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Area (sq.km)
120,540

Population

22,224,195 (July 2002 est.)

Capital
Pyongyang

Currency
North Korean won (KPW)

Leader
Kim Jong-il


Update No: 042 - (30/10/06)

The nuclear fall-out
October 2006 will go down as a fateful month in North Korean history, and more widely. Continuing what in retrospect was a clear theme, a change of course and a build-up ever since July's missile tests, Pyongyang in short order gave notice that it intended to conduct its first ever nuclear test - and promptly made good that threat, within a week. It must now be regarded - if not remotely welcomed - as the eighth declared and (counting Israel) ninth known member state in the global nuclear club.

A similar cycle to after the missile tests then repeated itself, with China and Russia both backing a UN Security Council resolution imposing sanctions. Yet familiar faultlines over the proper mix of stick and carrot to use continued to split Kim Jong-il's main interlocutors. As the month ended, the momentum for firm action seemed to erode; partly because as ever it was hard to see, and impossible to agree, what measures would be effective. It was even possible that, having made its point and warded off any threat of attack, North Korea might (as in the past) suddenly switch tack and become open to renewed six-party nuclear talks - assuming preconditions could be agreed for such a resumption.

A nuclear test was rumoured in August
As mentioned in our earlier Updates, a nuclear test had been rumoured as early as mid-August. 
On August 17 ABC News quoted a senior US official as saying spy satellites had observed suspicious vehicle movements and other signs, including unloading large reels of cable, near Punggye-yok, a suspected nuclear test site in northeastern North Korea. The source stated: "It is the view of the intelligence community that a test is a real possibility." South Korea's foreign ministry confirmed next day that both capitals were on high alert, and President Bush warned North Korea not to do it.

Armitage predicted a test this year
On September 24 Richard Armitage, under-secretary of state to Colin Powell in the first Bush administration, presciently told the Financial Times it was "more likely than not" that North Korea would test a nuclear weapon this year; adding that "in their thought-process it's the next logical escalation." Other analysts, however, reckoned this would be a risk too far, so soon after the missile tests, and that Kim Jong-il might 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.

A new "common and broad" approach is mooted
Hopes of renewed diplomacy rose after Presidents Roh and Bush met in Washington on September 14. This produced talk of an unspecified new "common and broad" approach, which Roh said on September 28 had been put to North Korea before he discussed it with Bush. There were hints that the US might even offer Kim Jong-il the bilateral talks it has long refused But by then, it now appears, Pyongyang had decided on a different course.

North Korea threatens a nuclear test
All this went by the board when on October 3 North Korea for the first time explicitly said that it will test a nuclear weapon. It set no date at that point. Clutchers at straws still hoped this might be a dramatic negotiating ploy rather than a firm statement of immediate intent. The statement was issued by the foreign ministry rather than the armed forces ministry, and announced that the "field of scientific research" would conduct the test, not the military. 

Despite the alarming content, the tone was mild by Pyongyang standards. In a three-part statement, while the first said there would be a test, the second and third pledged no first use, non-proliferation, and commitment to nuclear disarmament in Korea and worldwide.

Kim Jong-il upstages Ban Ki-moon
The timing was mischievous, upstaging news that South Korea's foreign minister, Ban Ki-moon, is to be the new UN secretary-general. Ban said he will use his UN post to focus on and try to visit North Korea, as his predecessor Kofi Annan had not done for a decade. Ban will prioritize the peninsula, but he may be rebuffed: North Korea remains suspicious of the South despite eight years of a sunshine policy of generous engagement, and has mistrusted the UN ever since the 1950-53 Korean War when it fought a US-led coalition under the UN banner. UNSC condemnation and sanctioning of Pyongyang for both its missile and nuclear tests, although right and proper, will do nothing to heal this rift and mistrust.

All concerned warn Kim not to do it
North Korea's threat brought strong responses all round. Roh Moo-hyun told his cabinet to react "hard-headedly and decisively". In an unprecedentedly sharp public rebuke, China's UN envoy, Wang Guangya, warned that "no one is going to protect" North Korea from "serious consequences" were it to go ahead with "bad behaviour."

