Roh Tae-woo administration agreed to provide US$650 million to Hungary, US$450 mln to Poland to establish relations

Posted on : 2020-04-12 17:57 KST Modified on : 2020-04-12 17:57 KST
Diplomatic documents on “economic cooperation funds” publicly revealed after 30 years
<b>A diplomatic document drafted in August 1988 containing an agreement in which South Korea would provide US$650 million in loans to establish relations with Hungary.<br><br></b>
A diplomatic document drafted in August 1988 containing an agreement in which South Korea would provide US$650 million in loans to establish relations with Hungary.

The Roh Tae-woo administration provided US$125 million in bank loans to establish its first diplomatic relations in Eastern Europe with Hungary in February 1989 as part of an aggressive “northern diplomacy” push amid its confidence over the staging of the 1988 Summer Olympics in Seoul, a diplomatic document recently confirmed. While it had been known that South Korea pledged a large amount of economic cooperation funds during its negotiation of relations with Hungary, the government documents shared for the first time that the amount totaled US$650 million, and that diplomatic relations could only be established after Seoul provided the loan.

The content was included in 1,577 diplomatic documents (totaling around 240,000 pages) chiefly from the years 1988-1989 that were disclosed to the public along with a summary of key content by the Ministry of Foreign Affairs (MOFA) on Mar. 31, over 30 years after the documents were originally drafted.

After two rounds of negotiations, South Korea and Hungary signed “agreed minutes” on Aug. 12, 1988, stating that a permanent mission would be established, after which negotiations could begin on diplomatic relations. The minutes specified that South Korea was to provide economic funds totaling US$650 million to establish diplomatic relations with Hungary, and that the relationship would only be established after US$125 million -- half of the pledged bank loans -- had been provided. This marks the first time the agreed minutes in question have been made public.

South Korea did indeed sign a contract for a US$125 million bank loan on Dec. 14, 1988, and the two sides established diplomatic relations on Feb. 1 of the following year. As recently as the early 1980s, Hungary had been reluctant to establish diplomatic ties with Seoul out of concerns about its relationship with Pyongyang, but it ended up changing its position as its economic difficulties intensified. In a report drafted before the negotiations, the South Korean government expressed concern that agreeing to Hungary’s demand for economic cooperation would raise the “possibility of similar demands being made when we attempt to expand diplomatic relations and economic cooperation with other countries.” Indeed, South Korea also had to provide US$450 million in economic cooperation loans when it established relations with Poland the following November.

By Kim So-youn and Park Min-hee, staff reporters

Please direct comments or questions to [english@hani.co.kr]

Caption: A diplomatic document drafted in August 1988 containing an agreement in which South Korea would provide US$650 million in loans to establish relations with Hungary.

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