Korean Unification: The Future of the Two Koreas

The idea of reuniting the two Korean countries again in today’s world seems very much as if it were merely destined to happen. With the reunification of East and West Germany being a possible blueprint for just how this reunification could happen and have a successful outcome we almost start wondering what is taking Korea so long. As we delve into this subject more we find that this is a much more complicated issue than many would originally think. One of the most important aspects that is easily overlooked by many today is the Korean people and just how they view the idea of reunification. Then, if it wasn’t complicated enough with just the Korean citizens of both countries you have the economic aspect where we have a thriving economy in South Korea and one in the North that is virtually non-existent. Also there is the political aspect of who will rule the country and what government type will be accepted. Then, just to sprinkle a bit more into the mix, we have external powers that have their own agendas trying either to sway the two countries toward unification or keeping them separated.

The North Korean economy is a centrally planned economy. The allocation of business resources and property ownership are strictly regulated through centralized government plan. According to Marcus Noland the driving ideology of the North Korean economy is “juche”, which means self reliance. North Korea’s economy is designed to produce goods it needs first before producing goods for export. This explains why North Korean exports account for a mere 12 percent of its total Gross Domestic Product¹. This is extremely low when compared to any modern nation, looking at South Korea that has had to develop just as North Korea has its exports make up 50-55 percent of its GDP. ² Monetary prices are difficult and many times simply illogical in the North due to prices being set by the government. Many times the prices were set merely for external trade with little care for internal cost. The large problem North Korea faces is the fact that it simply cannot produce the goods and products in the quantities it needs. This situation requires North Korea to rely heavily on external aid to keep its economy afloat and its people fed. China is the largest donor of aid to North Korea. We do not know just how much aid in money and various resources China sends to North Korea. We however, have some accepted estimates that put the aid at one-quarter to one-third of China’s total foreign aid³. It is also estimated that China’s fuel oil and food exports accounted for three-quarters of North Koreas imports in these areas⁴. It should be mentioned that this is not an endorsement of North Korea on China’s part as it is just in China’s interest, as one Chinese leader said “We can either send food to North Korea or they will send refugees to us-either way, we feed them. It is more convenient to feed them in North Korea than in China.”⁵ North Korea knows this is the reasoning behind why China gives it so much aid and uses this “near collapse” threat as a means to extract more aid from its neighbors. In recent years it seems that China’s aid has shifted from keeping North Korea alive to actually trying to helping build its economy. China is planning several building projects with North Korea, such as building a bridge from the North Korean border city of Sinuiju to Dandong, China, over the Yalu River.

The South Korean economy was designed to be a capitalist economy, albeit heavily influenced by Rhee and his government. Rhee’s economic strategies suppressed the economy due to missed allocations of necessary resources. This miss allocation was due to Rhee’s three driving principles of low grain prices, low exchange rate, and lower interest rates.⁶ The low interest rates hurt the banking market by making profit margins very low allowing for very few new banking companies to actually get into the market. Over the next few decades there was a slow but steady trend towards liberalization of the economy and a release of government constraints and controls. There were a few instances where the controls were not released; the Roh government’s strict control over the South Korean financial markets is one example. Roh’s emphasis on growth rather than being profitable or even efficient was a choice that had good and bad implications. It allowed financial markets necessary for world commerce to build and expand but in doing so encouraged them to become large conglomerations that were highly inefficient. During the 1990s South Korea saw a dramatic shift in its economy from a rural population to factory labor and service oriented jobs based in the metropolitan areas. The drastic need for workers increased the push for and hiring of women workers, and led to a rise in unions that influenced the labor market.

