Wednesday, May 26, 2010

A Question of Kaesong

Is North Korea prepared to close the Kaesong Industrial Complex? It could be the biggest question of all, except for the one about whether or not there will be a war.

And yet, as with all things involving the thin slicing of salami, it was never going to be that simple. No, for all North Korea did today was expel South Korean government officials from one particular office in the zone, the "North‐South Economic Cooperation Council."

Actually, not quite all. They also ceased communications between various authorities of North and South, for example the Red Cross, and announced that their belligerence would continue for as long as the "traitor" President Lee Myung Bak remains in power.

One can look at the Kaesong issue one of two ways. Either North Korea hasn't closed it because it cannot afford to close it, which seems unlikely since even North Korea's GDP is above the level at which the loss of $50 million per year would be seriously felt at the highest levels, or Pyongyang is keeping it in reserve to use as a pawn later. Closing it would be one of the few things North Korea could do which could not readily be undone, and so would need to be pondered long and hard in the corridors of power.

If it is the pawn rationale in play, and it probably is, there is a good side. The deliberate placing of obstacles in the way of war, as President Lee did in his speech on Monday and now the North has done by making a show of expelling eight South Korean government officials and then shouting about it rather than throwing out the whole show, proves that nobody has any intention of moving away from jaw-jaw.

This is bad news in terms of undermining the international community's strategy against North Korea, since announcing that you are ending all cooperative economic projects with the exception of the Kaesong Complex to punish North Korea is rather like saying you are closing all the coffee shops in the USA with the exception of those owned by Starbucks, but it depends on the ends one seeks.

If you are simply seeking to avoid a catastrophic conflict, look upon this kindly. If you are looking to bring down the last Cold War frontier, I'm afraid I won't be heading for Pyongyang with The Daily NK tomorrow, and you won't be reading about it either.

Thursday, May 20, 2010

The Mother of All Cold War Hangovers

So, it's official. After much speculation, North Korea has officially been fingered for the Cheonan attack, possibly the worst of Pyongyang's many peacetime provocations against South Korea since 1953.

According to the explanation given in this morning's press conference, a Yeoneo Class midget (meaning weighing 300T or less) submarine left a port on the west coast of North Korea on the night of March 26th, skirted through international waters to avoid detection, came in from the west towards the Cheonan, which was to the west of Baekryeong Island at the time, and deliberately torpedoed it.

The torpedo exploded 69m below the portside of the vessel, creating a so-called "bubble jet" which impacted the hull of the vessel, scything it in two. Torpedo parts were scattered far and wide, of course, but a pair of intact propellers and a drive shaft were left on the ocean floor surprisingly close to the site of the explosion.

One and a half months later, a dredger employing extremely high tensile netting dragged up that torpedo propeller and drive shaft, the latter of which had the ill-fated numerical, "1번" written on it.

It was perhaps unnecessary for an investigating official to announce in today's press conference, "We have confirmed that no other nation besides North Korea marks its torpedoes in Korean."

We know the torpedo didn't impact with the hull of the ship itself for these reasons, and we know that this particular torpedo sank this particular ship for these reasons.

Not everyone in South Korea believes it, of course. We know that North Korea is denying it, and apparently thinks that the best form of defense is attack.

The inevitable but unusually swiftly released statement from the Korean Central News Agency is not interesting for what it says, which is, among other things;

“In the event of any punishment, retaliatory action or any kind of sanction which damages our national interests, we will answer with hard-line measures including immediate war. This total war will be a sacred war of the nation, people and state to get rid of the base of followers of the rebel factions which created this fabrication and to build a unified great state.

Any trifling incidents in the waters, air or land of our sovereign territory including in the West Sea will be considered the actions of confrontation fanatics and we will cope with that with merciless physical blows and infinite retaliation.”

What is interesting, however, is that the statement was released by the National Defense Commission, to all intents and purposes the top administrative body in North Korea, and one of which Kim Jong Il is the chair. For this reason, the statement can be interpreted as being the word of Kim himself.

The second interesting thing about it is that it is more direct than most statements which emerge from North Korea, with few attempts at qualification.

These facts are designed to instill a measure of fear in South Korean people, obviously, and turn them off the rule of the conservative Lee Myung Bak administration, which some people think is to blame for creating conditions in which North Korea thought it might be a good idea to slaughter 46 conscript soldiers in cold blood.

And it is also designed to change the political landscape of the June 2nd local elections. Let us be clear, it certainly will do that, but whether it will be in the direction that North Korea wants is altogether more debatable.

