Vol: 2020-02

Hee-Gwan Chin
Professor of Unification Studies at Inje University

1. Could we witness the change on the Korean Peninsula?

This year marks the 30th anniversary since Germans saw the Federal Republic of Germany and the German Democratic Republic unite as one nation. Europe already underwent changes a generation ago when the Soviet collapsed and Eastern Europe has been in many people’s travel bucket lists for a long time before the Coronavirus pandemic. It has been over thirty years since the 45 year long lasted Cold War ended and Europe became whole new world now. Asia, on the other hand, has not gone through much geopolitical change after the Pacific War. One would wonder what have made Asia stagnated.

The postwar structure after WWII, which is also referred to as San Francisco System of which the origin of the term came from the Treaty of San Francisco, supposedly focused on preventing the Soviet from communizing Asian countries by using Japan as the outpost for it in return for exonerating Japan’s role in WWII (the Security Treaty Between the United States and Japan in 1951). The other 48 allied nations would have reluctantly agreed to the acquittal as the US was determined to preclude communization. Now the Soviet which was the reason for the San Francisco System to exist is long gone 30 years ago, however the system has kept up its existence. There are regions that are still affected by the old structure, one of which is the Korean Peninsula. One can still face geopolitical and physical barrier when they visit the inter-Korean border.

One of the reasons that the San Francisco System persists stemmed from an accidental discovery in the Korean Peninsula by the time the Soviet collapsed. The French commercial satellite SPOT-2 spotted nuclear facilities in Yongbyon in August 1989 by chance and made a public disclosure, which caused a serious conflict between the IAEA (International Atomic Energy Agency) and North Korea. Although the raised conflict was settled through the US-North Korean Agreed Framework in October 1994, the nuclear issue has since become the center of attention. In the US-Japan Joint Declaration on Security adopted in April 1996, the North Korea’s nuclear weapons and the tension on the Korean peninsula are considered as one of the biggest threats of the time (clause 3) and the role and importance of the Japan’s defense capacity in global security was emphasized (clause 4a).

The North Korean nuclear issue is playing a pivotal role in sustaining the San Francisco System, the relics of the Cold War. That means we might see the end of the post war structure after the Pacific War if we can solve the North Korean nuclear issue. Then, the geopolitical circumstances in the Korean peninsula will go through a volte-face which can eventually lead to ‘Peace Regime’ and the status of Japan as a strong alliance of the US will fade away.

The US’s stance under the Trump administration has bolstered this prospect. Soon after Donald Trump took his office as President, he charged Japan with yen manipulation and has demanded that Korea should split up the bigger part of the military costs on the Korean Peninsula. Furthermore, Trump’s recent three rendezvous with Kim Jong-un make it seem like Trump wants to give an end to the San Francisco System, although the last meeting in Hanoi last year seemed to put a hold on that thought. For now with the US presidential election months ahead, it can be too early to say how it will pan out.

Despite the current uncertainty, there is no doubt that it is a critical time for the Korean Peninsula and cooperation between two Koreas can make a big change. In this regard, the past three Inter-Korean Summit meetings are as important as Sino-US relations or North Korea-US relations in shaping security structures in Asia-Pacific and Indo-Pacific region.

2. What the Panmunjom Declaration represents

It has been two years since the two leaders of Koreas had a historically memorable meeting in eleven years in Panmunjom on April 27, 2018. It was a meeting between Kim Jong-un, Chairman of North Korea whose mother was from Jeju in South Korea, and Moon Jae-in, President of South Korea whose parents were from Ham-kyeng province in North Korea.

It was an unexpected meeting made, especially considering that North Korea tested an ICBM ‘Hwasong 15’ a half year ago on November 2017. Kim’s visit to South Korea draw positive attention in general, partly writing off his father’s debt that his father Kim Jong-il could not keep his promise to visit Seoul as addressed in the June 15th North-South Joint Declaration in 2000. This also lessened a big burden for Moon to make the agreed visit to Pyongyang in September 2018 which was addressed in the Panmunjom declaration. Some offer that we can sound Kim on his visit to Jeju in the future, Kim’s mother’s hometown.

The Panmunjom Declaration was as successful as it was expected. It took a first step for arranging an action plan to deal with the nuclear weapons and left a message of hope that further conversations can and will be made with and by other powers.

The part that both parties will make an effort to declare the end of the Korean War within the year is a very remarkable advance, however implausible it may sound. That they agreed to have frequent meetings means that there will be even more frequent sub-level meetings such as between Prime Ministers, Ministers and other high-level officials. Then, it won’t be too optimistic to talk about political unification and coalition between North and South Korea.

