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NORTH KOREA NEWSLETTER NO. 36 (January 8, 2008)

All Headlines 10:47 January 08, 2009



By Jinwook Choi
Senior Fellow, Korea Institute for National Unification, Seoul, Korea

Since the launch of the Lee Myung-bak administration in February 2008, North Korea has heightened tension on the Korean Peninsula. A series of events since President Lee's inauguration culminated in the partial suspension of inter-Korean traffic to Kaesong on Dec. 1. Leaflet launches by South Korean citizens, the South's proposal of a North Korean human rights resolution, and its disputes over the North's compliance with the June 15 Joint Declaration and the Oct. 4 Declaration were denounced by Pyongyang.

While during the first half of this year, North Korea's offensive amounted to verbal criticism, toward the latter half of 2008, its behavior turned to more aggressive tactics. As the Beijing Olympics drew to a close, food shortage conditions in North Korea improved, and the DPRK (North Korea) was removed from the U.S. list of state sponsors of terrorism, North Korea was encouraged to make bold moves. In addition to its attacks on the Lee administration's DPRK policy, it shifted to direct criticism of the South Korean government, using the anti-U.S. beef protests and unstable economic environment as opportune timing for censure. Instead of abruptly shutting out all inter-Korean relations, North Korea chose to gradually reduce inter-Korean ties, thereby escalating tension. However, it appears it is also afraid of complete severance from the South.

Assessment for 2008

The three biggest issues that influenced North Korea's policy toward the South in 2008 were: 1) Kim Jong-il's health, 2) the nuclear weapons program, and 3) the launch of the Lee Myung-bak administration. North Korea's ROK (South Korea) offensive seems to have several intentions. First, Pyongyang not only wanted to corner the Lee administration so it would change its stated hard-line position toward North Korea, but it also hoped for an opportunity to render it weak and helpless. Owing to the victory of U.S. President-elect Barack Obama, the progressive faction within South Korea was encouraged, and appropriately, North Korea was able to concentrate on solidarity with progressive U.S. and South Korean factions, which had flagged due to issues such as the death of a tourist in Mount Kumgang, the North Korean female spy case, and rumors of Kim Jong-il's poor health. Thus, the DPRK sought to denounce the leaflet launches and blame South Korea for cooled inter-Korean relations, meanwhile emphasizing the fulfillment the of June 15 and Oct. 4 declarations and garnering support from the South's progressives. North Korea has vehemently denied responsibility for the inter-Korean blockade.

Second, the North Korea's offensive reflects its desperate state of affairs. North Korea benefits from several forms of economic cooperation with South Korea, such as the Kaesong Industrial Complex (US$20-30 million), the Mount Kumgang tourist venture ($20-30 million), humanitarian assistance ($150 million), commercial trade ($300-400 million), etc. Of these, bilateral commercial trade is the most significant; however, signs of a shift toward decreasing trade have alarmed North Korea. Thus, in order to prevent losses from inter-Korean trade, the DPRK has decided to use the Kaesong industrial complex as a means to protect its commercial trade. Realistically speaking, without any headway in nuclear dismantlement, resuming the Mount Kumgang tours will be difficult, and needless to say, realizing the June 15 Joint Declaration and the Oct. 4 Declaration and further expansion of the Kaesong industrial complex will be impossible. These factors have pushed the North to take a hard-line approach. Meanwhile, shutting down the Kaesong industrial complex will be equivalent to cutting all ties with the South, and in that case, Pyongyang should take into consideration that it will have to shoulder immense economic costs. Furthermore, North Korea cannot overlook the social costs and complaints coming from over 100,000 North Korean Kaesong workers and their families.

Third, North Korea's offensive aims to drive a wedge between Seoul and Washington. Pyongyang has concentrated on attacking the Lee administration in order to incite conflict between the South and the U.S. For instance, Pyongyang believes it can damage the Lee administration's cooperation with the U.S. on "CONPLAN 5029," as well as weaken the South's intervention in U.S.-DPRK relations.