The US half-eats its words
Also sharp was Christopher Hill, assistant secretary of state and chief delegate to the six-party nuclear talks (which have not met since last November), who said the US was "not going to live with a nuclear North Korea." Next day the White House glossed this as "not a lethal threat", stressing that the US and others are "offering carrots" if North Korea returns to talks. Aside from persistent policy conflicts over how to handle North Korea in the Bush administration, the concern here was lest the US appear to be threatening military action.

Abe's fence-mending gains new urgency
Perversely, this timing gave added point to the new Japanese premier Shinzo Abe's already planned fence-mending visits to Beijing on October 8 and Seoul the next day - when North Korea actually carried out its test. Quite why Kim Jong-il would wish to push Japan and South Korea into closer cooperation is but one on this affair's many mysteries.

They did it anyway - or did they?
Ignoring all warnings, Pyongyang said on October 9 that it had successfully carried out a nuclear test that day. Seismologists did indeed record a shock, but as ever with North Korea menace was mixed with mystery. Air samples taken a day later reportedly contained no radioactive debris; suggesting either a conventional explosion, or a lesser nuclear one than hoped - or that the site was so well sealed that no radioactive matter was released. A week later the office of the US Director of National Intelligence said air samples confirmed that North Korea had conducted an underground nuclear explosion with a sub-kiloton yield: smaller even than those at Hiroshima or Nagasaki, suggesting that perhaps the test had not worked in full. South Korea and others later confirmed that the test was nuclear, but some analysts remain sceptical whether Pyongyang has proven it has a working nuclear weapon.

Might they do it again? Not right away
Suggestions that the test may have partially failed led to speculation a fortnight later, again apparently buttressed once again by satellite pictures, that a second test might be imminent. Others doubted if North Korea would further deplete a stock of nuclear devices thought not to number more than a dozen at most. By late October such fears had subsided, with reports that Kim Jong-il assured China's hastily sent special envoy, state councillor Tang Jiaxuan, that he had no plans for further tests. This was subtly modified in the first official word from Beijing on Tang's visit, with the rider that Kim had warned that if other countries impose more pressure, Pyongyang may "take further steps" - but maybe not right away.

Unwelcome to the club
North Korea thus becomes the newest and by far the least welcome member of the global nuclear club. It is the eighth current acknowledged nuclear weapons power, or ninth if Israel is included. This drives a coach and horses through the Nuclear Non-Proliferation Treaty (NPT), which in 2003 the DPRK was the first signatory state ever to quit. 

With a blame game already under way, the plain fact is that everyone's diplomacy failed. Neither sticks nor carrots prevented this alarming outcome, with its twin risks: of sparking a regional arms race, or of nuclear proliferation - which must surely be a red line, even for a US administration hitherto strangely reluctant to draw one as well as terminally incapable of hewing to a single clear and consistent policy towards North Korea.

Why did they do it?
The key question of what prompted Kim Jong-il to take this extreme step may be answered at two levels. In general, it is the ultimate and logical fruition of North Korea's consistent ideology of juche (autonomy) and its corollary jawi: self-reliant defence, against all comers and regardless of any allies or consequences. More immediately, Kim has clearly given up after five years on a Bush administration which he - and not only he - finds impossible to read as regards its intentions, but which he deeply fears still has a regime change agenda. He may thus regard a proven nuclear deterrent as his only guarantee of avoiding the fate of Saddam Hussein. And with the US militarily extended already, the timing was opportune.

The UNSC condemns again, this time with more teeth
Global reactions to North Korea's nuclear test were even sharper than to its earlier missile launches. (The sole exception was Iran, which unsurprisingly defended North Korea's right to test.) Again a UNSC resolution was drafted, debated, watered down to ensure Chinese and Russian support by removing any threat of military action, and passed unanimously on October 14. North Korea, predictably, repudiated this as a US-led conspiracy.