Either way, as Baek Hak Soon of the Sejong Institute told Yonhap;

The South Korean announcement on Thursday marks "a moment when inter-Korean relations have essentially ended. They will remain that way unless a fundamental political change takes place in either Seoul or Pyongyang."

Yet another day to remember in the last moments of the mother of all Cold War hangovers.

Tuesday, May 18, 2010

To the Fallen of Gwangju

May is a month thick with meaning in South Korea. First comes the anniversary of the 5.16 Revolution which brought little known military figure Park Chung Hee to power, eventually turning him, slowly but inexorably and despite his many wrongs, into a national hero.

But, conversely, today is also the anniversary of the Gwangju uprising, one of those rare events which matched the narrative propagated by Pyongyang, thus inspiring ten days of blanket Chosun Central Television and radio coverage. It isn't necessary to retell once again the tragic story of the events which took place in Gwangju themselves, for they are well known. Troops were sent, the rebellion was crushed, and many people, just a few of whom can be seen on the right, were slaughtered.

It is to be hoped, though, that as time passes the way this event is remembered at the end of the No. 518 bus route in Gwangju comes to be better known. Here, in the countryside outside the city, and in a way that stands in monumental contrast to the glossing over of historical wrongs to be found at Seodaemun Prison in Seoul, lies the May 18 Memorial Cemetary, a construction which compares favorably with Auschwitz or the vast cemetaries on the fields of Flanders. Not in terms of horror, for this is nothing to do with historical relativism, but in terms of the sheer grace with which the burden of remembering the events of May, 1980 is borne.

There are no plastic replica soldiers shooting plastic replica Gwangju citizens, no mechanical replications of torture in action, and no avoiding of responsibility for what unfolded. There is no drama, and there is no hate. For this the people of Gwangju deserve a huge, huge measure of respect.

Sunday, May 16, 2010

Logic Is a Necessary Part of Discourse

Broadly speaking, it is better to have various points of view on any one issue in the public domain than not, and this op-ed piece by Selig Harrison in the Hankyoreh does nothing to change that.

Nevertheless, it is an uncomfortable read. Inevitably, the most quoted part will be;

I don't know whether North Korea torpedoed the Cheonan, but I wouldn’t be surprised if it did. Lee Myung Bak has invited retaliation by repudiating the commitment to coexistence and eventual confederation enshrined in the two summit declarations negotiated with Kim Dae Jang and Roh Moo Hyun.

It is extraordinary to me that an expert could appear in a national newspaper and assert that playground logic ("If you don't listen to me, I'll break your toy") could possibly be appropriate in the international arena, but there it is.

However, that is in the introductory paragraph, and while I think readers of One Free Korea are perfectly within their rights to be aghast at it, if it were the end of the piece it would be dismissed out of hand. But it is not.

The lead paragraph is just an attention grabber. Let's go deeper into the piece, because that is where the interesting parts lie. Here are the points Mr. Harrison is really trying to make;

- What is needed is a series of explicit statements accepting the two summit declarations as the point of departure for the resumption of the efforts made by his predecessors to improve North-South relations in parallel with denuclearization negotiations.

- Seoul should push the U.S. to pursue bilateral denuclearization negotiations with Pyongyang, a trilateral peace treaty (North Korea, the United States and South Korea) and renewed six-party talks.

On the first, it is fair to say that Lee Myung Bak has violated some of the tenets of the summit declarations in question, but it is also much more to the point to say that North Korea abrogated them first, and abrogated them better. Every single provocation of the past ten years has been a violation of the summit declarations, which are rooted in non-aggression.

These are declarations which were designed to be adhered to in a state of peaceful coexistance. I could draw attention to a number of parts of the agreements, but I'll just leave it at article 3 of the October, 2007 "Declaration on the Advancement of South-North Korean Relations, Peace and Prosperity";

3. The South and the North have agreed to closely work together to put an end to military hostilities, mitigate tensions and guarantee peace on the Korean Peninsula. The South and the North have agreed not to antagonize each other, reduce military tension, and resolve issues in dispute through dialogue and negotiation. The South and the North have agreed to oppose war on the Korean Peninsula and to adhere strictly to their obligation to nonaggression.

To which I simply say; last November, and the Cheonan. Can we now really use these declarations as "points of departure" for a renewed dialogue? Should we simply ignore all these North Korean violations, the deaths of 46 sailors?

