Atsushi Ijuin, Lead Economist, Japan Center for Economic Research

International Forum on One Korea 2017: Solutions to the Korean Peninsula Crisis
Washington, D.C.
November 14-15, 2017

Over the last few years, concern among the Japanese public regarding the Korean Peninsula has focused on North Korea’s nuclear and missile development and abduction of Japanese nationals, as well as on disagreements with South Korea over perceptions of history. There is little interest in the question of Korean Peninsula unification and it is not even a specific foreign policy concern at the political level. However, given the uncertain outlook for the Korean Peninsula, it is vital for Japan and other neighboring countries to prepare for inter-Korean unification. Outlining some of the few discussions taking place among experts on the topic, I would like to examine how Japan can accommodate the unification of the Korean Peninsula.

Japan’s Korean Peninsula Policy and Relations Between Japan and North Korea

Although Japan established diplomatic relations with South Korea in 1965, it has not yet done so with North Korea. In accordance with the Pyongyang Declaration signed by then Prime Minister Junichiro Koizumi and Chairman of the National Defense Commission Kim Jong-il in September 2002, the Japanese government’s basic policy on relations with North Korea is to settle the unfortunate past between the two countries and normalize diplomatic relations following the comprehensive resolution of outstanding issues of concern, namely the issues of abductions and nuclear and missile development.

The Pyongyang Declaration includes a policy on the provision of economic cooperation to North Korea by Japan over a period of time deemed appropriate by both sides after normalization of diplomatic relations. At this point, the nature of this economic cooperation remains an entirely blank slate. There is no prospect of the outstanding issues of concern — abductions and nuclear and missile development — being resolved, so no discussions on economic cooperation with North Korea are taking place in public forums.

I believe that if outstanding issues of concern were resolved and diplomatic relations between Japan and North Korea were normalized, Japanese economic cooperation would need to take a form that would lead to Japan’s own economic development, as well as contributing to the economic development of both North Korea and Northeast Asia as a whole.

The main form of economic cooperation would be bilateral cooperation between Japan and North Korea, but trilateral cooperation involving South Korea and multilateral Northeast Asian cooperation that also involved Russia, China, the USA, the European Union, and international organizations would likely also be considered, depending on the project. The projects envisaged include industrial development aimed at ensuring North Korea’s sustainable economic growth, human resource development, and social infrastructure improvements focused on rail, road, port, electric power, and energy facilities, among others. Such economic cooperation could well enhance the economic level of the northern Korean Peninsula, which currently lags behind the south, thereby helping to put in place an environment conducive to inter-Korean unification.

Unification of the Korean Peninsula From Japan’s Perspective

As far as Japan is concerned, the question of Korean Peninsula reunification is certainly not “somebody else’s problem.” This is because the timing and format of Korean Peninsula unification will directly affect Japan’s national interests. As the Northeast Asian situation becomes increasingly fluid, one cannot entirely discount the possibility that the situation will evolve, whether Japan likes it or not. Japan needs to go beyond its conventional style of diplomacy, which focuses on dealing with the current situation, and prepare a Korean Peninsula policy that takes into account the potential for regime change in North Korea and north-south unification at some stage in the future.

The best scenario for Japan would likely be for the Kim Jong-un regime to resolve to abandon its nuclear program and follow a path toward reform and greater openness. Inter-Korean relations would improve, leading to an expansion in exchange and cooperation. Following a period of peaceful coexistence between north and south as a structure for peace is established, the two Koreas would, by mutual agreement, follow the path to unification based on respect for freedom, democracy, and a market economy. North Korea’s diplomatic relations with Japan and the USA would be normalized during this process, leading to warmer relationships between them. In this scenario, these developments would have a synergistic effect, leading to Japan developing closer relations with both Koreas and building a good relationship with the Korean Peninsula following peaceful unification.

