SEOUL, May 22 (UPI) -- Even as international concerns about North Korea's nuclear capabilities continue to mount, hopes for unification of the Korean peninsula remain strong in the Republic of Korea. Cautious optimism about reuniting the country after more than half a decade of division prevails, and surprisingly enough, a steady trickle of business investment from the South is still flowing into Kim Jong Il's regime, as well as financial and food aid.
Never mind that North Korea is by far the most isolated country in the world today, run by a man whose people have died of starvation in their thousands over the years, as the country pumps well over a quarter of its budget into military defense and weaponry development. For both those of the generation that experienced the horrors of the Korean War in the 1950s as well as those who have only known a South Korea that has been prospering, their emotional commitment to eventual reunification remains unshaken, regardless of recent political developments.
"We are the same people, we share the language, we are the same nation," said Park Chan-Bong, deputy assistant minister for unification policy in Seoul, adding for both the North and South, making the current demarcation line between the two nations permanent was out of the question. At the same time, it appears at first blush that while South Korea wants the two countries to come together with both sides embracing a market economy and democracy, Kim Jong Il has made clear he has no intention of either relinquishing power or giving up on pursuing their form of socialism.
As the global community endeavors to avoid a military confrontation with Pyongyang, South Korea has seen it increasingly necessary to try to convince the North to adapt and embrace a more open society on its own accord. And financial assistance as well as business opportunities is still regarded as the best means to convince them is to parade the power and prosperity of the republic at a working level.
"I have not seen any decline in North-South Korean economic relations," the unification ministry's Park said, adding most projects that have been put into place to bolster financial ties between the two sides under former President Kim Dae-Jong from 2000 remain in place.
One such effort is the plan to connect the North and South through a railway system. Granted, the railroad connecting the two sides would only extend several miles across the demilitarized zone that has divided them since the Korean War ended in an armistice. Initiated as part of the so-called sunshine policy to increase outreach to North Korea, South Koreans have remained committed to building the Western corridor railway system, which is hoped to boost trade between the two sides, particularly by establishing an industrial park zone on the northern side. The plan is for South Korean businesses to invest in Kaesong and provide technological know-how to the North, while they take advantage of the cheap labor in the north, tax-free.
The problem is, however, that while South Koreans have continued to put up money to keep the project going, commitment on the part of the North has been at a standstill for well over 6 months at this stage. Meanwhile, looking ahead at potential benefits from the investment, North Korean labor will unlikely be as cheap as southern entrepreneurs anticipate, given that the North is likely to charge high fees for use of its workers.
There are also a handful of other South Korean businesses in the communist country. One project is funded by the Hyundai group, which has been trying to develop a resort area in the southernmost mountains of North Korea. with the backing of Seoul's National Tourism Board. But while initial response to the project was favorable, particularly in light of renewed hope amongst southerners for reunification and renewed interest in the goings-on of the North, the plan was never going to be a profit-maker even in the best of times. Now, fears of severe acute respiratory syndrome, among other factors, is keeping tourists completely out of the north.
"It's just a money-loser," said Jeffery Jones, former president of the American Chamber of Commerce in Korea.
Likewise, Jones said Fiat's tie-up with the Unification Church to produce so-called peace motors in the communist state has been an unprofitable venture, though North Korea ironically imports more cars than the South, given South Korea's extremely low level of automobile imports in order to protect its domestic auto manufacturing industry. UPI is owned by News World Communications Inc., a media company founded by the Rev. Sun Myung Moon, the head of the church.
Some, however, argue there is already a shift, albeit glacial, in North Korea's attitude towards economic growth. Since the country stated that a form of market price-led economic system should be introduced last summer, there has been an increasing awareness of the mechanics as well as benefits of capitalism, said Deok Ryong Yoon, research fellow at the Korea Institute for International Economic Policy.
Yoon, who has crossed the border a number of times to take part in humanitarian aid missions and was last in Pyongyang in March, said there is increasing acknowledgement of the need for competition in the marketplace, and a recognition that depending on the government for everything was unlikely to be sustainable.
"The problem is that there is no capital...few factories" that would spur market growth and consumer demand in the first place, he said.
Whether and how Kim Jong Il's regime will survive under the current climate remains one of the biggest question marks in international relations today. But what is evident is that the North Korean threat is weighing down on foreign investments into South Korea.
"Foreign investment has come to a halt since November 2002...with the nuclear crisis," said Jones. While overseas investors continue to profit in South Korea, investments into South Korea have been kept at a standstill and are likely to remain flat "until they feel more comfortable with the North Korean situation," Jones added.