The new Resolution 1718 contains tougher sanctions and other checks than its predecessor 1695, which followed the missile tests. As such, they will bolster the punitive approach that the US had already been following for the previous year. Stuart Levey, the US Treasury under-secretary for terrorism and financial intelligence, travelled widely in recent months pressing countries and companies to sever financial ties with North Korea - as also with Iran. This campaign paid off, with even China and Vietnam closing DPRK accounts there.

Financial pressure is a blunt instrument
Levey explicitly claimed that "the line between illicit and licit North Korean money is nearly invisible", saying "the US continues to encourage financial institutions to carefully assess the risk of holding any North Korea-related accounts" (emphasis added). So blunt an instrument hits legitimate business and crime alike, thus giving North Korea no incentive to abandon the latter for the former; and it is easier for crime to go underground. This pressure was also hard to square with the US's wider and surely prior diplomatic goal of reactivating nuclear diplomacy. On the contrary, it handed Kim Jong-il a fresh excuse to stay away from the six-party talks. It may even have been one cause of October's nuclear test.

UNSC sanctions include military items
UNSC resolution 1718, passed unanimously on October 14, includes a detailed and wide-ranging list of sanctions. Predictably, these begin with a wide range of military items, by no means confined to WMD. Its arms trade is an important source of income for North Korea, so this may hurt if (a big if) it can be enforced. Not all customers may be scrupulous here.

Luxury goods are also banned
Also banned are luxury goods. North Korea operates a "court economy," procuring special goods and services exclusively for the leadership. This third realm, besides the military and civilian economies, has its own companies, retail outlets, and foreign trade organisations, which are not accountable to the cabinet and the normal economic bureaucracy. Some of its activities appear to include smuggling, drug trafficking and counterfeiting.

Vivid anecdotal evidence of this had surfaced often in recent years. Kim Jong-il's former Japanese sushi chef has told of being sent to Iran and Uzbekistan for caviar, to Denmark for pork and Thailand to buy mangoes for the dear leader. Konstantin Pulikovsky, a Russian official who accompanied Kim on his special train across Siberia in 2001, said that any dish of Russian, Chinese, Korean, Japanese and French cuisine could be ordered. Live lobsters were flown to the train, as was Kim's favourite delicacy: donkey meat.

In the early 1990s Kim Jong-il was reportedly the largest single consumer of Hennessy cognac, importing more than US$650,000 worth a year. He is also said to have a 10,000-bottle wine cellar, which should enable him to ride out sanctions for quite some time. That point applies more generally: North Korea will hardly have embarked on a nuclear test without first attempting to stockpile imports which it knew would be sanctioned.

The aim is to disrupt Kim's patronage system
Besides needling the dear leader - John Bolton, the hawkish US envoy to the UN, quipped childishly that Kim needed to diet - the aim here is disrupt his system of patronage. Kim is believed to cement his control at the top by lavishing gifts such as luxury watches and cars on favoured generals and others. North Korea's fury over its frozen accounts in Macau may be because they include slush funds of this kind; the actual sum, US$24 million, is hardly huge. Further provisions include freezing any funds found to be linked to North Korea's WMD activities, and a travel ban on persons so associated plus their family members. In principle that could cover just about any senior member of the DPRK regime and elite.

Differences rapidly surface over cargo inspections
Interpreting and enforcing such provisions is another matter. An immediate but crucial divergence arose over a clause calling for "cooperative action including through inspection of cargo to and from the DPRK, as necessary". The US sees this as permitting challenges and inspections at sea, as already provided for under the Proliferation Security Initiative (PSI), a US-led coalition of the willing. Others, like Russia and China, regard such action as liable to raise tensions. China swiftly clarified (or qualified) its position as supporting inspection, but opposing interception or interdiction. 

China is key to sanctions' effectiveness
Much will hinge on such niceties, and also on how thorough China's inspections really are along its long border with North Korea. After the resolution inspectors were seen checking lorries in Dandong and other border cities, but no thorough probing of cargo was witnessed. 

