Asia Times: Go north, go west: growth poles in a reunified Korea


	June 27, 2001	atimes.com

The Koreas

PYONGYANG WATCH
Go north, go west: growth poles in a reunified Korea
By Aidan Foster-Carter

Economic geography sounds dry and abstract. In fact, few social sciences are as rich and concrete. In plain English, we're talking what grows and what goes where.

Nature is only half the story, affecting two aspects above all. Climate sets limits to agriculture: thus South Korea grows rice, while the colder, hillier North harvests mainly maize. Mines, obviously, go where the minerals are; and hydroelectric power too depends on the terrain. In Korea, as it happens, both of those are found mainly in the North.

The rest is at least partly politics, or the congealed politics which is history. In an ideal world, plants of the industrial variety would be rationally and evenly sited. In practice, the power of empire or nation is just as important. Not long ago the city where I live, Bradford, was the center of the global wool trade. Half a world away, New Zealand sheep farmers tuned crackly radios to the daily price on the Bradford wool exchange: their livelihood hinged on it. That has long gone, and Bradford's fortunes with it. But globalization famously creates ever more such interdependencies - usually with winners and losers.

And Korea? In olden days it was largely self-reliant, as were most places; although already a thousand years ago Korean traders were venturing over the Yellow Sea to China. But modern Korea's economic geography was set from its east, not west. As Japan's influence grew even before formal annexation in 1910, the part of Korea nearest to Japan became a Japanese beachhead. So Pusan in the southeast rose from nothing to become today South Korea's second city and one of the world's largest container ports.

From Pusan, Tokyo's next target was the Korean capital, Seoul; and beyond it, the route to China. So Korea's first railway linked Pusan with Seoul, and on to Sinuiju on the Chinese border. All that was in place by 1906, creating a backbone for the new colonial economy that ran from southeast to northwest - and marginalized the northeast and southwest. The latter, Cholla, was Korea's granary - although the downside was that rich harvests meant more was creamed off by the court in Seoul.

Cholla's status as an underdog goes back to this, was reinforced by being off the Japanese main line, and was entrenched under Park Chung-hee from the 1960s, whose industrialization favored his own Kyongsang province. New steel, auto and ship industries were all clustered in the southeast, to Cholla's chagrin. Seoul and its surrounding Kyonggi province became a megalopolis, with 20 of South Korea's 47 million people.

In North Korea too, industrial location was politically driven. In a highly militarized economy, arms factories were dispersed to remote rear border areas, often underground. Consumer goods were a low priority, largely left to provinces to cobble as best they could. Latterly the same has applied to food, in effect recreating the local self-reliance (plus state exactions) of feudal days.

Pyongyang, the showpiece capital, gets the lion's share of resources. Other big projects, like the Nampo lockgate and other large dams, are more a case of leaderly whim and pyramid-building than economic rationality. The North's sole free zone so far, Rajin-Sonbong, languishes in the northeast - right at the wrong end of the country.

One day it will be different. The Federation of Korean Industries, whose usual job is to defend chaebol (conglomerates) like Hyundai from their critics - ie, pretty much everybody - has been thinking long-term for a change. The Korea Economic Research Institute (KERI), an FKI think tank, recently published a study of how Korea's industrial map might look after reunification. It envisages a continuing division of labor, with the South keeping high-tech (surprise) while the North does metal-bashing and consumer electronics.

Specifically, KERI posits Pyongyang as the best site for a raft of industries: food and beverage, textiles, garments, leather, cement, glass, steel and electronics - many of them already there. It also sees Anju, northwest of Pyongyang, as good for chemicals and cars; while Haeju, close to the South, is viewed as suitable for higher tech activities such as electronics, telecoms and precision machinery.

On the east coast, Chongjin is rated for metal and auto plants, and Kimchaek (site of the North's main steelworks) for, er, paper. In general the North is good for machines and electronics - but not oil refining, plastics, wood or tobacco.

This last may surprise Korea Tobacco and Ginseng (KTG), the state-owned Southern monopoly. KTG has a joint venture cigarette plant in the North, and plans to expand it. That is for real, whereas KERI's talk is so far highly abstract. KERI also skates over two general points, perhaps because they're politically sensitive. Any North-South division of labor is bound to be neocolonial at first, since the North's sole comparative advantage is its cheap workforce. And the North's west coast is far better placed than its east, for four reasons: it's flatter, nearer Seoul, includes Pyongyang, and is the shortest route to China.

Korean unification won't just be an internal matter: it'll make northeast Asia a single economic space for the first time since before 1945. Once more, trucks and trains will run from Seoul to Beijing. Some will head for Siberia too - but the royal road to China will be the main line, just as it was a century ago.

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