End to proxy war on the Korean peninsula would have a global economic payoff: Don Pittis

South Korea'smain stock index shot up nearly twoper 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 ispaltry compared to cutting the chanceofa global nuclear war.

But the reaction of investors represents just a first instalmenton an enormous dividend if the two quirkyleaders can transform their war of words into steps toward peace.

Many experts on the Koreashave expressed doubts over whether any sort of deal is possible. Butthere is no denying it is an historic breakthrough, says Janice Kim, a Korean studies specialist at York University's Centre for AsianResearch.

"I'm extremely optimistic," she says.

No one wants war

Kim says that while Trump likes to pointto 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.

But rather than being motivatedby starvation or dire shortages as might have been the case in the past, North Korea has felt its neighbour's economic squeeze on the country'semerging business class, says the York historian.

"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."

• Kim gives Trump a chance to show off deal-making artistry

And while the playersarefar 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 hasspent decades in Asia and visited North Korea as part ofTrack 2 Diplomacyin 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,busycity "like Ottawa."

And while both North and South Korea were pounded to rubble in the 1950sin a proxy war that hadChina and the Soviet Union on one side and countries like the U.S. and Canada on the other, the North may now be at an early stage on the growth curve of other Asian tigers.

"I've been to North Korea with Koreans from the South," says Courtis. "They sayit'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. Hesays he has heard rumours the meeting could happen in Vladivostok, Russia, since Kim won't fly and refuses to enter China.

Cartoon image

A lot of media reporting has turned both Kim Jong-un andTrump into caricatures, personallymaking eachdiplomatic decisionwith 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 unitedfaster than anyone had expected.

Koreans who support that idea imagine a country that is a nuclear power with a population bigger than France, says Courtis.

Other countries in the region might not be so pleased with theidea. Nor would theNorth 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 anynegotiations that come as a result would be protracted.

The Trump-Kim confabhas met with strong criticism in the U.S. including from former Obama Asia adviser Evan Medeiros.

"This move is vanity over strategy,"Medeirostold 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 toliberalization that happens too quickly.

"That would actually make, of course, North Korea more vulnerabletoan 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 aNobel Peace Prize?

With their idiosyncraticpersonalities, maybe Kim and Trump will get on famously.

Bizarrely, a recentprank nominatingTrumpfor the Nobel Peace Prize could turn into fact if a meeting leads to the end of the Korean War, whichtechnically is still onnearly 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.

Follow Don on Twitter @don_pittis

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