A relentless trend of the severe economic plights in North Korea since 1990 - including the shortages of food, raw materials, and foreign exchange - is likely to continue in the short- to medium-term, at the least. Worse still is South Korea's economy under difficult economic conditions, owing to its own financial crisis since late 1997. Therefore, a search for multilateral international cooperation has become all the more attractive and critical for North Korea.

For South Korea, the burden of the unification cost has been felt increasingly heavier since the advent of the financial crisis. There is no doubt that South Korea's fiscal support cannot be left out in the calculus of financing the cost of unification. As a recourse, however, South Korea will necessarily have to opt to 'internationalize' financial burden for the unification by means of a multilateral international cooperation, given the impact of the financial crisis and its lack of economic caliber like that of the former West Germany.

Beyond a need for the liberalization and reform of the North Korean economy, increased efforts to build structures for the international cooperation are especially important for paving the road to the unification. To this very end, the South Korean government has to mix flexibility into the existing unification policy, which places the sole and foremost importance on the North-South relation, and manage to create a working framework with an initiative for the multilateral international cooperation.

Until now, a vast majority of the researches on the Korean unification have focused on the domestic economic policy for the post-unification period. As a result, there is a growing need for the development of studies on the unified Korea's international economic policy and structural design of the international cooperation. In due preparation for the unification of the two Koreas, our research aims to develop a paradigm for cooperation with the international financial institutions - such as the International Monetary Fund (IMF), World Bank, and the Asian Development Bank (ADB).
Since South Korea's fiscal support to North Korea can only make a limited contribution to the astronomical amount of the unification cost, direct investment by the foreign private sectors in alliance with South Korean enterprises will become a magnanimous supplier of funds.

Accordingly, inducement of the foreign direct investment in North Korea not only remains, but will continue to remain as an important issue for the international cooperation. Without the endorsement of the international financial institutions, no substantial private investment in North Korea seems feasible in the current world economic order. And by a thread of this reasoning, inducing North Korea to participate in the international community on official terms by first helping it join the international financial institutions would likely prove to be a most practical way of facilitating and reducing the cost of the unification.

Moreover, to the extent that the various international financial institutions' economic support to North Korea could prevent its economic over-dependence on any particular country, the North Korean leadership would find it advantageous to accommodate the inducement on the ground that it can maintain the stability of its political power. In fact, North Korea has continued to demonstrate its enthusiasm for participation in the international financial community as early as 1997. In February 1997, it had officially applied for membership to the Asian Development Bank, and in September of the same year, it had received a fact-finding visit from the IMF. Furthermore, North Korea had invited a senior official from the World Bank in February 1998. Given this trend, North Korea appears to have made a considerable progress in improving its relations with the international financial institutions. And despite the skeptical views about its missile tests and nuclear sites, North Korea's relationship with the international financial institutions is expected to progress. In light of these developments, again, the need for an in-depth research on North Korea's international cooperation before the unification materializes is becoming more clear and present.

Our study intends to find out under what conditions North Korea can be eligible to receive what available types of financial support when it joins the international financial institutions. Moreover, we intend to investigate and understand what types of support there are available for North Korea to receive in the context of a non-member status. We also intend to make an overall assessment of the information and materials obtained in order to provide a basis for the development of South Korean government's North Korea policy.

The structure of our study is as follows. In Chapter 2, we will discuss the importance of international cooperation in a closely equated context of the cost for the unification. In Chapter 3, we will overview the current economic situation in North Korea and the North-South economic cooperation. Chapter 4 suggests a model for the international cooperation on the provision of technical assistance to North Korea, as a measure to involve the international financial institutions for the short run. Chapter 5 examines a variety of ways to engage the international financial institutions in North Korea support. And finally, Chapter 6 will comprise of a conclusion based on our research and study of the methods for utilizing the benefits, which the international financial institutions have to offer, and a number of the remaining issues for the future international cooperation. In the annex, we have incorporated the main contents of the IMF's November 1997 North Korea Report and a several detailed explanations of the international financial institutions' technical assistance to North Korea, and the functions and roles of the financial support. In this way, we hope to offer our readers an ample amount of the reference materials on the central issues of our concern. Helping North Korea join the international financial institutions would be a first step in laying the foundation for a practical framework of the international cooperation. With South Korea's crisis-hit economy, North Korea as a member of the international financial institutions would effectively shoulder the cost of financing the unification. At the IMF/World Bank 1997 Annual Meeting held in Hong Kong, the South Korean government had announced a position in support of North Korea's joining the international financial institutions. However, in order to clear the way for North Korea, the U.S.-DPRK and Japan-DPRK relations will have to improve, as they will continue to remain critical issues for South Korea.

