Books on North Korea
Update No: 049 - (29/05/07)
Nothing much doing
After a busy April, May was a quiet month regarding North Korea. On the
nuclear issue, despite assurances from Washington that a solution to the problem
of DPRK funds tied up in the sanctioned Banco Delta Asia (BDA) of Macau was
imminent, by late May this was still unresolved. Accordingly, North Korea's
Yongbyon nuclear site remained open, six weeks after it was due to be closed
under the February 13 six-party nuclear accord.
Yet the US and other parties still seemed fairly unfazed by this delay -
although South Korea delayed promised rice aid, due by end-May, until Yongbyon
is actually shut.
Meanwhile the first trains in half a century ran between North and South Korea -
albeit not far, and just once. Pyongyang named a veteran diplomat as its new
foreign minister, while sources in Seoul claimed to detect changes in the
North's murky power structure.
A US bank is asked to take North Korea's money
The BDA issue - for more detail and background, see previous Updates -
dragged on for yet another month. In a new twist, it emerged that Wachovia, the
fourth largest US bank, has been asked by Washington to accept transfer of the
US$25 million in DPRK funds from BDA. Since the latter remains subject to US
sanctions, Wachovia is reportedly (and understandably) not keen to do this
unless it is guaranteed indemnity from any negative consequences. This may
entail a further retreat by the US Treasury Department, already unhappy at
having its hand forced by the State Department for the greater good of getting a
hoped-for agreement on the nuclear issue.
Swisss doubts over counterfeiting
Meanwhile on May 21 a Swiss police report cast doubt on one of the central
claims in the BDA affair, that North Korea has been counterfeiting US currency.
According to the Bundeskriminalpolizei, who take a special interest in
counterfeiting, North Korea's own currency is of such poor quality that it must
be incapable of making high-grade so-called supernotes (fake $100 bills) on old
printing presses dating back to the 1970s.
The US Secret Service said it stood by its charges. There is strong evidence
linking North Korea to supernotes, as well as drug dealing and other crimes and
financial misconduct. Yet the fact remains, as the Swiss also noted, that after
an 18 month investigation the US Treasury Dept. has yet to make public its
detailed accusations against Pyongyang. While this may be of less consequence
now that Washington is busy trying to backpedal on the BDA issue, it all adds to
the oddly shambolic air that this business has taken on.
First trains in half a century link North and South
Elsewhere, on May 17 the first trains to connect North and South Korea since
the 1950-53 Korean War crossed the Demilitarized Zone (DMZ). Two trains of five
coaches, each carrying 50 North Koreans and twice as many from the South,
crossed the border for a brief journey: northward from Munsan in South Korea to
Kaesong in the North on the Kyongui line near the west coast north of Seoul, and
southbound from the North's Mount Kumgang resort along the Donghae east coast
The South's unification ministry (MOU) waxed lyrical, proclaiming in a headline
on its website that "In Half a Century, the National Blood Vessel is
Reconnected." Symbolic this certainly was, but the suture may only be
temporary. This was just a one-off test run, delayed by over a year, on tracks
which have been ready for two years. Parallel roads in each coridor daily take
Southern managers to work in the Kaesong joint industrial zone just north of the
DMZ, while Southern tourists are bussed to Mt Kumgang in thousands. (Needless to
say, there is no matching flow of North Koreans heading South.)
The Northern authorities seem to regard the new roads with equanimity, so it is
puzzling why they hesitate to allow trains. Military objections from the Korean
People's Army (KPA) are surmised; yet the roads have already turned the front
line into a partial front door, so it is uncertain why railways are seen as an
additional threat. Regular crossborder services are thus still some way off,
much less dreams of an "iron silk road" conveying Southern freight to
Europe via the Trans-Siberian railway. That, or indeed passenger services from
Seoul to Pyongyang and on to Beijing, would also entail modernizing the North's
extensive yet decrepit and mainly single-track rail network; Russian surveys
suggest this would cost at least US$3 billion.
The South will keep pressing, not least because rail would be a far cheaper way
to send rice and other aid than by ship as at present. Seoul is also slyly
suggesting using the line for Northern workers to commute from Kaesong city to
the eponymous zone; this would put the line into use, but without crossing the
border. How soon the North lets real trains run regularly across the DMZ will be
one touchstone of its wider readiness to open up.
For now, merchant shipping fills the gap. With less fanfare than the one-off
trains, May 20 saw the first North Korean vessel in over half a century enter
Pusan, the South's major port and second city. It left a day later with 50 empty
containers, inaugurating a regular thrice monthly service, run by a Southern
firm, between Pusan and Rajin: North Korea's most northeasterly port, close to
the borders with Russia and China.
Inter-Korean military talks make little headway
North Korea's wider motives are ambiguous too. At inter-Korean talks between
generals on May 8-11, whose main agenda (for Seoul) was to achieve a military
guarantee for the train tests, the North insisted on raising the issue of the
west coast maritime border: the Northern Limit Line (NLL), imposed unilaterally
by the UN command after the Korean War and never formally recognized by
Pyongyang. Yet the North's alternative line is a non-starter, since it ignores
several Southern-controlled islands near the North's coast.
