Saturday, August 11, 2007

Summit to mean massive aid for North Korea?

South Korea may be ready to offer billions of dollars to rebuild the failing North Korean economy when leaders meet for only the second ever summit between the enemy states later this month, analysts said.

Leaders from the two countries, technically at war for more than half a century, will meet in the North Korean capital Pyongyang on August 28-30.Analysts said the South Korean President Roh Moo-hyun's government has been trying to put together a massive aid package.

North Korea wants help to rebuild the port of Nampo that serves Pyongyang and build at least four industrial complexes, former Prime Minister Lee Hae-chan, told local media. North Korean leader Kim Jong-il will also likely push for more tourism ventures to attract South Koreans, said Lee, who went to the North earlier this year and served as premier under Roh.

South Korea has made clear that a major focus of the summit will be revival of its communist neighbor's destitute economy, but has not yet said what might be on offer.

A study by the state-run Korea Development Bank estimated the cost of refurbishing the North's infrastructure would top 60 trillion won ($64 billion) over 10 years.

Some in South Korea argue it makes sense to get a head start and avoid a bigger financial burden when unification occurs and the South has to absorb its neighbor.The Roh government has been criticized for being too accommodating to what many consider a renegade state. But officials argue that South Korea's economy would buckle under the strain if the North collapsed and its poorly trained population fled south in search of work, and it is far safer to gradually bring the country out of its primitive economic state.

[Excerpt of an article by Jack Kim, International Business Times]

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