When President Roh Moo-hyun took his office in February 2003, he changed North Korea policy’s name from “Sunshine Policy” to “Policy for Peace and Prosperity” but retained the nature of reconciliation. For improving relations with North Korea, the Roh Government tried to play down inter-Korea sensitive issues such as North Korean human rights issues, 43 reducing domestic spying activities targeting the DPRK, and removing “Anti-Communist Bureau” from governmental agencies. 44 Against this background, South Korea and North Korea terminated their fifty-year propaganda warfare on the border since June 2004.45 South Korea’s Defense White
Paper also ceased to mention North Korea as its primary
enemy since October 2004, despite strong criticism from the opposition Grand National Party. 46 The Roh43 Park Soo-gil, “Seoul's Silence on North Korea's Human Rights Situation,” Korea Focus,
http://www.koreafocus.or.kr/commentaries.asp?vol=34&no=949§ion
=2
44 June 29, 2003, http://www.libertytimes.com.tw/
45 http://news.chinatimes.com/Chinatimes/newslist/newslist-content/0,3546,110504+112004061600077,00.html
46 'Main Enemy' Controversy Set to Cloud Sunshine Policy
http://www.koreatimes.co.kr/kt_nation/200111/t2001112217091241110.h tm;
http://chinese.chosun.com/site/data/html_dir/2004/07/15/2004071500000
Government also revised the National Security Law deleting North Korea from the list of anti-government organizations.47
However, South Korea under Roh did not relax its military muscle at all in response to perceive the military threat from North Korea but it sought independent defense from the US. Roh made significant remarks regarding his philosophy on national security and direction for defense development during his speech marking the national liberation day in 2004. Additionally, his statement in Los Angeles in September 2004 drew attention with regard to Korea’s strenuous pursuit of the ROK- US alliance based on self-sufficient defense and further civilian control of military affairs. 48 In 2007, the defense budget increased 10% from the previous year to US$26.4 billion, then up to US$28.9 billion in 2008. Strengthening of strategic forces and research and development projects increasing military expenses were aimed at building up South Korea's self-defense capabilities, reducing its dependence on the US
6.html;
http://www.nautilus.org/napsnet/dr/2004/nov/ndr18nov04.html#item14
47 http://times.hankooki.com/lpage/200407/kt2004071516364510220.htm
48 “Scorecard on Roh's Agenda: Military Culture Changing,” The Korea Time, February 15, 2005.
military,49 and responding to the military build-up of neighbours Japan and China,50 the former in particular.
President Roh Moo-hyun perseveringly strived for a
diplomatic solution to North Korea's nuclear programs against criticism from both domestic conservatives and the U.S. He followed Kim Dae-jung's Sunshine Policy, assuming that economic sanctions would not lead North Korea to halting the development of nuclear weapons.
Moreover, he attempted to build a permanent mechanism of peace and stability in the Korean peninsula through economic assistance to North Korea, inter-Korea economic cooperation and a summit as well as multilateral approaches such as the Six-party talks. In July 2006 when North Korea fired several missiles ignoring international warnings, Japan in conjunction with the U.S.
proposed to impose strict sanctions against North Korea’s provocative actions in the Security Council of the United Nations. 51 Japan even claimed that it had the right to initiate preemptive strikes against North Korea. Insisting on dialogue with Pyongyang, 52 the Roh Government allied
49 “South Korea Plans 9% Increase in 2008 Defense Budget,” September 27, 2007, http://www.defenseindustrydaily.com/south-korea-plans-9-increase-in-2008-defense-budget-03877/;
http://www.monstersandcritics.com/news/asiapacific/news/article_12055 52.php
50 “South Korea launches $1 billion advanced destroyer,” May 26, 2007, http://www.timesofmalta.com/articles/view/20070526/local/south-korea-launches-1-bln-advanced-destroyer.16651
51 http://www.yomiuri.co.jp/world/news/ 20060705i118.htm;
http://china.donga.com/big/srv/service.php3?bicode=
060000&biid=2006072139358
52 “Korea, China agree to seek dialogue to deal with North,” The Korea
with China to oppose any strict sanctions and military options so as to avoid pushing Pyongyang into a corner.53 The two countries also objected to the holding of five-party talks to discuss how to cope with North Korea’s provocation, excluding the DPRK. 54 Even though North Korea detonated its first nuclear bomb in October 2006, still the Roh Government favored the accommodating approach to Pyongyang. In its action plan to impose sanctions against the DPRK requested by the resolution of the UN Security Council, the Roh Government did not include concrete details, in particular the Kaeseong industrial park and the Mount Geumgang resort project were untouched. The reason was that no proof could be shown that money from the South was used to develop nuclear weapons and weapons of mass destruction (WMD). At the same time, Roh Government decided not to participate in the US-proposed Proliferation Security Initiative (PSI) aimed at preventing the proliferation of WMD so as not to irritate Pyongyang.55 North Korea had repeatedly warned it would regard the South’s participation in the PSI as a declaration of war. The Roh Government also worried about the possibility of armed conflict if any attempt were made to interdict a North