Fourth, North Korea's hard-line diplomacy toward South Korea is for the sake of domestic unity. Since the end of 2006, North Korea has enforced control over society in order to preserve internal solidarity, and this requires a certain level of external pressure. For example, DPRK markets supervise female market workers who are younger than 45 years of age, and starting Jan. 1, 2009, it will restrict market activity to three times a month. Furthermore, the government is taking measures to strictly regulate the release of grain from cooperative farms in order to restore the rationing system. It has also held a conference for party cell secretaries and a conference for intellectuals, as well as strengthened the central party's intensive censorship in order to tighten government control. These regulations have roused complaints from North Korean citizens, but even to relieve them of this pressure external, tension must be present. Since the deterioration of Kim Jong-il's health, the North Korean elites need to demonstrate loyalty to him by taking a hard-line approach.

Looking Ahead to 2009

For the moment, North Korea's containment policy toward the South will continue, and heighten tension in phases as the DPRK uses its "salami" tactic. However, rather than completely cut ties with South Korea, Pyongyang will most likely use a series of familiar brinksmanship strategies up until the point of severing inter-Korean relations. It will be difficult for North Korea to completely break ties with the South, given the international circumstances and environment.

First, restoring inter-Korean relations will be a tricky and time-consuming process, and the slightest error could cause an avalanche of negative impact on North-South trade relations.
Second, adverse public opinion in the South could give rise to a aggressive countermeasures, and third, it could have a negative effect on U.S.-DPRK relations. However, if relations with the U.S. come to ruins, North Korea will spring back more aggressively. North Korea may completely shut down the Kaesong industrial complex, and it will be tough to eliminate the possibility of a DPRK military provocation, nuclear weapons tests, and missile firings.

Several factors could influence North Korea's approach hereafter, namely: tangible progress in U.S.-DPRK relations, the worsening domestic economy, and a turnover in the Lee administration's DPRK policy. Regarding the first, while a sudden advance in the nuclear weapons conflict is not foreseeable, mutual visits by high-ranking officials and steady development in nuclear dismantlement can improve U.S.-DPRK bilateral relations. The North's objective is not only to obtain a security guarantee from the U.S., but also to remove barriers to attaining economic assistance. Therefore, there is a high chance of proactive interaction with the South after substantial progress in the denuclearization process. North Korea may also apply pressure to South Korea by taking a more concessive stance on the kidnapping issue and initiate talks with Japan.

Second, despite the increase in crop production this year, due to new regulations of market activity made in an effort to revive the food distribution system, North Korea may face mass starvation in 2009 in some areas. If distribution is not effective and markets are debilitated, it will be challenging to supply food for the general civilian population. I suspect that North Korea's famine is impacted more by the government's public distribution system than by the gross quantity of food. If Pyongyang decides to close the Kaesong complex, it is not hard to predict a flood of complaints and grievances from the North Korean workers and their families.

Third, the Lee administration's policy toward North Korea will have the most impact on North Korea's outlook on the ROK. South Korea needs to encourage Pyongyang to change its stubborn attitude.

2009 Strategic Vision

If we retain this "neglect strategy" for DPRK policy until the first half of next year, we must not give the impression we are completely neglecting the North, and we must continue efforts to restore inter-Korean dialogue. We must refrain from making provocative comments and sustain the volition to achieve North-South dialogue. At the moment, South Korea's domestic environment and continuing international collaboration efforts are more pressing than North Korea's own problems. If there is an incremental buildup of tension from the DPRK and the nature of U.S.-DPRK dialogue improves after President-elect Obama steps into office, there is a possibility that the progressive faction will criticize the Lee administration and cause internal conflict.

In case North Korea feels the need to improve North-South relations and receives such pressure after the first half of 2009, we must create a preparation handbook. Especially because of the rumors of Kim Jong-il's poor health, inter-Korean dialogue is increasingly necessary. The public may expect improved inter-Korean relations after the first year if hostile relations with North Korea continue.

We should offer North Korea the right incentives and rationale to step out of its hermit state and communicate with Seoul, and insist on a plan that transforms the character of inter-Korean negotiations. No matter what dire straits North Korea finds itself in, there is a very small possibility that it will yield. We should work toward realizing a method of negotiation that unites the goals of bringing both change inside North Korea and giving humanitarian assistance. We must work toward enforcing the monitoring of the allocation of humanitarian aid, promote the business practices of the Kaesong industrial complex and the Mount Kumgang tourism venture, and improve the transparency of inter-Korean businesses in compliance with international standards.

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