North Korean Economy Watch

Asia Times
Michael Rank
10/20/2007

This 38-year-old British soprano may not be a household name in the western world, but she’s a superstar in North Korea where she has given dozens of concerts and appeared countless times on the rigidly state-controlled television.

Suzanne Clarke has performed every year since 2003 in the culturally and politically isolated country, where she has sung everything from Mozart to Gershwin and from Verdi to Andrew Lloyd Webber.

North Korea may be highly repressive and deeply suspicious of foreign cultural contamination, but Clarke says the government has never attempted to censor what she sings. “There’s been no interference. I sing what I would like to sing,” she says.

She sings Korean songs as well as Western classics, but is careful to avoid being used as a tool of the Pyongyang regime, so she tactfully turns down requests to sing hymns of praise to the Great Leader Kim Il-sung and his son and successor, Kim Jong-il, around whom an all-embracing personality cult revolves, and which the North Korean government is always eager for foreigners to endorse.

“I come with a message of friendship and peace, not politics. I’m incredibly careful about what I choose to sing. I won’t sing anything in praise of any regime or any particular person,” said Clarke, an active member of Britain’s Labor Party who has nurtured ambitions to become a member of parliament.

She is strongly against capital punishment, which is widely carried out in North Korea, and does not hesitate to tell North Korean officials when she disagrees with their policies. “I tell them that I don’t believe in the death penalty. If I see something that isn’t correct I will point that out.”

Clarke, who has been a principal singer at La Scala, Milan and has been taught by Pavarotti’s singing teacher, Arrigo Pola, loves the Italian repertoire and has sung plenty of Puccini arias in Pyongyang. But she’s wary about including Madame Butterfly in her North Korean repertoire, as this is a sensitive area because of the undertones of American imperialism in the tragic love affair between a Japanese geisha and an American sailor.

Clarke said that despite frequent media attacks on cultural imperialism, North Koreans have “a certain level of knowledge of western music”, and their orchestras play works by Beethoven, Mozart, Tchaikovsky and even the decidedly modernist Shostakovich. In fact, Shostakovich’s Seventh (or Leningrad) symphony seems to be something of a favorite, judging how often performances of it have been reported by the official North Korean news agency KCNA, although it is unclear whether the government is aware that it is sometimes seen as a veiled attack on Stalin.

Clarke said North Koreans love to be challenged by music that is technically difficult, “so I deliberately try to perform some of the more difficult pieces in the repertoire”. She finds North Korean audiences highly appreciative and they are especially fond of Danny Boy which is surprisingly something of an old favorite in Pyongyang (as it is with older Koreans across the DMZ). “I like trying to win them over, and they do reciprocate,” she says.

Clarke suffered a nasty attack of food poisoning when she visited North Korea for the first time for their annual Friendship Festival in 2003, but this didn’t put her off in the least. She enjoys the country so much that she has twice taken her mother, also a Labor Party activist – “They love my mother because she comes from a poor family and always looks immaculate” – and this year she took her partner Chris to Pyongyang. But next year she may have to skip a visit because she is expecting her first baby in January.

Clarke became a star in Pyongyang via a highly unexpected route. She hails from the northeastern English town of Middlesbrough, which is where North Korea sensationally beat Italy in the quarter finals of the soccer World Cup way back in 1966. In 2001 the remaining members of the North Korean team returned to Middlesbrough as part of a film documentary, The Game of Their Lives, and Clarke sang the North Korean Song of Friendship at the town’s new stadium.

This was the beginning of a remarkable relationship which is continuing not only with concerts but also with fundraising. Clarke has raised money to buy musical instruments for North Korean schools, and now she is hoping to bring a North Korean orchestra over to London next year.

This would be the first ever visit by a North Korean orchestra to the West, and despite the enormous hurdles Clarke is hopeful that she will succeed. “Things are going very well but we need more sponsorship,” said Clarke, who is working with, among others, David Heather, who this summer brought the first North Korean art exhibition to London.