Herald, July 27, 2006, http://www.koreaherald.co.kr/SITE/data/html_dir/
2006/07/27/200607270044.asp
53 Tony Saich, “China in 2006: Focus on Social Development,” Asian Survey, Jan/Feb 2007. Vol. 47, No. 1, p. 43.
54 “Seoul, Beijing rule out five-way meeting without Pyongyang,” The Hankyoreh, July 26, 2006, http://english.hani.co.kr/arti/english_edition/
e_international/144432.html
55 http://china.donga.com/gb/srv/service.php3?biid=2006111304448
Korean vessel, and limited their participation in the PSI to observing offshore drills.56
In comparison with the Kim Dae-jung Government, the Roh Mu-hyun Government was more active, bolder and more independent in terms of conducting foreign policy. This tendency was shown in Roh’s seeking independence from the U.S. by insisting on engaging North Korea in spite of deteriorating U.S.-North Korean relations, attempting to serve as a mediator between Washington and Pyongyang exemplified by bringing North Korea and the U.S. back to the fourth round of the six-party talks in August 2005 and claiming to pursue a balancing role in Northeast Asia. President Roh in March 2005 stated that South Korea does not want to see the U.S. forces stationed in South Korea sent to act as task forces in Northeast Asia and his country was seeking to act as a strategic mediator between regional powers such as Japan, China and Russia.57 U.S. Assistant Secretary of State Christopher Hill viewing the balancer doctrine was
“annoyed’’.58 Furthermore, South Korean Deputy Foreign Minister Lee Soo-hyuk in June 2003 pointed out that the U.S. and Japan seemed to agree on the need to manage the North Korean nuclear issue at the United Nations, but South Korea urged the two sides to wait and see as efforts
56 “South Korean Joins PSI In Response to North Korea Nuclear Test,” GI Korea,May 26, 2009, http://rokdrop.com/2009/05/26/south-korean-joins-psi-in-response-to-north-korea-nuclear-test/
57 http://chinese.chosun.com/site/data/html_dir/2005/05/18/20050518000 030.html
58 http://times.hankooki.com/lpage/200505/kt2005051917054510230.htm
were underway to realize multilateral dialogue. 59 Additionally, South Korean Unification Minister Chung Dong-young conveyed President Roh's "important proposal" to Kim Jong-il in June 2005, an offer of large-scale economic assistance what was the so called South Korean version of the Marshall Plan in exchange for the scrapping of North Korea's nuclear weapons program.60 Minister Chung then visited Washington immediately after his meeting with Kim Jong-Il and presented proposals to the U.S. in order to get North Korea back to the negotiation table.61 In the wake of the subsequent fourth round of six-party talks, even though the U.S. insisted that North Korea must dismantle its nuclear facilities including both nuclear weapons and light water reactors, ROK Unification Minister Chung Dong-young indicated that North Korea has the right to maintain its light water reactors which are used for peaceful purposes.62
Unlike his predecessor, Roh Moo-hyun viewed North Korea policy as the nucleus of a grand strategy comprising an overall policy for unification, foreign relations, security,63 and even economic development and regional integration. To be more specific, the lynchpin of Roh's
59 The Korea Times, June 16, 2003.
60 http://www.koreaherald.co.kr/SITE/data/html_dir/2005/07/02/20050702 0021.asp
61 http://www.koreaherald.co.kr/SITE/data/html_dir/2005/07/02/2005070 20026.asp
62 Mainichi shimbun, August 13, 2005, http://www.mainichi-msn.co.jp/kokusai/asia/news/20050813ddm007030103000c.html
63 Taehyun Kim, “Bush Reelected, Roh Speaks Up, and Kim Redirected?
Prospect of the Second Nuclear Crisis on the Korean Peninsula: Part I,”
Sejong Policy Research, 2005, Vol. 1, No. 2, p. 238.