The least desirable scenario would be one in which North Korea pushed forward with its nuclear and missile development and headed down the path toward economic collapse. Not only Japan, the USA, and South Korea, but also China and Russia would try to curb these moves, but North Korea would ignore them and become increasingly isolated. Having lost any room for maneuver both at home and on the diplomatic stage, the Kim Jong-un regime would engage in extreme behavior in an effort to survive. Risky actions would have the potential to trigger another war on the Korean Peninsula and the possibility of an internal coup d’état in North Korea could not be entirely discounted.

In reality, there are various conceivable scenarios between these two extremes. Japan needs to give thought to security policies that will ensure that the nation is prepared for all eventualities, but diplomatic efforts and preparations for fostering a positive environment are also crucial. What role can Japan play in the Korean Peninsula unification process and what specific policies can it adopt? What can it do in terms of security and how can it contribute to the economic aspects? Japan should probably prepare responses tailored to the whole spectrum of possible scenarios, from peaceful inter-Korean unification over an extended period to unification triggered by an unexpected incident.

Discussions in Japan About Inter-Korean Unification

Due to growing tension on the Korean Peninsula over the North Korean nuclear and missile issues, debate has raged in Japan concerning its response to an emergency over the last few years. The scenarios discussed include the outbreak of war once more on the Korean Peninsula, the launch of a missile strike on Japan or United States Forces Japan by North Korea, and the collapse of the North Korean administration due to war or insurrection.

Discussions in the Diet and mass media platforms focus on such issues as the security policies that Japan should adopt in the event of such an emergency, the protection and evacuation of Japanese nationals on the Korean Peninsula, and measures to deal with an anticipated influx of North Korean refugees to Japan. However, interest certainly is not high when it comes to the actual question of Korean Peninsula unification, which could occur as a result of such an emergency.

Foreign affairs think-tank the Okazaki Institute published an essay entitled The Korean Peninsula Can Benefit Japan: A Call to Deepen Talks Between Japan, the USA, and South Korea online in November 2015. The essay referenced an article by Bruce Klingner, Senior Research Fellow at US think-tank The Heritage Foundation, summarizing its argument thus: “As long as the Korean Peninsula remains divided and the North Korean threat remains, Japan pays an enormous opportunity cost, in the form of military spending to guard against the nuclear threat from North Korea and the abductions issue, so Japan would benefit from Korean unification.

“Japan is not in a position to play a proactive role in Korean unification, but Japan’s importance should not be underestimated, both in terms of the role of US military bases in Japan in any military operations preceding unification and in providing extensive economic support after unification.”

The essay expressed the view that “Although Japan is not in a position to play a proactive role in Korean unification, as soon as unification becomes a real possibility, Japan should not only express its views on such matters as concerns about military conflict during the unification process and the need for denuclearization after unification, but also make clear that it is prepared to offer appropriate economic assistance once unification occurs.”

Naoki Tanaka, President of the Center for International Public Policy Studies, is one of Japan’s most eminent economists. In his blog on the center’s website, Tanaka pointed out in 2013, “Even if a unification program developed peacefully, they would still have to confront a very great inconsistency within the unified state. Based on 20th century history, one could not say that this has nothing to do with Japan.” He went on to propose, “We should conduct in-depth discussions focused on what preparations we should make to sort out this problem in the event of Korean unification and on how we can narrow down the focus to what we can do to change our long-term relationships with our neighbors for the better.”

There are also those who take a cautious view on inter-Korean unification. Author and critic Akihiko Reizei points out, “If a unified Korea ends up arising amid ongoing chaos, the situation on the Korean Peninsula will become grave.” “If South Korea merges with a failed state, the people will face an extreme drop in their standard of living. The citizens of the north might become somewhat freer, but they could well suffer discrimination or instigate a backlash as they are rocked by exposure to a society with free competition. One cannot deny the possibility that, amid this situation, the new state might decide to pose a challenge to Japan, in an attempt to maintain its cohesive power,” he wrote, indicating his feelings of caution about the possibility that a unified Korea might adopt anti-Japanese policies.

