1. Introduction

President Desai, Ambassador Holbrooke,
Excellencies, distinguished guests,
Ladies and Gentlemen,

I am very honored to be here to speak to you today. I would like to thank President Desai and the Asia Society for their kind invitation. It gives me great pleasure to be back at the Asia Society, where I had spoken several times in the past in my capacity as a cabinet member or Korean ambassador to the United States.

I am also delighted to see some familiar faces whom I met when the Asia Society Korea Center first opened in Seoul last April. As symbolized by the opening of the Korea Center, the Asia Society has expanded its role as a core intellectual network for deepening mutual understanding among the peoples of Asia and the United States. I look forward to seeing further creative contributions by the Society.


2. 60 Years of Achievement Since the Establishment of the Republic of Korea and New Historical Challenges

Ladies and Gentlemen,

The year 2008 holds great significance for Korea. This year marks the 60th anniversary of the establishment of a modern democratic government by Koreans against the background of a five millennia-old national history.

As you are aware, in the past 60 years the Republic of Korea has made considerable economic, political and social achievements. The Republic of Korea has ridden out the tragedy of the Korean War and overcome poverty to become the world’s 13th largest economy with a thriving democracy with human rights fully protected. Korea is now looking forward to joining the groups of advanced nations by promoting ‘Low Carbon, Green Growth’ as a new axis of overall development. Korea has also become a powerhouse for popular culture in Asia with the rise of a trend called Hallyu, the ‘Korean wave’.

In our path to achieving such success, we have had a very special companion: the United States of America. The United States has always been with us as an active supporter for democracy and a market economy.

The strong Korea-US alliance laid a pivotal foundation for the growth and development of the Republic of Korea. This solid alliance will continue to be an indispensable component as well as the driving force for the future friendship and cooperation of the two countries.

As you know, the Lee Myung-bak Government was launched earlier this year. The new government is confronting new historical challenges. Most importantly, we have to seek ways to share our prosperity with our people in the North, and to prepare a foundation for unification of the two Koreas underpinned by universal values.


3. A Need for Change in North Korea

Ladies and Gentlemen,

When the government of the Republic of Korea was established in 1948, Korea was one of the poorest countries in the world. The GDP per capita of the Republic of Korea was merely 67 dollars in 1953 immediately following the Korea war, and rose to only 79 dollars in 1960. At that time, North Korea’s economy was much stronger than that of the South. Natural resources were abundant in the North, and even electricity was supplied from the North to the South. Most of the industrial complexes were located in the North, whereas agriculture was the main industry of the South.

Today, six decades later, South Korean economy is around 40 times larger than the North’s. A comparison between the two Korean economies has now become virtually meaningless.

Such disparities do not arise from differences in long-standing historical experiences. The disparities cannot be attributed to such experiences because Koreans have shared a history for thousands of years as one nation in the Korean Peninsula. The gap between the South and the North rather reflects more recent historical choices made by the two sides during the past 60 years.

Democracy, an open market economy, and constant reform were the essential factors that made South Korea what it is today. Unfortunately, however, the North chose an entirely different path. As the French Economist Guy Sorman proclaimed, “the economy does not lie.” A good system and good policies that promote economic freedom and creativity guarantee development and prosperity, while systems and policies that do not inevitably bring poverty and instability. Since North Korea has persistently adhered to a planned economy and an obsolete ideology, it is now trapped in a vicious cycle, suffering from unstable food supply and low or even at times negative economic growth.

Nonetheless, North Korea has shown little interest in examples of reform and openness demonstrated by Vietnam or China. Instead, Pyongyang has developed a nuclear weapons program posing security instability in the region and placing a heavy burden on North Korea itself.

The general public of the South is becoming increasingly uncomfortable with the fact that many North Koreans are suffering from economic despair while the South enjoys unprecedented prosperity. There are probably no two neighboring countries that experience such a huge economic gap, let alone those that share the same ethnic and historical background. The danger is that such a discrepancy can easily become a source of instability and conflict.

In order to overcome its economic deficiencies and attain social stability, there will be no choice for the North but to give up its nuclear weapons program and use the financial resources to move towards reform and an open-door policy.

We are trying to persuade the North to make this strategic decision and to opt for a better future. We are ready and more than willing to help the North achieve economic growth. I am sure that once both Koreas work together, we will be able to forge a favorable environment in which all Korean people can live together in common prosperity.


4. Realization of an Economic Community on the Korean Peninsula and Creation of a Sustainable Peace Structure

[Realization of an Economic Community on the Korean Peninsula]

Ladies and Gentlemen,

Peace and security almost always flow from economic stability. As such, North Korea’s economic recovery is of utmost importance for an enduring peace on the Korean Peninsula. We need to build a foundation for growth in the North in order to pursue common prosperity on the Korean Peninsula.

