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New Challenges for the Korean Peninsula and Northeast Asia: The Role of the Republic of Korea and the United States

Speaker: Dae-Jung Kim, President, South Korea
Presider: Peter G. Peterson, Chairman, Peter G. Peterson Foundation
June 8, 1998
Foreign Affairs

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Words cannot describe my emotion as I stand here today.

In the past, I spoke to you as the leader of the opposition party. On those occasions, I repeatedly pointed out that the Republic of Korea would be able to reform its domestic politics and confront North Korea with confidence only if it renounced authoritarian rule and embraced democracy.

You gave me full support on this, and now, I stand here before you as the president of the first genuinely democratic government since the founding of the Republic 50 years ago. As I look at this audience, I see many familiar faces and good friends who have been unfailing in their support of me throughout the years. Thank you for your support. My success is your success.

I have no doubt that my state visit to the United States will be a great triumph because of your active and distinguished support.

Ladies and gentlemen,

I want to talk to you today about new challenges for the Korean Peninsula and Northeast Asia and the role of the Republic of Korea and the United States.

On the threshold of the 21st century, Northeast Asia promises to be the most exciting place in the world. And the Republic of Korea is right in the center of things. Since the end of the Cold War, Northeast Asia has faced various challenges as it has sought a new international order of peace and stability.

If Northeast Asia can overcome these challenges now, I believe the region will be able to play a leading role in the next century. The vast well-educated populations, high levels of technical skill, great economic potential, and similarities in cultural backgrounds all combine to make the region’s prospects bright.

On the other hand, there are a lot of challenges to overcome in establishing a new order in the midst of the many changes taking place in the region.

Currently, East Asian countries are faced with a severe financial turmoil. Japan, as the second largest economic power in the world and the largest economic presence in the region, should lead the efforts to help Asian countries to overcome the present crisis as soon as possible. Japan should also pay heed to interests and concerns of some countries in the region over the U.S.-Japan defense cooperation. While I hope that the defense cooperation between the U.S. and Japan will contribute to strengthening peace and stability in Northeast Asia, including the Korean Peninsula, I think it is necessary for Japan to maintain transparency in implementing defense cooperation with the United States.

China is making steady efforts to assume a greater role in the region as a political power and as a potential economic power. In fact, Asian nations expect China will play an important part in maintaining peace and prosperity in the region.

Russia is also searching for a new role for itself in the new order, and it is trying to improve relations with its Asian neighbors, including Japan and China. We hope that Russia, with its enormous potential, will pull itself together again and contribute to peace and economic development in the region.

The United States, although it is not a part of Northeast Asia, perhaps plays a more important role than any other country in the region. It does so in almost every respect, politically, economically, and militarily. It is a close ally of Korea and Japan and therefore maintains bilateral security agreements with both. It will also have an opportunity to establish a new strategic partnership with China when President Clinton visits this month. As this illustrates, U.S. national interests in Northeast Asia are vast and varied. The United States has much at stake in maintaining peace and stability in the region.

Ladies and gentlemen,

Few nations in Northeast Asia maintain closer relations with the United States than the Republic of Korea. It was some 116 years ago that Korea and the United States established official relations. Since then, the two countries have maintained close, friendly relations.

Korea is unique in that it has never in its history waged a war against any nation in the West and has never been colonized by a Western country. The United States liberated Korea from Japanese imperialism and defended it from North Korean Communist aggression. U.S. assistance played a central role in our efforts to rebuild the economy from the ruins of the Korean War. U.S. help has also been crucial to us in overcoming the economic crisis that began late last year. We are deeply grateful.

In return, the Republic of Korea has also done its best as friend of the United States. Economically, it has not hesitated to help the United States in its times of need. In the 1980s when the United States was suffering enormous trade deficits, Korea dispatched several purchase missions to the U.S. and bought billions of dollars’ worth of American goods. In 1996, Korea imported American goods actively, to the extent that it incurred a deficit of 11.6 billion US dollars with the United States out of a total trade deficit of 20.5 billion dollars.

Moreover, several Korean companies have invested more than I billion dollars each in the United States. During the time of my current visit, Korean Air plans to purchase 2 billion dollars worth of aircraft, despite our foreign exchange crisis.