The New York Philharmonic is discussing a possible concert in Pyongyang next February, so North Korea is clearly opening up musically, and Clarke is ready to give the Americans some expert advice should they request it.

Korea Times
Lee Hyo-sik
10/18/2007

Finance and Economy Minister Kwon O-kyu plans to call on the global financial community to increase support for North Korea’s economic projects when he attends the annual meetings of the International Monetary Fund (IMF) and the World Bank in Washington D.C on Oct.20-22. The country’s top economic policymaker will also ask international financial institutions to allow the Stalinist state to become a member.

Kwon is planning to brief IMF meeting participants as well as U.S. administrative officials and lawmakers on the outcome of the inter-Korean summit between President Roh Moo-hyun and North Korean leader Kim Jong-il early this month.

He has said the government will attract funds from the World Bank and other international financial institutions, as well as from the private sector, for a range of large-scale inter-Korean economic cooperation projects, which is expected to cost billions of dollars over the years.

Hyundai Research Institute projected that the establishment of a special peace zone in the West Sea area and other economic cooperation projects between the two Koreas will cost $11.2 billion (10.3 trillion won). The state-run Korea Development Bank (KDB) and other institutions have put forth even larger spending estimates for the envisioned economic cooperation between the two Koreas _ as much as 60 trillion won over the next 10 years.

While in the U.S., Kwon is also scheduled to meet with the U.S. trade representative Susan Schwab to discuss the ratification of the Korea-U.S. free trade agreement (FTA). He plans to ask Schwab as well as other U.S. administrative and congressional officials to urge the Congress to quickly approve the bilateral trade accord.

He will also have a series of interviews with the U.S. media to promote the trade agreement and publicize the second inter-Korean summit. Seoul and Washington signed the deal in June, and Korea submitted the agreement to the National Assembly last month for ratification.

However, there has recently been growing opposition to ratification of the Korea-U.S. FTA in the U.S. Congress. Many lawmakers, including Democratic Party presidential contender Hillary Clinton, are openly opposing the agreement, claiming it will have negative effects on the U.S. manufacturing industry and job growth. They also said Korea should do more to open its markets to U.S. industrial and agricultural products.

To promote Korea as a regional financial hub, minister Kwon plans to hold a meeting with heads of leading international investment banks and prominent financers to ask for more investment in Korea and increasing cooperation with Korean financial firms.

Additionally, a number of local bankers and heads of other financial institutions will converge in the U.S. capital for the meetings and hold talks with executives from global financial institutions.

Bankers include Kookmin Bank President Kang Chung-won, Woori Financial Group Chairman Bahk Byong-won, Shinhan Bank President Shin Sang-hoon, Hana Bank President Kim Jong-ryul and Export-Import Bank of Korea President Yang Cheon-sik.

Among others, Korean Federation of Banks Chairman Yoo Ji-chang, Korea Asset Management Corp. CEO Kim Woo-suk and Korea Investment & Securities CEO Yoo Sang-ho are flying to Washington.

Marcus Noland Response… 

N.K. needs technical help before joining int’l financial institutions: U.S. expert
Yonhap
10/19/2007

North Korea must first receive technical assistance from international financial institutions before it can join them and begin receiving monetary aid, a U.S. expert said Friday.

Pyongyang, viewed as one of the most secretive regimes in the world, has to provide certain economic data and follow standardized practices and procedures in order to be able to join financial institutions, Marcus Noland, a senior fellow at the Institute for International Economics, told Yonhap in an e-mail interview.

Noland proposed first inviting North Korea in as an observer “to begin the process of education and technical assistance to support their economic transition” into full membership.

North Korea had said it wanted to join such institutions in 1996, but lost all interest after finding out it would not immediately begin receiving money, according to Noland.

Since then, it has not indicated willingness to adopt the transparency and openness required for membership into the institutions, he said.

Outside aid to the North is heavily constrained by various sanctions, notably by the U.S., which brands Pyongyang as a state sponsor of terrorism. The designation requires Washington to vote against monetary loans and assistance programs to North Korea through international organizations, such as the World Bank and the International Monetary Fund (IMF).

