Yonhap
8/26/2007
South Korea will likely lose 2.2 trillion won (US$ 2 billion) in its food loan to North Korea, because the price was set by international market standards, an opposition lawmaker said Sunday.
Since 2002, South Korea has loaned 2.1 million tons of rice worth 2.86 trillion won to North Korea to help alleviate chronic food shortages in the impoverished communist country.
The loan was offered at international prices at the time of the shipments, although 2.1 million tons of the shipment were homegrown products, whose domestic price is four times higher than international prices, said Rep. Hong Moon-pyo of the Grand National Party.
Citing data from unification and agriculture ministries, Hong said the total monetary value of the South Korean food loaned to North Korea during the period comes to 2.86 trillion won.
North Korea is required to pay back the loan at international market prices, which currently stand at US$380 on the average, the lawmaker said.
“According to the terms of the contract, South Korea will not be able to recover about 2.2 trillion won, so the difference should be offset by taxpayers’ money,” Hong said, adding that the government should unveil the exact amount of the loan and its conditions.
