Aju Business Daily

SEOUL -- There have been signs of encouraging inter-Korean economic cooperation. Human and material exchanges are frequent, and the scale is growing day by day. It must be a good thing and it is important to lead inter-Korean economic cooperation in the right direction in order to see the fruitfulness of such an effort. It is time that the right guidance role of our government is required.

The basic preconditions must be met to guide inter-Korean economic cooperation in the right direction -- North Korea's reform and opening. As long as North Korea does not reform or open up, we will not be able to escape the fate of being dragged around by North Korea.

The initiative of economic cooperation is ours. Therefore, it is our responsibility to properly guide North Korea to reform and openness. In order for our people not to miss this good opportunity, North Korea's authoritarian system must be reformed. So we can expect the prosperity and development of our nation.

First of all, we have to adjust our attitude of accepting North Korea's unilateral demands. Recently, there have been a lot of opportunities for inter-Korean exchanges. Doubt in this process grew over the cost of visiting North Korea. North Korea's demand has been uniform and excessive given its economic level. A more serious problem is that no one knows the basis for calculating costs. It is the authoritarian regime that makes contracts useless with unfounded demands.

Second, North Korea's reforms must be required to ensure the fairness and sustainability of economic cooperation. Authoritarian regimes are traditionally sensitive to sovereignty and legitimacy. The problem that always arises in the process of economic cooperation is a debate on the ownership of facilities, management and operating rights.

One of the most prominent features of inter-Korean economic cooperation is SOC. The institutional guarantee of ownership, management rights and operating rights is premised on North Korea's overall and diverse reforms. Legal and administrative systems, as well as the relationship between central and local governments, must all be reformed.

Finally, we should demand that the results of economic cooperation be distributed fairly to the people of North Korea. In the past, the international community raised the seriousness of this problem in aid to North Korea and called for the direct management of aid distribution. It is obvious that corruption will be serious under an authoritarian regime. We must seek necessary reforms to ensure that the case of seizing foreign investment and subsidies at the hands of many Third World authoritarian leaders should not be repeated in the North.

(This column was contributed by Choo Jae-woo, a professor at Kyung Hee University's College of International Studies.)