Remarks 
by H.E. Ban Ki-moon
at "Samsung Global Investors' Conference"

The Security and Economic Environment in Korea





May 18, 2004 

        First, I wish to express my deep appreciation for the kind invitation to address this important 
conference.

        As the first full-scale international IR(investor relations) event organized by a Korean company, this 
conference is indeed a valuable venture.  Our appreciation goes to the host and organizer of this event, 
Samsung Securities.

        Personally, I am truly glad to have an opportunity to share views with distinguished CEOs and 
investors from around the world.  It is my sincere hope that this session will help you better understand 
Korea's security and economic environment.

        As I understand that Deputy Prime Minister Lee Hun-jai briefed you intensively this morning on 
economic aspects of business environment in Korea, I would like to focus my remarks on the security 
aspects.

        I will try to describe in simple terms the current security landscape on the Korean peninsula and the 
basic policy lines of my government on some pending security issues.

(Korea and the International Community)

Ladies and Gentlemen,

        Korea stands out as a country that has embraced close cooperation with the international community.  
And we know that, in this age of globalization, uniting in efforts with the international community is not only 
desirable but indispensable.

        As the 12th largest economy in the world, highly dependent on external trade which accounts for as 
much as 66% of its GDP, Korea knows only too well the importance of interaction with the international 
community.

        And our commitment to the advancement of universal values and norms remains strong.  We believe 
that the spread of such values, which serve to unite, is in our national interest.  We will gladly play a full 
part in the international endeavors to promote them.

        And as has been clearly illustrated by the common efforts to resolve the North Korean nuclear issue, 
we will continue to value the ties of friendship and cooperation with other countries in facing current and 
future challenges.

(Domestic Political Situation)

        Before entering the main theme of my speech, which is Korea's security environment, I would like to 
touch briefly upon our domestic political situation.

        There have recently been some major political developments which have crucial bearings on the 
future of Korea.

        Emerging victorious from the general election last month, the ruling party is now in the majority for the 
first time in sixteen years.

        The last general election marked a break from the past, where the necessary political power was 
absent to give weight to government policy.

        Another mile-stone development, of course, was the decision last week by the Constitutional Court 
to overrule the impeachment of President Roh Moo-hyun.

        President Roh has come back with stronger and broader mandate.  Now on a firm footing of public 
and political support, the incumbent leadership can pursue its reform policies with more momentum and 
coherence.

        The process of impeachment, though an unprecedented event in the history of our constitution, has 
in some ways served to demonstrate the robustness of the democratic institutions in Korea.

        Our democratic system was put to the test, and it has proved to be sound and functioning well.  This 
was evidence of a democracy which has reached a full maturity.

        The new National Assembly will consist of people with diverse political and personal backgrounds.  
And many of them have had little experience within the established political institution.

        For this reason, some concerns have been expressed, especially in the foreign media, that Korea's 
policies might sway toward a much more progressive line. 

        However, I should tell you that the Korean society and the Korean political system are sound enough 
to accommodate differing opinions without negative side-effects such as conflicts and divisions.

        Once the members of the Democratic Labor Party enter the National Assembly, they become a part 
of the political institution.  The new Assembly, as an integral body and with the diverse beliefs and 
expertise of its member as its valuable asset, will employ its collective wisdom to find optimal solutions to 
all important issues.

        In a word, the recent political drama in Korea has only expanded Korea's political horizon.  The 
Korean people, in that sense, have demonstrated an excellent sense of balance and fairness in the last 
election.

(Security Situation)

        Now let me turn to the main theme of my remarks -- the security landscape in Korea.

        The ramifications of political and security considerations on economy can be great.  That has proved 
to be particularly true for Korea, and I believe that is one of the reasons why I am here this evening.

        In security area, Korea faces the dual task of ensuring a stable management of inter-Korean relations 
on the one hand and resolving outstanding challenges, including the North Korean nuclear issue, on the 
other.

        Our endeavors for a stable management of relations with North Korea are encapsulated in the 
strategic rationale of the 'Policy for Peace and Prosperity'.

        To realize the vision of peace and prosperity on the Korean Peninsula, it is imperative that economic 
conditions in North Korea be improved.  For this, we need to further promote exchanges and cooperation 
with the North, through which we can expect to facilitate reconciliatory process between the South and the 
North.

        This Policy will first benefit the two Koreas, but peace and prosperity on the Korean Peninsula will in 
turn contribute to that in Northeast Asia and beyond.

