Relationship between North and South Korea after the June 15 Joint Declaration and the Development Plan for the Korean Peninsula
By Suh Dong-man (徐東晩)

Sangji University (尙志大學校)

1. The Historical Implication of the ‘June 15 Joint Declaration’

The relations between North Korea and South Korea have been steadily improved since the June 15 summit between President Kim Dae-jung and Chairman Kim Jong-il in the areas of exchanges and cooperation even though there have been ups and downs in the government-to-government relationship. In 2005, the two Koreas held civil and governmental ceremonies together to celebrate the anniversary of the June 15 summit and the August 15 Liberation Day.
In the past, the North unified civil-government events on these anniversaries, while the South chose to separate civil ceremonies from government-sponsored activities. However, this time, exchanges and cooperation were made at the government-to-government, party-to-party, and people-to-people levels with equal attention and force. Just as the June 15 summit meeting was realized on the basis of the people’s democratic capabilities, the exchanges and cooperation have shown the democratic system in the South working to overcome the differences between the government and the civil society.
On the other hand, the joint events signified the mitigation of the suspicion that the South Koreans have had about the North’s “Unified Front” strategy for the unification of Korea. The visit to the National Cemetery by the North Korean delegates visiting Seoul for the August 15 Ceremony was a symbolic act that reflected the status of South-North reconciliation. Despite the heightened conflicts between North Korea and the United States, the North Korean nuclear crisis is being dealt with at the “Six-Party Talks” with the increased cooperative relationship between the two Koreas working as a deterrent to the possible reliance on a military solution.
The effect of the June 15 summit is being felt in North Korea as much as in the South. Since the June 15, 2000 summit, the North Korean economy has received substantive benefits from the bilateral exchanges and cooperation and also from the South Korean aid. This is no secret among North Koreans. The North Korean regime, which has been as vocal as South Korea for unification, must have faced pressure from the people to show progress in the North-South relationship.
The so-called “June 15 spirit” is grandly propagated as the great product of Kim Jong-il’s unification policy and as the foundation of a new North-South relationship replacing the framework under the previous Kim Il-sung regime. The phrase “among us (North and South) as a nation,” used in the North as the core slogan of the “June 15 spirit,” seems to have been produced by softening the concept of “independence” and then combining it with the idea of “grand national unity” in the three principles of “Independence, Peace and Grand National Unity” declared in the July 4, 1972 Joint Communique. This demonstrated the change in North Korea’s acceptance of South Korea as a partner, departing from the perception as an outsider, a colony of external force, and a regime to destroy to realize “anti-colonial independence.”
The phrase “grand national unity” used in the North also embodies the meaning of “reconciliation and cooperation” used by the South. This signifies an increased flexibility on the part of the North from the past policy line of “independence first, national unity later” to a flexible approach of simultaneous pursuit for the two goals or the reversed policy of “national unity first and independence later.” North Korea has finally realized the need to recognize the existence of South Korea and seek its assistance, despite the current North Korea-U.S. confrontation and South Korea-U.S. alliance. “Among us as a nation” certainly denotes a change in the North Korean concept on inter-Korean relations but “independence” still is the North’s main strategic line that can come up to the front at any time. Thus, it is premature to be totally optimistic about change in the North Korean attitude.
In South Korea, the June 15 summit triggered diverse discussions on how to define the inter-Korean relationship, and the June 15 anniversary ceremony in 2005 intensified the debate. Some people even suggest that the June 15 summit marked the end of the age of separation and the beginning of the era of unification, based on the agreement in the Joint Declaration, which recognized the similarity between the commonwealth system proposed by the South and the low level of federation favored by the North.

2. Progress and Setback in Inter-Korean Relations

The progress in inter-Korean relations of the past five years have been so substantial that some people point to June 15, 2000 as a turning point, a watershed between the old and new regimes. However, the South-North ties still show limitations in many areas. That is, there is still a long way to go along the road to peace and unification of the Korean Peninsula. Considering that the global Cold War has ended, many tasks that should have been achieved by now have not yet been accomplished.
