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In-depth Business Intelligence
Books on North Korea
REPUBLICAN REFERENCE
Area (sq.km)
120,540
Population
22,224,195 (July 2002 est.)
Capital
Pyongyang
Currency
North Korean won (KPW)
Leader
Kim Jong-il
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Update No: 032 - (01/01/06)
Snakes and ladders
Well into the first decade of the 21st century, North Korea is still there,
largely unreformed and wholly unrepentant; fully 16 years now after communism
collapsed in eastern Europe, and nearly 15 years since the fall of the USSR.
Sheer survival is just one of many ways that Kim Jong-il's regime continues to
defy outsiders' expectations. In a rapidly changing world the DPRK's
immutability is striking, if not exactly reassuring. Yet North Korea still faces
many challenges, most of its own making; with no guarantee that its remarkable
obdurance in adversity so far can be prolonged indefinitely, if the pressures
and contradictions mount.
The nuclear issue: back to square one?
Among many worries raised by North Korea, its claimed nuclear deterrent
understandably tends to loom largest. On that front, the first half of 2005 was
devoted to efforts to persuade Pyongyang back to the hexagonal table in Beijing
for six-party talks; the other five being China as host plus the US, South
Korea, Japan and Russia. Hopes ran high when this forum finally reconvened in
July; the more so since a new US representative, assistant secretary of state
for Asia Christopher Hill, appeared to have more flexibility to negotiate and
explore than had his predecessor James Kelly, who was reined in by neocon hawks
in Washington.
Starting in July, a marathon fourth round of talks ran into August, recessed
amid deadlock, resumed in September, and after almost three weeks in total
finally produced an agreement - of principles. Any euphoria was short-lived, as
North Korea at once demanded new light water reactors up front: as unfeasible
technically as politically. A brief fifth round began in November, but lasted
only three days before all except the DPRK decamped to the Asia Pacific Economic
Community (APEC summit) in Pusan, South Korea. The purpose of so brief a meeting
was unclear, but apparently there had been expectations - or hopes - that
working groups could be set up and begin substantive work between the plenary
sessions.
Washington bangs a drum on crime and human rights
Not only did that not happen, but by early December US-DPRK ties were worse
than ever. An endemic problem of negotiating with North Korea is that its
multitude of concerns need careful prioritising, as well as coordination with
other interlocutors whose agendas may be different. Having hitherto focused
above all on the nuclear issue, latterly Washington has - as discussed in
previous monthly Updates - muddied the water on two fronts: human rights, and
Pyongyang's involvement in criminality such as drug trafficking and
counterfeiting.
Both these converged in December. The US government's special envoy on North
Korean human rights, Jay Lefkowitz, appointed last year under the North Korea
Human Rights Act (NKHRA, a congressional initiative), visited Seoul for a high
profile NKHRA-funded NGO conference on DPRK human rights issues. His presence
and this meeting embarrassed the ROK government, which soft-pedals on this
subject for fear of stalling progress elsewhere. The ruling Uri party criticized
Lefkowitz for calling on Seoul to take a tougher line.
Meanwhile the new US ambassador in South Korea, Alexander Vershbow, who
succeeded the popular Christopher Hill, caused similar frissons on December 7
when - responding to questions, rather than in prepared remarks - he described
the DPRK as "a criminal regime." Pyongyang predictably blasted back,
accusing Vershbow of destroying the spirit of the six-party talks and vowing it
will "mercilessly retaliate." It had already said it would not return
to talks unless US sanctions against DPRK companies are lifted. There seemed
briefly in December a chance of bilateral talks on the latter, but this
foundered on semantics: the US said it would explain the steps it has taken, but
not negotiate about them. With Vershbow's comment further fanning the flames -
one especially virulent North Korean response on December 10 threatened to nuke
him personally - none of this will make it any easier even to reconvene the
six-party talks in early 2006, let alone make progress on the actual issues.
Vershbow later said he regretted his comment; it remains to be seen if this will
help.
Not for the first time, it is hard to fathom the Bush administration's strategy
- and timing. While North Korea is indeed guilty as charged on all counts, none
of this is new. All who choose to engage with Pyongyang must not only prioritise
among the dozen or so issues one could easily raise - others include missiles,
chemical and biological warfare (CBW), conventional forces, refugees, abductions
and more - but also coordinate their agenda with other interlocutors. In the
Clinton era a formal Trilateral Coordination and Oversight Group (TCOG) ensured
that the US, South Korea and Japan sang from the same song sheet. Now there is
disharmony even within Washington, let alone between it and both Korean
capitals. All may become clearer in 2006, but it looks as if vice-president Dick
Cheney has reasserted his hostility to any serious engagement with Kim Jong-il -
whose own commitment to real progress is equally suspect. This does not augur
well for dialogue, six-party or otherwise.
Order of the boot for aid agencies
Important as the nuclear challenge is, other issues must not be overlooked.
A key question in 2006, as throughout the past decade, is how well if at all
North Korea will be able to feed its people. While conditions have eased since
the deadly famine of 1996-98, the UN World Food Programme (WFP) had been
provisioning up to 6.5 million persons, 28% of the total, in what was its
largest operation anywhere. Since 1995 WFP has supplied some 4 million tonnes of
grains (mainly maize) for North Korea, worth $1.7 billion.
