Unification Minister Chung Dong-young says the two Koreas by 2020 must set up an economic cooperation system allowing the free exchange of people, goods and money on the Korean Peninsula.

In a luncheon hosted by foreign diplomats in Seoul Monday, Chung said his vision is to create a virtuous cycle of peace promotion and economic prosperity, adding peace is an essential element for a healthy economy.

On the canceled light-water reactor project in North Korea under the 1994 Framework Agreement, he said the reactor in the North's city of Shinpo and that discussed in the six-party talks are two separate issues.

Though Pyongyang and Washington are on the opposite ends of the nuclear issue, Chung said Seoul will seek to narrow that gap and provide two million kilowatts of electricity to the North.