Even though the improvement in inter-Korean relations based on reconciliation and cooperation certainly signifies progress in the context of history, a counteraction that could lead to a setback is always possible. There is the “theory of divided system” which argues that even though reconciliation and cooperation between South Korea and North Korea have increased after the demise of the Cold War, it has also created an unstable condition on the Korean Peninsula. It points out the limit of the one-dimensional approach of looking at the reconciliation and cooperation between the two Koreas as a progress from the contradiction of the Cold War and national division of Korea.
The current North Korean nuclear crisis demonstrates how an unsettled and postponed task that should have been accomplished at a certain historical point is negatively impacting relations. In fact, the fundamental cause of the North Korean nuclear crisis is the conflict between North Korea and the United States and between North Korea and Japan, which have been left unsettled since after the end of the Cold War. During the Roh Tae-woo administration, South Korea normalized diplomatic relations with the Soviet Union and China, and gained the UN membership simultaneously with North Korea.
On the other hand, North Korea in its foreign relationship did not overcome the Cold War confrontation with the United States and Japan. Furthermore, the economic crisis faced by North Korea also worked as the barrier to its economic transformation into launching a full-scale reform and liberalization program. The normalization of the North Korea-U.S., North Korea-Japan relationships was the historic task that should have been achieved in the late 1980s, and early 1990s at the latest.
In the end the North Korean nuclear crisis emerged in 1992 and 1993, and has become the stumbling block against progress and improvement of the situation on the Korean Peninsula. The Korean situation, from the historical perspective, cannot be said to have progressed since the end of the Cold War. The advancement of South Korea alone in its foreign relations following the end of the Cold War between the East and the West does not automatically guarantee the development of the Korean Peninsula as a whole.
Economic cooperation that dominates the inter-Korean relationship was the key product of the June 15 Summit. The current three major cooperation projects – Gaesong Industrial Complex, Mt. Geumgang tourism, and the linking of inter-Korean railroad and highway – are to be expanded to seven projects as the next stage of cooperation. They are energy cooperation, modernization of railroads, Mt. Baekdu tourism, modernization of Nampo port, reforestation, development of a joint agricultural complex, and the joint use of a border river.
The new large-scale South-North economic cooperation projects are linked to North Korea’s economic reform and development. Going beyond unilateral assistance, they have been selected for their mutually beneficial and sustainable characteristics. However, cooperation in areas such as infrastructure, logistics and energy will be linked to the progress in the settlement of the North Korean nuclear issue to a certain degree.
The proposed electricity assistance to North Korea, the core of inter-Korean economic cooperation, has been a pending issue between the two Koreas. However, the Kim Dae-jung government failed to settle the issue in the face of U.S. pressure. The Roh Moo-hyun government raised it within the framework of the six-party talks to resolve the North Korean nuclear problem. Seoul’s initiative only resulted in internationalization of the issue and the supply of 2 million KW of electricity to the North remains the major task of the times that should be realized as the follow-up measure to the June 15 summit.
The North Korea-U.S. relationship since the South-North summit turned worse with the inauguration of the Bush administration, making the North Korea-U.S. joint declaration in 2000 that envisaged the normalization of the relationship and the peace arrangement a dead letter. Since then, the issues of easing military tension on the Korean Peninsula failed to move ahead. North Korea has only responded to the military talks at a working level when they are related to economic cooperation projects. The deadlock in North Korea-U.S. relations may be the direct cause, but the widening gap in military capabilities in South Korea’s favor seems to be of a great burden to North Korea.