Therefore, in accordance with progress in the Six-Party Talks, my government is promoting a vision to create a Korean Economic Community in collaboration with the North. There have been similar discussions in the past on establishing such an economic community. This time, however, we envisage substantial economic cooperation programs to significantly improve the living standards of all Korean people.

An important action plan to realize this vision is our new inter-Korean cooperation policy named "Vision 3000: Denuclearization and Openness." In cooperation with the international community, we will help North Korea raise its annual per capita income to US$3,000. To this end, we will carry out joint projects in five key areas: education, finance, industrial infrastructure, quality of life, and economic development. We would need an institutional mechanism to implement this initiative, such as an inter-Korean consultative body.

Mere economic assistance or investment is not sufficient for a country to bail itself out of the vicious circle of underdevelopment and poverty. A national economy can take a leap only when the necessary infrastructure, an adequate level of competition and reasonable governmental policies are in place. We know how difficult it is to achieve such a condition because we have learned it through our own experience. Our vision for an inter-Korean economic community is about sharing our experiences with the North.

[Creation of a Sustainable Peace Structure]

Ladies and Gentlemen,

It is true that inter-Korean relations have expanded on a large scale. However, such a quantitative expansion has not brought fundamental change to the relationship between the two Koreas. There have been many inter-Korean agreements before the 2002 October 4 Summit Declaration such as July 4 Joint Communiqué (1992), Basic Agreement of 1992, Joint Declaration on the Denuclearization of the Korean Peninsula (1992), South-North Joint Declaration of June 15, 2000. However, these agreements have not been fully implemented.

The shooting incident at Mt. Geumgang last July demonstrated the vulnerable nature of the inter-Korean relations. A middle-aged unarmed female tourist was shot to death as she was walking peacefully on the beach to see the sunrise, unfortunately crossing a few hundred meters over the boundary of the tourist zone inadvertently. This dreadful incident occurred at a place that has long been considered a symbol of inter-Korean economic cooperation and people-to-people exchanges. However, no dialogue has emerged to investigate the incident, or to prevent the recurrence of such a mishap. My government asked for a joint investigation team to find out the truth but in vain.

Under these circumstances, there have been greater calls in our society for a new approach towards development of inter-Korean relations. A common understanding began to take shape that inter-Korean relations should conform to principles and standards that any member of the international community should respect.

Another key, future-oriented consideration for common prosperity is to consolidate a sustainable peace structure on the Korean Peninsula. The sustainable peace structure that we are pursuing refers not to a state where hostilities are absent, which characterizes the present armistice. It refers to an enduring peace, which is not easily affected by temporary incidents or accidents and is able to prevent politico-military crises such as the North Korean nuclear problem. The only way to realize such a sustainable peace should be by completing the denuclearization process of North Korea and establishing a peace regime on the Korean Peninsula.

As of today, the Six-Party Talks, which aims for the denuclearization of North Korea, is the principal framework that can open up the future for the North. The world is watching the North through the window of the Six-Party Talks. If the North completely abandons its nuclear weapons program, many beneficial outcomes can come about. Relations between the North and its neighbors can improve, along with greater probability of forming a Northeast Asia peace and security mechanism.

We are making continuous efforts to share this vision with the North with patience and sincerity and to induce them to take the path towards common prosperity on the Korean Peninsula.

5. Conclusion

Ladies and Gentlemen,

As I have explained, since the new government came into office in Seoul this year, little progress has been made in relations between the two Koreas. From a longer-term perspective, this can be seen as a period of adjustment. We in South Korea are striving to get back on track for normal inter-Korean dialogue and cooperation. However, the ultimate challenge for us would not be to simply make a breakthrough in this stalemate. We must address more fundamental issues, such as the nuclear problem, chronic food shortages and other economic problems, and the North’s isolation from the international community.

I believe that our new vision for common prosperity will eventually open up ways to solve these difficult problems concerning North Korea. This vision will not only bring in a better future for North Korea, but also make the Korean Peninsula a gateway for peace and prosperity in Northeast Asia. Such a process will allow the maximization of the economic vitality of Northeast Asia for the benefit of the whole world.

Still, the first step needs to be taken, and it should be to begin a sincere inter-Korean dialogue. Leaders in the North may mistakenly believe that it is possible for them to circumvent or outmaneuver the South. However, I would like to emphasize that, in the end, South Korea is the neighbor whom the North can truly trust and rely on the most. We hope that the North will realize this and make a wise choice.

In all our endeavors, I would like to ask all the friends here in the Asia Society to render us continued support and cooperation.

Thank you.