'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.