Confederation or instant unification

In this photo released by South Korean Ministry of Unification, head of South Korean delegation Lee Duk-haeng, center, crosses a borderline to hold a meeting with North Korea in the North Korean side of Panmunjom, Feb. 5, 2014. Red Cross delegates from the two Koreas had talks on holding reunions of separated families.(Photo : AP/South Korean Ministry of Unification)

Over the last few months we have seen a number of signals which indicate that Marshall Kim Jong Un, the young North Korean dictator, is really serious about changing his country. Most likely, he wants to turn his country into a mini-China, where cutthroat capitalism will be practiced under the auspices of the Party apparatchiks (and, admittedly, with great success). This might be a good intention – such system, with all its shortcomings, will significantly benefit the common North Koreans, but will he succeed?

The jury is still out on the question. On one hand, it is not beyond the realms of possibility that the North Korean leadership will somehow find the right balance of economic reform, political repression and propaganda. To the present author, though, it seems significantly more likely that in the peculiar case of North Korea, attempted reforms will trigger instability, which will soon be followed by state collapse.

The present author might be wrong (and, actually, does not want to be right), but we must keep in mind the fact that a reforming North Korea is likely to be dangerously unstable. This is exactly the reason why the outside world should start seriously thinking about ways of dealing with the coming crisis, as well as ways to arrange the post-collapse future of North Korea.

It is highly likely (but by no means certain) that regime collapse will trigger a train of events that end in speedy unification, or rather the absorption of the impoverished and underdeveloped North by the rich and democratic South. For a long time, such a scenario was the dream of South Korea’s political elite, but this ceased to be the case over the last decade or two. Lip service to the idea of unification is still obligatory, and every Korean politician is still expected to occasionally profess his/her belief in unification as the ultimate goal of South Korea’s foreign policy. However, these statements ring increasingly hollow. South Koreans are losing their enthusiasm for unification – and this is happening just as unification itself is becoming a distinct possibility.

Pacific Century Institute Chairman Donald Gregg, left, and a private U.S. group arrive at Pyongyang Airport, North Korea, Feb. 10, 2014. Gregg, a former U.S. ambassador to South Korea, wouldn't say what he hoped to discuss in N. Korea. (Photo : AP/NEWSis)

The fate N.Koreans will face

The general skepticism of unification is by no means unfounded. It is widely understood that the huge economic gap between the two Korean states will make unification ruinously expensive for the South. What is often overlooked, though, are the social problems that North Koreans will encounter as a result of unification. And these problems will be troublesome indeed.

There is little doubt that unification, when and if it comes, will dramatically increase the absolute living standards of the average North Korean. That said though, the vast majority of them will discover that their skills are of little or no value in this strange new world that will surround them. North Korean medical doctors may be very good at treating people will no modern equipment and almost no medicine at hand, but will the ability to make a drip out of a beer bottle be very helpful in a modern hospital? And what will happen to a North Korean engineer who might have a better understanding of fundamental science, but virtually no idea about computer-based design systems?

But, we should not concentrate on the sorry fate of the North Korean elite. The common people will also suffer greatly. As the experience of other post-socialist states has shown, the inhabitants of these countries are very vulnerable to all kinds of con artistry and pyramid schemes.

In the particular case of North Korea, we should also keep in mind the real estate issue. There is little doubt that if South Korean real estate speculators are left unchecked, they will descend on the nascent North Korean real estate market and buy up everything of value. In a few years, the North Koreans will discover that nearly all good real estate belong to South Korean speculators.

One should also expect massive trans-border migration with countless North Koreans moving to the rich South in search of jobs. Unskilled, low-paid South Koreans will be unable to compete with these newcomers who will be willing to work for literally three bowls of rice a day. This is likely to further increase the North-South divide and frictions between two sets of people, who are supposedly two halves of the same nation.

There seems to be one way in which to mitigate the aforementioned and many problems that unification will bring. The solution is to avoid the instant unification of the two countries and instead create a confederation.

The idea of a confederation has floated a number of times in South Korea. This idea though has almost always been advanced by the South Korean left, who talk of a confederation that will emerge as the result of deals and agreements between South Korea and the current North Korean government – that is, the Kim family regime. Needless to say, the Kim family has not the slightest inclination to enter into such a deal. However, a confederation may become possible in case of a regime collapse in the North. A confederation deal will be struck not with the Kim family, but with the government that emerges as its successor, following its collapse.

A North Korean Embassy official gestures to allow questions at a press conference by North Korean Ambassador to China Ji Jae Ryong, seated center, at the North Korean Embassy in Beijing, China, Jan. 29, 2014. Ji told that the North wanted to reduce tensions to allow steps toward reconciliation and eventual unification between North and South. (Photo : AP/NEWSis)

Avoiding Germany’s mistake

Such a confederation will allow both parts of Korea to keep their own legal and currency systems, as well as controls on movement between the two countries. Under a confederative structure, it would be possible to stop South Koreans from buying up arable land and houses in the North. It will also be possible to finally accept the results of the 1946 land reform irreversible, thus making the dangerous claims of the descendants of Northern landlords null and void.

Needless to say, under such a confederative system, North Korea will be allowed and even expected to keep its own currency. It has often been stated that the hasty unification of monetary systems was one of the reasons why German unification ended up being so expensive; this mistake should not be repeated in Korea.

For a brief while, the confederative regime will allow the continuance of border controls between the two Koreas, thus lessening the number of South-bound migrants. One should not overestimate however the significance of administrative measures. The best way to prevent a tidal wave of migration from North Korea is to make living sufficiently attractive in the shortest possible time.

It might even be proposed that all official positions in the northern part of the country be held by northerners. This would mean that the apparatchiks of the Kim era will be overrepresented among the new elite – after all, they are the only group with the necessary experience to do so in North Korea today. These people, however morally dubious they may be, might still be preferable to carpet-baggers from the South (at least they are more likely to be accepted by the North Koreans themselves).

It will make sense for the confederation to be provisional under the assumption that within twenty years, unification will either follow, or at least a referendum on unification will be held. This is important, because North Koreans may otherwise see the confederation as a way to keep them in a position of cheap labourers and as subservient to the Southern political system and economic vested interests. However, in the immediate wake of state collapse in North Korea, a confederation is likely to be a less painful solution than immediate unification. It will help to reduce the costs of unification of the two countries, while protecting North Koreans from predatory interests in the South.

It seems that now is the time to start talking about this and other relevant issues openly and frankly. The ostrich policy will not work no matter how often South Korean politicians say that sudden unification is “unacceptable” and crisis in North Korea is “unthinkable.” History has shown us time and again that unthinkable things happen.