The two markets simply cannot be much less similar, even though South Korea still heavily used governmental control over the markets that helped them grow instead of help the state produce items it needed. These differences pose a drastic problem of unification for a variety of reasons. One reason is that the North has a weakening infrastructure that must be rebuilt in order for it to become productive again. Power lines will need to be rebuilt, roads will need to be reworked or even paved to allow access to factories. Both countries have inefficient industries; the South is trying to clean them up while the North with its top down execution encourages inefficiency. The population of the North is overall very literate and is estimated to be near 100%.⁷ In the North if one desires to obtain a job then one must join the Communist Party. If the two countries unite it is very certain to be under a government style of South Korea. This will take away the one thing people in the North know as a means of bettering themselves. People are not very apt to change if they can avoid it. This does not say that the South Koreans are overly excited about the idea of reunification and the North is not. The South Korean people and politicians realize that undertaking a reunification will suppress the economy for a generation or more. South Korea’s appointed a special committee to estimate the costs of a reunification. When the report came in it estimated that the cost will range between 800 billion to 1.3 trillion dollars.⁸ This uses the year 2016 as the beginning of the reunification and the ending year of 2025 and estimates the cost will run up 6.63% of South Korea’s GDP. The report also states that the longer unification is delayed the more it will cost and the longer it will take. When it comes to doing something good and actually executing it money is a very important motivating factor. Asking the South Koreans to take a step back economically by a decade or more to help rebuild and refit North Korea is asking a tremendous amount that many politicians have been unwilling to do, it is politically correct to give lip service to the idea of reunification but little beyond that. That static situation has appeared to change recently with Chung Dong-young, former head of the Ministry of Unification, is pushing a more open policy with North Korea.⁹ Lee Hoi-chang is focused on economic improvement of South Korea and improving the economic well being of the people of South Korea. This clash of policies will test just how interested the South Korean people are about reunification or if they are more interested in maintaining their current lifestyle and income levels.

Politically North Korean and South Korea are polar opposites. North Korea is a heavily militarized dictatorship. It is very difficult to get a grasp on just how things in the North are organized due to the government’s extremely tight grip on everything. The official line given from North Korea can be summed up in a quote by Kim Mun-sung “Our country is well organized. There are no riots, no strikes, no differences in opinion.”¹⁰ Now, no one actually believes this but this is the line given by North Korea. The ideology of the North is that its leader, Kim Jong-Ill, is the most intelligent man for the job just as his father was. There is something to be said about this as North Korea has taken its country which could easily be overlooked and forgotten by many of the countries in the region and put itself at the forefront of regional politics. North Korea uses problems either to get or extort aid depending on the view point of other countries. North Korea has forced China to deal heavily with it by giving North Korea large quantities of heavy fuel oil and food to keep North Korean refugees crossing the border into China to a minimum. North Korea has used its brinkmanship with nuclear weapons to force the United States to step up and take notice along with all other nations in the region. North Korea also uses the size of its army as a flash point to encourage South Korea to be more open in its talks with Pyongyang. North Korea has either brilliantly or luckily been able to twist international politics to its favor. During the mid nineteen nineties North Korea came perilously close to a large scale war with the United States during the Clinton administration.

North Korea was rumored to be refining weapons grade plutonium for several years now coupled with its test of the three stage rocket that flew over Japan into the Pacific Ocean. The rocket was thought to be capable of carrying a nuclear warhead. To say that this got everyone’s attention is not even coming close. The concern is not so much that North Korea was use the weapons against the United States or its allies but that it might sell its technology to the highest bidder. The reasoning for this was simple and summed up quite well by Bill Clinton, “it is pointless for [the North Koreans] to try to develop nuclear weapons, because if they ever use them it would be the end of their country.”¹¹ After this Clinton gave the go ahead for a large scale military buildup in the region in preparation for war. North Korea stated the American response was tantamount to war and any build up would force North Korea to a preemptive strike. Many doubted that North Korea would have attacked in the case of a build up; Carter claimed that North Korea intended to do so. The crisis was averted when former president Jimmy Carter worked out a last minute deal to halt aggression on both sides. While war did not happen the crisis moved the Chinese to get involved in North Korean politics as the thought of a large scale war in its own backyard with refugees flooding its borders and the thought of a North Korea nuclear attack on its neighbors was not appealing. Looking at this brinkmanship one could think that Kim Jong-Ill was crazy and had nearly caused his countries destruction. However, Kim was either very lucky or very smart because in this power play he forced all the eyes of the world onto his nation and thrust North Korea to the front pages all over the world. Since his people were facing mass starvation and supplies of raw materials for North Korea’s economy were extremely low, drastic times called for drastic measures. As a result of this crisis North Korea was able to get food, aid, and oil from South Korea, China, The United States, and even some European nations.

