Archive for Sunshine

RFA: N. Korea tells overseas trade reps not to use the internet

In our latest of edition of North Korea Perestroika Watch, Radio Free Asia, citing identified sources speaking on condition of anonymity, reports that Pyongyang has instructed its overseas money-men to stop using the internet. The regime is even threatening to seize their work and personal laptaps to enforce the order. The trade workers tell RFA that the order, which even includes the use of e-mail, is impeding their ability to do their jobs and earn foreign currency.

A source living in China along the border with North Korea said the order was issued verbally by senior officials in Pyongyang recently. It is causing great inconvenience to the trade officials, most of whom are based in China with others living in Europe, Russia, and Africa, the source said.

“The order discouraging trade workers abroad from using the Internet by the North Korean government is actually a warning to not [disseminate] outside information,” said the source, who is linked to trading of goods with North Korea. “Trade workers abroad are used to contacting the North Korean authorities at home by email,” the source said. [Radio Free Asia]

According to the report, most of the North Koreans overseas save enough to buy laptops, which they then use to access South Korean web sites. Presumably, many of these people understand enough English to all kinds of sites, including this one. Which could mean I’m going to stop getting all those hits from Cambodia, Singapore, Malaysia, Tanzania, and Ethiopia.

If the report is accurate — and it seems like something that could be confirmed through multiple sources — then it suggests that the regime must have enough fear of the internet’s subversive power to incur some economic harm from the imposition of this inefficiency.

The regime has gone so far as asking trade workers to communicate by fax, presuming anyone else still has a fax machine.

The U.N. Panel of Experts recently printed documents showing that North Korean trading companies used e-mail with .silibank domains to facilitate the weapons transactions with Cuba that were uncovered by the seizure of the Chong Chon Gang last year. Years ago, Sili Bank was the false-dawn perestroika sighting of the week when it set up a pay-for-message e-mail system for foreigners. Curiously, and unlike many other North Korean banks, Sili Bank does not have a SWIFT number, suggesting that if it really does operate as a bank, it doesn’t operate internationally.

Personally, it’s hard for me to imagine that this order will last much longer than North Korea’s ban of the U.S. dollar, or South Korean clothing. It will be a huge hassle for a few weeks, after which all those affected will have that much less respect for the state’s authority.

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.

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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.

Dear President Park: He’s not that into you (updated with N. Korea’s rejection)

In every successful relationship, there are certain things one must not ask the other party to the relationship. No matter how much you may desire it, the answer will never be “yes.” The request itself will not be received well. Depending on the request, the special equipment it would require, and the identity of the other participants, it may even lead to the destruction of property or violence.

In the relationship between North and South Korea, it is apparently no longer OK to ask the other party — that party being North Korea — for nuclear disarmament. One strong indication of this is the fact that as of this morning, both Koreas are shelling each other’s territorial waters, and residents of Yeonpyeong Island are hiding in shelters. (Update: David Chance of Reuters says “[t]here was no fleeing to shelters.”)

What are we to take from this? Perhaps the most obvious is what North and Korea have is not a relationship at all, which makes the idea of cohabitation seem blithely unrealistic. But that is what President Park proposed during a visit to Dresden, where she announced her long-awaited plan to reunify Korea. You can read the full text of her speech here.

Much of Park’s proposal consisted of things most of us would call unobjectionable — the idea that reunification of Korea is ultimately desirable, and that the eventual marriage of South Korea’s technology and capital with North Korea’s labor, natural resources, and favorable geography would catalyze the rapid economic development of the North and greater prosperity throughout Korea.

In theory, the North might even join Park in deploring the cultural, economic, and ideological divisions between North and South, and in aspiring to reduce the mutual isolation and distrust across the DMZ. What that would amount to in practice sounds like Sunshine 2.0:

[T]hose from the south and the north must be afforded the chance to interact routinely. We will encourage exchanges in historical research and preservation, culture and the arts, and sports — all of which could promote genuine people-to-people contact – rather than seek politically-motivated projects or promotional events. [....]

This would consist mostly of exchange and education programs that various NGOs have pursued on a small scale for decades. The fact that North Korea allows these limited programs suggests that they’ve helped North Korea accumulate wealth for its various priorities, but they’ve failed to make any apparent favorable change in Pyongyang’s world view. Oh, and Park is still promoting that “international peace park” along the DMZ.

Park also called for more humanitarian and development aid to North Korea:

The Korean Government will work with the United Nations to implement a program to provide health care support for pregnant mothers and infants in North Korea through their first 1,000 days. Furthermore, we will provide assistance for North Korean children so they could grow up to become healthy partners in our journey toward a unified future. [....]

[W]e must pursue together an agenda for co-prosperity through the building of infrastructure that support the livelihood of people. South and North Korea should collaborate to set up multi-farming complexes that support agriculture, livestock and forestry in areas in the north suffering from backward production and deforestation. [....]

[South] Korea could invest in infrastructure-building projects where possible, such as in transportation and telecommunication. Should North Korea allow South Korea to develop its natural resources, the benefits would accrue to both halves of the peninsula. [....]

In tandem with trilateral projects among the two Koreas and Russia, including the Rajin-Khasan joint project currently in the works, we will push forward collaborative projects involving both Koreas and China centered on the North Korean city of Shinuiju, among others. hese will help promote shared development on the Korean Peninsula and in Northeast Asia. [....]

If South and North Korea could shift the adversarial paradigm that exists today, build a railway that runs through the DMZ and connect Asia and Europe, we will see the makings of a genuine 21st century silk road across Eurasia and be able to prosper together.

None of this is particularly new, either. Expect the North’s reaction to be, at best, to accept as much of this as it can easily control and still profit from.

There were also things that Park’s failure to mention would have caused worldwide consternation — so she did mention them, ensuring swift rejection from Pyongyang:

Ladies and gentlemen, It pained me to see a recent footage of North Korean boys and girls in the foreign media. Children who lost their parents in the midst of economic distress were left neglected out in the cold, struggling from hunger. Even as we speak, there are North Koreans who are risking their lives to cross the border in search of freedom and happiness.

And this:

North Korea must choose the path to denuclearization so we could embark without delay on the work that needs to be done for a unified Korean Peninsula. I hope North Korea abandons its nuclear aspirations and returns to the Six Party Talks with a sincere willingness to resolve the nuclear issue so it could look after its own people.

Should North Korea make the strategic decision to forgo its nuclear program, South Korea would correspondingly be the first to offer its active support, including for its much needed membership in international financial institutions and attracting international investments. If deemed necessary, we can seek to create a Northeast Asia Development Bank with regional neighbors to spur economic development in North Korea and in surrounding areas.

Park did not clarify how many of these benefits are conditional on North Korea’s disarmament, which is an essential point. If they aren’t conditional on disarmament, this is little more than a recycled list of Sunshine projects. If it is conditional, judging by Pyongyang’s reaction, it’s dead on arrival.

As an aside, I wonder how many Germans shifted in their seats uncomfortably when Park said, “Wir sind ein Volk!”

Since Park’s speech at last week’s nuclear security summit — which North Korea denounced at length — North Korea has published calls for Park’s resignation, called her “a faithful servant and stooge of the U.S.” for calling for North Korea to give up its nuclear weapons, and insisted that its missile tests, prohibited by multiple U.N. Security Council resolutions, are “justifiable.” It continues to repeat that it will never give up its nuclear weapons and threatened to “bolster” its “war deterrent,” usually understood as a reference to its nuclear weapons. It even threatened to carry out a new kind of nuclear test, presumably one using enriched uranium.

There is more. Referring to the South’s seizure of a North Korean fishing boat that entered South Korean waters, the North is vowing revenge against “military gangsters.” The North continues to deny its responsibility for sinking the ROKS Cheonan.

Can someone as smart as Park Geun-Hye really be naive enough to believe that these proposals are plausible in the near term? Although they are very much in line with the Sunshine Lite policies that Park has advocated for at least a decade, I doubt it. It seems more likely to me that Park is issuing these proposals now, while keeping the conditions for their realization vague, with an eye on South Korea’s approaching mid-term elections. The North’s escalation of its rhetoric suggests that Park’s vision has about as much chance of being realized as Lee Myung Bak’s strikingly similar vision.

As Park herself has said, “It takes two hands to clap.” The sound that can be heard from the Yellow Sea today isn’t applause.

Update: As I expected, the other hand isn’t clapping:

The North’s main Rodong Sinmun newspaper called [Park] an eccentric old maid, an idiot and a hen over her comments on North Korea’s economic difficulties and its homeless children. Park’s comments “are an unpardonable insult” to the North, the newspaper said.

I knew they wouldn’t like this part:

The Rodong Sinmun, an official mouthpiece of the North, said Park’s comments on pregnant women and infants in North Korea are “disgusting,” noting that Park hasn’t even been able to get married.

The newspaper also claimed Park’s policy on unification with North Korea is designed to hurt the North’s ideology and its socialist system.

Stop me if I’m out of line here, but if Pyongyang doesn’t want to keep hearing this sort of thing, maybe it should consider feeding its people.

KCNA has also published a lengthy defense of its nuclear weapons, and it’s still harping on the “pirates” and “gangsters” who seized that North Korean fishing boat, and denouncing President Park by name. It may be preparing to carry out large-scale military exercises near Pyongyang, and it has also declared a no-fly/no-sail zone in the Sea of Japan, suggesting that more fireworks will follow.

It seems we’ve entered a new cycle of provocations.

