By Lee Hyo-sik
Korea Times Correspondent
WASHINGTON _ The country's top economic policymaker called on the International Monetary Fund (IMF) and the World Bank to increase support for North Korea's integration into the global economy as geopolitical risks associated with the Stalinist state have eased significantly over the past year.
In a keynote speech delivered to participants of the annual meetings of the IMF and World Bank here on Monday, U.S. local time, Finance and Economy Minister Kwon O-kyu urged the global financial community to take preliminary steps to engage the North prior to its accession to the two international institutions.
``The six-party talks and inter-Korean summit have drastically increased the prospects for North Korea's integration into the global community. At this juncture, continuous support for and cooperation with North Korea are the keys to bringing this nation into the international community,'' he said.
His remarks come at a time when the two Koreas are accelerating the reconciliation process and expanding economic cooperation, following the inter-Korean summit between President Roh Moo-hyun and North Korean leader Kim Jong-il early this month, as well as the recent six-nation talks in Beijing where the North agreed to disable its nuclear facilities and submit a complete list of its nuclear programs by the end of the year.
``The second inter-Korean summit paved the way for broader and more concrete economic cooperation projects. In addition to the creation of a special peace and cooperation zone in the West Sea, the two leaders agreed to jointly undertake more concrete economic cooperation projects such as building special economic zones,'' Kwon said, stressing such a decision will open a new era of cooperation and prosperity on the Korean Peninsula.
Touching on the global economy, he projected global economic growth will deteriorate next year. ``The world economy has exhibited solid growth for the past few years and the international financial market has shown a strong performance. But the recent U.S. subprime mortgage crisis, triggered by weakened credit discipline and universally low interest rates, has brought about significant turbulence and uncertainties in the global financial market.'' Kwon said the importance of financial market transparency cannot be emphasized enough under these circumstances.
Kwon also said there is more room for improvement in the current credit ratings system to stimulate competition among credit ratings agencies and eliminate moral hazards.
He then called for stronger global policy coordination efforts in ensuring stability of the global financial market, adding member economies should remind investors of the risks associated with the excessive ``yen carry trade'' _ the borrowing of yen at low interest rates in Japan to invest in higher-yielding currencies and assets elsewhere.
Global investors, who borrowed low-interest yen-denominated loans to invest in stocks and other assets for higher returns, have begun withdrawing investments from the local securities market to pay off loans to avoid higher interest burdens after the subprime loan defaults in August, increasing financial market instability worldwide.