The changing shape of the South Korea-U.S. military alliance, involving Korea’s proposed recovery of the U.S. operational control of Korean forces in wartime, among others, also affects progress in inter-Korean military dialogues. In the meantime, the agreement at the first South Korea-U.S. strategic dialogue held on January 19, 2006, which recognizes the strategic flexibility of the U.S. Force in Korea, could cause concerns about a negative impact on the relations with North Korea and with China. There is a growing need to utilize the inter-Korean relationship to find a breakthrough on the nuclear issue.

3. Division, Peace, Unification

Even without referring to the example of Germany, which has been suffering after-effects of unification, the majority of Koreans understand that an abrupt unification may bring disasters to both Koreas. The North Korean regime is not in any condition to sustain itself economically, and South Korea finds itself impotent in tackling with economic and social imbalances between the two Koreas. Therefore, unification should be managed with a long-term perspective. In addition, the two Koreas are still locked in military confrontation, and the Cold War regime has not been eliminated on the Korean Peninsula. The establishment of a peace regime is the foremost task.
The long-term perspective does not mean that we should give up the goal of unification. Ironically, the German unification came when the two Germanys were unprepared for it with the sudden breakdown of East Germany and the demise of the global Cold War. The inter-Korean relationship at this moment has not even achieved the level of exchanges and cooperation that the two Germanys had accumulated before the unification. Koreans should stop emphasizing blindly that the settlement of peace must come before unification, and be careful not to make the same mistakes as Germans.
In this regard, it is quite encouraging that the Law on the Development of South-North Relations, which was passed at the National Assembly in December 2005, mandates the government to draw up an overall policy plan for the development of North-South relations every five years. Setting up national policy agenda step by step with a long-term perspective to prepare for unification would mark a turning point to discard the old method, which was characterized by hurried pursuit of progress to satisfy immediate political needs, and seek a new approach for problem-solving.
More than anything else, the June 15 Joint Declaration, which recognized the commonalities between South Korea’s “commonwealth” scheme and the “low level of federation” in North Korea’s unification process, is significant in view of the fact that the two sides identified common points from their formal unification policies and legalized discussions on unification. At least according to the text, the North Korean side divided its unification plan of “federation” into two stages and tried to come closer to South Korea’s “commonwealth.”
Even though it is not expressed explicitly, South Korea seems to have taken into consideration the stage of “federal republic” from President Kim Dae-jung’s three-stage unification plan. Considering the heterogeneity of the two regimes that have existed for more than 60 years, whatever their achievements and negative aspects, instant unification into a single state may not be the best solution. Korea so far has mainly focused its discussion of unification on how to restore Korea as one nation, as was envisioned at the time of Korea’s liberation from the Japanese colonial rule. Now, Korea should include in its perspectives for unification even the unification as a nation of complex regimes such as a federal state.
Recognizing the commonalities of the unification plan of the two Koreas was an epochal agreement in the June 15 Joint Declaration. The core implication of the agreement is that two Koreas will pursue unification gradually with a long-term perspective, and will individually develop to better status. If it is not for a unification that provides better condition than now, there is no need to rush for unification. The future of unification should be able to give both the northern and the southern regimes chances to exert their own individual potentials for further development.
However, even if such perception is blocked by the reality of the North Korean regime which cannot but cling to its own survival, the argument by some progressive scholars that expecting unification is unrealistic and undesirable to either South or North is also a pessimistic and fatalistic attitude on the division of the Korean peninsula. The problem is that the current division is fundamentally unstable, and once the Cold War system on the Korean Peninsula, the external condition of the division, disappears, the current state of division cannot be maintained.
It should also be noted that changing the status of division could paradoxically bring unrest to the division itself. In particular, the desire for unification that may burst out from the regimes in the South and the North in this process would be difficult to suppress with the passive approach of “division management.” The more realistic approach, on the contrary, is to respond with the approach of “unification as a process.” In this perspective, the improvement of the situation on the peninsula to a “good division” and a “better division” should be a preparatory process to prevent a “bad unification.”
