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Update No: 117 - (26/04/13)

North Korea: Guns – and butter?
April was an eventful month on the Korean peninsula. And as usual where North Korea is involved, the events and news were not good. The tensions and wild rhetoric described in NewNations’ last monthly update were ratcheted up yet further. These included suggestions by the DPRK that not only foreign embassies in Pyongyang, but also foreigners in South Korea – who number some 1.4 million – might wish to leave, since their safety could not be guaranteed in the now imminent war. In fact no diplomat based in Pyongyang is known to have heeded this call, and foreigners in the South were equally insouciant. Western travel firms continued to run tours into North Korea, though they had a few cancelled bookings.

All this was largely verbal, but there was also one tangible casualty. The Kaesong Industrial Complex (KIC), the last surviving inter-Korean joint venture, finally fell victim to politics after surviving for almost a decade, including through previous periods of tensions. As April ended it was inoperative and its future looked very uncertain.

Mixed signals
Meanwhile, almost unnoticed amid all the shouting, on the home front a quite different note was being sounded. As March ended and April began, successive party and parliamentary sessions saw North Korea’s only known economic reformer, Pak Pong-ju, elevated to the Politburo and appointed as premier of the Cabinet (the DPRK does not say ‘prime minister’), a post he had held before. There was talk of foreign investment, and even of more special economic zones – even while the sabotage of Kaesong was simultaneously sending a clear signal that investors should not touch North Korea with the proverbial barge-pole. Quite how the North’s young leader Kim Jong-un, seen as behind both the tensions and the hints of reform, imagines he can square this circle remains to be seen. As April ended the crisis appeared to be easing somewhat, but it was far from clear how exactly the growing tentative hopes of a return to talks rather than war talk, would be accomplished in practice.

It would be tedious to list every threat uttered by Pyongyang. Most were in any case widely covered in global media, whose attention to North Korea during April was much higher and more sustained than usual. (From long experience such media frenzy usually lasts no more than a day or two, but this time it went on for several weeks). Unprecedentedly, this writer was summoned to the red sofa of breakfast television – not the ideal format for explaining a complex crisis, really – on both major UK channels, no less than three times in ten days.

Bigger and better temple, now enshrined in law
The most recent hair-raising threats came on April 25. As usual this day brought extensive celebrations for Army Day: the 81st anniversary of the supposed foundation of the Korean People’s Army (KPA) in 1932 by Kim Il-sung, who was just 20 at the time. (The real KPA was founded in February 1948, but the day and date were changed in 1971 as part of the process of myth-making, so as to root everything in Kim’s anti-Japanese guerrilla activities.)

Though a widely predicted further rocket launch did not materialise, April 25 saw a military parade as it often does. This was held at the Kumsusan Palace of the Sun, the mausoleum of Kim Il-sung and now Kim Jong-il, northeast of the city centre; normally the venue would be Kim Il-sung square in downtown Pyongyang. Built in 1976, Kumsusan was Kim Il-sung’s official residence in his later years. As such it was secluded, on the edge of the capital, and totally off limits. After Kim’s death in 1994 his son and heir Kim Jong-il had it repurposed and remodelled on a vast scale as a shrine and place of pilgrimage, including the huge plaza used for the parade. Shut for most of 2012 to install Kim Jong-il beside his father, along with some favourite toys – like a luxury yacht brought from the east coast; rail tracks had to be relaid – Kumsusan reopened on December 17, the first anniversary of Kim Jong-il’s death.

You might think the message was clear enough already, but on April 1 the Supreme People’s Assembly (SPA; see below) passed a new law and constitutional amendment on Kumsusan. Full texts of these are not yet to hand, but the official Korean Central News Agency (KCNA) summarised the aim as being “to fix by law the shining achievements made in accomplishing the cause of perpetuating the memory of the leaders and complete it on a new higher stage ... The Kumsusan Palace of the Sun where President Kim Il Sung and leader Kim Jong Il lie in state is a grand edifice for the immortality of the leaders, a symbol of the dignity of the whole Korean nation and its eternal sacred temple ... The law on the Kumsusan Palace of the Sun specifies that its noble mission is to preserve and glorify forever the palace, which is the supreme temple of Juche, as the eternal temple of the sun of the entire Korean nation. It is the obligation of all the Koreans to regard the Palace as a symbol of dignity and a great pride of the nation. [The law] also specifies the state duty to spruce up the Palace in a sublime and perfect way ... and devotedly safeguard the Palace in every way so that no one can violate.”

