Unification Of The Two Koreas: An Economic Approach 

Source: ABC News

Unification of the two Koreas entails an integration of two extremely divergent political systems. As Article 1 of North Korea’s Constitution states that it is an “independent socialist state,” and Article 1 of South Korea’s Constitution declares that “The Republic of Korea shall be a democratic state,” the homogeneity of the two political parties would result in disorder amongst the citizens of respective nations. Due to this contrast, it is difficult to imagine how these two parties can come together under one unified political system. In many cases, this ambition to bridge together such political differences has proven to be unachievable and back-breaking as seen in the unsuccessful peacebuilding treaties such as the July 4th Joint Communique, The North-South Basic Agreement of 1992, and the June 15th Joint Declaration of 2000. However, we should be mindful of the fact that the North and the South have initially sprouted and evolved from a common historical and cultural base such as having an analogous language, rooting from Confucian ideals, and deriving their country names from the Chinese name for Goryeo. Although heavily forgotten and erased due to the consequences of the Korean War, there was a time when a single demarcation line did not separate the citizens of the Korean Peninsula and impel the belief of being strangers to one another. On this note, if the sensitivity of the political-security vantage point is withheld, there are many similarities that can push the conversation towards stable inter-Korean relations and possibly even direct the heavy atmosphere towards more lenient measures of unification, on the basis that this would not have to generate the merging of the two contrasting political systems but of economic and social ideals. 

Economic Development 

The exchange and integration through economic affairs in regards to mending inter-Korean relations is not new but has always been deemed as an experimental and refreshing move. Development through economic efforts is always sensitive because there is so much at stake, especially in regards to  public perception, but can never be disregarded despite its past failed initiatives because it promises so much growth. For this reason, South Korea shares economic connections with countries who were not historic allies and are still treading water as there are remains of unresolved animosity. For instance, although China invaded Korea and partook in the Korean War, China is South Korea’s largest trading partner, raking in a significant record of imports of integrated circuits and exports of nuclear reactors. In a similar vein, Japan also has a history of colonizing Korea for approximately 36 years, yet it is one of South Korea’s most important economic partners, with Japan providing 90% of South Korea’s fluorinated polyimide and photoresist importance and 44% of hydrogen fluoride imports. 

However, there were several instances when trade disputes between the aforementioned countries resulted in setbacks in economic development. In 2016, major South Korean companies suffered economic losses of up to $4.3 billion when China retaliated over a dispute about Korea’s U.S. Terminal High Altitude Area Defense (THAAD). Similarly, Japan removed South Korea from their export licensing “white list” and in return, South Korean semiconductor, manufacturing, and concentrated supply chains lessened their dependence on Japanese suppliers as observed by SK Hynix diverting to domestic sources and LG testing Taiwanese replacements. Despite difficulty in finding common ground, a potential South Korea-Japan-China Free Trade Agreement that was proposed in 2013 could give rise to nearly $16.3 billion in joint economic benefits in just about a decade. Concerning economic prosperities of South Korea, Japan, and China, it can be observed that South Korea has operated towards the strategic mending of relationships through economic affairs and trade exchange despite lingering historic issues that at times seeps into the realms of the present. 

It Takes Two To Tango 

Through continuous efforts, prosperous economic development is possible even amongst countries with bitter historical affiliations; in light of the facts, the North and the South may be able to mend relations through guidance based on the objective of economic development. Although the idea that development of inter-Korean relations can prosper through similar constructs is idealistic, it does not seem to be too far out of reach because North Korea is also seeking marketization and advancement much alike that observed in South Korea,  in fields of innovative infrastructural industries, scientific development, tourism, and education. Although North Korea has tried to deviate from Western ideals in retrospect, the rule of Kim Jong Un is proving otherwise with the leader and the state portraying interest in an altered vision of North Korea. This is portrayed in North Korea improving its tourist spots, namely the Yangduk Hot Springs, Samijiyeon, and the New Yalu River Bridge, in order to bring more tourists into their region. Moreover, the interest of North Korean professors in educational initiatives such as the MBA program demonstrates the state’s attentiveness towards economic cooperation, consumer behavior to spread internationally, and allowing more autonomy to private sectors. Subsequently, it can be inferred that although a majority of public perception on a domestic and international level may believe North Korea to be a state that is close-minded and rigid in terms of ideals, North Korea may be open to constructive changes for its development more so than we think. However, it is highly possible that in order to work towards this development, North Korea may need and want economic aid from the international community. This is where the problem arises as not many would be willing to offer such an assistance without asking for compromises pertaining to nuclear disarmament from North Korea.

In regards to the Voluntary National Review, this effort shows that the arrow is pointed in the right direction and is remarkable in that it portrays North Korea’s willingness to integrate global norms through the SDGs implementation and the 2030 Agenda. The idea that North Korea has localized a global norm should hold promising prospects. However, it should be noted that it is essential to raise awareness on SDGs within the North Korean community before it reaches out for support from the international community to achieve these goals. The raw motives behind North Korea’s compliance with the United Nations’ global assignment should be analyzed as well so as to reduce further risks. The international community cannot help but ask if this voluntary action is a strategic calculation to get more aid and economic support from the international community by signaling its willingness to follow the SDGs. So while North Korea’s initial actions to come forward voluntarily and present such efforts are a big step and an arrow pointed in the right direction, we should effectively be aware of what the VNR entails and could signal.

“Peace Economy” 

Source: The Diplomat

The Kaesong Industrial Complex (KIC), which gives us a look into what economic cooperation between the North and South would look like, was a project that was launched in 2004 and was largely financed by the South to increase co-operation with the North. Dr. Jin-hyan Kim, the former head of the KIC, stated in an interview that the complex “was designed to move beyond the division of the past 70 years towards peaceful cooperation. The KIC is not just an economic complex, rather it is an industrial complex of peace and unification.” Dr. Kim has openly promoted the idea of “Peace Economy”, referring to the enhancement and expansion of inter-Korean economic cooperation in order to achieve abiding peace. 

The economic engagement, built based on the creation of the KIC, aimed to reform North Korean society by introducing the principles of capitalist operations of tax and accounting systems, acquire knowledge in consumer goods technology and factories operation,  and most importantly, produce critical hard currency for the state. Although the plan was initiated to help the North, it also benefited the South in a way that the venture provided cheaper labor costs and encouraged companies to keep the production local rather than rely on China or other neighboring countries; it created a competitive edge for South Korean firms by solving problems of high-cost and low-efficient production. Although the project was conclusively suspended following the North’s rocket launch and nuclear test, it was one of the last remaining points of peaceful and partially successful engagement between the two nations and is also a glimpse into the reality of how co-existence would look like. 

Double Edged Sword  

Like a double edged sword, unification has its costs and benefits and arguably, many tend to focus more on the consequences of the political contest. However, the idea of unification doesn’t always have to center around the political-security issue. The mending of relations can deviate away from such a sensitive topic long enough to create similarities to agree upon and subsequently bolster cooperation. Since North Korea finds it difficult and unapproachable to find affinity with other nations, similarities can integrate North Korea with the international network and advocate for a common goal of protecting such closeness. It is crucial to bear in mind that the two Koreas share just as many similarities as their differences. 

Do Hwi Choi
About Do Hwi Choi 4 Articles
Do Hwi Choi is a graduate student pursuing Global Affairs & Policy at Yonsei University. An early exposure to many different cultural backgrounds triggered her interest in regional integration and enkindled an ambition to bridge the divide in relations pertaining to humanitarian rights, international law, and migrational studies. She is a believer in Nelson Mandela’s words, “The greatest glory in living lies not in never falling, but in rising every time we fall.”