Archive for July 2006

Uri Takes Another Election Beating

July 27, 2006 Korean Politics 14 comments

It lost all four contests in yesterday’s bi-election. Three seats went to the GNP; one to a Democratic Party candidate who spearheaded his party’s effort to impeach Roh:

The ruling Uri Party suffered another crushing defeat in Wednesday’s parliamentary by-elections. No Uri Party candidates won in the four constituencies of Seongbuk-eul and Songpa-gap, both in Seoul, Sosa in Gyeonggi Province and Masan-gap in South Gyeongsang Province. That means the ruling party has secured no seat in parliamentary by-elections since 2005.

So much for that backlash. Turnout was at an all-time low, which is the natural consequence of the parties not standing for anything particularly compelling or uplifting.

Among the Uri candidates defeated was former Roh mouthpiece Kim Man Soo.

Now What? Part 4: Someone Didn’t Get the Memo

July 27, 2006 Appeasement, NK Economics, U.S. & Korea, WMD No comments

[Several very interesting updates here; scroll down.]

Recently, it has often seemed that different parts of South Korea have been applying different policies to the same issue. Take South Korea’s response to the new U.N. Security Council Resolution 1695, which requires countries and companies to exercise “vigilance” in making sure they don’t supply North Korea with the components or funds to build more missiles. UniFiction Minister Lee Jong-Seok has opted for a “don’t ask, don’t tell” interpretation of that resolution, but yesterday, Korea’s Ministry of Commerce seemed to be interpreting the resolution much more strictly:

The Ministry of Commerce, Industry and Energy has written to some 80,000 export-import companies here asking them to heed the UN Security Council resolution on North Korea. It warns Resolution 1695 may hurt firms that export “dual use” goods that can be used both for military and civil purposes.

That’s because South Korean firms that violate the resolution face a panoply of potential secondary sanctions by the United States, Japan, and other nations. The most likely would be asset-freezing under Executive Order 13,382. One wonders how this relates to Stuart Levy’s recent visit.

“The resolution will strengthen sanctions imposed by the international community against exports to North Korea,” the statement says. “When it comes to goods coming out of the joint-Korea Kaesong Industrial Complex in the North, a thorough review is needed to determine whether they violate the resolution,” it adds, suggesting that the government is hard at work on the matter. “We urge companies here to take special precautions so they do not engage in illegal exports of strategic materials to North Korea either directly or via a third country,” the e-mail says.

So we have a difference of interpretation within the South Korean government.

Clearly, this is going to have a disparate impact on Kaesong, and it leads to why all those who oppose Kaesong ought to support a Free Trade Agreement that excludes it (today, the Korean government is again hinting that it may drop Kaesong from its FTA demands). If every non-Kaesong product made in South Korea enjoys a heavy U.S. tariff preference over its Kaesong-made competitor, Kaesong instantly loses any advantage that its lower wages might offer. If there’s the additional risk that firms bringing dual-use technology into Kaesong could face sanctions under U.N. 1695, Kaesong suddenly becomes a very risky proposition. Finally, firms whose “wage” payments are suspected of funding North Korean missile development could face U.S. or international economic sanctions, even asset freezes. It all brings to mind Ross Perot’s infamous evocation of that “giant sucking sound.”

The prognosis for Kaesong has never been this bleak. The world should celebrate that.

Update: Kim Jong Il, Unplugged

The Joongang Ilbo is reporting that the United States Treasury Department is making swift (maybe even stunningly swift) progress toward disconnecting Kim Jong Il from his financial lifelines (background here). Treasury Undersecretary for Terrorism and Financial Intel Stuary Levy has apparently secured promises from Singapore and Vietnam to “cooperate in isolating North Korea from international financial channels.” More importantly, White House Spokesman Tony Snow is now confirming that the Bank of China’s Macau branch has frozen North Korean assets, a move of gargantuan significance.

