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22,224,195 (July 2002 est.)


North Korean won (KPW)

Kim Jong-il

Update No: 041 - (02/10/06)

How to break the stalemate?
As a humid and squally summer eased towards autumn, Korea's most beautiful season, the political climate on the peninsula avoided fresh storms - but the underlying weather got no better. In September the reverberations from North Korea's missile tests in July continued to echo, and to prevent progress. Meanwhile, some claimed to detect distant rumblings - or maybe not so distant - of a potential nuclear test, whose political fallout would be far more serious. Despite rumours, there were few signs that any concerned party had much idea, or even an active will, as to how this uneasy stalemate might be broken and dialogue restored.

More likely than not?
Richard Armitage, who served as under-secretary of state to Colin Powell in the first Bush administration, told the Financial Times on September 24 that it was "more likely than not" that Pyongyang will test a nuclear weapon this year; adding that "in their thought-process it's the next logical escalation." But as ever with North Korea, analysts are divided and hard facts few. On this reasoning, having defied even his sustainers in China and South Korea by testing missiles, yet having failed thus to jolt the US or anyone else into being nicer to him (although how could he have imagined those means would achieve that end?), Kim Jong-il might conclude that he needs a bigger bang to really get the world's attention and respect.

The counter-view is that the dear leader is not actually that dumb, or reckless. With Seoul and perhaps also Beijing cutting aid since the missiles, Kim can ill afford to precipitate a further escalation. He may also pause to take stock of Japan's new prime minister, Shinzo Abe: very much a hawk hitherto on North Korea, especially over the abductee issue, but already seeking to mend fences with China and South Korea. Thus Armitage may be too pessimistic, at least in his timing. But next year, if nothing has moved, the risk will grow.

More rods to fuel controversy
Another American, Selig Harrison of Washington's Center for International Policy, visits Pyongyang regularly and is used by its leaders as a conduit for their views. His latest trip brought typically mixed messages. The bad news was that within three months they plan to unload the fuel rods from the nuclear reactor at Yongbyon: mothballed under Bill Clinton's 1994 US-DPRK Agreed Framework (AF), but restarted in early 2003 as the second North Korean nuclear crisis mushroomed. This would generate more spent fuel for conversion to plutonium. Pyongyang may already possess enough fissile material for some 10 bombs.

Yet Harrison also reported that North Korea hopes for US help in joining the World Bank. Given the present stand-off over US financial sanctions as well as the nuclear knot, it is hard to give this prospect much credence. Pyongyang has never evinced any serious interest in the Bretton Woods institutions, despite several overtures from them in recent years.

A new approach?
Meanwhile the search for a way out of the present impasse continues. The usual talking up of prospects - the latest an as yet unspecified new "common and broad" approach, said to have been agreed when George Bush and Roh Moo-hyun met in Washington on September 14 - may just be whistling to keep spirits up. Although the US and South Korean presidents papered over the cracks, their respective preferences for stick and carrot are well known.

Yet something might be afoot. Roh, loose-tongued as ever, said on September 28 that the new approach was put to North Korea before he discussed it with Bush. A day later China's top delegate to the six-party talks, Wu Dawei, said in Seoul that Beijing supports it. What no one can or will yet say is what this magic formula consists of. That is not necessarily a bad sign. A certain public vagueness may mean the nitty gritty is being argued behind the scenes: a better bet than publicly parading specific non-negotiable incompatible demands, as has too often occurred in the past. Just possibly, all parties realize they have collectively dug themselves into a hole that benefits no one, and are ready to compromise. But how?

Further straws in the wind include hints from the US envoy in Seoul, Alexander Vershbow, hitherto seen as a hardliner, that bilateral US-DPRK talks might be possible (albeit within the 6-party format). Vershbow also said that his predecessor Christopher Hill, well liked in his brief sojourn in Seoul before he was promoted to assistant secretary of state to head the US delegation to the 6-party talks, could be willing to visit Pyongyang. Despite the Bush administration's consistent if baffling refusal of bilateral dialogue for many years, Hill is believed to have recently offered to make such a trip - only to be rebuffed.