Royce goes to Seoul, calls for cutting off Kim Jong Un’s cash

So Ed Royce, Chairman of the House Foreign Affairs Committee, was in Seoul last week, and sat down for an interview with Yonhap to talk North Korea:

“It seems that the strategy that slows down North Korea the most is not allowing them access to the hard currency which they use in order to create their offensive nuclear weapons capabilities,” said Royce in an interview with Yonhap News Agency in Seoul. 

Royce is now in Seoul along with a delegation from his foreign affairs committee. He met with President Park Geun-hye and Foreign Minister Yun Byung-se earlier in the day. 

“We have tried various strategies and at this point, one of the problems is that if we give any additional support to the regime of North Korea, for example, we were to give them inducement in the form of currency, they would use that hard currency to further expand their nuclear weapons capabilities,” the lawmaker said. [....]

Royce also said the new United Nations report on the North Korean regime’s brutal human rights violations may help add pressure on Pyongyang to give up its nuclear program and may possibly make North Korean leader Kim Jong-un stand trial on crimes against humanity in the International Criminal Court (ICC). [....]

“Perhaps there will be new opportunities (following the publication of the U.N. report) to have fresh pressure brought from governments such as Beijing on North Korea in order to try to slow its development of nuclear capabilities,” the U.S. politician said.

“I think it will galvanize international public opinion with respect to the conditions inside North Korea and hopefully can push to put North Korea on a different track.”

When the final report is submitted to the U.N. Human Rights Council on March 17, the international community could take actions to refer the North Korean leadership to the ICC, he said, adding, “I know there’s much discussion of that at the U.N.”

If you’re one of those who wonders why people worry so much about North Korea’s nukes when other countries also have nukes, read the COI report. It isn’t the proliferation of nuclear weapons that scares me. It’s the proliferation of nuclear weapons to people who don’t value human life and who have no compunction about killing large numbers of people that scares me.

And lest we think that South Korea has completely recovered from the Sunshine fad, its interviewer hasn’t quite shaken it off.

“An issue for the Obama Administration and Congress is to what extent they will support – or, not oppose – Park’s possible inter-Korean initiatives,” the Congressional Research Service (CRS) said in a report posted on its Web site Thursday.

For instance, it pointed out, the Park government has indicated a desire to someday internationalize and expand the Kaesong Industrial Complex, a historic joint venture between the two Koreas located just north of their land border.

“These moves could clash with legislative efforts in Congress to expand U.S. sanctions against North Korea, such as H.R. 1771, the North Korea Sanctions Enforcement Act,” it added. [Yonhap]

As much as it cramps my fingers to write this, I actually believe there are ways that South Korea could make Kaesong into something most Americans would accept. As it is, Kaesong “wages” are not only paid directly to the regime itself, but they’re paid at a ludicrous, confiscatory exchange rate. Then, there are also various “taxes” the regime charges the tenant companies, which requires the South Korean government to subsidize those companies to keep them afloat. In effect, it’s a scam to launder money from the South Korean government to the North Korean government, with slave labor as the medium of exchange.

The other problem with these arrangements is that they’re increasingly at odds with U.N. Security Council resolutions that require transparency in financial dealings with North Korea. That’s particularly true of UNSCR 2094, which passed with a “yes” vote from South Korea, as a non-permanent UNSC member. Need I remind everyone that those resolutions were passed, in large part, to protect South Korea’s own security? If you doubt me here, read Paragraph 11 and tell me how you square a big, fat, no-questions-asked cash pipe with that. Korea isn’t in a very good position to complain that China is violating UNSC sanctions when it’s arguably guilty itself. 

As it was advertised, Kaesong was going to be an engine of reform. But if we don’t know there all that money goes — and we don’t — then it could be used, for all we know, for nukes, yachts, and ski resorts. But Kaesong could become palatable to Americans if Park Geun Hye extracts enough financial transparency from the North Koreans, and ensures that those workers really are getting the $70-or-so a month, and to ensure that the money isn’t being used to build centrifuges. If that happens, Kaesong might diminish as a potential irritant in U.S.-ROK relations. It might even become an engine of change — this time, of North Korea.

Post-Sunshine South Korea is sober, pragmatic, and grouchy.

In this post last week, I cited polling data showing how South Koreans’ views of North Korea have hardened in recent years, representing a dramatic swing since the fervent anti-Americanism and pro-appeasement sentiment of the Kim Dae Jung and Roh Moo Hyun years. I reckoned that the 2010 Cheonan and Yeonpyeong attacks were the tipping point in this shift, but a wealth of polling data from the Pew Global Attitudes Project changes my mind about this. I wish the data directly measured South Koreans’ views of North Korea, but they do measure other indicators that turn out to have a logical relationship to them.

In the decade between 2003 (the height of the anti-American wave) and 2013, the polls tell us that South Koreans’ views shifted steadily toward what we usually associate with “conservative” views — their opinion of the U.S. became 32% more favorable, unfavorable views of the U.S. fell 30% to just 20% in 2013, and 15% more South Koreans believed that the U.S. considers their country’s interests “a great deal” or “a fair amount” in making international policy decisions.

Between 2008 and 2013, the percentage of South Koreans viewing the U.S. as a “partner” as opposed to an “enemy” rose 18%, from just 51% to 69%. Between 2002 and 2013, favorable views of China fell 20%, to 46% (up from the 2010 nadir of just 38%). Very few South Koreans see China’s growing military power as “a good thing.” About a quarter of South Koreans view China as an enemy, but that figure has hardly shifted since 2008, when it was first measured.

The results I had really hoped to show you come from a poll by the Asan Institute, which I’d picked up as a paper booklet at a conference last summer. The poll gave a detailed generational breakdown on South Korean attitudes toward the North, and showed that Koreans in their 20’s were the most conservative age group in two generations. That’s immensely relevant; unfortunately, I’ve managed to lose the pamphlet in one of my stacks of paper, and I can’t find the results online, so you’ll have to settle for the next best thing — this report from Asan’s Kim Jiyoon, which shows us the same image in lower resolution:

When examined by age group, there is an interesting but consistent tendency. The young generation of South Korea exhibits conservative attitudes toward national security issues. They are quite a different species from the young generation ten years ago. Conventionally, a conservative South Korean tends to be hostile and assertive toward North Korea and friendly toward the United States. Much like those who are in their sixties, a disproportionate number of the youngest generation of Korea chose to support the United States (64.8%) in the hypothetical match against North Korea. This is the second highest proportion following the oldest generation’s support 72.8 percent. The most ethnically bound generation was in their forties—the so-called 386 generation. 

Surprisingly, most of this shift occurred between 2007 and 2009. The trend was underway before the election of Barack Obama, the Cheonan Incident, the Yeonpyeong Incident, the killing of Park Wang-Ja and the closure of Kumgang, or any of the events Americans might be tempted to think catalyzed this trend. It’s more likely that a steady stream of evidence gradually undermined the grandiose and wishful unifictions of the Korean left. The incidents of 2010 were not the cause of the shift, but probably solidified it just as people were growing tired of Lee Myung Bak, and prepared to listen to criticism of his policies.

There is also evidence that the Yeonpyeong attack shook off many South Koreans’ disbelief that North Korea sank the CheonanThis report by the International Crisis group cites a poll showing that Yeonpyeong attack convinced 17.7% of South Koreans that North Korea sank the Cheonan.* It’s human nature to view evidence as self-affirming, and I suppose plenty more South Koreans who were at least willing to entertain Cheonan conspiracy theories before Yeonpyeong decided, after the event, that they knew all along that North Korea did it. And overwhelmingly, they wanted to hit North Korea back.

The data suggest a zero-sum ideological contest between North Korea and the United States. The good news is that the contest has shifted away from North Korea lately (I care much less whether it shifted toward us). The bad news is that the shift is more a withdrawal of interest, of investment, of hope, and of fear. It does not look forward to reunification and has no desire to hasten it. It is the grouchy hangover that follows intoxication. I have no quarrel with pragmatism; it’s the selective apathy I can’t stand. And young Koreans are as blindly nationalistic as their elders, despite their immersion in the global culture.

The rejection of appeasement in its most masochistic forms, in a favor of a more rational, interest-based calculus, should not be confused with a complete rejection of inter-Korean exchanges or dialogue. It especially should not be confused with affection for the United States, or for the young, libidinous, and occasionally drunken American soldiers gallivanting around Seoul, Pyongtaek, and Uibongbu.** What it means is that South Koreans think they need us, and that the Sunshine fad is over.

Later this week, I’ll examine how South Korea’s changed media environment may have contributed to these changes, and why, even if the Democratic Party wins the next elections, it will be on a far more moderate platform than that of its predecessor, the Uri Party. It all sort of fits together. Trust me.

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This particular study also makes the mathematically impossible finding that 83.6% already believed that North Korea did it. The study concluded that South Koreas were moving to the left, but based this conclusion on a snapshot of public opinion during the second and third years of the Lee Administration, a point in the political cycle when voters usually grow disenchanted with the party in power. No wonder the study wrongly predicted a DP victory in the 2012 election.

