No Reforms from Co-op Project: Report

A recent publication indicates that the inter-Korean economic cooperation project was not satisfactorily effective in encouraging North Korea to make reforms or open its policies.

On December 15, the Institute of Monetary and Economic Research, an institute within the Bank of Korea (BOK), commented based on its report about the inter-Korean economic cooperation project’s present status and assessment, “Despite that the project has made some partial accomplishments in recovering North Korean’s economy, it has fallen short of relieving military tensions, thus causing negative effects in achieving other goals such as facilitating its economic integration and an open door policy.”

The report pointed out that when East and West Germany concluded their treaty in 1972, they agreed on a clause not to use armed force but rather to pursue a peaceful resolution. However, since the June 15 inter-Korean joint statement signed in 2000 lacks such a clause, this project might cause some potential fears.

The report highlighted the fact that “in order to ease military tension, we need to pursue not only economic but also military cooperation for establishing a peaceful regime between the South and the North.”

It also indicated, “The reason why the government had to face criticism of dishing out money to the North is because it invested and gave support without receiving anything in return. Like the case of West and East Germany, investments by private sectors and the government should be kept in separate boxes. While private sectors provide humanitarian aid, the government should only promote investment on the ground of reciprocity. The challenge to change North Korea will only be met by such a dualistic investment system.”

jinhup@donga.com