In the study, I attempted to examine current situation of the energy sector in the North Korea and directions of the Inter-Korea Energy Cooperation.
The North Korea has suffered from serious shortage of energy supply which in turn jeopardized its economy over the last fifteen years. The downturn of energy sector in the country is a combined result of significant cut of subsidized oil supply from the Former Soviet Union and China since the late 1980's, failure to maintain and modernize energy infrastructure, the impacts of natural disasters, and inefficient energy production.
The North Korea's government should rehabilitate its ailing economy through fundamental reform measures to resolve the energy crisis : 1) Abandoning its long-pursued economic policy of self-reliance and opening the energy system to commercial energy supply from overseas, 2) establishing market mechanism for energy and creating energy market by introducing energy pricing and tax system and reforming energy legal structures, 3) promotion active cooperation with South Korea and other countries for rehabilitation of existing energy facilities, 4) strengthening energy policy making capability by improving energy statistic and modeling infrastructure and training energy experts and scientists.
In other to make progress in building South-North Economic Community through activation of economics exchange and cooperation, it is necessary to overcome impediments and promote South-North Korea energy cooperation. Considering its necessity and importance, South-North Korea energy cooperation has yet to be furthered. South Korea must prepare for a situation whereby the six-nation talks will continue for a long time without substantial results, and South Korea must also prepare alternatives to a possible breakdown of the six-nation talks. Therefore, apart from the six-nation talk channel, Korea needs to continuously review and complement its own comprehensive blueprint for energy support for North Korea and for South-North Korean energy cooperation according to existing conditions. This plan must evaluate long-and short-term alternatives and review various situations in depth.