B00BY4HXME EBOK

by Lankov, Andrei

  Bearing in mind the scale of the expenses, one should not be too judgmental about the increasingly cautious attitude toward the unification project among the South Korean public. At the end of the day, this project will have to be supported by the South Koran taxpayers, and they are predictably wary of this.

  When people talk about a unification cost (and such talks are very common in South Korea nowadays), they usually mean the financial burden that will fall upon South Korean taxpayers. This burden is likely to be crushing, but Koreas’ unification will also produce a vast array of other social problems, many of which will have no attractive solutions. It makes sense to outline some of these likely problems—with the full understanding that many others will pop up as well, completely unexpectedly.

  If we look at the experience of the anti-Communist revolutions in Eastern Europe, we can see that educated, urban, white-collar workers, essentially the Eastern European equivalent of the middle class, played the leading role in these movements. It was largely schoolteachers, low-level managers, nurses, engineers, and skilled industrial workers who in the late 1980s went into the streets of Moscow, Prague, and Budapest, demanding democracy and a market economy. If a popular movement plays a role in the collapse of North Korea, the same scenario is likely to be repeated in North Korea as well. However, the North Korean “middle class” are people who—in relative terms—are likely to lose the most after unification.

  This does not mean that unification will bring ruin to the medical doctors and sociology teachers of North Korea. Their absolute income is almost certain to increase instantly and dramatically, in fact. However, they will also discover that their skills are of little value in post-unification society.

  North Korean professionals generally tend to have a solid background in theory, so it is quite possible that the average North Korean engineer is more confident in using calculus than his or her South Korean peer. But their practical and applied knowledge is usually archaic and/or irrelevant. If a North Korean engineer never worked in missile or nuclear design, he or she has probably never used a modern computer and doesn’t know what CAD stands for. He or she also has virtually no command of English, the major language of modern technical manuals, documentation, and reference books. A typical North Korean engineer spends his or her entire career working out how to keep in operation the rusty equipment of the 1960s Soviet vintage. From the point of view of a South Korean employer, such a person has no value as an engineer.

  Everyone who worked in North Korea during the famine testifies to the remarkable skills and selflessness of medical doctors. They knew how to make workable drips out of empty beer bottles and how to conduct a complicated heart surgery with equipment straight from the 1930s. However, after unification, North Korean physicians and surgeons will immediately discover that they have never heard of perhaps 90 percent of the drugs and procedures that are now standard in modern medicine.

  Even school and college teachers will find themselves in serious trouble. Those who teach theoretical and nonpolitical subjects—like geometry or organic chemistry—will probably be able to maintain professional employment, but what about the rest, especially teachers of humanities? The average North Korean teacher of history knows a lot about events that never actually happened—like, say, the alleged leading role of Kim’s family during the March 1, 1919, uprising, or Kim Jong Il’s childhood allegedly spent at a nonexistent secret camp on the slopes of Mount Paekdu. He or she has little knowledge, however, about the events that defined the course of Korea’s actual history—pretty much all that he or she knows of traditional Korean culture is that it is the “reactionary culture of a feudal ruling class.”

  It might be argued that these people should be reeducated, but this is easier said than done. Reeducation will require a lot of money and time. Some people (those with exceptional gifts and good luck) will probably master new skills, but for the vast majority of North Korea’s “middle class” this will not be possible. In absolute terms, their standard of living is set to rise dramatically: they will have computers and drive cars, will eat meat and fish every day, and will have more time to enjoy sunsets. But at the same time, their relative social standing will decline, and many of them will perceive this as humiliation.

  But we should not be too elite-orientated and worry only about the fate of the relatively privileged groups. Many common North Koreans are also bound to have reasons for being disappointed by the “unification by absorption.” For a while the citizens of what is now North Korea will enjoy the newfound prosperity, since the post-unification government is likely to instantly deliver what Kim Il Sung once promised: an opportunity to enjoy a meal of meat soup with boiled rice while sitting under a tiled roof. They will appreciate a new individual freedom as well—it is nice to listen to a song you like even though it has no references to the Dear Leader and Great Family. But they will soon inevitably start comparing themselves with their southern compatriots, just to discover that a significant gap continues to exist. The North Korean people will support unification (and perhaps even fight for unification) on the assumption that it will soon deliver the living standards that approximate those of South Koreans. Needless to say, this cannot possibly happen.

  Nearly all North Koreans will soon discover that they are not eligible for anything but low-skilled, low-paid work. Some of them will manage to retrain themselves, but a majority will have to spend the rest of their life sweeping floors and working in sweatshops. They will see this as the result of discrimination. Indeed, as the bitter experience of North Korean refugees in the South demonstrates, some discrimination against the Northerners is almost certain to emerge. But to a large extent most of this so-called discrimination will reflect objective disadvantages of the North Korean workers who lack many modern skills.

  Some South Korean businesses will rejoice when they discover a reservoir of low-skilled but disciplined and cheap labor in the North. However, most authorities agree that cheap low-skilled labor is not what the South Korean economy needs at present.

