Trump-Kim summit raises hope of new economic blueprint on Korean peninsula

US President Donald Trump and North Korean leader Kim Jong Un shake hands at the historic summit in Singapore on June 12, 2018.
US President Donald Trump and North Korean leader Kim Jong Un shake hands at the historic summit in Singapore on June 12, 2018.ST PHOTO: KEVIN LIM

SEOUL - The historic summit between US President Donald Trump and North Korean leader Kim Jong Un has raised hopes for a new economic blueprint for the Korean Peninsula, said the head of a presidential committee on Friday (June 15).

 

Seoul remains cautious because sanctions will remain until denuclearisation takes place, said Mr Song Young Gil of the ruling Democratic Party, who heads the Presidential Committee on Northern Economic Cooperation.

US Secretary of State Mike Pompeo said after meeting his South Korean and Japanese counterparts in Seoul on Thursday that there will be no sanctions relief for North Korea until it completely denuclearises, reported Yonhap news agency.

Mr Song said he "is cautious about discussing economic cooperation projects with North Korea as sanctions are in force.

However, he said he expects economic projects with North Korea to gain momentum if there are some meaningful "follow-up" steps after the Trump-Kim summit held in Singapore on June 12.

The presidential committee envisions three economic belts - eastern and western coasts and the border area - that would link South Korea's industrial heartland with the North and then with China and Russia.

South Korea President Moon Jae In gave Mr Kim a USB memory stick containing materials on a "New Economic Map of the Korean Peninsula" during their summit on April 27.

 
 
 
 

The belt on the eastern coast would be used for energy and resources. It will incorporate the "northern triangle" linking South Korea's southeastern port city of Busan, China and Russia, and the "southern triangle" that runs through Busan, the North's Rajin-Sonbong free economic zones and Japan's Niigata Port.

The second belt on the western coast will serve as the industry, logistics and transportation network that connects South Korea's western cities with North Korea's border city of Kaesong which is interconnected with Pyongyang and Sinuiju close to the Sino-North Korean border.

If all things go well, a high-speed transportation system along the western belt that cuts through North Korea would connect Seoul and Beijing.

Improved infrastructure would help North Korea lift barriers to monetising its mineral resources, including outdated and underdeveloped transportation networks and a severe energy shortage, reported Bloomberg.

That would pave the way to tap the North's vast mineral reserves, which could be worth US$6 trillion, according to a 2013 estimate by the North Korea Resources Institute in Seoul.

North Korea is also home to what might be the world's single-biggest rare earth deposit, a crucial element for electronic car engines and many high-tech gadgets which South Korea produces.

North Korea could use its minerals as collateral to get funding to develop its economy, Lee Yoon Sok, a researcher at the Korea Institute of Finance in Seoul, told Bloomberg.

The third economic on the inter-Korean border would be for the environment and tourism. South and North Korea would operate eco-tours and a green business, and engage in joint water resources management projects, reported Yonhap news agency.