1. 1 IPE-K 2013.6.7 IPE-K: Two Koreas and Unification *Some parts of this note are borrowed from references for teaching purpose only. Semester: Spring 2013 Time: Friday 2:00~15:00 pm Class Room: No. 331 Professor: Yoo Soo Hong Office Hour: By appointment Mobile: 010-4001-8060 E-mail: yshong123@gmail.comyshong123@gmail.com Home P.: //yoosoohong.weebly.com

2. Geography 2

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4. Two Koreas Today South Korea GDP Per Capita $20,400 Military Expenses $21.06 billion Military as share of GDP 2.6% Population 48,846,823 Infant mortality 6.16 deaths/1,000 live births North Korea GDP Per Capita $1,800 Military Expenses $5.21 Billion Military as share of GDP 31% Population 23,113,019 Infant Mortality 23.29 deaths/1,000 live births 4

5. Cold War History: Korea USA/USSR tensions emerge almost at once USA envisions capitalist democracy USSR envisions communist government 1945: Divided occupation by the 38th Prallel Line 5

6. Two Koreas Emerging Cold War conflict between USA and USSR Joint elections were impractical Two separate Korean Governments established 1948 “Elections” in both South (UN endorsed) and North Korea 6

7. Korean War January 12, 1950, United States Secretary of State, Dean Acheson referred at: US Press Club: About America's Pacific defense perimeter Implied that the U.S. might not fight over Korea This omission encouraged the North and the Soviets 7

8. Korean War War began June 25, 1950: North Korea Invades Incheon landing, September 15 - September 28, 1950 Chinese entry, October, 1950 January 4, 1951, Communist Chinese and North Korean forces recaptured Seoul. MacArthur was removed from command by President Truman on April 11, 1951. Stalemate, July, 1951 8

9. Korean Division Originally 38 th parallel Post Korean War: Red line called the DMZ 9

10. Korean War Ends Cease Fire: July 27, 1953 Neither Korea signed armistice State of war continues Both Koreas considered themeslves the only legitimate authority Both Koreas had aurhoritarian dictatorships at least through 1987 10

11. Post Korean War History South Korea: 40,000 US troops remain to guard South Korea –US supports pro American authoritarian regimes North Korea: Chinese troops leave –North argues that South Korea is an occupied country, not independent –North sees US troops as a threat 11

12. North Korea North Korea sees 40,000 US troops on its southern border as a major threat –Asserts South Korea is simply a colony of the US. –No need to work with SK, it is the US that matters. Develops Juche ideology of independence –Economic independence –Military independence –Focus on People’s needs –In reality, Juche is a failure both in independence and in People’s needs. –It became an ideological back-up for the Kim’s family dictatorship. 12

13. North Korea Authoritarian Anti religious persecution Inefficient production, very little economic growth Becomes progressively less secure as South Korea outgrows the North 13

14. North Korea Cold War ended Communist Block Collapsed 1991 North Korea could not play China and Russia against each other South Korean President Roh Tae Woo (1988-1993) launched “Norde Politic” drive and normalized relations with China and Russia, Isolating North Korea. Isolated North Korea has difficulty feeding its population –Bad weather –Communist incentive structure –Poor distribution –No more cheap resources from China and Russia –25-30% of GDP spent on military 14

15. Nuclear Crisis –North Korea launched Nuclear program, 1990 –1994: NK withdrew from membership with International Atomic Energy Agency (IAEA) Jimmy Carter visited Korea representing Clinton Administration –1994 Agreed Framework negotiated N. Korea gives up nuclear weapons for energy support Korean Economic Development Organization (KEDO) formed to help N. Korean energy development. 15

16. Nuclear Crisis –1994 Agreed Framework DPRK's nuclear power plants would be replaced with light water reactor (LWR) power plants by a target date of 2003. Oil for heating and electricity production would be provided while DPRK's reactors were shut down, until completion of the first LWR power unit. The two sides would move toward full normalization of political and economic relations. The U.S. would provide formal assurances to the DPRK, against the threat or use of nuclear weapons by the U.S. The DPRK would take steps to implement the Korean Peninsula Denuclearization Declaration. 16

17. South Korean Response President Kim Dae Jung (1998-2003) Initiated “Sunshine Policy” –Attempts for the first time to engage NK with positive incentives –Negotiates some trade and family exchanges President Roh Moo Hyun (2003-2008) Continued Sunshine policy President Myung Bak Lee –Disagrees with the “Sunshine” approach 17

