11.15 Thu

Opinion

The last chance?

Aug 23,2018
Kim Byung-yeon
The author is an economics professor at Seoul National University.

The significance of a third inter-Korean summit to be held in September is different from the previous ones. The first one was a meaningful breakthrough just by bringing the two leaders together and the second was a quick meeting. But in the third meeting in Pyongyang, the two leaders need to achieve specific outcomes for denuclearization. While there has been great progress in improving inter-Korean relations and economic cooperation, people will grow indifferent without visible denuclearization outcomes. For this third meeting, the two leaders should be ready to do business, not stage a show.

The first step toward success would be calmly reviewing the current situation. If it continues, it is North Korea, not the United States, that will fret. U.S. President Donald Trump seems to believe that he is not going to struggle in the midterm elections in November after just preventing North Korean threats and provocations. From a U.S. point of view, security threats have decreased and not much has been lost. So Washington would not mind if the status quo continues.

But North Korea is suffering due to international sanctions. Kim Jong-un recently mentioned “gangster-style sanctions,” suggesting how painful they have been for the reclusive state. While China opened the backdoor, it only helps North Korea to survive, not grow. Without lifting the ban on exporting minerals, which is the key sanction, the North Korean economy will continue to decline. Before the sanctions, minerals accounted for 50 percent of total exports. The profit rate from mineral exports is about 80 percent. So if minerals exports are blocked, half of the North’s total foreign currency income will disappear. As a result, North Korea’s foreign currency reserves could run out next year. Also, minerals are the hardest thing among the sanctioned items to smuggle. They are large in volume and have limited means of transportation.

The Seoul government needs to use the situation as an opportunity for a successful summit. First of all, it needs to make sure that without drastic progress in denuclearization, sanctions cannot be lifted and substantial inter-Korean economic cooperation is impossible. North Korea is likely to use the summit as a chance to have sanctions lifted. Pyongyang will attempt to crack the Korea-U.S. alliance through the summit, stressing the importance of not being swayed by other countries and the fate of the Peninsula being decided by Koreans. If South Korea is dragged into this tactic and actually eases sanctions before denuclearization, the possibility of denuclearization will become more distant.

The recent case of North Korean coal smuggled into South Korea is enough to arouse concerns. When minerals sanctions fall, the last bastion of denuclearization will fall. In the past administration, a governmental taskforce checked the sanctions situation almost every day. But in the current administration, the taskforce seems to have disappeared. That means a prompt and responsible decision is hard to make.

Government slackness and incompetency deserves criticism. What’s more important is preventing future cases. A taskforce should be revived to check the situation in real time and a committee of outside experts needs to be formed to make decision on sanctions without political considerations.

Second, a front-loading denuclearization plan should be drafted in consultation with the United States. Recently, North Korea mentioned a declaration to end the Korean War and lift sanctions as preconditions for progress in denuclearization. The statement corresponds to the parallel pursuit of nuclear and economic development, which is Kim Jong-un’s survival code. If North Korea has a nuclear program to keep the system safe, the declaration of ending the war could partially satisfy the need. Lifting of sanctions would improve the economy and enhance North Koreans’ support for Kim Jong-un.

South Korea needs to consider simultaneously exchanging lifting of sanctions and a declaration to end the war with prioritized denuclearization. Of course, it should be made clear that the stationing of U.S. Forces in Korea is a separate issue. The goal of the prioritized denuclearization should include promises to report and abandon not only nuclear facilities but also nuclear weapons, missiles and nuclear materials. Without this, the U.S. administration and Congress will not lift the sanctions.

For the summit to succeed, North Korea needs to be pushed with sanctions in the back and drawn with specific agreements for post-denuclearization from the front. While maintaining the structure, effective plans should be devised and offered to North Korea. But past experiences show that policies that are trapped in ideology will fail. The next few months may be the last chance at prioritized denuclearization. How well are the president and the government prepared? History could be made here.

Translation by the Korea JoongAng Daily staff.

JoongAng Ilbo, Aug. 22, Page 31
All News