The dead come first
It goes on: “Orders were also set so that Korean people, overseas Koreans and foreigners can pay respects to the great Generalissimos at the Kumsusan Palace of the Sun.” No detail or expense is to be spared, including “... matters of establishment of special sanctuary of the Palace for its protection ... management of buildings... park, arboretum, outdoor lighting [etc]... It was specified ...that electricity, facilities, materials and other supplies needed for the Palace shall be planned separately and be provided without fail on a top priority basis. The law also set the duty ... to strictly supervise and control ...the work for safeguarding, eternally preserving and providing the conditions for the management and operation of the Palace.” In sum, “the law on the Kumsusan Palace of the Sun is the unique code for the immortality of the leaders ... it is the biggest honor for the army and people of the DPRK to have the legal weapon for the immortality of the leaders.” The level of detail is striking.

So the living can go hungry and suffer power cuts – actually fewer these days, in Pyongyang at least – but the dead divine duo must now never be unlit nor untended, by law. No expense is to be spared. (We are describing, not mocking. An article on April 13 in the Party daily, Rodong Sinmun, was headlined: “Law on Immortalizing Leaders.”) This fact, and use of the word temple – three times! let no one claim North Korea lacks a religion – is telling as to the regime’s priorities. Very recently, tour firms reported that Kumsusan will be closed again throughout May to July; perhaps for further sprucing up in accordance with the new law.

Wild threats
But back to the rhetoric. KCNA’s English press release – the point being, this is the message North Korea wants the world to hear – quoted Air and Anti-air Force Commander Ri Pyong-chol as uttering what sounds like a kamikaze threat. Saying that “the men of his force is [sic; KCNA’s English isn’t what it used to be] waiting for a final attack order to put an end to the enemies”, Ri continued: “The flying corps of a-match-for-a hundred stalwart pilots, once given a sortie order, will load nuclear bombs, instead of fuel for return, and storm enemy strongholds to blow them up.” Not to be outdone, Strategic Rocket Force Commander Kim Rak-gyom thundered that: “The DPRK's inter-continental ballistic missiles have already set the dens of the brigandish US imperialists as their first target and officers and men of the Strategic Rocket Force are one click away from pushing the launch button. If the US imperialists and their followers dare make a pre-emptive attack, they will be made to keenly realize what a real nuclear war and real retaliatory blows are like and their stooges be made to feel the taste of horrible nuclear holocaust.” Not many states talk like that, nowadays!

You might want to leave
There was a lot more like this earlier in the month, and indeed in March. But such currency tends to depreciate. By early April no one was taking much notice any more, so North Korea felt a need to up the ante. One tactic was to try to unsettle foreigners. This was attempted on two fronts, north and south of the Demilitarised Zone (DMZ). On April 5 several sources, including Russia’s foreign minister and the British embassy in Pyongyang, reported that DPRK authorities had contacted them to offer assistance in case they might wish to leave. None did so, and several – including the UK – rebuked North Korea for stirring up tensions.

Separately and publicly, on April 9 a KCNA headline read: “KAPPC Urges Foreigners in S. Korea to Take Measures for Evacuation”. The initials denoted the Korea Asia-Pacific Peace Committee. With black humour, or maybe none, it was this body (rather than, say, the KPA) which warned that “the situation on the Korean Peninsula is inching close to a thermonuclear war.” It blamed “the United States and the south Korean puppet warmongers”, of course, but added that: “once a war is ignited on the peninsula, it will be an all-out war, ie a merciless sacred retaliatory war to be waged by the DPRK.” Since “it does not want to see foreigners in south Korea fall victim to the war, the committee informs all foreign institutions and enterprises and foreigners including tourists in Seoul and all other parts of south Korea that they are requested to take measures for shelter and evacuation in advance for their safety.”

This unprecedented piece of brazen and irresponsible cheek was almost universally ignored. Lest anyone be tempted to make the North’s day by fleeing in panic, it was noted that the 1.4 million foreign residents in South Korea include 200,000 from China. Having already taxed Beijing’s patience to the limit, Kim Jong-un was not really about to start killing its citizens. However, a couple of US professional golfers did pull out of a tournament in the South, and a few young English teachers came home at the entreaty of families panicked by the media.

Kaesong feels the heat
In one area North Korea’s threats did go beyond the verbal. Like the refusal of foreigners to leave either Korea, the continued normal functioning of the joint venture Kaesong Industrial Complex (KIC; the DPRK calls it the Kaesong Industrial Zone or KIZ) had in a sense called Pyongyang’s bluff. Inevitably, some in Seoul and elsewhere pointed out that the North might huff and puff, but it needed the South’s money: gaining valuable income from rents, tax and wages paid by the 123 Southern firms which employ some 53,000 Northern workers there.