In an annual IMF meeting here next week, South Korean Finance Minister Kwon O-kyu is expected to call on the global community to increase support for North Korea’s economic development, and to allow Pyongyang to become a member of global financial institutions.

His recommendations follow an inter-Korean summit earlier this month that highlighted economic cooperation and progress in six-nation efforts to denuclearize the Korean Peninsula.

Noland questioned whether Pyongyang would be willing to be subjected to the scrutiny required for a membership into the international financial system.

“Frankly speaking, the most important thing that the international financial institutions could immediately provide to the North Koreans is technical assistance,” he said.

“But again, it is not at all clear that they are particularly interested in becoming members of these organizations or reforming their internal practices in ways that would allow them to make full use of membership.”

Such assistance could involve setting up processes, procedures and regulations to reform North Korea’s laws and practices, he said.

North Korea also has to provide the necessary data, a process which international institutions could assist by providing basic standards, such as data collection standards.

North Korea and financial institutions also need to come up with a strategic plan, said Noland. If, for example, Pyongyang wanted to set up a stock exchange, the institutions would assist in starting it and revising relevant laws in the North, he said.

Korea Herald
Ko Kyoung-tae
10/16/2007

South Korean experts yesterday called on the government to develop Haeju, a North Korean port which South and North Korean leaders recently agreed to develop as a special zone, into a business hub covering a wide array of industries, from fisheries to manufacturing.

Jeong Hyung-gon, an economist at the Korea Institute for International Economic Policy, recommended in a seminar yesterday that the special zone of Haeju should be transformed into a comprehensive economic zone so as to expand inter-Korean economic ties.

He cited several Chinese free economic zones as good models for the joint-development project. “It should be developed like Shenzhen or Dongguan,” Jeong said.

These two coastal cities have been locomotives of China’s red-hot economic growth since the Beijing administration opened them to the global economy in the late 1970s.

Jeong’s speech implies that North Korea should also substantially open Haeju to foreign investors, including South Korean companies.

South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il recently agreed to transform this harbor city into another joint industrial complex.

A special peace zone will be set up along the coast of Haeju, with the purpose of developing joint fisheries and establishing a new economic zone.

The city is geographically advantageous to South Korean manufacturers because it is close to Incheon Port, the nation’s second-largest harbor.

“The Haeju project and Gaeseong Industrial Complex should be complementary to each other,” Jeong said.

But he cautioned that Seoul and Pyongyang should settle their dispute over the Northern Limit Line in the West Sea, in order to effectively operate the Haeju special zone.

The sea border was unilaterally drawn by the U.N. forces at the end of the 1950-53 Korean War, but there has been no legal agreement on the demarcation between the two Koreas.

This has caused frequent military and diplomatic conflicts, including two deadly naval clashes in the West Sea, and has been a major obstacle to co-developing Haeju.

Donga Ilbo
10/15/2007

Our source on the ground in North Korea informed us that he conducted various interviews with North Korean refuges in China yesterday, and shared this information with a variety of civilian experts on North Korea and the Bush administration officials.

― What was the difference Kim Jong Il showed this time, compared with the 2000 summit?

“He didn’t look good. Chinese, Russian and American exports do not believe that Kim could hold on to power for more than five years. When he’s gone, North Korea will probably get bogged down in a power struggle. That may be a critical moment on the peninsula. The South Korean government has to closely monitor the situations in North and has to prepare itself with diverse contingency plans. Washington does not give much attention to the inter-Korean matters. The Middle East primarily occupies America’s attention. That’s not going to help South Korea.”

– Despite the physical condition, Kim still looked powerful, didn’t he?

“Warring factions are constantly waging hostile power struggles around Kim. Each of them has its own access to arsenals and power to mobilize troops. Also, each faction has a well-established human network. In addition, army generals further divide the army. Diverse personal connections stemming from the old days have transformed into factions. A sudden disappearance of Kim from power will probably spur them into action, putting North Korea in a very dangerous situation.”

