Australian Outlook

War and Peace in Korea

01 Oct 2014
Colin Chapman

Stumbling, bent-forward, through a dimly lit tunnel 73m underground near the demilitarized zone that separates South and North Korea, serves as a reminder that an attack by Kim Jong-un’s troops does not have to be nuclear.

Tunnel 3, as it’s called, is mostly well under two metres high, and runs for 1600m. South Koreans discovered it in 1978, after a tip-off from a defector, and believe it to be capable of accommodating about 2000 troops an hour

Despite the Korean War ceasefire of 1953 that led to the creation of the demilitarized zone (DMZ), the two sides are still at war. A fourth tunnel, much deeper, was discovered as recently as 1990, and Seoul’s defence establishment believes there may be more. Little wonder, then, that in the last few days there have been reports in the Stars and Stripes newspaper that the United States wants to keep an artillery brigade at a base close to the DMZ after the planned imminent relocation of American troops to the south of the country.

For now, though, the talk in Seoul is not of war, but of peace.

President Park Geun-hye, thwarted so far by the ambitious plans to begin the process of reunifying the Korean peninsula, told Reuters in an interview that the door is open for talks with the North during the upcoming UN General Assembly. This has reignited interest in the possibility of reunification.

This begs the question: What form could reunification take? The options—if there are any—vary from the complete collapse of the North and its economy to a friendly, negotiated settlement that leaves both sides intact. Both options are seen by scholars as the least likely. At an AIIA NSW meeting with the Institute of Peace and Unification Studies at Seoul National University, director professor Philo Kim, did not think collapse was imminent, and suggested that the West had underestimated Pyongyang’s ability to survive.

The following are scenarios that are being discussed in South Korea:

  • Collapse of the Kim Jong-un regime
  • Neither war nor peace; in other words, maintaining the status quo
  • Reconciliation and cooperation; a negotiated settlement
  • Improving and normalizing relations

These options, and variants, were considered in detail at a conference to which I was invited by the Korean Institute for International Economic Policy that evaluated the cost-benefits of unification to the four countries most deeply involved—China, Japan, Russia and the United States (US).

The Russians were characteristically blunt. Professor Svetlana Suslina, a political economist with extensive experience in North Asia, said most of these scenarios had shortcomings. She thought reunification in the short and medium term was unlikely. If South Korea, with the support of the US, were to try to take over the North, Russia’s reaction would likely “be much tougher than in the case of Iraq or Libya”. The decline in trade with both Koreas and extra security required would cost Russia US$5 billion a year.

But Dr Suslina said Russia was not in favour of leaving things as they are, because there was a high probability this would lead to a fourth nuclear test by the unpredictable North. In economic terms, it would also postpone the “benefits of the geographical location of the Korean peninsula as an integration bridge in East Asia”.

Far more beneficial for the Russians would be a negotiated settlement; but to get there it would probably be necessary to move one step at a time, involving first a radical reduction of tensions, eliminating the threat of armed conflict, and introducing “large-scale economic cooperation and trade”; all of which would, she said, “lead to confidence-building”. But the bottom line for reunification was that Korea should be a neutral, non-aligned country posing no threat to its neighbours. This would include greater independence in its relations with the US.

The US representative, Marcus Noland, executive vice-president of the Peterson Institute for International Economics at the East-West Centre, was circumspect on his choice of options but said his economic modelling showed that the US could gain up to US$20 billion in increased merchandise trade. However, this would be dampened by the lack of economic reform in the North; and a collapse scenario might lead to increased violence.

He raised a problem for the US if the North remained a legal entity, as the Russians favour, or if a federation of the two Koreas resulted. He pointed out that in the condition of such an outcome, Congress might find it difficult to repeal legislation that gave rise to sanctions; whereas a collapse of North Korea would leave the South in charge, and therefore there would be no sanctions. Dr Noland also noted that the US fiscal position made a public sector contribution uncertain, with American investment in the North more likely coming from the private sector.

Three Japanese professors favoured a peaceful and market-oriented transition, arguing that this would give rise to a large investment boom, which would also boost demand in Korea’s main trading partners. But unless there was rapid economic development in the North, they noted the risk of “huge migration” to the South.

The Japanese team see the development of a “Super Korea” as a direct threat to them. They expect a unified Korea’s exports to China to double in every sector, taking business away from Japan and the US. Still, they think job losses in Japan will be concentrated in a small number of sectors, such as electrical and optical equipment, basic metals, fabricated metals, and leasing. The Japanese see the Chinese as the big winner of reunification, but are confident they will benefit as well.

Professor Jingyi Jin, from the University of Peking, appeared to agree with this assessment, arguing that a divided Korea, with a closed North, was a hurdle in achieving China’s strategic aim of a North Asian security and economic community embracing energy, trade, currencies and standards. A China-Japan-Korea free trade agreement would be the first step.

China remembers that its northeast was a battlefield during the Sino-Japanese war between 1937 and 1945, when 930 cities were occupied and the country suffered 3.5 million casualties, noting also its immense grievances during the Korean War. The country believes that the only remaining cold war regime needs to be dismantled, so as to improve China’s own security risk in the expense of a potential adversary in its own backyard.

“The key task is to build conditions favourable for peaceful Korean unification”, argued Professor Jin. “The starting point is to end the isolation of North Korea”. According to him, this could lead to the “jackpot”.

In Seoul today, unification is a popular subject of conversation, particularly when the president raises it. But the reality is that no one expects anything to happen any time soon, and that “jackpot” is a long way off.


Colin Chapman, president of the AIIA in NSW, is leading a delegation visiting Seoul for a series of meetings with Korean officials and think tanks.