ICAS Special Contribution

No. 2002-1017-SCY

Republic of Korea's Position on North Korea's Nuclear Issue

Ambassador Yang Sung Chul

Institute for Corean-American Studies, Inc.

965 Clover Court, Blue Bell, PA 19422

Tel: (610) 277-9989; (610) 277-0149
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Email: icas@icasinc.org

Biographic Sketch & Links: Yang Sung Chul

[Editor's note: We gratefully acknowledge a generous contribution, with a written permission, of this speech at the University of Pennsylvania by Ambassador Yang Sung Chul to ICAS. : sjk]

Republic of Korea's Position on North Korea's Nuclear Issue

Ambassador Yang Sung Chul
October 17, 2002

Good afternoon. I suppose everyone has read today's headlines concerning North Korea's nuclear program, so let me state the Republic of Korea's position on North Korea's nuclear issue. First, my government was informed about North Korea's nuclear weapons program during the U.S. Special Envoy's trip to North Korea. My government, U.S. and Japan have been conducting close consultations on this issue.

Second, my government has consistently maintained our position that we are firmly opposed to North Korea's development of nuclear weapons.

Third, to denuclearize of the Korean peninsula, my government is calling upon North Korea to fully comply with all its commitments under the Agreed Framework, the Nonproliferation Treaty (NPT) and the Joint Declaration on the Denuclearization of the Korean peninsula.

Fourth, all issues, including North Korea's nuclear weapon's program, should be resolved by peaceful means through dialogue, and in this regard, my government will continue to maintain close coordination with the U.S. and Japan.

Finally, my government will also raise this issue with North Korea through the on-going inter-Korean dialogue channels.

Let me add that two days from now -- October 19-22 -- the eighth South-North ministerial meeting will be held as scheduled. At this meeting, my government will strongly urge a prompt and peaceful resolution of this issue. At the moment, Assistant Secretary of State James Kelly is en route to Beijing, Tokyo and Seoul for further consultation on this matter.

There are a number of points which are worth mentioning. The 1993-1994 nuclear crisis is quite different from the current situation on the Korean peninsula. Let me tell you why.

Unlike the situation of the early 1990s, thanks to the vision and leadership of President Kim Dae-jung, who has been patiently and persistently pursuing the Sunshine Policy, the tension level on the Korean peninsula is at an all time low. Since 1998, the Ticog (trilateral coordination and oversight group) has been in operation between the ROK, U.S. and Japan. This group trilaterally and bilaterally coordinates and cooperates not only on North Korea's nuclear issue but also on all other matters concerning North Korea.

Most importantly, the ROK and North Korea have developed dialogue mechanisms from the working to the highest level so we must resolve this matter and other questions peacefully.

Because North Koreas' weapons of mass destruction program has been the primary concern for all these years and is not acceptable under any circumstances, my government is urging North Korea once again to abandon such nuclear projects promptly.

Above all, since the early 1990s, the Korean people have learned to respond to such crises in a far more mature and controlled manner.

Ladies and gentleman, my speech will cover two areas: recent developments pertaining to the Korean peninsula, the Korean economy and the Sunshine Policy which has promoted stability and reduced tension on the Korean peninsula.

At the outset, I would like to inform you about four developments taking place on the Korean peninsula. Last Monday, the two-week long 14th Asian Games hosted by Busan, the second largest city in the Republic of Korea, ended. The games brought together nearly 10,000 athletes and staff from 44 nations, including the newly independent East Timor and North Korea. It is noteworthy that North Korea sent their 500 athletes and staff to compete in the ROK for the very first time.

Three other important events have taken place on the Korean peninsula. They were: the groundbreaking ceremony, commencing the re-linking of the East and West coast railways and roads across the Demilitarized Zone, Prime Minister Koizumi's trip to North Korea as the first Japanese head of government last month; and Assistant Secretary of State James Kelly's visit to Pyongyang earlier this month.

Let me first speak briefly about the economy of the Republic of Korea. Korea is now the world's 13th largest economy. Its foreign currency reserves have increased to 116.7 billion dollars as of October 15, making it the fourth largest in the world after Japan, China and Taiwan. This is a quantum leap from the level of 1997 when the currency reserves totaled a mere 3.8 billion dollars, triggering the unprecedented 1997-1998 financial crisis.

An International Monetary Fund (IMF)/ World Economic Outlook report showed that China will have the highest projected real GDP growth for 2003 at 7.2 percent, followed by Korea at 5.9 percent. According to the KDI (Korean Development Institute), the ROK's GDP next year is projected at 5.3 percent while the Consumer Price Index (CPI) is expected to be around 3.6 percent. The ROK's unemployment rate stands at 3.2 percent.

In the first half of this year, the ROK achieved a 5.9 percent GDP growth and continued to show economic expansion despite a global economic downturn. In the second half, its economic growth rate is expected to reach 6 percent. In the last four and a half years, its foreign direct investment from abroad totaled 52 billion dollars, more than twice the total amount of the 24.6 billion dollars over the previous 35 year period. Similarly, the trade surplus for the last four years totaled 85.7 billion dollars, almost equaling the total trade deficit of 86.7 billion dollars of the previous 35 years.