** Except me, of course. I’m sure I was a lot nicer than the other drunken, libidinous young soldiers.

Update, Feb. 10:

Many thanks to Steven Denney for providing two links to studies relevant to this post. The headline is that ethno-nationalism is on the decline in Korea, but when I read the actual texts, I’m more inclined to think that the character of Korea’s ethno-nationalism has changed from generation to generation. Nationalism is no longer seen in explicitly political terms that militate union with the North. Instead, the younger generation invests its national pride in the South Korean nation, rather than in the Korean race. Says CSIS:

Koreans have begun to view themselves and their republic in a way that reflects political, social, and economic realities. Korea’s new nationalism is based less on 

ethnicity than previous strands of nationalism, views the state with an increasing level of confidence, and presumes that South Korea is on the rise in East Asia and the world. …

The 2013 data makes it clear that the South Korean public judges North Korea on its actions, with public opinion turning sharply against the North following tensions in early 2013. Of course, if North Korea can become a responsible neighbor, attitudes would improve. The question is if the North can achieve this before the youngest South Koreans decide that they, and their country, are better off seeing the Republic of Korea as a completely separate political and national entity. In 2012, while 11 percent of those in their 60s expressed no interest in reunification, 23 percent of those in their 20s stated the same. Notably, it was those in their 20s (60 percent) who were most in favor of reunification on South Koreans terms, indicating a less accepting and less tolerant attitude toward the North. …

The most important point to make is how sharply South Koreans in their 20s have broken in their views of North Korea with those in their 30s and 40s. In 2011 and 2012, those in their 20s were the least likely to identify the North Korea as “one of us.” Indeed, in 2012 this cohort was more likely to define the North as an enemy (24 percent). Following heightened inter-Korean tensions in the first quarter of 2013, the response “one of us” decreased by 9 percentage points.

I suppose if push came to shove, it would still be a case of “my brother and me against my cousin, my cousin and me against the stranger.” And I would hesitate to conclude that we’re seeing the emergence of a post-racial Korea. Still, we’ve at least seen the decline of an explicitly political racism in South Korea, something that disgusted me enough to inspire the very creation of this site. That is good news, because political racism never ends well.

Young South Koreans were also more confident in their country than their elders, and more resolute in the face of North Korea provocations. I can’t help thinking that insecurity is often the root of nationalism in its most extreme forms.

Kaesong running at half-capacity as investors trickle away

When Kaesong reopened after a five-month shutdown, I speculated that the shutdown would have lingering adverse effects on some of the operations there — that some of the manufacturers would have lost suppliers and customers, experienced workers would not return, credit would be overextended, and machinery and materials would have degraded.

Sure enough, Kaesong still hasn’t recovered from the shutdown. Contrary to South Korean government claims that it’s running at 80% capacity, the true figure is just 50%. That may be as good as it gets. South Korean companies are starting to trickle out of Kaesong, and new ones can’t go in to replace them:

Two South Korean companies with factories at the inter-Korean factory park in Kaesong have decided to discontinue operations in the face of unfavorable business conditions, sources said Tuesday.

The unification ministry and corporate insiders said a textile manufacturer and an electronic parts producer opted to sell their factories and land at the Kaesong Industrial Complex and signed related contracts.

Another small company that makes stuffed goods at a factory apartment run by the Korea Industrial Complex Corp. is close to abandoning its Kaesong operations in the face of mounting financial difficulties, they said.

Of the 123 companies with factories in Kaesong, three have not restarted their factories, with many others conceding they are operating below full capacity. Entrepreneurs claimed companies are currently operating at just 50 percent capacity even though normal operations resumed on Sept. 16.

“Concerns caused by a cooling off of cross-border relations after the Kaesong complex reopened are making it hard to secure orders, and there are growing fears that things will not improve in the near future,” said a corporate source, who declined to be identified.

He claimed that there are other companies who may decide to leave Kaesong if things don’t improve soon. [Yonhap]

Korea Real Time has more on the specific troubles some of the firms are having, and also notes that “another seven South Korean companies, which had leased land to build factories” at Kaesong, have informed the Korea ExIm Bank “of their decision to give up and scrap their business plan.”

On top of everything else, some companies that received $166 million in insurance payments from the South Korean government before restarting operations will now have to repay their bailout money to the government. The North has also made exorbitant demands that the investors pay the workers it has not yet reemployed “a so-called supplemental security income equal to 40 percent of their monthly pay.”

Sources speculated that up to 1,800 workers may be let go by companies, which means business will have to pay security income totaling $40,000 this month to 1,000 workers they want to retain.  [Yonhap]

Although the September deal that reopened Kaesong was designed to protect investors from political risks, the policies of both governments continue to constrict business operations. The North’s restrictions on “travel, communications, customs, and basic rights of South Koreans working at” Kaesong are inhibiting its competitiveness. So are South Korean trade sanctions imposed after the North’s 2010 attacks against the South. Seoul recently considered, then rejected, demands by the not-pro-North-Korean-at-all Democratic Party to lift trade sanctions against North Korea without the precondition that the North apologize for sinking the Cheonan (and for shelling Yeongpyeong Island?) and “take responsible measures,” whatever those are.

A surprising point that arose from this debate is that, according to ROK Unification Minister Ryoo Kihl-jae, “as long as the ban [on North-South economic exchanges] is in place, South Korean companies will be barred from investing in Kaesong, although this rule does not apply to foreign firms.” Presumably, Ryoo is only speaking of new South Korean investments, but still — really? So a venue whose sole appeal to a potential investor is a nationalist delusion exclusive to South Korea … is only open to investors who aren’t South Korean? If that’s a business model that tempts you, I hope I can interest you in my plans for a chain of bondaegi stands, coming soon to a county fair near you.

[True story: I accidentally ordered these in a restaurant once.]
 

Is it any wonder that “[i]n the past foreign companies had shown interest in investing in the special business zone, but this did not bear fruit”?

The extreme political risks of an investment in Kaesong hover over the whole experiment. At the moment, tensions appear to be rising. Some predict that more provocations are likely, and those provocations that would almost certainly impact Kaesong. On the other hand, signals from the South Korean and U.S. administrations suggest that each is interested in cutting some kind of deal with Pyongyang, but also fearful that the other ally will do so to its own disadvantage. Park Geun-Hye has even floated the prospect of a summit, before denying (not quite believably) that the condition are “ripe” for that. (Judging by the recent experience of the Mongolian President, they’ll be ripe when she makes the NBA draft.)

Policy-wise, we’ve reached a fork in the road, and it isn’t clear which fork we’ll take. The problem, as always, is that Pyongyang doesn’t want the same deal we do. It has no use for Park Geun-Hye’s conditional type of engagement, or Washington’s demands for nuclear disarmament. Unless someone caves, one of these two forks is blocked. The other leads to more political risk for Kaesong, and for things that matter much more.

Ambassador Gifford’s Trojan Rabbit

Just in time for North Korea’s latest nuke test scare, Mike Gifford, the British Ambassador to North Korea, takes to the pages of the L.A. Times to urge readers to support “engagement” with North Korea, although not very convincingly. Gifford begins with a litany of reasons why we either shouldn’t, or can’t — human rights (reason enough to isolate South Africa and Sudan, but not North Korea, apparently); WMD proliferation, attacks, and threats (followed by U.N. sanctions that impose financial transparency requirements North Korea can’t meet); the closure of Kaesong (further depressing the already-low level of investor confidence).

FrenchTaunt

Allow me to help Gifford refute his own thesis by citing another example — Kumgang Mountain. There is no better paragon for engagement with North Korea than Kumgang, which sucked up massive subsidies by South Korea that still didn’t cover the massive losses of its investors, but which did provide Kim Jong Il “tens of millions a year in hard cash” to sustain his misrule. Hardly anyone ever talked about how Kim Jong Il spent all this money, but Swedish investigative journalist Bertil Lintner cited an October 2000 conference paper by our friend Marcus Noland, alleging that money paid by South Korea’s Hyundai Asan company to the North Koreans had gone “into the Macau bank account of ‘Bureau 39′,” for what Noland calls “regime maintenance.”

As for the countervailing benefits of Kumgang, well, there weren’t any. Tourists were kept within hermetically sealed boundaries that prevented any meaningful contact with the North Korean people, and were guided and watched at all times. Those who broke the rules were arrested or forced to write confessions. One who slipped the bounds was shot. This was the last straw for the South Korean government, which stopped the flow of South Korean tourists (and cash). North Korea then confiscated the whole expensive shebang.

Screen Shot 2013-10-24 at 8.00.38 PM

[A screen shot from the actual Kumgang web site. Yes, it's still live.]

Five years later, South Korea is talking about another round of bail-outs for the companies that lost money on Kumgang. So it always goes with engaging North Korea.

Gifford also acknowledges (with apparent approval) that the U.N. has responded to some of North Korea’s assorted outrages by tightening sanctions. These require targeted financial isolation of North Korea to the extent that the money could be used for WMDs, weapons, and luxury goods. And yet, Gifford still calls for more “engagement.” So, exactly what kind of engagement can he still plausibly advocate? The answer turns out to be “nothing much”:

We are negotiating an extension of a highly successful English-language teacher training program we sponsor, which operates in six Pyongyang universities and one middle school.

So they’re teaching English to the scions of pre-selected regime loyalists, most or all of whom are presumably in Pyongyang? Huzzah for them. Do you suppose they’re using John Locke or John Stuart Mill as course texts? Neither did I. In which case, it’s far from clear how this will transform North Korea. It’s not as if the students will have a wide range of English reading materials to choose from.

Through the British government’s Chevening Scholarships, we recently sent two postgraduate students from North Korea to study at Cambridge University. We are also funding smaller-scale projects supporting the elderly, the disabled and nursing mothers.

So, that’s … two down and 22,999,998 to go.

U.N. agencies such as the World Food Program, UNICEF, the World Health Organization and half a dozen international civil society organizations with operations in North Korea work bravely with limited funds to improve the lives of ordinary people through better healthcare, sanitation, education, disability rights and agriculture — crucial in the face of malnutrition and deprivation outside the capital.

