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[UPI] Analysis: Seoul Slows Unification Effort
ROLAND FLAMINI, United Press International, Chief International Correspondent
WASHINGTON, United States
July 29, 2004

South Korea has put a virtual hold on its policy of unification with the communist North Korean regime fearing the burden on its weakening economy. While this is not publicly stated, South Korean and Western analysts in Seoul were saying this week that the emphasis has shifted to normalization measures and giving the north economic help.

"South Korea has to keep aiding Pyongyang in order to ensure stability on the region, which in turn helps the south by creating confidence among foreign investors," Park Young-ho, of the Korea Institute for National Unification in Seoul told United Press International. "But unification is a long, long way down the road."

Earlier, he painted a more optimistic picture of the normalization process. Telling a conference on north-south relations organized by the Interreligious and International Federation for World Peace in the South Korean capital that there had been regular contacts between Seoul and Pyongyang since June 2000, he said officials from both countries had held 110 meetings, 14 of them at ministerial level. But other conference sources spoke of a more cautious approach to unification as the South Korean economy has faced increasing problems.

IIFWP is an organization founded by Rev. Sun Myung Moon. Moon is also the founder of News World Communications, which owns United Press International.

"Many people in the south are nervous about taking on the huge financial burden that unification would bring while the economy is in its current state," declared one expert who asked not to be identified.

By contrast, the sources said, the north has been on especially good behavior and has shown greater willingness to establish closer relations with the south.

Recently, Pyongyang agreed to lower the tension along the demilitarized zone by silencing the loudspeakers that have blasted propaganda across the border for decades. The armed forces of both countries have set up joint radio frequencies and a hot line to avoid accidental clashes. And work is progressing on the $180 million industrial park that South Korea is developing north of the border in Kaesong.

Asia's fourth-largest economy recovered more quickly than that of any other country from the financial turmoil in the area in the late 1990s. Seoul received international praise for its radical steps to bail out its banks and reform its corporate sector.

But the recovery was based on massive consumer spending which ground to a halt last year as Koreans wrestled to bring their huge credit card debt under control. This year, consumers cut their credit card spending by 40 percent, according to figures published Tuesday. At the same time, data released this week showed a sharp drop in South Korean capital expenditure in the first quarter of this year to its lowest level since the 1998 financial crisis.

The disastrous impact of German unification on the country's economy is frequently mentioned by South Korean analysts and commentators as a warning of the consequences of their own efforts to unify.

They note how efforts by Chancellor Gerhard Schroeder's Social Democrat government to revive the country's economy are hampered by the continued huge expenditure on integrating east Germany. They also observe how the lingering effects of 50 years of communist attitudes still undermine productivity even after 14 years of unification.

As was the case in Germany, "Achieving social unification after political unification will be very difficult," Washington-based South Korea expert Paul Chamberlin told the conference. "As behavior depends on knowledge educating North Koreans will be a challenge."

South Koreans concede that there is no indication that Korean unification is in any way imminent. North Korea's Kim Jong Il is still in firm control of a repressive regime under which North Koreans wishing to go out to dinner in a public restaurant must seek permission from the authorities, and the country's adult population is divided into three categories -- familiarly called "tomatoes, apples and grapes" -- based on their usefulness to society.

But part of the German analogy is that change can come quickly and unexpectedly, as the East German regime collapsed in 1990.

In pursuing the "sunshine policy" towards Pyongyang that won former South Korean President Kim Dae-jung the Nobel Peace Prize, the South Koreans are breaking the united front with the Bush administration. After North Korea restarted its nuclear program in late 2002, Washington pressed South Korea to hold back much needed aid as a bargaining chip.

But South Koreans argue that outside help is essential for the north to survive, and to encourage Kim Jong Il to introduce further reforms. For example, an analyst told the Seoul conference that the north's collective farm system (organized in 1948) was so inefficient that the last good harvest was in 1991; and without outside help, an estimated 6.5 million North Koreans would starve for three months of the year.

But as the nuclear crisis has dragged on, with the Bush administration refusing until last week's six-party talks in Beijing to countenance anything less than a total shut down of North Korea's nuclear program, Seoul has pressed on with north-south contacts -- but with lowered expectations.

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