Korea is neither a superpower nor a rich country. However, Korea has worked more closely with the U.S. than virtually any nation in the world in many areas, including political, military and economic issues. This is, of course, in our own national interests as a friendly relationship with the Republic of Korea is in America’s national interests.

Now that Korea is suffering economic difficulties, I hope America will continue to actively provide us with assistance and investment. I am visiting the United States to convey our firm commitment to honor such assistance when our economy recovers.

Ladies and gentlemen,

As I mentioned already, Northeast Asia is very important to the national interests of the United States. It also needs the United States to maintain peace and stability and promote prosperity. In this respect, the continued presence of the U.S. troops currently stationed in Northeast Asia is absolutely necessary, just as U.S. troops are necessary for stability and peace in Europe, even in these post-Cold War years.

Ladies and gentlemen,

The key to Northeast Asian peace and prosperity at this particular stage is settlement of peace on the Korean Peninsula.

Unfortunately, the Korean Peninsula, the last hot spot of the Cold War era, still faces the potential threat of armed conflict. In order to deter any provocation and nurture enduring peace, a solid military alliance between Korea and the United States should be maintained and further reinforced.

Close cooperation between our two countries for peace is more important now than ever before for several reasons:

First, broader understanding and cooperation are needed between the Republic and the United States in the project of building light-water nuclear reactors in North Korea. I want to make it clear again that Korea will take a central role in that project as promised. But at the same time, I feel it is incumbent upon the United States to consider Korea’s current economic situation in approaching this matter.

Second, we should be careful not to isolate North Korea from the international community. So in principle, I do not oppose the U.S. efforts to expand the scope of its relations with North Korea. However, I believe that we need to exercise caution so as to avoid the possibility of North Korea perceiving a gap in the positions between the Republic and the United States and using it to its advantage. That possibility alone is reason enough for our two countries to coordinate policies with each other ever more closely.

Only when cooperation is maintained, will smooth dialogue between Seoul and Pyongyang be possible.

Third, issues involving economic and other forms of interaction between the South and the North should be initiated and duly observed by the two parties concerned. Structuring a permanent peace regime on the Peninsula, in turn, will have to be negotiated in the Four Party Talks. On these two principles, the United States has already expressed support for my government’s position, and I appreciate that.

Ladies and gentlemen,

We cannot emphasize enough the need to embrace North Korea as a member of the international community while maintaining a solid security agreement between the Republic and the United States. In this regard, I’d like to reiterate the three fundamental principles of my administration’s policies toward North Korea that I outlined at the time of my inauguration in February.

First, we will not tolerate any military threat or armed provocation. This principle is based on my belief that any provocative action is certain to have extremely serious consequences for both the South and the North and would threaten the stability and security of Northeast Asia at large.

Second, we will not seek to undermine North Korea – or unify the divided land by absorbing it. We all know the political, economic and psychological difficulties that both West and East Germans suffered after West Germany absorbed the East. I cannot even imagine what kind of difficulties we might experience, if we tried to undermine North Korea and annex it. I declare, once and for all, we have no intention whatsoever of absorbing North Korea.

Third, we will pursue genuine interaction and reconciliation with the North. Our economic interaction and cooperation will be based on the Agreement on Reconciliation, Nonaggression, and Exchanges and Cooperation between the South and the North adopted in 1991. In accordance with this new guideline, the new Korean government is now pursuing a policy of separating politics from private sector business activities. We will also encourage exchanges of people and promote cooperation in cultural, social, and industrial areas.

As a case in point, the founder of Hyundai Corporation is planning to make a road journey back to North Korea very soon. He will be taking 500 cows with him all the way to his birth place, and will donate the animals to the people there. Koreans have had a special attachment to cows since ancient times. The giver and receivers of the cows are sure to share feelings of genuine love that have been suppressed for the past 50 years of separation. Mr. Chung’s trip, if realized, will be a good start toward reconciliation.

As for my administration’s policy directives for the exchanges and cooperative efforts of the South and the North, they are as follows.

First, we will continue to provide emergency humanitarian assistance – whether by the government or private sector – with no strings attached. We have already donated 50,000 tons of food through the Red Cross, and recently announced provision of another 50,000 tons through the World Food Program (WFP).

