Kim Jong-il Fears Possible Subordination of NK Economy to China

The following is the full text of speech former President Kim Dae-jung delivered at the Hilton Portland in Oregon on April 18 under the title of 'The Six-Party Talks and the North Korean Economy.'--ED

I would like to express my sincere thanks for your kind invitation to today’s luncheon. I am particularly honored and grateful for Portland Mayor Tom Potter’s warm welcome and the proclamation of ‘A Day of Appreciation for President Kim Dae-jung.’

I was also a businessman running a fairly large business of coastal freighters and a local daily newspaper in Korea. As a fellow businessman, I am indeed pleased to meet with you.

Today I would like to share a few words on the six-party talks and the North Korean economy. As you know, the six-party talks are somewhat stalled due to the issue of North Korean declaration of its nuclear programs.

However, the six-party talks already reached an agreement in the bigger frame. The United States would remove North Korea from its list of terrorism-sponsoring nations, lift trade sanctions imposed under the Trading with the Enemy Act, and guarantee the normalization of diplomatic ties with North Korea.

Meanwhile, North Korea agreed to completely abandon its nuclear program and denuclearize the Korean Peninsula. The agreement was concluded on a give-and-take basis, and parts of the agreement are making smooth progresses.

Although the six-party talks now seem to be faced with difficult moments, North Korean nuclear issue will be eventually resolved through the talks, since that’s what both the U.S. and North Korea want. I believe the chances of successfully settling the North Korean nuclear issue through the use of military force or economic sanctions are slim.

North Korea has been regarded as a poor country without much economic value. North Korea is indeed poor, but is rich in natural resources, including minerals such as iron, copper, gold, magnetite, tungsten and coal. According to a report by the Korea Chamber of Commerce and Industry, the economic value of such mineral resources is estimated at two trillion dollars.

Now China and many EU nations such as UK, France, Germany, Sweden and Italy are aggressively advancing into the North Korean economy.

Furthermore, North Korea has an abundant labor force which is well-trained. The wage of North Korean workers is only a third of what Chinese counterparts are paid. North Korea is also rich in tourism resources.

In addition, once connected with the North Korean one, the South Korean railway will be extended to the Pacific Area, traversing Eurasian continent all the way to Paris and London. The logistical cost and time will be reduced by around 30%. Russia, China and Japan have keen interests in this railway project.

Currently North Korea imports 80 percent of its daily necessities from China, and China is making extensive investment in such areas as North Korean mines and ports. However, Chairman Kim Jong-il fears possible subordination of North Korean economy to China. Instead, Chairman Kim wants to improve relations with the U.S., so that the North can seek diversified economic exchanges with many nations such as South Korea, the U.S. and the EU. In particular, he earnestly desires economic cooperation with the U.S. If we keep neglecting North Korean economy, however, only waiting for the complete resolution of the nuclear issue, North Korea cannot help but rely on China.

If China further expands its influence on North Korea through its economic involvement, China will eventually come to strengthen its political clout as well. Then, South Korea and Japan will be put under great pressure, which will directly affect the interests of the United States as well. Therefore, in order to keep the balance against China’s increasing influence on North Korea, we need to advance into North Korean economy under the leadership of the private sector, while speeding up the settlement of North Korean nuclear issue.

The ROK-US military alliance is very solid, and the alliance plays a critical role in maintaining stability across the whole Northeast Asia. South Korea has been actively cooperating with the U.S. It dispatched soldiers to the Vietnam War, where nearly 5,000 Korean soldiers lost their lives and more than 10,000 were injured.

It also sent the third-largest army to Iraq next to those of the U.S. and UK. Furthermore, Korean military is also stationed in Lebanon and Afghanistan. Moreover, South Korea is the first East Asian country to have signed the Free Trade Agreement with the United States.

I think it is in the interests of both South Korea and the United States to collaborate for the resolution of North Korean nuclear issue and to seek involvement in the North Korean economy. The Korean Peninsula is geopolitically important in Northeast Asia in terms of military, politics and economy.

North Korean leader Kim Jong-il also wants the US forces to continue to stay on the Korean Peninsula. Moreover, he aspires to normalize diplomatic ties and start economic collaboration with the United States.

I heard this directly from Chairman Kim when I visited Pyongyang in June 2000. Chairman Kim also delivered the same message to U.S. Secretary of State Albright during her visit to Pyongyang.

We have both the trade and diplomatic relations with communist nations such as Vietnam and China, and we don’t see any reason why we can’t do the same with North Korea. While Seoul and Washington will need to lead the six-party talks to a resounding success and realize denuclearization of the Korean Peninsula, both will also need to be prepared to benefit from entering into the North Korean economy.

I would like to seek your understanding and invite you to join us in advancing into the North Korean economy.