For South Korea to participate in development of a constructive framework for the international cooperation before North Korea joins the IMF and the World Bank, each of the current United Nations Development Programme (UNDP), the World Bank's educational programs for the North Korean government officials, and the World Bank's North Korea-related research programs deserves a close examination. The benefits of educational programs for North Korea, such as an increased knowledge of the international financial institutions and the market economy, as well as the recent trends and flows of the capital and trade, will altogether serve the last totalitarian, communist entity to become a part of the international community.

South Korea's participation in the educational programs has to proceed in a number of stages. First, South Korea's research institutions would have to participate in the North Korea educational programs on market economy on the unofficial basis. More specifically, they would have to participate in designing the World Bank and the UNDP's educational programs for North Korea. Subsequently, the foreign private sector  such as colleges, research institutions, and non-governmental organizations (NGOs)  would need to participate in the training programs in either Pyongyang or any third world nation. In case the U.S. and Japanese colleges were to respond positively to such an initiative, then not only the U.S.-DPRK and Japan-DPRK relations would improve, but also the U.S. economic sanctions against North Korea would be eased. Furthermore, development of a constructive working plan for cooperation by South Korea's private institutions  such as economic research institutions, colleges, and more  in partnership with those of the United States, Japan, and other major countries, is urgently being called for. As a response, the international financial institutions should offer official technical assistance to North Korea. Taking such a measure poses no severe difficulty in that the trust funds, which the major countries have deposited with the international financial institutions, can be used to deliver the necessary technical assistance to the non-member countries.

South Korea will need to pursue a diplomatic maneuver of securing a special trust fund through the World Bank to aim at organizing an extensive technical assistance for North Korea. As a precedent, the World Bank had established a special trust fund - so-called the 'Trust Fund for Gaza and West Bank' - to give financial support to the Palestinians, who had not been a non-member state. With the political and diplomatic support from the United States, the special trust fund had been the source of benefits to the Palestinians, while they had been experiencing difficulties in joining the World Bank back then. So had been the cases of Bosnia and Herzegovina before they became members of the World Bank. Each of the non-member cases had involved a critically significant amount of the financial support. Therefore, North Korea has as much an equal chance as to benefit the large financial support, with South Korea's diplomatic effort to play an important success variable.

Once North Korea joins the international financial institutions, South Korea will need to help North Korea receive financial assistance on the concessional terms. The possibilities of such assistance would include the ESAF (Enhanced Structural Adjustment Facility) of the International Monetary Fund, the IDA (International Development Association) fund of the World Bank, and the ADF (the Asian Development Fund) of the Asian Development Bank. Should North Korea successfully implement the reform programs of the IMF and the World Bank, then South Korea would also need to help North Korea receive external debt relieves through the HIPC Initiative of the IMF and the World Bank.

Apart from the focus of our research, there could be many other ways to foster the international cooperation on North Korea support. We intend to look into those possibilities in the next phase of our research. For instance, development of a facility for the foreign private investment in North Korea with the aid of the World Bank Group's International Finance Corporation (IFC) is one of the various important considerations. Furthermore, with North Korea still not introduced into the international community, a method of utilizing the non-governmental organizations (NGOs) - which would avoid the North's negative reaction - could be put into a practical use. Moreover, expedient ways of acquiring emergency economic support from the international financial institutions in contingency situations should be sought after. This is based on a concern that, in a given contingency situation, a deluge of refugees would cross into Russia, China, and Japan. Therefore, a preventive course of international cooperation should also be outlined.

서언
국문요약

I 서론

II 국제협력의 중요성
1. 통일비용과 국제협력
2. 점진적 경제통합시의 국제협력

III 북한관련 국제협력 현황
1. 북한과 주요국과의 경제관계
2. 다자간 국제협력
3. 국제사회의 대북지원

IV 국제금융기구의 단기적 활용방안: 기술지원을 통한 국제협력
1. 북한의 국제금융기구 가입조건과 여건
2. 북한과 국제금융기구의 최근 관계 현황
3. 국제금융기금의 기술지원 개요 및 베트남의 활용사례
4. 기술지원을 위한 국제협력 방안

V 국제금융기구의 장기적 활용방안 자금지원을 통한 국제협력
1. 정식가입 이전단계에서 가능한 자금지원 활용방안
2. 정식가입 이후 국제금융기구의 양허성 자금지원

VI 결론 및 정책과제

참고문헌

Executive Summary