Yay, nuclear blackmail! Obama Admin caves on N. Korea denuclearization, human rights in face of nuke test threat

The Nuclear Threat Initiative Newswire, citing Yonhap, reports that the Obama Administration, South Korea, and Japan have agreed to a major shift in its policy toward talks with North Korea, “easing its conditions for returning to nuclear talks,” out of fear of a new nuclear test on the eve of mid-term elections in South Korea and the United States.

Since before Obama’s inauguration, North Korea has repeatedly said that it would never give up its nuclear weapons programs. Until now, the administration had taken the position that the purpose for having the six-party denuclearization talks was denuclearization, and that there was no point in returning to talks unless North Korea agreed that the talks were leading toward North Korea’s denuclearization at some point. Here is how Secretary of State John Kerry put it in February:

We have yet to see evidence that North Korea is prepared to meet its obligations and negotiate the verifiable denuclearization of the Korean Peninsula. Let me be clear: The United States will not accept North Korea as a nuclear-armed state. We will not accept talks for the sake of talks. And the D.P.R.K. must show that it will negotiate and live up to its commitments regarding denuclearization. [John Kerry]

In Washington, however, “let me be clear” is politispeak for “here comes a talking point I’m going to repeat until I abandon it under political pressure.” And true to this rule, NTI reports that we will abandon that talking point — sorry, principle — in favor of a return to one of the most memorable flops in the history of North Korea diplomacy:

Washington, along with allies Seoul and Tokyo, now wants North Korea to accept a moratorium on its nuclear weapons development in order for the frozen six-nation, aid-for-denuclearization negotiations to be resumed, the Yonhap News Agency reported on Monday, citing an informed diplomatic insider.

The negotiations involving China, Japan, the two Koreas, Russia and the United States were last held in December 2008. They propose to reward Pyongyang’s gradual and irreversible denuclearization with timed infusions of economic assistance and international treaties.

“Two principles have been set,” said the source. “The first is to make practical progress in denuclearizing North Korea and the second is to prevent the North from sophisticating its nuclear capability.”

Yay, nuclear blackmail! Now that the administration thinks the North Koreans are about to test a nuke, it’s floating this trial balloon, signaling that it’s ready to drop long-standing U.S. demands from disarmament to a freeze.

Fortunately, there are no signs that the North Koreans are ready to take this deal, but if they were smart, they would, because accepting it now — after demonstrating their leverage over Obama — could put them on a path toward de-facto recognition as a nuclear state. The administration will insist, of course, that the eventual goal of the talks is still denuclearization, but North Korea has never been more forceful in insisting that it will never give up its nukes, or more ferocious in reacting to any such suggestion. At its moment of diplomatic triumph, Pyongyang almost certainly would not sign off on place-holder language adopting, for example, the September 19, 2005 joint statement (which North Korea unilaterally reinterpreted into meaninglessness within a day of signing it).

If the administration is really desperate for a deal — and it certainly looks desperate — it will simply obscure that question within a cloud of inky unwritten commitments. That seems to be the plan this time, too. The offer on the table now is a revival of the ill-fated Groundhog Day Leap Day deal of 2012, which promised aid (and other things we’ll get to later) in exchange for a freeze (not a dismantling) of North Korea’s nuclear and missile programs.

Because nothing was reduced to writing, however, the Leap Day “deal” began to unravel almost immediately, as it became clear that the parties walked way from it with at least three different understandings. Would the WMD moratorium would be in effect while talks continued? Which would arrive first, the IAEA monitors or the aid? You’d think that a competent diplomat would have said what a competent lawyer would say: “Get it in writing.” In the end, there wasn’t even a written agreement that the North Koreans would shut down the Yongbyon reactor; the North Koreans omitted any mention of that when they announced the deal. Just 16 days after it was “agreed,” the Leap Day deal collapsed when North Korea announced a long-range ballistic missile test. The Obama Administration now proposes to pour its entire North Korea policy into this leaky vessel.

(Also, it has to be awkward to offer food aid right after the World Food Program found major deficiencies in its program to monitor the distribution of that aid. Aid monitoring conditions made up a large part of the 2012 deal. Congress would also have a say, as its last Appropriations Act put strict limits on aid to North Korea. A new aid package might require a special appropriation, which seems extremely unlikely.)

It would be bad enough if this offer had been a long-standing element of a policy that laid out a progression toward disarmament. It’s far worse that it is revived now, as a policy shift offered in response to (and therefore, as an incentive for) blackmail. Instead of a coherent policy that focuses economic, financial, humanitarian, diplomatic, and subversive pressure in an integrated campaign to change the security calculations (or failing that, the personnel composition) of the regime in Pyongyang, the administration appears to have no coherent North Korea policy at all. It looks passive, reactive, unplanned, and uncoordinated. The signals being sent from Seoul and Tokyo are equally confusing and uncoordinated — so much so that that topic merits its own post — but the real point is that if the U.S. doesn’t coordinate those policies (and it isn’t) then North Korea will divide us from our allies with clever inducements, and entropy will prevail. Deal or no deal, our diplomats are being outsmarted, bluffed, and blackmailed by a man who has never met a foreign leader or diplomat, but who has met Dennis Rodman three times.

What else did the U.S. agree to in the 2012 Leap Day deal? “[T]o take steps to improve our bilateral relationship in the spirit of mutual respect for sovereignty and equality.” (As an aside, who believes that the United States and Pyongyang are equals in any conceivable way?) Pyongyang will certainly understand that as a concession that the U.S. will sit back and do nothing of consequence later today, when Justice Michael Kirby goes to the Security Council to call for action to address the world’s worst human rights crisis. Sidelining that issue until the world forgets about it again would, by itself, be a very big win for North Korea and China.

Everything about this report sounds like a trial balloon (or a lead balloon — choose your own metaphor). Within a day or two, the administration may well deny this report — and they’ll certainly deny how I characterize it here — but I doubt that Yonhap reporters simply invented it. Far too many elements of this story fit with other things we’ve seen.

For instance, it would explain the conspicuous silence of Samantha “Genocide Chick” Powers in the face of the U.N. report finding that North Korea is committing crimes against humanity. It would explain all of those suspicious diplomatic moves last month (same link, below the embedded video). It would explain why Bob King, our Special Envoy for Human Rights in North Korea, is saying that human rights and nuclear issues will remain separate, allowing the State Department to sideline the entire human rights issue, as it did in 2007. It would explain those “secret” talks between North Korea and Japan, given that Abe was Prime Minister in 2007, when the State Department betrayed him by sidelining the abduction issue in Agreed Framework 2.0. It would explain why the administration has kept its North Korea sanctions sluggish, incremental, and thus easily evaded.

And of course, the timing is right — second-term administrations do deals like this when they’re weakened politically, when they lack the political energy to implement anything more plausible, and when they really just want to buy time and make a quiet exit. But for the victims of North Korea’s pathology — North Koreans, South Koreans, Japanese, Syrians, and eventually Americans — there is no escape.


[Note: This post was edited after publication, including correction of the date of the 2005 Joint Statement. Thanks to a reader for pointing that out.]

A terrible tragedy

I’m sorry I’ve been too busy to post quite as much this week, although I have a number of posts half-finished and in the queue.

Today, however, my thoughts are with the families of the many young lives lost in the terrible tragedy off the coast of South Korea. Like everyone, I’m eager to know how this could have happened in calm seas, when the ship was reportedly near its intended course, and why the crew told the passengers to remain in place as the ship started to list.