Despite reports, citing a Yonhap interview, that Levy had “warned” South Korea about cash flow from Kaesong, Levy didn’t really do that here:

He said his talks with South Korean officials focused on “general concerns” to ensure that money wasn’t going to North Korea’s weapons buildup. Contrary to some press reports, he said he did not personally raise issues about inter-Korean economic cooperation projects.

Treasury’s spokeswoman Molly Millerwise said during the interview that there was “overreporting” in the press about the U.S. taking issue with inter-Korean business.

Levy went into more detail on his interpretation of Resolution 1695, however, and the effect may be the same in the end:

The undersecretary said the U.S. was discussing with its allies how to properly interpret the Security Council resolution. Some argue that any and all money flowing into North Korea can be misused to bolster its missiles and WMD and therefore even routine business transactions should be severed with North Korea.

Levey said in theory the argument is right.

“Money is fungible so one would have to be careful to make sure that even the best proceeds of routine trade transactions could benefit the WMD or missile programs,” he said. But he added there was “a long way to go” to reach that conclusion.

The Senate has also passed the new North Korea Nonproliferation Act, which I humbly opined here would have little practical effect on the current state of North Korea-related sanctions and law enforcement operations. It’s mainly enabling legislation for Resolution 1695 (the one thing I called wrong here, because I assumed that anything coming out of the U.N. would be meaningless).

If you want to follow the action that matters, keep an eye on Treasury.

Roh’s Former Foreign Minister Attacks His Policies

July 26, 2006 Appeasement, Korean Politics 10 comments

Yoon Young-Kwan isn’t the only former member of his administration attacking him today, but these two criticisms seem particularly spot-on:

He fumed at North Korea, calling Pyongyang “high-handed” in its attitude while it accepts handouts from Seoul. “Economic cooperation,” he added, “should instead help a market economy develop in North Korea.”

He continued, “Emotional nationalism appears to rule our society at the moment, because an outdated resistance spirit and passive world view are rampant. Diplomacy is something you do with cool-headed calculation, not with emotions.”

Yes, I would favor engagement with North Korea if there were any evidence that it was reaching the people through the curtain of fear or leveraging needed reforms. By making the aid unconditional, South Korea simply prolongs the suffering of the people.

The timing is interesting, given that there will be bi-elections for four vacant National Assembly seats today.

Reading, Writing, Rodong

July 26, 2006 Anti-Americanism, Korean Education, Korean Politics, Korean Society, The Fifth Column 3 comments

One reason I don’t think the North Koreans would invade South Korea is the simple fact that their infiltration of the South has been so successful as to render war unnecessarily strenuous. Now, the powerful and well funded Korean Teachers’ Union — remember them? — is caught in the act of flogging juche to its members. The ultimate recipients would have been South Korean kids. Although the KTU didn’t disclose the source of its information, this should have been a clue:

Quoting a U.S-based sociologist, it also hails North Korean leader Kim Jong-il’s Songun or military-first policy as a “unique achievement.

Strictly speaking, that’s true. I can’t think of one other regime that’s managed to starve 10% of its people to death while its elite drive Mercedez sedans and quaff cognac. How this societal model appeals to socialists escapes me.

South Korea is in serious need of educational reform, or a least another perspective. More on South Korea’s Fifth Column here.

Race for Chairmanship of House Int’l Relations Committee Heats Up

July 25, 2006 Washington Views No comments

Whoever replaces retiring Rep. Henry Hyde as Chairman will have big shoes to fill, particularly when it comes to Hyde’s blunt moral clarity on North Korea and those who would appease its regime, as well as on Japan’s need to come to terms with its own past. Five candidates are said to be seeking the Chairmanship, presuming that the Republicans hold the House in November. I will express strong opinions on just those of whom I know through the (admittedly narrow) lens of Korea policy.
Read more

China Frees the Shenyang Three, But Keeps Feeding the Dear Leader

July 25, 2006 China, China & Korea, Famine & Food Aid, Human Rights, Refugees No comments

They’re on their way to America now. You will recall that these refugees originally entered the South Korean Consulate, then overpowered a guard, jumped a wall, and entered the U.S. Consulate next door.

