The two Koreas: Some considerations on the relationship between North and South Korea

I
f the two Koreas reunified, as planned in 2000 with the joint declaration of June 15, we would have an unreasonable merging of two radically different political principles. South Korea has chosen to be a periphery of the American empire, which uses the US economy on the basis of its internal cycles and mature technologies that it exports by taking advantage of the low cost of manpower and of some raw materials.

North Korea played the Cold War card, supported only partially by China and Russia, which used North Korea as a block for the West and paid for said North Korea's commitment with political stability and some economic aid.

The Cold War, however, is really over and this holds true both for North and for South Korea.

We need to think of new worlds and new “super-concept rules”, just to quote Wittgenstein.

Traditionally, unification is conceived as a Confederation, as supported by South Korea, or as a Federation with wide autonomy for both areas, as always supported by North Korea.

The two inter-Korean meetings held in 2000 and in 2007 - with the first one that even made the South Korean President be awarded the Nobel Peace Prize for his Sunshine Policy - recorded excellent economic results (including the free trade area of Kaesong and the tourist area of Mount Gumgang), but no effective political results.

Indeed, in November 2010, the North Korean Minister for Reunification officially dismissed the Sunshine Policy as a failure.

This always happens when politicians are only interested in conveying a good "image".

However, let us better analyzing the reunification policies which are currently being proposed, also by authoritative US think tanks.

The excessive psychologism - the flaw Husserl saw in the European philosophy of his time - still characterizes the North American analysis of strategic phenomena in Asia and the Middle East

Hence, both in North and in South Korea, the phenomenology of elites is often quite simplified and devoid of the necessary nuances.

The "states of mind" or the subjective tendencies of the real members of the two countries’ ruling classes are not so relevant as they may appear at first sight.

“Les faits ont la tête dure” (Common sense is not so common) - just to quote Voltaire - and elites do not live on psychology, but enjoy verifiable and significant privileges that someone has to pay anyway.

Meanwhile, the Constitution establishing the North Korean Workers' Party repeats still today that conquering South Korea militarily is the primary strategic (and economic) goal of the North Korean regime - not to mention the fact that North Korea’s ruling class is selected with military and national criteria, while South Korea’s ruling class is more technocratic and less prone to accept the line of military confrontation.

The difference is not marginal. Pending an inter-Korean conflict, South Korea’s elites would escape to the United States - thinking of being at home - while the North Korean ones would fight their war until final victory.

Furthermore, in this Asian context, our American friends quote the example of "de-Baathification" in Iraq after Saddam Hussein’s fall.

Never was an example more dangerous for the theses it intends to uphold.

The abolition of Baath, namely the Party-State, and the selective and loyalist mechanism of the ruling class in Syria and Iraq was, on the contrary, a real strategic folly which voided Iraq and certainly made it viable - just to use the typical terminology of US strategic analysis - not to the bipartite “democracy” which is so fashionable in the Anglo-Saxon world, but rather to the Iranian regime and later to the Sunni sword jihad of Daesh.

This means also viable to the division of the areas of influence in a country like Iraq, having a Shiite majority and a Sunni area which, through the jihad, has now become mass of geopolitical manoeuvre for the Gulf powers.

Every manipulation of the historical heritage of peoples and Nations is bound to lead to their fragmentation into new areas of influence, which have often not even been foreseen by the crazy "social engineers" who believe - as happened to the first US Governor of Baghdad - they can use the same laws in force in Boston to regulate road traffic in the Iraqi capital city.

Turkey, too, has got its hands on Iraq - obviously with a view to settling the Kurdish issue.

Furthermore it seems to flout any "line" worked out within NATO, of which Turkey is a member.

From the Balkans’ wars - waged to avoid the globalization of Russian oil and gas towards Europe and the Mediterranean region - to the massive use of the Afghan jihad to destabilize and disrupt the post-Yugoslav political system, to the stable destabilization - if I may use this oxymoron - of the Maghreb region with the silly "Arab Springs" to be completed with the end of Syria and its ethnic and religious splitting up, it seems that the current US global strategy is designed to disrupting every geopolitical region.

Nevertheless if all countries become "liquid" and viable, every political contagion will tend to spread and worsen.

Just think of Macedonia’s current situation and the not-so-secret plan to achieve a Great Islamized Albania, capable of standing up to the Slavic and, hence, pro-Russian Serbia.

Reverting to the US line in this Korean region, the idea is that of a reunification creating a favourable interest for the North Korean ruling classes.

How? The North Korean system based on songbun, namely the traditional caste system, is further divided into 51 subgroups.

Obviously, as everywhere, the main criterion is loyalty to the regime - hence I do not see how the North Korean elite can accept a soft reunification, in which North Korea will inevitably lose a share of power to preserve hegemony - although with fewer elitist “privileges” - in a possible peaceful reunification with South Korea.

According to the most reliable calculations, approximately 4.4 million North Koreans can be part of the local "ruling class", but - as those who are acquainted with Pareto’s and Veblen’s theories know all too well - all elite classes are intrinsically factionist and must have strong symbolic and material incentives to back the regime that supports them.

Psychology and the democratic myth are not enough.