Above all, the Korean economy has finally achieved financial and monetary stability. The average inflation rate has remained between 2 and 4 percent, the foreign exchange rate stands at around 1,200 won to the U.S. dollar and the interest rate fluctuates between 2 and 5 percent. A single-digit interest rate is rare in the ROK economy, which has suffered from chronic double-digit interest rates for many years. It has, furthermore, repaid most of the money it borrowed from the IMF and World Bank three years ahead of schedule.

The IT industry has become the driving force in the Korean economy. Sixty percent of the Korean people now own mobile phones. More than half of all Korean households are Internet users and 33 percent of South Koreans own PCs. It is also the first in the world in online stock trade. Approximately 80 percent of individual stock trading is conducted though the broadband Internet. It also leads E-shopping in Asia, the world's second largest online consumer market after the United States.

Korea has a relative competitive advantage in automobiles, industrial robots and steel production. It has a highly skilled labor force. According to an OECD study of the academic skills of 15-year-olds in 33 countries, the ROK ranked first in science, second in math and sixth in reading.

Could Korea have achieved the present stable and robust economy without the reform and restructuring in the four sectors ' financial, corporate, labor and public? Could it have recovered so quickly from financial crisis or successfully co-hosted the World Cup with Japan and the most recent Busan Asian Games if a high level of tension existed on the Korean peninsula? Who would have invested such record amounts in Korea over the last four years if the Sunshine Policy had not been implemented? Could Korea have achieved such an unprecedented stable economy if the Sunshine Policy were not pursued relentlessly? Could the Korean people respond to today's news about North Korea's nuclear weapons program without panic if the Sunshine Policy had not been successful in stabilizing inter-Korean relations? The answers to these questions are self-evident.

Let me turn now to the Sunshine Policy.

Two major criticisms have been lodged against the Sunshine Policy. One is the allegation that the South is just giving everything away to the North without receiving anything in return. The plain truth of the matter is that the Kim Dae-jung government's assistance to North Korea has been rather miniscule in comparison with the former West Germany's aid to East Germany. For example, between 1972 and 1989, West Germany invested $57.4 billion (104.4 billion DM) in the East' 68 percent ($38.2 billion or 70.7 billion DM) of which was in grants. On average, the West gave 2.1 billion dollars to East Germany annually. The ROK, in comparison, has given $100 million, or 21 times less than West Germany gave to its poor brother. This is a small price to pay for peace

The second criticism labels the Sunshine Policy as a Korean version of appeasement. It alleges the ROK is making a series of unilateral concessions while the North attempts to manipulate by its whims and schemes. Such accusations are groundless. Appeasement is like Neville Chamberlain's Munich Pact, which allowed Nazi Germany to take Czechoslovakia without a fight. But not a single inch of land in the ROK has been given over to the North under the Sunshine Policy. To the contrary, if any land deal is involved, it was the Mount Kumgang area of North Korea, where nearly half a million ROK tourists have visited thus far and where Hyundai constructed dock facilities and other infrastructures to facilitate tourism.

It took 21 years to realize Willy Brandt's Ostpolitik and nearly half a century for the countries of Europe to form a common market with a single currency. Likewise, the Sunshine Policy will take time and patience to achieve its ultimate goal of a unified and peaceful Korea. We must more forward, not backward to square one, in dealing with obstacles along the path.

The Sunshine Policy is a process of diplomacy and dialogue based on deterrence. The Korea-U.S alliance is the cornerstone of this policy. The Korea-U.S.-Japan tripartite security cooperation and coordination, assistance of Russia, China and other friendly nations are essential in reducing tensions on the Korean peninsula, in facilitating South-North reconciliation and in ensuring peace and stability in Northeast Asia and beyond.

Why dialogue instead of confrontation and containment? Because the world has changed. Communism is now history, except for the peculiar brand surviving in North Korea. The Cold War, with the conspicuous exception of the Korean peninsula, has receded into the past. Even Cuba is struggling to transform itself despite its socialist rhetoric. North Korea, too, is changing.

Not long ago, the people of Republic of Korea and the rest of the world had a monolithic image of North Korea as a militant, war-mongering threat to security and stability on the Korean peninsula and the region. But now, the image of North Korea is mixed, at best.

The image of North Korea we see now is that of refugees overwhelming foreign embassies in Beijing. This is, however, only the outward manifestation of the North Korean masses who are suffering from chronic shortages of food, energy and other means of livelihood. It is estimated that up to 300,000 have fled to China since 1995 to escape economic hardship. According to a recent UNICEF study, some 63 percent of North Korean children have been physically stunted as a result of chronic malnutrition.

When the ROK and other nations try to deal with North Korea, it puts up a front, or another image, which is far more confusing, frustrating and complex to deal with than the other images. This is the dilemma that the Sunshine Policy must cope with.

