Written by: Douglas Barrett  |  Posted on: November 13th, 2019

North Korea – “Foundations for Economic Revival”

The British Korean Society and The Henry Jackson Society hosted an invitation only roundtable entitled “North Korea – The Foundations for Economic Revival” at the prestigious Naval and Military Club in London on 11 November. The event was kindly supported by the Embassy of The Republic of Korea in London and featured an all-star cast of expert speakers who gave their views on the future of the North Korean economy.

The event was opened by Korean Ambassador to London HE Enna Park, who began by reminding the audience that it was Remembrance Day and saluting those who had made the ultimate sacrifice to keep us all safe. Ambassador Park noted that the terms for co-existence on the Korean Peninsula were laid out by President Moon Jae-In at the UN General Assembly. They are: –

•  Zero tolerance for war – and a peaceful end to the Korean War;
•  Mutual security guarantees and de-nuclearisation on the Korean Peninsula;
•  Co-prosperity and interdependence.

We had to focus on the opportunities. The Ambassador ended by reminding us all that 2020 was the 70th Anniversary of the start of the Korean War.

The first speaker was Dr Ramon Pacheco Pardo from Kings College London. He felt that Kim Jong-Un was firmly in charge in the DPRK. Kim was studying economic models in Mongolia and Vietnam which he thought would work in the DPRK. Kim had stayed in Vietnam following the failed summit with Trump to study the economy. Dr Pardo noted that Kim wanted good relations with the USA, but wondered when President Trump would get bored with the process. Most in the ROK believed in engagement with the DPRK – and there was now a bipartisan focus in Washington to make engagement sustainable. China wanted a multilateral process; and Japan wanted to invest in the DPRK. People were now engaged.

Alison Evans, a senior researcher at IHS Markit, took a slightly different view. Due to sanctions, the DPRK economy had contracted by around 3% to 4% in the past two years. She wondered whether a federated states dynamic of One Country – Two Systems was the answer. Marketisation in the DPRK had opened some aspects of the economy, including agriculture. The DPRK produced hydro power which could help the ROK, as well as access to rare earths and minerals. The DPRK would be able to provide light manufacturing capability, which would extend further than the mothballed Kaesong Industrial Zone. There could also be a peninsula-long railway and pipeline – for Ms Evans the key was economic.

Dr Michael Schluter of Relational Peacebuilding Initiatives wanted to build a very different model. The key was to build trust by using economic and social capital. China was providing the DPRK with food aid. Information about the outside world was now flowing into Pyongyang. Instant unification can be difficult – for example inequalities still exist following the collapse of the Berlin Wall and the unification of the two Germany’s. We should start economic and social convergence focussing on agriculture, healthcare and education. This would form a shared basis for unity and trust – and be based on a mutually agreed economic strategy. Sanctions could then be relaxed based on mutual need. The key was to focus on rural areas and then spread the wealth.

We then had a very lively Q&A session (under Chatham House rules) which featured questions on how to build trust with the Kim regime; information flows into the DPRK; and most interestingly the economic impact of cyber-attacks and stolen money.

The sessions were expertly chaired by our own Martin Uden, the executive chair of the British Korean Society and Matthew Henderson, the Director for Asian Studies at The Henry Jackson Society. Following the discussion, the 70 or so attendees enjoyed some wonderful drinks and canapés to round off a stimulating and thought-provoking discussion.

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