  Many North Koreans will move to the alluring bright lights of the cities of the South—after all, Seoul lays within merely one day’s walk of what is now North Korea. Labor migrants from the North will probably undercut unskilled South Korean workers, driving wages down and further increasing mutual distrust between the former citizens of the two Korean states. Some of them will certainly take up criminal activities of all kinds, so after unification, South Korean cities, now remarkably safe at any time day or night, might become dangerous. Younger women from the North will probably contribute toward the revival of the steadily declining sex industry in South Korea—with predictable consequences for the way the two Koreas perceive each other.

  The mass migration of Northerners to the South is likely to produce much social friction but on balance it is the much smaller migration of Southerners to the North that will produce greater problems. Rudiger Frank, an East German by birth and a perceptive observer of Korean events, recently put it nicely in a private conversation with the author: “When and if Korean unification comes, it will be necessary to protect Southerners from the Northerners, but it will be far more important to protect Northerners from Southerners—from predatory Southern businesses in particular.”

  Indeed there are a number of potentially explosive problems, including the attitude toward the 1946 Land Reform Law, which has never been officially accepted by the South Korean government. Unlike, say, China where former landlords were either slaughtered or, if they were lucky, cowed into permanent silence, most North Korean landlords were fortunate to escape to the South between 1946 and 1953. They seldom forgot to take their land titles, so nowadays significant parts of the best arable land in North Korea theoretically have “legal owners” who are happily living somewhere in Seoul. As the present author knows from many experiences, these old land titles are carefully preserved by the second and third generation of ex-landowners.

  The history of South Korea’s economic boom was
also the history of obscenely profitable land speculations. In some parts of the Apgujeong ward of southern Seoul, for example, the price of land increased some thousandfold in the years 1963–1990 (this is after the adjustment to the inflation was made!). South Koreans understand the potential value of land, especially if it is located close to a future booming business or industrial center. Unless something is done, the holders of pre-1946 land titles will descend on destitute North Korean villages, using litigation in order to take from North Korean farmers the only potentially valuable asset they have. Unfortunately (for North Korean farmers), the descendants of post-1946 migrants tend to be very successful and powerful in modern South Korea and therefore, if they decide to fight for “their” property, have a chance of succeeding.

  Greedy scions of long-dead landlords are not the only people who are going to create trouble in the post-unification real estate market. Investing in North Korean real estate is likely to be tremendously profitable in the long run. At the same time, even though a shadow real estate market is now quietly developing in North Korea, the majority of North Koreans have distorted ideas about the value of real estate. One should not be surprised about this fact—when the present author bought real estate for the first time in his life, in the still (technically) Soviet Leningrad of 1991, a one-bedroom apartment in this second-largest city in the then Soviet Union would cost less than a badly made Lada subcompact car and would be just slightly more expensive than a new IBM desktop computer (IBM PC XT with hard drive of 20 Mb, if you remember such a thing). If South Korean investors are “lucky,” they might easily persuade some North Koreans to sell their derelict houses for the price of, say, a shiny new fridge or a Japanese motorbike. Needless to say, urban North Koreans will soon realize that they have been cheated, and this will not make them more enthusiastic about the realities of unification.

  The experience of post-Socialist Eastern Europe and the USSR has shown yet another potential vulnerability the ex-Communist populations have. They are ignorant and sometimes very naïve about the workings of markets. They therefore can easily fall prey to con artists who peddle all kinds of get-rich-quick plans. Ponzi pyramid schemes seem to be especially common. In 1994 in Russia, a Ponzi scheme run by the MMM Company wiped out the savings of five million ex-Soviet citizens. The MMM affair led to some political disturbances but it was nothing in comparison to post-Communist Albania. In Albania, a number of Ponzi schemes succeeded in attracting the investment of a quarter to half of all Albanians—some $1.2–1.5 billion, or half of the annual GDP in this country with a population of three million. Their collapse in 1997 led to a short but intense civil war that cost an estimated 500 to 1,500 people dead.1 Romania—another country that resembled North Korea in many regards—also suffered from the collapse of the Caritas, as a local Ponzi scheme was known, even though this collapse did not lead to much violence.

  Unfortunately, similar events are also likely to happen in North Korea. North Koreans might be street-smart in their own ways, but they tend to be remarkably credulous and naïve when it comes to the workings of modern capitalism. Actually, we already have a warning sign: according to recent research, in South Korea one in five Northern refugees has been a victim of fraud, a rate more than 40 times higher than the national average.2 They will make an easy prey for the predatory outsiders, especially those from the South—and such an outcome is not going to promote better mutual understanding in post-unification Korea.

  It is clear that the social transformation of North Korea will be difficult for everybody. There is one group, however, that seems to stand out—the military.

