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Regional Peace Building: The Korean Peninsula and North-east Asia

10 June 2010, Centre for Asian Pacific Studies, Lingnan University

Investing in Engagement:
 Encouraging Responsible Actions through FDI in North Korea

Kevin Shepard
James A. Kelly Korean Studies Fellow, Pacific Forum, CSIS

In the aftermath of the sinking of the South Korean naval vessel Cheonan, inter-Korean relations are at possibly the lowest point in decades. With rising tensions, increasing propaganda and threatening military posturing on both sides of the border, the prospect of peace on the Korean peninsula are dim. In particular, the cessation of most inter-Korean economic cooperation threatens stability, and could have long-term implications.

Now is the time for South Korea, the United States, and other concerned parties to re-evaluate the objectives and means of their policies toward North Korea. Abandonment of North Korean nuclear weapons and weapons programs remains an important but long-term goal. Now, it is necessary to economically engage North Korea in order to lay the groundwork for confidence-building, trust-building, and ultimately, a peace regime that will contribute to unification efforts.

By encouraging private-sector, market-driven foreign investment into joint ventures and infrastructure projects, we can engage, rebuild, and educate North Korea. By avoiding government assistance programs, we can avoid politization of the projects, and let market economics encourage North Korea to move toward becoming a reasonable, stable and transparent member of the international community.

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