– We have noticed the different attitude of Kim Jong Il. He acted differently in the 2000 summit with Kim Dae-jung. What do you say of it?

“Yes, that’s true. First, his lukewarm attitude must have come from his weakened health. Second, he did not expect as much from Roh as from Kim [Dae-jung]. Kim [Jong Il] seems to have considered the recent summit as an opportunity to inform the world of his positions on various issues. Otherwise, he did not want to commit himself to binding promises.”

― Kim seems to have acted differently on the first day of Roh’s arrival compared to the second day. Do you agree?

“We don’t have to overreact to each and every move of Kim. His ailing physical condition may have led to different emotional reactions. On the first day, Kim did not approach Roh and did not smile. I believe he did it intentionally. He must have wanted to show that Roh could not boss him around, and his regime did not need anything.

― What impact, if any, will the recent inter-Korean summit have on Kim Jong Il’s power?

“I don’t think it will have any. Kim is the one who makes the final calls in North. Nonetheless, he has to maintain balance among the factions. In short, he cannot make decisions without considering their opinions. When Roh suggested the withdrawal of troops from the DMZ, Kim declined it vehemently on the spot. The incident demonstrated Kim’s prearrangement with the army and the army’s prior consent to the summit.”

― After the summit, Roh defined Kim Jong Il as competent ruler. Do you agree?

“Kim Jong Il is a shrewd ruler when it comes to internal control. Of course, his regime is immoral and oppressive. Still, Kim maintains his power by controlling and confronting factions against each other. Kim Jong Il is competent only in that respect. But I don’t believe he cares about ordinary North Koreans and their welfare when making policy decisions.”

Daily NK
Yoon Il Gun
10/10/2007

A famous professor at Sunchon University in South Korea, Kim Yong Ok, who was invited to the Summit, opened to the public his discussion with Sung Ja Rip, the president of Kim Il Sung University, on October 8th in a JoongAng Daily Newspaper interview.

According to the article, Kim asked President Sung, “Did you study Freeman?” and the Chancellor answered, “Aren’t theories of Keynes and Freedman the basics?”

Seemingly, it sounds as if North Korean college students and intellectuals can freely study about economic theories of modern capitalism or modern thought.

Unfortunately, this is not true. Only cadres of the Party or those favored by the regime could have access to foreign books on modern thinking.

Kim Myung Chul (32, pseudonym) defected from the North while he was still a student at Kim Il Sung University. Mr. Kim’s testimony is as follows.

“There is a ‘closed library’ on the fourth floor of the Grand People’s Study House in Pyongyang. Foreign books at the library are only available for cadres of the Party or VIPs. Chancellor Sung Ja Rip must have read the theories of Keynes and Freedman at ‘the closed library’,” Mr. Kim said.

“There is discrimination in access to books and data against the general public,” Mr. Kim said, “general college students have no chance to study Keynes and Freedman.”

Since Kim Il Sung’s “May 25 Instruction” in 1967, most of books on western literature and philosophy have been burnt or smeared with ink, or pages have been torn out of books. Such vandalism was carried out under the so called “Book Arrangement Activity.” For some time thereafter, the general public had no access to books, even to those related to Karl Marx.

“Pyongyang Foreign Literature Publishing House” began to publish foreign books in 1984. From then on, the western classics in literature were made available. However, books on modern economics and modern thought are accessible only to the Party officials or some special groups at the “closed library.”

Mr. Kim said, “I had a chance to read the classics in North Korea but nothing on modern thought or economic theories. Only state-approved foreign books are readily accessible to the public. Ideologies or theories that seem to challenge the system are thoroughly denounced.”

Mr. Kim added, “In the late 1990s, the state education authorities approved classic economics and classic philosophy for public reading in order to stress the superiority of socialist economic theory and Juche Ideology.”

“In the 1990s, I checked out from library and read the classics such as Marx’s ‘Das Kapital,’ Engels’ ‘Ludwig Feuerbach and the End of Classical German Philosophy,’ ‘The Holy Family,’ and Lenin’s ‘The State and Revolution.’ But the books were so old that the pages were worn out and yellow,” said Mr. Kim.