Who’s against that? Oh, right. Kim Jong Un is against that. For over a decade, he and his father manipulated foreign NGOs into feeding their loyalists while they used food as a weapon against the lower castes, and then spent the savings on European luxuries (Gifford’s ulterior motives now begin to emerge). Otherwise, Gifford argues against a straw man. I’ve long wished we could deliver food to every hungry North Korean, provided we could be reasonably certain of helping them (we can’t be).

They deserve our support, as do the outside organizations working to end North Korea’s human rights abuses, in which freedom of expression, movement, religion and thought are severely curtailed.

And how many organizations are currently working inside North Korea to promote freedom of expression, movement, relation, and thought?

Anyone who criticizes the government or party is punished severely, and knowledge of the outside world — where it exists — is extremely minimal or distorted.

So, that’s … zero.

On the other hand, North Korea does have an inexhaustible appetite for a ski resorts, water parks, fitness centers, dolphinaria (which I guess is a word), mausolea (ditto), MiGs, missiles, nukes, and a whole lot of things that aren’t much use to starving people. You could say these things are changing North Korea. You just can’t say they’re changing it for the better.

U.S. law isn’t what’s isolating North Korea. North Korean exports haven’t been welcome here since 2011, but so what? North Korea wasn’t exporting anything to us before that; it doesn’t make anything we want to buy, and in any event, it can still export to China and South Korea. U.S. companies can export to North Korea if they obtain the necessary licenses, and provided they aren’t trading in things banned by U.N. resolution (luxury items, WMD components, or weapons), but generally don’t because North Korea tends to dishonor contracts (sound familiar?) and can’t get letters of credit. Americans aren’t prohibited from traveling to North Korea; it’s North Korea that doesn’t allow its people to come here. You can read North Korean news sites here; now try to read the L.A. Times in Pyongyang.

Trojan Rabbit

The now-belabored point being — the main obstacle to constructive engagement with North Korea is … North Korea. North Korea, or rather the tiny minority that rules it, is determined to prevent the very change that Gifford is asking us to sow. If only. Our friend Nicholas Eberstadt has done us a great service by finding and printing this quote from a North Korean policy pronouncement on the subject of “engagement:”

It is the imperialist’s old trick to carry out ideological and cultural infiltration prior to their launching of an aggression openly. Their bourgeois ideology and culture are reactionary toxins to paralyze people’s ideological consciousness. Through such infiltration, they try to paralyze the independent consciousness of other nations and make them spineless. At the same time, they work to create illusions about capitalism and promote lifestyles among them based on the law of the jungle, in an attempt to induce the collapse of socialist and progressive nations. The ideological and cultural infiltration is their silent, crafty and villainous method of aggression, intervention and domination. . . .

Through “economic exchange” and personnel interchange programs too, the imperialists are pushing their infiltration. . . . Exchange and cooperation activities in the economic and cultural fields have been on the rise since the beginning of the new century. The imperialists are making use of these activities as an important lever to push the infiltration of bourgeois ideology and culture. . . .

The imperialists’ ideological and cultural infiltration, if tolerated, will lead to the collapse and degeneration of society, to disorder and chaos, and even to the loss of the gains of the revolution. The collapse of socialism in the 20th Century — and the revival of capitalism in its place — in some countries gave us the serious lesson that social deterioration begins with ideological degeneration and confusion on the ideological front throws every other front of society into chaos and, consequently, all the gains of the revolution go down the drain eventually.

If Gifford thinks the scale and type of activity he cites going to transform North Korea, he’s not only ignorant of recent history, he’s ignorant of North Korea’s ideology. If Gifford wants to argue against the people who are preventing engagement with the North Korean people, he has better things to do right there in Pyongyang.

But then again ….

Screen Shot 2013-10-24 at 8.38.37 PM

Kaesong was not shut down properly. Would you like to restart Kaesong in safe mode?*

Like most people, I don’t know what the genius behind this shutdown strategy realistically expected to accomplish with it. Its sudden, and apparently pressured, abandonment suggests that its mastermind didn’t think through its potential economic or political consequences, and that the decision was largely motivated by emotion and impulse, most likely egged on by a few yes-men in an echo chamber. He will (and should) pay significant economic and political costs for it. Potential investors, foreign governments, domestic government officials, and ordinary citizens will now question his capacity — and the capacity of those around him — for competent governance, or to create a safe place to do business. Indeed, it is those who are associated with him politically who must be the most bitter toward him.

Obviously, I’m talking about Kim Jong Un’s shutdown of the Kaesong Industrial Park.

Incidentally, and on a completely unrelated note, you may have heard that I had some unscheduled time off recently. I’m glad to report that I used the time productively. I did plenty of reading, writing, long walks with my wife, repair projects, and finally finished these:

P1020882

 

The frames are oak, with mortise-and-tenon joinery. They were inspired by a window lattice I saw at Toksugung Palace during my Army days in Korea, years ago.

 

P1020890

I was unhappy with the news that Kaesong would reopen, because Kaesong is based on the thoroughly discredited idea of bribing North Korea into reform and disarmament. Three nuclear tests later, the Security Council (including, at the time, South Korea) agreed to adopt UNSCR 2094, whose significance is its shift toward cutting off North Korea’s potential sources of funding for its WMD programs. If Kaesong is one of those funding sources, then it undermines that strategy. There’s something irreconcilably inconsistent about giving someone mouth-to-mouth while you’re strangling them, unless you happen to be a German dominatrix.

A key element of 2094 is that it shifts the burden of investors. It’s no longer sufficient to say that you don’t really know how Kim Jong Un will spend the money you pay him; UNSCR 2094 requires member states to “prevent the provision of … any financial or other assets or resources … that could contribute to the DPRK’s nuclear or ballistic missile programmes,” or other sanctioned activities, such as luxury goods imports. Do you really suppose the South Korean government or any of Kaesong’s investors know how Kim Jong Un is spending the money, or can exclude the possibility that he will use it for sanctioned purposes? Our Treasury Department can’t. If not, their financial arrangements violate UNSCR 2094.

Fortunately, attempts to restart Kaesong in safe mode are working about as well as … well, restarting a PC in safe mode. A high-profile planned conference of international investors that had been scheduled for this week had to be put off due to the North’s failure to lay the groundwork for rebuilding Kaesong’s infrastructure.

South Korea said Monday that it has postponed an investor relations event planned for the end of the month at a joint inter-Korean factory park in Kaesong.

The event that was originally set for Oct. 31 was arranged to attract foreign investors to set up factories at the Kaesong Industrial Complex, which is currently home to only South Korean companies. [....]

“Seoul sent the message to the North last Friday adding that under present circumstances, the reason for holding the event cannot be met,” a unification ministry official who declined to be identified said. He said the decision reflects the lack of progress made in talks to enhance cross-border communication and travel between Kaesong and the South.

Negotiations in these areas were part of the agreement reached to normalize operations at the industrial complex.

“As is known, negotiations on Internet connectivity, mobile phone use, utilization of radio frequency identification tag to ease travel and customs inspections have made no headway since the North called off working-level talks for the Sept. 26 meeting,” the official said. He said since no headway was made in matters that are critical for foreign investment, it has been decided that there is no point in holding the investors event. [Yonhap]

This Daily NK report, by contrast, suggests that the North actually delayed the conference, but this Joongang Ilbo report says that the North agreed to the delay at the South’s suggestion, which is still an unusually compliant response for North Korea. The Chosun Ilbo says that the North is giving the South the cold shoulder because it really wants Kumgang to restart, too.

Although most of the factories at Kaesong are back in production, both the southern managers and the northern workers continue to suffer from the lingering effects of the four-month shutdown.

Of the initial 123 South Korean companies, 118 South Korean companies returned to the Kaesong complex since the reopening and currently employ some 44,000 North Koreans, roughly 80 percent of the workforce before the shutdown in April.

Prior to the shutdown, the factory zone was home to 123 South Korean companies with some 53,000 North Korean laborers. Five firms have not restarted production for various reasons.

A month has elapsed since the resumption of operations on Sept. 16, but South Korean firms still face challenges as demand for their products plunged amid the prolonged tensions on the peninsula. The fall in demand has led to a cash shortage and created a vicious cycle in their business operation. [Yonhap]

The true picture is probably gloomier than this on closer examination:

South Korean firms at Kaesong, however, said they are facing liquidity crisis as their earnings remain weak as buyers are seeking deals at companies located at safer places less affected by volatile political situations.

“We already spent the compensation from the government to pay back bank loans,” another official from a Kaesong-based firm said. “Although we want to make a profit, there are no opportunities.”

A group of electronic firms in Kaesong echoed the view, adding that the companies will not be fully normalized until the uncertainties are abated.

“Out of 45 electronics and machinery firms in Kaesong, only 47 percent have operating factories, at least partially,” the group said in a statement urging two Koreas to resume talks in fully normalizing the complex.

“While the government says around 70-80 percent of the area’s factories are in operation, market watchers here believe the ratio hovers around only 50 percent,” another official from an apparel maker said. “Although all workers are showing up to work, nearly half of machinery are turned off.”

As Kaesong’s existing investors continue to struggle under the weight of last spring’s losses, the South Korean government is considering various bail-out options. (In a related development, the South is also meeting with Kumgang investors, to discuss possible bail-out options for them.)

At the same time, some of the North Korean workers who conceded too much in their “criticism” sessions after the April closure are also having problems getting their old jobs back, or any jobs, for that matter:

As the Kaesong Industrial Complex slowly moves toward a return to normal production, a number of its former employees have been dismissed by the North Korean side as a result of so-called “ideological problems,” Daily NK has learned.

