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Shim Jae Hoon

Time for a New Approach

SHIM Jae Hoon

July 29, 2005

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The Seoul government is right in thinking that keeping North Korea engaged in dialogue is the best way to lower the military tension on the Korean peninsula. It is also right in asserting that economic aid has prompted the North to open more contacts at high levels, including the ministerial talks in Seoul in June.

In the nearly two decades of democratic rule, South Korea has come a long way in pursuing the so called " Sunshine " policy of reconciliation with the North. As a result of talks in Seoul recently, the South is sending half a million tons of rice and 200,000 tons of chemical fertilizer to help Pyongyang thwart a new wave of critical food shortages.

It's hard to believe, but the outside world has practically sustained the lives of 22 million North Koreans for the past ten years now. And in one form or another, South Korea has provided economic aid to the North for 15 long years. It ranges from cash to food, trade and tourism revenues subsidized by South Korean taxpayers, even the supply of 15,000 kilowatts of electric power to run a North Korean industrial park built by South Korean money to help revive the North's broken economy.

The North-South merchandise trade, conceived essentially to provide hard currency to the financially-strapped Pyongyang regime, has risen from US$13 million in 1990 to US$697 million last year. The purported commission-based trade, under which North Korean workers produce garments and handbags with material and skills provided by Seoul importers, reached US$176 million last year.

On top of that, North Korean dictator Kim Jong Il is pocketing millions of dollars each year from South Korean tourists visiting Mount Kumgang resorts. This tourism revenue, subsidized over the years by the Seoul government with taxpayers' money, reached US$400 million in 2004.

Indeed, it is no exaggeration to say that North Korea has been kept from economically imploding largely with the help of aid from South Korea, its sworn enemy. So far, the South alone has delivered humanitarian aid worth US$1.16 billion, according to official figures.

It has not been a bad business for a country run on Stalinist control whose total international trade amounted to a meager US$3.5 billion last year. Its main trick has been what may be described - for want of a better term - as extortionist diplomacy, based on intimidation and resting on its threat to implode.

Has it helped to change the deceitful nature of Kim Jong Il regime? The answer is "not much."

In violation of the 1994 agreement to freeze its nuclear weapons development program, Kim proclaimed North Korea a nuclear-weapon state last February. He has admitted to running two separate bomb-making programs based on plutonium extraction and uranium enrichment. He is wasting tens of millions of dollars on test-firing medium-range ballistic missiles capable of reaching Japan and Hawaii. In the field of economic management, he announced price reforms in 2002 but still maintains an iron grip on an agricultural policy based on collectivization.

In short, food and largess from Seoul have misled him into thinking he can buy more time on developing bomb while other countries take on the responsibility for feeding his oppressed people.

It is clearly time to rethink our policy. The key to new policy formulation should be on linking more aid projects to specific goals, such as Seoul's agenda on detente and humanitarian concerns. This also includes more meetings of families separated between the North and South, exchange of mail, exchange of journalists and youth organizations, establishment of liaison offices in Seoul and Pyongyang to coordinate regular contacts at government level, reactivation of the armistice commission channel at Panmunjom, and reduction of naval confrontation in the West Sea to name a few.

Aid policy should also shift from a simple delivery of food to a development program involving the presence of South Korean agricultural teams to help improve the North's productivity. It should move the party's control of agricultural policy from ideologues to technocrats who can improve farm management. The system of collectivized farming should be abolished in favor of village-based production units such as those Deng Xiaoping introduced in China in the early phase of reform.

While curtailing cash-based aid that can be used for military purposes, the South should propose sending economic planners that can produce an export model allowing Pyongyang to earn foreign exchange by legitimate means. It will necessitate restructuring of the archaic industrial system and management in favor of developing light industries geared to export to the South or to other markets.

While the six-party talks in Beijing tackle the nuclear issue, policymakers in Seoul can focus on revamping their aid policy. The emphasis should be on linkage and practicality. Seoul's recent proposal to supply two million kilowatts of electric power in exchange for the North's dismantling of its nuclear arms program appears grandiose but hardly realistic. We should focus on steady results, not bombastic propaganda.

Shim Jae Hoon is a Seoul-based columnist and political commentator. The views expressed are his own and do not represent the views of the publications that carry his columns.
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