Pacific Commander-to-Be Worries About USFK Relocation Costs

The next commander of the U.S. Pacific Command has expressed concerns about the costs of relocating U.S. Forces Korea headquarters further south away from the border.

Harry Harris

In written testimony to the U.S. Senate Committee on Armed Services ahead of a confirmation hearing on Tuesday, Admiral Harry Harris said the relocation costs under the Land Partnership Plan remain a concern given the current fiscal environment.

The U.S. defense budget could suffer further cuts in case the White House is faced with another sequester in the fiscal year 2016.

Under the relocation plan, the USFK is to return a total of 170 million sq.m of land, or 64 percent of all granted areas, to the Korean government. That includes 34 bases measuring 40 million sq.m and three training grounds measuring 130 million sq.m scattered across the country.

Korea will bear the costs of building alternative facilities for the USFK to replace its existing bases that Seoul wants to move, and buy land for them. But the U.S. will bear the construction costs for facilities it wants to relocate.

A new headquarters is already being built in Pyeongtaek, Gyeonggi Province.

But Harris, adding to a growing chorus of second thoughts about the relocation plan from Washington, appeared to suggest that the expense sharing should be renegotiated, signaling trouble for an already monumentally expensive project.

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Bank Bonds Would Pay for Bulk of Reunification Costs

The government estimates that rebuilding the North Korean economy after reunification would cost US$500 billion. A new road map envisages establishing banks in North Korea and raising $250-300 billion by issuing bonds there.

This would mean that more than half could be raised without billing the taxpayer.

The blueprint was released by the Financial Services Commission on Tuesday. It estimates that $500 billion is needed to raise the North's per capita GDP from an estimated $1,251 in 2013 to $10,000 within 20 years. The plan is to rely heavily on state-run financial institutions, considering the limited government budget.

It envisages setting up subsidiaries of state-run financial institutions like Korea Development Bank, the Export-Import Bank of Korea and the Industrial Bank of Korea in the North and investing $30 billion in them over 20 years in addition to the $300 billion from bonds.

The blueprint also includes private investment of $107.2-$186.5 billion from home and abroad for special economic zones or lucrative projects. Once the North Korean economy is developed, the commission expects that $330 billion can be collected in taxes over 20 years, of which $100 billion would be earmarked for reconstruction of the North.

The commission claimed this would minimize the government's financial burden.

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