Inspector General finds flaws in WFP monitoring in N. Korea (and I find a bigger one)


A reader (thank you) directs my attention to this Fox News report covering a new report by the U.N. World Food Program’s Office of Inspector General, finding major loopholes in the WFP’s controls to prevent the North Korean government from stealing food aid and diverting it to regime loyalists and the military. The report is so cryptic that it’s almost unreadable, so I’ll summarize:

- The WFP failed to meet its targets for monitoring visits to ensure that aid was being delivered to intended recipients. The in-country program padded its monitoring visit statistics by including fly-by VIP visits, and monitoring visits that were canceled by the regime.

- When the regime did cancel monitoring visits — in many cases, ostensibly because of weather-related reasons and road damage — the WFP never checked up on the North Koreans’ excuses.

- The WFP isn’t doing adequate on-site “supervision and oversight” of its food warehouses. The report suggests — sorry, the language is so impenetrable that “suggests” is the best verb I can use — that the WPF has outsourced its warehouse security to … the North Koreans. (The North Koreans are guarding the food! What could go wrong?)

- The WFP allowed the North Koreans to help run its computer networks and databases, which creates a vulnerability in the integrity of WFP monitoring.

- The WFP failed to document what it paid the North Koreans for fuel and labor provided by North Korean nationals, making it impossible for the auditors to know if the WFP overpaid.

- And finally, there is this:

Assessment of ‘No Access, No Food’ requirement – In the absence of documented analyses and evaluations by the Country Office of the Governments’ reasons for the denial of access to WFP staff of WFP project sites, the Country Office could not demonstrate that its agreement with the Government on access is fully complied with. Collect and analyse data on reasons for denial of access for both programme and logistics at all levels and implement the relevant clause of the agreement where warranted. [Page 10]

As an aside, I can’t help wondering why the WFP pays the North Korean regime for services rendered to feed the very people the regime itself is responsible for feeding. After all, it’s not as if they’re really short of cash in Pyongyang, but that also goes to the wider issue of why the U.N. has to have a feeding program for North Korea at all.

The latest report won’t do much to improve the WFP’s donor fatigue problem:

In the case of North Korea, WFP in the past two years has been trying to raise $200 million to feed some 2.4 million of the country’s most vulnerable people. Those operations are currently only “21.3 percent funded,” according to a WFP spokesman. And as a result, the spokesman said, “WFP in 2013 distributed the lowest amount of food assistance [in the country] since 1996.” [Fox News]

Some of the worst damnation of the WFP’s efforts actually comes in guise of praise. For example, the IG praises the great working relationship between the program officers and regime officials:

“[T]he [U.N.] Country Office monitoring staff and Senior Government County officials had established effective and efficient working relationships and County officials came to meetings with the Country Office monitoring missions with most of the required supporting documentation.”

In other words, the regime managed them, and they all got cozy. How you react to all of this will obviously depend on your perspective:

“The report makes clear that the WFP program in North Korea is unsustainable,” argues John Bolton, former U.S. Ambassador to the U.N. and a Fox News contributor. “There is simply no evidence the WFP can prevent itself from being exploited by the North Korean authorities, so that food aid is allocated according to the regime’s priorities rather than by the needs of the people.”

The WFP responds that it’s all because … they’re underfunded. So noted.

This raised one of my bushy eyebrows:

WFP also declared that “the audit report commended the geographical coverage of WFP’s monitoring and the robust monitoring systems that WFP is able to use in the country.” In fact, the report did declare that “the geographical coverage of the Country Office’s monitoring activities was commendable.” 

Yes, let’s talk about that, because I’ve been meaning to talk about this for a while now. A well-regarded North Korea scholar gave me the color-coded map you see below. It was produced by the WFP. The areas shown in blue are those where the WFP claims to have had access to NorthKorea in 2013, in accordance with its “no access, no food” principle. I then made that map into a Google Earth overlay, so that I could show the locations of North Korea’s main political prison camps — places North Korea says don’t exist, and where foreigners aren’t allowed to go.

Overlay - Camps and WFP access

If you click and expand this map, you’ll see that the areas the WFP claims to be visiting, and feeding the population, include parts of Camp 14, and all of Camp 16, the largest and most secretive camp. They include Camp 25, on the outskirts of the city of Cheongjin, which recently underwent a major expansion, and Camp 12 at Cheongo-ri, also recently expanded. They even include Camp 22, from which thousands of prisoners simply disappeared, many of whom may have starved to death.

Now, if the WFP’s aid monitors had really gone to these places, you’d think that by now, one of them would have leaked word about what he or she saw there, or didn’t see. “See? Just an ordinary peaceful farming village, only surrounded by electric fences to keep the undeserving from entering this bucolic paradise!” That certainly would have been newsworthy. Or, you’d think that the WFP’s spokesman would have told me so when I posed the question to him in this interview. He didn’t answer.

In other words, the Inspector General isn’t finished inspecting the WFP’s adherence to “no access, no food.” Why isn’t the WFP feeding North Korea’s political prisoners, who may be the hungriest and most vulnerable people in North Korea? The WFP feeds prisoners in the Ivory Coast, Rwanda, and Cambodia. Why not North Korea, too? Must they be sacrificed to the WFP’s “effective and efficient working relationships” with this regime?

What I say here, I say more in sadness than in anger. The WFP is motivated by a sincere desire to help the North Korean people. Unfortunately, it fell into the same trap that all foreigners eventually fall into when they enter North Korea — they are bullied and cajoled into playing by Pyongyang’s rules and abandoning the principles that got them there in the first place. It’s what Marcus Noland has described as “North Korean exceptionalism” — Pyongyang’s ability to exempt itself from rules, like “no access, no food,” that apply to everyone else. The WFP made the difficult decision to help some North Koreans — actually, just 2.5 million out of a population of 23 million — even at the cost of perpetuating the system that starves many others. But if we can’t be sure that the WFP is feeding its intended recipients, that compromise becomes much harder to justify.

Open Sources, April 10, 2014

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YONGBYON JUST KEEPS GETTING SCARIER: OFK readers will remember the day the North Koreans blew up the cooling tower of their 5-megawatt reactor at Yongbyon to feign compliance with George W. Bush’s Agreed Framework 2.0. This was the modest pinnacle of Chris Hill’s diplomatic career, and came even as North Korea was submitting false declarations about its nuclear programs, denying the existence of a (since revealed) uranium enrichment program, and submitting samples of aluminum tubing and documents that were smeared with … enriched uranium.

(Meanwhile, as North Korea was reneging, Bush removed North Korea from the list of state sponsors of terrorism, allowed a shipment of North Korean tanks to land in Ethiopia in violation of UNSCR 1718, did nothing about the revelation that North Korea built a nuclear reactor in Syria, and — most distressingly of all — lifted the potentially crippling financial pressure on North Korea’s accounts at Banco Delta Asia.)

At the time, a debate waged about whether the cooling tower was even essential to the operation of Yongbyon or whether its destruction was mere media theater. Later, during the Obama Administration, the North Koreans resolved that debate by laying down a network of underground pipes as an alternative cooling system, connecting it to a nearby river, and restarting the reactor.

Unfortunately, last summer, the river flooded and moved eastward, away from the intake and outlet for this system. Writing at 38 North, Nick Hansen warns of a significant risk that flooding could block — or cause the river to bypass — the system, which would probably cause the reactor’s graphite core to catch fire before the North Koreans could shut it down. Yongbyon is a small reactor, so this wouldn’t be a Chernobyl-scale disaster, but it’s safe to say that North Korea’s response to it would be inept, secretive, and almost certain to make the worst of things.