Second, we will promote economic exchanges and cooperation between the South and the North. To facilitate such exchanges, my government has recently lifted some restrictions on business trips to North Korea and abolished ceilings on investment in the North. I believe both sides will benefit if capital and technology from the South are combined with labor in the North.

Third we will provide non-emergency governmental aid under the principle of reciprocity, considering that money comes from our taxpayers after all. In the South-North vice-ministerial tam held in Beijing last April, we did not commit fertilizer provisions requested by the North Koreans because they declined our humanitarian request to arrange reunions of family members who have been separated for half a century. We are ready to provide fertilizer to North Korea as soon as we receive a positive response on our proposal.

Even though the Beijing talks did not produce any concrete agreement, the talks were significant in that the two sides met for the first time in four years. We plan to patiently continue our efforts for dialogue.

I understand my administration’s position is firmly supported by the United States, Japan, China, and Russia, as well as the Korean people. Not only that, I was very much encouraged by the support given to my position by the Asian and European leaders at ASEM in London last April.

As I conclude my speech here, I sincerely hope that you will support us in our efforts to secure peace on the Korean Peninsula.

Thank you very much for joining me here today.

Ambassador Bill Richardson (Presider): Ok, who is going to be first? Questioner: Mr. President, you mentioned that you will encourage economic cooperation between North and South. What about economic cooperation between the United States, on the one hand, and the two Koreas, on the other? Specifically, between the United States and North Korea.

President Kim Dae Jung: Based on the principle of separating political issues from economic concerns, we are promoting economic cooperation with the North at the private sector level although dialogue at the political level may not be going on so well. In the same context, I think it would be very desirable for economic cooperation to take place between Americans at the private sector with North Korea. The Geneva Agreement, in that agreement, the United States had pledged the easing of economic sanctions on North Korea, so, in that spirit, I think it would be desirable for the United States to ease sanctions on North Korea. There will be many reasons why such easing of sanctions would be needed but I can think of two at this point.

One is that with the recent developments concerning the Indian and Pakistani testing of nuclear weapons, at that point, if we did not come out with some sort of a measure easing the sanctions, the North Koreans might have an excuse to think twice about their weapons development program, so we should not give them that room of thinking again. There are hardliners and there are moderates in North Korea, but currently the hardliners are dominating the policymaking in North Korea. And intelligence tells me that the moderates are concerned about the future of North Korea. They think that if they continue on this road that North Korea will be in further hardship. So they’re concerned within the regime.

So by easing the sanctions the United States will be giving encouragement to the moderates in North Korea. History tells us that in dealing with a totalitarian communist regime, you have to be firm in your security stance but otherwise you also have to be flexible to be effective. For example, looking at the former Soviet Union, flexibility based on a firm security stance led to the Helsinki Treaty and this greatest, the largest empire in the world collapsed with not even a single bullet being shot from the outside. That has also, of course, led to the collapse of the Eastern block. And looking at China also, we could not bring about much change with containment policy, starting with President Nixon’s trip to China bringing it to join the United States and recognizing it, we could bring about, as we could see, great changes in China. Also with Vietnam, the United States went to war with this country and put all of its military resources to it at once, but war could not change anything. But with diplomatic and economic negotiations, it could bring about great changes in Vietnam as well. In short, with the communists, if you push them into a corner too hard, they become more hard-line, they become more bellicose.

But based upon strength, if you’re dealing with flexibility, in the long run, that brings about changes in the communists. Especially with North Korea, it is maintaining a hardline stance not because it has strength but because it is fearful, as we can see, so to make them feel safe and to encourage their moderates. I think they will bring about benefits in the long run. I am confident that with this stance we will bring about changes in North Korea. And that change will be brought about, not with pressure, but by inducing North Korea to find out about the outside world, about North Korea. Indeed there are signs that the society is changing, that it is headed toward collapse. So once again based upon a strong security stance, by dealing with North Korea with flexibility, with all the western countries getting closer to North Korea, we will be able to bring about change in North Korea.

Questioner: You, yourself, have should great concern that in the economic restructuring that South Korea is now undergoing that the poorest people should not be made to suffer the most. What changes would you see as needed in the policies of the IMF, the World Bank, your government, and our government in order to ensure that the people who are the least able to bear the pain of economic cutback are not required to do so?

