With regard to the issue of North Korea, what are the biggest dangers to security on the Korean Peninsula, and what can you do to change the situation now? In addition, what do you think about the idea expressed by some that the Korean Government is taking a hard-line policy toward the North?

– More than anything else, North Korea’s pursuit of a nuclear arsenal is posing the greatest threat to the security of the Korean Peninsula. In addition, it constitutes a grave challenge to the international nonproliferation regime and could set off an arms race in Northeast Asia.

Since the issue of the North Korean nuclear program began to loom in the early 1990s, negotiations to resolve the problem have gone through many twists and turns. Agreements have been repeatedly reached and broken. Even though the international community has continued providing the North with energy and economic aid, its nuclear program has continued to progress anyway.

The Republic of Korea and the community of nations will never tolerate or acknowledge North Korea as a nuclear power under any circumstance.

With the support of the international community, the Korean Government is closely consulting with the member states of the Six-Party Talks in a bid to achieve the verifiable denuclearization of the North.

UN Security Council Resolution 1874, which was adopted in the wake of recent North Korea’s nuclear test, contains a strong message urging the Stalinist country to abandon its nuclear ambitions and come out as a responsible member of the international community.

The North and South signed an agreement on the denuclearization of the Korean Peninsula in January 1992. North Korea must honor the pledge it made under that agreement.

The Korean Government hopes that the North will come forward to engage in a candid dialogue aimed at promoting inter-Korean cooperation. In particular, the issue of humanitarian collaboration can be readily addressed through dialogue at anytime and anyplace.

The Republic intends to step up cooperation with the international community with a shared understanding while consistently maintaining a flexible stance based on principles.

The Swedish Prime Minister went to Pyongyang in 2001 when Sweden was the chair of the EU. What do you think Sweden could do to help mediate this situation?

– Former Prime Minister Göran Persson visited both North and South Korea in 2001 when Sweden was the chair of the EU. Furthermore, during the Korean War that lasted from 1950 to 1953, Sweden dispatched a mobile field hospital unit consisting of 162 medical personnel. Since the Armistice Agreement, the country has also carried out its mission as a member of the Neutral Nations Supervisory Commission at the truce village of Panmunjom. The Kingdom deserves high credit for the constructive role it has been playing in efforts to bring peace to the Korean Peninsula.

Sweden has special relations with the Korean Peninsula, in part, because it has maintained diplomatic ties with both South and North Korea. Particularly, the Kingdom has a permanent mission in Pyongyang, which is also representing U.S. interests. In this regard, Sweden may be able to help dissuade the North from developing nuclear arms by collecting and delivering the message of all the European states in its capacity as the Chair of the EU.

It is the Korean Government’s hope that Sweden will continue to play a constructive role in persuading the North Koreans to return to the negotiation table by consistently telling to them that the EU will never tolerate North Korea’s nuclear weapons program.

It is true that the Korean way out of the present economic crisis stands out. In your opinion, what has been the most effective policy in overcoming the crisis? How does your policy differ this time from that during the earlier economic crisis triggered by the Asian foreign exchange crisis?

– In trying to overcome the current economic crisis, Korea has been implementing bold and preemptive measures as agreed upon at the first G-20 Financial Summit last year.

It made a head start in taking such actions as cutting taxes, lowering interest rates and expanding fiscal spending. Such measures are thought to have clearly taken effect faster than in any other country.

Compared with 10 years ago when Korea was hit hard by the foreign exchange crisis, the country secured adequate foreign reserves in the face of the crisis this time. The lessons learned from the past financial crisis has empowered the country to navigate through such daunting tasks as addressing toxic financial assets and carrying out corporate restructuring.

You are putting a great deal of emphasis on a green growth and low-carbon economy. In implementing this strategy, which parts are most important, and what are the most difficult challenges to it?

– Low-carbon, green growth can be termed as a national development strategy to maximize the synergy effect of environmental protection and economic development. We will be able to do so by creating new growth engines in the process of overcoming problems stemming from global warming and the energy crisis.

Differently put, green growth and economic development are not on a collision course, but on the contrary, they are on the same path, producing a complementary, synergy effect. The overriding conventional wisdom has so far been that economic growth equals the degradation of the environment. Green growth, however, is a new paradigm shift that will allow us to pursue economic growth and environmental protection simultaneously.

It is the very spirit of green growth that has inspired Korea to set the bold fiscal policy dubbed the Green New Deal in motion early this year. With this new policy, the country was able to embark on making proactive investments to deal with the pending economic crisis and climate change at the same time.

The key to pursuing green growth is to form a national consensus on the necessity of the initiative on the basis of a clear understanding of the current, pressing situation.

As a matter of fact, Korea is virtually 100 percent dependent on imports to meet its energy needs. Imports last year exceeded US$140 billion. Against this backdrop, the crucial national task is to overhaul the fossil-fuel dependent economic and industrial structure by enhancing energy efficiency and developing new and renewable energies. It is not an easy task, however, to alter the habits and the fundamentals of energy-intensive industries.

In a bid to help put green ideas into practice, the Government has so far placed top priority on the necessary institutionalization, including the formulation of basic green growth laws and a five-year action plan. The five-year plan will require that an amount equivalent to two percent of the GDP be invested in coping with climate change and developing green technologies.

Taking it a step further, yet another important task is to help make low-carbon and energy-saving lifestyles take root. They include curbing private car use and purchasing energy-efficient automobiles that emit less CO2 to meet the standards of advanced countries. In addition, the pattern of air-conditioning and lighting at home and in offices has to be changed.

My firm belief is that green growth is not a matter of choice but a must. Simply put, there is no plan B, only plan A.