A source from Shinuiju in North Pyongan Province reported on the 4th, “During the KIC shutdown in April, ideological sessions were held where some workers confessed they had been influenced by the impure ‘capitalist wind.’ They were then dismissed and sent back to their family hometowns. Upon hearing that the complex was to reopen, some had hoped to be reinstated but the authorities ignored this. On the contrary, they actually worked to isolated them from everyone else.”

“The Upper [the authorities] just instructed them to go and find work elsewhere; that was it. But no matter how good they are after working for ages in Kaesong, no enterprise or factory wants to use them because they are tainted goods now.” [Daily NK]

Kaesong turns out to be a risky proposition, whatever your nationality.

 

* With apologies.

 

N. Korea says Park GH’s father “smelled of elderberries,” S. Korea responds with “large wooden badger” plan

I don’t know about you, but I sure got tired of Park Geun Hye’s hippie Earth mother act last summer, after North Korea started making nice, right after banks all over China and Europe started blocking North Korean accounts. Thank God that’s over with. We’re back to steaming reactors, spinning centrifuges, war drums, nasty taunts, and all the things we’ve grown to love and miss about North Korea. The North was uncharacteristically quietly during August’s Ulchi Freedom Guardian exercises, but for reasons known only in Pyongyang, it’s having an apoplectic fit over another one being held now:

On Monday Rodong Sinmun, the official newspaper of the Pyongyang regime, called the exercise a “bellicose attempt to escalate the situation on the Korean Peninsula […] by openly threatening it with nukes,” referring to the presence of the aircraft carrier USS George Washington. (The U.S. has a policy of neither confirming nor denying whether its ships are equipped with nuclear armaments.)

A North Korean military spokesman said that the U.S. would be “wholly accountable for the unexpected horrible disaster” that faced its “imperialist aggression forces.”  [Time]

Anyone want to start a pool on when KCNA puts up banners calling for Park’s disembowelment?

Referencing Park by name, rather than using the more neutral “chief executive” moniker, the spokesman warned the president that she was steering the Korean peninsula back into a period of dangerous “confrontation”. The commentary, carried by the North’s official KCNA news agency, was largely a response to a speech by Park on Tuesday urging Pyongyang to give up its nuclear ambitions. The president had also talked up the development of a military deterrent capability that would render the North’s nuclear weapons “useless”. [....]

“If Park and her group conspire with outsiders under the pretext of leading (North Korea) to ‘change’ … and force it to dismantle nuclear weapons, it will be little short of digging their own graves,” the NDC spokesman said. “There will be no bigger fool and poorer imbecile than the one who schemes to side with a nuclear-wielding robber and urge one’s own kinsmen to lower a knife first,” he added.  [AFP]

See also Yonhap and Sky News. But at least they aren’t threatening to strike first.

“If our enemies try to threaten us in the slightest, the country will launch ruthless pre-emptive strikes of annihilation,” the CPRK said. [Yonhap]

How to explain the very different reaction? Well, one cause we can eliminate is the exercise itself, given the muted reaction to Ulchi Freedom Guardian. If there’s one thing we should know about North Korea by now, its mood is driven by its own hormonal cycle. No one really knows what’s driving that cycle, but I’ll offer some possibilities.

If you forced me to guess, I’d cite the need to keep the military on high alert and forward deployed as Kim Jong Un sacks the head of his armed forces for the third time since December 2011 (or so say a lot of journalists who don’t really know if that’s true or not). [Update: See also Aidan Foster-Carter's take--"this is not normal," although previous reports of Kim Kyok-Sik's demise have been (possibly) wrong.]

Money is always a reasonable guess, although the signs of financial distress aren’t that clear. Yonhap is reporting that North Korea’s exports to China rose 8 percent (compared to last year) in the first eight months of this year, “thanks to higher exports of coal, ores and woven garments,” while its imports fell by 6 percent. As always, we have to begin by observing that we have no idea if these figures are even accurate before we speculate about what they mean. It could mean that the blocking of some of North Korea’s offshore accounts has caused them to shift toward paying for imports with raw materials instead of cash. North Korea also sounds pretty desperate for hard currency from foreign investment, but what else is new?

This part, however, is much easier to explain: they’ve restarted the 5-megawatt reactor at Yongbyon, and said for the umpteenth time that they will never give up their nukes. I speculate that this is because they want them some nukes.

The National Intelligence Service informed lawmakers of the restart, ruling New Frontier Party lawmaker Cho Won Jin said by phone yesterday. Lawmakers were also told that North Korean leader Kim Jong Un told his cabinet he plans to seek reunification with the South by force in three years, Cho said.  [Yonhap]

Did you read that last sentence carefully? If you’re reading it from Seoul, no, I don’t have a spare room, unless you’re related to me.

Running the reactor at Yongbyon would mean the North is making good on promises made in April to restart the facility as part of efforts to produce energy and improve its nuclear armed force. The United Nations Security Council has imposed strict sanctions on the North in a bid for it to return to negotiations and abandon its nuclear ambitions. [Bloomberg]

Chris Hill was not available for comment. So what is the South Korean government doing to send a stern message it won’t give cash or concessions in response to North Korean threats? It’s asking us to give the North cash and concessions for (or at least, in the immediate aftermath of) North Korean threats. According to Yonhap, South Korea “will begin talks with the United States next month on whether to entitle its goods made in North Korea to advantageous tariffs under their bilateral free trade agreement.” But Kaesong’s Trojan Rabbit strategy is a conclusive failure. Why double down with a Trojan Badger?

The idea of giving Kim Jong Un free trade benefits would certainly draw furious opposition in Congress, and frankly, I doubt that the administration (State Department notwithstanding) would even support it. It does, however, prove the premise of my own opposition to the FTA, as agreed. Skeptics–you know who you are–said this could never happen. The idea of extending free trade benefits to North Korea–benefits that not even Japan has–when North Korea continues to nuke up, sell chemical weapons technology to Syria, and threaten us is crazy talk, of course, but anything South Korea asks our government to do is self-evidently possible.

Kaesong investors beware: Treasury issues new warning about N. Korea money laundering risk

Precisely what North Koreans do with earnings from Kaesong, I think, is something that we are concerned about.”

David Cohen, Undersecretary of the Treasury for Terrorism and Financial Intelligence

Just as Kaesong begins the process of reopening, and as the South Korean government seeks to “internationalize” investment there, the Treasury Department has issued a new warning about money laundering risks emanating from North Korea. The warning echoes longstanding concerns by the global Financial Action Task Force.

Every potential investor in North Korea needs to understand just how severe the potential consequences of turning a blind eye to money laundering can be, especially with respect to a place like North Korea, where Treasury has put the world on notice of the risks. Careless investors face multiple risks, including the blocking of their assets and accounts, civil penalties, and criminal prosecution. Assets that are co-mingled with criminally derived property, or that are co-mingled with assets involved in the commission of a money laundering offense, are subject to criminal or civil forfeiture.

Investors who may think that U.S. Treasury regulations don’t apply to them because they aren’t doing business in the United States may be shocked to learn that nearly all dollar-denominated transactions pass through U.S. Treasury-regulated banks, through correspondent accounts. Chinese and European banks that need their own access to U.S. financial institutions may also shun transactions with North Korea.

To further raise the political risk, new North Korean provocations are likely to cause President Obama, or a future U.S. President, to direct Treasury to further tighten financial restrictions on transactions involving North Korea.

Even today, investments in North Korea will attract greater scrutiny than investments in other countries. U.N. Security Council resolutions impose a duty to refrain from transactions that could help North Korea proliferate, and different jurisdictions have different blacklists of North Korean banks that are known to be involved in proliferation and money laundering.

It’s the investor’s duty to understand those complex and potentially tricky regulations governing transactions with North Korean nationals, something that no investor can do safely without specialized legal advice. Regulators will expect investors to ensure more financial transparency than they would if those investments were in places that did not pose the same money laundering risks. When it comes to the assessment of that risk, North Korea and Iran are in a class by themselves.

Kaesong Updates

The North Korean workers who were previously dispersed from Kaesong are being told to prepare to go back to work … provided that the necessary gratuities are paid, of course. Aidan Foster-Carter asks a very sensible question in a commentary at Korea Real Time: “What foreign firm in their (sic) right mind would consider investing in Kaesong?” This Joongang Ilbo report bolsters his skepticism:

The ministry in charge of inter-Korean relations said that in order to attract investments from outside Korea to the park, a subcommittee for its global competitiveness will host an investment briefing session next month for foreign companies stationed in the South.

“Some [foreign] companies expressed interest in the Kaesong complex but were also hesitant to make investments because of risk concerns and the fact that the Internet was not available there,” said Kim Ki-woong during a press briefing yesterday at the Unification Ministry.

Kaesong has nothing that an investor couldn’t find in the Philippines, Malaysia, or China, but it does have a lot of political risk and limitations of infrastructure that those places don’t have. In any event, as long as the two sides are still talking, there’s always hope that talks can fail.

Can North Korea have both Kaesong and Yongbyon?

Who is the real Park Geun Hye? The uneasy coexistence of two headlines may soon tell us. The first headline tells us that, six months after North Korea withdrew its workers, the Kaesong Industrial Park will soon restart.  The second tells us that North Korea’s reactor at Yongbyon already has. Both of these developments are bad news for those who want to see North Korea disarmed, for reasons I explained here. But if Park is really as tough as some of us wanted to believe she was, she’ll at least make Kim Jong Un choose one.

