[VIEWPOINT]An offer the North can’t refuse?

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[VIEWPOINT]An offer the North can’t refuse?

Pyongyang must have a great deal to think about, now that Seoul has offered 2 million kilowatts of electricity in return for its nuclear disarmament. North Korea’s biggest concern today is its food and electricity shortages. Although the regime is ultimately responsible for the shortage of food, the immediate cause is a lack of fertilizer.
But an electricity shortage is a completely different matter. The shortage of electricity in North Korea is strangling its economy, completely blocking its potential for production. Seoul’s offer might be an effective way to save North Korea from its misery in a relatively short period of time.
Seoul is willing to supply as much electricity as North Korea now produces. At present, the North produces 2.3 million kilowatts of electricity, enough for a city the size of Incheon, with 800,000 households and a population of 2.6 million. If 4.5 million kilowatts of electricity is needed to keep North Korea running, then the 2 million kilowatts South Korea would provide can almost make up the shortage. The scale of the offer is such that North Korea cannot resist it.
However, Pyongyang no doubt has concerns on a different level ― the main one being the possibility that it would become dependent on the South. Given the Koreas’ starkly different systems and ideologies, North Korea would face a major economic burden if it accepted the offer. Pyongyang would have to be constantly concerned that the power could be shut off at any time. Of course, the odds of that happening are very slim, considering the improving relationship between the Koreas. But the uncertainty is still there.
Another concern would be that North Korean residents, and the society as a whole, would rapidly come to have a different view of the South. The stability in production and in day-to-day life that would result from the electricity from the South would enhance cooperation and exchange between the Koreas, both economically and socially, and North Koreans would feel increasingly friendly toward the South.
So how will Pyongyang respond? In the short term, the North would like to have the electricity. But ultimately, Pyongyang is very likely to demand the construction of a power plant in the North with comparable capacity, to avoid becoming dependent. Moreover, Pyongyang might not be satisfied with the economic package Seoul is offering, arguing that it is no bigger than the one offered in 1994 for a nuclear settlement. Pyongyang might ask for more economic aid at the six-party talks. If Seoul agrees to build a power plant in the North, the additional burden to South Korea would amount to several trillion won (several billion U.S. dollars).
If the cost of supplying electricity to the North would be offset by the money saved in aborting the light-weight nuclear reactor project in the North, then the project would be accepted by the South Korean public. But building a new power plant is another matter. Having wasted some 800 billion won ($ 775 million) on the light water reactor project, citizens will object to the idea.
Seoul needs to consider many variables. Aside from whether we are even capable of supplying so much electricity in the near future, we need to consider the cost of producing and transmitting the electricity every year, and of updating North Korea’s aged transmission facilities and power distribution system. It is also important to consult the other participants in the six-party talks. Establishing a compensation structure before the nuclear issue is resolved could put a burden on Seoul’s partners in the talks.
The electricity offer is a clever one that encompasses the positions of Washington, Pyongyang and Seoul at the same time. The problem is that Pyongyang still has to agree to give up its nuclear program in return. The choice is entirely Pyongyang’s. North Korea must not pass up this opportunity to bring the nation together. Let’s hope the fourth round of six-party talks establishes a specific, working-level plan for the North’s nuclear disarmament.

* The writer is the director of Center for the North Korean Economy at the Korean Institute for National Unification. Translation by the JoongAng Daily staff.

by Kim Young-yoon
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