Economic Perspectives and International Cooperation

A Joint Conference by the Korea America Economic Association, Hanns Seidel Foundation, and Seoul National University

The Korea America Economic Association (President Suk Kim), the Hanns Seidel Foundation Korea (HSS), and Seoul National University (SNU) held, on May 19, 2006, a daylong conference on the North Korean economy at the Graduate School of Publication Administration of Seoul National University. The conference, with the main theme of North Korea—Economic Perspectives and International Cooperation, consisted of two academic sessions and one round-table discussion of a broad range of topics, from North Korean economic reform and U.S. economic sanctions against North Korea to North Korean information technology and international economic cooperation with North Korea. Six paper presenters, from South Korea, Germany, and the United States, and almost 70 attendees from academia, foreign embassies in Seoul, think tanks, and nongovernmental agencies reflected the fact that understanding North Korean economic perspectives and the country's international cooperation is in the interests of the world community.

In his opening remark, Bernhard Seliger, Resident Representative of the Hanns Seidel Foundation Korea, challenged the audience by saying "we must think about how the aid to North Korea can trigger change, help the people in need, and influence the North Korean regime." Yet, he stated, "unconditional aid is not understandable neither as an economist nor as a German, speaking from the German experience." Foreshadowing the day's discussions, his remark insinuated that the thought of aid or economic cooperation with North Korea is in itself a difficult, but a real, issue. In fact, the lectures of the day did not hesitate to address the problems regarding assisting North Korea and inducing economic cooperation from the North Korean side.

In his opening speech, Suk Kim, President of the Korea America Economic Association, expressed the gratitude of KAEA to the Hanns Seidel Foundation and the Graduate School of Public Administration of Seoul National University not only for successfully organizing the joint convergence but also for funding the entire conference. In addition, Kim explained the three types of his ongoing projects involving North Korea—editing North Korean Review, writing and editing research monographs on North Korea, and organizing joint conferences and seminars about the North Korean economy—and appealed to the audience to participate.

The three KAEA members, Joachim Ahrens of the European Business School, Semoon Chang of the University of South Alabama, and Suk Kim of the University of Detroit Mercy, presented their papers in the first session. Ahrens argued for the need for transitional institutions, and viewed unification as something that would come along as a result of the long-term process of market-enhancing governance. Suk Kim shared his view of the need to do business with North Korea and stated that "the strained relationship between the U.S. and North Korea under the Bush leadership is unlikely to change Pyongyang's open-door policy."

After listing North Korea's past deeds, such as hijacking and money laundering, which have led directly to the U.S. economic sanctions against the country, Chang simply described North Korea as "lucky," saying that such acts have been sufficient to cause war. Chang continued by explaining how North Korea poses a threat to U.S. national security. "North Korea's policies in the past have crossed the paths of many U.S. laws that automatically invoked economic sanctions like a puzzled animal stepping on the hunter's traps," said Chang. While Chang shared the pessimistic view that "it is not clear how members of the six-party talks can afford not to find solutions to the latest nuclear crisis, that may end up being the last chance for peace without incurring huge human and economic costs from its failure," other speakers presented technically difficult but possible actions that can be taken to assist the North Korean economy.

In the second session, the four paper presenters addressed specific North Korean economic issues and evaluated various North Korean attempts to improve its sagging economy. Sung-wook Nam of Korea University described the North Korean economic reform of July 2002 and its implications. Sang Tae Choe of the University of Southern Indiana claimed that although North Korea has recently aroused fears among the world's citizens, it possesses the latent potential to become economically strong. Sung-jo Park of the Free University Berlin said that despite the poor conditions of the country's information system infrastructure, North Korean efforts to set up its own software development system have enjoyed some success. Dalgon Lee of Seoul National University explained why discussions on the reunification of the Korean peninsular have recently switched from political perspectives to economic ones.

North Korea—Economic Perspectives and International Cooperation

A Joint Conference by the Korea America Economic Association, Hanns Seidel Foundation, and Seoul National University

09:00-18:00, May 19, 2006
The Graduate School of Public Administration, Seoul National University, Seoul, Korea

• 09:00-09:30
  • Registration
• 09:30-10:00
  • Opening Ceremony
  • Dalgon Lee (SNU), Suk Kim (KAEA), and Bernhard Seliger (HSS)
• 10:00-12:00
  • First Session—Moderator: Sang Tae Choe, University of Southern Indiana
  • Joachim Ahrens, European Business School, "Market Enhancing Governance on the Korean Peninsular: The Role of Creditability and Transitional Institutions"
  • Semoon Chang, University of South Alabama, "The Saga of U.S. Economic Sanctions on North Korea"
  • Suk Kim, University of Detroit Mercy, "Reasons for Doing Business with North Korea"
  • Discussants: Lee Suk of the Korean Institute for National Unification, Im Su-Hwan of the Research Institute for International Investigation, and Nicole Risse of the EU-Korea Industrial Cooperation Agency
• 12:00-14:00
  • Lunch (Hoam Faculty House of Seoul National University)
• 14:30-16:30
  • Second Session—Moderator: Bernhard Seliger, Hanns Seidel Foundation
  • Sung-Wook Nam, Korea University, "Evaluation of North Korean July Economic Reform and Implication from the Perspective of Comparative Socialism"
  • Sang Tae Choe, University of Southern Indiana, "A Small Country with Big Issues"
  • Sung Jo Park, Free University Berlin, "IT Cooperation with North Korea"
  • Dalgon Lee, Secoul National University, "How Large Will the Birdcage be? Centering on the Goeseong Industrial Complex Project"
  • Discussants: In-Young Chun of Seoul National University, Jeong-won Lee of University of Suwan, Jong-Il Kang of the Institute of Korean Peninsula Neutralization, and Ralf Sonntag of the German Embassy
• 16:30-16:45
  • Coffee Break
• 16:45-17:45
  • Roundtable-Moderator: Dalgon Lee of Seoul National University
• 17:45-18:00
  • Closing Remarks: Suk Kim of the Korea America Economic Association
• 18:00-
  • Reception at Hoam Faculty House of Seoul National University