As China is by some way North Korea's largest trade partner (at least for publicly recorded commerce), with South Korea in second place, it is these two countries' interpretation and implementation of the UNSC resolution which will be crucial. Since both remain basically pro-engagement and wary of destabilizing Kim Jong-il's regime, it is easy to see how the brief unity achieved at the UN might start to fray into equivocation and recrimination. It was not clear if a whirlwind tour of Tokyo, Seoul, Beijing and Moscow - all ports except Pyongyang, indeed - by the US secretary of State, Condoleezza Rice, would stave this off.

In an early sign of difficulties ahead, the US ambassador to Japan, Thomas Schieffer, said on October 16 that for North Korea to agree to return to six-party talks would not suffice to get the new sanctions lifted. China for one is likely to take a less tough stance. Two days later, criticism in Seoul by Christopher Hill of South Korea's Mt Kumgang tourism project, which it has no plan to end, brought a testy response from Song Min-soon, the senior Blue House security adviser; Hill later partially retreated. There will be more such clashes.

Japan had already tightened its pressure
By contrast, another of North Korea's neighbours has taken to sanctions with enthusiasm. Besides the US, Japan too had been pursuing sanctions long before the UNSC resolutions. Initially at least in theory part of a balanced stick and carrot approach calibrated to North Korean behaviour, in practice the stick won out as bilateral ties soured over failure to solve the abductions issue. For decades Japan was North Korea's second largest trade partner and chief source of hard currency earnings, but in recent years commerce has plunged as Japan tightened up on several fronts: scrutinizing financial flows and dual-use exports, tougher port inspections for North Korea's decrepit merchant ships, and more.

Tokyo is quick off the mark
Japan responded swiftly to the missile and nuclear tests, both anticipating and going beyond the two UNSC resolutions. In July it had halted charter flights from Pyongyang and renewed a six-month ban on the Mangyongbong-92, a North Korean ferry that plies between Wonsan and Niigata. This will especially hit pro-North Koreans living in Japan, whose organisation Chongryun (Chosensoren in Japanese) is very much on the defensive.

Japan bans just about everything
Japan responded rapidly to the nuclear test, announcing on October 11 (before the UNSC resolution) and implementing two days later measures which go well beyond UNSC 1718. It has now banned all imports, vessels, and visitors from North Korea: the last 'in principle' and for six months. Australia too has closed its ports. Japanese will thus have to go without seafood, mushroom and other delicacies; already the import of clams fell last year due to a boycott organized by an abductees' support group. By-election wins for the ruling Liberal Democratic Party (LDP) reinforced the impression that the nuclear test had played into the hands of Tokyo's hardliners. The Japanese defence minister said on October 25 that setting up a missile defence system will now be brought forward, for completion by end-2011.

Sunset for sunshine?
South Korea, by contrast, faces a painful dilemma. Roh Moo-hyun - a lame duck president, whose term has barely a year to run - in July had harsher words for Japan's "fuss" over North Korea's missiles than for Pyongyang. In September he reportedly told George Bush that any nuclear test would see South Korea shift from sunshine to a more punitive stance.

Yet in fact Seoul is already punishing North Korea - but the people rather than the regime. Its perverse riposte to the missiles was to suspend the usual 500,000 tons of rice aid (it later partly relented, offering 100,000 tons after the North was badly hit by floods in mid-July); but to continue two cross-border projects - tourism at the North's Mt Kumgang resort, and the nascent Kaesong industrial zone north of Seoul, where Southern firms employ Northern workers to make export goods - which earn cash for the regime, as these are long-term and also private sector. In fact both are heavily subsidized and key tools of official policy.

Business ties may continue
Even now the plan is for Kumgang and Kaesong to continue. The conservative opposition Grand National Party (GNP) - already likely to end a decade of centre-left rule in Seoul in presidential and parliamentary elections due in December 2007 and April 2008 - has called for both to be halted, and is appealing to citizens to boycott Kumgang tours. Whether that is heeded will be one barometer of South Korean opinion. Despite a poll showing most (40%) blaming the US for North Korea's test, there is no doubt that sunshine has now dimmed. 

Seoul will reshuffle its security team
Besides foreign minister Ban Ki-moon's impending promotion to the UN, this was a major factor in the resignations of South Korea's defence minister on October 24; followed next day by unification minister, Lee Jong-seok, seen as the cornerstone of the sunshine policy.