South Korea, while it has undergone many changes including government overthrows, it’s a nation built on freedom. Its people engage in elections and enjoy a decent amount of freedoms, especially when compared to North Korea. South Korea even allows the expression of opinions that are different than their government. South Korea has not had to use the same type of crisis diplomacy that North Korea has used to get the aid it needs. Thanks to its friendship with the United States and its allies. This ability to have its markets readily open to the world has aided the South Koreans tremendously. North Korea has a great ability to use “saber rattling” to gain its objectives while South Korea is more focused on its economy which determines how it contacts the outside world. This area of foreign relations is by far the most complicated aspect to a possible reunification. The North Korean government will reunite with the South if the South submits to the North’s form of rule. Because a southern capitulation never happen, so the North talks about how unreasonable the South is because the South does not desire to be ruled by the smartest man alive. North Korea states “the stubborn and mistaken attitude of the South” is the reason talks have broken down at times.¹² This quote was related to North Korea’s request for the South to take its troops off a state of alert that began when the U.S. invaded Afghanistan. North Korea has made it a practice that it demands for talks to be held where the North so desires. North Korea insisted on the 2001 talks to be held at Diamond Mountain instead of Seoul or Pyongyang. The North went on to insist that family reunions also be held at Diamond Mountain. The reasons it is believed that the North wants talks held away from the cameras and TVs of the South is that with the War on Terror news will be reporting on U.S. military actions and showing the U.S. military might.¹³ There are several reasons North Korea does not truly desire to reunite with the South because unless the North is allowed to dominate politically, many of its political leaders will likely be killed. This belief comes from watching what happened in Romania after the fall of the Soviet Union. In the case of Romania riots became increasingly violent which led to the over throw of the government and execution of Ceauşescu and his wife Elena by firing squad. Contact with outside markets will also cause problems for North Korea in many ways because that will require tight control over its people to keep them from rioting forcing the country to change politically allowing more freedom to the people.

Assessing the current condition of North Korea’s population is difficult due to the rigid nature of the country and its control over virtually all forms of communication. So, liberty in making assumptions must be taken when trying to understand the minds of the North Korean people and whether or not they could push for reforms that might facilitate reunification. The Korean Economy has been in decline since the late nineteen eighties. During the nineteen nineties a rapid famine engulfed North Korea and increased over a short time. The famine first became known from the testimony of refugees crossing the border into China but its severity was not fully comprehended until after the near war crisis with the United States. The flooding of many parts of North Korea only intensified the initial problem as it damaged crop land and forced many North Koreans from their homes. The estimates of the number of dead vary widely; South Korea estimated 1.6 to 3.0 million in the period of 1994-1998. A North Korean defector, Hwang Jang-yop, stated that just before he fled the country in 1997 the Statistics Bureau of the Korean worker’s Party estimated 1.5 million died from starvation or related illnesses.¹⁴ We have no indication that North Korea is planning any drastic reforms politically or socially to help change its economic problems or its starving people. Several prominent people in South Korea and other countries believe North Korea will simply fall as its people will finally rise up against starvation and persecution from political prisons. There is logic to this line of thought but it is flawed as North Korea has very tight controls over its people in all aspects of their lives. If the people do not know that the world outside is much better why will they rise up and fight? Also many North Koreans are members of the Communist Party because it’s a means of upward mobility in society. The overthrowing of the North Korean regime would do away with the only way of bettering themselves that the North Korean people have ever known. Still, the idea of a collapse of North Korea is a very real possibility. Even though its population does not have firearms or political power, the thought of starving to death is a very powerful motivating force.

All is not doom and gloom in the case of a North Korean collapse. South Korea would be free of the requirement to maintain its heavily militarized border with North Korea. This will free up labor for South Korea, the military is well educated overall and capable of doing most tasks with minimal training. This will aid in easing the pains of lack of qualified factory workers. The influx of North Koreans will also help with the labor problems of South Korean. The problem here is that while many are literate they have little training on modern factory equipment. This unskilled labor force could be more than happy to set up on the rural farms where many are seeking to go into the cities for jobs and a better future.