It’s an interesting post, well worth reading in full. I’ve found that a good rule to follow with 38 North is to read everything that comes with satellite imagery, and nothing that comes without it.

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DEFECTION NUMBERS RISE despite an ongoing border crackdown. The rise is modest:

Statistics released by the Ministry of Unification today have revealed a total of 360 North Korean defectors entered South Korea during the first quarter of 2014; 153 in January, 111 in February and 96 in March. While the figure is a slight increase from previous years, it would be premature to assume a rise in defector numbers across the board, a ministry official said. [Daily NK]

It will be interesting to see now many of the newer arrivals are from the Inner Party, and what they have to say about the mood in Pyongyang since the Great Purge.

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SERIOUSLY? The Japanese managed to persuade President Obama to make a three-day state visit to Tokyo, yet he’s only going to make an overnight stop in Seoul? That’s not going to endear him to the Korean Street. I can understand the importance of highlighting our friendship with Japan when it’s under threat from China, but isn’t it just as important to demonstrate our friendship with South Korea when North Korea is invading its airspace with UAVs and threatening to test another nuke?

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THE ROOF OF ONE OF KIM JONG UN’s palaces has caved in. As my grandmother would have said, “nebach.”

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NK NEWS HAS ASSEMBLED a panel of North Korean refugees, who offer their predictions about the length of Kim Jong Un’s rule.

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ANDREI LANKOV THINKS the era of “dangerous” dissent may have begun in North Korea. I don’t agree with much of Andrei’s analysis — in particular, I think this era has begun to a greater extent that Andrei does, and has waxed and waned with the circumstances, and the analogy between the U.S.S.R. and North Korea is a bad fit. It’s still interesting reading.

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KAESONG UPDATE: Say, do you ever get the idea that North Korea doesn’t share South Korea’s vision of Kaesong as a globally interconnected capitalist megaplex sprawling across the Workers’ Paradise, tempting hundreds of thousands of North Koreans with the lure of blue jeans, toilet paper, and ChocoPies? No?

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REGULAR READERS KNOW THAT I’M UNIMPRESSED by most foreign “engagement” projects inside North Korea. Few of them offer any real potential to trigger significant social or political change in North Korea, and nearly all of which provide significant hard currency to the regime, thus helping to pay for the secret police, propaganda apparatus, cell phone trackers, barbed wire, and other tools that help keep non-elite North Koreans isolated, ignorant, and hungry.

The one “engagement” project about which I’ve reserved some ambivalence is Koryolink, the cell phone venture of the Egyptian conglomerate Orascom. I can’t weigh the costs and benefits of the program unless I know how Pyongyang uses the money it earns from the venture, but cell phones certainly are a potential tool of inter-city communication, and it seems unlikely that the regime can monitor all of the calls. No, I don’t believe Koryolink really has 2 million subscribers — that would be about 10% of the total population — but even so, how can the regime prevent them from being used for subversive talk? An illuminating report from the VOA provides some answers, including the fact that the minutes cost so much that many subscribers carry their phones as status symbols, but can seldom afford to use them.

There are no signs that North Korea introduced cell phones as a means of reforming or opening up to the outside world. On the contrary, Pyongyang appears to be using the wide distribution of mobile phones to maintain and solidify its stability. One defector explained, “It is stupid to criticize the regime on the cell phone, which does more harm than good, when the call rate is exorbitant.”

It isn’t just the money factor, though, that is stopping cell phone users from actually using the handsets for communication. Authorities monitor all text messages, along with location data in real-time. Voice calls are recorded, transcribed, and stored for three years according to a former North Korean security agent. Also, there are no international calls allowed, and Internet access is banned for all but the ruling elite.

He told VOA that security guards often stop and question cell phone users on the street to search for any “politically inappropriate” content on their phones, especially South Korean soap dramas. An officer can confiscate a phone on the spot at his discretion. [VOA]

And if things get edgy enough in Pyongyang, you can be sure there’s a kill switch for the whole system. Even so, traders still manage to use them to exchange price information or arrange transactions, and trade is what’s feeding most North Koreans today.

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OH REALLY? KOREANS ARE OFFENDED when Japanese put up “Japanese only” signs? You know what? I totally understand how that sort of thing would offend someone.

It’s enough to make you wonder why South Korean troops are still defending them. Oh, wait.

With or without flamethrowers, purges continue in North Korea (Updated)

What are the odds that Jang Song Thaek was eaten by a pack of dogs, or that Ri Sol Ju made a sex tape with Jang? Probably not greater than 10%, and I’d put the odds that the South Korean NIS planted both stories at roughly twice that. Lurid stories like these have never held much appeal to me, because I’ve never believed that anyone in a position to know them first-hand would ever tell them to a South Korean reporter, and in any event, I can’t add anything useful to the speculation about their veracity. Their epidemiology interests me much more. It’s inevitable that stories like these would emerge, spread, and mutate in a society that’s a vacuum of reliable information, but stifling and irriguous with terror. That, by itself, is notable. (So is the fact that they also spread to our own society nowadays, but that’s a subject I’ll leave to others.)

The most recent of these stories holds that one O Sang-Hon, the Deputy Minister of Public Security, was executed by flamethrower. The story, in the Telegraph, is attributed to “South Korean media.” Further investigation traces it to this report, from the Chosun Ilbo, which claims that O was given this gruesome end because “he had turned the ministry into Jang’s personal protection squad.” On the bright side, at least O’s job description gives us little cause to mourn for him. I probably have enough fingers to count the people who will miss him.

Interestingly, the death-by-flamethrower story is not completely novel. Last month, an informant for the guerrilla news service Rimjin-gang reported a similar claim:

According to our reporting partner, in the North Korea’s third largest city, Chongjin, North Hamkyung Province, several officers belonging to the fisheries enterprise run by the military unit affiliated to Jang Song-thaek have also been executed by firing squad.

It is difficult to verify the information at this point, but it is said that a rocket grenade was used for their execution instead of a rifle, and the remains of their bodies were incinerated by a flamethrower. This rumor is spreading among the people, adding to the already tense atmosphere. [Rimjin-gang]

If two independent sources are reporting similar rumors, it’s reasonable to believe that mutations of this rumor are circulating inside North Korea. Most of Rimjin-gang’s accounts of officials being purged are less vivid. They tell of well-connected officials who simply disappeared without explanation.

The Chosun Ilbo‘s report also claims that “nine other high-ranking party officials” and “around 100 lower-ranking party officials” have been purged so far, that a second purge is underway now, and that a third purge of security forces officials is planned, to “target [Jang’s] supporters in provincial chapters of the Workers Party.” With respect to the previously reported purges of the ambassadors to Cuba and Malaysia, the former was executed, while the latter was “fortunate” enough (my word) to be sent to a prison camp, then returned to Pyongyang, jobless.

At best, this report is the product of an inexact science. Just a week ago, the same newspaper reported that the regime was “poised to execute 200 high-ranking officials loyal to” Jang, and to send 1,000 of their family members to prison camps. Yonhap, by contrast, reports that a large number of officials close to Jang were recently elected as deputies in the Supreme Peoples’ Assembly, suggesting that the purge was slowing. It notes, however, that some officials who had appeared at public events a month after Jang’s purge have, themselves, been purged since those appearances. If half of this is true, we can deduce that there’s no such thing as job security in North Korea today.

