[VIEWPOINT]Traveling by rail to PyeongyangTouring Pyeongyang and Mount Geumgang in 1992, I came to the realization that with North Korean social infrastructure so dilapidated, it would be a mission impossible to develop North Korea with South Korean capital alone. Although nationalist sentiment prevailed in inter-Korean relations at that time, I advocated the establishment of special economic zones in North Korea and the introduction of foreign investment there. South Korea, with its experience in attracting foreign investment, should work with North Korea to draft a plan to invite foreign investment to the North Korean special economic zones. Having done a thesis on the internal policy wrangling of the Chinese government over attracting Japanese capital to Chinese special economic zones, I thought that such North-South cooperation and special economic zones were the keys for North Korean economic growth. But at that time, neither South Korea nor North Korea was willing to entertain such thoughts.
North Korea is changing. The July 1 economic management reform measures, the North Korea-Japan summit meeting and the opening of Sinuiju, the first North Korean special administrative region, show a country embracing ideas totally different from those of a decade ago. How far should North Korea go in this direction?
First, North Korea's partial adoption of market prices on July 1 will soon trigger inflation. The North has undertaken, in one step, economic reforms that China did gradually over 10 years. It is a desperate measure taken by a regime facing a devastated economy; it is a dangerous choice nonetheless. The success of the bold strides of reform that North Korea has taken will depend heavily on whether it can secure outside aid, because its shortages of raw materials and food are far more dire than those of China when it began its reforms.
Second, North Korea has been trying continuously to attract foreign aid and investment without any substantial results. Last year, by normalizing relations with the European Union, the North had hoped to follow up with normal ties with the United States. Its plans went awry when the United States began its war on terrorism. This year, North Korea took another bold step by turning to Japan. Kim Jong-il and Junichiro Koizumi chose each other because of their individual needs. Their meeting brought unexpectedly frank exchanges and admissions from North Korea, paving the way for much-needed foreign investment. When normalization talks begin this month, it is likely that foreign investment will follow.
But all these desires are nothing more than wishes if there is no improvement in relations between North Korea and the United States. U.S. President George W. Bush, putting foremost priority on preventing proliferation of weapons of mass destruction, still puts North Korea in his "axis of evil." The United States wants North Korea's firm promise that it will not develop, export or deploy weapons of mass destruction.
Distrust between the two nations drives rancor in bilateral relations; the United States demands that North Korea undergo international nuclear inspections before the planned 2005 completion of the two 1,000-megawatt light-water nuclear reactors. North Korea demands that the inspections take place after the nuclear reactors are built.
Without a nod from the United States, development aid from international institutions like the International Monetary Fund and the World Bank will not come, and the reform blueprint of the Sinuiju Special Administration Region will not work. North Korea's economy will deteriorate further and the political situation in Northeast Asia will remain tense.
North Korean leader Kim Jong-il would do well to convey to Mr. Bush that he is trustworthy, having seen how honesty worked with the Japanese. If Mr. Kim keeps bragging about his army's power, peace will be elusive.
The fourth Asia-Europe Summit Meeting adopted a Korean Peninsula peace declaration that is awaiting a response from Kim Jong-il. I want to travel by rail from here to Pyeongyang and see how the city has changed in the past decade.
Kim Jong-il must pursue peace and stability; he has no other choice.
The writer is a professor of international relations at the Graduate School of International Studies, Korea University.
by Ahn Yin-hay