New Chinese ambassador is US expert
Also intriguing is China's new ambassador in Pyongyang. Liu Xiaoming presented his credentials on September 11 to Kim Yong-nam: the long-serving ex-foreign minister and no. 3 in the power structure, who as president of the Presidium of the Supreme People's Assembly (SPA) is technically North Korea's head of state. (Kim Jong-il's executive post is as chairman of the National Defence Commission, so he spares himself such formalities.) Two days later Liu was at the airport with his Russian and Cuban counterparts to wave Kim Yong-nam off on his lengthy flight to the Non-Aligned Movement summit in Havana.

Liu Xiaoming is the first Chinese ambassador to North Korea born after the Korean War, so the old rhetoric of friendship sealed in blood (a million Chinese died saving Kim Il-sung's hide) is but history to him. Moreover, he has no prior East Asian postings or experience - but a great deal in the US, where he spent a decade in study and work. Evidently Beijing's top priority for now is to try to educate minds in Pyongyang on how Washington works.

Meanwhile Han Song-ryol, North Korea's long-serving deputy envoy to the UN in New York - a key if intermittent point of contact with Washington - is to be replaced after five years by Kim Myong-kil, currently a senior researcher with the DPRK foreign ministry's thinktank on arms control. Perhaps these personnel changes will encourage fresh thinking.

Tokyo tightens the screw
As the Koizumi era drew to a close, on September 19 Japan joined Australia in announcing fresh pressure on Pyongyang. Tokyo said it will inspect 270 financial institutions - many linked to Chongryun (Chosensoren), which represents pro-DPRK ethnic Koreans in Japan - to ensure remittances do not breach regulations, including the limited sanctions prescribed in July 15's UN Security Council resolution condemning the missile launches. Beyond this, the joint steps with Canberra are a copycat of earlier US sanctions, targeting a dozen DPRK companies - and one Swiss one, Kohas AG, whose president Jakob Steiger strenuously denies any role in helping Pyongyang proliferate weapons of mass destruction (WMD).

Seoul suspends Kaesong applications
South Korea, by contrast, remains reluctant to paint the North into a corner. But it is still struggling to find an effective response to the missile tests. On September 21, unification minister Lee Jong-seok said Seoul is suspending applications from local SMEs to set up in the Kaesong industrial zone, just across the Demilitarized Zone (DMZ) inside North Korea. Yet he insisted that "the general development of the Kaesong complex is continuing", and that the applications process will resume "when market conditions are most appropriate."

Market conditions hardly seem the point. While only 15 ROK firms are operating in the zone so far, interest had hitherto been keen; but the fear was that the missile tests would scare off applicants. Yet the Bush administration dislikes Kaesong, and is firmly resisting Seoul's vigorous efforts to have its products included in the bilateral free trade agreement (FTA) which the two nations are currently seeking to negotiate - in any case a long shot politically, given strong public opposition in South Korea. In view of its timing, a week after Roh Moo-hyun met Bush, this suspension looks like a gesture to please Washington.

Missiles raise famine risk
July's missile launches have not helped the UN World Food Programme (WFP)'s already fraught efforts to keep famine at bay in North Korea. John Powell, WFP's deputy executive director, told the Financial Times on September 26 that no donations at all have come in since July. This year's DPRK appeal is so far only 8% funded, despite being much smaller (at Pyongyang's insistence) than in the recent past; it was once WFP's biggest operation on the planet. With 37% of North Korean children still malnourished (down from 62% in 998), Powell warned that "we are at real risk of losing all the gains made in nutritional status."

The regime's curtailment of WFP, with its strict monitoring rules, was based on expectation that less onerous bilateral food aid from China and South Korea would suffice. But Powell said Beijing has slashed its grain shipments from 300,000 tonnes in 2005 to 100,000 tonnes this year, whether for commercial or political reasons. After the missiles Seoul suspended its usual half million tonnes of rice, though it has since sent 100,000 tonnes as flood relief. Moreover, this autumn's DPRK harvest is expected to fall short of 2005's 4 million tonnes. South Korean foreign minister Ban Ki-moon - a front-runner to succeed Kofi Annan as UN secretary-general - has said that the North faces a 1.5 million tonne grain deficit this year.

