(Interview with Mr. Ian Davies, former OIC of the Tumen Secretariat for the Tumen River Area Development Programme, born in Sydney, Australia in 1947, Ph.D. in Economics from the University of Sydney, UNIDO Ambassador for China and the DPRK in 1992 – 1995, currently an independent consultant)
“The
Government and researchers need to overhaul
their blueprint from the beginning.”
Dr. Ian Davies (53) revealed during his interview with the Sisa Journal
that South Korean Government’s infrastructure assistance plan for North Korea
consisted mainly of unrealistic projects ignoring the real situation of North
Korean economy, and that North and South Koreas might experience difficulties
in their future negotiations. His point
is that the Government’s infrastructure plan for North Korea should be
overhauled on a full scale. During the
interview, Dr. Ian Davies even suggested some alternatives based on his own
experiences. He is known to understand
almost every nook and corner of North Korean economy through his visits to
North Korea for over twenty times.
Recently he came to Seoul to attend the “International Workshop on
the Environment and Peace of Northeast Asia,” organized by the Korean
Commission for UNESCO from 5 – 7 July.
What kinds of problems are there in South Korean Government’s plan for infrastructure assistance towards North Korea?
No one
can support the costs easily, and also it is difficult to know what the best
way is. While analyzing some of the
infrastructure assistance plans formulated by the South Korean Government, the
National Intelligence Agency and some research institutes, I came to feel that
they were very unrealistic, albeit this is only a view from a foreign expert.
What
points are unrealistic?
For
example, I don’t think North Korea will be interested in the proposal to
establish joint measures that can prevent the Imjin River from flooding. It is because North Korea may not get much
out of that proposal. The proposal to connect
railway lines between Seoul and Sineuiju has a significant symbolic meaning,
but from an economic viewpoint it is not everything to simply connect the
railway lines. While connecting the
railway lines, the overall system in the northern section of the Seoul-Sineuiju
railway should be improved at the same time.
After having analyzed 6 – 7 more project proposals, I had an impression
that the proposals in general had been formulated in a rough-and-ready manner without
full consideration of North Korean situation.
Do you mean that problems might develop in the course of negotiations with North Korea on specific proposals?
I think
so. North Korea will bring forward its
own proposals that could be widely different from South Korean ones. If South Korea one-sidedly pushes to carry
out its own proposals, North Korea might draw its seat back, and then there
will be hardly a chance for the proposals to be implemented. South Korea needs to put North Korean
proposals on the table for serious review, without clinging to its own
proposals.
You are pointing out that Government’s plan does not reflect the situation in North Korea. Then what direction should the plan take?
The
Government needs to change its viewpoints.
Currently, there are too many long-term plans that may take over 10
years of time for implementation. What
North Korea needs now are not these long-term plans, but short-term plans from
which it can achieve results in the immediate future of one to two years. Chairman Kim Jong-il might need to quickly
achieve some results, so that he could persuade the military and the
people. Losing a momentum may make
negative effects even on the relationship between the two Koreas. On the contrary, making some quick results
could enormously help establish a long-term cooperative relationship.
On what areas do you think will North Korea focus its attention while making its own proposals?
North
Korea may suggest such proposals that can mainly help recover its economy in a
short period of time. North Koreans
know very well what should be done first.
However, there can certainly be some aspects to be cautious of. Depending on who is taking the initiative,
North Korean proposals may look after the initiators’ interest only, or North
Korea may have a tendency to prefer exhibition proposals to substantive
ones. These kinds of proposals should
be avoided completely. Two areas are
considered most important for the recovery of North Korean economy: solving the
electricity shortage and rehabilitating the transportation network. Strengthening these two areas will enable
North Korea to develop its agriculture, to improve the quality of life of its
people, and to strengthen its industrial competitiveness.
What
would you like to do, if you were to formulate a plan?
First
and foremost, it is important to rehabilitate thermal power plants in order to
solve the electricity shortage. In this
regard, it is urgent to supply fuel for electricity generation. Secondly, there are several power plants in
the basin of the Yalu River in addition to the Soopoong Power Plant, and it is
also urgent to replace the outworn equipment of these power plants. It is very important to change the power
transmission networks or to improve the coal transportation network. You will see immediate impact on the
transportation network, if you supply diesel engines, passenger trains and fuel
to North Korea. South Korea can supply
these to North Korea immediately, and impacts will be many.
I think it is urgent to rehabilitate the railway network, because North Korean transportation system composes primarily of railways and then roads.
Certainly
so. In rehabilitating the
transportation network, the second job is to rearrange the railway
network. Double-tracking even a few
sections of the Sineuiju-Pyongyang railway line might immediately halve the
transportation time. It is not
necessary to double-track the whole line, but only a few sections. Next job is to rearrange the Chongjin-Rajin
railway line, and then to upgrade the Pyongyang-Wonsan railway line. What I would like to stress upon here is
that a focus should be laid on implementing such projects that could produce
significant impacts with less money.
Another important matter is selecting target areas. South Korean Government seems to put value
on the western area, but North Hamgyong Province should not be ignored in order
for impacts to be transmitted to the entire North Korean economy.
Why is
it so?
North
Hamgyong Province is the area that represents North Korea’s heavy
industry. It means that North Hamgyong
Province takes a large portion of the entire North Korean economy. Not much money is needed actually. For example, an improved line of the
Namyang-Rajin railway might make impacts not only on the economy of North
Hamgyong Province but also on that of Northeast Asia. It might enable cargoes from the three northeast provinces of
China to be shipped on containers to Namyang-Rajin-Pusan. With such a development, Pusan could grow up
as the largest container port in Northeast Asia. Also the logistics from Yanbian, Jangchun, Jilin, Heilongjiang,
Haarbin and so on could be concentrated into North Hamgyong Province, and a big
market would be established there.
Compared to these significant impacts, it would take only $50 million to
improve the Namyang-Rajin railway line within roughly two years.
Can you suggest other economic cooperation projects than infrastructure ones that North and South Koreas can easily implement?
I would
like to suggest fishery cooperation.
North Korean fishermen could sail to the distant sea to catch fish, with
the diesel oil or gasoline provided by South Korea. Then they could hand over the fish to South Korea on the sea that
would be sold in South Korean markets, and their bills would be paid. Certainly a fishery agreement would be
needed, but this kind of cooperation could enable North Koreans to understand
the market mechanism in South Korea. It
could not only make economic effects, but also could help build confidence
between the two Koreas. Also,
transferring cultivation technology may be another project. South Korea may wish to implement
demonstration projects on cultivation on the east and west coast of North
Korea.
I think it is very important to consider what direction North Korea will unfold its economic policy.
I think
North Korea will initially go through an experimentation period on the market
economy system just like China did. Of
course North Korea might not open its door on a full scale, but would try to
experiment on a very selective basis.
This experimentation period might take about 5 – 10 years.
Free translation
· Source: “The Sisa Journal Weekly News Magazine,” 20 July 00, pp. 62 – 63
· Reporter: Nam Moon-Hee