Interaction with North Korea in general and engagement in particular are the most time-consuming and nerve-wracking processes, severely testing the ROK's patience. The glacier of mistrust and misapprehension still underlying the two halves and between the United States and North Korea will only melt bit by bit. Hence, no matter how difficult and disheartening the process of engagement, it must be pursued resolutely.

Let me pose the North Korean question from a different and comparative perspective. First, in North Korea, a typical failed state, the contrast between its military situation and economic condition is startling. While its economy is in shambles, its weapons of mass destruction, including nuclear program, missile development, biological and chemical weapons and its conventional forces are menacing. It has 1.1 million armed forces -- 70 percent of which are deployed south of the Pyongyang-Wonson Line, facing South Korea.

Second, an extreme contrast exists in both halves today. The ROK is now a member of the OECD. In contrast, North Korea has become one of the poorest nations as well as the largest food aid recipient in the world.

In 1945, when Korea was divided along the 38th parallel in the wake of World War II, both halves ranked among the poorest in the world. Although no accurate date are available, in 1945, the per capita income of Korea was estimated to be about 40 dollars. When the Korean War ended in 1953, the per capita incomes of the ROK and the United States were 67 dollars and 2,400 dollars, respectively. In 1980, the per capita income was 1,600 dollars for the ROK, 760 dollars for North Korea and 12,000 dollars for the United States. In the year 2000, the ROK's per capita income jumped to 10,000 dollars while the income stood at 760 dollars in North Korea for 20 years and 36,000 dollars for the United States.

How has the Republic of Korea become an economically competitive nation in the increasingly IT-oriented global economy while North Korea has remained a poverty-stricken state? How has the ROK developed as an exemplar model of emerging nations, politically and economically while North Korea remains an economic basket case and concurrently, one of the most heavily militarized garrison states?

Living under two diametrically opposed political and economic systems for more than half a century nonwithstanding, the Korean people in both halves still retain a high degree of homogeneity. They speak the same language and share the same history, culture, heritage and ethnicity. But what a stark contrast between the two halves today! While the ROK has succeeded in achieving a working democracy and market economy with a guarantee of basic human rights and freedom, North Korea has yet to shed its totalitarian political system with an autocratic leadership under a command economy. While the South has upheld and constantly upgraded the private property ownership and free market system, the North has until now tried to shun them.

The contrast between the South and North stem from their fundamentally different leadership styles and policy choices along with their basic regime and system differences. Both halves today dramatically demonstrate how such factors can influence the fate of a country and the welfare of its people. Ultimately then, a country's regime and system, its leadership type and the policy choices it pursues are decisive factors in determining a nation's prosperity or poverty.

Having said that, three points concerning North Korea are particularly noteworthy.

First, it will take a long time for North Korea to move out of its system-inherent, Juche (self reliant) ideology-propelled, other-imposed isolation, which is compounded by its geographically-induced claustrophobia. For any country, it is a Herculean task to shed more than half a century-old entrenched isolation and encapsulation.

Second, we must not overreact to any one time success or setback in dealing with North Korea. The inter-Korean relations of the past 50 years, especially within the last four and a half years, reveals a cyclical pattern. Progress between the South and North has never been uni-linear. In one cycle the inter-Korean dialogue makes progress. In the next, a setback occurs such as the first naval incident of June 1999. Then, another dialogue exemplified by the historic 2000 South-North Summit takes place. At the present time, the two sides are again in dialogue mode after temporarily heightened tension in the wake of the most recent naval clash of June 29th. To repeat, dialogues and deadlocks, cooperation and confrontation co-exist in inter-Korean relations, much like two faces of the same coin. One thing is self-evident: while inter-Korean dialogue and cooperation have steadily increased in scope and depth, conflicts and confrontations between both halves have substantially declined over the years. Thus, as I mentioned earlier, we must not be easily discouraged by temporary stalemates, nor excited about any one-time success. Rather, we need to be proactive, vigilant and unwavering when engaging North Korea.

Third, we are under no illusion that peace and unity will be realized anytime soon on the Korean peninsula. The ROK, United States, Japan and other concerned countries understand what North Korea is, the military menace it poses with its weapons of mass destruction, missile development and exports and conventional force deployment, as well as its dire human rights conditions and humanitarian needs. Engagement with North Korea has proven, however, to be the most practical and constructive way to resolve these outstanding issues.

Finally, I would like to make two personal observations:

1. The ROK and U.S., as allies, must continue to coordinate and collaborate as we have done all these years on three dimensions of policy: the South-North political, economic and security realities; the overlapping interests of the four major powers in the region ' the U.S., Japan, China and Russia; and the global strategic imperatives of the U.S. as the sole superpower.

2. The Korean peninsula still remains the only area which is not freed from the burden of the Cold War -- territorial division and human separation. This lingering legacy of the last century has been preoccupying and consuming the Korean people's energy, time and resources for nearly 60 years. It is indeed time for the Korean people and all freedom-loving people around the world to remove this last vestige of the Cold War and lay the foundation for peaceful Korean unity.

Thank you very much

Last update 10/22/2002 jdb

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