In pursuing green growth, it is crucial to develop new green technologies. As of now, Korea is striving to further expand R&D efforts aimed at securing original technologies and to increase investments particularly in the green technology sector. The Republic hopes to work together with Sweden, which is well known for advanced industries and technologies in this area. Accordingly, I believe that the prospect of such collaboration between our two countries is very promising considering Korea’s broad-based competiveness in green technology and IT.

Under this strategy, emphasis is being placed on fostering new growth engines and related industries. In which direction are you planning to promote those areas?

– For a systematic nurturing of new growth industries, it is indispensable to come up with investment strategies based on a clear-cut order of priority. First and foremost, it is necessary to identify core areas that could have added value in the future and a great economic ripple effect. In this regard, green technology and industries receive top priority. The Korean Government has singled out 17 new growth engines from three areas, and they are now receiving active support. The two areas besides green industries include advanced convergence industries encompassing IT, bio and nano industries as well as high value-added service industries involving finances and logistics.

When the above-mentioned three new growth industries go into high gear, the Republic’s industrial structure would become highly energy efficient, departing from the energy-intensive structure of the past. From a broader perspective, it could be regarded as a green growth strategy.

As the next step, investment strategies have to be formulated in a bid to commercialize technologies that have been newly developed, and the necessary support should be provided to give further impetus to the process. In order to materialize strategies, it is necessary to properly manage the whole cycle from R&D design for green technology to distribution of financial resources and evaluation and feedback.

In your opinion, is international cooperation moving in right directions in dealing with the current economic crisis? Is the G8 a fruitful group, or do you think that the G20, where Korea and other important economies are full members, has to function as an alternative to G8?

– The current economic crisis originated in a drop in housing prices in the United States, and it triggered a financial and economic crisis across the globe. In this context, it is necessary for all countries to join forces in tackling the problem.

The first and second G-20 Financial Summits served as a great opportunity to rapidly forge the necessary international coordination. Such achievements include collaboration in macroeconomic policies, the Standstill Proposal on protectionism, provision of trade financing and improvements in financial regulations. These collaborative efforts have somewhat slowed down the economic slide, and some hopeful signs indicating an escape from the crisis have also been found.

As evidenced by the financial crisis this time, there seems to be limits in how effectively the G8 framework can deal with global issues. The G20 is more efficient than the G8 in addressing such global issues as the financial, energy and food crises as well as climate change since, as a gathering of both advanced and emerging economies, it accounts for 85 percent of the global GDP.

What kind of cooperation does Korea seek with Northern Europe and Sweden, especially concerning the environment and climate change?

– Sweden is a leading green-growth nation placing second globally in the recent Environmental Performance Index (EPI) rankings announced at the World Economic Forum (WEF). The Kingdom scored very high in all areas of environmental preservation measures, including reduction of greenhouse gases. Northern European countries have proven that the nations of the world can successfully pursue economic development and environmental preservation at the same time.

Korea hopes to invigorate policy exchanges with Sweden in this field with a view to promoting green growth. During my visit to Sweden, I am scheduled to tour Hammarby, an exemplary environment-friendly city. I am confident that the city will serve as a fine model in building green cities in Korea in the years to come.

The 2009 United Nations Climate Change Conference is slated for December 7–18 in Copenhagen, Denmark. Sweden, as the chair of the EU during the second half of this year, will play a crucial role in helping work out a Post-2012 Climate Change Agreement. Korea will proactively cooperate with the Scandinavian countries in order to set up a major historic milestone in Copenhagen.

What is your opinion about the Swedish welfare system?

– The Swedish welfare system is the quintessence of the Nordic model. It is famous for the highest level of welfare expenditures and resulting universal well-being of the populace.

I understand that the Swedish model is also remarkable in that it accomplishes social equity and economic efficiency. In other words, the system seems to increase employment and productivity while reducing poverty and inequity in individual incomes.

There are a lot of things that Korea and other countries can learn from the Swedish system. But the problem is that countries have fundamental differences in social, economic and other conditions. Therefore, it would not be easy for Korea to adopt the Swedish system exactly.

Swedish labor unions and the International Trade Union Confederation have criticized the frequent arrests of union leaders in Korea. Do you want to change the labor laws in your country in any way? In your opinion, are there any elements of the Swedish labor market model that could be of interest to Korea?

– In recent years, the Korean Government has consistently worked toward strengthening the basic rights of workers and upgrading the laws and regulations concerning labor-management relations. Since the 1990s in particular, labor laws and systems have been improved substantially in tandem with progress in democratization and social and economic development. The Government will continue to help improve and advance labor laws and regulations consistently through active dialogue and compromise among labor, management and the Government.

The Korean Government will not be complacent with what the country has achieved so far. To the best of its abilities, the Republic will continue to strive to advance Korea’s labor-management laws and systems to meet ILO regulations and international standards although there might be times domestic realities have to be taken into account.

The Korea-EU FTA negotiations are now underway. What is the significance of the trade agreement?

– I hope that Korea and the EU will conclude the agreement in the spirit of opposing protectionism and of aggressively upholding free trade. In this way, Korea and the European Union will be issuing a strong message to the global community that the current economic crisis should be overcome through expansion of international trade.

The agreement should also give great economic benefit to both parties, further solidifying comprehensive bilateral relations. When the trade treaty is put into force, Korea will have secured an enormous and stable market for its exports since the EU is the largest regional economic bloc in the world and is the second largest trading partner for Korea.

The agreement also means that the EU will be making inroads into the Korean service market that has great growth potential. When the FTA goes into effect, Korea can expect 10 billion euros worth of economic effect while the EU may reap 4.3 billion euros worth of benefits. Korean manufacturers and the EU service industries are likely to be the chief beneficiaries of the trade deal.

The interview was done by e-mail.