Chosun buys Daedong
Mergers and acquisitions (M&A) are more typical of South Korea's busy capitalism than the North's crusty communism. Yet early September brought consolidation among the few foreign financial investors in Pyongyang, as Chosun Fund bought Daedong Credit Bank (DCB). Chosun, an embryonic if ambitious London-based fund, aims to raise $100 million to invest in North Korean mines and other assets. DCB, by contrast, is already a decade old. Originally a joint venture by the now collapsed Hong Kong-based Peregrine group, it was bought out by its British management - who will stay on - and has offered basic banking services with a staff of five from a Pyongyang hotel suite, mainly to foreign residents. 

But for the past year DCB has seen most ($6 million) of its $10 million assets frozen: a victim of the blunt instrument of US financial sanctions against the Macau-based Banco Delta Asia (BDA). $3 million reportedly belongs to British American Tobacco (BAT), whose unpublicized ownership of a cigarette factory in Pyongyang was revealed last year. Chosun, whose advisers include a senior ex-US State Department negotiator with North Korea, says it will challenge Washington and prove that DCB at least is squeaky-clean. 

A Chinese satellite?
All analysis of North Korea, as anywhere, needs to contemplate the longer term as well as immediacies. The cover story in October's issue of the US magazine Atlantic Monthly was a long article by Robert Kaplan, provocatively titled "When North Korea Falls". If rather one-sidedly reflecting the view from US forces in Korea (USFK), this performed a service in thinking the unthinkable on several fronts. Most striking was his suggestion that "China's infrastructure investments are already laying the groundwork for a Tibet-like buffer state in much of North Korea, to be ruled indirectly through Beijing's Korean cronies once the KFR [Kim family regime] unravels." Kaplan suggests that the US and even South Korea might go along with this, if only because the alternative of either of them trying to run a post-Kim North Korea (vide Iraq) threatens to be riskier and costlier than letting China carry the can.

A royal niece takes her life in Paris
Mid-September brought a rare and tragic fresh glimpse of North Korea's royal family, with reports that Kim Jong-il's niece had killed herself in Paris in August. Jang Keum-song, 29, was the sole birth child of Kim Jong-il's brother-in-law and confidant Jang Song-thaek, a first vice director in the ruling Workers Party of Korea (WPK), and the dear leader's only sister Kim Kyong-hui, herself director of the WPK's light industry department.

Said to be tall and beautiful (and not to have told her friends she was North Korean), Ms Jang was studying in Paris, evidently in some style; her body was found in her villa by her maid and chauffeur. She had taken an overdose of sleeping pills. Press speculation - none of this has been announced or confirmed, needless to say - is that she had been ordered to return to Pyongyang, where she had a suitor whom her parents rejected because of his bad ideological background. In North Korea's contorted demonology, that means some of his family members may have been landlords, Christians, victims of successive purges, living in South Korea, returnees from Japan, or a long litany of similar supposed sins. (South Korean parents can be equally picky, but there the social snobbery is more straightforward.)

Echoes and repetitions
If true, this is ironic in that North Korea's founding leader Kim Il-sung opposed Jang Song-thaek's marriage to his daughter on similar grounds. Jang was exiled for a while to the east coast city of Wonsan, before the great leader relented and permitted them to wed in 1972. (Rumour has it that they are now separated, and that Kim Kyong-hui has a drink problem.)

This also echoed a parallel recent tragedy for South Korea's quasi-royalty. Last November Lee Yoon-hyung, 26, youngest daughter of Lee Kun-hee - chairman of the Samsung group, Korea's biggest conglomerate, and the country's richest man - hanged herself in New York where she was studying. Here again the cause was said to be parental opposition to the man she loved: Shin Soo-bin, who found her body. Public sympathy was strained by Samsung's initial clumsy attempts to hush up the suicide and claim she had died in a car accident.

