S. Korea seeks closer ties with N. Korea

S. Korea seeks closer ties with N. Korea

By Riyadi

SEOUL (JP): South Korea is aiming to become a primary business
center in Northeast Asia but must overcome the daunting obstacle
of its sister North Korea before it will be able to do so.

Soogil Young, president of the Korea Transport Institute, said
at the third International Next Generation Leaders' Forum here
Monday that South Korea seeks reunification with North Korea, at
least economically, to become a strong economic force in
Northeast Asia.

"Through the economic integration of South and North Korea,
the inter-Korean community will be realized and will emerge as a
primary economic force in Northeast Asia," Young told the forum,
organized jointly by the Korean Foundation and the Institute for
Global Economics.

Speaking on South Korea's economic vision for the 21st
century, Young noted that the country is seeking to become a
"first rate nation".

He projected that the real per capita income will increase to
over US$30,000 (at 1995 constant prices) in the year 2020 from
$10,163 last year.

To become a primary regional business center, however, South
Korea must first solve an intractable problem, the North Korea
factor. All accept that the current tensions between North and
South Korea must be ameliorated peacefully before union can be
achieved.

South Korea has been insisting on reunification with North
Korea for many years. However, the latter seems to be
uninterested in the process, complicated by the presence of major
powers in the region, including the United States, Japan, China
and Russia.

Many Koreans believe that North Korea will not be able to
continue with its isolationist stancefor very long and it will
eventually come to terms with South Korea, according to South
Korea's Deputy Prime Minister and Minister of National
Unification O-Kie Kwon.

Speaking at the forum's opening ceremony, Kwon noted that
North Korea's economy is very inefficient, as a result of the
country's communist system. It has been shrinking since the early
1990s, with the gross domestic product decreasing by 4.5 percent
annually.

"We don't want to see North Korea collapse nor exist in
isolation," Kwon said, adding that South Korea wants to help
North Korea solve the differences between the two nations in a
peaceful manner.

Reform

Concurring with Kwon's view, Young noted that South Korea will
support the reform of North Korea's economy through a National
Joint Development Plan, a system of cooperative economic policies
between the two countries.

"To be able to accept the economic burden accompanying
reunification without excessive hardship, the Korean economic
capacity will be continuously expanded," Young said.

South Korea believes that, in terms of economic scale, it will
join the Group of Seven leading industrial nations in the year
2020, by when its gross domestic product will be $4 trillion and
export volume US$1.2 trillion.

To reach the target, Young said South Korea is currently
improving its economic efficiency by pursuing a freer and fairer
market economy and creating fiercer but better competition among
domestic economic players.

"By actively participating in the formation of an open and
fair global economic order, Korea will emerge as a globally
central country in the 21st century," Young said.

He noted that South Korea has been actively participating in
the formation of an open and fair global economic order. It is an
active member of both the Asia Pacific Economic Cooperation forum
and the Asia Europe Meeting. It will host the Asia Europe Meeting
in year 2000. It has played an active role in the World Trade
Organization.

The country is also raising its international standing by
increasing its support and assistance to developing countries
with which it maintains complementary relations, Young added.

Besides, Young noted, South Korea is continuously opening up
its market and assimilating itself to international trade and
investment standards.

Domestically, economic and social efficiency can be maximized
by promoting autonomy and competition in the private sector,
through the acceleration of deregulation and the improvement of
government productivity, which is the basis of national
competitiveness.

The present Kim Young-Sam government has been committed to
deregulation from its outset. As soon as he came to power three
years ago, Kim launched, within the Economic Planning Board, a
special task force charged with deregulation. In two years this
body managed to abolish or relax 200 regulatory measures out of
800 that had been identified for abolition.

South Korea is currently conducting a general review of
government functions. "Unnecessary functions will be abolished
and functions which the private sector can assume will be
resolutely transferred to the private sector," Young said.

In its search for efficiency, the South Korean government has
merged a number of ministries and downsized the civil service.

In Dec. 1994, for instance, the government merged the Ministry
of Finance and the Economic Planning Board to become the Ministry
of Finance and Economy and the Ministry of Construction was
merged with the Ministry of Transportation to become the Ministry
of Construction and Transportation. The government also cut the
number of civil servant positions in central government offices
by 1,000 to 5,000.

To elevate national competitiveness, the Kim government has
undertaken further investment in such social capital projects as
the Soul-Pusan high speed railway, the development of a new
international airport on Youngjon island, off Inchon, and the
development of deep sea ports in Pusan and Kwangyang Bay.

"The Inchon International Airport will be developed as the
main airport of Northeast Asia, and the Pusan and Kwangyang
harbors will become the primary ports for international trade,"
Young said.

In the manufacturing sector, South Korea will convert its
scientific technology development system from the current
imitation-oriented system to an innovation-oriented system, Young
added.

He noted that the country's competitiveness will be
strengthened by increasing the productivity of the financial and
services sectors, which have lagged behind those of their
competitors as a result of a growth strategy focusing mainly on
the manufacturing sector.