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July 05, 2009

Nervous in North Korea
by KWR: Scott MacDonald

NEW YORK (KWR) -- North Korea remains one of the major flashpoints in the world. It combines a hair-raising mixture of conventional and (potentially) nuclear weapons, an opaque and threatening Stalinist dictatorship, and a ticklish set of issues, encompassing imprisoned American journalists, the right to intervene on the high seas, and a potential missile threat to the region as well as Alaska and Hawaii. Looming over everything is the issue of political succession in North Korea, a development that involves not just that regime, but the United States, South Korea, Japan, Russia and China.

But we have been here before. In January 2009 a Council on Foreign Relations report noted, North Korea spent most of the 1990s on "a prolonged deathwatch". That decade did observe an acute economic crisis related to the collapse of the Soviet Union in 1991-92, which removed North Korea's major financial backer, the loss of its founding father, Kim Il-Sung (the Great Leader) in 1994 and a devastating famine that resulted in probably a million or so deaths. Out of this period, Kim Jung-il (son of the founding father and referred to as the Dear Leader) emerged as North Korea's paramount leader. Last summer the 67-year old Kim had a stroke and the East Asian country sits at the crossroads of another round of political succession. This is bad, but it could get worse.

The critical issues surrounding North Korea are as follows - a weak economy, largely unable to feed its population, and political factions in the regime jockeying for dominance as the elder Kim seeks to impose a family succession. The best way to divert attention to a political succession struggle is to threaten the neighborhood -- mainly Japan, South Korea and possibly the United States via Alaska or Hawaii. If North Korea's enemies are busy dealing with threats of armed incursions or missile attacks they will not be able to influence the Byzantine politics in the Kim's inner court - or so it is hoped in Pyongyang.

The brashness vis-à-vis the outside world is manifest in a number of ways. Beyond the testing of missiles, North Korea is holding two U.S. women journalists after sentencing them to 12 years of "reform through labor" for what state media called an illegal border crossing and an unspecified "grave crime". In addition, the Kim regime has demanded that South Korean firms with factories in Kaesong (a jointly-run industrial zone in the North) raise wages for its 40,000 workers to $300 a month from $75. It also demanded an increase in rent for the Seoul-funded estate to $500 million, compared to the current $16 million for a 50-year contract.

North Korea in the past has violated past agreements, acted in a belligerent fashion, and then come back to the bargaining table. This worked in 1994 and again in recent years. This time around its past history of breaking agreements is undermining North Korea's ability to push the international community into another agreement. That was evident in the passage in the United Nations on June 12th of sanctions against North Korea, which include high-seas searches of North Korean ships for weapons of mass destruction (one of the country's major exports). North Korea has stated that it will regard any such intervention as a declaration of war and act accordingly. As the official line reads: "If the U.S. imperialists start another war, the army and people of Korea will...wipe out the aggressors on the globe once and for all."

While the high-sea searches will certainly hurt North Korea and raise tensions further, the most effective measures are those that target the lifestyle of North Korean leaders. That means financial sanctions that seek to end all banking transactions related to Pyongyang's weapons trade as well as halting grants and loans. As a New York Times op-ed noted: "This would effectively freeze many of Pyongyang's overseas bank accounts, cutting off the funds that North Korean leader Kim Jong-il has used to secure the cognac, Swiss watches and other luxury goods needed to buy the loyalty of his country's elites."

What complicates matters is that very little is known of the factional politics at play inside North Korea. Our guess is that Dear Leader Kim is seeking to impose his third son as the next leader. His first son, Kim Jong Nam, appears disqualified as he was born out of wedlock and arrested in Tokyo in 2001 with a false passport on his way to Disneyland. He also has a reputation as a playboy, often observed in Macau. Son number two appears to have problems from unsubstantiated rumors over his health and possible homosexuality. This has left the third son, Jong-un, as the heir apparent by the elimination of his siblings. He is also 26 years of age and has been described as "short, a bit overweight and aggressive". Apparently the Dear Leader has favored number three, indicating that he is the most like himself.

In late June 2009, it was reported in the South Korean press that the Dear Leader in March ordered senior officials at the State Security Department to "uphold" Kim Jung-un's position as head of the secret police. In this role, the younger Kim would have presided over the treatment of the two American journalists and their trail. It is noteworthy that the "rise" to power of Kim Jung-un such that it is comes as the head of the state security apparatus, which is central to maintaining the regime's control over the nation of 24 million people. To help bolster Kim Jung-un's acceptance among the guardians of the dynasty, five luxury cars were given to top security officials, each vehicle allegedly worth some $80,000.

Yet, political succession from Kim Jong-il to Kim Jong-un may not be a smooth process. The Council on Foreign Relations noted that all three sons are "widely considered deficient or compromised in some way." This leaves other political players, especially those senior figures in the military, with considerable influence. Power also appears to be concentrated into the hands of Kim Jong-Il's brother-in-law, Chang Sung Taek. Consequently we are left with a government in North Korea that has decided that it wants to be a nuclear power or at least is posturing like one and is also in the process of reducing foreign influence during a period of political succession.

Despite Washington's global power status, North Korea is a game in which Beijing has far more clout - and national interests at stake. With greater pressure being exerted on Pyongyang due to the UN sanction, its economic and political dependence on Beijing will increase considerably. Beijing will most likely seek to keep the regime alive; it might use its influence to move the Pyongyang regime away from its dynastic mode to something closer to a modern socialist-soft authoritarian state under civilian leadership, much like China. That would be relatively constructive move, considering where matters are currently.

The path to greater tensions in North Asia clearly exists. The U.N. sanctions provide the context for the United States and other countries to reduce North Korea's ability to generate exports and maintain the superior lifestyle of the country's elite. At the same time, this will add pressure on an already weak economy, threaten to push the country toward renewed food problems, and leave the military the only force capable of maintaining order. Under such developments a regime collapse cannot be ruled out, though the Kim dynasty has defied expectations thus far. This leaves the short-term defined by higher political tensions both within North Korea and North Asia, a questionable lifespan for the Kim dynasty over the medium term, and increasing chances that major changes are likely in Asia's geo-political make-up, with long-term implications for Korea, China, the United States, Korea and Japan. Much depends on how cautious Washington proceeds and what role Beijing wants to play. The deathwatch remains prolonged.

Dr. Scott B. MacDonald,
KWR International, Inc.

Scott MacDonald is a Senior Consultant at KWR International. To obtain your free subscription to the KWR International Advisor, please click here to register for the KWR Advisor mailing list. Please forward all feedback, comments and submission and reproduction requests to: KWR.Advisor@kwrintl.com.

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