End to proxy war on the Korean peninsula would have a global economic payoff: Don Pittis
Rise in stock market could be a first instalment on an enormous dividend of peace
South Korea's main stock index shot up nearly two per cent on Friday after U.S. President Donald Trump announced he would meet face to face with North Korea's Kim Jong-un.
A rise in stocks is paltry compared to cutting the chance of a global nuclear war.
But the reaction of investors represents just a first instalment on an enormous dividend if the two quirky leaders can transform their war of words into steps toward peace.
Many experts on the Koreas have expressed doubts over whether any sort of deal is possible. But there is no denying it is an historic breakthrough, says Janice Kim, a Korean studies specialist at York University's Centre for Asian Research.
"I'm extremely optimistic," she says.
No one wants war
Kim says that while Trump likes to point to the impact of U.S. sanctions, it is the economic and political pressure applied by China that has had the real effect. China has made it very clear it does not want a war on the peninsula.
"I think this is more of a result of an increasing prosperity or marketization in North Korea," she says. "I think it's not the result of very bad poverty. It's more indicative of a rising middle class."
And while the players are far from any such deal, there would be huge benefit to both sides if South Korea's global corporate players had access to the underemployed labour force of the North.
"Everybody speaks the same language, it's a highly educated population, so there are those sorts of benefits [for South Korean businesses]," says Kim.
Pyongyang is called pleasant, 'like Ottawa'
Canadian businessman Ken Courtis, who has spent decades in Asia and visited North Korea as part of Track 2 Diplomacy in 2016, agrees that North Korea is more economically advanced than many U.S. observers give it credit for.
He describes the North Korean capital Pyongyang as a pleasant, busy city "like Ottawa."
"I've been to North Korea with Koreans from the South," says Courtis. "They say it's like [South] Korea in the '70s."
While the announcement of a meeting between Trump and Kim Jong-un seemed to come out of nowhere, and while some U.S. military hawks may not be pleased, Courtis insists it was long in planning.
"There's not a lot of people who understand there's been a huge amount of background work by the Chinese, the Russians, the South Koreans, the Swiss and also the Americans," says Courtis. He says he has heard rumours the meeting could happen in Vladivostok, Russia, since Kim won't fly and refuses to enter China.
A lot of media reporting has turned both Kim Jong-un and Trump into caricatures, personally making each diplomatic decision with tweets and megaphones. Courtis says that's naive.
"People think this is like a cartoon — it just happens, just like that. It doesn't happen just like that."
Both the historian and the businessman mused about the eventual merger of the two Koreas. Certainly, in the German example Communist East and capitalist West united faster than anyone had expected.
Other countries in the region might not be so pleased with the idea. Nor would the North Korean leadership be thrilled by the German example that effectively saw East Germany's government swept away.
Of course that is putting the cart before the horse, since all that's been agreed to so far is a meeting, and all sides say any negotiations that come as a result would be protracted.
The Trump-Kim confab has met with strong criticism in the U.S. including from former Obama Asia adviser Evan Medeiros.
"This move is vanity over strategy," Medeiros told the Financial Times.
Risks for both sides
Critics warn that Kim may just be stalling for time, giving his scientists the opportunity to upgrade the country's nuclear capabilities. But York's Janice Kim says there is a lot at stake for the North as well, if peace leads to liberalization that happens too quickly.
"That would actually make, of course, North Korea more vulnerable to an internal revolution."
Instead, she says, the North's leadership wants to play a careful game where any change is gradual, "opening like China did with its political system intact."
Relations between North Korea and the United States are far more complex that the cartoon image of two leader calling one another names. But in making peace, personal contact has made a difference, as former U.S. president Richard Nixon showed when he visited China.
Perhaps a Nobel Peace Prize?
With their idiosyncratic personalities, maybe Kim and Trump will get on famously.
Bizarrely, a recent prank nominating Trump for the Nobel Peace Prize could turn into fact if a meeting leads to the end of the Korean War, which technically is still on nearly 70 years after it started.
Considering that Trump has been threatening a pre-emptive strike on North Korea that would almost certainly lead to counterattacks on South Korea and the involvement of China, success in finding peace could deserve the Peace Prize.
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