Mr. Kim also borrowed some books from those who had access to “the closed library.” The books he secretly borrowed and read were “How to Win Friends and Influence People,” by Dale Carnegie, “From the Third World to First” by Lee Kuan Yew and “The Decameron” by Giovanni Boccaccio.

“Only approved literary works are translated and published. Many literary works which do not threaten the current system have been published,” Mr. Kim said, adding “When I was in college, I read many foreign books including novels written by Pushkin, John Byron, Heine, Shakespeare, Moliere, Stendhal, Tolstoy, Dumas, Victor Hugo, and Cervantes”

Unfortunately, Mr. Kim said, “I had never had a chance to read modern novels because only classics were made available. North Korea censors any books or information that it regards as a threat to the system or seems to produce illusions of capitalism.”

“Translations of up-to-date technology and information are weak,” Mr. Kim said, “When college students write their dissertations, they use outdated books as a reference.”

Mr. Kim also recalled that around 2001, it was all the rage among college students in Pyongyang to read “Gone with the Wind” by Margaret Mitchell, and “An American Tragedy” by Theodore Dreiser.”

Ever since the former US President Jimmy Carter gave Kim Il Sung “Gone with the Wind” on video tape as a present upon his visit to Pyongyang in 1994, such American novels have been translated and published.

Kim Myung Chul added, “The authorities approved of publishing such books because they did not consider the books challenging to North Korea’s system or status quo. However, those college students who read the American books loved the opportunity of reading them, for it served as a chance to learn about America.”

Yonhap
10/11/2007

North Korea sees the legacy of Korea’s ancient kingdom of Koguryo, which controlled northern Korean Peninsula and northeastern China for more than 700 years, as a means of improving inter-Korean relations and an eventual unification of the two Koreas, a senior North Korean official said Thursday.

“I’m passionate about opening this exhibition, as I am confident that it will further boost our people’s struggle to achieve a unified powerhouse nation and promote the improvement of (North) Korea and Japan relations based on a drastic clearance of their past,”said Hong Son-ok, a North Korean official in charge of external cooperation in cultural cooperation.

Hong made the statement to Yonhap News Agency at a ceremony here to open an exhibition of photos of artifacts of the Koguryo kingdom co-hosted by Yonhap News Agency and Japan’s Kyodo News Service. Hong’s statement was referring to North Korea’s chilly relations with Japan, which colonized the Korean Peninsula for about 35 years until 1945.

The exhibition is taking place at the Korean Central History Museum here amid signs of warming inter-Korean relations just a week after the leaders of South and North Korea held their second summit in seven years.

North Korean leader Kim Jong-il “paid special care and courtesy” to the exhibition, Hong said.

It is the first time that the South Korean news agency has hosted an event in North Korea. The exhibition of 121 photographs of tombs and murals of the Koguryo Kingdom (37 B.C.-668 A.D.) continues until Nov. 10, and includes World Heritage sites.

“The murals of the Koguryo kingdom, which controlled the northern part of the Korean Peninsula and Manchuria (northeastern China), are an element that links the people of South and North Korea,”Yonhap President Kim Ki-seo said.

Kim cited the popularity in South Korea of television dramas and literature featuring the ancient kingdom, which he referred to as a spiritual root shared by the two Koreas. Kyodo’s president, Satoshi Ishikawa, was also on hand at the opening ceremony.

About 100 Pyongyang citizens attended the ceremony with most of the women guests wearing Korea’s colorful traditional costume, hanbok.

Citizens expressed pride in their ancient legacy.

“It’s a centennial powerhouse in the East,” a North Korean said. “We should inherit the great spirit of our forefathers and develop our nation into a unified powerhouse.”

Horse-riding warriors of Koguryo dominated politics and culture in Northeast Asia until they were defeated by joint attacks from the southern Korean kingdom of Silla and China’s Tang Dynasty.

