North Korea

For current reports go to EASY FINDER

North Korea




Area (

22,224,195 (July 2002 est.)


North Korean won (KPW)

Kim Jong-il

a NEW service


a FREE service

FREE World audit country reports on democracy, corruption, human rights and press freedom


parties &

Currency converter


Following World War II, Korea was split with the northern half coming under Communist domination and the southern portion becoming Western oriented. KIM Jong-il has ruled North Korea since his father and the country's founder, president KIM Il-song, died in 1994. After decades of mismanagement, the North relies heavily on international food aid to feed its population, while continuing to expend resources to maintain an army of about 1 million. North Korea's long-range missile development and research into nuclear, chemical, and biological weapons and massive conventional armed forces are of major concern to the international community. 
Korea is in fact one of the world's older nations. Most of the peninsula was unified in 668CE, when the southern kingdom of Shilla conquered its northern rival, Koguryo. Despite owing much of its civilisation to China, to which it was long a formal vassal, Korea is ethnically and lingusitically quite distinct and was in practice self-governing.
Few countries have known a more painful passage to modernity. The imperialist age found the last Chosun dynasty in decay. Its efforts to keep out the wider world earned it the sobriquet 'hermit kingdom'; but its stubborn refusal to reform made it a "shrimp among whales": prey to whichever power achieved regional dominance. That turned out to be Meiji Japan, which trounced the fading Chinese and Russian empires to rule Korea brutally during 1905-45. This brought some development; yet the scars - such as 'comfort women' (sex slaves) - still poison ties between Japan and today's Koreas.

Those scars include Korea's almost accidental, yet fateful, partition: a 'temporary' US idea in 1945, to stop the Red Army occupying the whole peninsula. Predictably, US and Soviet zones hardened into separate regimes, proclaimed in 1948: the Republic of Korea (ROK) south of the 38th Parallel, the Democratic People's Republic of Korea (DPRK) to the north. In 1950 the north's ex-guerilla leader, Kim Il-sung, invaded the south, but was beaten back by a US-led UN force. The 1953 Armistice - there is still no peace treaty - left both states in place, but terribly ravaged. Four million died. The sealed border, now ironically called the Demilitarized Zone (DMZ), hardly budged.
Thereafter the two Koreas competed economically and diplomatically. The DPRK led at first: its GNP was ahead of the ROK's until the 1970s, giving it clout in the Non-Aligned Movement. But the south's alliance with the US and export-oriented model proved a more lasting formula for success, even before the USSR's demise in 1991 both alarmed the now ageing Kim Il-sung and removed his main source of subsidy.

JUCHE - a myth
That blow exposed the 'Great Leader''s vaunted self-reliance (Juche) as a myth. As in Cuba, North Korea's economy went into free fall. Unlike Cuba, the regime's refusal to adapt led to catastrophe. In a uniquely tragic trajectory, a once industrial economy took a great leap backwards. In 1996-98, famine killed at least one million out of 23m people: some estimates run as high as 3m. The country now relies on food aid, which is falling as needs arise elsewhere (Afghanistan, Iraq) and donors grow exasperated. 
Their fustration is threefold. Economically, the DPRK malgre tout still resists market reforms. In July 2002 it imposed drastic wage and price rises; but without supply-side measure to match, these produced little except inflation. Politically, the extreme cult of personality around Kim Il-sung, who died in 1994, passed to his son Kim Jong-il in a system, which in the C21 remains Stalinist, ossified, opaque, bizarre, and cruel. Yet even its foes must admit the DPRK's staying power, defying forecasts of its collapse.
Thirdly, rather than reform, North Korea's response to adversity was to rearm. In a policy of militant mendicancy, the threat of weapons of mass destruction (WMD), real or suspected, has been used to parlay resources. Thus after the 1993-94 nuclear crisis, when the Clinton administration considered bombing the Yongbyon nuclear site, the 1994 Agreed Framework (AF) with the US shut Yongbyon - in exchange for fuel oil and two new light water reactors (LWRs), to be built and paid for mainly by the ROK via a consortium, KEDO (Korean Peninsula Energy Development Organization).
Hopes of the AF as a model rose when Kim Dae-jung became ROK president in 1998. His 'sunshine' policy of outreach led to the first ever North-South summit, held in the DPRK capital Pyongyang in June 2000, for which Kim won that year's Nobel Peace Prize. But progress proved fitful, as the US under George W Bush took a harder line: naming North Korea in 2002, along with Iraq and Iran, as part of an "axis of evil".