While Jang Keum-song's death has no known direct political overtones, in Pyongyang the personal is political. Her father, long the dear leader's right-hand man, fell from grace in 2003 and was not seen for two years before re-emerging early this year in what appeared a slightly lower rank - soon belied by his following his brother-in-law in making a high-level but low-profile visit to China in March. One alleged reason for Jang Song-taek's purge was his pushing his adopted son Kim Jang-hyun - in fact a natural son of Kim Il-sung with one of his nurses - as a potential successor to Kim Jong-il. In North Korea's neo-patriarchy, princesses seem to have no claim; even though the dear leader's daughter Kim Sol-song is reportedly an able economist who accompanies her father on some of his workplace visits.

France: formal froideur belies real ties
By all accounts the French authorities cooperated in secretly repatriating Ms Jang's body - just as they had done in August 2004 with Kim Jong-il's consort, Ko Yong-hee, mother of his two younger sons, who died in Paris where she was being treated for breast cancer. That France is the last EU country (with Estonia) to deny the DPRK full diplomatic relations - it has also prevented the European Commission from opening an office in Pyongyang - belies a long history of de facto contacts. North Korea has had a presence in Paris since the 1960s: initially a trade office, joined in the 1970s by a mission to Unesco. In 1980 the then French president Francois Mitterand infuriated South Korea by upgrading the North's mission to a "general legation": a status shared with Palestine and Quebec. Things are not as they seem.

All is revealed
North Korea's obsessive secretiveness is indefensible in more than one sense; it is no match for spy satellites. No longer restricted to the professional intelligence community, detailed views of everything from Kim Jong-il's palaces to his prison camps, not to mention missile batteries and nuclear sites, are now available - free, at present - to anyone with broadband internet access, courtesy of Google Earth ( Writing on August 29, Sonni Efron of the Los Angeles' Times commented that this was far more revealing than anything she was ever allowed to see as a visiting reporter. Already viewers are debating landmarks of interest. One has identified no fewer than 332 mainly military sites, including artillery along the Demilitarized Zone and the vast network of air defences ringing Pyongyang.

Efron also noted a stark visual contrast: "Click on down into South Korea and the barren, deforested mountaintops give way to lush forests, the dusty valleys to emerald rice fields, the surface-to-air missiles to factories, houses and cars…. Kim may rule in secret and hide nuclear secrets underground, but the shameful nature of his regime is on global display."

Two lighter moments
Other than the regime's endlessly risible self-presentation, humour on North Korea tends to be in short supply. Last month was lightened by two exceptions. On September 25 Seoul dailies headlined a claim by Kang Song-ju, North Korea's senior vice foreign minister and long-time chief nuclear negotiator, that Pyongyang has at least five nuclear weapons. Their source was an article on the website, a key forum of debate on North Korea, by Robert Carlin, a former chief of the Northeast Asia section in the US State Department. 

Carlin's title, "Wabbit in Free Fall", plus sundry other clues, made it abundantly clear that what purported to be a speech by Kang was in fact a spoof; indeed, a clever and poignant lament for those on both sides who spent years building bridges between Washington and Pyongyang, only to see all their efforts ruined by hardline colleagues. (It follows a similar exercise by Erich Weingartner of the Canadian clipping service CanKor, imagining how a senior North Korean aid official might strive to make sense of the famine and the ups and downs of his government's dealings with an outside world that it barely understands.)

Six hours passed before the South Korean media twigged, issuing red-faced retractions and apologies. Soul-searching and self-criticism followed, for not only literal-mindedness but sheer laziness and haste in simply reproducing the story without checking it out first.

Wordplay as a weapon
North Koreans themselves have precious little to laugh about. While communism elsewhere - especially in eastern Europe - generated a rich vein of wry humour, North Koreans are often deemed too cowed or brainwashed to do likewise. Yet a recent issue (no 38) of North Korea Today - a well-informed newsletter from the South Korean Buddhist NGO Good Friends - reports some ironic punning on who really does what in North Korea. Wordplay has the Democratic Women's Union (DWU) as 'Running', the Socialist Working Youth League (SWYL) 'Standing', and the ruling Workers Party of Korea (WPK) 'Sitting'. That is, the party just sits around, young male officials of the SWYL stand and out bark orders - and the women do all the work. Good Friends adds that "it is no exaggeration to say that the North Korean economy is run by women." It is good to know they have the last laugh.

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