Peace is a precious value that should be pursued in the efforts to attain unification and is a task that should be persistently promoted. Peace has so far been regarded as the stage to be achieved in advance of unification. This was a common perception in Korea during the Cold War era when Korea tried to formulate the inter-Korean relationship modeled after the 1972 Framework Treaty between West Germany and East Germany. The establishment of the peace regime on the Korean Peninsula between the United States and South and North Korea should be the pre-condition before unification.
However, peace, just like the “unification as a process,” must also be a “process” that should be achieved and developed by continuous efforts. Peace cannot be guaranteed in a situation where the 1991 South-North Basic Agreement cannot be implemented despite its detailed institutional plans. Even though the armistice arrangement is maintained on the peninsula, there has been no war for more than 50 years. Even though a comprehensive military dialogue has not been held since the June 16 summit, the peace on the peninsula has progressed remarkably with exchange programs and the three major economic cooperation projects underway. The territorial division is the result of a violent event called the Korean War, and now the inter-Korean exchanges and cooperation restores peace on the Korean Peninsula in the non-violent way.
As is emphasized by the concept of “structural peace,” peace cannot be maintained under economic poverty and extreme social inequality. This applies to individual regimes as well as to the North-South relationship. North Korea’s economic crisis can be a greater threat to the peninsula and Northeast Asian region than its military force, which is a no match for South Korea’s. The North Korean nuclear issue is also directly linked to the crisis of the North Korean regime.
At the six-party talks, there has been an understanding that the dismantlement of the North Korean nuclear facilities would lead to economic assistance from other parties. In this vein, the establishment of a peace regime, which is related with the reduction of the conventional armed force, will have to be considered for North Korea’s economic reconstruction. Enhancing peace based on the narrow definition of military and security terms could raise instability of the North Korean regime. The peace separated from exchanges and cooperation, and furthermore from the long-term unification process, is one-dimensional. A new approach is needed: not with the antiquated perception promoting “long-term peace settlement process as the stage prior to unification,” but from the new perception that the two processes could overlap.
As North Korea and South Korea reached the stage in which they started to recognize each other’s regimes, different sectors – the government and non-government groups – must start building consensus on the rules and practices that will govern the South-North relationship. If the unification movement continues to neglect legitimate processes in building contacts and lines with the North Korean counterpart, it will lose broader domestic support. In order to gain public support in South Korea and gain momentum, the movement should go hand in hand in the direction of the current democratic progress in Korea. It is important that the two sides meet to build legal and customary processes similar to those applied between nations and improve them to be more democratic and institutionalized.
However, when considering the establishment of a peace regime or North-South reconciliation, not to mention the unification in the longer term, finding the basis for North-South solidarity is the task that should not be neglected. Internationally, there once existed a class-solidarity based on the proletarian internationalism, but it lost its rationale. An international civil solidarity in the area of peace, environment and civil movement is emerging at present, but it would be difficult to find a corresponding force in North Korea considering its political, social and economic situation.
In this sense, the North-South people’s solidarity emphasized in the “theory of divided system” may provide some insights, because it looks at the benefits to the people of North and South Korea as the criteria for solidarity. One of the links is the sense of identity as the “Korean race.” The “nationalism of the Korean peninsula” that pursues unification is the natural desire of the people in the current condition of “division.”
While the negative aspects of nationalism are checked, the Korean nationalism should take an open form, because identities different from “ethnicity” that have evolved in the condition of separation – the North Korean “people” and the South Korean “nation” – must be mutually recognized. This is also because Koreans have complex identities that require realization of “coexistence in heterogeneity” along with the “expansion of homogeneity.” The identity of the Korean nation must be developed in the direction that embodies democracy and diversity.
The identity of the North Korean people, however, will inevitably need major transformation as they begin to experience reform and market opening. South Korea’s national identity may expand to “grand Koreanism” that pursues unification by absorption, whereas the North Korean “nationalism” could shrink into the “Kim Il-sung nationalism.” Denying nationalism because of its negative aspect will only make this situation more likely to prolong.
