The 9th World Knowledge Forum of the Mail Business Newspaper

The Strategic Role of North Korea
The 9th World Knowledge Forum of the Mail Business Newspaper

Sheraton-Walkerhill Hotel, Seoul, South Korea
17:00-18:10, October 16, 2008

• Speaker
  Marcus Noland, Senior Fellow of Institute of International Economics
• Panelists:
  Donald Johnson, Former Secretary-General of OECD
  Thomas F. Cargill, Professor of Neavad-Reno Univ.
  PARK Chan-Mo, Former President of POSTEC
  KIM Chin Kyung, President of Pyongyang University of Science & Technology
• Moderator
  KIM Suk Hi, Editor of North Korean Review, the University of  Detroit Mercy University

Pyongyang University of Science & Technology

I  had the great privilege of organizing a session on the North Korean economy at the 9th World Knowledge Forum (WKF) held in Seoul, South Korea, on October 14–16, 2008.  The Maeil Business Newspaper, Korea’s number one economic daily, has hosted the WKF for years. Its supporting organizations include the Financial Times, Reuters, the OECD, and the INSEAD. Its past speakers include Colin Powell, Alan Greespan, George Soros, Paul Krugman, and Thomas Schelling. The 9th WKF called for senior-level executives, entrepreneurial innovators, technologists, financiers, analysts, and high-level government workers to solve outstanding global issues that are in desperate need of solutions. With 150 speakers from 50 countries around the world and 3,000 participants, this important forum integrated top decision-makers from all sectors of global society in the most comprehensive way.

In the opening ceremony of the 9th WKF, South Korea President Lee Myung-bag proposed the establishment of new international organizations to cope with new global challenges, such as the global financial crisis, climate change, and the energy crisis. Lee said, “Now is the time to find common solutions to pressing global issues. We need to create a better order if necessary.” Lee’s aids said that he has long believed that the world needs a new international organization capable of tackling global financial market issues and the establishment of a new organization to deal with climate change. The U.S.-originated financial crisis has hit the global economy hard and terrified many people. Uncertainty seems the most appropriate term to describe today’s circumstances.

Panel members of a WKF session called “The Strategic Role of North Korea” included three editorial board members of North Korean Review, Thomas Cargill, Suk Kim, and Marcus Noland, in addition to Donald Johnston (OECD), Chin Kyung Kim (Pyongyang University of Science & Technology), and Chan Mo Park (Blue House). The five panel members presented a variety of information on the North Korean economy from the standpoints of both economics and politics to about 200 people from the government, business, and academic communities.  In my role as session organizer, I commented on each of the panelists’ arguments and led the discussion.  Perhaps the most intriguing aspect of the session was the information about a university being established in Pyongyang  by a group of South Koreans.

In these times of global and economic uncertainty, North Korean watchers have to wonder how these crises will affect North Korea. Does this country have in place the kind of infrastructure that will enable it to deal with these arising global challenges and economic uncertainties, both now and into the future? One way for any country to face its future successfully is to educate its people. Chin Kyung Kim stressed the need to develop relations with North Korea by any means possible, believing, that "the future will be brighter if we put our hands together". When China opened its doors in 1979, he realized that what was needed was a university to satisfy a populace hungry for education. A few years later, he founded Yanbian University in the heart of China’s ethnic Korean region of Yanbian, near the Tumen River frontier, to fulfill this purpose. The university has become a successful model for cooperation. Now, he is trying the same model with North Korea, with  Pyongyang University of Science & Technology (PUST), scheduled to be opened with 150 students in April 2009. Eventually, the university plans to grow its student body to 2,500 students and hire 250 professors.

PUST is North Korea’s first institution of higher education founded, operated, and funded by associations and people outside the country.  Since 2001, Chin Kyung Kim and another panel member, Chan Mo Park, have spearheaded the establishment with these privately raised funds to construct the sixteen buildings necessary for the opening of the university. The dormitories, academic and utility buildings have been almost completed as of the end of 2008.  PUST plans to train talented young North Korean people in the fields of information and communication technology, industrial management, agriculture, food and life science, architecture, joinery and construction, and public health. The major challenge that faces the university is related to maintaining its financial resources.  The founders and their supporters will need to provide PUST with its entire operating and capital expenditures almost permanently, because North Korea will continue to suffer economic difficulties for years.