In the aggregate, multiple sources tell us that North Korea’s Great Purge isn’t over. In the last several weeks, we’ve heard that (via Yonhap) that the Ambassador to Syria and (via Singapore’s Straits Times) the Commerce Minister have been sacked. The latest rumor, which comes to the Joongang Ilbo from a South Korean government source, holds that “North Korean Prime Minister Pak Pong-ju will be dismissed ahead of the upcoming Supreme People’s Assembly session,” and will be made a scapegoat for North Korea’s economic woes. The Global Times, via The Daily NK, even reports that elite North Korean military units are training to respond to a potential attempt to assassinate Kim Jong Un.

You don’t have to believe any of the more lurid details of these reports to believe that North Korea’s power structure still hasn’t stabilized under Kim Jong Un’s firm control. RAND’s Bruce Bennett links the ongoing purge to North Korea’s recent military provocations:

While North Korean Leader Kim Jong-un perceives these exercises as a show of strength for both internal and external consumption, they actually demonstrate that his regime is weak and that he fears instability. Kim has been purging many in the North Korean leadership and executing some. He has certainly been able to do so, but sooner or later one or more of his leaders will seek to avoid personal and family doom by targeting Kim with assassination or a coup. Kim is trying to avert such a prospect by demonstrating his support of the military and his military empowerment—with both heavily targeted at the internal political audience. [Bruce Bennett, RAND]

Bennett concludes from this that “the North Korean regime is less stable than many experts believe.” Bennett is talking about internal cohesion within the regime, but another implication of these reports is found in the wilder stories that circulate at the bottom of the songbun ladder.

No doubt, some people will rise to say that these stories must be false — even disinformation — but this would be groundless and speculative. Reports we’ve heard from too many sources to dismiss tell us that North Korea is capable of some awful things when it comes to the taking of human life. A better answer is that the claims are extraordinary, that extraordinary claims require extraordinary evidence before we should be prepared to accept them, and that this report is not supported by extraordinary evidence. Who knows if any of them are true? Not me, and probably not you. See also.

The very fact that stories like these circulate widely in North Korea is still significant. I don’t think the North Korean regime would plant them, despite their useful in terrorem effect, given that they’re spreading along with expressions of disapproval at Kim Jong Un’s cruelty, and even of sympathy for Jang.* In December, the Daily NK reported that the regime was suppressing any idle talk of the purge. If that’s still true, then the circulation of these rumors and conspiracy theories inside North Korea itself has some significance — that the regime is losing control over what people think, and what they think they can get away with telling each other.

* This sympathy is misplaced. Among his other responsibilities, Jang oversaw the dreaded State Security Department (Kuk-ga An-jeon Bo-wi-bu), which operates all of North Korea’s remaining political prison camps.


Update: Contrary to the Joongang Ilbo‘s report, Pak Pong Ju was not fired. It doesn’t mean he won’t be, but it does mean that you should be especially distrustful of “insider” reporting on North Korean kremlinology.

More interesting to me is the fact that former Ambassador to Switzerland Ri Su Yong is the new Foreign Minister. Not surprisingly, Ri is reported to be an expert money launderer. I suppose he also knows a few things about where to buy Nestle infant formula ski lift equipment.

Oh, and someone named Kim Kyong Hui was also “elected” to the Rubber Stamp Gallery, who may or may not be the same person as Kim Jong Il’s sister and Jang Song Thaek’s widow, whom we haven’t seen in public for many months. South Korean government sources aren’t sure if it’s the same person.

HRNK to host address by Michael Kirby, other events next week

The Committee for Human Rights in North Korea will host a series of events next week. From HRNK’s site:

- Human Rights in North Korea: An Address by Michael Kirby. On April 14, the Center for East Asia Policy Studies at Brookings and the Committee for Human Rights in North Korea (HRNK) will host an address by Michael Kirby, chair of the U.N. Commission of Inquiry on Human Rights in North Korea (COI), to present its findings and recommendations. Following the keynote address, Marcus Noland of the Peterson Institute for International Economics and an HRNK board member, will comment on the COI report and discuss policy implications for the United Nations and its member states, and possible impact on North Korea and its people.

- Illicit Economic Activities of the North Korean Government. On April 15, the Center for East Asia Policy Studies at Brookings will host the release of a report from the Committee for Human Rights in North Korea (HRNK), entitled “Illicit: North Korea’s Evolving Operations to Earn Hard Currency.” The report, authored by Brookings Nonresident Senior Fellow Sheena Chestnut Greitens, analyzes the history and current status of North Korea’s foreign currency earning operations, focusing on illicit activities. It discusses how these activities have changed in recent years and the implications for U.S. and international policies toward North Korea. Nicholas Eberstadt of the American Enterprise Institute and Marcus Noland of the Peterson Institute for International Economics, both HRNK board members, will comment on the presentation.

- Korea Club with Hye-Won Ko. April 15th at Woo Lae Oak Restaurant, in Tyson’s Corner, Virginia. Hye-Won Ko is the Senior Research Fellow (former Director of Center for the Evaluation of Skills Development Policy ) in the Korea Research Institute for Vocational Education and Training (KRIVET) under the Korean Prime Minister’s Office. Dr. Ko will address the relationship between lifelong vocational education and training (VET) and social cohesion of North Korean defectors in South Korea. Lifelong VET develops human and social capital. In turn developed human and social capital leads to economic and non-economic achievements. The point that Dr. Ko has made in studies she authored is that greater economic and non-economic achievements would result in a higher level of social cohesion.

- 2014 Annual Conference of the International Council on Korean Studies. On April 17, 2014, from 8:45 am to 6:00 pm, HRNK, KEI, and the International Council on Korean Studies (ICKS) will co-host the 2014 Annual Conference of the International Council on Korean Studies. The human rights panel discussion, held from 9:00 to 11:45 am, will be moderated by Greg Scarlatoiu, HRNK executive director. The panelists will include: Roberta Cohen (HRNK co-chair and senior non-resident fellow, The Brookings Institution), who will address the forcible repatriation of North Korean refugees by China; Robert Collins (author of HRNK’s report “Songbun, North Korea’s Social Classification System”), who will address the human rights implications of the succession process in North Korea;  and Bruce Bechtol (Angelo State University), who will address the impact of proliferation and illicit activities on the North Korean human rights situation. The discussants will be Amanda Mortwedt Oh (HRNK) and Soon Paik (U.S. Department of Labor and ICKS).

Some of these events require an RSVP, so follow the links if you want to attend.

Open Sources, April 7, 2014

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A THIRD NORTH KOREAN UAV has been found in the mountains near South Korea’s east coast. It’s another low aspect ratio wing design, similar to the one found in Paju last week.

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NORTH KOREA LAUNCHES A NEW CRACKDOWN on Christians: “A Pyongyang source explained the details. ‘Having sent 30 people off to prison camps, I am told that a total of around 100 more residents have been taken in for questioning by the Department of State Security. Among them there are some who went to China this year, but others were last there between five and eight years ago.’”

In February, The Daily NK reported that the regime had eased up on religious belief, but in retrospect, that was probably either a false dawn or a temporary priority shift. We later heard a rumor that 33 Christians were about to be executed for having contact with South Korean missionaries.

Needless to say, none of these reports can be confirmed. If only some big, responsible corporation had a news bureau right there in Pyongyang to investigate this, I’m sure it would get to the bottom of it.

Update:  More here. North Korean security forces reportedly lured some of those arrested back from China.  Update 2: And there’s this report that the regime has launched a campaign of anti-Christian ideological education in Pyongyang. It’s interesting that these reports are focused on North Korea’s capital, which is ostensibly a reserve of the loyal elite.