President Kim Dae Jung: I’m very grateful for that question. The unemployment rate is currently about 6.7 percent, 1.5 million people are out of work, and unlike in the United States, the Korean people are used to lifetime employment. The existing social safety net is not sufficient to deal with the problems, so the government is trying its very best to deal with their problems. We’ve managed to come up with $5 to $6 billion to carry out various programs for the unemployed. Of course a fundamental solution would be to create jobs for the unemployed, and to create jobs we need two things.

One is a fundamental structural adjustment of our financial sector, of our corporations, so that they will be operating according to the market principles so that they will be competitive on the global market. The second factor is to bring in a lot of foreign investments, to bring them into our factories again and create jobs. And about investment, I would like to add, of course, investments are not loans or debts – you do not have to pay them back, you don’t have to pay interest – it’s there to stay and that would be a great improvement on our current foreign exchange situation. And foreign investments will make our businesses more transparent. With the money will come advanced investment skills and knowledge and that will develop our management skills. With foreign investments will also come greater markets overseas so the markets for our export goods will expand. And, of course, the other important thing is that with the foreign investments we will create more jobs for our people.

So my greatest purpose in visiting the United States at this time is to plead with the government, the businessmen, and the people of the United States to invest in Korea and to tell them that we are prepared, we are doing all we can to create an environment very favorable for the investments. I think foreign investment is the fundamental answer to your question concerning what we should be doing for the poorest sectors of the population. And finally on that question, may I say that everyone of you here are dignified leaders of American society so if each one of you can come up with 100 million dollars in investments to Korea, that would be a great help.

Questioner: I’ve got my 100 million right here. Mr. President, continuing a little bit on the same direction that you were speaking about, if in the unlikely situation that reunification with North Korea comes about quickly, and, based somewhat on the German experience, what would that do to the South Korean economy and how would you ever pay for it?

President Kim Dae Jung: Yes, unification is, of course, the dream of all Korean people. It’s our aspiration, but, to be very frank with you, if unification should come too fast that would create a great deal of problems. Economically speaking, North Korea is a much poorer state than East Germany was before unification and, of course, South Korea is also much behind what West Germany was before unification.

Beyond economics, the intensity of the hostility between the two sides is much more intense on the Korean peninsula than was the case with the two Germanys before unification, so I have always advocated a three stage process, a gradual process toward unification. But, of course, as you said that is always a possibility, things could happen quite suddenly, and that causes a great deal of concern for us. I personally do not think that the North Korean regime will collapse all that easily. The economy is very bad, but the regime is supported by a strong military sector. But South Korea, with United States and Japan, should be prepared for all contingencies based on close cooperation among the three.

Questioner: Mr. President, I noticed how many Japanese guests you had at your inauguration. You’ve sent your foreign minister to Japan, you seem to be reaching out to Tokyo, and I would love to hear what you feel the chances are for a new and stronger relationship between Seoul and Tokyo.

President Kim Dae Jung: I believe that on both sides, in Korea and in Japan, there is an atmosphere that is being created to create a genuine conciliation and cooperation between the two sides, the first time that such an atmosphere is being created in the 33 years since normalization of ties in 1965. I have plans to visit Japan in October of this year. I believe that the visit will be the second important development – the first being the normalization of ties – and the second most important milestone in the relationship between the two countries.

But on that visit it is my sincere wish to see a new start in the relationship between the two countries, so that from now on we will not have serious problems deterring the relationship – that the relationship will be kept on a smooth face from that point on. And in order to achieve that there are certain things that the two sides must do. Korea and China and other countries of the region are not satisfied with the way Japan has dealt with the past. It has not fully and completely come to terms with the past. It has not come out with a sincere, clear apology and so that leads us to think ‘what can they do in the future?’ and that makes us suspicious.

