A breakthrough for the economy

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A breakthrough for the economy

The 1,400-kilometer (870-mile) route from Dandong to Hunchun divides the Korean Peninsula from China. The Aprok and Duman River and grand Mount Baekdu show the border of the Korean Peninsula. When South and North Korea become unified, the path would lead us to China and Russia to the north and to Japan across the East Sea and the United States beyond the North Pacific. The Korean Peninsula of 75 million people is where the continent and the ocean met.

However, the lonesome Broken Bridge over the Aprok River seemed to represent the tragic reality of the Korean Peninsula divided into two and unable to stretch out. I had to solemnly face the reality of three years of devastating war and seven decades of division.

A boat ride on the Aprok River passes by the houses, factories and people of North Korea. The workers in the North were so close. But at night, the North Korean side becomes dark and deserted, posing a clear comparison to the splendid lights in Dandong. There are 25 million people starving in the most closed socialist country in the world. Unfortunately, their fates were determined when they were born. While they are of the same Korean heritage, those born in Korea have one-twentieth the income and spending power of South Korean citizens. The average annual income of North Koreans is similar to a month’s earnings of minimum wage for a South Korean worker.

The six-day five-night Peace Odyssey was a perfect opportunity to think about peaceful reunification of the Korean Peninsula amongst the experts with years of experience and research. At the official sessions, over meals and during the journey, we shared opinions on peaceful reunification. We agreed that non-political exchanges and economic cooperation at the civilian level must be revitalized at any cost. Political, social and cultural differences as a result of prolonged division would not be resolved by political declarations alone. To restore severed talks and pursue gradual reunification, we need to expand humanitarian assistance and human exchanges to accomplish integration of the South and the North. We can begin from easier tasks, such as sports, music, culture, health and academic exchanges, and once we have increased exchanges, we will have more understanding of each other and move a step closer to the restoration of national homogeneity.

Economic cooperation with North Korea depends on how South Korean companies utilize North Korean labor, as seen in the Kaesong Industrial Complex. Based on the wage level at the joint industrial park, the wage of the North Korean workers is half of what Chinese workers are paid. The human resources in the North will be key to expanding economic cooperation. As the North Korean defectors’ cases have illustrated, it would take time for North Korean residents to adapt to the unfamiliar environment due to lack of understanding of, and experience with, a market economy. Government-level education and training programs for North Korean defectors need to be established, and a long-term plan for workforce utilization should be prepared.

Inter-Korean economic cooperation can become a breakthrough to the Korean economy falling into the trap of low growth. Due to outdated economic structure and low productivity, the economic growth rate of North Korea in the last decade has been less than 1 percent.

However, much research shows that North Korea has great potential, just like China and Vietnam before it, if it drastically opens up, reforms and expands economic cooperation with its neighbors. In the long term, North Korea’s expansion of spending power and infrastructure demands will benefit Korean companies. Young people can also have wider job and start-up opportunities.

Moreover, increased human exchange and the spread of a market economy can bring internal political and social changes in the North by expanding the middle class and improving education. There are ample reasons to increase civilian exchanges and economic cooperation.

No one can say for sure how peace and reunification will arrive in the Korean Peninsula. Germany, Vietnam and Yemen all had different ways of attaining reunification. While the unifications were between countries with the same historical background, language and culture, the integration was hardly an easy process. In the course, each nation had to pay considerable economic and social costs.

Korea won’t be an exception. But if we prepare and make efforts in advance and induce changes in North Korea, those costs can be lessened. I hope that the second and third Peace Odyssey can contribute to draw North Korea into the way of reform, opening and peaceful reunification.

Translation by the Korea JoongAng Daily staff.

JoongAng Ilbo, Aug. 18, Page 33

*The author is an economics professor and the director of the Asiatic Research Institute at Korea University.

by Lee Jong-hwa

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