On the second point, the U.S. was not in need of any pushing to revive the Six-Party Talks, at least not until Pyongyang put a torpedo in a passing vessel one Friday evening in March. Yes, the U.S. was and is reluctant to engage in bilateral dialogue with the North, but that was and remains because the North Koreans manufactured a rationale to desert the Six-Party Talks, and talking to them would certainly represent rewarding that bad behavior. To then come out and say that a military vessel was torpedoed in peacetime (yes it is, let's not go down that road) because the U.S. refused to talk to the regime in Pyongyang (which is not true, anyway) so we should talk to them now (reinforcing the apparent belief that bad behavior is destined to be rewarded) is broadly insupportable.

I think the claim that North Korea developed its nuclear weapons out of fear of the U.S. carried weight in the beginning, but the fact is that the Obama administration went out of its way to present an open door to North Korea, which Pyongyang promptly slammed shut.

The reality is that North Korea now is so weak that it is fearful of everyone around it, and no amount of talking will change that. We have reached an impasse, and the only thing that will change it is for North Korea to enter civilized international society.

Which does not necessarily mean reunification. I do not actually believe that "reform and opening," as the Korean press is incapable of not calling it, will necessarily destroy the North Korean regime, although it will put its internal contradictions under improbable strain. All I know is that a measure of economic liberalization is the only path North Korea has left, and if the successor has half the statecraft of his father, he had better put it to good use and make that happen. Because the clock is ticking in a big way.

Tuesday, May 11, 2010

Who Is Calling the Shots?

It's time to think more about the logic of engagement with North Korea, to improve the lives of North Koreans and, in the case of private businesses, to make a profit; and the alternate logic of squeezing the Kim Jong Il regime until it pops, but potentially at the expense of the North Korean people alive today.

The reality is that while most experts and politicians view this as an either/or question, it doesn't have to be. Both approaches have a vital role to play. When well-coordinated, they can even create potentially productive synergy.

For example, when Saebyul Coal Mining Complex, a North Korean mining management organization, recently sealed a contract between two mines under its auspices and a Chinese enterprise, it agreed to hand over a substantial and unusual degree of discretion in affairs of personnel management, food, wages, materials and working methods to the Chinese. Anything of note for the running of the mines, basically.

Accordingly, and you won't need to sit down for this, the productivity of the mines has drastically improved. Needless to say, so have profits. Better yet, the Party committee at the mine has apparently been scaled back, so it presumably has less manpower to employ in making business more difficult, profits less, workers unhappy and the future grimmer.

And profitability is not the only winner;

The source noted, “North Korean workers are delighted with this method of collaboration. They get guaranteed wages and food, and the working environment has also improved thanks to new, stronger mining timbers, so productivity has increase.”

In the cafeterias at the mines, they serve 900g of rice to everyone, and pork and eggs, which workers like. According to the source, “Workers want to take meals served in the cafeteria home for their family members. In this worker-friendly mood, Party cadres are unable to complain.”

A while ago, an anonymous, prominent American expert told me that he had it on good authority that the Obama administration had told the Chinese to keep investing in the northern provinces of North Korea regardless of the rhetoric coming out of Washington. Every deal I see like this makes it more and more likely that this is the case.

It would not help for the U.S. to admit to such a conversation publicly, of course, since that would make the North Koreans leery and reduce Chinese leverage, not to mention making the U.S. appear somewhat two-faced. However, that it happened makes a lot of sense; after all, such investments are pretty clear violations of sanctions, but are never questioned publicly by anyone.

And what effect are they having? If this one is anything to go by, they are making lives better in small pockets of North Korea, and, just like the jangmadang they are wrestling control of the people's lives away from the state.

Furthermore, they are developing areas of north and northeastern North Korea which are pretty low down the list of priorities in Pyongyang's own development plans. This is taking a measure of economic strength away from the Pyongyang region and placing it in the hands of traditionally less developed areas along the border which, if it continues, will make those areas harder to police and control. People will have more money, hopefully they will have food in their bellies, and they will know all too well what life in China must be like. There is nothing about that not to like.

It should not be forgotten, then, that some part of the reason why North Korea is being forced to accept Chinese investments on Chinese terms like this is doubtless because UN and U.S. Treasury sanctions are having an effect on North Korean access to "normal" sources of funding. It's the good cop, bad cop routine.