        We have so far made considerable progress in inter-Korean relations.  Since the launch of the Roh 
Moo-hyun government in February last year, the authorities of South and North have held a total of 42 
rounds of meetings at various levels, including five rounds of Ministerial meetings.

        At the 14th Inter-Korean Ministerial-level Talks held in Pyongyang earlier this month(May 4-7), the 
two sides agreed, for the first time since the Korean War, to hold General-level Talks between the military 
authorities.  It is hoped that the General-level Talks may serve as a catalyst for easing military tensions 
and promoting exchanges between the two Koreas.

(North Korean Nuclear Issue)

Ladies and gentlemen,

        Now let me move on to the North Korean nuclear issue.  Early last year, tension over the nuclear 
issue was heightened anew, causing some concern over its possible impact on the Korean economy.

        With the holding of two rounds of Six-Party Talks, however, situation has been stabilized and 
momentum is building for the efforts to reach a negotiated solution.

        In such efforts, the principle of resolving the nuclear issue peacefully through dialogue stands firm.  
And the participating countries have agreed to work on 'coordinated steps'　to resolve the issue.

        Steps forward are being taken.  In the Working Group meeting of the six parties held last week, 
substantive discussions took place that pave the way for progress in the plenary talks.  It was also 
reconfirmed that the third round of the Six-Party Talks will be held before the end of June in Beijing, and 
agreement was reached to convene another round of the Working Group meeting to prepare for that plenary.

        We see some positive signs which point to possible progress in future Talks.  During his visit to 
China from April 19 to 21, Chairman Kim Jong-il of North Korea reaffirmed his commitment to the 
denuclearization of the Korean Peninsula and a peaceful resolution of the nuclear issue through dialogue.  
He also indicated that North Korea will actively participate in the Six-Party Talks 'showing patience and 
flexibility'.

        These comments and others give us grounds to believe that North Korea also wants to resolve the 
nuclear issue through negotiation.

        Moreover, the actions shown by North Korea in the wake of the Ryongchon train explosion seem to 
reflect a shift towards a more pragmatic approach on the part of North Korea. 

        It is our hope that increased cooperation between North Korea and the international community will 
lead to a clearer recognition of the benefits of open exchanges and of following international norms.  
Stepping up humanitarian assistance, for example, will serve as a constructive element that expedites 
such positive shift in North Korea's stance.

(ROK-US Relations)

        Here, I would like to underline the importance of one key element in Korea's security landscape, and 
that is the ROK-US alliance.

        This alliance has served as the cornerstone for peace, stability and prosperity on the Korean 
Peninsula for more than five decades.  It has also been fundamental to peace and security in Northeast 
Asia.

        Both the Republic of Korea and the United States have a shared interest in maintaining a solid alliance 
and indeed developing it still further.

        This was underlined at the Summit meeting between President Roh and President Bush held in May 
of last year, where the two leaders agreed to expand and develop Korea-US relations into a 
'comprehensive and dynamic' partnership, looking to the future relations for the next fifty or a hundred 
years.

        One of the new kind of security issues Korea has to deal with wisely in cooperation with the U.S. is 
the relocation of U.S. military bases in Korea.

        In order to realize the vision for our future alliance and reach an agreement on the realignment of the 
U.S. forces in Korea, Korea and the U.S. began in 2003 the meetings of the so-called "Future of the ROK-
U.S. Alliance Policy Initiative (FOTA)".

        Both countries fully recognize the need to adapt the Korea-U.S. alliance to the changing global 
security environment and utilize revolutionary advances achieved in military technology.  Both 
Governments have agreed that the relocation of U.S. forces from the Seoul metropolitan area will be 
implemented in a manner that enhances the combined defense capabilities of Korea and the U.S..

        On the basis of this common understanding, we will make every effort to conclude the negotiations 
currently under way on the relocation of the bases as soon as possible. 

        Last night, President Bush and President Roh had a telephone conversation.  While congratulating 
President Roh on resuming official duties, President Bush consulted with him about the possibility of 
moving a brigade of the U.S. forces in Korea to Iraq.  President Roh expressed his understanding that the 
troop shift is needed in order to ensure a successful transfer of sovereignty to Iraq.

        Earlier yesterday, I myself had a telephone call from Mr. Steve Hadley, Deputy Advisor of the U.S. 
NSC, regarding the same matter.  Actually, discussions have been going on for some days through 
diplomatic channels.

        As the U.S. officials also emphasize, shifting part of USFK troops to Iraq will not entail any 
weakening of the Korea-U.S. combined deterrence capability in Korea.

