North-South Korea Economic Cooperation Blocks North Korea’s Reform

[imText1]The analysis has been proposed that after the March of Tribulation in the middle of the 1990s, the lives of North Korean citizens could be sustained with the operation of the markets, but after the expansion in North-South Korea economic cooperation, the North Korean authorities began to control the markets, contributing to the recent food crisis.

In a seminar sponsored by the Korea Institute for International Economic Policy (KIEP) on the 23rd titled, “The Lee Myung Bak Administration’s North Korea Policy Agenda and Plan of Action,” Dong Yong Seung, the Chief of the Security and Economics Department of the Samsung Economic Research Institute, expressed the following.

In the presentation, “A Policy Agenda for Leading North Korea’s Opening and Reform,” he stated, “North Korea’s trade has been continuously increasing after the March of the Tribulation. Internally, it can be predicted that a spontaneous economic system in response to the current situation has been operating.”

However, he said, “North Korean citizens’ living relying on the market was recently weakening and international experts suggest that a food crisis is coming again because North Korean authorities have been restricting the market. The cause of the stories of a food crisis can be found in the strict regulation of the expansion of the markets and the unfolding of a large-scale clean-up for gouging out a corrupt system.”

He pointed out that the change in North Korea’s position is rooted in the confidence that North-South Korean economic cooperation will possibly dominate the North Korean regime to control spontaneous markets.

He maintained, “When examining as a whole North Korea’s series of market restriction policies and North-South Korean economic cooperation which has expanded rapidly after 2004, it can be inferred that the economic cooperation is playing a role in aiding North Korea’s repressive policies over markets.”

He also pointed out, “North Korea’s latest measures have to accompany its authorities’ economic capacity to restrict an internal system. Therefore, with the expansion of North-South economic cooperation the authorities can repress the market and make their economic system turn to a socialist planned economy.”

A KIEP researcher Jung Hyung Gon retorted, “It has been said that South-North economic cooperation has played a regulatory role on the marketization, but the relative weight of the cooperation on North Korea’s economy is not very significant. Has not China played a bigger role?”

In response, Dong insisted, “While economic exchange between North Korea and China has been business-to-business, in the case of Kaesong, the exchange has been controlled from a single control tower, the North Korean regime. That is, the condition has been set up for government-to-government economic exchange to facilitate North Korean government’s planned economy. Economic cooperation in the style of South Korea’s has been obstructing North Korea’s rational transformation.”

Moving forward, Lee Sang Hyun, a Sejong Institute researcher, said in a presentation titled, “A Policy Agenda for Denuclearization” that principle and prioritization should be maintained. “From the perspective of a blockade in North-South Korean relations, the North Korea policy of the Lee administration will be challenged. President Lee said that he would not unconditionally support the North, but it will be difficult to endlessly sustain a confrontation.”

Researcher Lee criticized, “North Korea’s demand to evacuate all of the personnel of the North-South Economic Cooperation Office in Kaesong and the ‘rebel’ statement dedicating President Lee are abnormal. Because North-South Korean relations has been acknowledged as a “special relationship” until now, North Korea’s dysfunctional attitudes have been permitted.”

Further, he forecasted, “The North has expressed its dissatisfaction through aggressive treatment and will exacerbate the tension on the peninsula by demanding from the new administration the prohibition of NGO visits to North Korea, the removal of North Korean laborers from the Kaesong Industrial Complex, limited gunfights at the Military Demarcation Line, and infringement into the NLL.”

He suggested, “The Lee administration should establish a positive culture of dialogue where common sense and logic (in North-South relations) are present. The pains and blockage in North-South Korean relations have to be taken to a certain extent to make a dysfunctional situation into ‘normal relations.'”