What Might be Yoon Suk-yeol’s Productive Approach in Economic Cooperation with North Korea?

This article is adapted from remarks presented by the author at International Forum on One Korea 2022 in Seoul, Korea on August 13, 2022.

Today, the issue of reunification on the Korean Peninsula seems to be left out of Korea’s national interest and is increasingly being forgotten in our memories.

It is true that implementing the reunification policy amid various challenges such as the denuclearization of North Korea and an improvement in human rights is incredibly tough. However, it is unfortunate that the current Yoon administration has yet to craft a clear vision for reunification.

Also, we should be very cautious about the new administration’s attempts of following the failed policies of the former administrations that have achieved nothing new in breakthroughs for inter-Korean dialogue and exchange.

In particular, the way of solving the North Korean nuclear problem and finding a solution to the reunification issue by pursuing an inter-Korean summit by sending humanitarian aid to North Korea as a bait seems no different from previous failed attempts by the progressive South Korean governments.

In addition, the Green Detent policy aims to promote co-existence and co-prosperity of the two Koreas and build a foundation for peaceful unification by easing tensions and creating trust in non-political, non-military ecology, and environmental fields. But this is highly unrealistic.

This is because North Korea is a country where politics and ideology dominate the people and their everyday lives. It is an environment in which no policy can be formulated and implemented apart from politics, ideology, and military concepts.

Therefore, I would like to take this opportunity to highlight the limitations and failures of past South Korean governments’ policies toward North Korea and also discuss the policies and direction that the new administration can take in achieving the goal of a free and unified Korea.

Without a doubt, the human rights issue in North Korea should be top priority unification policy. However, today, I would like to propose both a realistic and efficient economic-cooperation policy besides the human rights and denuclearization issue that is prevalent in most policies.

When we talk about inter-Korean economic cooperation, there are two models that cannot be left out: (1) the Kaesong Industrial Complex and (2) Mt. Kumgang tourism. There was nothing wrong behind the idea of the two economic cooperation models, but the implementation of these two policies have completely failed.

The facts that the profit from these two economic cooperation models were used only for the North Korean regime’s nuclear development and military maintenance – and none that contributed to the lives of the North Korean people – and the failure to achieve constructive people-to-people exchanges between the North and South Koreans all indicate a complete failure of such policy.

Therefore, I would suggest several policies that can be implemented to focus more on the North Korean people and get the North Korean regime interested while avoiding a repeat of past policy failures.

First, the dispatch of North Korean workers abroad is one of the top priorities of the North Korean regime to the extent that it would send labor workers to the Donbas region of Ukraine, which is currently at war.

I believe that the South Korean government can take advantage of the North’s prioritized policy and boldly propose to Kim Jong Un that South Korean companies will hire North Korean workers in South Korea rather than in North Korea’s side of the area such as the Kaesong Industrial Complex.

Inviting and hiring North Korean workers to South Korea allows South Korean companies to directly pay the North Korean workers, and the North Koreans can witness the stark contrast between South Korea and their own country with their own eyes while interacting South Koreans in a more free-flowing environment.

In addition, by paying workers directly to their bank accounts, we can reduce the amount of money flowing into the regime as much as possible and improve the quality of the workers’ lives, as well as create a more suitable environment for them to learn about liberal democracy and the market economy.

Second, another type of inter-Korean cooperation in the energy sector to resolve North Korea’s power shortage has notably sufficient conditions to attract the attention of the North Korean regime.

North Korea’s actual electricity production is 23 billion kWh (kilowatt hour), which is only 4% of South Korea’s power generation. The power shortages, more chronically severe than food shortages, have a greater impact on the overall North Korean economy and the lives of its residents.

Without electricity, which is the basic means of developing the economy, the factories will be stalled, and the production of food and other means will be halted entirely.

Economic cooperation with North Korea’s electrical supply is an area that needs to be cooperated in for the purpose of improving the quality of life of the North Korean people and achieving a free and unified Korea in the future.

However, North Korea’s nuclear power plant construction plan and electricity infrastructure plan promoted by the Moon Jae-in administration were dangerous measures that could give Kim Jong-un most of the advantage.

Instead of building small modular nuclear power plants in North Korea, the South Korean government can propose building them in South Korea. This method can limit the North Korean power supply to factories that produce daily necessities, food production, and raw materials and can exclude the munition factories, military facilities, and party and government agencies in the process.

We need to let the South Korean government, not the North Korean regime, conduct the planning and control the power supply chain.

Also, electricity should not be provided for free, but must be paid for through an exchange in natural resources or other various means.

Furthermore, there may be various ways to minimize the influence of the North Korean regime in policymaking by utilizing cooperation in the tourism industry and IT sector, which are Kim Jong-un’s main interests.  

Undoubtedly, these proposals have the disadvantage of not being able to proceed unless the Kim Jong-un regime accepts them. However, cooperation that only benefits the Kim Jong-un regime will further delay the achievement of the freedom of the North Korean people and the reunification of the Korean Peninsula.

The long-term goal of any inter-Korean economic cooperation should be a free unified Korea, and economic cooperation that does not share the principle of reciprocity and free market values should be firmly excluded.

Moreover, when designing a better model for inter-Korean economic cooperation, the government needs to keep in mind that the North Korean regime’s authority should be minimized, the benefits of the North Korean people should be maximized, and the South Korean government should be able to control it as much as possible.

As President Yoon Suk-yeol said in his inauguration speech, “We should pursue a sustainable peace that blooms freedom and prosperity, not a fragile peace that temporarily avoids war.”

Likewise, the reunification policy is truly meaningful only when it develops into sustainable cooperation for freedom and prosperity, not cooperation for temporary dialogue.

latest Article