The external influences still hold great power over the possibility of reunification. China has stated that what is in the best interest for now is that the two Koreas exist peacefully. The United Nations General Assembly encouraged the two Koreas to “consolidate peace and lay a solid foundation for reunification.”¹⁵ Also, with the amount of aid being given to North Korea by China to keep the refugees at bay, the North Korean government could conceivably muddle through for some time. With the Chinese government shifting from life support to helping the North Korean government actually build new factories, roadways, and helping it with its electricity problem. As stated before China is feeding and sending fuel oil to North Korea to keep the refugees in North Korea that does not mean that China does not care about North Korea and wants it to join with South Korea in any form. This would put a United States ally and possibly U.S. Troops next to the Chinese border. While the United States and China are not at war there is tension due to the influence both exert in the region. Russia also has stepped in over the past decade under the leadership of Putin to help North Korea. Russia is alleged to have given Kim Jong-Ill reassurance that he would prevent The United States from invading North Korea as it did Iraq. With this renewed interest from Russia it is possible that Kim could play the United States and Russia off on each other as has been done in the past keeping his struggling nation afloat. With Russia he can get some financial backing but also the fact that the United States is less likely to push war if Russia is backing North Korea. Also Russia has fuel oil in large quantities, something North Korea needs.

The history of political relations between North and South Korea varies over time but consistently improves. The two first came to the negotiating table in august of 1971 at the Red Cross meeting. This came after an announcement by then President Park Jung-hee of a “Plant for Peaceful Reunification.” Nothing substantial came from this meeting other than the fact the two countries established a method of dialogue between the two nations. In 1980 President Chun Doo-hwan pursued a more active engagement of North Korea even stating that he desired for the leaders of both North and South Korea to meet directly. This new found energy on the part of South Korea was frozen for a period due to a series of tragic events in which a South Korean airliner was shot down by a Russian jet a terrorist attack in Burma, and the recent infiltration of spies. This did not last forever as in 1984 the two countries discusses a joint athletic team at the ’84 Olympics in Los Angeles. The joint athletic team was actually proposed by North Korea, according to The Ministry of Unification. Another Red Cross meeting took place in 1984 where the two countries discusses possible aid to flood victims and town visits of families that have been separated by the war and divided country. The 1990s was the great break in relations between the two countries. There were eight rounds of high level meetings between officials from both countries. These high level talks were mainly centered on the nuclear crisis. Talks slowed for a brief period due to the death of Kim Ill Sung but soon increased. These talks were started again by China as it was very concerned with the threat of a large scale war on the Korean peninsula. The talks of a joint Korean sports team finally came to pass as the two countries had joint teams in Table Tennis and Youth Football. South Korea agreed to send a tremendous level of support and aid to North Korea during the 1990s as North Koreans were suffering from flooding and starvation. There were non aggression agreements passed between the two countries as a means of easing tensions over the nuclear conflict. Also the Sunshine policy was created in 1998. Talks between the two Koreas continued to increase culminating in a summit in 2000 at which the leaders of both Nations met. The 2000s have tested the political ties and will of both Koreas. This is mainly due to the United States, with the election of a new President with a new policy towards North Korea. Also with 9-11 as it affected the United States’ policy in a drastic way along with the nuclear test performed by North Korea. This caused talks to stall heavily as the current policy of the United States is one of regime change of North Korea with little care to what happens as long as Kim is out of power. Even with these problems the consistent trend is that talks have increased as time goes on, even though some years we see a drastic drop. The number of talks that took place under President Kim Dae-jung was 75(from 2000-2002) while President Roh is currently at 90(2003-2005). The number of agreements between the two nations has increased from 51 to 66. ¹⁶ A special thanks to the Ministry of Unification for the above general information concerning the history of Unification talks.

The current policy of South Korea that is used when dealing with North Korea is called the Sunshine Policy. The Sunshine Policy was created by Kim Dae Jung in 1998. The guiding philosophy of the Sunshine Policy is that South Korea will open up North Korea by encouraging political and economic interaction. The Sunshine Policy has three guiding principles; aero tolerance for aggression, reunification of unification through absorption, and an active drive for reconciliation and mutual exchange.¹⁷ The reasoning for this change from isolation to the Sunshine Policy is that few isolationist strategies ever work. Examples of this look at The United States’ strategy towards Cuba and Iraq. To encourage South Korean investors to invest in North Korea the government has loosened the normal restrictions on companies. This policy was meant to have two effects; that this will help rebuild North Korea’s aging infrastructure before reunification lowering the costs when reunification happens it is hoped that this will encourage North Korean citizens to push for reform internally. The attempts to weaken the North Korean government were later abandoned due to the risks of a collapse causing both Nations to suffer. The Sunshine Policy is thus far been held to by South Korea, even during the nuclear crisis they continued shipments of aid to North Korea. The Policy does not require anything in return from North Korea, a win them over by love ideology. The policy is aimed at helping North Korea’s economic and humanitarian needs and not responding to it on military or ideological points. The policy is also designed around the idea that North Korea will not collapse anytime soon, as so many during the 1990s though. Also the policy does not seek to solve the large problems at once, it simply focuses on small tasks that can be easily accomplished building up to the larger ones at a later date. South Korea has also encouraged other nations throughout the world to engage North Korea politically and economically.