Quite a few people in Japan feel a nebulous sense of alarm about the prospect of a nation with a population of 75 million springing up right next door. There are also concerns that the post-unification state might be more favorably inclined toward China than to Japan or the USA. Would a unified Korea maintain South Korea’s military alliance with the USA or dissolve it? What kind of relationship would it build with China? Quite a few commentators express anxiety about the possibility that Japan’s security environment might deteriorate if the Korean unification process and the post-unification state’s foreign and security policies destroyed the power balance between major states in East Asia.

The Ideal Unification Process and Resultant State

Let us look now at what kind of inter-Korean unification process Japan and other neighboring countries would welcome on the Korean Peninsula. Former South Korean Minister of Unification and chair professor at Kyungnam University Kang In-duk discusses this question in Kaib? Kitach?sen risuku [Dissecting the North Korean Risk], a book published in Japan in 2016 which he co-authored and edited.

In terms of the basic principles, he asserted, “In the unification process, South Korea should adhere to the principles of independence, peace, and democracy. The unification process must be carried out gradually and peacefully under South Korean leadership, and cooperation with neighboring countries must be secured in this process. Based on the principle of respect for territorial integrity and sovereignty, a unified Korea must make a declaration of coexistence and cooperation with neighboring countries, without fail.”

He also set out the following specific guidelines.

  • South Korea must aspire to a mode of unification that encompasses distinctive values based on universal values, avoiding a mode of unification, ethos, and values that place excessive emphasis on the special nature of the Korean Peninsula.
  • A unified Korea must adopt democracy as its political system, market economics as its economic system, and the rule of law to guarantee human rights and freedom.
  • A unified Korea must aspire to be a peaceful nation and a welfare state.
  • A unified Korea must be based on East Asian culture and contribute to the prosperity of East Asia as a whole.
  • A unified Korea must achieve denuclearization before unification and aspire to be a non-nuclear state after unification.
  • A unified Korea should aspire to “open nationalism,” which pursues peaceful coexistence and mutual prosperity with other ethnic groups.

In addition, Kang offered the following guidelines for ensuring that inter-Korean unification does not compromise the peace and security of the region.

  • A unified Korea must conquer the desire to be a bloc pursuing the balance of power and should aspire to be a military, security, and economic middle power that upholds universal and international norms.
  • It should aim to achieve the formation of a comprehensive regional community with the participation of countries including China, Japan, Taiwan, and the USA, based on the concept of regional integration.

All of these points are important. If all of the conditions could be satisfied, it would probably go a long way to dispelling the fears of the Japanese people who feel a vague sense of anxiety about inter-Korean unification. Above all, achieving denuclearization prior to unification and adopting a clear stance that a post-unification Korea would continue to be a non-nuclear country would seem to be a prerequisite.

Japan’s Role in Preparing for Inter-Korean Unification

Japan’s colonial rule of the Korean Peninsula came to an end with its defeat in World War II. The San Francisco Peace Treaty signed in 1951 states, “Japan, recognizing the independence of Korea, renounces all right, title and claim to Korea, including the islands of Quelpart, Port Hamilton and Dagelet.” Given this history, the general feeling in Japan is that, having renounced the Korean Peninsula, Japan is not in a position to play a leading role in Korean unification.

However, there are those who take the view that Japan’s importance should not be underestimated, both in terms of the role of US military bases in Japan in any military operations preceding unification and in providing extensive economic support before and after unification.

In the aforementioned book, Kang In-duk points out, “Cooperation between a unified Korea and Japan would fundamentally be the best way to resolve the long history of discord between them, so in this sense, Japan must be aware of and fulfill the important role that it can play not only in the development of the North Korean region, but also in the development and peace of Northeast Asia as a whole.”

Both Koreas have complex feelings regarding Japan. In South Korea, there are some who believe that the Korean Peninsula’s misfortunes were triggered by Japan’s colonial rule and that the peninsula was split in two because it became entangled in the chaotic process of Japan’s defeat. Whether or not this view is valid, there are those in Japan who state, “We have no choice but to discuss what kind of standpoint Japan can take on Korean unification, based on this historic background” (economist Naoki Tanaka).