As 2005 ends, so it seems must WFP's assistance. Buoyed by the best harvest in a
decade plus food aid from Seoul and Beijing - lightly monitored if at all,
unlike the WFP's strict rules - North Korea has said it no longer needs
humanitarian aid (developmental aid is still acceptable). It has also told
resident NGOs, mainly European, to leave by the year's end, even though many are
doing developmental work in areas like forestry and sanitation. Also, from
October the sale of staple grains in markets was banned, and the public
distribution system (PDS) of state rationing, which largely collapsed in the
late 1990s, was resurrected.
While the DPRK state has long equally resented being seen as a beggar and losing
its grip on the economy, this seems a high-risk strategy. Should the revived PDS
fail, even locally, any return of hunger could prompt anger or even unrest; all
the more so, as the surreptitious but growing circulation of South Korean videos
and DVDs imported via China has made many more North Koreans aware of the now
yawning gulf between living standards on the two sides of the Demilitarised Zone
(DMZ). WFP and others are continuing to negotiate with the government, so some
repositioning may prove possible. But on December 15, after a visit to Pyongyang
by the head of WFP, it was confirmed that food aid will cease from 2006. Already
19 food factories have closed, and only 600,000 people are being fed. (Besides
food, the future of much-needed medical aid is also both unclear and critical.)
China and South Korea compete to invest
In the wider economy, the key issue for 2006 is whether partial market
reforms introduced in 2002 will be extended; and if any real recovery is
possible without major investment, which will not come from the west or bodies
like the World Bank (which the DPRK shows little interest in joining) as long as
the nuclear issue remains unresolved. Yet Kim Jong-il can tap other sources;
indeed he even has rival suitors, as both the ROK and China are getting more
deeply involved in the DPRK economy. Although two cross-border railways have yet
to come into use - test runs, originally due in October, have now been
rescheduled for February - South Koreans now regularly cross the once
impermeable DMZ by road. Tourists (over a million since 1998) visit the Mt.
Kumgang resort on the east coast, while managers and engineers commute from
Seoul to the nearby Kaesong industrial zone, whose pilot phase was supposed to
see 15 ROK firms producing for export with Northern labour by the end of this
year; it is not clear if all these are in fact up and running just yet.
The US looks askance at all this. On December 12th Ambassador Vershbow confirmed
his bent for plain speaking by urging South Korea to "coordinate" its
aid to the North with progress on the nuclear front. Seoul will do its best to
ignore such hints, not least so as to match a rival neighbouring power
impervious to US pressure. With little fanfare, unconfirmed provincial Chinese
press reports imply a growing grip on the North Korean economy, moving beyond
mere life-support aid to major investments in upgrading crumbling plant and
infrastructure.
Reported deals include the 50 year lease of the DPRK's ice-free port of Rajin to
the nearby Chinese city of Hunchun; investment in North Korea's largest iron
mine at Musan, also in the northeast, to supply Chinese steelworks; and a
consortium led by a Chinese millionaire that will modernise the extensive but
decrepit railway network. Despite Washington's fears, arguably anything that
demonstrates the benefits from normal economic intercourse might help dissuade
Kim Jong-il from his ultimately self-defeating dabblings in drug trafficking,
counterfeiting, missile proliferation and so on. Legitimate business is not only
less risky but also more profitable. Yet with Pyongyang protesting its complete
innocence on all fronts in typically bellicose rhetoric, the political
atmospherics may take a while to settle again.
Will there be a Kim III?
A final issue to watch in 2006 will be political succession. Next February
16 will see Kim Jong-il turn 64 officially, or perhaps 65 in reality. By that
age, his father Kim Il-sung, the DPRK's founding leader, had already installed
him as heir apparent: a process - startling at the time for a nominally
communist country, and initially not only secret but angrily denied in Pyongyang
- which even in so totalitarian a system could not simply be imposed, but had to
be carefully prepared over a period of more than twenty years. With succession
often the Achilles' heel of communist states - think of the struggles that
followed the deaths of Stalin and Mao - it is high time the dear leader got a
move on with this, if the DPRK's survival is to be assured. Yet despite the
occasional opaque hint in the media, nothing seems to be happening; indeed
recent reports claim that all discussion of the topic has been banned in
Pyongyang.
That will not make the problem go away. As discussed in earlier monthly updates,
due to a complex marital history Kim Jong-il has at least three rival sons by
two mothers; neither of whom he seems to have married, and both now deceased.
While on balance 2006 is likely to be another year of stability in North Korea -
the nuclear 'crisis', now in the fourth year of its second phase, looks set to
remain contained, if far from resolved - one must ask what would ensue were the
dear leader to drop dead, for whatever reason. With no succession in place,
there would surely be a power struggle, possibly violent: be it between rival
sons, or moderate technocrats against old guard hardliners, the party versus the
army, or a complex amalgam of all these. All bets for North Korea would then be
off. This would be a moment of great peril for South Korea, with the risk of
getting drawn in to any internecine Northern strife - or that other powers,
notably China, might intervene. This reminds us that while a 'soft landing' on
the peninsula remains the preferred scenario, it can hardly be guaranteed.
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