~   3   ~

THE RODONG SINMUN KEEPS IT CLASSY with more sexism about Park Geun-Hye. The English version of the Rodong Sinmun is publishing denunciations of President Park as a “bitch,” and more:

The three-part series, which ran in the official newspaper Rodong Sinmun on Wednesday, describes her as a lunatic, idiot and “cold-blooded animal”. But it also stresses the fact she has never married or had children and claims she “jabbers like a little girl”, in a string of insults presented as quotes from ordinary North Koreans. The subtitle of one piece reads: “Old cat groaning in her sickbed”. [The Guardian]

This may or may not be worse than KCNA’s previous characterization of Park as a “political prostitute,” but probably isn’t as bad as the Korea Central News Agency’s calls to slit the throat of “rat-like” ex-President Lee Myung Bak.

Now, I don’t want to be another pedantic know-it-all who tries to defend North Korea from its own English translations — a unicorn is just as mythical as a unicorn-lion, after all — but I was curious enough to track down the original Korean version to see what word the Rodong’s translators derived the b-word from. The original version doesn’t translate to a single whole word, but uses the suffix “nyon.” This requires some explanation. The Korean language uses a complex system of honorifics, most often tacked onto nouns and verbs as suffixes, to connote a person’s age and social position. “Nyon” is a suffix of dishonor, used exclusively against women. It isn’t exactly profanity, but it’s a fighting word, and fairly described as sexist, especially when used against the president of a country.

Either way, if this is a “charm offensive,” it’s more the latter than the former. I wonder if any self-described feminist could still sympathize with such a regime. Oh, wait ….

~   4   ~

CHILD ENDANGERMENT: Christine Ahn has been blessed with an adorable little girl, but Ahn’s adorable little girl has not been blessed with a very sensible mother. Writing in the Huffington Post, Ahn informs us that despite her sister’s appeals to better judgment, rising tensions with South Korea and the United States, State Department warnings about the risk of “arbitrary arrest and detention,” and the existence of a U.S. Embassy web page warning Americans about the severe air quality risk in Beijing in the winter, she brought her two year old girl to Pyongyang, one of the world’s unhealthiest places, to use her as an accessory for her next political argument. Which, apparently, is that air pollution in China and bad state-run medical care in North Korea (remember, this was Pyongyang) are the fault of Yankee imperialists who blocked the offshore bank accounts of the DPRK Institute of Atomic Energy.

Ahn writes that her little girl got sick from the air pollution in Beijing and struggled to breathe the night after they arrived in Pyongyang. Ahn woke her minders, who rushed them both to a hospital, where the lights (naturally) went out. Ahn’s experience with North Korea’s medical system appears to have fallen short of Margaret Chan’s.

Ahn then writes of sitting in the darkness, crying about her little girl and also, about how the people of North Korea were suffering because, you know, America. She does not recall crying about millions of North Koreans who may have starved to death because of choices made by Kim Jong Il and Kim Jong Un, the obscenity of spending $300 million on a ski resort and other amenities instead of hospitals (or back-up generators to power them), or upon reflection on her choice to bring her toddler to such a place. The most remarkable thing about this is that as her own child struggled to breathe in a dark hospital room, Ahn’s mind still wanders off to politics. In the end, she never even bothers to tell us if her little girl recovered.

Update: A reader points out that, buried in Ahn’s long-winded article, is the fact that her little girl recovered. That’s wonderful news. Let’s all hope for the day when more North Korean parents can experience the same sense of relief.

~   5   ~

FELIX ABT ACCUSES NORTH KOREA OF RUNNING GULAGS: Because I get occasional visits to this site from Pyongyang, I wish to denounce this capitalist war-monger for spreading vicious lies about the DPRK’s dignified socialist system. Also, if I get an extra meat ration for turning Felix in, can I claim it without going to North Korea?

~   6   ~

THE U.N. HUMAN RIGHTS COUNCIL VOTES to endorse the report of the U.N. Commission of Inquiry.

~   7   ~

SOMEHOW, I DON’T THINK THE CHICOMS are really all that agonized about it:

Daniel Russel, assistant secretary of state for East Asian and Pacific affairs, said Beijing is still struggling between two priorities in terms of its North Korea strategy — stability and denuclearization. “One is the maintenance of stability on its border,” he said during a conference call hosted by the Asia Society. “The other is ending North Korea’s quest for nuclear weapons capability.” And China is confronted with the daunting task of reconciling what appear to be “two contradictory imperatives — stability and denuclearization.” [Yonhap]

He forgot the part about keeping Korea weak and divided, and maintaining North Korea as a strategic distraction for U.S. forces.

~   8   ~

GORDON CHANG in the World Affairs Journal:  “Replace Failed Diplomacy with Sanctions on North Korea.”  Chang aptly summarizes the policy vacuum the Obama Administration has left us by failing to articulate or execute a coherent North Korea policy that lays out a plausible path to a realization of our national interests. Gradual, incremental pressure isn’t going to get us there, because Pyongyang can always adapt to and circumvent incremental pressure.

(Separately, Keith Koffler argues that this President often fails to articulate coherent policies because he’s naive and just plain disinterested in foreign affairs. Similar suspicions have crossed my mind, too.)

On the other hand, I’m not opposed to diplomacy — even with North Korea — under the right circumstances. I’m just opposed to diplomacy before we accumulate enough leverage to negotiate from strength, and I’m opposed to throwing away that leverage before we achieve enough of our essential interests to ensure that North Korea has ceased to be a threat. Unlike our State Department, I can’t envision a North Korea that continues to be a threat to its own population that isn’t also a threat to us, and to our allies. Also unlike our State Department, I’d rather induce the collapse of North Korea than lift sanctions before we achieve our objectives.

Update: Ed Royce holds forth on North Korea, Iran, sanctions, and diplomacy.

~   9   ~

NORTH KOREA PERESTROIKA WATCH: In Pyongyang, the regime continues to enforce its previous order to turn in and exchange foreign currency. This is a uniquely North Korean solution to the gap between rich and poor, imposing a more equal distribution of misery.

~   10   ~

IN CHINA, A HIDDEN CAMERA CATCHES what it claims are North Korean officials partying with bar hostesses, although the video is too blurry for me to see any evidence that the customers are North Koreans.

~   11   ~

ACCORDING TO THIS SURVEY, far more South Koreans believe their news media are censored than citizens of any other nation surveyed, including China and Pakistan. Are South Koreans uniquely conspiratorial and distrustful, or are Chinese and Pakistanis just afraid to answer honestly?

~   12   ~

A REFUGEE DESCRIBES FUNERALS in North Korea. Many of the customs sound similar to those in South Korea, including staying up all night and drinking together, but the logistics are much more complicated in a place where it’s hard to get travel passes, transportation, and burial sites.

~   13   ~

I’VE LONG ADVOCATED MORE SUPPORT for certain rebel groups in Syria, but at this late stage, and given the extensive radicalization of the opposition, giving them man-portable surface-to-air missiles sounds like a very bad idea. Wouldn’t 40-  or 57-millimeter guns be a far safer, less terrorist-friendly alternative?

If Kaesong “wages” aren’t used to pay workers, what are they used for? (The Unification Ministry won’t comment.)

