[Viewpoint] The need for the unification tax

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[Viewpoint] The need for the unification tax

The surprise appearance of North Korean leader Kim Jong-il in China has attracted the attention of the world. It is certainly unprecedented that he visited China only three months after he was last there. But what is more incomprehensible are the circumstances of him leaving the country in a hurry without meeting former U.S. President Jimmy Carter, who was visiting Pyongyang.

What is going on? Korean officials interpreted the move as a part of the process to name Kim Jung-un as his successor by touring Kim Il Sung memorial sites in China. Does it really explain this strange behaviour?

Some experts say Kim Jong-il’s visit to China is a positive sign and is connected to the visit by Wu Dawei, Beijing’s special envoy for Korean Peninsula affairs, who was visiting Seoul via Pyongyang on the same day. They speculate that a plan to resolve the nuclear issue is under discussion. It sounds plausible considering the positions of Beijing and Pyongyang.

The core of China’s Korean Peninsula policy is maintaining the status quo. They do not wish for the reunification of the two Koreas, but they do not want increased tensions in the region either. The most desirable scenario would be gradually building up its influence over the Korean Peninsula and maintaining peace.

Still, Beijing cannot stand the growing influence of the United States. China is not pleased with the Cheonan incident, which has increased Washington’s presence in the region. While Beijing sided with North Korea in the U.N. Security Council, an escalation of inter-Korean tensions is against its foreign and security policy principles.

So the best possible option available to China is restoring the six-party talks. However, the sinking of the Cheonan made the resumption of the talks more difficult for Korea, the U.S. and Japan. In order to bring around Seoul, Washington and Tokyo, it needs to provide an innovative plan transcending the tragic incident.

The only card is the North Korean nuclear threat. Wu Dawei’s busy moves may be evidence that Beijing has secured what it hopes will be a comprehensive solution to resolve the nuclear threat, say some specialists.

In this case, China needs to give a gift to the North. North Korea is suffering from a serious food shortage. It is short of 130 tons of food this year alone, and it suffered severe flooding not long ago. In early September, a meeting of the party delegates is scheduled for the first time after 44 years. Pyongyang is weighted down with numerous pressing issues.

During the last visit to China in May, Kim Jong-il requested $10 billion in aid and one million tons of oil, but Japan’s Tokyo Daily reported that Beijing promised to provide only a portion of that amount. Maybe, China has approved the entire request this time. If Kim Jong-il is travelling to personally confirm China’s nuclear resolution plan and obtain pledges for assistance, his sudden visit can be explained.

Of course, it is uncertain if Kim Jong-il’s surprising act will actually lead to such a positive outcome. Everything is under wraps, so making an accurate analysis might be farfetched. However, we need to pay attention to the possibility, if not now, then sometime in the future.

The unification of Germany arrived without notice. It is wise that we prepare for the possibility of reunification at any time.

When President Lee Myung-bak was inaugurated, he proposed three basic principles on North Korea: denuclearization, economic openness, and achieving a per-capita income of $3,000 by providing full scale assistance. If Pyongyang carries out denuclearization and market opening now, President Lee needs to keep his promise.

However, the only capital that can be used for assistance in the government budget is the Inter-Korean Cooperation Fund. This year’s allocation is about 1 trillion won. About 3 percent of the fund has been used so far, but even if the remaining amount is spent, it is not enough to raise the per-capita income ten times from its present level.

That’s why Lee Myung-bak’s “unification tax” is noteworthy. When he proposed the taxation plan in his August 15 Independence Day speech, it was criticized has being premature. However, President Lee proposed innovative reconciliation and cooperation policy ideas when he was a first-time lawmaker.

If you remember his dedication, the tax proposal deserves serious consideration. It would be a misunderstanding to think it as an impromptu move without much understanding of the situation.

Whether North Korea changes drastically or the South offers assistance based on progress in reconciliation, Seoul will inevitably face a funding problem. Lee Myung-bak’s unification tax is a way to raise needed capital. It is a fund we will need for sure, whenever that may be. The financial burden is unavoidable, and if the President does not speak of preparation measures, he would be neglecting his duty.

The president’s proposal is in tune with the JoongAng Ilbo’s campaign to reserve 1 percent of the annual budget as a North Korean fund. The purpose is to save financial resources in preparation for the unification process that will require large investments from both sides.

Experts have calculated that emergency assistance to North Korean residents, infrastructure and economic cooperation will require at least 3 trillion won every year. Next year’s budget is estimated to be 300 trillion won, and setting aside 1 percent would match the amount that Korea will inevitably have to pay for establishment of peace and reunification.

It is a challenge to predict whether Kim Jong-il’s sudden appearance in Manchuria will lead to some type of upheaval on the Korean Peninsula. The uncertainty is just another reason why we need to be solidly prepared.

*The writer is the chief editorial writer of the JoongAng Ilbo.

by Heo Nam-chin
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