Firm Determination to Enhance Inter-Korean Relations &
Transition towards Mutually-beneficial Ties

Inter-Korean Relations: Present and Future

Lee Joo-tae
Policy Cooperation Division of the Ministry of Unification

The inauguration of the Lee Myung-bak administration drew attention from both home and abroad, especially from North Korea. Reflecting public calls for change in North Korea policy, the new administration presented pragmatism, productivity, happiness of the South and North Korean people and establishment of the foundation for unification as major factors of future North Korea policy.

After observing the new leadership for a month, North Korea began taking an aggressive stance towards South Korea since late March, strongly criticizing the South Korean government and the President.

In this article, I would like to look into why Pyongyang has taken such actions, how the inter-Korean relations are going on and what Seoul s future policy toward Pyongyang would look like.

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Private exchanges active despite suspended inter-Korean dialogue

Current Status

On March 27, South Korean officials pull out of the Office of Inter-Korean Economic Cooperation in Gaeseong. Two days later, North Korea banned South Korean government officials from entering the country. Afterward, government-level bilateral talks suspended and North Korea began denouncing the South Korean government and even the President with very strong language.

Such attitude is not entirely unexpected. Pyongyang criticized new governments and new leadership in Seoul each time they were sworn in, intended to pressure them into adopting appeasement policy.

Many have the impression that the North did not criticize the Kim Dae-jung administration. But, they are wrong. In the beginning of his presidency, Pyongyang accused Seoul of sweet-talking North Korea into opening with the sunshine policy. It called President Kim a puppet and a rebel. Inter-Korean relations were in no way friendly before the inter-Korean summit in 2000. Even after the summit, bilateral talks were suspended three times. In March 2001, North Korea did not attend the 5th inter-Korean ministerial talks after sending a short notice on the very day that read We cannot participate in the talks due to various circumstances.

The Roh Moo-hyun administration, too, had similar experiences. The North boycotted inter-Korean dialogue for nine months from July 2004 to May 2005, after Seoul s refusal to allow its citizens to visit Pyongyang on the occasion of the 10th anniversary of the death of Kim Il-sung and the decision to admit a large group of North Korean defectors.

Again, North Korea seems to be taking the same strategy of rebuking the South with an intention to gain an upper hand and lead the South s policy toward Pyongyang in a direction it desires.

Despite the unhappy atmosphere in the government-level relations, trade and various economic cooperation projects, including the Gaeseong Industrial Complex (GIC) and Mt. Geumgang tour are continuing smoothly.

Inter-Korean trade from January to April this year posted $561.53 million, a 39 percent increase compared with the same period last year. As of May, a total of 70 firms are in operation in GIC and some 27,000 North Koreans work alongside with 950 South Koreans there. The number of factories and North Korean workers is expected to grow to more than 100 and 50,000 respectively by the end of this year.

The aggregate number of South Korean tourists to Mt. Geumgang from January to April this year already surpassed the 100,000 mark, a twofold gain from last year. The figure for Gaeseong city tour also exceeded 40,000 during the same period.

Social and cultural exchanges in the private sector and humanitarian cooperation projects are also proceeding smoothly.

In other words, challenges in government-level contacts are not affecting joint economic projects promoted by the private sector.

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North Korea Policy based on pragmatism and productivity

Future Direction

The reason behind North Korea s criticism against South Korea seems obvious. It is attempting to pressure Seoul to lend support to and cooperate with Pyongyang without raising the nuclear issue or mentioning South Korean POWs and abductees, just as previous administrations in Seoul have done. This, however, would mean retreating to the past, discarding the new principles of pragmatism and productivity.

Furthermore, the North has a ****** agenda of blaming the South for the suspended talks and of gaining advantage in future talks. However, the Lee administration will not be swayed by such tactics. It will not be shaken by groundless accusations nor disturbed by threats. It will not respond to each and every provocation from the North. It will take resolute actions, firmly upholding the principles.

Firmly sticking to the principles may temporarily deteriorate inter-Korean relations. However, it will make the ties even healthier down the road. A resolute response from the South will urge the North to face the new reality and accept the new relationship sooner.

Such belief is based on the favorable conditions at home and abroad. As witnessed from the summit meetings South Korea held with the United States and Japan, ties between the three nations are stronger than ever before. Seoul is also closely cooperating with Beijing and Moscow.