In yesterday’s post about Kaesong, I argued that by any reasonable definition, its North Korean workers are forced laborers, and that the best evidence we have suggests that the vast majority of their “wages” are probably stolen by the Pyongyang regime, through a combination of direct taxation and confiscatory exchange rates. My argument relied heavily on a recent study by the economist Marcus Noland, who has done an excellent job researching questions that most journalists have overlooked, addressing the ethical implications of the answers, and arguing for a voluntary code of ethics that could go a long way toward address those implications.

Noland has done a good enough job discussing the ethics of Kaesong’s labor arrangements that I see no need to add to it. I do, however, see some important legal implications that no one else has addressed in depth.

The first set of legal issues arises from long-standing suspicions that Kaesong manufacturers are sneaking components or finished goods from Kaesong into U.S. markets, a benefit that the South Korean government sought when it negotiated its Free Trade Agreement with the United States, and which it raised again as recently as last October. Because the two sides couldn’t agree on the inclusion of products from Kaesong, they agreed instead to Annex 22-B of the FTA, on “Outward Processing Zones.” Annex 22-B, however, is nothing more than an agreement to keep talking. It’s fair to say that Congress would not have ratified the FTA without the understanding that Kaesong products were excluded from it.

That means that despite the FTA’s ratification by the Senate, by its own terms, it lacks supremacy over a statute that specifically excludes goods that are “mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor.”

You’re entitled to question the administration’s determination to enforce this law, but as it turns out, an obscure Customs regulation at 19 C.F.R. 12.42 allows private petitioners to oppose the landing of goods made with forced labor in U.S. ports. The U.S. cotton industry has been especially effective at using this provision to tie up Uzbek cotton in customs warehouses, and to raise political pressure against the import of cotton from Uzbekistan. If human rights organizations became aware of specific Kaesong-made goods being imported into the United States, Noland’s study now gives them a strong evidentiary basis to tie those products up in customs warehouses, too. This, by itself, might be enough to make the export of those products to the United States unprofitable.

Finally, depending on the amount of Kaesong labor embodied in a product, its import to the United States could violate complex country-of-origin labeling rules, or could be receiving a lower-tariff status under the U.S.-Korea Free Trade Agreement, from which Kaesong products were ostensibly excluded (after much contentious negotiation).

Nor does the administration seem inclined to defend Kaesong imports. In 2011, President Obama signed Executive Order 13,570, which banned North Korean imports from the U.S. market. Any violation of that executive order carries the severe penalties of Section 206 the International Emergency Economic Powers Act – 20 years in prison, a fine of $1,000,000, and a civil penalty of $250,000. Despite a recent spike in suspicious travel by U.S., South Korean, North Korean, and Chinese diplomats, the North Koreans are a no-show, tensions with North Korea are back on the rise, and the Obama Administration is hinting about strengthening sanctions, not weakening them.

~   ~   ~

These still aren’t the questions that cause the greatest discomfort at the South Korean Unification Ministry. That question is this: If the money paid into Kaesong isn’t going to the workers, just where is that money going? As Treasury Undersecretary David Cohen recently said, “Precisely what North Koreans do with earnings from Kaesong, I think, is something that we are concerned about.”

Cohen is concerned because his department enforces the regulations and executive orders that implement U.N. Security Council sanctions against the North’s WMD programs. Those resolutions limit unrestricted cash flows to North Korea, in order to deny its WMD programs of funding. The latest of those resolutions, U.N. Security Council Resolution 2094, was passed in 2013 and says this:

“11.  Decides that Member States shall, in addition to implementing their obligations pursuant to paragraphs 8 (d) and (e) of resolution 1718 (2006), prevent the provision of … any financial or other assets or resources, including bulk cash, that could contribute to the DPRK’s nuclear or ballistic missile programmes, or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this resolution, or to the evasion of measures imposed by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this resolution ….;


“14.  Expresses concern that transfers to the DPRK of bulk cash may be used to evade the measures imposed in resolutions 1718 (2006), 1874 (2009), 2087 (2013), and this resolution, and clarifies that all States shall apply the measures set forth in paragraph 11 of this resolution to the transfers of cash, including through cash couriers, transiting to and from the DPRK so as to ensure such transfers of bulk cash do not contribute to the DPRK’s nuclear or ballistic missile programmes, or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this resolution, or to the evasion of measures imposed by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this resolution;

“15.  Decides that all Member States shall not provide public financial support for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade) where such financial support could contribute to the DPRK’s nuclear or ballistic missile programmes, or other activities prohibited by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this resolution, or to the evasion of measures imposed by resolutions 1718 (2006), 1874 (2009), 2087 (2013), or this resolution;

The use of the words “could contribute” is burden-shifting language, like the language in Paragraph 8(d) of Resolution 1718 (2006) that required member states to “ensure that any funds, financial assets or economic resources are prevented from being made available” to persons and entities involved in North Korea’s WMD programs. You can’t “prevent” unless you know where the money is going in the first place, and if you aren’t asking, you aren’t preventing. The Security Council’s clear intent was to force member states and companies under the jurisdiction of their laws to move beyond feigning ignorance and make reasonable inquiries. The Unification Ministry’s Sergeant Schultz act doesn’t work anymore.

Past precedent gives us reason to share Undersecretary Cohen’s concern. As early as October 2000, Noland wrote here that North Korea’s revenues from the Kumgang Tourist project, which he estimated at $450 million per year, were being deposited into a Macau bank account controlled by the notorious Bureau 39, for “regime maintenance,” despite the lack of “real systemic implications for the organization of the North Korean economy or society.” For all we know, North Korea could be using its Kaesong revenues for even more sinister purposes.

There is also the broader problem that a steady stream of cash dulls the economic pressure that is the outside world’s principal lever for disarming North Korea.

“The fact is, South Korea and China are providing North Korea with a considerable amount of unconditioned economic support,” said Marcus Noland, a Korea expert at the Institute for International Economics in Washington. “As long as that support is forthcoming, North Korea will not feel as much of a need to address the nuclear issue, and attempts to isolate the North economically will have less and less credibility and effect.” [WaPo 2005]

The Congressional Research Service also discusses the tension – some would say, schizophrenia — attendant in alternating between economic subsidy and economic pressure. No wonder South Korea has clung so dearly to the pretense that Kaesong wages really are paid to the workers. Unfortunately for the Unification Ministry, the evidence contradicts this cherished falsehood — it’s impossible to deny that Kaesong is a subsidy to Pyongyang. The U.N. Security Council, however, has chosen economic pressure, most recently with the active support of South Korea’s Ambassador to the United Nations (at the time UNSCR 2094 passed by a vote of 15-0, South Korea was a non-permanent member of the Security Council).

But what does South Korea know about what Pyongyang is doing with its money? I posed the question to the Unification Ministry in an e-mail and on their Facebook page. Here, in relevant part, is what I asked them:

Recently, I read a report by the economist Marcus Noland indicating that most South Korean investors at Kaesong don’t actually know how much of their nominal wages the North Korean workers there actually receive, and that the North Korean government likely keeps most of the money. First, can the Ministry comment on that? If you deny this assertion, can you explain the basis for your denial?

Second, this assertion also raises the question of where the money is going. A series of U.N. Security Council resolutions requires Member States to ensure that their money isn’t being used to finance North Korea’s WMD programs. A senior U.S. Treasury official and a report by the Congressional Research Service recently raised concerns about how North Korea uses its revenue from Kaesong.

Can you describe what if any financial checks, precautions, and transparency are in place to ensure that North Korea isn’t using Kaesong earnings for illicit purposes, to facilitate human rights abuses, or to buy weapons to threaten people, including U.S. troops, in South Korea?