Putatively angered by such slights – though one should never take either DPRK faux rage as such, nor the pretexts they adduce for it, at face value – North Korea acted. On April 4 the Committee for the Peaceful Reunification of Korea (CPRK: another of the North’s ironically named bodies) threatened that: “If the South Korean puppet group and conservative media keep vociferating about the [KIC], we will take a resolute measure of withdrawing all our personnel.” Then on April 8 Kim Yang-gon, a senior Party secretary, visited the zone and announced what he called “important steps as regards the crisis in the Kaesong Industrial Zone.” There was in fact no KIC crisis until then, but the North proceeded to create one.

Kim declared that “The DPRK will withdraw all its employees” and “temporarily suspend operations in the zone and examine the issue of whether [to] allow its existence or close it.” He was as good as his word. Next day no Northern workers showed up, nor have they since. Their fate is unknown, but they can hardly be happy to lose what by local standards were good jobs in not unpleasant conditions. Evidently the DPRK state still has the capacity, as well as the will, to control even so large a group of the potentially disaffected.

Going beyond what Kim had announced, from April 9 the North also refused entry across the DMZ to Southern personnel or vehicles; those already in the KIC were free to leave. At first many managers, supervisors et al. chose to stay in the zone and look after their facilities, rather than risk not being let back in again if they left. The Southern government protested vehemently, while offering to discuss matters. But the North dismissed this as a ruse and adamantly refused to talk about anything: be it a resolution to the overall problem, or even the immediate needs of Southern personnel who were starting to run out of food, medicine and other supplies. Eventually on April 26 the ROK had no option but to call its remaining workers home. At this writing on April 27 they were beginning to leave, with a full pull-out expected to be complete by April 29.

Dismaying though this turn of events is, it is too soon to read Kaesong’s funeral rites. There is a precedent, and a potential way out. On the other side of the peninsula another former joint venture zone, the Mount Kumgang resort, has been shut for five years since a Southern female tourist was shot dead in 2008. That suspension was ordered by the South, after its investigators were refused entry. Though a complicating factor is that the North has since nominally confiscated Southern assets at Kumgang – a risk which now arises at Kaesong as well – one logical solution would be to trade one suspension for the other: the North could reopen the KIC if the South agrees to let its tourists visit Kumgang again. Admittedly that might be politically risky for both Kim Jong-un and the South’s new president, Park Geun-hye. But at some point and somehow the crisis, which already feels off the boil now, will enter a phase of diplomacy, and concrete ways forward will have to be sought and found.

Bae at bay
That may not come soon, however, as Kim Jong-un has bigger fish to fry. On April 27 North Korea again made headlines; this time by announcing that Kenneth Bae, a Korean-American tour operator held since his arrest in the Rason special zone in the far northeast on November 3, will soon be tried. As KCNA put it, using Bae’s Korean name and DPRK Romanisation:

“The preliminary inquiry into crimes committed by American citizen Pae Jun-ho closed. In the process of investigation he admitted that he committed crimes aimed to topple the DPRK with hostility toward it. His crimes were proved by evidence. He will soon be taken to the Supreme Court of the DPRK to face judgment.”

Whatever Bae may or may not have done – the rumour is Christian proselytising – the game being played with him is clear. He is the sixth American detained in North Korea since 2009, and like his predecessors he will no doubt be traded for something. In 2009 it famously took a visit by no less than ex-president Bill Clinton to win the release of the highest profile such prisoners, journalists Laura Ling and Euna Lee. If Kim Jong-un had not done enough already via threats to get Barack Obama’s attention, putting an American on trial should guarantee it. What Bae will be charged with, his sentence, his likely rescuer, and Pyongyang’s concrete demands all remain to be seen. But the playbook is an old one, and the broad script familiar.

Meanwhile, reform?
All of the above is tiresomely in character for North Korea, even if Kim Jong-un is pushing crisis to new extremes. Yet much less noticed amid all the tension is a puzzle. Even while uttering menaces abroad, at home the North’s young leader appears to be pursuing a rather different agenda: one which emphasises the economy and hints at reform.

We have alluded to such hints in several past Updates, and they continue. One was a meeting of light industry workers on March 18. Admittedly Kim Jong-un’s speech could have been given by his father or grandfather. Stressing the need for more loyalty and better science, it contained no hint that solving what he admitted were “not a few difficulties and bottlenecks at present” might require enterprise autonomy, much less markets. Still, it is striking to hold such a rare meeting, emphasising consumer goods, while fomenting international tensions.

Two further meetings followed back-to-back at the turn of the month. At short notice, North Korea announced on March 27 that a “historic” meeting of the Central Committee (CC) of the nominally ruling Workers’ Party of Korea (WPK) would convene by the month’s end. It duly met on March 31. Ideologically, it proclaimed “a new strategic line on carrying out economic construction and building nuclear armed forces simultaneously.” (In Korean the term, set to become a new slogan, is byungjin, meaning ‘progress in parallel’.) This is “not a temporary countermeasure for coping with the rapidly changing situation but a strategic line to be always held fast to.” Possession of “nukes” – KCNA’s word – is to be “fixed by law.”