Suffice to recall the phenomenon of Ostalgie, namely the nostalgia felt by many German citizens and voters for aspects of life in East Germany after reunification - Nost-Algie for permanent and regular jobs, for the lack of unemployment, for the authoritarian but effective Welfare of the old Sociality Unity Party of Germany (SED).

Money, however, never pays for the symbol - hence intangible incentives must always be greater than the tangible ones.

There is also talk about a selective amnesty for North Korea’s defectors.

Why?

How could South Korea support this new share of frustrated ruling classes coming from Pyongyang and finally what would be the strategic aim of this operation?

We may assume that the aim would be voiding the North Korean regime from inside - but are we really sure that the South Korean ruling class can safely double its size, possibly incorporating the North Korean songbun classes that are already accustomed to unlawful transactions?

Furthermore, reunification would bring no concrete benefit to South Koreans.

Quite the reverse. It would be necessary to support a population - about 50% of North Korean inhabitants - who is well below the typical economic standards of South Korea's working class.

According to our estimates, for the five years following reunification, this would create a public debt at least 24% higher than expected - which is already approximately 40% - in a situation of weak growth, due to the crisis and saturation of the US market and the contraction of the domestic market.

Being a client State never pays.

In other words, this kind of reunification would certainly lead to the default of the South Korean government.

Furthermore, currently South Korea is bearing the brunt of political uncertainty, after the impeachment of President Park Geun Hye - not to mention the already described decrease of domestic consumption, resulting from an excessive cyclical link to the US economy and the decline of exports to China.

With a 2.6% planned growth throughout 2017, South Korea certainly has not the potential to absorb or make credible its debt generated by the costs of reunification, regardless of its being an elitist or mass reunification.

Even demography does not help, as the South Korean population is expected to start falling structurally next year.

Certainly we must consider the North Korean manpower, but the labour force has a cost of training, obviously adding to the cost of the means of production which should guarantee jobs precisely to the North Korean workers.

It is worth recalling that it took over twenty years to achieve homogeneous social and economic conditions between West Germany and the old German Democratic Republic (DDR) - a goal that has not been reached yet despite the Euro manipulation and the huge German investment.

Moreover, at the time of Vereinigung, Germany was the third world economy and certainly not the respectable, but much smaller South Korea’s economy.

And what about China? Obviously it is not interested in the Korean reunification.

In fact, if this were to happen, it would be the repetition - in the Third Millennium - of the unification of Northern and Southern Italy and, in this case, the economic and political "line" would be dictated by South Korean and not by North Korea.

As can be easily imagined, China does not like this.

China has every interest in freezing any geopolitical issue in Asia, by operating with peripheral States - as in the Roman legend of the Horatii and Curiatii - by dividing and later linking them with bilateral agreements.

In Asia, China wants to avoid everything may lead to the creation of a new strategic bloc capable of dictating certain conditions to its geoeconomic and military system.

Considering that South Korea is always a US client State, China would regard reunification as an undesirable increase of the North American potential in the safety buffer zone of its Eastern and Southern coasts.

In many ways, however, not even the United States would benefit from the Korean reunification.

While there is no longer such a reason to keep large troops in South Korea, the correlation of US interests is inevitably expected to change, thus leaving the Korean Peninsula uncovered while the United States is supposed to redeploy its Armed Forces in the Pacific, around the South China Sea and in the Japanese safety buffer zone.

Currently neither China nor Japan appreciate this new scenario of the American military power in Asia.

If the United States maintained a large amount of troops in the new reunified Korea, everybody would regard this as only having the aim of opposing China.

Not even Japan would benefit from a German-style reunification between the two Koreas.

Both South Korea and, potentially, even North Korea, are now global competitors of Japan - not to mention the strategic bloc represented for the country by an imperial "co-prosperity area" that a reunited Korea would undermine.

There is no Japanese geopolitics not targeted to the whole Southeast Asia - it is not possible otherwise.

And this holds true both for the Empire - the Dai Nihon about which Haushofer spoke in the 20th century - and for the Japan regionalized by the United States.

Unlike Italy, Japan was defeated in World War II, but it is still able to think big and really understand geopolitical issues without demonizing its past and worshiping its old enemy.

Hence, what can be done? It is simple.

Reopen the Six Party Talks circle, as well as fund specific projects in North Korea and help its people with humanitarian aid, but above all, with a peaceful reindustrialization policy going towards Russia, China, the EU and, possibly, also the United States.

The Asian Bank for European Infrastructure and the European financial institutions should take immediate action - and Italy is present in the Bank of Asia. In a new type of nuclear negotiations, we should also rethink the civilian potential of North Korea’s nuclear system for it to sell energy to its neighbours.

Obviously the resumption of the Six Party Talks should be based on a reconstruction of North Korean free trade areas and on an effective relationship with Russia and China, which should become the new guarantors of the Korean Peninsula’s nuclear and economic balance.

Giancarlo Elia Valori

Advisory Board Co-chair Honoris Causa

Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York.

He currently chairs "La Centrale Finanziaria Generale Spa", he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and member of the Ayan-Holding Board.

In 1992 he was appointed Officier de la Légion d'Honneur de la République Francaise, with this motivation: "A man who can see across borders to understand the world” and in 2002 he received the title of "Honorable" of the Académie des Sciences de l'Institut de France

 

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