Also, I’m wondering if you’ve sought an advisory opinion about Kaesong from the U.N. 1718 Committee’s Panel of Experts.

So far, the Unification Ministry hasn’t responded. I’ll update this post if they do, but I’d be astonished if they had extracted enough financial transparency measures from the North to answer the question in good faith.

Incidentally, one of the interesting points I gleaned from the last U.N. Panel of Experts report is that the POE gives advisory opinions on transactions with North Korea. If the Unification Ministry isn’t asking for one, it may be because it doesn’t want to know the answer.

Largely because of South Korean domestic politics and government subsidies, Kaesong has outlasted a few of my predictions of its demise. It will face more challenges this year and next, as we appear to be entering a new cycle of North Korean provocations, and as South Korea’s present leader appears unusually disinclined to tolerate them. The fact that Kaesong’s workers are functionally slaves deserves to be one of those challenges. So does the likelihood that the entire enterprise consequently violates a series of Security Council resolutions designed to protect South Korea’s own security.

At Kaesong, “engagement” teaches S. Korean corporations the dying art of slavery

slavery n 1. (Law) the state or condition of being a slave; a civil relationship whereby one person has absolute power over another and controls his life, liberty, and fortune; 2. the subjection of a person to another person, esp in being forced into work; 3. the condition of being subject to some influence or habit; 4. (Industrial Relations & HR Terms) work done in harsh conditions for low pay

A good test of whether any particular “engagement” program with North Korea has lived up to its founding promises is this simple question: “Who changed who?” In most cases, it’s the foreign investor or NGO that changed to conform to North Korea’s rules and ethics (a classic case in point: the Associated Press).

Engagement advocates cling to North Korea’s outdated self-characterization as socialist, ignoring its well-established reliance on predatory state capitalism. After all, if North Korea is socialist, one can always construct a self-serving argument that any form of trade, no matter how exploitative, is somehow contributing to reform. But at Kaesong, at least, experience proves something closer to the opposite of that.

A decade later, Kaesong has failed to induce reforms or reduce tensions.

Last month, an important paper by Marcus Noland added strong support to long-standing suspicions about the exploitative arrangements at the Kaesong Industrial Park, the flagship of the Sunshine Policy and the largest surviving “engagement” project.

To the extent the newspapers noticed it, they mostly noticed Noland’s most sensational conclusion — that each North Korean worker there nets as little as $2 a month, out of average of $130 in “wages” and “bonuses” for overtime. Noland isn’t pleased with the media focus on this point (for example), although I’d argue that it’s an important one that deserved even more attention and introspection than it got.

kaesong (1)

[image via The Atlantic]

What the Korean press largely missed, however, was Noland’s deeper conclusion that North Korea has negotiated its way to pan-opticon control over Kaesong’s work force, negating the very reformist forces that Kaesong’s promoters once promised.

Survey data on South Korean employers indicate that the North Korean government has in large part successfully circumscribed exposure of North Korean citizens both to South Koreans and to new, more market-oriented economic practices. Hiring is largely conducted via the North Korean government, which pre-screens workers (possibly on political criteria), sets wage rates administratively, demands payment in foreign currency, and takes a large cut.

South Korean managers typically do not interact directly with North Korean employees, but rather manage them through North Korean intermediaries who effectively represent state interests in monitoring and exercising control over workers. And even in firms that report direct supervision of workers, there is little statistical correlation with knowledge of working conditions or worker attitudes.

In a narrow economic sense, South Korean investment in North Korea may well be beneficial both for the firms and the workers involved, but there is no evidence of broader spillovers of the sort that proponents of engagement sometimes assert.

When Kim Dae Jung’s government first sold us the Sunshine Policy — and Kaesong, its centerpiece — it promised the world that Sunshine would, by easing North Korea’s hard currency shortages, help “create an environment in which North Korea can feel safe to open up and pursue reforms.” The North Koreans were willing to accept this arrangement because they wanted the money, and because they calculated that they could change South Korea more than South Korea could change them. They calculated that they could use Kaesong to extract increasingly exorbitant payments from South Korean investors, and ultimately from the South Korean taxpayers who subsidized them, while clamping down on any heresy by isolating and terrorizing Kaesong’s North Korean work force. They could also use Kaesong as a political lever against the South Korean government, knowing that left-of-center politicians would invariably pressure Seoul to bend to Pyongyang’s demands.

We’ve watched this experiment long enough to conclude, safely, that Kim Jong Il was right and Kim Dae Jung was wrong. Contrary to the promise that the Sunshine Policy would promote “reconciliation instead of confrontation, and cooperation instead of hostility,” North Korea is a greater threat to South Korea today that it was in 2002. It has attacked South Korea multiple times, advanced its WMD programs to an operational capability, and has never been more brazen about sharing its WMD technology with Iran and Syria. North Korea’s arbitrary taxes and its use of Kaesong as a hostage to its political moods have deterred most international investment. A recent U.N. report finding North Korea responsible for crimes against humanity will further deter investors who may fear adverse publicity.

Reports from last month contained mixed news for those investors. On one hand, Kaesong’s production levels had nearly recovered from a five-month shutdown by the North Koreans last year. On the other hand, North Korea has threatened this fragile recovery by demanding another hefty increase in the “wages” ostensibly paid to its North Korean workers, from $67 to $107 a month.

By now, it’s safe to say that Kaesong will never live up to its master plan, which once forecast that it would employ 150,000 North Koreans, without dramatic political change in Pyongyang. Kaesong’s remaining investors, most of them South Korean, still rely heavily on South Korean government subsidies.

Kaesong “wages” are confiscated through taxes and exchange rates.

South Korea’s Unification Ministry frequently asserts that Kaesong workers are paid a surprisingly high nominal wage, currently just over $67 a month. Few of the newspapers that pass that figure along to their readers ever bother to question it. In fact, only the North Koreans really know how much of “their” wages Kaesong workers are actually paid. Noland’s paper does much to reenforce those doubts. First, the regime takes a large cut off the top:

At the time of its closure in April 2013, the minimum wage at the KIC was $67.05 per month, and once all payments and bonuses were accounted for, the average wage was $130. Workers, however, were not receiving the full $130 per month; the North Korean government was thought to retain roughly 30 to 40 percent of this payment, ostensibly to cover social security payments, transportation, and other in-kind benefits. More importantly, while South Korean firms pay in US dollars, North Korea pays the workers in North Korean won converted at the wildly overvalued official exchange rate.

Evaluated at the more realistic black-market rate, North Korean workers may have been netting less than $2 per month (if the entire dollar amount were converted into won at the black market exchange rate). Alternatively, market prices for rice have been on the order of 4,000 to 5,000 (North Korean) won per kilo, suggesting that monthly after tax wages might purchase roughly 2 to 3 kilos of rice.3 These figures imply that the real wages of KIC workers are low. Nevertheless, while conditions in Kaesong may be exploitative, they probably are considerably better than those existing elsewhere in North Korea, and there appears to be no shortage of North Koreans willing to work on these terms.

What Noland can’t know, of course, is what these particular workers were doing before they were drafted into Kaesong. Presumably, they were from families with good political backgrounds, so they probably weren’t among North Korea’s poorest. For all we know, they were successful market traders who were forced to abandon more lucrative professions to enrich the state instead.

Next, Kaesong workers probably receive very little of what remains:

Given that wages are usually paid to the North Korean government, the firms hiring via the government were asked if they knew exactly how much money their workers were in turn receiving from the government. A majority of the employers refused to answer the question. Of those that did, their responses were split nearly evenly between those that said they knew (21 percent) and those that said they did not (18 percent). In other words, only one in five firms indicated that they knew how much their workers were actually paid. 

