SEOUL -- The South Korean government on Monday firmed up its commitment to back North Korea's bid to join the International Monetary Fund and World Bank, as part of its strategy to help Pyongyang open up its market to the world.
In a scheduled policy statement for 2019, the Finance Ministry said it would seek support from the international community for the North's entry to the international bodies. But with denuclearization talks between Washington and Pyongyang at a stalemate, South Korea will have much work to do to convince the U.S. -- the largest shareholder in both organizations -- to allow Pyongyang in.
Membership would enable North Korea access to international financial expertise and funding, helping it to integrate into the global economy -- if that is leader Kim Jong Un's objective. But it is likely to be a long road to joining, with North Korea having been isolated from the rest of the world for decades because of issues including its nuclear ambitions and human rights abuses.
In the statement, the Finance Ministry said that it will seek support from the international community for inter-Korean economic projects. Seoul wants to help its neighbor open up through means such modernizing its railways and connecting them to those in the South as a precondition for further infrastructure and tourism development projects.
"If conditions are fulfilled, such as improvements in denuclearization, we will operate an inter-Korean dialogue channel for the projects and support this by launching a government task force team," the ministry said. "We will push for them step-by-step, starting with inter-Korean projects that can be realized easily."
The ministry also said it will work to create a forestry industry in the North and jointly develop the mouth of Han River. Seoul also wants to converse with Pyongyang about developing joint economic zones -- the two Koreas ran the Kaesong Industrial Complex together for a decade with capital from the South and labor from the North. The site was closed in 2016 due to rising military tensions.
But Washington has huge sway over the realization of these projects, or any bid by the North to join the international financial bodies. The U.S. holds of 16.52% voting rights in the IMF and has 15.98% stake in the International Bank for Reconstruction and Development, the WB's largest organization.
In as sign of the current impasse in denuclearization talks, North Korea took a swipe at the U.S. Department of State on Sunday.
"It is miscalculation if high-ranking officials in the U.S. State Department believe that they can make us give up nuclear by pressuring us with sanctions and human rights accusations," said a statement carried by the official Korean Central News Agency. "That will block ways to denuclearization on the Korean Peninsula and may cause consequences which nobody wants."
Even so, North Korea did leave the door open for further negotiations by showing appreciation for U.S. President Donald Trump's will to rid the Korean Peninsula of nuclear weapons.
Also Monday, South Korea trimmed its economic growth forecasts.
The finance ministry said Asia's fourth-largest economy would post annual expansions of between 2.6% and 2.7% this year and next year, down from previous projections of 2.9% for this year and 2.8% for next year. The ministry said that shipments from the export-orientated economy would slow next year.
The job market is also struggling, with only 96,000 new jobs created per month on average in 2018, down from 316,000 last year -- the worst performance since the global financial crisis.