Money talks at Korean summit
South Korean President Roh Moo-Hyun, left, and North Korean Leader Kim Jong-Il toast during a luncheon hosted by Kim for the two Korea Summit in Pyongyang, North Korea.
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KAI RYSSDAL: South Korea has plenty of money -- the International Monetary fund says it's the 12th largest economy in the world. North Korea, on the other hand, is far on the opposite end of that list. Which speaks volumes about why so much of the negotiating this week was financial.
Marketplace's Alisa Roth has more.
ALISA ROTH: The promises of economic cooperation include joint fishing grounds, the expansion of an industrial park, and reinstating freight train service between the two countries. South Korea will foot the bill, estimated to be in the billions of dollars.
The benefits for the North -- whose closed economy is practically non-existent -- are clear. But for the South, the biggest draw may be political.
WILLIAM OVERHOLT: Well, stability is a lot.
William Overholt directs the Rand Corporation's Center for Asia Pacific Policy. He says the region's been a conflict zone for more than half a century -- so the promise of peace might be worth a couple of billion.
OVERHOLT: Just to keep the momentum of the Korean, Chinese, U.S. nuclear deal going is a significant plus.
So South Korea gets peace, stability and access to cheap North Korean labor. Mitchell Reiss is vice provost for international affairs at the College of William and Mary, and a former U.S. negotiator in Korea. He says the South is thinking long-term:
MITCHELL REISS: They're placing a bet that by engaging in North Korea this way, that over a period of time -- and we're talking, really, decades here -- that they will be able to not only raise the level of the standard of living in North Korea, but gradually integrate them into a common economy and into the region.
But he says some critics say South Korea's generosity could cause more problems than it solves, by undermining international efforts to force North Korea to give up its nukes.
In New York, I'm Alisa Roth for Marketplace.