The Need for International Dialogue With a View to Unification

Today, with tensions rising on the Korean Peninsula, the most pressing issue is finding a solution to the North Korean nuclear and missile issues to ensure the peace and stability of the region. This problem is expected to take considerable time to resolve peacefully. Achieving the denuclearization of North Korea through negotiation and dialogue will require stable, long-term coexistence between the two Koreas and guarantees regarding this on the part of the international community.

What is needed is the creation of an effective scenario for the solution of the North Korean nuclear and missile issues and the achievement of regional peace and stability, along with dialogue aimed at creating a scenario in which the major countries concerned can work together. Inter-Korean unification would be a continuation of that process.

If South Korea aims to achieve unification, dialogue with its partner, North Korea, is essential. South Korean initiatives will only proceed smoothly if carried out with the cooperation and support of Japan and the USA, with which it shares key ideals, political and economic systems, and fundamental principles; the cooperation and support of China and Russia, with which South Korea has close economic and diplomatic relations, will also likely be required.

In addition to north–south talks, a variety of other frameworks are likely, including US–South Korea, Japan–South Korea, Japan–US, Japan–US–South Korea, and Japan–US–China–South Korea–Russia. Moreover, Mongolia — which has diplomatic relations with all major countries, including North Korea — has indicated its willingness to provide a venue for talks among the countries of Northeast Asia.

The Mt. Fuji Dialogue, which is co-organized by think-tanks the Japan Center for Economic Research and the Japan Institute of International Affairs, published a report on the prospects for Japan–US relations in April 2017. Entitled Toward a Greater Alliance, it recommended that the governments of Japan and the USA initiate highly confidential bilateral dialogue to prepare for the future unification of the Korean Peninsula.

To encourage candid discussions aimed at the peace and stability of the region, dialogue between the countries concerned should be undertaken not only at the Track 1 level, but also at a variety of other levels, including Tracks 1.5 and 2. In his speech to the United Nations General Assembly and in other forums, Japanese Prime Minister Shinzo Abe has advocated intensifying pressure on North Korea to resolve the nuclear and missile issues. Japan should be actively involved in this dialogue, with an eye to the future.

Kazuo Ogura, Kang In-duk and Japan Center for Economic Research eds. (2016) Kaib? Kitach?sen risuku [Dissecting the North Korean Risk], Nikkei Publishing
Kazuo Ogura, Kang In-duk and Japan Center for Economic Research eds. (2017) Ch?sen Hanto Chiseigaku Kuraishisu [Geopolitical Crisis on the Korean Peninsula], Nikkei Publishing
Okazaki Institute Ch?sen Hanto T?itsu ha Nihon no Rieki ni: Nichibeikan no Giron Fukameyo [The Korean Peninsula Can Benefit Japan: A Call to Deepen Talks Between Japan, the USA, and South Korea] (November 2, 2015)
Bruce Klingner ‘Allies Should Include Japan in Korean Unification Plans’
(Heritage, September 28, 2015)
Naoki Tanaka Ch?sen Hanto T?itsu he no Genjitsu to Kun? [Toward Korean Peninsula Unification: Reality and Suffering] (February 8, 2013)
Akihiko Reizei Kitach?sen ‘Y?ji’ yori mo Osoroshii, Nanboku T?itsugo no Mend?kusai Ch?sen Hanto [Even More Terrible Than a North Korean ‘Emergency’: The Troublesome Korean Peninsula After Unification] (May 31, 2017) ws/251104/2
The Mt. Fuji Dialogue Special Task Force ‘Toward a Greater Alliance’ (April 5, 2017)

The International Forum on One Korea 2017: Solutions to the Korean Peninsula Crisis on November 14-15 was convened at the Dirksen Senate Building and the Ronald Reagan Building and International Trade Center in Washington, D.C. on November 14-15. The forum was sponsored by by the Global Peace Foundation, Action for Korea United, EastWest Institute, and One Korea Foundation in partnership with the National Unification Advisory Council of the Republic of Korea.