Since the 1970s, the unification policies of the South Korean administrations have been based on functionalism. It sought strengthen cooperation and exchanges in areas that are not as politically sensitive such as the economic, social, and cultural fi...
Since the 1970s, the unification policies of the South Korean administrations have been based on functionalism. It sought strengthen cooperation and exchanges in areas that are not as politically sensitive such as the economic, social, and cultural fields and then to translate that momentum onto the political field. On the contrary, North Korea has been aiming to reunify by forming a federal state. A community of states forms a federal system, with the governing authorities residing in the federal state. Authorities are divided amongst the member states and the federal state, and the member states are allowed to participate in the formation of national policies.
Despite the apparent differences in their unification policies, North and South Koreas have been claiming that they were making gradual progress with regards to unification and that they have come up with the following five agreements through dialogue in the last 50 years: the 7.4 Joint Statement (1972), the Basic Agreement (on reconciliation, nonaggression, exchanges, and cooperation between the North and the South), the Declaration for the Denuclearization of the Korean peninsula, the 6.15 North-South Joint Declaration, and the 10.4 Agreement. These five agreements outline mutual confidence building, strengthening of exchanges and cooperation, and mutual nonaggression as the foundation for reunification on the Korean peninsula.
At the current point in time, the North-South relation is on a downward slope despite these five agreements. It would not be an exaggeration to say that these five agreements were dead and meaningless. North Korea is creating tension on the peninsula by completely disregarding the denuclearization declaration with a nuclear test in 2006, a long-range missile launch on April 5th, 2009, and a second nuclear test on May 25th. The United Nations Security Council has denounced North Korean provocations as violations of the UNSC Resolution 1718 and unanimously passed the UNSC Resolution 1874, which places stronger restrictions on North Korea.
The North-South relation is walking on thin ice. The tourism programs in Kumgang Mountain and Kaesung have been suspended, and the future of the Kaesung Industrial Complex remains uncertain. Since March 30th, 2009, a staff member of Hyundai Asan has been under arrest without any means for the South to get in contact.
Depending on the political atmosphere, the North-South relation has fluctuated drastically in the last half century. The most paradoxical aspect of the North-South relation is that the first agreement between the North and the South, the 7.4 Joint Statement, was issued under the Park Chung Hee administration, which was very hostile towards the North, and that the Basic Agreement and the Declaration for the Denuclearization of the Korean peninsula were made under the Roh Tae Woo administration, which was a military regime. On the contrary, the Kim Dae Jung and Roh Mu Hyun administrations, which were very friendly towards the North, had to experience military engagements in the West Sea as well as the North Korean nuclear test. The North-South relation is quickly deteriorating in the current administration with the 2nd North Korean nuclear test.
These facts demand a critical look at the unification policies of the past administrations and their effectiveness. After a careful assessment, it became clear that there are certain limitations on the unification policies of the past administrations.
First, history has shown that reunification cannot be achieved through dialogue. Examples of unification from Vietnam, Yemen, and German demonstrate that the unification between two drastically different political systems demand the collapse of one side, and the unification of the two Koreas will most likely not steer too far from these historic precedents.
Second, opportunities for unification arise when the division itself is managed effectively. Effective management of the division within the Korean context means the maintaining of peace on the Korean peninsula, controlling of the North Korean nuclear capabilities, and resolving of the North Korean refugee issue that has become a major problem since the mid-1990s. Only the proper management of the division itself will allow for the ideal conditions for unification.
Third, unification policies must take into account the issue of social integration. Social integration between the North and the South will be about choosing the more efficient political, economic, and social system and applying it to the entire society. A unified Korea must clear out the antiquated ways of socialism and set the conditions for a market-economy to blossom throughout the peninsula. This will set the foundation for the reconstruction of the North Korean economy.
The reconstruction of the North Korean economy should be at the core of the preparations for unification. The unification policies up until now have focused on the political integration and have neglected the economic integration side of the picture. The political integration and unification without any preparations for the reconstruction of the North Korean economy will lead to many negative side-effects and confusion.
The reconstruction of the North Korean economy depends on the transformation of the North Korean economy. Transitioning from the socialist planned economy to the market economic system involves a great deal of reforms; therefore, there may be large side-effects. In transitioning into a market economy, certain important variables must be taken into consideration. The reformist group must be able to restrain the outgoing communist groups, which will oppose all forms for reform, and it must obtain the full confidence of the general population through the demonstration of integrity and transparency. In addition to these variables, the transition must be accompanied by a stabilization policy.
Under the current administration, North Korea’s transformation will move along in a very slow pace; however, there is always the possibility of the regime collapsing and eventually resulting in the reunification of the North and the South. In this case, North Korea’s transformation will be led by South Korea, just as West Germany had done in their efforts to unify the East and the West. The German precedent serves as a valuable example for the two Koreas.
Monetary unity and privatization lie at the heart of the North Korean transformation. Within this context, monetary unity will mean substituting North Korean currency, which merely serves as a medium of exchange, with the South Korean Won, and privatization will mean restoring all the assets held by the Communist Party back to the general population.
Privatization will not only provide the foundation for the introduction of the market economy but also will serve to politically crush the outgoing communist regime. Confusion and negative side-effects can be avoided by establishing a solid foundation for the transformation. Without proper privatization prior to the reforms such as liberalization of prices and trade can lead to chaos and ultimately a barrier to the transformation itself.
North Korea’s transformation will be monumental task that will decide the fate of a reunified Korea. Historical precedents of privatization in Eastern Europe and East Germany will serve as excellent guidelines in preparing for North Korea’s transformation. A careful look at the trial and error in Germany’s case will provide tremendous help in successfully transforming North Korea.