So, from that perspective maybe we should let Hu Jintao do the diplomatic dance with Kim in Beijing, for if he is building confidence so the Kim regime will let Chinese businesses push harder and harder bargains with the North Koreans inside the country, that might not be such a bad outcome.

Friday, May 7, 2010

There Are Good Ways to Fight, and...

According to an assembled group of North Korean defectors, Kim Jong Il is unquestionably to blame for the Cheonan sinking;

Defector NGOs gathered their members in front of the South Korean Ministry of National Defense on Friday morning to assert with one voice that the Cheonan tragedy was the work of North Korea.

The NGOs made a joint statement at the protest, “Kim Jong Il, Do Not Behave So Outrageously!” Reading the statement, Kim Young Soon of the Committee for Democratization of North Korea and herself a former Yoduk Camp prisoner said, “We know intuitively that it was a cruel act by Kim Jong Il,” adding, “Is there anyone who would carry out such a dirty move besides Kim Jong Il?”

In the joint statement, she explained what leading defectors believe were the causes of the Cheonan incident, “As the people got angrier about the failed currency redenomination, Kim Jong Il tried to create fear of war among the people, thus strengthening his control.”

The defectors additionally pointed the finger at pro-North Korean activists in the South, asserting that they share responsibility “for the victims of the Cheonan and the starvation of millions of people.”

Park Sang Hak, president of the Free North Korea Movement, said, “From May 10th, we will send balloons to North Korea containing leaflets entitled, ‘Warriors of the Cheonan, South Korea Will Avenge You!’ If the direction of the wind is right, we will send balloons every day.”

Other participating defector organizations at the event were the Committee for Democratization of North Korea, Free North Korea Broadcasting, Democracy Network against North Korean Gulag, North Korea Intellectuals Solidarity, and North Korea Reform Broadcasting.

It seems fair to say that the majority of people are now prepared to lay the blame for the sinking at North Korea's door, with the exception of Kim Jong Il's tragi-comic pseudo-academic mouthpiece Kim Myong Chol, who recently spent a goodly amount of time trying to pursuade the readers of this Asia Times piece that the Cheonan was sunk by American friendly fire.

It is also fair to say that South Korea, with or without the cooperation of the international community, is within its rights to put in place whatever countermeasures it sees fit in response to this criminal act.

It is also fair to say that the sending of leaflets into North Korea is a justifiable activity. Whether or not it has any great effect on the North Korean people is a different story; one presumes that soldiers guarding the border regions are affected by it on some level, but one also suspects there are more effective outlets for the time and effort of anti-Kim Jong Il groups overall.

In any case, none of that is the issue. What is the issue is the sending of a leaflet proclaiming, "Warriors of the Cheonan, South Korea Will Avenge You!"

What possible benefit could such a confrontational title hope to have? The average North Korean, who has precisely no influence over the activities of his or her government, and who is only fractionally likely to know anything about the Cheonan sinking in any case, and who, if he or she knows anything at all, is likely to have heard that it was heroic revenge for the damage to a North Korean naval vessel in the Battle of Daecheong last November, picks up the leaflet... and?

There is so much of importance that could be contained in these leaflets, so I hope that behind such a confrontational headline there are some very carefully contemplated contents.

Thursday, May 6, 2010

Playing in the Traffic

Diplomacy routinely seems like an exercise in saying nothing of substance in as roundabout a way as possible. Nowhere is this truer than in a U.S. State Department press briefing. Not because the U.S. is prone to an excess of diplomatic doublespeak, but because, for better or worse, the U.S. has interests in so many places and has to operate in concert with so many partners.

It is the very distance between the interests of the partner and the interests of the U.S. that leads to the greatest degree of question avoidance, it appears. This diplomatic dance would be funny, were it not for the fact that it has real life implications.

Look at yesterday’s departmental press briefing. Spokesman Philip Crowley was presented with two blunt questions about whether the U.S. is going to deal with the Cheonan tragedy and the return of North Korea to the Six-Party Talks separately, as two unconnected events which should not influence each other, or whether it plans to hinge the future of the Six-Party Talks on the results of the ongoing Cheonan investigation.

It is not that the U.S. and South Korea are on different paths with regards to timing; indeed, it seems clear from this that the U.S. would want to wait for the Cheonan investigation results before saying anything on the Six-Party Talks even if Kim Jong Il were to trumpet North Korea’s return to the Talks from the top of the Juche Tower.