To some, Park’s tactical success at negotiating the reopening of Kaesong revealed a predisposition to a more conditional variation of Sunshine. To others, it showed that Park was a completely different kind of leader than her predecessors–one who was not only willing to let Kaesong die rather than yield on principle, but perhaps even secretly hopeful that it would die, for reasons not easily attributed to her. As one who previously held the latter view, with declining confidence, over the last few months, I grasped at her insistence that the North “guarantee” that it wouldn’t shut Kaesong down again. Perhaps these guarantees were really poison pills. Perhaps they disguised demands for apologies or compensation–things that North Korea couldn’t possibly accept. But it doesn’t look that way now.

Bruce Klingner of the Heritage Foundation said it best in a conversation over dinner a few weeks ago, when he called Trustpolitik “a Rorschach test.”

~          ~          ~

In early April, just before North Korea was hit by a wave of financial pressure, Kim Jong Un made what turns out to have been a grave miscalculation by withdrawing 53,000 workers from Kaesong.  Kaesong was a source of $80 million a year in hard currency, but in early April, Kim Jong Un calculated that Park Geun Hye would be as easy as her predecessors to manipulate, that the disruption would be brief, and that he had enough cash reserves to weather it.  He would not have withdrawn the North Korean workers from Kaesong had he known what would happen in the following weeks.

The Kaesong affair has taught us all–but Kim Jong Un most of all–that Park Geun Hye’s tactical sophistication is a dimension beyond her predecessors. For years, I’ve watched North Korea lead the likes of Roh and D.J. with nose rings forged from their own beneficent hallucinations.  I’ve watched them stampede every American president to hold office since 1993 with thunderclaps of scary headlines.  President Obama is the only one of them who hasn’t paid Pyongyang off yet, but it’s still hard to see what his policy vision is, or that he even has one.

Park Geun-Hye is not like these others.  Park–who was poised and statesmanlike at an age when most of us were experimenting with facial hair, whose North Korea messaging has been maddeningly consistent for a decade, who coolly questioned her staff as they rushed her to the hospital with a slashed throat–has an actual, calculated policy vision for North Korea.  I’m not sure exactly what that vision is, but I doubt that it’s quite the same as the advertised vision.  I saw hints of it when I was fortunate enough to be in the Capitol for her speech to a joint meeting of Congress.

I’m at the upper center-right of the audience in the beginning of the video (appropriately enough). Recognize me? No? Neither do I. Here’s what I keyed in on:

But as we say in Korea, it takes two hands to clap. Trust is not something that can be imposed on another.

The pattern is all too familiar — and badly misguided. North Korea provokes a crisis. The international community imposes a certain period of sanctions. Later, it tries to patch things up by offering concessions and rewards. Meanwhile, Pyongyang uses that time to advance its nuclear capabilities. And uncertainty prevails.

It is time to put an end to this vicious cycle.

Pyongyang is pursuing two goals at once, a nuclear arsenal and economic development. We know these are incompatible.You cannot have your cake and eat it, too.

The leadership in Pyongyang must make no mistake. Security does not come from nuclear weapons. Security comes when the lives of its people are improved. It comes when people are free to pursue their happiness.

North Korea must make the right choice. It must walk the path to becoming a responsible member in the community of nations.

In order to induce North Korea to make that choice, the international community must speak with one voice. Its message must be clear and consistent.

Is Park now letting that cycle re-play itself? Her tactical achievement in negotiations over Kaesong now threatens to become a strategic setback, both for Park and for her American allies, who expended substantial diplomatic capital securing the passage of U.N. Security Council 2094.

What financial transparency ensures us that Kaesong and Yongbyon aren’t really just two reactors in different stages of North Korea’s nuclear cycle? No one knows that answer. And if Park doesn’t know, she’s violating that Security Council resolution we’ve just fought to secure, and are trying to get other nations to enforce. That would be a major diplomatic victory for North Korea. And weakening the enforcement of Security Council resolutions shortly after their passage is part of North Korea’s playbook.

Kaesong deal leaves more questions that answers

“Precisely what North Koreans do with earnings from Kaesong, I think, is something that we are concerned about.”

David Cohen, Undersecretary of the Treasury for Terrorism and Financial Intelligence

I won’t conceal my disappointment that North and South Korea say they’ve reached an agreement to reopen Kaesong.  Doing so now would undermine that international financial pressure that will be necessary to disarm North Korea at a time when it’s showing signs of working, and when that pressure might help us achieve interests that matter far more than the mostly emotional reasons for keeping Kaesong open.

There are reasons for Kaesong skeptics to remain optimistic.  The most fundamental of these is that Kaesong is now so obviously a bad investment that if it does reopen, it won’t recover its pre-April output for years, if ever.  Its political climate is inherently unstable; investing shareholders’ money there is like building a nuclear power plant on a fault line.  Assurances from North Korea are unlikely to ease the concerns of analytical, unemotional investors.  In a time of rising international sanctions, Kaesong’s financial arrangements will (and should) also become difficult.

At least some of the current investors must be ready to cash out by now.  Their machinery hasn’t been maintained for months.  Their materials and finished goods have been mildewing in Korea’s record heat all summer.  The workers have been scattered to the four corners of North Korea.  Even if the negotiations proceed relatively smoothly, there will be weeks of delay before the workers, managers, materials, and machinery are reassembled and ready to resume work. Meanwhile, many of the Kaesong factories’ customers have found other suppliers.  Who wants a business relationship with a supplier who can’t guarantee a supply?

Fortunately, agreements in principle with North Korea never mean much, and they can have very short shelf lives.  There are still enough unresolved details to hide a few devils.

South Korean negotiators, entering what they described as a final round of talks, had spent more than 50 hours — over six meetings — pressing for such an assurance. The South had said that it would not agree to Kaesong’s reopening unless Pyongyang pledged that it would not again unilaterally shutter the plant.

The wording in the joint statement was vague and did not directly blame the North for the April shutdown. But it said both the “South and North” would guarantee the zone’s “normal operation.”  [WaPo]

There are unresolved questions of “if” and “when.”

Both sides, however, fell short of agreeing when to reopen the zone that has been idle since early April. They said only that the reopening would depend on how soon more than 120 impacted South Korean companies complete maintenance checkups on their facilities there.

A joint committee will be set up to supervise the future operation of the factory park and other related issues, including compensation for impacted South Korean plants, it said.

“Once the joint committee is set up and inspections and refurbishment of manufacturing facilities takes place, companies will be allowed to go back to the complex and start operations,” said a unification ministry official who requested that he not be identified. [Yonhap]

The way the negotiations played out may be more interesting than the outcome.  The North only conceded, if vaguely, to the South’s demand for more guarantees when the South said it was about to start making insurance payments to Kaesong’s investors, implying that it was about to shut Kaesong down for good.  Park handled the negotiation with a steadiness we haven’t seen in a South Korean president for decades.  One could almost be forgiven for thinking that Park was more eager to be perceived as wanting Kaesong to reopen than really wanting it.

The mirror image of Park’s toughness was the North’s uncharacteristic conciliation (at least by North Korean standards).  It’s curious–but on closer examination, not hard to explain–that North Korea began demanding talks to reopen Kaesong in May, just weeks after shutting it down.  In the end, Pyongyang appears to have acceded to most of Seoul’s demands, although I have to qualify this assertion by conceding that there’s much about the demands and the agreement-in-principle that I still don’t know.  Overall, however, this sequence suggests that Kim Jong Un miscalculated how Park Geun-Hye would react, and failed to foresee other critical events that would unfold two weeks later.  I’ll have more to say about these questions later this week.

North Korea’s cash-for-summit demands put 2010 attacks in a new light

WERE THE 2010 ATTACKS North Korea’s way of making good on extortion?  Stephan Haggard, not widely know for his hard-line views, cites an article in the Chosun Ilbo revealing that Kim Jong Il wanted a summit with Lee Myung Bak, but at a price.

The sticking point was money. How much? According to the Chosun Ilbo, $500-600 million in rice and fertilizer aid, which had effectively been cut from the first of the year, and perhaps some cash too; that was about the price that Kim Dae Jung paid for the first summit. Negotiations continued through November at Kaesong, when the North Korean delegation even presented a draft summit declaration including a resumption of aid.  [Stephan Haggard, Witness to Transformation]

The Chosun Ilbo story adds this important piece of evidence:

In January 2010, after the secret contacts ended and North Korea realized that it was impossible to extract any aid from Seoul, it vowed to launch a “holy retaliatory war” against the South and fired multiple artillery rounds at the Northern Limit Line, a de facto maritime border on the West Sea.  [Chosun Ilbo]

Haggard makes a compelling (if circumstantial) argument that the attacks were meant to demonstrate that North Korea’s extortion should be taken seriously. We now know that two months after Lee refused to pay up, North Korea sank the Cheonan.

Wondering if I could make this case a bit less circumstantial, I decided to consult my archives and see what else North Korea said and did in the months between Lee’s refusal to pay and the Cheonan attack. I didn’t find what I expected.  Although there were certainly some menacing acts and words by North Korea, the threats were nowhere near as extravagant or as frequent as those issued in early 2009, after President Lee cut off aid, and as President Obama warmed up his chair.  What’s interesting, however, is that in early 2010, North Korea was facing a severe popular backlash against The Great Confiscation.

In November, of course, North Korea followed up with the Yeonpyeong attack.

Let me take Haggard’s point a step further:  if he’s correct in his inference, this course of conduct would be a good fit for the legal definition of “international terrorism.”  Some commenters have suggested that the 2010 attacks — particularly the Cheonan attack — are not a basis (not that another is needed) to re-list North Korea as a state sponsor of terrorism, but fresh evidence of a motive to extort merits reconsideration. The key element is that the violent act must have been intended to influence South Korean government policy, and some of North Korea’s statements from 2009 provide additional evidence of North Korea’s intent.  The evidence is circumstantial, but somewhere in North Korea are people with direct evidence, and one of them is probably thinking about defecting.