The nuclear crisis
Last October the US accused the DPRK of having a new covert nuclear programme - and says it admitted it. This sparked a new nuclear crisis. KEDO cut off oil supplies; North Korea expelled IAEA inspectors, restarted its Yongbyon reactor, and became the first of 170 signatory states ever to leave the Nuclear Non-Proliferation Treaty. Provocations continued, in a bid to gain the attention of a US busy with Iraq. North Korea tested two short-range missiles - one spoilt the inauguration of a new ROK president, Roh Moo-hyun, despite his pro-sunshine bent - and buzzed a US spy plane. 
A shift to dialogue came when an anxious China brokered talks between North Korea and the US in April. Wider six-party talks followed in August, bringing South Korea, Japan and Russia to the table too. Neither session made substantive progress; at both North Korea hinted that it has nuclear weapons, and might sell or test them. This may be bluff; nor is it clear if any nuclear arsenal is negotiable, or whether Kim Jong-il has concluded after Iraq that only a nuclear deterrent can save him from sharing the fate of Saddam Hussein. With pressure from China, and some signs of a softer line by the US towards meeting North Korea's concerns, the six-party talks may reconvene by December; although as of late October no further meetings had formally agreed.
If and when talks resume, the next hurdle will be to agree an agenda. North Korea's two nuclear programmes are just the start. On the security front, other worries include its missiles, suspected chemical and biological weapons (CBW), the million-strong Korean People's Army (KPA), and more. Further concerns include kidnaps (a major issue for Japan), counterfeiting, drug trafficking, refugees fleeing hunger into China, and human rights. With different interlocutors having varied priorities, it is very hard to see what kind of deal the DPRK can accept that would resolve much or all of this.
Thus Korea now has odd echoes of two older eras. Again a hermit strategy has failed; and again south has trumped north, at least economically. The gap is so wide that the two no longer fit on the same graph. South Korea exports more in two days than the North in a year, and throws away more food than the North eats. The Korean question today is thus not just about nukes, but how this widening chasm can ever be bridged.
Four scenarios are possible. A 'soft landing', with Kim Jong-il gradually embracing peace and reform, is still feasible and devoutly to be hoped and worked for. Secondly, the alarums may continue, and North Korea limps on as is - but surely not indefinitely. Collapse and absorption is a third possibility: sure to be even more expensive than in Germany, but unlikely to be as peaceful. Finally, a second Korean War would inflict vast casualties (again), and cost trillions of dollars to rebuild South as well as North. 

High stakes
Even a world awash in turmoil has few unfolding dramas with stakes as high as this. The chapter in Korea's long history that began in 1945 is coming to a close. Can the DPRK leopard change its spots, and if so how and with what result? As a sub-plot, but of major import: a growing US-ROK rift, with some Koreans seeing Bush as raising tensions, may yet push South Korea into the arms of a waiting China, already its main trade partner. Unlike most of China's neighbours, Koreans feel comfortable with this; so here again history may repeat itself, and shift East Asia's security tectonic plates. The only certainty is that developments in Korea will demand our utmost vigilance.

 « Top  

Update No: 006 - (27/10/03)

Trouble behind the scenes?
The past month saw a dearth of visible events in North Korea, further nuclear threats (met largely by yawns), plus speculation on events behind the scenes. The invisibility extended to Kim Jong-il, who went to ground from September 9 to October 21. While it is not rare for the dear leader to disappear for long periods, as during the Iraq war earlier this year, this time family problems were rumoured. His consort, Ko Yong-hee, is variously said to have been seriously injured in a car crash, or to be dying of cancer. Relatedly, another theory is rivalry between various sons - Kim has a complex marital history; he is not married to Ms Ko - to be designated as his heir. Whatever the truth, it may be unwise to take the DPRK's veneer of stability at face value, or as eternal.