It is hard to believe that Mr. Chin Kyung Kim  is the same man who was detained for six weeks in North Korea in 1998 and threatened with a death sentence by his interrogators. The establishment of PUST represents a shift in the outlook of North Korea’s ruling elite, which counted on the former Soviet Union and its eastern allies for most of their technical aid and advice until the breakup of the Soviet empire in 1990.  PUST, along with the Kaesong Industrial Complex, appears to be the best kept secret for the long-term survival of North Korea.  During “The Strategic Role of North Korea” session, Kim argued that Asia needed a union, similar to the European model, and that this union would not be possible without the inclusion of North Korea to bridge gap between North and South East Asia.  Kim hopes that this new university would be a first step towards bridging that gap. Those who would like to know more about PUSTA are encouraged to visit its website at http://pust.net/

Suk Hi Kim of the University of Detroit Mercy wrote this report.

Pyongyang University of Science and Technology (PUST)

Session Summary          

Professor Suk Hi Kim of the University of Detroit  Mercy moderated the special session on The Strategic Role of North Korea at the 9th World Knowledge Forum hosted by Maeil Business Newspaper. He introduced the keynote speaker, Marcus Noland, Senior Fellow of the Institute for International economics.

Noland presented a brief analysis of current state of the North Korean economy in regards to crop production and addressed key issues leading up to the current food shortage. He proposed that the current economic environment is "better understood as an unintended response to state failure than as a top-down reform by government". Noland expounded by describing the decline and recovery of the economy in the 1990s and the subsequent loss of revenue due to black market transactions. Further, North Korea experienced chronic balance of payments deficits due to its dependency on foreign aid.

Noland shifted his focus from the past to the "key challenge of this year – the reemergence of pre-famine conditions." The North Korean government has made policy decisions which have diminished crop production, hindered and disconnected international aid agencies and perpetuated geopolitical provocations. The result has been a "deterioration of the economy". Available food supplies have fallen below demand in recent years and can be supported by the analysis of North Korean grain process in relation to world market values. Thus, "there is a reemergence of pathologies reminiscent of the pre-famine 1990s," argued Noland.

Professor Thomas F. Cargill of Nevada-Reno University expanded upon Noland's arguments by drawing attention to several key issues. He stated, one "cannot separate political issues, paranoia and economics in North Korea," and analysis must be done within the framework of political economics. He asserted that North Korea would never recover from its stagnant economy unless it engages in cooperation with the rest of Asia. Professor Cargill next described the potential concerns resulting from the decision of the United States to remove North Korea from its list of terrorist states. He noted, 'North Korea has an opportunity to turn a vicious cycle into a virtuous cycle" and challenged the government to open its market to Asia, deal more seriously with Japan, and enable both political and economic freedoms.

Park Chan-Mo, former president of POSTEC, spoke on the theme of educating North Koreans. He quoted the adage, "do not give them fish, rather, and teach them how to fish". The Scientists of North Korea are very smart and hard working, he noted, and simply require further education, Thus,  he and others decided to found the Pyongyang University of Science and Technology (PUST).

Park continued with some observations he had made while working with the people of North Korea during the founding of the new university. He first observed the need to establish trust with the people. Second, one needs a very high level of patience. Third, in order to develop the areas of science and technology, North Korea needed to open up. Hopefully, PUST would help establish this trust and open up this hermit nation.

Kim Chin Kyung, President of Pyongyang University of Science and Technology, stressed the need to develop relations with North Korea by any means possible, believing, that "the future will be brighter if we put our hands together".

When China opened its doors in 1979, Kim realized that what was needed was a university to satisfy a populace hungry for education. A few years later a university was founded to fulfill this purpose, and became a successful model for cooperation. Now, he is trying the same model with North Korea, and has founded the Pyongyang University of Science and Technology.

Kim concluded that Asia needed a union, similar to the European model, and that this union would not be possible without the inclusion of North Korea to bridge gap between North and South East Asia. He hoped that his new university would be a first step to attaining that goal.

Donald Johnston, former Secretary-General of OECD, gave a brief statement urging for a full, comprehensive assessment on North Korea. Without this study, nations would be unwilling to provide development aid to the country, since the donors would be unsure of what was being developed. Last, Johnston noted that "someone needs to convince North Korea that this [study] is necessary".

The question and answer session involved questions concerning North Korea's possible collapse in light of Kim Jong II's poor health. None of the panelists believed that North Korea's would collapse, even in the event of his death, and that eventually their political system would stabilize.

The staff of the World Knowledge Forum wrote this report

Opening ceremony of the 9th World Knowledge forum at Seoul, Korea: Oct 15, 2008;	President Lee Myung-bak, left, shakes hands with a foreign participant at the opening ceremony of the ninth World Knowledge Forum in Seoul, Korea