IPEK Lecture Note 8 2013 6 7 IPEK

IPE-K <Lecture Note 8> 2013. 6. 7 IPE-K: Two Koreas and Unification *Some parts of this note are borrowed from references for teaching purpose only. Semester: Spring 2013 Time: Friday 2: 00~15: 00 pm Class Room: No. 331 Professor: Yoo Soo Hong Office Hour: By appointment Mobile: 010 -4001 -8060 E-mail: yshong 123@gmail. com Home P. : //yoosoohong. weebly. com 1

Geography 2

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Two Koreas Today • South Korea • GDP Per Capita $20, 400 • Military Expenses $21. 06 billion • Military as share of GDP 2. 6% • Population 48, 846, 823 • Infant mortality 6. 16 deaths/1, 000 live births • North Korea • GDP Per Capita $1, 800 • Military Expenses $5. 21 Billion • Military as share of GDP 31% • Population 23, 113, 019 • Infant Mortality 23. 29 deaths/1, 000 live births 4

Cold War History: Korea • USA/USSR tensions emerge almost at once • USA envisions capitalist democracy • USSR envisions communist government • 1945: Divided occupation by the 38 th Prallel Line 5

Two Koreas • Emerging Cold War conflict between USA and USSR • Joint elections were impractical • Two separate Korean Governments established • 1948 “Elections” in both South (UN endorsed) and North Korea 6

Korean War • January 12, 1950, United States Secretary of State, Dean Acheson referred at: • US Press Club: About America's Pacific defense perimeter • Implied that the U. S. might not fight over Korea • This omission encouraged the North and the Soviets 7

Korean War • War began June 25, 1950: North Korea Invades • Incheon landing, September 15 - September 28, 1950 • Chinese entry, October, 1950 • January 4, 1951, Communist Chinese and North Korean forces recaptured Seoul. • Mac. Arthur was removed from command by President Truman on April 11, 1951. • Stalemate, July, 1951 8

Korean Division • Originally 38 th parallel • Post Korean War: Red line called the DMZ 9

Korean War Ends • Cease Fire: July 27, 1953 • Neither Korea signed armistice • State of war continues • Both Koreas considered themeslves the only legitimate authority • Both Koreas had aurhoritarian dictatorships at least through 1987 10

Post Korean War History • South Korea: 40, 000 US troops remain to guard South Korea – US supports pro American authoritarian regimes • North Korea: Chinese troops leave – North argues that South Korea is an occupied country, not independent – North sees US troops as a threat 11

North Korea • North Korea sees 40, 000 US troops on its southern border as a major threat – Asserts South Korea is simply a colony of the US. – No need to work with SK, it is the US that matters. • Develops Juche ideology of independence – Economic independence – Military independence – Focus on People’s needs – In reality, Juche is a failure both in independence and in People’s needs. – It became an ideological back-up for the Kim’s family dictatorship. 12

North Korea • Authoritarian • Anti religious persecution • Inefficient production, very little economic growth • Becomes progressively less secure as South Korea outgrows the North 13

North Korea • Cold War ended • Communist Block Collapsed 1991 • North Korea could not play China and Russia against each other • South Korean President Roh Tae Woo (1988 -1993) launched “Norde Politic” drive and normalized relations with China and Russia, Isolating North Korea. • Isolated North Korea has difficulty feeding its population – Bad weather – Communist incentive structure – Poor distribution – No more cheap resources from China and Russia – 25 -30% of GDP spent on military 14

Nuclear Crisis – North Korea launched Nuclear program, 1990 – 1994: NK withdrew from membership with International Atomic Energy Agency (IAEA) • Jimmy Carter visited Korea representing Clinton Administration – 1994 Agreed Framework negotiated • N. Korea gives up nuclear weapons for energy support • Korean Economic Development Organization (KEDO) formed to help N. Korean energy development. 15

Nuclear Crisis – 1994 Agreed Framework • DPRK's nuclear power plants would be replaced with light water reactor (LWR) power plants by a target date of 2003. • Oil for heating and electricity production would be provided while DPRK's reactors were shut down, until completion of the first LWR power unit. • The two sides would move toward full normalization of political and economic relations. • The U. S. would provide formal assurances to the DPRK, against the threat or use of nuclear weapons by the U. S. • The DPRK would take steps to implement the Korean Peninsula Denuclearization Declaration. 16

South Korean Response • President Kim Dae Jung (1998 -2003) Initiated “Sunshine Policy” – Attempts for the first time to engage NK with positive incentives – Negotiates some trade and family exchanges • President Roh Moo Hyun (2003 -2008) Continued Sunshine policy • President Myung Bak Lee – Disagrees with the “Sunshine” approach 17