The Stillbirth of Sunshine Lite

SO PARK GEUN-HYE HASN’T EVEN BEEN INAUGURATED YET, and her plans to engage North Korea – she called them “trustpolitik” – are turning out just as I’d predicted they would, and just how Sung Yoon Lee predicted in the opening paragraphs of this piece — they’re being overcome by North Korea’s own plans:

Kim Jong-un, the North Korean leader, has ordered his top military and party officials to take “substantial and high-profile important state measures” to retaliate against American-led United Nations sanctions on the country, the North’s official media reported Sunday.

North Korea did not clarify what those measures might be, but it referred to a series of earlier statements in which Mr. Kim’s government has threatened to launch more long-range rockets and conduct a third nuclear test to build an ability to “target” the United States.

Mr. Kim threw his weight …

Excuse me, did the New York Times correspondent just make a fat joke?

… behind his government’s escalating standoff with Washington when he called a meeting of top security and foreign affairs officials and gave an instruction in his name. He inherited the posts of supreme party and military leaders from his father, Kim Jong-il, who died in December 2011.  [N.Y. Times]

When North Korea blusters against the Security Council, remember that South Korea just began a term as a non-permanent member.  According to the Times, the North specifically said that its subjects “demand” a nuclear test.  It also explicitly threatened the United States, whose Presidents have kept it off the list of state sponsors of terrorism since October 11, 2008, to reward it for its progress toward nuclear disarmament.  Discuss among yourselves.

For what it’s worth, KCNA’s rhetoric is especially high-proof these days.  I’ll give you a Whitman’s sampler:

A sledgehammer should be dealt to … [t]he U.S. imperialists.”

Show of military force, not words, is needed to settle accounts with the U.S.

[T]he rhetoric of traitor Lee Myung Bak that ‘unification comes like an alley cat’, daring insult the supreme desire of the Korean nation. The Lee regime is a group of such human scum.”

[T]he Lee Myung Bak group is kicking up anti-DPRK human rights racket. This is an act reminding one of a thief crying “Stop the Thief!

The DPRK already stated to the world that it will react to the confrontation elements’ provocation with immediate retaliatory blows and their war of aggression with a grand and just war for national reunification.  The group of traitors should heed this warning and not go indiscreet.  The provokers will meet only merciless retaliatory blows.”

My personal favorite, referring to annual U.S.-ROK joint exercises, “Those who dare provoke the just cause of the DPRK will meet death only.”  In related news, The Onion reports that all North Korea is in celebration at learning that Kim Jong Un is the first man to walk on the moon. This a serious North Korea-watching site.  One of the important public services we provide is to mark the increasingly treacherous boundary between reality and parody.

To be fair, North Korea’s rhetoric (as quoted here) explicitly refers to the Lee Administration, not Park, but does so in reference to policy decisions that Park presumably supports and probably intends to continue.

 

Many tea-leaf-readers who are skilled at parsing North Korean New Year’s messages for vague and cryptic hints of reform or cross-border thaws that the rest of us can’t quite see have a corresponding talent for overlooking or discounting the most direct, patent, and brazen threats from Pyongyang.  Don’t expect to see any deep analysis of these things at 38 North, although I do look forward to Joel Wit’s post explaining why the coming provocations and Park’s curtailment of cash flow to the North in response are somehow Park Geun Hye’s fault, or perhaps even Barack Obama’s.  My advice to Mr. Wit would be to wait about two years.  By then, memories will have faded, and some people will still want to believe it as much as ever.

My problem is that I remember too much.  I’ve watched these cycles repeat themselves enough to see patterns.  The pattern I see here is of a North Korea that ramps up its provocations when new U.S. and ROK administrations come into office. The long-received conventional wisdom held that North wanted better relations with the U.S. and South Korea, and was (however cautiously) open to engagement, the expansion of trade, and economic integration.  Years of evidence do not support that view, which is why its remaining advocates are now probably a minority among North Korea watchers.*

In fact, the evidence really suggests that North Korea intentionally frames its relationships with newly elected administrations around provocations.  You can debate whether that’s to extort or to create the safety of distance.  I don’t think it has to be one or the other.  Richardson once called this “strategic disengagement,” meaning that North Korea uses provocations to limit foreign interaction.  I’ve always seen considerable merit in that, and I would add that the North calibrates international tension just enough to maintain that level of trade needed to keep a modest amount of regime-sustaining hard currency flowing in.  This makes sense to me, because I’ve never believed North Korea was interested in engagement for any purpose other than to fund a few high-priority projects and lifestyles.  Its tolerance for any particular interaction is proportional to a series of factors, including the economic benefit to be gained, its own need for hard currency, and the degree to which the “cultural pollution” associated with those interactions can be controlled.

Yet although some have (perversely, in my view) constructed arguments blaming Lee Myung Bak for the deterioration of North-South relations, the odd thing about this is that North-South trade actually increased during Lee’s term, although some kinds of higher-profile engagement were curtailed.  North Korea felt the need, and also the ability, to attack the South militarily without losing this key source of revenue.  The scary thing about this?  North Korea can only calibrate these tensions as carefully as it does by maintaining a great deal of insider knowledge of how the South Korean government thinks and reacts.  North Korea seems to have sunk the Cheonan and shelled Yeongpyeong secure in the knowledge that South Korea wouldn’t close down Kaesong.  Ilshimhue must have been just the tip of the iceberg.

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* The majority, which includes many who have lost hope in Sunshine, is harder to characterize.  Mostly, I see a few gloating hard-liners mixing uneasily with disillusioned ex-Sunshiners who still hope, against their better judgment, for something they don’t really believe in.  They’re mostly waiting for the next shoe to drop.  Most of them are frank enough to admit that they don’t know what to say anymore.

Update, 5 Feb 2013:  The Daily NK reports that the state has begun its anti-Park demonization campaign:

The source added, “He stated that the new Park Geun Hye administration wants to start a war with us, so people from every organ, enterprise and Worker and Peasant Red Guard unit must prepare to meet the threat. He emphasized that the people must be on guard at all times and stay prepared to respond to any provocation.”

I often suspect that the content of the regime’s external propaganda is different from what the regime tells its people domestically.

 

Happy New Year, Now Pay Up

Those who read only headlines will believe that Kim Jong Un has declared peace with South Korea. Those who read on, and who know anything of the background to the story, will see that Kim Jong Un’s New Year’s Speech is a demand for Park Geun-Hye to resume massive financial aid and make territorial concessions to the North, in line with what Roh Moo-Hyun agreed in his 2007 going-out-of-business summit.

It’s debatable whether the message was really all that conciliatory.  Kim, whose country has launched two major military attacks and multiple terrorist attacks against South Korea since 2010, called on “anti-reunification forces” in South Korea to cease their hostility toward the North.  Good to know.  As Reuters’s Jack Kim notes, any mention of North Korea’s nuclear programs was “conspicuously absent” from the speech.  In fact, the speech is more demand than offer:

Kim on Tuesday asked for a détente — but with prerequisites that the conservative Park will be reluctant to agree to. To promote inter-Korean relations and hasten unification, Kim said, both sides must implement joint agreements signed off years ago by liberal, pro-engagement presidents in Seoul. Those agreements call for, among other things, economic cooperation between the countries, high-level government dialogue, and the creation of a special “cooperation” zone in the Yellow Sea, where the North and South spar over a maritime border.

Park, who takes office next month, has said she’ll resume humanitarian exchanges and small-scale economic projects with the North — efforts that were shuttered under outgoing hard-liner Lee Myung-bak. But Park promises to hold off on major economic cooperation unless the North disassembles its nuclear weapons program, something Pyongyang says it will never do.  [WaPo, Chico Harlan]

The terms ostensibly agreed in 2007 are worth rereading, if only to remind yourself just how dangerously naive Roh was, and to take stock of how many of the terms the North has since violated.  But what did Roh actually give up?  During South Korea’s most recent presidential election, there were persistent reports that Roh (perhaps with opposition candidate and former Roh aid Moon Jae-In’s knowledge) compromised the integrity of the Northern Limit Line, the de facto maritime extension of the DMZ in the Yellow Sea.  The fact that the conservative press pushed the story is suspect, but part of the reason it became a major issue is that it rings true.  Roh’s associates deny that they agreed to give up the NLL, but concede that they discussed creating a “a peace zone in the West (Yellow) Sea,” under which North Korea would have gained access to most of the disputed waters south of the NLL and west of Incheon, plus the Han Estuary.

Oddly enough, Roh’s people say there are no records of exactly what they discussed with the North Koreans in that regard, and Roh himself wasn’t immediately available for comment, so the precise meaning of “peace zone” will now be open to different interpretations.  Even if Park knew what this North Korean demand meant, she could never accede to it.  It would mean giving up South Korea’s control over some of its most important fishing waters, and one of its more important sea lanes. As a general matter, Park supports aid and expanding trade with the North, but not without certain preconditions.  The North will not compromise its demand or accept preconditions.  So far, in other words, events are unfolding just about the way I’d expected.

And of course, as Sung Yoon Lee points out, none of this means the North isn’t about to do something nasty.  Some analysts continue to speculate that North Korea is about to test a nuke.  Their evidence looks a little flimsy to me, but with the U.N. still failing to agree on any reaction whatsoever to North Korea’s missile test — defenders of Susan Rice, take note — the North may see this as the perfect moment to continue perfecting better and smaller nukes.