The Koguryo people left paintings on the walls and ceilings of tombs depicting their daily lives and mythical beliefs. A mural from Anak Tomb No. 3 shows a vivid image of a woman in white stirring soup in a big pot in a kitchen beside a meat storeroom. Other murals show a hunting scene of horse-riding warriors and a nobleman enjoying an acrobatic performance.

A total of 107 Koguryo tombs have been discovered, 76 in and around the North Korean capital of Pyongyang and the rest around the North Korean border with China.

As much of the kingdom was located in what is now northeastern China, Chinese scholars have recently begun claiming that the Koguryo kingdom is part of Chinese history. Last year, Yonhap and Kyodo co-hosted an exhibition in Seoul of photos that Kyodo took at Koguryo tombs in North Korea.

Korea Times
Yoon Won-sup
10/11/2007

The United States is considering setting up a representative office in Pyongyang as a diplomatic mission, according to a report Wednesday.

Radio Free Asia said the United States will set up a diplomatic mission in Pyongyang, and its form would most likely be a representative office, not a liaison office or an embassy.

The U.S.-based media quoted a source as saying that the U.S. government and Congress are discussing the level of a diplomatic mission in Pyongyang, which will depend on progress in North Korea’s dismantlement of its nuclear weapons program.

Washington reportedly plans to remove North Korea off its list of terror-sponsoring states this year after North Korea disables its nuclear facilities and declares all its nuclear weapons programs. After the removal, the United States will likely begin the process of normalizing relations with North Korea, according to the report.

Experts showed optimism on the moves to normalize relations with North Korea.

A U.S. official who worked on the creation of a diplomatic mission in Pyongyang in 1994 told the radio station that it would be good for Washington to have representation in North Korea in order to understand it.

The official stressed that the absence of a mission may lead the United States to make policy based on wrong information.

However, the experts agreed that the prerequisite for the diplomatic mission was the denuclearization of North Korea.

“It is not so meaningful a debate to discuss whether to set up a representative- or embassy-level mission in Pyongyang because there will be a U.S. Embassy in the end,” a senior Korean government official said. “But the more important thing is that North Korea moves toward denuclearization for this to be realized.”

The United States promised to establish full diplomatic relations with North Korea, depending on North Korea’s actions toward denuclearization on the Oct. 3 agreement reached at six-party talks involving the two Koreas, the United States, China, Russia and Japan.

U.S.-North Korea relations have recently been improving. In early September, Christopher Hill, the top U.S. negotiator to the talks, had a successful meeting with his North Korean counterpart Kim Kye-gwan in Geneva on the normalization of relations.

Yonhap
10/10/2007

The Unification Ministry has dropped the words “reform and openness” to describe the South Korea-invested industrial park in the North’s border town of Kaesong from its Web site in an apparent bid not to provoke the North.

North Korean leader Kim Jong-il complained in the second-ever inter-Korean summit in Pyongyang last week that South Korea has been using the Kaesong industrial park as a scheme to force reform and openness in the communist North, whereas Pyongyang had gained little from the inter-Korean economic cooperation project.

President Roh Moo-hyun responded by saying in the North Korean capital that North Korea should not be described as a subject of reform and openness.

Joong Ang Daily
Limb Jae-un
10/8/2007

Days after both Koreas vowed to heighten cooperation, a lawmaker said yesterday in a report that the Kaesong Industrial Complex, the experimental site combining South Korean technology and North Korean labor, has been unprofitable so far.

In addition, the Ministry of Construction and Transportation said in a report yesterday that repairs to the airport on Mount Paektu will cost 280 billion won, or $304 million.

One of the agreements signed at the inter-Korean summit Thursday calls for allowing South Korean tourists to visit the scenic mountain on the Korea-China border.

“In terms of the runway length, Samjiyon Airport can accommodate large airplanes, such as a Boeing 747, but the condition of the airport is bad,” said an official of the construction ministry, who asked for anonymity. The airport, located on a plateau 1,000 meters, or 3,280 feet, above sea level, needs advanced navigation facilities, he said.

