What was most significant in the South-North declaration at last week's summit was the detailed economic cooperation projects. Some of the accords were highly specific as compared to the first summit in 2000, making some watchers question whether this was a summit or set of ministerial talks. If realized, these will surely speed up the two Koreas' integration into one economic community, as President Roh envisions. As always, however, doubts are strong over whether and how this will be possible.
The most difficult matter is funding. A private institution estimates it would take up to $11 billion to finance all the projects agreed to at this summit. There will be clear limits to meeting the costs of the ``unification funds,'' as it requires taxpayers' _ i.e., bipartisan _ approval. Seeking the participation of international lending institutions will not be easy, either, not least because the North does not have membership in most of these. All this leaves only one realistic option _ private business investment.
Unfortunately, corporate responses are lukewarm at best, at least so far. Little wonder: About 80 percent of firms operating in the Gaeseong Industrial Complex, the symbol of inter-Korean business cooperation, are incurring losses, an opposition lawmaker says. A South Korean CEO there complains about the ``big hassle'' with just getting in and out of the special economic zone just north of the border. Unless the basic ``three C's'' _ conveyance, communication and customs _ are solved at a minimum, little can be done.
President Roh made two key points while in Pyongyang _ the reciprocal nature of economic projects and the North's displeasure with the terms, ``reform and openness.'' Some Chinese and U.S. companies are readying themselves to jump into the untapped market if the business environment there improves. This points to the need for closer inter-Korean cooperation, as the North's undue dependency on foreigners could pose a serious problem for a unified Korea.
North Korean leaders want to get out of their economic crisis without changing their political system by mimicking the socialistic capitalism of China and Vietnam. Even so, their progress in opening up to the outside world is too slow to bring about any meaningful changes. Some North Koreans might be wondering soon what this adherence to the system aims to protect _ the people or the leaders themselves? Roh's three-day stay in Pyongyang demonstrated the North Korean dilemma.
North Korea's escape from its economic plight will depend on Pyongyang's willingness _ or ability _ to allow North Koreans to learn the ``real taste'' of capitalism and how fast it does so. And this will become possible only when its leadership shifts from a ``military-first'' to an economy-first policy in both name and reality.