A top-level Chinese visit is postponed
Another sign that something was up was the postponement of a visit by Wu Bangguo, China's no 2 party leader. Wu is now due in Pyongyang on October 29-31, having reportedly being put off earlier. That may signal Kim Jong-il's anger at pressure from China - doubtless intense, though not public - to be less defiant on the nuclear issue, which is still unresolved. No new round of six-party talks has yet been agreed, despite optimism in Beijing that these will be held by December. North Korea has continued to rock the boat. It demanded Japan's exclusion from further rounds for muddying the waters by raising the unrelated issue of abductions. Then on October 16 Pyongyang issued its clearest warning yet that, at a time of its own choosing, it will give physical proof of its nuclear deterrent - presumably meaning a nuclear test. A few days later it test-fired at least one, or maybe two, short-range anti-ship missiles: doubtless timed to coincide with George W Bush's Asian tour, to APEC in Bangkok and elsewhere.

Pyongyang's latest nuclear threats are received calmly
What was striking, and encouraging, was how calmly (if wearily) others reacted to all this bluster: even interpreting it positively as North Korea staking out a position ahead of talks, implying that further negotiations will indeed take place. Even the US did not rise to the bait, amid signs that the State Department, which favours engagement, has - at least for now - won the argument in Washington against hawks who seek regime change. Bush himself spoke in detail for the first time about consulting with allies on a way to allay North Korea's security concerns; though he was firm that the bilateral peace treaty which Pyongyang demands is a non-starter. While initial DPRK reaction dismissed the idea of a multilateral peace guarantee as "laughable", other reports said North Korea had noted Bush's shift and was studying it. But Pyongyang complained that it lacks a regular channel to Washington since Jack Pritchard, the administration's former point man on North Korea - who used to meet almost weekly in New York with DPRK diplomats at the UN - resigned in August, frustrated with Bush's policy.

More six-party talks are likely this year
The combination of Bush's shift and Wu's visit should suffice to bring North Korea to a further round of 6-party talks in Beijing, probably in December. Kim Jong-il surely grasps that for Bush, bogged down in Iraq and facing re-election next year, opening a new Korean front in the war on terror at this point is not a vote-winner. The risk is if the dear leader uses this window to goad the US, rather than to win a better deal. He may also suspect that a second term would see the US revert to a hard line; and that Bush showed his true colours in Australia, saying he had no respect for a leader who starved and even shrank his own people. This may be true, but in a delicate situation such rhetoric is surely no way to lure a suspicious adversary to the conference table.

Mixed signals from Washington
A monolithic regime like North Korea's must be hard put to read the varied tealeaves in Washington. Curt Weldon, a pro-dialogue Republican congressman, is due to visit Pyongyang for the second time this year, and hopes to meet Kim Jong-il. Meanwhile conservatives have invited former party secretary Hwang Jang-yop - North Korea's most senior defector, now a fierce foe of Kim Jong-il - to testify to the Senate foreign relations committee; hitherto South Korea had refused him a passport for the trip. In further negative publicity, on October 22 a US committee on human rights in North Korea published on the internet a damning 120-page illustrated expose of the DPRK gulag, based on extensive interviews with former inmates. The political agenda here is to make dialogue with, or aid to, so cruel and odious a regime appear unconscionable.

Pyongyang is sustained by Beijing, and increasingly by Seoul
As usual, hard news on North Korea's economy came from elsewhere. South Korea reported that the DPRK has an accumulated trade deficit with China since 1990 of US $4.4 billion. This crucial de facto aid could be used as leverage by Beijing to enforce nuclear compliance. Perhaps for fear of that risk, North Korea is diversifying. Seoul, again, reported that in the first nine months of this year inter-Korean trade rose 47% over last year, to US$507 million. This modest total could be much expanded, once projects like the planned Kaesong industrial zone, close to Seoul, come on stream. Yet such sustenance could come into conflict with continuing US moves, despite Bush's new push for dialogue, to squeeze North Korea economically as a method of pressure.

Political ructions in South Korea worry the North
Finally, noises off in Seoul must be mentioned. On October 10 Roh Moo-hyun, South Korea's newish but beleaguered president, said he will seek a fresh mandate through a referendum in December. This may not be legal and might not happen, but it creates a fresh layer of uncertainty. At the twelfth North-South ministerial talks in Pyongyang on October 14-17, anxious DPRK delegates sought clarification - while giving none on the nuclear issue. In fact the conservative main opposition Grand National Party, despite criticizing the 'sunshine' policy as appeasement, supports engagement - but would insist on more reciprocity. American hawks, please note: in Seoul, where it counts, there is almost no support for actively seeking regime change in Pyongyang.

 « Top  




Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 
For further information email:

Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of U$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!
To order please click here:
Investment background report


« Top

« Back


Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774