On October 26, pressed by Washington, Seoul announced its implementation of the UNSC sanctions. North Korean officials suspected of nuclear links will be banned from visiting the South, and inter-Korean trade will be more tightly controlled - but the Kaesong and Mt Kumgang projects are to continue. The US will not be pleased.

Will Kim get away with it?
It is perhaps premature to speculate on the medium or longer-term impact either of North Korea's nuclear test, or of the sanctions it has prompted. Clearly Kim Jong-il took a big risk, incurring unprecedented condemnation even from Beijing for this "brazen" act. Yet he may have judged accurately what he can get away with. Although he has exposed Seoul's 'sunshine' policy of the last decade as a one-way lovefest, and Beijing's bland calls for all sides to keep calm as impotent flannel, signs are that not even a nuclear test will jolt either South Korea or China from their prime policy goal: to ward off a North Korean collapse, with all the political, social and security chaos they fear this would herald. If however he were to prod Beijing too far, it might be another matter.

A tipping point?
There is also a domestic dimension. If the nuclear gambit backfires and sanctions bite, this may weaken the hardline generals who urged the test, while re-empowering technocrats angry that their cherished market reforms - which Kim Jong-il has stuck with throughout the nuclear crisis, another overlooked aspect - have been so rashly jeopardized. No one will come and invest in a North Korea which is a nuclear flashpoint, even absent UN sanctions. 

It also looks a serious own goal to lose not only 500,000 tons of rice from South Korea, but also now by some accounts food aid from China too. Kim was counting on these to replace the UN World Food Programme (WFP), which once fed 6 million North Koreans but which he forced to drastically cut its programme this year. Add serious flood damage in July to rice and maize crops awaiting harvest, and renewed famine as in 1996-98 is a real risk. This might be the last straw for a longsuffering people whom a demanding state no longer looks after, and ever more of whom know that other Koreans and the rest of the world live better.

Meanwhile, at 65 Kim Jong-il has yet to appoint a successor. His irregular marital history leaves at least three sons by two mothers (both dead, and neither of whom he married), all young and untried, vying for his crown. Also in the frame is his brother-in-law Jang Song-thaek, who returned to prominence this year after being purged for three years.

What if all these strands came together? If Kim Jong-il will not yield, might one of the rival dauphins seek Chinese support for a coup to instal a more biddable regime that would give up the bomb and promote reform? That would be a relief to South Korea, the US and others also. Despite decades of seeming stability, in Pyongyang's corridors of power as well as its remote mountain mineshafts we should brace ourselves for unexpected seismic events.

Summary of key provisions of UNSC resolution 1718

- No sale or transfer to North Korea of military equipment and nuclear technology

- No sale or transfer of luxury goods to North Korea

- A freeze of North Korea's financial assets linked to developing weapons of mass destruction [WMD]

- Cooperative action for inspecting North Korean cargo if necessary

- No entry or transit for persons associated with WMD and their families

- Member states to report the implementation of the resolution within 30 days

- North Korea called upon to return to the six-party talks without precondition and to seek to ease nuclear tension through diplomacy

- North Korea was asked not to conduct any further nuclear tests or launch more ballistic missiles

- North Korea was asked to return to the Treaty on the Non-Proliferation of Nuclear Weapons

- North Korea was asked to abandon all nuclear weapons and existing nuclear programs in a complete, verifiable and irreversible manner 

- North Korea was asked to abandon all other existing weapons of mass destruction and ballistic missile programs 

Source: Adapted from Korea Times, Seoul, 16 October 2006


Footnote: further details on economic sanctions 
1. The full text of UNSC resolution 1718 is available inter alia at 
http://www.nautilus.org/fora/security/0689UNSCStatement.html

2. A thorough and well-documented account of the background and wider picture is Julia Choi and Karin Lee, North Korea: Economic Sanctions and US Department of Treasury Actions 1955-September 2006, US National Committee on North Korea, October 2006.
http://www.nautilus.org/fora/security/0687ChoiLee.pdf

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