'U.S. attacks to affect Korea'

'U.S. attacks to affect Korea'

TAEJON, South Korea (Reuters): South Korean President Kim Dae-
jung said on Friday the country's economy would suffer serious
adverse effects from this month's air attacks in the United
States.

The government has lowered its forecast for 2001 GDP growth to
2 to 3 percent in the aftermath of the air attacks. The economy
grew a provisional 8.8 percent last year.

"We don't need to elaborate that at a time like this, our
economy, which heavily depends on exports, will suffer serious
adverse effects," Kim said in a speech at an Armed Forces Day
parade in Taejon, a city near the center of South Korea.

Kim said it was vital to remain competitive and boost exports
but also to increase domestic demand and stabilize the economy.

The president said a sound economy, along with firm security,
was one of the prerequisites for achieving peaceful unification
with communist North Korea.

Kim also said North-South talks, resumed this month after a
six-month hiatus, were playing an important role in easing
tensions on the peninsula.

Referring to the Sept.11 air attacks in the United States, he
reiterated South Korea would cooperate with the United States in
fighting terrorism. Seoul has offered medical and logistical
support but not combat troops.

"The way war is waged has changed greatly," he said. "There is
no guarantee that such awful terrorist atrocities will not occur
in our country, too."

Kim said that meant maintaining frontline security but also
establishing "a defense posture against terrorism that could
strike anywhere, 24 hours a day". This was particularly relevant
because South Korea co-hosts next year's soccer World Cup finals
with Japan and is also hosting the 2002 Asian Games.