And also, 21 percent of those surveyed lied. At least 21%.

Remarkably, none of the firms that reported paying piecework rates indicated that they knew how much the workers were paid—they simply paid their North Korean counterparty and left it at that. However, when asked the follow-up question whether they believed that the government took a large amount of money that was supposed to go to their employees, a majority responded affirmatively (76 percent overall, 77 percent in the KIC, 71 percent outside the KIC). The implication is that those firms claiming to be paying piecework wages cannot know for sure if they actually are. 

But what about payment of the workers in rations, or access by the workers to alternative forms of exchange like ChocoPies? As it turns out, the North Koreans have made additional demands to suppress the ChocoPie trade, too:

[C]hoco-Pies, a South Korean snack similar to American Moon Pies, emerged as a kind of parallel currency in the city of Kaesong. Originally providing Choco-Pies to workers as a snack, South Korean firms, unable to vary wage rates or reward particularly productive workers, began using extra allocations of the snacks as a way to lure workers away from their competitors. (The cakes circulated as a kind of parallel currency in the environs of Kaesong, so that providing workers with extra cakes that could be sold outside the KIC effectively amounted to granting them a bonus.4) 

Like cigarettes in prison?

The North Korean government became sufficiently concerned over these developments that in November 2011, North Korean officials, the South Korean KIC management committee, and the employers agreed to rules to limit the distribution of the snacks. Choco-Pie rules were on the agenda when North and South Korea negotiated the reopening of KIC after its closure in 2013.

What you make of this depends on your perspective. I doubt that most North Koreans would find the existence of packaged snack cakes in South Korea to be particularly subversive, but I suppose the regime differs with me on that. The more important point is that, a decade into this experiment in arbeit-macht-frei, North Korea remains intolerant of even the smallest foreign heresy.

Most Kaesong workers are “managed” by North Korean security forces.

North Korea has also negotiated away most of the human contact between North and South Koreans. South Korean firms doing business in Kaesong do not supervise North Korean workers directly. Instead, the supervision is done by North Korean “intermediaries”:

Apparently supervision via North Korean intermediaries is a highly imperfect substitute for direct supervision. This may come from the fact that the North Korean intermediaries are not individuals who are assigned to Kaesong because of any managerial expertise, but who essentially play a political function; indeed, it is plausible that such intermediaries reduce the efficiency of Kaesong businesses, as has been reported anecdotally with respect to other foreign-invested businesses.

This isn’t really news. We’ve known since at least 2007 that the North Koreans had seized control of the management of the workers. In circumstances that are still unclear, in 2009, a South Korean worker was arrested after being accused of trying to induce a North Korean worker to defect. North Korean workers are reportedly under close supervision by the regime. Draw your own conclusions, but it’s reasonable to assume that these intermediaries are security forces officers (it would be naive to doubt it).

In spite of all this, Kaesong workers may still be the envy of their wretched countrymen, which is saying a lot. But if they had no choice in the matter of their assignments to work at Kaesong, where they earn a pittance for hard work and long hours, they are effectively slaves.

~  ~  ~

To summarize, the North Korean government prescreens and drafts Kaesong’s workers, sets wage rates arbitrarily, demands wage payments in foreign currency, taxes a high percentage of those wages and other payments off the top, steals most of what remains by converting it to worthless local currency and paying that to the workers, and denies the workers the right to organize or strike.

The Korean Confederation of Trade Unions, needless to say, has never uttered a peep about any of this. And what of the South Korean government that once promised to make Kaesong an engine of change? Noland finds, “To date, there is no evidence that the South Korean government has undertaken any steps that would encourage or require its firms to abide by any standards whatsoever.” Remember, South Korea is supposed to be the “good,” “free” Korea.

The likelihood that Kaesong’s workers receive just a fraction of their nominal wages is an important ethical question. Noland discusses the limitations of international law in setting clear standards to address it, and advocates for a business code of ethics akin to the Sullivan Principles, which major investors once applied to apartheid-era South Africa. For that, I really suggest you read Noland’s own paper and discussion. But as much as the adoption of some ethical limits would be a welcome improvement, the problems with Kaesong are more than ethical, they are also legal. Setting up the legal discussions that will follow tomorrow is the principal reason why I wrote this post. (Its intentionally provocative title is another.)

I’ll discuss those legal issues in tomorrow’s post. The greatest of them — and the one that the Unification Ministry fears the most — is this: if the money isn’t going to the workers, where is it going?

AP outraged about free speech in Cuba

Is the AP a cabal of closet Marxist-Leninists or just the supine courtesan of every tyrant who lets it open a bureau in his kingdom? Either way, I really don’t understand what drives its corporate conscience. On one hand, it recently criticized the Obama Administration for “propaganda” photos. On the other hand, it did this not long after putting on an exhibition of actual propaganda photos of Kim Il Sung and Kim Jong Il.

Now, the AP has released a breathless expose of a U.S.A.I.D.-backed program, launched by the Obama Administration, to bring just a sliver of free speech to Cuba, in the form of a Twitter clone called “ZunZuneo.” AP even gave the 60 Minutes treatment to the civil servant who ran the program, following him home and sticking a camera in his face.

Let’s sum this up. The program was completely non-violent and appears to have broken no laws except Cuban censorship laws. It never even got far enough to plant any subversive information (unfortunately!). It was also popular and potentially effective. Before the AP exposed it, it was providing a service that Cubans liked and used. What if they liked and used it even more after it became a safe place to complain about food shortages, nosy block committees, corruption, the persecution of dissidents, and censorship? Is it morally wrong for people living under oppressive governments to be able to complain about those things or organize online?

ZunZuneo’s organizers wanted the social network to grow slowly to avoid detection by the Cuban government. Eventually, documents and interviews reveal, they hoped the network would reach critical mass so that dissidents could organize “smart mobs” — mass gatherings called at a moment’s notice — that could trigger political demonstrations, or “renegotiate the balance of power between the state and society.” [AP]

I want our government to help people do that! There’s no evidence that anyone was hurt by this program, and had it succeeded, no one would have been hurt except the Castro brothers and their censors. At worst, the program might have been housed more appropriately in the CIA or the Broadcasting Board of Governors, although U.S.A.I.D. didn’t deny its involvement after the program’s exposure. The Cubans who used ZunZuneo were unaware of its U.S. government connections and weren’t endangered (one good reason why U.S.A.I.D. initially concealed its links to ZunZuneo). Why is this a scandal — other than the fact of its public exposure? Is it the AP’s position that the Cuban people should spend their whole lives living under poverty and oppression? How else will those conditions ever change?

Also, note how the AP “interviews” Cuban citizens, almost certainly in the presence of government minders, without telling us whether any minders were present. That fact, however relevant to the viewer, would have illustrated the absurdity of the AP’s argument nicely.

Say, do you suppose the AP has a bureau in Havana? Do you suppose it ever covers stories about dissent in Cuba, or is it pretty much like AP’s bureau in Pyongyang — a lucrative partnership with censors and propagandists? This story is a good example of why, as much as I distrust all news media, I distrust the AP more than the rest of them.

Based on everything in the AP’s report, I conclude that this was actually a great idea that served both the interests of the United States and those of the Cuban people. I wonder how hard it would be for the CIA to hack into Koryolink and bring Twitter to North Korea. I wonder how long it would take for the AP to blow the lid on that.