Economic gap between the two Koreas is ever widening. South Korea s trade volum--estimated at $728.33 billio--is 248 times that of North Korea--estimated at $2.94 billion--in 2007. South Korea s energy consumption--232,000 Ton of Oil Equivalent (TOE)--is 13 times larger than that of the North--18,000 TOE--in 2006. Inter-Korean trade accounts for 38 percent of North Korea s total trade, with the former standing at $1.8 billion and the latter at $4.74 billion in 2007.

Such internal and external environment attests that we are able and obliged to lead the inter-Korean relations. Moreover, we are determined to constantly advance the bilateral ties. The principle of mutual-benefit and co-prosperity reflects our strong determination.

Implementation of the Denuclearization-Opening-3000 initiative & development of a complementary economic structure

North Korea can facilitate progress in inter-Korean relations and advance its economy by moving away from its past practices and dismantling the nuclear programs taking the road to a positive change.

This is the very idea behind the Denuclearization-Opening-3000 initiative. If North Korea makes progress in denuclearization and opening, we will help it raise its per capita income to $3,000 in ten years. We will carry out various projects to enhance the North s struggling economy and to improve the living standards of the people in close cooperation with the international community.

Some interpret denuclearization in the initiative as a strict condition, but they are wrong.

The initiative is a step-by-step formula; therefore, the implementation of it is subjected to the progress in the nuclear issue. We are now taking preparatory steps to put it into action. In the future, we will broaden the scope of bilateral cooperation and build a complementary structure of the two economies upon the progress in the nuclear issue.

To this end, the Lee administration stands ready to resolve the nuclear issue through the Six-party Talks and inter-Korean dialogue.

Qualitative leap in economic cooperation & large-scale projects based on four principles

It is high time to take a qualitative leap in inter-Korean economic cooperation for both the South and the North to reap the fruits together. For this, we plan to amend unreasonable rules of existing projects. We aim to resolve issues concerning passage of people, communication and customs clearance and operate the Inter-Korean Commercial Arbitration Committee, which are part of our institutional efforts to provide better environment to businesses involved in joint economic projects.

New large-scale projects will be conducted on the grounds of four principles: progress in North Korean nuclear issue, economic feasibility, financial capability and national consensus. We will stay flexible considering bilateral consultations and Pyongyang s actions. Meanwhile, the private sector will be encouraged to carry out cooperation projects based on market principles.

However, the imbalance between deteriorating official relations and brisk private exchanges is not desirable. We are determined to make headway in inter-Korean and resume talks. We will resolve all issues through dialogue. Against this backdrop, President Lee proposed establishing permanent liaison offices in Seoul and Pyongyang on April 17.

North Korea continues demanding the implementation of the June 15 Joint Declaration and October 4 Declaration. However, these are only two of the many agreements reached between the two Koreas. To name a few, there are the July 4 Joint Statement and South-North Basic Agreement in 1991. Some were put into action but others were not. Based on the reality and in the spirit of mutual respect, the South Korean government expects to review possible ways to implement them through dialogue.

Assistance based on brotherly love and humanitarianism
Expect positive response from the North in family reunion and abductee issues

Dialogue is the key to implementing those agreements. North Korea, however, is refusing to come to the table, constantly criticizing the South. Condemning the president, in particular, is not desirable. We are waiting for the North to give up its tactics of condemnation and reopen the communications channel. We will patiently wait for Pyongyang s change.

We have a strong will to provide aid to the North. North Korea and its people are in desperate need of outside help and we should lend them a helping hand.

Brotherly love and universal humanitarianism will be the basis of our humanitarian assistance toward the North. From a humanitarian perspective, we are willing to provide large-scale aid, including the provision of food and fertilizers, after consideration upon request from Pyongyang. As national consensus is that assistance should directly benefit the people in the North, we will raise transparency in the distribution process.

Food aid may happen in case of a severe food shortage or a natural disaster.

Healthy inter-Korean relations would require sincere reaction from the North in terms of humanitarian efforts. The South expects the North to show sincerity by collaborating in resolving humanitarian issues such as separated families and South Korean abductees, and POWs.

It will not take long to thaw the currently chilled bilateral relations. Change may come sooner and may be larger than anticipated. To foster such change, public sympathy is essential. Close communication and cooperation between the government and the people is necessary to overcome the current deadlock.