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 linguistically 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.
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 frustration is threefold. Economically, until recently the DPRK resisted reform. In July 2002 it imposed drastic wage and price rises; but without supply-side steps to match, these produced little except inflation. In 2003, however, it became clear that wider, if cautious, market reforms were under way. 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, and rue, the DPRK's staying power. Over a decade after the demise of the USSR, its battered Korean epigone is still alive and kicking.
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".
In October 2002 the US accused the DPRK of having a new covert nuclear project - 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. With pressure from China, and some signs of a softer line by the US towards meeting North Korea's concerns, it was hoped that six-party talks would reconvene this year. Despite much diplomatic shuttling and exchanges of draft proposals, however, the two main protagonists remained far apart. By mid-December it seemed there would be no fresh talks until January at the earliest.
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: 008 - (01/01/04)
Still no nuclear breakthough
The Democratic People's Republic of Korea (DPRK), better known as North Korea, is set to enter 2004 with the issue which dominated the headlines in 2003 unresolved. That, of course, is the nuclear crisis, which a year ago escalated dramatically as North Korea in quick succession reopened its plutonium reprocessing facility at Yongbyon (mothballed since 1994), expelled the inspectors of the International Atomic Energy Agency (IAEA), and withdrew from the Nuclear Non-Proliferation Treaty
A year on, one must ask: is this a crisis? The Bush administration, with a consistency otherwise rare in its Korea policy (if any), insists it is not - and seems in no hurry to deal with it. So despite the odd spike when Pyongyang claims (often) it has finished reprocessing - but are they bluffing? - after 14 months this has become a slow-burn affair, or even low-key. The contrast with Iraq could not be greater. The US invaded Iraq, ostensibly over weapons of mass destruction (WMD) that remain elusive; yet it seems insouciant of a North Korea which now boasts of having a nuclear deterrent.
Will six-party talks succeed?
Despite the lack of a breakthrough, there were significant developments. China, under its new leader Hu Jintao, emerged - not before time - as an active mediator. In April it hosted three-way talks with the US and DPRK, expanded in August to a six-party format that brought in S. Korea, Japan and Russia. This unwieldy full house got little further than reading prepared statements, and has not yet managed even to meet again. Hopes of a new round this year faded by mid-December; there is talk now of January.
At least the delay reflects active prior shuttle diplomacy, including exchanges of draft proposals. In this sense, US insistence on a multilateral forum, rather than the one-on-one preferred by Pyongyang, has its positive side in promoting coordination and fine tuning. Yet the two principal protagonists remain far apart; nor is it clear if either is sincere. While no longer insisting on nuclear surrender in advance, the US still wants a lot upfront from North Korea - which in turn is demanding more than a Republican administration, facing re-election, could realistically give, even if it were minded to.
Where there's no will .
The gap is not unbridgeable, if the will is there. But one suspects each is stringing the other along. While Kim Jong-il plays hard to get diplomatically, he can press on with both his nuclear programmes: the old plutonium-based one, and the newer one, based on highly enriched uranium (HEU), whose discovery in 2002 triggered the crisis. The Bush administration, meanwhile, has never reconciled the hawks and doves in its own ranks. If the latter currently have the upper hand, it is only because the former do not believe that talks will get anywhere - a self-fulfilling prophecy, if need be. Yet at the same time, for neo-cons who (despite the Iraq quagmire) still favour regime change as the only ultimate solution for the entire "axis of evil", North Korea is a sideshow - East Asia being of lower priority than such West Asian candidates as Iran or Syria.
So in 2004 the US will remain passively hostile to North Korea, giving it no incentive to do what it may well not do on any terms: give up the one card which Kim Jong-il sees as his insurance against the fate of Saddam Hussein (whose capture will have given the dear leader a nasty turn). There is thus every chance that the nuclear issue will rumble on well into next year. Even if the six parties meet again, the chances of a resolution look slim. US and DPRK intransigence apart, most of the other parties - except a nowadays rather hardline Japan - would rather not rock the boat too hard, and still believe that carrots are better than sticks for bringing Pyongyang to heel.
Market reforms have taken root
Thus China, Russia and South Korea are all actively encouraging North Korea to open up its economy, hoping commerce will bring peace in its wake. Such a view is now less utopian, in that - overshadowed by the nuclear cloud - 2003 also saw Pyongyang at long last take unambiguous and probably irreversible steps towards market reform. Following July 2002's price and wage rises, which have proved inflationary, this year North Korea at last acknowledged and made official the markets which since the mid-1990s have on the ground increasingly supplanted the old state planning and rationing systems. While details of the new system remain unclear - typically, nothing has been officially announced - the DPRK economy is clearly now in some kind of transition.
Unfortunately it risks getting stuck there. As seen in post-communist states, moving to the market is no panacea. The UN World Food Programme (WFP), which still feeds (funds permitting) over a quarter of the DPRK's 22 million people, has welcomed the reforms - but warns they have created as many as a million newly vulnerable people.
Guns or butter?
More fundamentally: if reform is to really take off, then in 2004 Kim Jong-il faces a hard choice - between guns and butter. So far he is trying to have it both ways, yet there are several reasons why this cannot succeed. Domestically, an avowed military-first (Songun) policy not only channels the lion's share of scarce resources to the huge Korean People's Army (KPA), but ideologically preserves the old rhetoric of loyalty and sacrifice - rather than encouraging budding entrepreneurs by assuring them, as the late Deng Xiaoping famously did in China, that "To get rich is glorious".
Externally, meanwhile, only the most daredevil of venture capitalists will touch North Korea whilever the nuclear issue remains unresolved. Serious money - above all, the $10 billion or so that would come if there were ever a full diplomatic settlement with Japan - will stay away. South Korea is a partial exception; yet even here the chaebol (conglomerates), seeing how cynically Pyongyang has milked the Hyundai group (all but destroying it in the process), are holding back - in contrast to Taiwan business's rush into China. Yet even small-scale processing suffices for South Korea to have overtaken China as North Korea's main market, although volumes so far are tiny.
Hands across the DMZ
In 2004, if all goes to plan, two new road and rail corridors will open across the long impermeable Demilitarized Zone (DMZ). That will be a symbolic moment on several levels. Breaching what remains the world's most heavily fortified frontier cannot but have security implications. Even if Pyongyang still resists formal disarmament, for a front line to become a front door has to be progress. In Seoul, which after all is right in that front line, most people believe that luring North Korea into opening and win-win cooperation is a better bet than backing it further into a nuclear corner. Neither way is without risk, yet one hopes the US will heed its Korean ally: it is their country.
Russian utility wants to export power to Pyongyang - South Korean report
A Russian state-run utility firm is negotiating with North Korea on exporting electricity to the energy-starved country, the Voice of Russia (VOR), said on the 27th of November, Yonhap News Agency has reported.
The Unified Energy Systems, one of the world's largest electricity utilities, said it is ready to expand production volume to export electricity to the North and the two sides are engaged in talks, the VOR reported.
During inter-Korean economic talks in Pyongyang early in November, North Korea demanded electricity assistance from South Korea and called for the establishment of a joint committee charged with helping the North ease its energy shortage.
North Korea previously said it was being forced to reactivate its nuclear reactor in order to generate electricity, though reports from Washington suggest the power output from the North's only operational 5-MW nuclear reactor is negligible and would only be sufficient for the facility itself.
Energy shortages are a serious problem for the North's moribund economy. The communist country has been relying on outside food aid since 1995 to help feed its 22m people.
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