The best way to overcome the negative effects of nationalism is by attempting to create a sound and open nationalism. Nationalism for the Korean peninsula will be richer if both North and South Koreans can build a national community together over the whole peninsula and even invite Koreans living overseas in the four major countries – the United States, China, Japan and Russia. The creation of multi-lingual, multi-national Korean network would signal its efforts and directions for open nationalism. This can only be established with the region-wide cooperation in Northeast Asia, in peace and prosperity.

4. Development of Inter-Korean Cooperation for Co-Life

The connection between the internal conditions of both Koreas and the territorial separation has been the subject of discussions from both “theory of divided system” and the “theory of confrontational co-existence.” It is generally accepted that North and South Korean regimes have been interdependent while confronting each other from the period of Cold War conflicts up to the early period of democratization. This aspect has become prominent in terms of the interrelation between democracy and division in South Korea, and interrelation between division and North Korea’s reform and liberalization.
From the viewpoint of “divided system theory,” there has been an argument that the “system of division” was shaken by the progress of democracy in South Korea. South Korea’s developmental nation system that achieved the fastest economic success unprecedented in the world under the Cold War structure could no longer be sustained, and faced the financial crisis of 1997-98 by failing to undertake reform at the appropriate time. However no concrete causation has yet been scientifically analyzed. The problems facing South Korea or North Korea should not be all attributed to the separation alone. While admitting the unique structure and rationale of each regime, the effort to seek their interaction with the separation would be able to provide different perspectives for understanding the domestic problems from a broader perspective.
Looking at the political terrain as well as the economic system, Korean nationalism has not yet overcome the “Cold War syndrome” and is still confined to the ideologically narrow mentality. In the meanwhile, South Korea was besieged heavily by “neo-liberalistic polarization.” Even though Korea boasts a trade volume as one of the world’s top 10 countries, its social welfare budget (6 percent) is less than one-third of the average of the OECD members, and thus remaining at the bottom rank. Yet, the power of progressive parties remains minimal, and Koreans still take sides with the public opinion against the arguments that are defined as socialist – that sound growth cannot be achieved without distribution, or that the welfare policy should be established to secure the minimum level of social safety net to prevent social polarization.
This phenomenon cannot be understood without considering the current situation of division. It is hard to neglect the over-blown military, security sector compared to the weak social security system. The proportion of the military expenditure in the total GDP has greatly decreased with Korea’s economic growth, but it still takes a great proportion in the total national budget. The size is greater when the invisible security-related sector is taken into account. The situation is much more dreadful in North Korea, which still sacrifices the already-exhausted economy for huge military spending.
North Korea’s national socialism has been strongly influenced by the situation of division. North Korean socialism has already become stagnant in the 1970s and through the 80s. However, it has obstinately refused to attempt any reform that requires adoption of market elements, and tried to overcome problems by strengthening the national-socialism ideology. The development of a superhuman ruling system, an extreme form of absolute despotism by leaders Kim Il-sung and Kim Jong-il, should have its own rationale, but no doubt it is also influenced by the condition of division.
The refusal to adopt market elements and the fear of it are two sides of a coin. Unlike China or Vietnam that have promoted reform and open-door policy since the 1980s, North Korea stayed behind, and thus had to face economic crisis with the fall of the Soviet Union and the East European socialist bloc, until it finally initiated a market-oriented reform in 2002. North Korea’s reform and market opening is inter-connected with the alleviation of the security threat from South Korea when the inter-Korean relations began to improve following the June 15 summit meeting in 2000.
As the reconciliation and cooperation between the two Koreas move on the right track, inter-Korean relationship will increasingly become linked to the internal situations of the two parts. Therefore, the relationship needs to be pursued with clear intention, with more caution and preparation. Most of all for South Korea, the inter-Korean economic cooperation in the new stage would require a huge amount of financial resources for electricity supply or infrastructure building. The North Korean aid has also passed the stage of humanitarian assistance of clothes or food and reached the phase in which developmental assistance should expand to areas such as agricultural cooperation or development of consumer goods industry.