Park, Lee, and Obama all had big plans to “engage” North Korea. North Korea had other plans.

Robert links to some polling data suggesting the pleasantly surprising fact that not only did North Korea’s missile test fail to swing votes toward Moon Jae-in, the ideological successor and former Chief of Staff to arch-appeaser Roh Moo-Hyun, it may have caused more conservative voters to flock to the polls to vote for Park (or against Moon).  If those voters expected Park to govern as a hard-liner, however, they’re projecting. Park didn’t run as a hard-liner in this election; in fact, she avoided creating much daylight between herself and Moon on North Korea policy.  Park has advocated Sunshine Lite for years, and even if (like me) you don’t agree with Park’s positions, at least acknowledge her consistency.

People have a tendency to project policies they want on candidates they prefer to other candidates — just look at how disappointed the left is at Barack Obama, the guy who won a Nobel Peace Prize at around 4 p.m. on Inauguration Day for promising to close Gitmo. It’s possible, of course, that Park comes to office with a secret hidden agenda, or with an enduring grudge for the fact that Kim Il Sung sent the assassin who killed her mother on live television.  It would be nice to think that the evil that men do eventually returns to them.  But that’s not how I assess Park.  Park is all about expediency and pragmatism.  She’s competent, tough, and honest, an will be an effective and cool-headed executive, but isn’t ideological (another adjective we could substitute, given the awful realities of life for most North Koreans, is “principled”).

If you forecast Park’s policies based solely on the evidence she’s offered us, at this moment she intends to give North Korea aid, but not without some return on her investment, not at the expense of South Korea’s own economy, and not at the expense of its relations with the United States.  Sound familiar?

In his inaugural speech, Lee reiterated his willingness to engage North Korea economically as long as it gave up its nuclear program. Unlike Roh, who always emphasized that North Korea was a small country that felt threatened by the outside world, Lee placed the onus on North Korea.

“Once North Korea abandons its nuclear program and chooses the path to openness, we can expect to see a new horizon in inter-Korean cooperation,” Lee said, adding that he was willing to help North Korea raise its per capita income to $3,000 within 10 years.

Considered a moderate in his party, Lee, unlike some South Korean conservatives, does not call for regime change in Pyongyang and is not expected to emphasize human rights violations in the North. During the presidential transition, he signaled that he might take a harder line on the North by eliminating South Korea’s Ministry of Unification, which critics consider soft on the North. But he eventually decided to keep it.

Like his left-leaning predecessors, Lee said that policy toward the North should “prepare the foundation for unification.”

“Unification of the two Koreas is the long-cherished desire of the 70 million Korean people,” he said.  [NYT]

Like Lee, Park doesn’t want to expend political capital on a pissing match with North Korea, and she might even have convinced herself that she can avoid one.  She’ll soon learn that she can’t. North Korea isn’t interested in what Park is offering.  It demands aid, and it refuses conditions.  North Korea will provoke her because that’s what North Korea does when it doesn’t get what it demands.  And when it does — key point — Park Geun-Hye will not just take it. Consequently, her North Korea policy will turn out to be something completely different than what she promised and still expects.

Today, the left is painting a revisionist image of Lee Myung Bak as a “hard-liner” for falling victim to the very same cycle.  On North Korea, however, Lee advocated a more generous brand of Sunshine Lite than either Park or the ultra-conservative offshoot Liberty Forward Party.  Lee was never an ideologue on North Korea. All he really cared about was bulldozing out big ditches and helping the chaebol make lots of money.  He was ready to give North Korea its own piece of the action by employing cheap (read: forced) North Korean labor in the service of the chaebol.  Here it is, all spelled out in detail, in a form that hardly seems less aggressive than Roh’s model.  Unlike Roh and like Park Geun-Hye, however, Lee demanded disarmament and reform in return.  He wanted a North-South relationship without the co-dependency and abuse, he wasn’t interested in spending his term wearing a ball gag, and he assumed that Kim Jong Il would accede to that.  When Lee entered office, the head of his transition team made this telling comment:

“In evaluating the past five years, the ministry admitted there had been no visible reforms in the North and that their policies had lacked effectiveness,” said Lee Dong-gwan, the transition team’s spokesman.

At about that time, an American president was also entering office hoping that he could reduce tensions with North Korea where his predecessors failed. Like Lee, he also favored economic outreach. Both presidents’ plans were almost immediately overcome by events:

Jan. 2008:  Incoming Lee Administration reviews aid programs for North, including massive last-minute aid commitments by outgoing President Roh Moo-Hyun.  Lee indicates he will link further aid to nuclear disarmament and return of South Korean abductees and POWs.

July 2008:  North Korean soldier shoots and kills South Korean tourist Park Wang-Ja at Kumgang.  South Korea demands that North Korea cooperate with an investigation into Park’s death; North Korea refuses.  South Korea halts tours out of concern for its citizens’ safety.

Jan. 2009:  Barack Obama takes office and asks North Korea to unclench its fist. North Korea says it will no longer recognize the Northern Limit Line (NLL), the de facto sea boundary between the Koreas, and unilaterally withdraws from a 1991 inter-Korean non-aggression agreement.

Mar. 2009:  North Korea detains U.S. journalists Laura Ling and Euna Lee along its border with China, an incident that Ling later suggests was a trap.

Apr. 2009:  North Korea tests an Unha-2 long-range rocket, in violation of UNSCR 1695 and 1718. The following week, it orders U.N. inspectors to leave Yongbyon, signaling the final collapse of George W. Bush’s Agreed Framework II.

May 2009:  North Korea tests several short-range missiles, restarts the reactor at Yongbyon, conducts an underground nuclear test, then unilaterally withdraws from the 1953 Korean War cease fire.

June 2009:  U.N. Security Council responds to the nuclear test with Resolution 1874.

Aug. 2009:  North Korea frees a South Korean Kaesong manager after 137 days in custody, and  bills her employer $20,000 for the cost of his room and board.

Sept. 2009:  South Korea accuses the North of intentionally releasing water from a dam and killing six South Koreans.

Nov 2009: North Korean ship crosses the NLL and gets the worst of it.  North Korea vows to take revenge.

Jan. 2010:  North and South Korea exchange artillery fire near their maritime boundary.

Mar. 2010:  North Korea torpedoes the ROKS Cheonan south of the NLL and kills 46 South Korean sailors.

Apr. 2010:  North Korea announces that it will confiscate South Korean property at Kumgang.

Oct. 2010:  Two shots are fired from a North Korean DMZ guard post.

Nov. 2010:  North Korea shells a civilian village on Yeongpyeong Island, South Korea, killing four and causing the evacuation of the island’s entire population.  The attack causes a significant shift in South Korean public opinion, away from giving unconditional aid to the North.

What’s amazing in retrospect is that Lee still kept the aid flowing until North Korea attacked South Korea on its own territory, and even then, he never shut down the Kaesong Industrial Park, a massive indirect subsidy for North Korea.  (Meanwhile, North Korea regularly blocked or restricted South Korean access to Kaesong, and levied confiscatory taxes against companies located there.)

So what hints do we have about where things are headed now?  First, KCNA has already been antagonizing Park and equating her with “traitor” Lee Myung-Bak (and Park’s own father, of course).  Remember how KCNA called for tearing out the throat of “rat-like” Lee?  North Korea will provoke — if only to test Park — and I’m betting that Park won’t take their shit.

Then, consider that second terms are policy tipping points for American presidents. Second terms are characterized by centrist, “stewardship” policies as weakened presidents try to keep the focus on a few second-term agenda items.  Obama’s team would have tipped toward engagement but for the missile.  Now, they feel they have to sanction.  I predict they’ll swing and miss at the U.N., which will give people like Ed Royce and John McCain a chance to voice a more conservative alternative policy for dealing with the North.  Obama may not want to argue the point.

Right now, everyone is predicting a softer line toward North Korea.  I don’t think it matters much what plans Obama and Park have right now.  Events will overcome those plans, too.

Really? DJ Horked the Whole Sunshine Thing from the Moonies?

Depending on your perspective, this revelation may soften your image of Reverend Moon, or you might be saying to yourself, “yeah, that figures.” Having lived in South Korea during the height of the Sunshine craze and observed it with more pity than anger ever since, the whole thing certainly looked like a cult to me.

Moon was an early practitioner of the kind of conciliatory politics that the South Korean government would eventually embrace in its now-abandoned “Sunshine Policy,” which it introduced in the late ’90s in an effort to build friendlier ties with the North. In 1991, the self-made mogul visited North Korea’s founding leader, Kim Il Sung, in Pyongyang, nine years before South Korean president Kim dea-Jung’s groundbreaking visit to the North Korean capital. “Moon began his efforts to engage with the North Koreans at a time when the South Korean government still formally opposed that kind of interaction,” says Scott Snyder, a Korea expert with the Council on Foreign Relations.

But Moon had hardly been coopted by his hosts. The Washington Times published a conspicuously defiant opening paragraph about the meeting: “President Kim Il-sung of North Korea, one of the last of the Stalinist states, yesterday discussed reconciliation of the two Koreas with a man he once imprisoned, the Rev. Sun Myung Moon, the founder of the fiercely anticommunist Unification Church.” Moon’s flagship American media property published original reporting about the “horror” of the country’s “communist gulag,” even at a time when the Unification Church was engaged in precedent-setting investment in that same country. This approach was not without its drawbacks for Moon and his business empire. [Armin Rosen, The Atlantic]

In related news, Moon’s funeral is widely expected to be “all weird.”