What we wish from Japan is something like what the Germans did after World War II, coming clearly to terms with the crimes that they committed against the Jews during the war. Such a clear attitude is something that we would like to see from the Japanese. Germany came up with a clear apology, clear regret about the crimes committed, the massacres of the Jews during the war. They teach their young in primary schools about the dark points in their history. They preserve the camps in which they had put all the Jews and they use such sights to give historical lessons to their growing generations. Japan is very different. Japanese people under sixty do not know about the past. They do not know about the crimes that the country committed in the past. And so on this point, should the Japanese come out with a clear apology about the past, we are willing to let that be a new beginning for a relationship between the two countries.

On our part, there are certain things that we must recognize that are positive about Japan. Japan, for fifty years since the war, has been practicing democracy. It is a strong economic power, it has potential military power, but it has stuck to the nonnuclear position. It has kept to the three principles of nonnuclearization. It has kept its peace constitution. There are many conscientious leaders in Japan. I think we need improvements among the Korean public in perceiving these people in Japan. So on my visit to Japan, I do sincerely hope that we can come to terms on these two issues on the two sides so that from that point on we will not let the past hinder our forward march to the future, that we will not be in confrontation again and that we will become indeed very close neighbors and partners. Thank you.

Questioner: Mr. President, the history of the world in the last ten years has been that in the oppressive or corrupt regimes at some point from the ground up there is real resistance for a country. For example, Indonesia most recently and to a degree, China. And with the departure of Kim Il Sung, do you see any diminution of the capacity of the North Koreans to keep the lid on their people? Is there any evidence from the intelligence you get from the North that at the ground level the people are beginning to say “enough”? And is that a danger because it could go to critical mass so quickly in terms of your country?

President Kim Dae Jung: I don’t think there is anybody outside the regime that has a clear understanding of what is going on inside the regime, and I am one of those outsiders. But judging by all the circumstantial evidence, I don’t think the North Korean regime will collapse all that easily, as I’ve said before. But the important thing is, of course, whatever organization or country, without a strong economy, you can not have a strong government or regime. That’s the truth, regardless of time, regardless of place.

But as far as the economy is concerned, I think we can say that the North Korean economy has collapsed. It cannot feed its own people and North Korea does not hide the fact that the starvation situation there is very serious. In market economy systems people take care of their own needs for food. In controlled economies the government takes care of the need for food, clothing, shelter, and that enables them to maintain the regime. But the North Korean regime is not doing that, it is unable to feed its people. How long they can keep this up is the crux of the matter, that is the question. So, in sum, I don’t think that in the short run we can say that North Korea is going to collapse but it is certainly true that the foundation of the regime is very shaky at this point.

Questioner: Mr. President, you’ve made a number of overtures to the North recently, has there been any response?

President Kim Dae Jung: In April there was a vice ministerial meeting between the two sides in Beijing. We went to the meeting wanting something done on our calls for the reunion of the separate families. The North Koreans came with a call for our aid in fertilizers but the negotiations failed. But the talks are not entirely to see what the ultimate outcome is going to be. But there are two concrete signs of improvements.

One is that according to the armistice treaty, there were military talks between the two sides which broke off seven years ago. In the very foreseeable future the talks are going to be resumed. That certainly will be an important development that reduces tension on the peninsula. The second is an event that will open the very tightly closed doors in Panmunjom, the truce village. Hyundai Group is the largest conglomerate in Korea. The founder of that group, Mr. Chung, will be going to North Korea toward the end of this month and he will not be going alone. He will be going through Panmunjom with 500 cows on trucks. He will be giving these cows to the North Koreans. I understand the American television networks have plans to broadcast this live so you will be able to see that too. The event carries a great deal of symbolic significance because it opens up the truce village.

So I certainly believe that based on a firm security stance, if we continue to deal with the North Koreans with genuine intentions and perseverance, over, there are still some developments, some talks going on at the informal level, so we have yet we will ultimately be able to bring about gradual changes in North Korea.

Questioner: Mr. President, in recent weeks the Korean stock market has taken a sharp turn downwards. Many observers have seen this as reflecting falling confidence in the pace of the recovery. Is this of concern to you and, if so, what can your government do about it?

President Kim Dae Jung: Of course, it’s not good that the stock market is dropping. But the situation has greatly improved with our foreign currency situation. Our foreign currency reserve stands at $ 35 billion, the highest in our history. Exchange rates and the interest rates are also lowering and stabilizing. The factors behind the drop in the stock prices are not only domestic, some of the factors are external. The developments in Indonesia have been a big influence and the drop in value of the yen has also been a big factor.