18. Axis of Evil and Bush Doctrine –At 2002 State of the Union, President Bush included North Korea in “Axis of Evil” with Iraq and Iran –Iraq Invasion –President Bush declared the “Bush Doctrine” of preemptive war –US invaded Iraq North Korean Reaction –2003 Withdrew from Nuclear Non-proliferation Treaty –Declared NK a nuclear power –Insists on addressing only US, not 6-party talks 18

19. –North Korea’s Nuclear threat was derived from North Korean perception of insecurity –Korea’s division created that insecurity –North Korea sees US as the core threat (40,000 US troops aimed at them) –Bush Doctrine and US behavior since 2001 reinforces perception of threat –North Korean leadership is not crazy nor suicidal –North Korea uses aggressive negotiating tactics to achieve its ends –North Korea is unlikely to use nuclear weapons –Panic or over-reaction to North Korean provocations are counterproductive 19

20. The Political Economy of North Korea  Major changes in North Korean political economy over last two decades - Transformation is better understood as an unintended response to state failure in the wake of the famine than as a top-down reform. - Policy has at times ratified these changes, most notably with reforms of 2002 - However, since 2005 “reform in reverse” has been going on 20

21. NK Economic Decline and Recovery - Collapse: the great famine of the mid-1990s - Recovery: unintended grassroots marketization - Since 2005, the return of slow growth (and food distress 21

22. Declining Food Production 22

23. Declining Reliance on the PDS PDS: public distribution system. When the PDS cannot provide enough food, there are few ways for vulnerable people to cope beyond the now very limited international assistance that is being provided. 23

24. Changing Pathways to Advancement 24

25. Origins of Shortage  On the back of increasing harvests, rising aid government seeks to re- assert control  Internally –Banning private trade in grain –Seizures in rural areas –Shut down relief agencies in the hinterland  Externally: 2006 missile and nuclear tests disrupt assistance from South  Bad weather: the floods of 2007 25

26. Evidence I: Quantities 26

27. Evidence II: Prices 1. 10/01/2005: Ban on private trade in grain & revival of PDS 2. 07/14/2006- 07/15/2006: Flood 3. 10/09/2006: Nuclear Test & UN Sanctions 4. 08/15/2007- 08/31/2007: Flood 5. 12/01/2007: Introduction of Chinese Export controls, partial ban on trading activities 6. 04/01/2008: Tightened control on trading activities 7. 05/14/2008: Military stocks reportedly ordered released & US aid announcement on the 16 th. 8. 06/30/2008: Arrival of first aid shipment 27

28. Evidence III: Qualitative 28

29. Developments in the External Sector 29

30. China’s Growing Share 30

31. China-DPRK Trade 31

32. China Food Exports to DPRK 32

33. North-South Trade 33

34. Forms of Engagement 34

35. The Kaesong Industrial Park  The model –An inducement in broader North-South relations –Engagement to socialize and transform  The outcome: leverage in reverse –North Korea not only holding hostage until release… –But holding entire Kaesong project hostage –Recent evidence of backing off by reducing land rent and wage demands  Compromise –Resumed normal business 35

36. The New Geography of North Korean Trade  Beyond China, the growth of ties with Middle East (ongoing project)  With new incentives to proliferate –Nuclear cooperation with Syria and Iran –Missiles: even during moratorium on test, working with Iran –Small arms to Burma, perhaps even Hezbollah and Hamas  Other illicit activities  US concerns: not simply sanctions in context of 6PT, but defensive concerns and link to Middle East 36

37. Refugees’ Life Beyond North Korea  Preferences for permanent resettlement –US attracts younger, better educated respondents –More might prefer China if policies changed  Most want unification 37

38. 38 South Korean Money Coins- 10, 50, 100, 500 Korean Won. Notes- 1,000, 5,000, 10,000 Korean Won. 1 US Dollar = 1,043 South Korean Won

39. 39 North Korean Currency

40. 40 http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=410158

41. Prospects of Reunification 41

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43. North Korea  Communist system - The world most isolated regime & economic backwardness - Dictatorship and human rights issues - Nuclear development & ‘military-first policy’  “Juche” (Self Reliance) Ideology: - Symbolizes autonomy or identity in ideology, independence in politics, self-sufficiency in economy and reliance on Korea’s own forces in national defense.  Characteristics of North Korean system: - Acceptance of hereditary succession of power - Most militarized country among communist countries - Anti-American education 43

44. South Korea (ROK)  One of the most successful postwar economic development and democratization - 12th largest economy (member of OECD) - 12th largest trading country - 11th in global competitiveness (WEF 2007) - 1st in university enrollment - 1st in broadband penetration (90% of households) - Fully democratized political system 44