The Sunshine policy is not without its critics. The argument made by most is that South Korea is merely propping up the North Korean regime. That North Korea is merely interested in keeping its current political structure as long as it can and will not ever give that up. Also arguments have been made that this was merely a political ploy on the part of President Kim Dae Jung to keep his party in power with little care for what actually comes out of the talks. This does not appear to be true, while under Kim talks did increase between the two countries and Kim also focused on reforming South Korea helping it continue to grow economically. Kim had a lot going for him and did not appear to need a political ploy to gain popularity. While I do agree that North Korea is likely attempting to get the most out of this policy it is at least opening the doors and easing tensions on the peninsula. This if nothing else allows for a more peaceful region which is the best thing for everyone of the world not just the Koreans.

As seen by the United Nations resolution there is considerable pressure from the outside world for the two Koreas to solve their problems. The countries in the region desire a peaceful step by step process which eventually ends with a reunification of the two countries. China desires a gradual reunification as this will limit refugees and possible retaliation from the North Korean military on its neighbors in case of a collapse. Russia desires the statuesque remain for several reasons. Russia would like to try and get some of its money back that has been given to North Korea. Russia is using North Korea to gain several things it desires, one is that Russia can use this to get back on the world stage and two it gives Russia a buffer to an ally of The United States. The two Koreas have thus far been able to push through these external influences towards a peaceful end thus far and appear to be able to continue on this path.

North and South Korea will continue down their current path for the foreseeable future, the real question is will this path led to reunification. The opposition to the Sunshine Policy has a very strong argument that the policy is merely propping up the North Korean government. South Korea will need to continue developing the North helping train workers on modern equipment and help rebuild North Korea’s failing economy so the cost will be less if reunification happens. The North Korean government will have to be encouraged to seek reunification not pressured into. South Korea will be forced to discover a way to encourage the North Korean government to reunify. This will be difficult because of the power the North Korean officials possess. Some of the officials are very likely scared of a change in government due to the chance of them being targeted for assassination by their own people. While the road to reunification looks brighter day by day there are many unsolved problems with difficult and complicated choices that are untouched. Momentum is on the Korean’s side as they go into the future, both parties are talking and working together more and North Korea is even opening its borders more to outsiders.

1Noland, Marcus. Avoiding the Apocalypse. Washington DC: institute for international economics, 2000. P. 61

2 Noland, Marcus P. 61

3North Korea news 724, February 28, 1994, pp. 5-6

4The Economist, March 26, 1994, p. 39

5Quoted in David Lampton and Richard Daniel Ewing, The U.S.-China Relationship Facing International Security Crises: Three Case Studies in Post-9/11 Bilateral Relations, Washington, DC: The Nixon Center, 2004, p. 70.

6Noland, Marcus p. 15

7 “Public Broadcasting.” Jan. 2003. http://www.pbs.org/frontlineworld/stories/northkorea/f… (accessed Oct. 22,

2007).

8 “Reunification cost likely to reach $1.3 trillion.” The Korea Herald, 1 Nov. 2007,

9Jong-han, Kim. “Chung’s Misguided Vision.” Korean Herald. Available from http://www.koreaherald.co.kr/.

Internet; accessed 22 October 2007.

10Quoted in the Financial Times, 27 September 1995

11Quoted in Oberdorfer 1997, 288

12 Kirk, Don. “Unification Talks Between the Two Koreas Break Off Abruptly.” New York Times 15 Nov. 2001

13 Kirk, Don. “Unification Talks Between the Two Koreas Break Off Abruptly.” New York Times 15 Nov. 2001

14Noland, Marcus p. 192

15 “UN’s G.A. supports Korean summit and urges North and South Korea to move toward reunification.” Korea

 

Herald 1 Nov. 2007

 

16 Ministry of Unification. July 2007. 17 Oct. 2007 <http://unikorea.go.kr/english/EUP/EUP010506I.jsp>.

17 http://www.fas.org/news/skorea/1999/reunification22.html