Seoul, August 15 (Saba) - South Korean President Lee Myung-bak on Sunday proposed a three-stage reunification with North Korea and the introduction of a "unification tax" to prepare for the huge financial burden expected if the two Koreas are reunited, according to Qatar News Agency (QNA).

The offer marked the conservative president''s first specific comments on the long-term goal of reunification, talks of which have been sidelined under his administration that has placed top priority on denuclearizing the North and wanted compliance from the North to repay for economic assistance, South Korea''s news agency (Yonhap) reported.

"Today, inter-Korean relations demand a new paradigm," Lee said in a televised speech to commemorate the 65th anniversary of Korea''s independence from Japan''s 1910-45 colonial rule. "It is imperative that the two sides choose coexistence instead of confrontation, progress instead of stagnation.

The two of us need to overcome the current state of division and proceed with the goal of peaceful reunification." Lee reiterated calls for the North''s leadership to face reality and not be afraid to change. Lee unveiled his blueprint for a unified Korea, saying creating a "peace community" that assures security and harmony is the first step. He set the denuclearization of the North as a prerequisite.

"The next step is to carry out comprehensive inter-Korean exchanges and cooperation with a view to developing the North''s economy dramatically.

The result will be an economic community in which the two will work for economic integration," he said. After this, the two Koreas can remove the wall of different systems and establish a genuine community, where freedom and basic rights of all Koreans are guaranteed, Lee pointed out.

Lee also asked his country to consider a special tax to finance preparations for reunification in the future. South Korea is estimated to shoulder a cost of around US$1.3 trillion in case it reunifies with the North, according to a study commissioned by a parliamentary committee.

Germany has spent two trillion euros over the last two decades to cover its so-called reunification cost. The president asked experts and politicians to start discussions on the size of the unification tax and ways to levy it.

Saba