However, for the South Korean government, while it has to start large-scale assistance and investment, it also faces the immediate task of meeting the huge welfare demand caused by internal socioeconomic polarization. While the Korean economy is suffering from the social polarization, it is in the state of “over supply of capital funds.” Around 400 trillion won is floating around the domestic market trying to find proper investment. The destructive impact from the rising real estate prices has demonstrated again that the Korean economy cannot advance by securing development demands through civil engineering and construction schemes. While the domestic imbalance, in which social polarization and capital oversupply co-exist, has emerged as the social ills doing harm to the development of Korean democracy, the economic imbalance on the Korean Peninsula could threaten peace too.
As such, if the limitation of the domestic system caused by the division can only be overcome by the progress in inter-Korean reconciliation and cooperation, the costs of cooperative programs, especially those for assistance and investment to North Korea, may also help create a favorable condition to increasing domestic social welfare budget. Investment opportunities in North Korea could be an outlet for South Korea’s oversupplied capital, which can promote simultaneous cooperative development of the two parts.
There is a need for vision and policy that could accurately calculate and forecast how peace and welfare can interactively accelerate each other. It would be desirable to demonstrate the tangible and substantial spillover impacts of the reduction in security costs to the expansion of peace and welfare. In this sense, the inter-Korean military dialogue that would mitigate military threats from each other would work as the catalyst to economic cooperation. People need to understand and believe in their heart that this is the way to co-live, that they are pre-investing for unification, or paying the cost of unification, for the eventual unification in the long run.
Even for North Korea that has cautiously moved forward to adopt market economy since the July 1, 2002 measure, its domestic reform will be closely related to the inter-Korean economic cooperation. South Korea’s food and fertilizer aid and economic cooperation projects have already taken up a significant proportion in North Korea’s domestic economic cycle. North Korea’s market-oriented reform can proceed only through economic cooperation as its development level remains at a very primitive stage. North Korea’s reform and market opening is directly related to China’s active investment in North Korea since 2004.
South Korea’s capital must also play a substantial role in the early stage of market creation and development so that North Korea’s economic structure could in the long term integrate with South Korea. South Korea should prepare a sustainable development program for North Korea that would create profits from the investment of South Korea’s over-supplied capital to North Korea. In the early stage of South Korea’s economic development, the entry of Japanese capital following the normalization of diplomatic relations between Seoul and Tokyo played a decisive role in the creation of the Korean economic structure in the current form. This is the lesson to consider.
As such, in Korea, peace, welfare, and a fresh leap in the next economic stage are interrelated and should be promoted together. And North Korea, in spite of the differences in the nature of the regimes and developmental levels, can take the right developmental path only when it works with South Korea. Under the current political terrain in South Korea, the reform-progressive political group will not gain majority support unless it becomes peace-progressive. The medium for such change is the consolidation of peace and welfare. But the progressive force will not be able to survive if that combination shows cleavage.
It is time to prepare a policy that could create a feasible inter-Korean cooperation scheme with peace, welfare and development all combined. This signifies a creation of a common economic structure in which inter-Korean economic cooperation takes root in all major areas of domestic economies and continues expansion and reproduction. Already by the June 15 Declaration of 2000, the blueprint for the creation of the “iron silk road” through the reconnection of railroads and highways and the balanced development of the national economy has been laid out. This has expanded Korea’s political, economic, social and cultural space to the Korean peninsula and Northeast Asia.
From the perspective of the whole Korean Peninsula and Northeast Asia, the major task in the post-June 15 era is to look up to the respective reform and development of the two Koreas and seek areas for cooperation and undertake them.
[The Quarterly Creation & Changbi, Spring 2006 No. 131, published by Changbi Publishers.]