22,224,195 (July 2002 est.)
North Korean won (KPW)
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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 spyplane.
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. It is not certain when or whether further meetings will take place.
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 limp 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.
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.
Update No: 004 - (02/09/03)
The most significant development in the past month was, of course, the six-party talks on the North Korean nuclear issue. Held in Beijing from August 27-29, this meeting cemented China's new role - seen earlier in three-way talks in April, with just North Korea and the US - as an active mediator on the peninsula. President Hu Jintao is said to be personally running Chinese policy towards its maverick neighbour and notional ally (under a 1961 mutual defence treaty, in practice a dead letter). This should warn Kim Jong-il that China's new leadership will be less indulgent of him than in the past.
The talks resolved no substantive issues: the US and North Korean delegates had the authority only to stake out their positions and listen, not to negotiate. Yet the fact that they took place at all is in itself progress, after ten months during which the second North Korean nuclear crisis, a decade after the first one, had seemed to be escalating out of control. Moreover, six is the proper number. Besides the two Koreas, the four powers tightly enmeshed in the peninsula by geography or history are China, Japan, Russia and the US. Washington had demanded a multilateral forum, but insisted only on adding its allies in Tokyo and Seoul to the troika that met in April. It was Moscow, keen not to be left out, which pushed for six-way talks: an old Russian (and Japanese) demand, hitherto ignored. It was also from Moscow that word of the talks first came.
But if that provenance (which annoyed China) means Kim Jong-il reckons Russia will fight his corner, he had better think again. Whereas the last two summers saw the dear leader's train trundle across Siberia to summits with Putin, this August the Russian far east was the scene of civil defence wargames: premised on an influx of North Korean refugees fleeing hostilities on the peninsula. Meanwhile Russia's Pacific fleet held its first joint exercises with the South Korean and Japanese navies. Pyongyang was asked to send observers, but angrily denounced these manoeuvres as raising tensions.
If nothing else, the six-party talks vindicated the Bush administration's insistence on a multialteral rather than a bilateral process. On his return to Pyongyang, deputy foreign minister Kim Yong-il (no relation) must have reported the unanimity of the other five in insisting on a nuclear-free peninsula: a stance only stiffened by a threat from Kim - made in an aside, typically - of a possible nuclear test. Rhetoric apart, for North Korea to mark the 55th anniversary of its founding on September 9 by declaring itself a nuclear power or even conducting a nuclear test would be reckless indeed, and could lead to an open breach with both Russia and China. Beijing remains the DPRK's main source of aid, but earlier this year it suspended oil flows for three days as a warning.
North and South do business
The other sustainer of North Korea's crippled economy is South Korea, whose new president, Roh Moo-hyun, is continuing the 'sunshine' policy of his predecessor Kim Dae-jung. Overshadowed by the six-way talks was an inter-Korean economic meeting in Seoul, whose nine-point press statement on August 28 (the six-way talks produced no joint communique) envisages deepening cooperation on several fronts. Two cross-border road and rail corridors across the hitherto sealed Demilitarized Zone (DMZ) are due to open this year: a tall order, given past delays and the work still to be done.
It was also agreed to expedite a planned industrial park for Southern firms just north of the DMZ at Kaesong, and to open an office there to promote direct inter-Korean trade (much of which hitherto has been conducted via third parties). Last year South Korea overtook China to become North Korea's top export destination. The volumes so far are tiny ($272m and $271m, respectively). Yet the multi-billion flows between Taiwan and China hint at what is possible, once inter-Korean trade really takes off.
Possible, but not guaranteed. For the two Koreas to do serious business requires two preconditions. One is that it be profitable. By contrast, Hyundai - once South Korea's top conglomerate, whose tourism ventures pioneered sunshine - has lost $680m so far on these tours, because Pyongyang exacted stiff fees and would not open a land route. In addition, Hyundai secretly paid $500m in business fees - including $100m sent by the South Korean government as, it now transpires, payment for the June 2000 North-South summit for which Kim Dae-jung won that year's Nobel Peace Prize. But with trials pending for these and other illicit payments, on August 4 the Hyundai chairman, Chung Mong-hun, jumped to his death from his 12th floor headquarters. This set off great soul-searching as to how much sunshine has really achieved, and at what cost.
We'll meet again?
The other condition for real progress, of course, is to resolve the nuclear issue. South Korea's national security adviser, Ra Jong-yil, has warned that Seoul's aid will stop if Pyongyang goes nuclear. Despite the Beijing meeting's lack of concrete results, Ra said he was "confident" of a positive outlook for the next round. Yet North Korea's foreign ministry on August 30 dismissed the talks as as "a stage show to force us to disarm .not only useless but harmful in every aspect", and threatened to "continue strengthening our nuclear deterrence". Both aspects are bound to infuriate Beijing.
In contrast, the US assistant secretary of state, Jim Kelly, spoke of "a productive start" towards "a peaceful solution"; while adding "We've got a very long way to travel".
Those different verdicts reflect US satisfaction and North Korean frustration at how this first meeting went. Pyongyang's stance is also a ploy: China can and will exert leverage to force it back to the conference table. The next meeting is expected in two months' time, probably in Beijing again. Before that, the US must once and for all refine and indeed define its North Korea policy, beyond insisting on multilateralism (achieved) and a complete nuclear surrender upfront by Pyongyang (unachievable).
The Bush administration's rifts have again been on public view. On July 31, the very day that six-party talks were announced, the under-secretary of state for disarmament John Bolton, a noted hawk, gave a speech in Seoul that attacked Kim Jong-il by name 41 times. Pyongyang in turn called him a "human scum", but did not pull out. But on August 25, on the eve of the talks, the State Department's point man on North Korea suddenly resigned. Jack Pritchard, a holdover from the Clinton era, liaised regularly with diplomats at the DPRK's UN mission in New York; he is said to be frustrated at the ascendancy of those in Washington who prefer regime change over engagement.
If a paranoid Pyongyang is to be convinced that the US does not seek disarmament as a prelude to invasion - and the Iraqi precedent is hardly reassuring - then Bush must rein in his hawks. All considered, at least one more round of six-party talks is likely in October or November. China has invested much in this dialogue process, including building a special hexagonal table. It has no intention of mothballing this just yet.
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