Kim Jong-il may just be playing hard to get. At all events, the lack of a
military guarantee is also holding up several other joint ventures earlier
agreed in principle: fishing, flood prevention on the Imjin river, and
extracting sand and gravel in the Han river estuary. All these are due to be
raised again when the generals next meet, sometime in July.
No rice aid till Yongbyon is shut?
Before that, the 21st inter-Korean cabinet-level talks since the 2000 summit
were due in Seoul from May 29 to June 1. On May 25 the South said the North will
attend, despite criticism in Pyongyang of Seoul's decision to withhold promised
aid of 400,000 tons of rice until the Yongbyon nuclear site is closed. Shipment
had been due to start in May. On May 22 the ROK government approved a budget of
US$170 million for this, plus another $80 million for raw materials for the
North to make soap, footwear and clothing.
While the latter is ostensibly linked to rather vague proposed mineral joint
ventures in the North, its timing makes it in effect a payment for May 17's
train test runs. If Pyongyang insists on being paid for every concession, this
will slow progress and erode goodwill.
New foreign minister
The past month brought both an overt personnel change in Pyongyang, and
rumours of reorganization of the power structure behind the scenes. On May 18
North Korea finally named a new foreign minister - more than four months after
the death from cancer on January 2 of Paek Nam-sun, who had held the post since
1998. His successor in Pak Ui-chun, aged 75, who served as ambassador in Moscow
from 1998 to 2006.
Such delay is not unusual. In any case the real clout in foreign affairs lies
with two of Paek and now Pak's nominal deputies: senior vice foreign minister
Kang Sok-ju, who negotiated the 1994 nuclear Agreed Framework with the US, and
Kim Kye-gwan, currently similarly engaged in the six-party talks.
On the same day, so perhaps relatedly, North Korea for the first time submitted
a defence white paper to the ASEAN Regional Forum (ARF). It joined ARF in 2000,
but has not hitherto been an active participant. This may presage a more active
multilateralism under a new foreign minister.
A boost for the NDC
Seoul press reports, citing intelligence sources, claimed in May that the
North's National Defence Commission (NDC) has been reorganized and is gaining
clout. The NDC is the DPRK's highest executive organ of state. Formerly under
the Cabinet, since 1998 it has been separate and now outranks the latter, whose
remit is purely civilian. Since the late Kim Il-sung remains 'eternal president'
despite being dead since 1994, Kim Jong-il runs North Korea as chairman of the
NDC. Touching all the bases, he is also secretary general of the nominally
ruling Workers Party of Korea (WPK) and commander in chief of the Korean Peoples
Army (KPA), the armed forces.
Hitherto the NDC had been a committee of persons whose chief posts lie elsewhere
in the hierarchy, mainly in the KPA. But now, if these reports are correct, it
has begun to acquire a full-time staff at all levels; becoming a new direct
instrument for Kim Jong-il's rule, and an emerging power centre in its own
right. Two key figures here are generals Hyon Chol-hae, former vice director of
the KPA General Political Bureau, who moved to the post of NDC vice director in
2003; and Ri Myong-su: the KPA's former operations director, recently appointed
to the NDC. Both men are close to the dear leader, having regularly accompanied
him on his various outings to inspect military and other units over the past
If the NDC has indeed gained power, this has several implications. First,
personally Hyon and Ri are names to watch at a time when North Korea's most
senior military figure and de facto overall no 2, vice marshal Jo Myong-rok, is
thought to be seriously ill. Second, the rise of the NDC looks like a further
blow to the WPK, which under Kim Jong-il's odd mix of an avowed military-first
policy and partial market reforms has lost power at the centre to both the KPA
and the Cabinet; the latter now having more autonomy to run the economy. In
almost 13 years of Kim Jong-il's rule no changes to the WPK Politburo have been
announced, other than by the ineluctable march of mortality as the old guard die
off. Nor is it clear whether the WPK Central Committee meets regularly, or
indeed at all.
Third, beefing up the NDC may also regularize to a degree Kim Jong-il's highly
personal rule, hitherto conducted mainly via personal ties to a kitchen cabinet
of cronies close to him whose formal rank may belie their real clout- as when
the foreign minister (at least the previous one) wields less real influence than
two of his nominal deputies.
Finally, all this has at least an implicit bearing on the eventual succession to
Kim Jong-il: an area where there is no visible movement. Absent any designation
of a successor, the suggestion is that if anything happened to the dear leader,
the NDC would be in charge; thus reverting to a more orthodox collective
leadership, at least in the first instance.
As we went to press, Japanese agency reports on May 25 claimed that North
Korea that day fired several short-range missiles towards what Koreans call the
East Sea, otherwise known as the Sea of Japan. Pending further details, the key
word here is short-range. It is neither unusual nor especially threatening for
Pyongyang to test small sea-to-sea missiles - as opposed to the larger kind
whose launch last July brought widespread condemnation, including from the UN
Security Council. But with February's first-stage nuclear accord starting to
look frayed, Yongbyon still running and the BDA saga dragging on, firing off a
few missiles hardly seemed helpful - if calculated as ever to keep the world on