I don’t necessarily see this as a sign that Chinese-North Korean relations are cooling, by the way. With the refugees safely inside an American Consulate, the Chinese and the Americans alike really had no choice but to allow this at some appropriate time. And although there are some signs of China’s diplomatic displeasure at Kim Jong Il, it’s still feeding him.

That support will be tested soon. According to the World Food Program, recent flooding in North Korea has damaged 74,000 acres of farmland, left 60,000 people homeless, and will raise North Korea’s food production shortfall by 10% this year.

Free at Last?

July 25, 2006 An Alliance?, Anti-Americanism, Korean Law, Korean Society, U.S. & Korea 6 comments

The Koreans have been relatively free for some time now. But if a new bill passes, the American men and women who help secure that freedom may be able to put outrages like these behind them:

The bill aims to prevent discrimination in all public and private sectors including employment and education. Discrimination would be defined based on 20 criteria, including gender, physical disability, religion, age, nationality, race, skin color, appearance, pregnancy, ideas and sexual preferences.

Under the bill, indirect discrimination resulting in unfair treatment for a certain group of people, teasing and harassment would also be considered discrimination.

The commission would require anyone guilty of discrimination to cease doing so and impose fines of no more than 30 million won ($31,520) if they did not comply. For discrimination judged to be significant, the guilty party would be ordered to pay punitive damages of two to five times the amount of estimated damages.

Let’s hope the bill passes before the last of our soldiers board the charter flight to Seattle.

Let Them Make Won!

July 25, 2006 Appeasement, Counterfeiting, U.S. & Korea One comment

Update: Gee, how curious.

Police recovered a briefcase containing a hoard of probably forged United States Treasury bonds worth $500 million during the investigation of a local theft, Seoul’s Gwanak Police Station announced. Police said they are looking into the possible involvement of international crime networks.

=====================================
With Seoul questioning why the United States is making such a big deal out of North Korea’s counterfeiting of its currency and saying it “will take no further steps” against it, the Chosun Ilbo asks the right question:

But what if the shoe was on the other foot? If a country hostile to South Korea forged a huge number of our banknotes and circulated them around the world, what should our government do? And if an ostensible ally of ours defended that counterfeiting country, what would we think of that ally?

As if on cue…

The Bank of Korea said yesterday the number of counterfeit bills is rising at an explosive pace, especially around the backstreet gambling districts.
Read more

Say What?

July 24, 2006 ROK Military, Unintended Humor, WTF? 3 comments

Army Officer Arrested for Fondling Privates

Now What? Part 3: Dave, What Are You Doing?

July 24, 2006 China, China & Korea, Counterfeiting, NK Economics, Six-Party Talks 5 comments

Update: The BOC account played a role in the 2000 summit scandal, according to the Chosun Ilbo.

What skill it must take to step in it this hard:

SEOUL, July 24 (Yonhap) — North Korea is suspected of having printed fake Chinese currency, which prompted the Bank of China (BOC) to freeze all of its North Korean accounts in an apparent retaliation, a South Korean legislator asserted on Monday.

Quoting a number of unidentified U.S. officials, Rep. Park Jin of the main opposition Grand National Party (GNP) said the freezing of North Korean accounts at the BOC is tantamount to virtual imposition of sanctions by Beijing on the North.

“I understand the North is even more frustrated because this means China is in fact imposing sanctions on North Korea,” the opposition lawmaker told Yonhap News Agency in a telephone interview.

No wonder Kim Jong Il wants to talk. Incidentally, I don’t believe Kim Jong Il really did this. Not even he is that brazen, nor is the yuan worth counterfeiting. I suspect this is China’s way of saving face after some pointed threats from the U.S. Treasury Department. Just my own theory, unsupported by any hard facts, but read this before you dismiss it.

Next, watch for more news on the Austrian and Swiss accounts. I’m reminded of the scene in “2001: A Space Odyssey,” where “Dave” disconnects Hal’s circuits, one at a time. My guess is that the North Koreans are coming back to the talks to ask, “Dave, what are you doing?”

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