For Peace and Prosperity part in the declaration, the previous agreements in the 2007 North-South Summit Declaration are to be sustained. It is a sensible decision given that advancing economic cooperation can receive huge backlash from the UN and the US that are keeping sanctions on North Korea. In that sense, the fact that they mentioned the possibility of connecting roads and railways can be seen just enough for now.

The Panmunjom Declaration could be made thanks to the close cooperation with other powers. Trump has showed support for inter Korean dialogues and it becomes the driving force of changes in North East Asia. Xi Jinping’s treating Kim as a national guest in having the China-North Korea summit meetings also bodes well. There are also some anxieties that might hinder the positive change, the North Korean abductions of Japanese citizens or the increasing agitation in Japan under Abe administration to name a few. The US policy on Asia and ME such as the US’s withdrawal from the Iran nuclear deal can also play a role in the international relations around the Korean Peninsula.

After all, the Panmunjom Declaration can make catalyst for giving an end to the long history of the Division of Korea.

A few weeks later after the Panmunjom Declaration made, two Korean leaders had another meeting again out of the blue on May 26. It was especially a surprise as the meeting was held two days after Trump canceled the planned summit meeting with Kim. Then there was the 2018 North Korea-United State Singapore Summit held on June 12, 2018. Although they did not make huge progress in denuclearization, it was meaningful as the first-ever meeting between leaders of North Korea and the US. It is said that the inter-Korean summit meetings facilitated the North Korea-US summit to be resumed.

This led to another summit meeting between North and South Korea on September of that same year in Pyongyang where Kim made a promise to dismantle nuclear facilities at Yongbyon. As President Moon took a tour of Mt. Baekdu during the summit visit, some expect that Chairman Kim would be able to pay a return visit to Mt. Halla in the future.

3. Possibility of the North-South Exchange and Cooperation Business at local governments level

The rupture of the North Korea-US negotiations in Hanoi last year had repercussion on North-South Korean relations. Although the most recent tone seems quite softened, North Korea has bombarded harsh criticism on South Korea since last August. Accordingly, it might not be the best time now to proceed with any Exchange and Cooperation Business between North and South Korea.

We can instead take this time of stalemate as a chance to a thorough plan for the future cooperation. Moon government’s policy on supporting Exchange and Cooperation Business involving North Korea makes it seem plausible. The policy roadmap which was released in July 2017 addresses the plan for supporting inter-Korean Exchange and Cooperation at local governments’ level and it was reaffirmed in the Panmunjom Declaration. It is different from the previous governments’ similar intention in a sense that it actually prepares the changing of policies and funding for support this time. The government is working on a system that can help local governments pursue direct Exchange and Cooperation Business with the North on their own. It is even said that local governments would be able to appropriate the central government’s Inter-Korean Exchange and Cooperation Fund. Leaving the feasibility aside, the fact that the central government is mapping out a scheme that enables local governments to do their own business on their own can make good motivation for them to develop new business.

There are things that local governments should keep tabs on in preparing the North Korea business. Some governments have experience while the others are new to the plan.

In terms of working out a business plan, many local governments have plans focusing on promoting features of their region. It would make better results if they also study more on what the North Korean government wants and needs, or on the ‘North Korean Marketing’ if you will. There are various media available dealing with the North Korean news and issues such as newspaper and TV programs, and it is not much difficult to figure out what the current trend is in North Korea and what kind of industry each government can put emphasis on. For example, recent key words often mentioned in the media regarding North Korea include a catfish farm, Samjiyon county and Wonsan-Kalma Beach Resort area, and a lot of articles and news are talking about new technologies and modernizing equipments and facilities. Wonsan-Kalma area is one of the hottest places in North Korea where they are currently building a huge resort complex along with the extensive Myungsasip-ri beach. Due to its sheer size of the construction, some wonder whether it can ever be completed and fully occupied. There are also other 27 development zones in North Korea at which one can examine the possibility of future business.

Once a local government finds a business opportunity that coincides with the North Korea’s interest, it can make the success more feasible. So, it will be a good strategy to prioritize the North Korea’s interest and then gradually extend the scope of business to other industries.

Secondly, while North Korea is a country where primary industries still prevail, a lot of local governments are placing too much emphasis on industrial facilities and logistics when they map out business plans. There will be plenty of opportunities in other business like agriculture, fisheries or animal husbandry. Technologies of the fifth industrial revolution that can be used in these primary industries will also draw a big attention of North Koreans. The fact that lands in North Korea are in higher latitude than ours is another chance we can study as the global warming is increasing global temperatures.