Despite the optimistic discussions during last week’s summit, inter-Korean economic cooperation has so far had dismal results, according to a report from Grand National Party Representative Lee Han-koo. Thirteen out of 16 companies operating at the Kaesong Industrial Complex are currently in the red, he said. Their debt is four times higher than their assets, he said. The combined assets of the 16 companies is only 4.5 billion won and their average annual sales is 790 million won.

“The biggest problem of the economic cooperation is that the relevant information has been held back from the public,” Lee said.

Meanwhile, a top European official said North Korea must go through serious reforms to become a viable investment destination for Europe.

North Korea is unattractive for Europe because “the conditions for investment are not safe enough and the regulatory environment is not predictable,” Guenter Verheugen, the EU Industry and Enterprise Commissioner, said in an interview with The Associated Press on Saturday.

Joong Ang Daily
Jo Dong-ho
10/9/2007

The summit meeting was quite successful. Some say it was because North Korea’s nuclear program was not on the agenda. Relinquishing its nuclear ambitions is the North’s card for normalizing ties with the United States and receiving rewards.

Costs cannot worry us either, because South Korea’s economy has grown so much that we can now pave a road even for a village on a remote mountain. If the size of government projects for culture cities or innovation cities were reduced, we would have trillions won, or billions more dollars, available.

As an economist, I would like to focus on roles of the government and the market discussed in the summit meeting. The ultimate question of economics can be summarized as how the market and the government will divide their roles to get maximum benefits out of limited resources.

The economics of past 200 years concludes that the best way is for the private sector to make independent decisions in economic activities and for the government to manage the rules so that those activities will be carried out fairly and smoothly. This can be likened to the relationship between players and referees in a sporting event.

The same principle applies to economic cooperation between South and North Korea.

Easing military tension, which will reduce the risk of investing in North Korea, is something that only the government can do. Repairing railways and roads is also the responsibility of the government. To improve transportation, communication and customs are the same. The private sector cannot do those jobs on its own.

However, building a shipyard or developing tourism on Mount Baekdu is for the private sector to carry out. But as these projects were agreed upon in the summit meeting, they must be carried out without feasibility studies. These projects were being discussed even before the summit meeting.

Private companies have been interested in them for years, but they have not made the decision to pursue them for many reasons, including low profits. Now the leaders of the two Koreas have made an agreement so these projects must be carried out. North Korea will probably make more unreasonable demands. The South Korean government will have to provide subsidies, and that will increase the burden on the South Korean people.

Some may find it disturbing that I criticize a few projects when there were many other good agreements reached. But these projects show the South Korean government’s basic view on economic cooperation with the North.

In fact, in all the projects agreed upon, there is a vague guideline for the division of roles between the government and the market. The same is true with the agreement to complete the first step of construction at the Kaesong Industrial Complex earlier than planned and to start the second step. The Hyundai Asan Corporation and the Korea Land Corporation are the ones doing the industrial park project, not the government.

These companies have their reasons for managing the industrial park project in its first stages. The government cannot and should not agree to implement the project at a faster speed. After North Korea tested its nuclear bomb, there was pressure to halt that project. Then the government said it could not intervene because it was led by the private sector. But the government has now agreed to complete it at an earlier date.

Some maintain that these agreements will improve inter-Korean relations so there is no use in dividing the government and the market. But it is more important that economic cooperation between South and North Korea improves properly than quickly. Let’s say the improvement of economic cooperation between South and North Korea is of the utmost value so the government can lead economic projects. But there must be good reasons for the government to intervene in the market.

The government has said until now that it supported economic co-operation with the North in an attempt to induce North Korea to open its doors and reform its economy. But that no longer sounds like enough. When providing assistance, the supporter must make sure that the party that receives assistance tries to stand on its own. But the president said we should not mention this in the summit meeting.

Six months ago, at an event for businessmen in the fisheries industry, the president said the government would provide support if need be, but what is most important is their own will and efforts.

One of President Roh’s strengths is that he is not afraid to say what he needs to say. That he could not say what he had to say to Kim Jong-il is what is most regrettable about the meeting.