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Railway engineer Park Heung-su (right) and Na Hee-seung

“If we lay double tracks on the Seoul-Sinuiju line and ship products from China to South Korea, we can make US$400 million a year, and if we bring materials from Heilongjiang Province or from Russia along the East Coast line, we can make more than US$1 billion a year.”

This remark, which North Korean founder Kim Il-sung made to a leader of Belgium’s Communist Party in 1994, is also said to appear in Kim’s collected works. This also coincides with the fact that the Seoul-Sinuiju and East Coast lines are the two pillars of the new economic map for the Korean Peninsula that was loaded on the USB flash drive that South Korean President Moon Jae-in handed to North Korean leader Kim Jong-un.

Connecting the railroads between South and North Korea would bring considerable economic benefits – including less expenditures on logistics and shorter timeframes – for both South and North. No small number of jobs would be created in transportation, storage and handling in the economic region that includes North Korea and China’s three northeastern provinces, which have a combined population of 100 million. There is even research suggesting that intensifying inter-Korean economic cooperation could raise South and North Korea’s per capita GDP to US$80,000 and US$50,000, respectively, within 33 years.

While promoting the “one belt, one road” initiative since 2013, China has already created a logistics network in its northeastern provinces around a high-speed railroad linking the cities of Dalian, Shenyang, Changchun and Harbin. Dandong, a city with high-speed rail and highway links to Shenyang and Dalian, is right across the border from the North Korean city of Sinuiju. In Feb. 2014, North Korea signed a contract with an international special-purpose company to build a high-speed railroad and expressway from Sinuiju through Pyongyang and on to Kaesong within six years (with a down payment of US$24 billion).

In Oct. 2014, A Russian company called Mostovik signed a contract for a North Korea-Russia railroad modernization project called Pobeda (meaning “victory”). The project was supposed to run for 20 years on the condition that North Korea provided development rights for mining rare earths, nickel and zinc.

Both of these contracts foundered on the North Korean nuclear issue. But while South and North Korea have been tied down because of the Cold War and nuclear weapons on the Korean Peninsula, China and Russia have been moving forward with an ambitious project to build a “Silk Railroad” linking the Far East and Europe via the Trans-China Railway and the Trans-Siberian Railway.

After North Korea expressed its commitment to denuclearization, South and North Korea promised to connect highways and the Seoul-Sinuiju and East Sea railroads, and the new economic map for the Korean Peninsula was delivered to North Korea. But just because South Korea was the architect of this new economic map does not mean it will play a leading role in North Korea’s economic development.

During the amiable mood over dinner after the summit on Apr. 27, a South Korean government official suggested that the two sides do their best on joint projects moving forward. Reportedly, a North Korean official replied by expressing skepticism about what would happen after Moon’s four years in office are over. This concern derives from North Korea’s experience of economic cooperation being cut off when power changes hands in the South.

Recent developments suggest that even the next four years may not be smooth sailing. North Korea cancelled high-level talks with the South and even had First Vice Minister of Foreign Affairs Kim Kye-gwan mention the possibility of rethinking the North Korea-US summit. It is hardly surprising that the North was provoked by remarks about the Libya method by White House National Security Advisor John Bolton and comments about the death of Kim Jong-un’s family members by Thae Yong-ho, former minister of the North Korean embassy in the United Kingdom.

On a fundamental level, this can largely be blamed on a disagreement about the process and stages of denuclearization and the security guarantee that North Korea and the US are supposed to give each other. On top of this, there is the mutual distrust that derives from long-standing hostility.

There are also figures inside South Korea who are displeased with the Panmunjeom Declaration itself and its agreement to exchange denuclearization for a security guarantee. Some of them argue that aid to North Korea must be linked to its human rights issues and that the ultimate goal should be regime change in the North, while others go so far as to say that the North must be held responsible for the Korean War. This makes it harder for North Korea to believe assurances about irreversible regime security that must be implemented at the same time as irreversible denuclearization.

North Korea and China had two summits around the time of the inter-Korean summit. The two countries have recently been taking steps toward economic cooperation, with the chairs of the Workers’ Party of Korea (KWP) municipal and provincial committees visiting China and Chinese entrepreneurs visiting Pyongyang. Some of North Korea’s draws are the demand for infrastructure, including railroads and highways, as well as its massive deposits of mineral resources, including rare earth. Given the flood of interest not only from the South Korean government, China and Russia but also from the US after North Korea’s pledge to denuclearize, the North appears to be weighing these various offers.

The Panmunjeom Declaration and Kim and Moon’s meeting on the pedestrian bridge raised hopes about inter-Korean economic cooperation, but the likelihood of the new economic map for the Korean Peninsula that South Korea is drawing actually being implemented remains cloudy. Setting aside the conflict between North Korea and the US, the plan for a new economic map could be undermined if the leader of South Korea’s opposition party – who sent Trump an open letter stating that the North must not be given a security guarantee until its denuclearization is complete – blocks government spending on the grounds that the North is playing a “peace charade.”

The most urgent matter of business is for President Moon, who departed for the US on May 21, to sit down with Trump and draft a roadmap for denuclearization that will also be acceptable to North Korea. That is essential for making smooth progress on denuclearization as well as securing a privileged position as the architect of the new economic map.

By Kim Ri-taek, editorial writer

Please direct comments or questions to [english@hani.co.kr]