The real difference, however, is this;

QUESTION: Follow-up. You said on this podium yesterday you hope that North Korea will come back to the Six-Party Talks. It means if Kim Jong Il in Beijing right now makes the decision and says they will come back to the Six-Party Talks, you take part in Six-Party Talks?

MR. CROWLEY: Well, there are a couple of ifs there. Let’s see, but, I mean, we are, there are things that North Korea has to do if this process is going to move forward. And its behavior, living up to its obligations, meeting its commitments that it’s made over a number of years; those are things that North Korea has to do. And let’s see what they’re prepared to do.

Note that he didn't mention the Cheonan investigation, he only mentioned extant obligations, meaning already signed denuclearization agreements. Yes the U.S. will wait for the results of the Cheonan investigation, but it doesn't seem that the results will actually matter. The reason, of course, is that the U.S. has greater interest in denuclearization than it does in the Cheonan disaster, while South Korea cares more about the probable deaths of 46 of its conscripts at the hands of North Korea than it does, in the short term at least, about the (still largely hypothetical) risk of nuclear Armageddon on the Korean peninsula.

Neither party is wrong in this, and neither party is right. It's national interest at work. What is true, though, is that North Korea has been playing in the gaps between the policies of each interested party to the inter-Korean dispute for more years than many people can remember, and it only benefits one: North Korea.

Tuesday, May 4, 2010

Going against the Grain

In stark contrast with most North Korea watchers, Alexandre Mansourov believes that Pyongyang’s economic policies since the currency redenomination of November, 2009 have not been the arbitrary, ad hoc responses to negative outcomes from earlier policy decisions that they have looked very much like.

Mansourov, writing on the new SAIS blog 38 North, says he believes that North Korea is engaged in a "longer term development strategy".

Pyongyang's aims, he explains at length and with no obvious signs of pessimism, are to “displace imports, restore self-reliance, and consolidate state control over the economic system at the expense of the newly emerging proto-markets in retail trade and the small private merchant class.”

As a result, he believes North Korea is likely to hereafter pursue a policy of increasing protectionism and a return to state leadership of the economy in an effort to “further control demand, regulate the supply of imported goods through selective protectionist tariff measures, raise funds for new infrastructure and facility investment, and boost the supply of domestically manufactured goods.”

Mansourov, to be fair, is unsure of how the new policy will work out, whether what he calls the “new equilibrium” will actually “bring about economic growth and contribute to increasing production, trade, and consumption,” or end up in “economic failure causing social chaos and political instability,” but is sure the western media is wrong to presume failure so soon.

Do I lay much stock in this analysis? No, not by any means. The currency redenomination was confiscatory, and could not possibly have led to any other outcome besides hyperinflation in the short term. Its aim was primarily to bring the markets to heel, a desired side effect in Mansourov's analysis, rather than the main ambition. In any case, it was an aim in which Pyongyang was largely unsuccessful, not least since the state was in no fit state to step into the breech and provide for the people for more than a month or two.

In addition to which, how can North Korea hope to "raise funds for new infrastructure and facility investment, and boost the supply of domestically manufactured goods"? There is nothing to tax domestically, and import substitution development is extremely hard when you have just stolen the assets of the emerging middle class! Kim's effort to claw privately held foreign currency into the state's coffers was also obviously doomed from the start, since even North Korea couldn't bring to bear the degree of repression necessary to get people to volunteer their savings to the state.

I am not alone in my opinion. Other experts, first but not only Marcus Noland, agree that the aim of the North Korean policy may indeed be to build back up a statist model of economic development, but also believe that the policy is almost certain to fail, and is, damningly, "unlikely to even contribute significantly to the stated goal of rebuilding socialism.”

By drastically reducing the amount of money in circulation at the time of the redenomination, the Noland report pointed out in January that the redenomination has had the singularly unhelpful effect of increasing the risks associated with market activity, adding fuel to the trend towards holding cash in foreign currency rather than won.

This is destined to actually circumscribe the state’s capacity to do what it is aiming to do, namely create a strong and prosperous state. At the end of the day, the market is the only way besides trade in natural resources for anyone in North Korea to generate wealth. Without wealth, and the taxation of that wealth, how can one possibly hope to develop the state? It's a Catch-22.

In short, it seems wildly implausible that the state is engaged in a "long term development strategy," or at least not one with any hope of success.

And, as an aside, what can we say about the execution of the "author" of the strategy, Park Nam Ki? Does this suggest a long term development strategy? If Kim Jong Il is casting around for scapegoats and going cap in hand to China, that is not a good sign, I'd say.