  The North Korean military is estimated to be 1.1–1.2 million strong. Most of these people can be seen as soldiers only if you stretch the definition of military service. They are essentially an unpaid labor force, whose members are also taught some basic military skills. But the North Korean armed forces also include a significant minority (perhaps as many as 300,000–400,000 people) of professional warriors, who have spent their entire adult lives mastering ways of low-tech killing. They are soldiers in the special forces, units of the Pyongyang Defense Command and other elite formations.

  After unification, they are likely to find themselves in an unenviable situation, since these lifelong professional soldiers usually don’t have even those limited skills that can be found among the civilian population. They are also likely to be hit especially hard by the collapse of the official value system: the sudden realization of the emptiness and lies behind the Juche ideology and the Kim family cult. Some of them will find poorly paid jobs as security guards, but many others will opt for more lucrative opportunities in the criminal underworld.

  A PROVISIONAL CONFEDERATION AS THE LEAST UNACCEPTABLE SOLUTION

  Let us now consider some ways in which we can mitigate the negative consequences of unification whilst making the most of its numerous advantages.

  One of the possible solutions might be the creation of a transitional confederative state where both North and South would maintain a significant measure of autonomy and keep different legal systems as well as, possibly, different currencies. A major task of such a confederation would be to lay the foundations for a truly unified state and to mitigate the more disastrous effects of North Korea’s future transformation.

  The idea of confederation has been suggested many times before, but in nearly all cases it was assumed that the two existing Korean regimes would somehow agree to create a confederative state. Needless to say, one has to be very naïve to believe that the current North Korean rulers could somehow coexist with South Korea within such a confederative state. Even if they are somehow persuaded to accept such a risky scheme, very soon their own population will become dangerously restive.

  In real life, a confederation will become possible only when and if the North Korean regime is overthrown or changes dramatically, so that a new leadership in Pyongyang will have no reason to fear the influence of the South. In other words, only a post-Kim government can be realistically expected to agree to such a provisional confederation. It does not really matter how this government will come to power, whether through a popular revolution, a coup, or something else. As long as this government is genuinely willing to unite with the South, it might become a participant of the confederation regime. If an acute security crisis leads to a South Korean or international peacekeeping operation in the North, the emergence of a provisional confederation still remains a possible—and highly desirable—solution on the way to Korea’s reunification.

  The length of the provisional confederation regime should be limited, and 10 to 15 years seems like an ideal interval. A longer period might alienate common North Koreans, who will probably see the entire confederation plan as a scheme to keep them from fully enjoying the South Korean lifestyle while using them as cheap labor. On the other hand, a shorter period might not be sufficient for a serious transformation—and a lot of things will have to be done.

  One of the tasks of such a provisional system will be to control cross-border movement. The confederation will make it relatively easy to maintain a visa system of some kind, with a clearly stated (and reasonable) schedule of gradual relaxation. For example, it might be stated that for the first five years all individual trips between the two parts of the new Korea will require a visa-type permit and North Koreans will not be normally allowed to take jobs or longtime residency in the South. In following years these restrictions could be relaxed and then finally lifted.

  One has to be realistic: this administrative border control is not going to be particularly efficient in stopping North Koreans’ exodus to the South. Post-unification border guards are not going to machine-gun illegal crossers, and with South Korea being so rich, so attractive, and so close, fines and mild punishments will have only marginal impacts. After all, the North Korean people have spent the last two decades boldly flouting countless regulations that were supported by an exceptionally severe system of sanctions and punishments. Thus, immigration between the
two countries can be reduced only if life in North Korea itself will become sufficiently attractive within a suitably short period of time.

  To achieve this goal, the North Koreans also should be protected from the less scrupulous of their newfound brethren. The provisional confederation regime, while encouraging other kinds of investment, should strictly control (or even ban) the purchase of arable land and housing in the North by South Korean individuals and companies, thus reducing the risks of a massive land rip-off being staged by greedy real estate dealers from the South.

  It will be important to explicitly acknowledge the 1946 land reform, declaring the property claims null and void. To placate former owners, some partial compensation might be considered, even though the present author is not certain whether grandchildren of former landlords, usually rich and successful men and women, are in dire need of such compensation (especially when one takes into account that many of these families got their land by being remarkably deferential to their Japanese overlords in the colonial era).

  The property of the state-run agricultural cooperatives should be distributed among the villagers. As a first step, it might be preferable to give the land of the cooperatives to the farmers who currently farm on them—not as property, but rather on a free rent basis. In five to ten years, those families who continuously toil on their land plots, producing food and paying taxes, should be accorded full ownership rights. This will discourage some North Koreans from rushing South while also contributing to the revival of North Korean agriculture. By the end of the confederation period, land and real estate in North Korea should be safely privatized, with North Korean residents (and, perhaps, recent defectors) being major or, better still, sole participants in this process. Incidentally it is conceivable that North Korean farmers will do what many East German farmers did after unification—reestablish agricultural cooperatives. But, these will be genuine cooperatives, and not the state-run farms thinly disguised as voluntary communal farmer’s organizations.