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Seoul says won't scrap joint projects with N Korea

The projects have raised 950 million dollars for the North and are seen by critics as a source of funds for its weapons programmes.

india Updated: Oct 19, 2006 13:10 IST
Agence France-Presse
Agence France-Presse

South Korea insisted on Thursday that two joint projects with North Korea -- seen by critics as a source of funds for its weapons programmes -- would not be scrapped despite last week's nuclear test.

The projects have raised 950 million dollars for the North since 1998 but the government said they did not fall under the terms of UN sanctions imposed after Pyongyang's test.

"The government and ruling party agree that the businesses in Mount Kumgang and Kaesong are not directly related to the UN Security Council resolution and affirm that the projects need to continue," said Kim Seok-Hwan, spokesman for Prime Minister Han Myeong-Sook.

Han earlier met the ruling Uri Party's chairman and the presidential chief of staff to reaffirm their backing for the projects, the spokesman said.

Mount Kumgang is a tourist resort launched in 1998 and funded by the South. Kaesong is an industrial complex also paid for by Seoul.

Han was speaking just before US Secretary of State Condoleezza Rice arrived as part of a tour to press North Korea's neighbours to strictly enforce the sanctions.

The Security Council Saturday unanimously adopted the measures, which are mainly related to curbing the North's weapons programmes, after the communist state's October 9 test.

Top US nuclear envoy Christopher Hill said Tuesday that Kumgang "seems to be designed to give money to the North Korean authorities."

But he expressed no criticism of the South-funded industrial estate at Kaesong, saying it was "trying to deal with a longer-term issue of economic reform" in the hardline communist state.

South Korea's unification ministry said it was considering halting government subsidies for trips to Kumgang, which has also been under fire from domestic critics.

The Yonhap news agency reported that Seoul has already decided to stop the subsidies.

The government, which has followed a "sunshine" policy of engagement with its neighbour, sees the projects as a symbol of rapprochement.

It has subsidized tours for students, war veterans and disabled people to Kumgang, which is run by South Korean firm Hyundai Asan.

The subsidy cost 21.5 billion won (22.5 million dollars) in 2002 but the cost fell to about 2.9 billion won in 2004.

An average of 40,000 South Koreans a month visit the resort.

Officials said Foreign Minister Ban Ki-Moon would explain Seoul's decision to Rice, who said on Tuesday in Washington her country "will see what the South Koreans decide to do about their activities in general with North Korea."

Dong-A newspaper said Wednesday that the government was considering asking Hyundai Asan to pay North Korea in goods and commodities for the tours rather than cash.

Hyundai Asan flatly denied the report, saying it has no plan to change its method of payment.

First Published: Oct 19, 2006 13:10 IST