By Lee Hyo-sik Staff Reporter South Korea is expected to face difficulties in securing funds to finance a range of large-scale economic cooperation projects agreed to between the leaders of the two Koreas on Thursday. The Roh Moo-hyun administration has said it will attract funds from the World Bank and other international financial institutions, as well as from the private sector, for the envisioned inter-Korean projects. But many bankers and analysts here say that most international financial organizations are reluctant to provide funds because of uncertainness associated with the Stalinist state, including its nuclear weapons development program. They say the government will have no choice but to resort to issuing state bonds and increasing taxes to raise funds, putting a burden on taxpayers for various projects that are similar to a Marshal Plan. The Marshal Plan refers to the efforts led by the U.S. to rebuild a stronger foundation for the allied countries of Europe after World War II. Moody's Investor Service said that the summit result will have no immediate impact on South Korea's credit ratings, as it will mean stepped-up South Korean economic and financial assistance to a collapsed and impoverished North Korean economy, it said. ``In view of the limited absorptive capacity of the North Korean economy and its rigid political system, we do not expect the agreement to lead to a South Korean 'Marshall Plan,' for the North, nor do we expect to see an economic miracle along the shores of Pyongyang's Daedong River to rival Seoul's 'miracle on the Han' in the foreseeable future,'' said Moody's Senior Vice President Tom Byrne in a statement. Analysts say inter-Korean projects may not move forward smoothly if President Roh's successor to be elected in December spurns the accord. Hyundai Research Institute projected Friday that the establishment of a special peace zone in West Sea and other economic cooperation projects between the two Koreas will cost $11.2 billion (10.3 trillion won). It estimated the creation of special peace zone around Haeju in North Korea and nearby areas would cost $4.6 billion, while South Korea would have to spend $2.5 billion to expand the Gaesong Industrial Complex (GIC) and $300 million to upgrade Haeju Port. Also, the maintenance and repair of train tracks and highways in the North is projected to cost $1.8 billion, while the South will shoulder $200 million to construct shipbuilding facilities in Nampo, $1.3 billion for a leisure complex at Mt. Baekdu and $900 million for the advancement of the North's agriculture sector. However, the state-run Korea Development Bank (KDB) and other institutions put forth even larger spending estimates for the envisioned economic cooperation between the two Koreas. The state lender projected earlier that the South Korean government would need to raise some 60 trillion won over the next 10 years to finance the range of planned inter-Korean economic projects. The KDB expects the government to spend 13.7 trillion won for the expansion of the GIC by 2015 and at least 20 trillion won for the creation of the special peace zone around the West Sea. It forecast the government will spend about 14 trillion won on roads, railways and other infrastructure in the North, and 10 trillion won to provide electricity and other energy aid by 2015, adding it will need an additional several trillion won if the construction of shipbuilding yards in Nampo is to be completed. With the tab for inter-Korean economic projects reaching tens of billions of dollars, the government will likely face a bumpy road to raise funds to finance the projects. The government has set aside only about 1.3 trillion won next year for North Korea-related activities, including a 750 billion won Inter-Korean Cooperation Fund. The Ministry of Finance and Economy said the government will first put more money into the inter-Korean cooperation fund to finance infrastructure development and other projects, as well as request overseas financial organizations to provide funds. However, the government will likely pass on most of the expenditure to taxpayers. According to an internal memo produced by the Ministry of Planning and Budget last month, the government is planning to create new taxes and run lotteries to raise funds for implementing the projects and providing aid to the Stalinist state. It said the government would first borrow funds from state-run banks and companies and then consider creating new taxes, which could be dubbed as either a ``peace tax'' or ``unification tax,'' as well as running lotteries and issuing bonds to raise funds for inter-Korean economic cooperation. Also, the KDB suggested the government could secure 40 trillion won mostly through state bond issuances and tax hikes, while raising the remaining 20 trillion won from either private companies here or international institutions and other foreign sources. leehs@koreatimes.co.kr