For a regime where in reality one man’s will or whim decides, this new concern to set some (in principle reversible) policy choices in stone – whether it is lavishing funds on Kumsusan, or keeping nuclear weapons – by embedding them in law or even the Constitution is striking.
Consistent with this, nuclear weapons were described as “the nation’s life”, “not a political bargaining chip... They are a treasure of a reunified country which can never be traded with billions of dollars.” But equally, “economic guidance shall be fundamentally improved as required by the new situation [using] Korean-style advantageous economic management methods ... The country's economy should be shifted into knowledge-based economy and the foreign trade be made multilateral and diversified and investment be widely introduced.”

Guns and butter?
In introductory economics texts, the ineluctable need to choose was sometimes summed up in the phrase “Guns or butter”. For all actors – be they governments, firms or consumers – more of X by definition means less of Y. The fundamental reason for this, obviously, is that funds and resources are finite; so every spending choice carries its own opportunity cost. If you plump for X, or the more you spend on X, the less you will have left to devote to Y.

Kim Jong-un, by contrast, seems to think he can have his cake and eat it (to mix metaphors). Perhaps his Swiss schooling was deficient in economics, so let us spell out why he cannot. The reasons are several. In strict economic terms, first, guns vs butter is not a ‘both-and’ but a clear ‘either/or’. High nuclear and other military spending means few funds are left to invest in the civilian economy: a Cinderella which in fact has long been subordinated to the military.

The CC has an answer to that. It claims that nukes save money: “By ... decisively improving our deterrent and national defence capabilities without spending more on defence ... we will be able to concentrate on improving people’s lives and economic construction.” That might be true if spending were also about to be cut on the KPA’s huge and costly (but outmoded) conventional forces, but it is very hard to imagine that happening; it would be radical indeed.

Then there is politics. How can the WPK expect to boost foreign trade and investment, when the result of nuclear and missile tests is UN sanctions which forbid or discourage any foreign involvement? Third, ideologically, a militarised system stressing loyalty is hard to meld with a modern market economy where actors make economic choices based on reason and profit. The latter would never enshrine in law that tending to the dead, matters more than the living.

A reformer returns
The inconsistencies are glaring, yet Kim Jong-un appears to mean it. On the personnel front, the CC meeting elevated North Korea’s only confirmed reformer to full membership of the Politburo. Pak Pong-ju caught South Koreans’ eye when as chemicals minister he visited the South with an economic delegation in 2002, in the heyday of the ‘sunshine’ policy. Pak was keenly interested in what made the South tick, whereas the more reserved Jang Song-thaek (who was also on the tour) kept his own counsel, as befitted Kim Jong-il’s brother-in-law.

In 2003 Pak was made premier. As such he oversaw North Korea’s first ever comprehensive if also tentative market reforms: the July 1st [2002] Economic Management Improvement Measures. These were never formally promulgated, and were partly rolled back after Pak’s dismissal in 2007. As someone close to Jang Song-thaek, Pak was never fully purged and he had recently returned to view as Party secretary in charge of light industry.

Now he is fully back in the saddle again. A day after the CC meeting, the Supreme People’s Assembly (SPA), North Korea’s rubber-stamp parliament, held its usual spring meeting. As ever, a single day sufficed to nod through a raft of predecided approvals, including a budget with no numbers (no change there, then). But the SPA also made Pak Pong-ju premier again. He replaces the loyal but ageing Choe Yong-rim, who at 82 must be glad to be relieved of what was an arduous round of provincial factory and other worksite visits. Kim Jong-il, over a decade younger than Choe, used to keep up a similarly punishing schedule, and the official account is that it killed him; he died on his train. Keen no doubt to avoid that fate, his son Kim Jong-un seems not to have a very busy workload and rarely if ever leaves Pyongyang.

What difference Pak as premier again can make in practice, remains to be seen. In the present climate of tensions, militarism is set to predominate. Besides, no government genuinely keen to boost the civilian economy and foreign investment would have made Kaesong a political pawn, jeopardising its present and future – let alone the chance of creating further Kaesongs.

Kim Jong-il never did that. When he raised tensions, as he often did, this was almost always carefully calculated and calibrated. His son by contrast appears reckless, and also incapable of either long-term or joined-up thinking. Even if byungjin is sincere, it is contradictory and doomed to failure. Guns and butter? As Eliza Doolittle might have said: Not b-----y likely.


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