President Lee Myung-bak proposed drafting new measures to prepare for a future reunification of Korea during his address marking the 65th anniversary of Korea’s liberation from Japanese colonial rule on August 15th. In his Liberation Day speech, entitled “Marching Together toward a Greater Republic of Korea,” President Lee said that the current inter-Korean relationship demands a new paradigm. He also put forward a three-stage unification formula, which would start with a “peace community” that requires North Korea’s denuclearization, followed by the creation of an “economic community,” and finally a “community of a unified Korean nation.” This is the current government’s first officially announced unification plan. The presidential office of Cheong Wa Dae explains that it represents a vision for the peaceful unification of Korea from a long-term perspective. Here’s Hong Hyun-ik, a senior researcher at the Sejong Institute, to explain how this unification plan is different from other unification theories suggested by previous governments.

The Roh Tae-woo government and the Kim Young-sam government also presented a three-stage unification plan. The first stage was to seek reconciliation and cooperation, and the second step involved the integration of Korea. Once these two steps are completed, peaceful unification would be fully achieved in the third stage. In contrast, President Lee’s three-stage unification formula divides the reconciliation and cooperation stages into two phases. In the newly-proposed first phase, a “peace community” would be set up to settle peace on the Korean Peninsula and ensure the mutual security of both Koreas. When North Korea shows its commitment to denuclearization, South and North would proceed to the second step to build an “economic community.” Here, President Lee’s North Korea policy, dubbed “Vision 3000: Denuclearization and Openness,” is presented once again. It calls for Seoul to assist North Korea in raising its per capita income to 3,000 dollars in a decade.

The highlight of Lee’s speech was a proposal to introduce a “unification tax.” Lee suggested that this issue be discussed widely and thoroughly by the entire society. It seems the “unification tax” is to prepare for the “economic community” described in the three-stage unification plan. An official of the presidential office explains it’s time to think about substantive ways to prepare for unification, noting that Germany, which failed to secure any funds prior to its re-unification, is still struggling under the heavy burden of unification costs. Meanwhile, some are more focused on why the new proposal was made at this particular time, speculating that the government may have a sudden regime change in North Korea in mind.

North Korean leader Kim Jong-il’s health conditions have deteriorated rapidly since the summer of 2008. The nation has taken its own measures, such as currency reform, to revive the domestic economy, only to fail dismally. The inefficient planned economy of the socialist North is in tatters. The impoverished North suffers from severe economic difficulties and faces a definite shortage of energy, foreign currency and raw materials, as well as food, which is the basic means of survival. All things considered, North Korea could collapse at any time. With the possibility of a sudden unification in mind, it is wise for Seoul to secure funds in advance to prepare for the huge financial burden of integrating the two Koreas. In this respect, President Lee proposed the adoption of a “unification tax” in his Liberation Day speech.

Relevant government agencies, mainly the Unification Ministry, will start formulating specific measures to initiate the unification tax. But controversy surrounding the new tax is unlikely to quickly subside. Even experts have mixed views about this issue. Some positively note that the government has presented a fresh topic on a long-term basis, while others point out that the proposal, presented at this tense juncture in inter-Korean relations, could be interpreted as an attempt to absorb North Korea. In a similar context, Mr. Hong says Lee’s recent announcement falls short of expectations to break the deadlock in inter-Korean ties effectively.

Inter-Korean relations have worsened in the wake of the sinking of the South Korean frigate Cheonan. The stalemate continues, with South Korea conducting a series of military exercises both in the East and West seas with the purpose of enhancing its self-defense capability and deterrence against North Korea. While the North is facing great difficulties internally, the six-party nuclear talks show few signs of resuming anytime soon. Under these circumstances, Seoul has every reason to come up with preparatory measures, like a unification tax. However, North Korea, for its part, may misunderstand the move and suspect that South Korea is ready to absorb the North.