vision of Korea's future role in Northeast Asia was North Korea. Integration and normalization with North Korea and resolution of the crisis caused by North Korea's development of nuclear weapons capability were the foundations for a more assertive and constructive role for Korea throughout Asia, and the easing of an explosive situation that divides Northeast Asia. As organized mainly by the 386 Generation whose ideas were more liberal than the previous government, the Roh Moo-hyun Government’s approach to foreign policy stressed more independence, such as playing a balancing role and in its approach to the DPRK, more active engagement. For the Roh Government, the Kaeseong industrial park was not only a symbol of inter-Korean economic cooperation but a strategic manufacturing base that increased international competitiveness of South Korean products, inter alia their price competitiveness from a combination of South Korea’s technology with North Korea’s cheap labor. The cost of their products would be much lower than those products made in China.64
Hence, the Roh Government encouraged small and medium enterprises to set up factories at the Kaeseong industrial park by offering incentives such as tax holidays and loans. Moreover, when negotiating free trade agreements with any country, South Korea always attempts to include a clause regarding those products
64 “Even though Chinese labor is cheap, North Korean labor is much cheaper still, since $15-20 a month would be seen by the average North Korean worker as a good wage. For the same labor, they would have to pay a Chinese worker between $100 and $150 a month.”
http://www.nkeconwatch.com/2011/06/21/lankov-on-the-dprks-new-sezs/
made in the Kaeseong industrial park and even other industrial parks in North Korea by South Korean companies as South Korean products and thus eligible for enjoying zero-tariff or preferential tariff. For example, South Korea was able to persuade the European Free Trade Association (EFTA) to agree to their bilateral FTA to regard products made in both the Kaeseong industrial park and the Rajin-Sonbong Free Trade Zone as products made in the ROK on the condition that more than 60% of its components came from South Korea.65 If this rule is successfully included in other bilateral FTAs signed by South Korea and its counterparts, this will contribute to exporting those products overseas for they enjoy price competitiveness and further accelerate North-South Korea economic cooperation. The economic benefit that the two Koreas could gain from this operation was estimated at US$20 billion per annum.66
Another major ingredient of President Roh’s blueprint for the inter-Korea relationship and Northeast Asian regional integration is reconnecting inter-Korea railroads agreed by the two Koreas in their first summit in June 2000. At the time, President Kim Dae-ung described the railway as an “Iron Silk Road” to link South Korea by
65 “Editorial: Made in which Korea?” Joongang Daily, November 4, 2005,
http://joongangdaily.joins.com/200511/04/2005110422080341099000901 09011.html
66 http://joongangdaily.joins.com/200511/04/200511042208034109900090 109011.html
land to Europe and Central Asia.67 The Roh Government was trying to narrow the gap between the economies of the two countries and prepare for eventual reunification.
South Korea's economy at the time was 35 times bigger than its northern counterpart and its citizens earned 17 times more. As a result, President Roh wanted to establish an inter-Korea rail link with the rest of Asia and ultimately to Europe from Kyongwon Railway Line (linking Seoul and Wonsan, a North Korean port city in East coast) via Russia’s Trans-Siberian Railway and the Trans-China routes through the Seoul-Sinuiju railway (Kyongui Railroad Line). President Roh's Moscow summit with Russian President Vladimir Putin in September, 2004 served this function. They explored the possibility of Seoul-Moscow-Pyongyang collaboration in energy and transportation projects that eventually could help defuse tension on the Korean Peninsula. Main projects under discussion included linking pipelines to carry natural gas and oil from Russia's Far East and Siberia via North Korea to South Korea and the connection of the Trans-Korean Railway with the Trans-Siberian Railway. The proposed natural gas pipelines would provide crucial energy resources to South Korea and could also benefit the impoverished North, if all parties could agree on passage through the isolationist communist state. Provision of energy has been one of North Korea's key demands for scrapping its nuclear weapons development.68
67 “How Korea’s new railroad will change Northeast Asia,”
http://www.nkeconwatch.com/2011/06/21/lankov-on-the-dprks-new-sezs/
68
Seo Hyun-jin, “Seoul plays Moscow card with North Korea,” Asia Times, September 24, 2004,
http://www.atimes.com/atimes/Korea/FI24Dg06.html
Furthermore, the railway project would enable South Korea to be directly linked to Europe through North Korea.
The two Koreas exchanged test trains in May 2007 for the first time in 56 years. If realized, freight train services joining the South and Kaesong would have sharply cut costs for South Korean businesses and have helped reduce tensions between the two sides.69 President Moo-hyun Roh had a summit with Kim Jong-il in October 2007.
At the time, more than 400 trucks cross the demilitarized zone by road every day, carrying raw materials into Kaeseong and bringing back finished goods. Inter-Korean trade more than tripled to US$1.35 billion in 2006 from US$425 million in 2000. 70