Axis of Evil and Bush Doctrine – At 2002 State of the Union, President Bush included North Korea in “Axis of Evil” with Iraq and Iran – Iraq Invasion – President Bush declared the “Bush Doctrine” of preemptive war – US invaded Iraq North Korean Reaction – 2003 Withdrew from Nuclear Non-proliferation Treaty – Declared NK a nuclear power – Insists on addressing only US, not 6 -party talks 18

– North Korea’s Nuclear threat was derived from North Korean perception of insecurity – Korea’s division created that insecurity – North Korea sees US as the core threat (40, 000 US troops aimed at them) – Bush Doctrine and US behavior since 2001 reinforces perception of threat – North Korean leadership is not crazy nor suicidal – North Korea uses aggressive negotiating tactics to achieve its ends – North Korea is unlikely to use nuclear weapons – Panic or over-reaction to North Korean provocations are counterproductive 19

The Political Economy of North Korea Major changes in North Korean political economy over last two decades - Transformation is better understood as an unintended response to state failure in the wake of the famine than as a top-down reform. - Policy has at times ratified these changes, most notably with reforms of 2002 - However, since 2005 “reform in reverse” has been going on 20

NK Economic Decline and Recovery - Collapse: the great famine of the mid-1990 s - Recovery: unintended grassroots marketization - Since 2005, the return of slow growth (and food distress 21

Declining Food Production 22

Declining Reliance on the PDS: public distribution system. When the PDS cannot provide enough food, there are few ways for vulnerable people to cope beyond the now very limited international assistance that is being provided. 23

Changing Pathways to Advancement 24

Origins of Shortage On the back of increasing harvests, rising aid government seeks to reassert control Internally – Banning private trade in grain – Seizures in rural areas – Shut down relief agencies in the hinterland Externally: 2006 missile and nuclear tests disrupt assistance from South Bad weather: the floods of 2007 25

Evidence I: Quantities 26

Evidence II: Prices 1. 2. 3. 4. 5. 6. 7. 8. 10/01/2005: Ban on private trade in grain & revival of PDS 07/14/2006 - 07/15/2006: Flood 10/09/2006: Nuclear Test & UN Sanctions 08/15/2007 - 08/31/2007: Flood 12/01/2007: Introduction of Chinese Export controls, partial ban on trading activities 04/01/2008: Tightened control on trading activities 05/14/2008: Military stocks reportedly ordered released & US aid announcement on the 16 th. 06/30/2008: Arrival of first aid shipment 27

Evidence III: Qualitative 28

Developments in the External Sector 29

China’s Growing Share 30

China-DPRK Trade 31

China Food Exports to DPRK 32

North-South Trade 33

Forms of Engagement 34

The Kaesong Industrial Park The model – An inducement in broader North-South relations – Engagement to socialize and transform The outcome: leverage in reverse – North Korea not only holding hostage until release… – But holding entire Kaesong project hostage – Recent evidence of backing off by reducing land rent and wage demands Compromise – Resumed normal business 35

The New Geography of North Korean Trade Beyond China, the growth of ties with Middle East (ongoing project) With new incentives to proliferate – Nuclear cooperation with Syria and Iran – Missiles: even during moratorium on test, working with Iran – Small arms to Burma, perhaps even Hezbollah and Hamas Other illicit activities US concerns: not simply sanctions in context of 6 PT, but defensive concerns and link to Middle East 36

Refugees’ Life Beyond North Korea Preferences for permanent resettlement – US attracts younger, better educated respondents – More might prefer China if policies changed Most want unification 37

South Korean Money Coins- 10, 50, 100, 500 Korean Won. Notes- 1, 000, 5, 000, 10, 000 Korean Won. 1 US Dollar = 1, 043 South Korean Won 38

North Korean Currency 39

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Prospects of Reunification 41

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North Korea Communist system - The world most isolated regime & economic backwardness - Dictatorship and human rights issues - Nuclear development & ‘military-first policy’ “Juche” (Self Reliance) Ideology: - Symbolizes autonomy or identity in ideology, independence in politics, self-sufficiency in economy and reliance on Korea’s own forces in national defense. Characteristics of North Korean system: - Acceptance of hereditary succession of power - Most militarized country among communist countries - Anti-American education 43

South Korea (ROK) One of the most successful postwar economic development and democratization - 12 th largest economy (member of OECD) - 12 th largest trading country - 11 th in global competitiveness (WEF 2007) - 1 st in university enrollment - 1 st in broadband penetration (90% of households) - Fully democratized political system 44