Thirdly, a local government needs to look at the UN’s sanctions on North Korea to figure out what it can and cannot do. Many plans that some of local governments have made so far are subject to violations of the UN sanctions. For instance, logistics, shipbuilding contracts, tourism can be easily caught by the sanctions as it involves so many items prohibited, not to mention that it involves huge money transactions which is also banned. Local governments therefore should work out their plans according to the progress of UN’s sanctions.

Lastly, a local government should take the effect on its own district into account when they make a business plan. Past plans were criticized for its shortsighted vision and inclination toward populism, so new plans should be original with a long-term perspective and able to return the benefit from business to the community. The Exchange business that Jeju and Gangwon province each made were excellent examples for this. To support fruitgrowers and stabilize the price of citrus fruits which is the pivotal industry in Jeju, the Jeju government started to buy a big volume of fruits and shipped it to North Korea for ten years from 2000. Initially, Jeju planned to send 50K tons a year but ended up sending 5K tons annually. However, it was enough to stabilize the domestic price and assessed as a success. Gangwon province was divided into two different districts when Korea was split. As plants and fruit trees had suffered from insect pests, Gangwon government in the South took preventive measures jointly with Gangwon province in the North. In the course of providing these supports, other business made its way into North Korea. Jeju pushed forward business using garlic and native black pigs and Gangwon discharged salmon and built a hatchery in the North. What it tells us is that plans closely associated with the interest of the community can be a key to success in North Korea.

Establishing an adequate system is also important in executing Exchange and Cooperation plans. For example, how a local government communicates with the North Korea and what the considerations in drafting regulations regarding the business will be can make a big difference. Participation and support of community is also very important.

Although Jeju has experience in trading, it needs to develop further relations with the North so that it can expand the Exchange and Cooperation in the future. At this critical juncture in North-South Korean relations, Jeju government needs to take extra care to a communication channel such as whether it will be handled by the local government or private sector.

Secondly, there need to be discussions at the local council about making regulations and fundraising. The North Korea business will require a fair size of fund and a local government must garner their own fund besides the central government’s Inter-Korean Exchange and Cooperation Fund or private funds from NGOs. Although the Ministry of Unification recently confirmed that the central fund can be appropriated by local governments, it will take time and each local government should make up seed money in advance.

Thirdly, a local government needs to help people understand governance of North Korea-related business. There need to be opportunities for citizens, NGOs, companies, educational institutions and media to participate and work together with the local council.

4. To conclude

The Korean Peninsula is at the brink of significant changes. The US has long changed its global security strategy since the end of the Cold War and Trump’s administration is taking the Indo-Pacific strategy. Trump is trying to change the game in North East Asia by demanding South Korea and Japan a large increase in its share of defense costs and by making an effort to communicate with North Korea. If the US could build up an amicable relation with North Korea, we would see the emergence of a new Asia-Pacific order. That means the end of the 70-year-old San Francisco System. It then will inevitably call for the change of overall policy and strategy to cope with the new era, both at central and local governments’ level.

The new policy and strategy should be planned to a win-win situation for both North and South Korea. As for Jeju, a thorough examination should be made to execute its ‘5+1 Exchange and Cooperation Business’ which includes citrus fruits, tourism, ecology and energy and a long-term plan should be mapped out.

Hee-Gwan Chin is a professor of Unification Studies at Inje University. Prof. Chin received Ph.D. from Dongguk University. He is also holding posts as Vice President at the Korean Association of North Korean Studies, Vice President of the Association at the Studies of Koreans Abroad and Advisor to the Ministry of Foreign Affairs of the Republic of Korea. His research interests lie in the fields of politics in North Korea, Korean unification and studies of Korean residents in Japan. His recent works include “Understanding Korean Reunification: 12 perspectives on the Korean Peninsula, Neulpum Plus (2020)”, “Reunification, Peace and North Korea, Pakyoungsa (2020)”, “Analysis Contents of Jeju Shown on the Literature on Space of North Korea, the Institute for Northeast Asia Research, 2018, vol.33, no.2”, “Analysis on Emergence of North Korea’s Works & Kim Jong-Un’s Works, the Journal of the Korean Association of North Korean Studies, 2017, vol.21, no.2”, “Korean Dispora Sourcebook, AKS Press (2017)”, “Study on the Changes in Power Elite of Kim Jong-un’s Regime in North Korea, Korea and World Politics, 2015”, “Understanding North Korea, Lexington Books (2014)”