of opposing economic systems - free market capitalism in the South and communism in the North.
The progress announced Thursday is "quite important," said Huang Yiping, Hong Kong-based chief Asia economist for Citi and who visited the North last year.
"The question now is how they are going to implement it given that the government is on the way out," he said, referring to Roh, whose five-year term as president ends in February.
Huang said that while a new government probably wouldn't reject the new steps toward economic cooperation, "we are not certain whether it will be implemented rigorously."
Lee Myung-bak, the former head of Hyundai Engineering & Construction Co and the conservative opposition presidential candidate leading in the polls, has also advocated helping the North rebuild its impoverished economy.
But his party opposed the summit and was the only major South Korean political group to not send a representative in Roh's entourage, saying it was inappropriate for a leader with such little time left in office to embark on such a trip.
According to the joint declaration, North and South Korea also agreed to begin regular cargo train service between border points near Kaesong and to construct joint shipyards at two ports in the North, including one at Nampo near Pyongyang.
The two sides also agreed to promote cooperation in agriculture, health, medicine and environmental protection and said they would upgrade the joint body that oversees economic relations from a committee to a commission at the deputy prime minister level.
Nam Sung-wook, a North Korea expert at Korea University, said that the economic cooperation deals could cost South Korea as much as $500 million.
Roh, who has called for the two sides to create what he calls an "economic community" on the Korean peninsula, was to visit the Kaesong complex later Thursday on his way back to Seoul.
Roh was accompanied on the trip to North Korea by some of South Korea's top business executives, including Hyundai Motor Corp Chairman Chung Mong-koo, Samsung Electronics Co Vice Chairman Yun Jong-yong and Lee Ku-taek, chairman of steelmaker Posco.