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South Korean President Moon Jae-in   © Yonhap/Kyodo

South Korea's Moon sets goal of nuclear deal with North by 2020

Administration's five-year plan also includes minimum wage hike, public-sector hiring

SOTARO SUZUKI and KENICHI YAMADA, Nikkei staff writers | North Korea

SEOUL -- South Korean President Moon Jae-in on Wednesday put forward a plan for his time in office that details a pivot to engagement with the North, as well as a raft of measures to address widening income inequality.

Road to rapprochement

Moon's new government said it will draw up a road map this year toward ridding the Korean Peninsula of nuclear weapons and negotiating a peace treaty to formally end the Korean War. It targets a 2020 deal to end North Korea's nuclear program, envisioning a moratorium followed by a phase-out.

Seoul's first task will be restoring severed dialogue channels with its northern neighbor. South Korea proposed military and Red Cross talks Monday and plans to pursue in-depth discussions later in such areas as sports and the economy.

Moon's government will also work toward a new basic agreement on North-South relations. Joint declarations issued after bilateral summits in 2000 and 2007 are not legally binding, having never been approved by the South's National Assembly. Turning these into a formal agreement would require future administrations to abide by them.

The five-year plan also calls for resuming joint North-South economic cooperation projects, such as the Kaesong industrial complex and tourism at North Korea's Mount Kumgang, that were halted under previous conservative administrations.

The plan lays out Moon's vision for a "new economic map" of the peninsula. This includes a so-called resource belt running between Russia and eastern coastal cities in North and South Korea, and a logistics and transportation belt linking Seoul, Kaesong, Pyongyang and the North Korean city of Sinuiju on the Chinese border.

Too optimistic?

Experts applaud Moon's principles, but question the feasibility of a 2020 denuclearization deal. "Is an agreement with North Korea really possible when it has said it will never give up its nuclear weapons?" asked Cheong Seong-chang, senior research fellow at the Sejong Institute's Department of Unification Strategy Studies. Moon "should prioritize a suspension of nuclear and missile development, rather than the ideal of denuclearization, to bring North Korea to the negotiating table," Cheong argued.

"Sanctions and pressure are the only option to get North Korea to engage in dialogue," said Moon Sung-mook of the Korea Research Institute for National Strategy's unification strategy center. The researcher contends that South Korea must bolster its defenses as well as security cooperation with Japan and the U.S.

The five-year plan does include reinforcing South Korea's defense capabilities to more effectively put pressure on the North if it continues its nuclear and missile provocations. In addition to boosting defense spending, Seoul will work quickly to set up systems that can intercept North Korean nuclear weapons and retaliate in the event of an attack. South Korea will also seek an early return of wartime operational control of its military from the U.S.

More jobs, higher pay

On the economic front, the report focuses on wages and unemployment. The administration plans to raise the hourly minimum wage by more than half, to 10,000 won ($8.90) by 2020 from 6,470 won now, aiming to bring greater financial security to the country's many contingent workers. The government recently decided to lift the wage floor by 16% to 7,530 won for next year.

But experts warn of possible unintended consequences here as well. A minimum-wage hike of such unprecedented speed would have "major side effects," said Nam Seong-il, a professor of labor economics at Sogang University. "Employment would probably actually decline as companies limit hiring and small businesses go under."

The plan looks to the public sector to address youth unemployment, which hit a record high of 9.8% last year among those aged 15 to 29. Public-sector employers will be required to have young people account for 5% of their workers starting next year, up from 3% now. The government will seek to fulfill by 2022 President Moon's campaign pledge to create 810,000 public-sector jobs.

The plan calls for readiness in the face of U.S. demands to renegotiate a bilateral free trade agreement. South Korea will also look to conclude a trilateral deal with Japan and China, as well as the Regional Comprehensive Economic Partnership -- a broader East Asian grouping -- to ensure Seoul plays a central role in region's economy.

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