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22,224,195 (July 2002 est.)


North Korean won (KPW)

Kim Jong-il

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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-guerrilla 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 Demilitarised 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, based on highly enriched uranium (HEU) - and says it admitted as much. (North Korea denies both.). 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 in 2003. Yet despite much diplomatic shuttling and exchanges of draft proposals, this deadline passed. In January an unofficial US delegation was shown what seemed to be plutonium at Yongbyon, whose reactor is up and running.
The six finally met again in late February. They agreed to hold a third round by June, preceded by working groups. Setting an agenda will be harder: 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 into China, and human rights. With interlocutors having different 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. Southerners today are substantially taller and heavier than Northerners. The Korean question today is thus not just about nukes, but how these widening chasms 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.

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Update No: 010 - (02/03/04)

A Process is Now in Place

A second round of six-nation talks, at last
The main event in February was a second round of six-party talks - both Koreas, plus China, Japan, Russia and the US - held in Beijing on February 25-28. Six months had elapsed since the first such meeting, during which China - which as host has invested a lot of time and face in this forum - tried to cajole North Korea to return to the table. Meanwhile shuttle diplomacy by the other five in various permutations tried to stake out common ground in advance, in the hope of making more solid progress this time.
Did they? Chinese media dutifully echoed the party line of a peace process smoothly in train - even as live TV showed the other five sitting embarrassed for some minutes, until North Korea's team deigned to show up for the closing session. Pyongyang also torpedoed an agreed joint declaration by demanding last-minute changes; in the end China issued an anodyne chairman's statement. This did little for Sino-DPRK ties.
While no one is claiming progress on the nuclear nitty-gritty, the consensus is that this was a more workmanlike meeting than last August, which hardly got past declaiming position papers. This time, despite Pyongyang's complaint that the US "only read the prepared script without stammering [sic] and showed no sincerity", in fact they held a 3-hour bilateral meeting on the first day. North Korea's new delegation head was a man with real clout: vice foreign minister Kim Kye-gwan, who has Kim Jong-il's ear.

There will be regular talks henceforth
The only solid outcome so far is that a process is now in place. A third round will be held by end-June. Before that - as early as this month, Seoul sources say - working groups will meet for preparatory spadework. Such institutionalisation is hopeful, if no guarantee of progress - as witness an earlier effort. During 1997-99, four-party talks - the Koreas, the US and China - met six times, but with no visible accomplishments.
Are prospects any better this time? At least there is a clear focus: the North Korean nuclear issue. But not only that: another Pyongyang complaint was that the US "also absurdly asserted that it can not normalize relations . unless missile, conventional weapons, biological and chemical weapons, human rights and other issues are settled" - as well it might, since all these are serious concerns. Japan, meanwhile, is exercised by past kidnappings, and held its own bilateral meeting on that. If and when six-party talks move on to matters of substance, there is plenty to keep them arguing for years.

Nuclear knots: peaceful projects (if any), HEU
Bracketing this wider agenda, the nuclear issue is knotty enough. One crux is whether Pyongyang could keep non-military nuclear projects, like the two light water reactors (LWRs) being built by KEDO (Korean Peninsula Energy Development Organization) under the 1994 Agreed Framework which defused the first North Korea nuclear crisis. But the AF and KEDO now look moribund, to the chagrin of South Korea which has invested almost a billion dollars in this. The US and Japan want the DPRK to end all nuclear activities; during the talks it appeared to dangle a full freeze, in exchange for aid and security guarantees. Seoul, Moscow and Beijing offered energy, but this fell foul of the US mantra, CVID: "complete, verifiable, irreversible dismantling" of all nuclear projects. In any case, after the talks Kim Kye-gwan withdrew the offer (was it a misunderstanding?), insisting on North Korea's right to retain civil nuclear power.
Then there is HEU - or is there? 16 months ago, the Bush administration's first talks in Pyongyang saw the US accuse North Korea of breaking the AF by covertly running a second nuclear programme, based on highly enriched uranium (HEU), in addition to the plutonium-based path based at its Yongbyon site mothballed under the AF. By US accounts, North Korea at first denied but then admitted this, and the crisis escalated from there (for details, see Background article, below). Pyongyang now denies having any HEU, and China too is sceptical - to US irritation. What should settle this beyond doubt is the confession of A Q Khan, father of Pakistan's bomb, that he illicitly aided North Korea. Yet the US brought no evidence to Beijing. Presumably the strategy was to get the talks set up first, and produce proof of HEU next time - giving Kim Jong-il more time to think it over and hopefully admit all, as is now the case with plutonium.

Bad faith on both sides?
Or perhaps it is not too cynical to predict - we shall see - that the US at this juncture is content for North Korea to stonewall. Ironically, both sides' motives are now driven into temporary convergence by this year's US presidential election. Kim Jong-il has scant incentive to yield to tough Republican demands, if a year hence he might get a better deal from President Kerry. George W Bush, meanwhile, will not enhance his chances of re-election either by peace in Korea (which he cannot deliver) - let alone a third front of global war, bogged down as the US already is in Iraq and Afghanistan.
Thus for now Washington and Pyongyang share an interest in appearing to talk, while actually yielding little or nothing. (Were they serious, it would not be hard to thrash out a phased strategy of step-by-step mutual concessions.) This also suits South Korea, China and Russia, who all seem more alarmed by the risk of US-DPRK confrontation than by whatever Kim Jong-il has in his arsenal. In any case, this trio also believes it is better to lure North Korea into peace and opening with carrots like aid and trade, than to paint it further into its solitary corner by sticks, pressure or sanctions.

A window of opportunity
In effect, then, the rest of 2004 constitutes a window for these three carroteers to show that their way can really work. With the latest round of inter-Korean economic talks - now routine, and undisturbed by the nuclear issue - due to begin in Seoul on March 2, touchstones will include progress on reopening two cross-border road- rail corridors. One of these is crucial for the planned Kaesong industrial zone, which it is hoped will thrive in Seoul's shade just as Shenzhen has done vis-à-vis Hong Kong.
In the past North Korea has missed many chances -the Clinton-Kim Dae-jung axis of goodwill during 1998-2000, above all - by being suspicious and slow to change. The time for such foot-dragging is past. Kim Jong-il has a few months to show he means business. Otherwise, if Bush wins a second term, and 2005 finds North Korea still stonewalling on nuclear and other concerns, the risk is of a switch back to the stick.

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