Zoom in Gazette

Iron Hammers and Counterblows

The title sounds like it refers to a couple of new all-action computer games but, sadly, it does not. This is the latest outburst from North Korean commanders on KCNA (Korean Central News Agency) in response to the ‘war games’ conducted by South Korea and the US. By the time you read this the 11-day-long drills will be over, hopefully without incident. Interestingly, while such activities and threats are taking place, South Korean President Lee Myung-bak has proposed a three-step plan for unification with North Korea.

While 56,000 South Koreans and 30,000 US personnel are engaged in exercises to improve the co-ordination of the respective forces, Lee Myung-bak is focusing on unification by peaceful means. It is, however, hard to believe that his proposals will be taken seriously by the South Korean populace who are so used to North Korea’s provocative behavior. Mr. Lee said the two nations should first form a peace community, then a deeper economic union and ultimately remove the other barriers to reunification. It sounds so easy, but few will believe that North Korea would open up so willingly.

In order to achieve this, Mr. Lee has suggested a “unification tax”, which would cost South Koreans more than $1.3trn (£830bn), according to estimates by Southern politicians. Whether South Koreans would be willing to pay for this - a number of who are not even keen for unification to take place - remains to be seen. Furthermore, it is unlikely that the North Korean government would be willing to deal with a man they consider to be a “traitor” and a “sycophant”.

What is certain is that it is still unclear in South Korea and, indeed the international community, how to deal with North Korea. Diplomatic efforts have often yielded initial promising indications only for North Korea to renege on its agreements and isolate itself further. The sinking of The Cheonan in March, attributed to North Korea, shows that the country cannot be ignored, but it is a sovereign country and therefore must be treated accordingly. Mr. Lee’s plan, however, without the backing of North Korea, cannot hold much ground while the current North Korean administration is in charge.

There is, however, some support for Mr. Lee’s three-step plan. During the party's Supreme Council meeting, Rep. Kim Moo-sung, GNP floor leader, agreed with the President. “The time is ripe for the nation to gear up for unification with the unification tax. Should the government complete drawing up the outline, we will sit down with opposition parties to move the agenda forward,” he said. Mr. Lee believes that unification will definitely come - although he did not indicate when - and so South Korea should start to prepare for it now.

If unification were to occur in the near future, it would without doubt seriously impact on South Korea as the economy of the two nations are so different. The Rand Corporation projected in 2005 that up to $670 billion would be needed to double the gross domestic product level of North Korea within five years in the wake of the unification, and even then there would be a huge gap between the two countries.

One thing that has come across strong from North Korea is that it has little desire for integration with the South unless it is on their terms. They will not wish to become absorbed into the South Korean economy. Rep. Park Jie-won, floor leader of the main opposition Democratic Party (DP), was wary of North Korea’s possible misinterpretation of the purpose of the tax. “The idea can stir up the North as it may interpret the unification tax to mean that South Korea seeks unification through absorbing the North Korean economy,” he said. It is not surprising that a communist nation would be concerned about such economic integration.

Finally, since we do not know when the unification is likely to take place, surely it is better to concentrate on improving the relationship between the two countries for the time being. It is not wrong to think about unification costs and taxes incase of a sudden unification such as what happened in Germany after the fall of the Berlin Wall in 1989, but the circumstances here are not the same as that instance and sudden unification would be much more difficult to achieve, in practice, than in Germany. The “wall” here, the DMZ, is much more difficult to penetrate and the society in North Korea is much more shielded and distant from their South Korean counterparts.