Domestically the radical labor decision to go on strike was a factor but I’m happy to tell you that they have decided to change their attitude. And of course with the restructuring going on at the corporate sector, those non-viable businesses are closing and this has been a factor that has brought the stock prices down. But I believe that this is a temporary phenomenon in the restructuring process. Presuming that the yen stabilizes in the near future and when we are done with the restructuring of our financial sector and money flows become normalized, that will activate the businesses and of course that will lead to increases in stock prices. So the prices at present are probably unnecessarily low, they are lower than they should be, so this is a very good time for American investors to come in and buy stocks. That will be good for you, you can make lots of money off it, it will also help our economy to stabilize. It will be to the benefits of both parties.

Questioner: Mr. President, as a former prisoner of conscience yourself, I wonder how you respond to those of your fellow Asian leaders who have argued that democracy and human rights are Western concepts which must take a subsidiary position within a construct of so called ‘Asian values’?

President Kim Dae Jung: Perhaps on that issue, some of you may recall my debate with Mr. Lee Kwan Yew in Foreign Affairs in 1993 on that specific matter. Mr. Lee Kwan Yew’s argument was that democracy is not suitable in Asia and my argument was that in Asian cultures there are strong, affluent, philosophical and historical traditions that go very much hand in hand with democracy. As evidence of that I gave proof of some of the sayings that Mencius, disciple of Confucius, said thousands of years ago. I also gave some quotes from Buddha, and also some from our indigenous religion of Tonghak in Korea. Mencius, 2,300 years ago, said, “The emperor is the son of the heaven, but if he does not guide the people with benevolence and good governments, the people have every right to kick him out.” And I think that saying is in spirit very much the same with what John Locke said three hundred years ago in a series of social contracts which said that the sovereignty laid with the people. And of course John Locke is the philosophical father of Western democracies.

And, of course, Buddha said many wise things but one of the things he said was that human dignity is the primary thing under and above earth. In our own indigenous religion, Tonghak, the teachings have it that you must respect human beings as you would respect heaven. And in ancient China, the feudal system which existed in the Western societies until the nineteenth century was abolished 2,000 years before that. In the Asian societies there is a long tradition of thousands of years in which even if you’re the sons and daughters of high-ranking officials and aristocrats, you have to pass the open public civil service examination to become a civil servant. Perhaps not daughters then but sons at least.

So what the Western societies did before us was that they institutionalized the philosophy and I think that was a genius move. So they’ve had the institutional arrangements for democracy long before us. But the institutional arrangements can be applied in other societies and other situations. I think it can be described this way, ‘water flows from upwards, downwards’. And if you apply electricity dams, you get electricity as a result. Of course the technology to build that dam the Western societies had first, but if we bring that dam technology into Asian societies we have the same flowing water, we will get the same electricity.

I think the failure of the Asian economies these days is because they did not practice democracy. Without genuine democracy you do not have a healthy market system, and without a market economy you do not have competitiveness, and without the competitiveness, of course, you cannot survive in this world of globalization.

In our country, in past authoritative rules, that made for a lot of collusion between politicians and businessmen. And so businesses, instead of trying to make their profits through competition, they tried to make money off of their privileged links to the powers that be. And the government in the old days could order not only a single stock in the banks, they ordered banks. They could order banks to loan $ 3 or 4 billion worth of money to very bad companies, not operating very well. And so the situation made for a great deal of corruption in the officialdom and in business. In that situation you cannot expect the growth of a financial company or business that can go out there and compete with the best of the international players.

So currently, as we are under the IMF program, I think this is, in fact, a very good opportunity for us to get rid of such corrupt practices of the past. So I think if the countries of Asia learn the lesson, as we have learned, that you must promote democracy and market economy in parallel, that Asia will rise again.

Mr. Peter G. Peterson: Mr. President, I’m afraid the hour has arrived. I’d like to say two things to you. I thought that the last series of statements you made was as elegant and eloquent a statement of the logic and the psychology of the relationship between democracy and success in a globalized economy that, at least, I’ve ever heard, and I thank you for that. Thank you, Mr. President, very much.