Current (MB) Korean Government Five Goals by Sector - A government serving the people - A lively market economy - Active welfare - A country rich in talent - A global Korea “ 21 st Century Strategic Alliance” KORUS FTA - “Denuclearization, Openness, 3000“ - Six-party talks (multilateral approach) >Inter-Korean Summits (bilateral approach) 45

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Inter-Korea Agreements and Documents 1953 -Present Total 92 agreements and documents: - 1953: Armistice Agreement - 1972: Inter-Korean Joint Communique - 1991 -1992 (11 on Inter-Korean Basic Agreement) - 1994 -1997 (9 on DPRK-US Agreed Framework-related) - 2000 -2004 -2007 (69+1 since the Summit in 2000) 47

South Korea’s Policy Towards North Korea From confrontation to reconciliation Engagement policy of North Korea during the last decade - Dialogue and cooperation - Confidence building - Peaceful coexistence - Prosperity on the Korean Peninsula and Northeast Asia Peaceful and gradual process of unification Sunshine Policy - Not allow any armed provocation hampering peace on the peninsula - Don’t absorb North Korea - Push reconciliation and cooperation with North beginning with those areas which can be most easily agreed upon 48

Inter-Korean Relations Humanitarian assistance - South Korea is the biggest donor county to the North People’s exchanges - In 2005, 88, 000 South Koreans visited the North (more than the total number of visitors during the previous five decades) - 1. 5 m South Korean tourists to Mt. Geumgang since 1998 49

SK Government Aid to North Korea 1995 -2004 Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Aid Amount (USD) Note 232, 000 Rice (150, 000 MT) direct 3, 050, 000 Grain, P milk via UN 26, 670, 000 Grain, P milk via UN 11, 000 Grain, flour via UN 28, 250, 000 Fertilizer - direct 78, 630, 000 Fertilizer – direct 70, 450, 000 Fertilizer, grain, underwear, medicine – D 83, 750, 000 Fertilizer, grain, med – Direct 87, 020, 000 Med, cash (Unicef), fertilizer, grain -D 740, 000 Yongchon ER supplies, medicines, etc. -D 50

SK NGO Aid to NK, 1995 -2004 Year Aid amount Note 9/95 -5/97 4, 960, 000 Food, blanket-via IFRC 6/97 -7/97 8, 500, 000 Food, fertilizer-Korean RC 8/97 -10/97 8, 900, 000 Food, vitamins-KRC 3/98 170, 000 Fertilizer (800 mt)-KRC 4/98 -6/98 9, 350, 000 Food, potato, socks–KRC 9/98 -12/98 11, 330, 000 Corn, cows; NGO-food 1999 18, 630, 000 Indep (10 NGOs)- diverse KRC (24 NGOs) -food, clothing, med 2000 35, 130, 000 Independ (13 NGOs); KRC (16 NGOs) 2001 64, 940, 000 Indep (19 NGOs); KRC ($238, 333) 2002 51, 170, 000 Indep (25 NGOs); KRC ($692, 308) 2003 70, 610, 000 Indep (29 NGOs); KRC ($583, 333) 2004 (Jan- 37, 510, 000 Indep (19 NGOs); KRC ($491, 667) 51

Gaeseong, the city next to the DMZ 52

Inter-Korean Summit Meetings (2000, 2007) Major results of the 2007 Summit: (Peace building) - Cooperation on denuclearization and establishment of a peace regime - Reduction of military tension and the holding of a defense ministers’ meeting - Holding Prime Minister’s meeting (Economic cooperation) - Creating a Special Peace and Cooperation Zone in the West Sea - Constructing ship-building complexes and repairing roads - Expanding Gaeseong Industrial Complex (Reconciliation) - Expanding the reunion of separated families - Promoting exchanges and cooperation in social and cultural areas 53

Six Party talks Long-term Goals - To establish a permanent peace regime on the Korean Peninsula - To develop a multilateral security forum in Northeast Asia Progress (North Korea’s action to be taken by the end of 2007) - Disable key nuclear facilities - Provide a complete and correct declaration of all its nuclear programs (Other Six Party’s action) - Economic and energy assistance up to the equivalent of 1 million tons of heavy fuel oil - Discuss normalization of US-North Korea relations, Japan-North Korea relations Stalemate (2008 - ) - MB government demands proper apology by the North for killing a civilian - Three-generation succession of the ‘Kingdom” - Military Confrontation between NK and SK in the recent period - Reconciliation? 54

Unification Strategy • Containment • Engagement • Absorption - Waiting collapse - Absolute superiority • EPA only 55

Statistics on North Korea 56

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