45. Current (MB) Korean Government  Five Goals by Sector - A government serving the people - A lively market economy - Active welfare - A country rich in talent - A global Korea  “21st Century Strategic Alliance” KORUS FTA - “Denuclearization, Openness, 3000“ - Six-party talks (multilateral approach) >Inter-Korean Summits (bilateral approach) 45

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47. Inter-Korea Agreements and Documents 1953-Present  Total 92 agreements and documents: - 1953: Armistice Agreement - 1972: Inter-Korean Joint Communique - 1991-1992 (11 on Inter-Korean Basic Agreement) - 1994-1997 (9 on DPRK-US Agreed Framework-related) - 2000-2004-2007 (69+1 since the Summit in 2000) 47

48. South Korea’s Policy Towards North Korea  From confrontation to reconciliation  Engagement policy of North Korea during the last decade - Dialogue and cooperation - Confidence building - Peaceful coexistence - Prosperity on the Korean Peninsula and Northeast Asia  Peaceful and gradual process of unification  Sunshine Policy - Not allow any armed provocation hampering peace on the peninsula - Don’t absorb North Korea - Push reconciliation and cooperation with North beginning with those areas which can be most easily agreed upon 48

49. Inter-Korean Relations  Humanitarian assistance - South Korea is the biggest donor county to the North  People’s exchanges - In 2005, 88,000 South Koreans visited the North (more than the total number of visitors during the previous five decades) - 1.5m South Korean tourists to Mt. Geumgang since 1998 49

50. SK Government Aid to North Korea 1995-2004 YearAid Amount (USD)Note 1995 232,000,000 Rice (150,000 MT) direct 1996 3,050,000 Grain, P milk via UN 1997 26,670,000 Grain, P milk via UN 1998 11,000,000 Grain, flour via UN 1999 28,250,000 Fertilizer - direct 2000 78,630,000 Fertilizer – direct 2001 70,450,000 Fertilizer, grain, underwear, medicine – D 2002 83,750,000 Fertilizer, grain, med – Direct 2003 87,020,000 Med, cash (Unicef), fertilizer, grain -D 2004 740,000 Yongchon ER supplies, medicines, etc.-D 50

51. SK NGO Aid to NK, 1995-2004 YearAid amountNote 9/95-5/97 4,960,000Food, blanket-via IFRC 6/97-7/97 8,500,000Food, fertilizer-Korean RC 8/97-10/97 8,900,000Food, vitamins-KRC 3/98 170,000Fertilizer (800 mt)-KRC 4/98-6/98 9,350,000Food, potato,socks–KRC 9/98-12/9811,330,000Corn, cows; NGO-food 199918,630,000 Indep (10 NGOs)- diverse KRC (24 NGOs) -food, clothing, med 200035,130,000Independ (13 NGOs); KRC (16 NGOs) 200164,940,000Indep (19 NGOs); KRC ($238,333) 200251,170,000Indep (25 NGOs); KRC ($692,308) 200370,610,000Indep (29 NGOs); KRC ($583,333) 2004 (Jan-Apr)37,510,000Indep (19 NGOs); KRC ($491,667) 51

52. Gaeseong, the city next to the DMZ 52

53. Inter-Korean Summit Meetings (2000, 2007 )  Major results of the 2007 Summit: (Peace building) - Cooperation on denuclearization and establishment of a peace regime - Reduction of military tension and the holding of a defense ministers’ meeting - Holding Prime Minister’s meeting (Economic cooperation) - Creating a Special Peace and Cooperation Zone in the West Sea - Constructing ship-building complexes and repairing roads - Expanding Gaeseong Industrial Complex (Reconciliation) - Expanding the reunion of separated families - Promoting exchanges and cooperation in social and cultural areas 53

54.  Long-term Goals - To establish a permanent peace regime on the Korean Peninsula - To develop a multilateral security forum in Northeast Asia  Progress (North Korea’s action to be taken by the end of 2007) - Disable key nuclear facilities - Provide a complete and correct declaration of all its nuclear programs (Other Six Party’s action) - Economic and energy assistance up to the equivalent of 1 million tons of heavy fuel oil - Discuss normalization of US-North Korea relations, Japan-North Korea relations  Stalemate (2008- ) - MB government demands proper apology by the North for killing a civilian - Three-generation succession of the ‘Kingdom” - Military Confrontation between NK and SK in the recent period - Reconciliation? Six Party talks 54

55. Unification Strategy Containment Engagement Absorption - Waiting collapse - Absolute superiority EPA only 55

56. Statistics on North Korea 56

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