        The plan is consistent with the ongoing Global Posture Review of the United States.  And there are 
many options which can offset the troop shifting, including augmenting air and naval forces in Korea.  
Besides, the 11 billion dollar enhancement package for USFK and the combined force, which was 
announced last year through FOTA talks, remains well on track.

        Moving some USFK troops to Iraq in no way represents a diminished U.S. commitment to Korea.  
Rather, it is a good illustration of the ROK-US alliance in operation.  For understanding each other's military 
requirement and providing necessary support, I believe, is the starting point of any working alliance 
relationship.

(Relations With Neighbouring Countries)

        Although the alliance relationship with the U.S. is a linchpin of Korea's security, strengthening ties 
with other neighboring countries is also vital for peace and prosperity on the Korean Peninsula.

        With Japan, we will set out to develop future-oriented cooperative relations.  For the present, we need 
to continue focused common efforts and close coordination with Japan in the process of resolving the 
North Korean nuclear issue.

        With Russia, Korea will foster mutually complementary ties of cooperation.  We will lay firmer 
groundwork for substantive joint endeavors in such fields as logistics, natural resources, and science and 
technology.

        In my capacity as Foreign Minister, I am going to visit Russia next week to have an intensive 
consultation with my counterpart, Foreign Minister Sergei Lavrov.

        We are also nurturing ties with China.  We look to China for backing North Korea's reform and opening 
up.  And we look forward to China's unfailing constructive role in resolving the North Korean nuclear issue.

        Although it has been less than 12 years since the establishment of diplomatic ties, the relationship 
between Korea and China has developed into a 'comprehensive cooperative partnership'.  China is now 
Korea's greatest export market and partner for investment.

(Assistance to Iraq)

        An issue which needs to be handled with wisdom and care is the dispatch of additional troops to Iraq.

        The basic mission of our troops is helping the Iraqi people rebuild their economy and engaging in 
humanitarian activities.  Such being the objective of our mission, this issue should not be linked with the 
shifting of USFK troops to Iraq, which I mentioned a while ago.  To help Iraq's economic rehabilitation, we 
also plan to provide an assistance of 260million US dollars over the next five years.

        Holding out a helping hand to Iraq, I believe, is the right thing to do, and also a promise Korea has 
made to the international community.  We expect that our efforts for Iraq will contribute to peace and 
stability in the Middle East as well.

        As we have seen, the security landscape in Korea is clear.  We do have some challenges, but all of 
them can be overcome successfully and, in some ways, offer ample opportunities for the future.

(Korea's Economic and Trade Policy)

        Now before closing, let me make a couple of brief comments on the economic aspects.

        As structural reform is essential to enhancing overall national competitiveness, my government is 
making continued efforts for structural reform.  Substantial results have been yielded -- in financial reforms, 
corporate restructuring and labor-management relations.  These efforts will continue until we have reached 
the high global standards.

        In a broader context, Korea will play a part in making progress in the WTO DDA negotiations.  The first 
step has been taken with the Korea-Chile FTA, and we will pursue FTAs with our major trading partners.

        We will do our best to conclude FTA's with Singapore within this year, and with Japan by the end of next 
year.  We are holding Experts Group Meetings with ASEAN, and plan to start a joint study with EFTA in 
August, and with Mexico in September.

        We are also giving thought to the possibility of concluding FTA's with Canada and China, and also a 
tripartite arrangement with Japan and China.

        As an FTA with the U.S. would provide a huge opportunity for both countries, we need to pursue this 
with a longer-term plan and vision.  I think a bilateral investment treaty would play a good bridging role in 
paving the way toward a Korea-U.S. FTA.

        On a slightly different note, the Policy for Peace and Prosperity I mentioned before also has an aspect 
relevant to Korea's economic environment.

        One component of this Policy is the long-term vision of building Korea into an economic hub in Northeast 
Asia.  As Korea pursues this goal, you are all invited to join us in the efforts to promote prosperity in the 
region and also utilize the opportunities Korea offers in the process.

(Concluding Remarks)

Ladies and gentlemen,

        The strength of Korea lies in its constant dynamic change.  Such change has acted as a driving force for 
the economic, political and social transformations in the past, and we will continue to pursue and experience 
such positive shifts in the years ahead.

        The whole series of political and social transitions within Korea in recent times have laid a still firmer 
basis for continued and steady reform.

        In close coordination with the private sector, my government will do its best to make Korea the best 
country to do business with.

        I will count upon your continued support for Korea's efforts and also your interest in the Korean market, 
so that the changes that we pursue can indeed benefit all of us.

        Thank you for your kind attention.                       /End/