Attention is also being paid to the potential cost of unification. Specifically, it refers to money to be invested until South and North Korea are merged into one society. West Germany spent a staggering 2 trillion Euros over the 20 years following unification. Estimates of the cost of Korea’s unification vary among research institutions, but they all agree that it will be astronomical. For example, the U.S.-based Rand Corporation calculated that it would cost up to 1.7 trillion dollars to raise the income level of North Koreans to that of their South Korean counterparts. The Samsung Economic Research Institute estimates that South Koreans would have to pour 33 billion dollars annually to subsidize North Korean people in order for them to meet the current minimum cost of living set by the South Korean government. Experts predict the cost could vary widely, depending on when it occurs. Most of all, they stress the need for a social consensus on the proposed unification tax.

Most importantly, the government must make efforts to cut unification costs. According to the estimates by several institutes, the cost for gradual unification amid North Korea’s reform and openness will be about one-seventh of that needed for an abrupt unification resulting from the sudden collapse of the Communist regime. If Seoul continues to engage in dialogue with Pyongyang, persuades the North to give up its nuclear program and induces the nation to pursue reform and openness through more vigorous inter-Korean economic exchanges, the unification cost will be reduced significantly, even though the North may still collapse. If the government makes such efforts and appeals to the public for a unification tax, it could lessen the resistance from tax payers. The public will then join the government’s drive to introduce a unification tax.

Now is the time to carry out policies carefully through a broad cross-section of public opinion, although it may take more time. Dialogue, exchanges and economic cooperation will, no doubt, help reduce the economic gap between South and North Korea and prompt change from Pyongyang. And this is the ideal way to prepare for unification and reduce its eventual costs.



[Interview] Internet Broadcasting Station for N. Korean Newcomers
A small studio in Gayang-dong, western Seoul, has a special meaning for Lee Geum-ryong, a former North Korean defector. “Hana Culture,” a production company consisting of North Korean newcomers, will launch an Internet broadcasting station right here on August 23rd. Mr. Lee holds the position of director in the broadcasting station named “Unification Grand Festival” or “Tongil Hanmadang” in Korean, which has ten staff members.

A total of ten members are working here, including one South Korean and nine defectors from North Korea. Although we’re not broadcasting experts, we’re working hard to let the South Korean people learn more about their northern neighbor, help our fellow North Korean expatriates here to ease their cultural estrangement, and encourage North and South Koreans to step closer to one another in preparation for future unification.

The broadcasting station airs its programs four hours a day: from 10 to 12 a.m. and from 2 to 4 p.m. Through a variety of programs, it discusses linguistic and cultural differences between South and North Korea, delivers North Korea-related news stories to soothe homesick people and introduces South Koreans to North Korean writings and songs. Mr. Lee says the station will focus more on job-related programs to provide newcomers with useful information about job openings and how to start a new business.

Our job programs, such as “Recruitment 24,” “How to Start a New Business” and “Success Stories,” receive job information from Seoul City, Gyeonggi Province and the Small and Medium Business Administration, and provide job counseling to newcomers. Programs like “Success Stories” profile North Korean expatriates who have successfully resettled in South Korea, including the owners of small companies or restaurants, and encourage the listeners to learn something from those business people and help them, when possible. After learning about a defector who opened a flower shop, for example, listeners can buy flowers there. They can drop by a restaurant managed by another North Korean newcomer. In this way, the defectors and the listeners share information.

The broadcasting station gives new hope to recent North Korean settlers, bringing South and North Koreans together. But it was far from easy to open this station. There were no broadcasting specialists, and the organizers had many difficulties setting up a studio and planning the programs. Due to insufficient funds, the station receives subsidies from Seoul City and invests part of the profits earned from Hana Culture’s video products. Despite the difficulties, the Internet broadcasting station continues producing programs, having one purpose in mind.

We believe not only North Korean defectors but also South Koreans and even people all over the world will listen to our programs. We’re hoping to let all the listeners think about Korean unification. South and North Korea can’t achieve unification simply with words. The 20-thousand North Korean defectors living in the South vividly demonstrate the need for unification. We hope South Koreans will feel a more acute need to narrow the cultural gap between the two Koreas and will be more committed to unification while listening to the stories of defectors from the North.

Here’s hoping many more North Korean newcomers and South Korean citizens will enjoy the amusing and touching programs aired on this broadcasting station.