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Neo-cons in Pyongyang

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In Brief

These days North Korea is heading for a major retreat, back to Military Communism. Only those elements of market economy which are necessary to keep the country afloat are being preserved. The economic policy of partial liberalization, which started on 1st July 2002 waned in mid-2005, and is now a history. The old patterns of central economic planning, public distribution system, and strictly controlled market activity are back in place. This might be surprising to those who expected from North Korea to open up and become a transitional economy, but its current economic policy attests to the contrary. We do not know whether this retreat had been planned from the start, but already in 2004 the North Korean authorities were talking openly about this possibility.

Kim Jong-il's ill health became apparent in October 2007 during the summit with Roh Moo-hyun. In November-December 2007, active anti-market actions were launched in North Korea. This was the time when Chang Sun-taek, Kim's brother in law, was promoted to the newly created post of first vice-director of the Korean Workers' Party, with oversight responsibility for the police, judiciary, and other areas of internal security. He was sent to the border area with China to "clean up" smuggling and speculation.

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This was followed by special instructions tightening the regulations relevant to Farmers’ Markets elsewhere in the country. This trend continued in early and mid-2008 and led to the conclusion that a conservative group in the DPRK leadership was victorious. In this, North Korea simply mirrored South Korea, where a new conservative government of President Lee Myung-bak came to power the same year.

Conservatives in the North have already faced some signs of public unrest and discontent (a demonstration of market traders in Cheongjin in March and a family suicide in Onjin in June) but they managed to keep control and prevented unrest from spreading. The killing of a South Korean tourist happened in July 2008 and, although was probably an accident, fits well into the general trend of cutting contacts with South Korea. Given the reality of collapsing inter-Korean cooperation, it is likely that North Korea will close the DMZ on 1 December. Kaesong Industrial Park will survive but stay effectively isolated from the direct influence of the South.

Two main factors (the weakening or ill Kim Jong-il and the stubborn and uncooperative attitude of Lee Myung-bak) contribute to the recent downturn in inter-Korean relations. North Korea never had illusions regarding the “Sunshine Policy” of Lee’s predecessors, understanding that its ultimate goal was to lure North Korea out of its shell. The South Koreans were not patient enough to wait until this policy could bear enough fruit to make it truly attractive to the North. Now the dominant mood in both governments has changed to the point that it becomes disruptive for peace and economic stability on the Korean Peninsula. Both governments are driving the divided nation back to where it was before December 1991, when the Non-aggression and Denuclearization pacts were signed.

As for North Korea’s erratic behaviour in rejecting the nuclear sampling and verification process, this too represents the conservative mood that is currently prevailing in today’s Pyongyang. Most agreements which Kim Jong-il concluded with the US were hardly popular among the North Korean military. Every time when Washington reneged on its promises given at the Six Party Talks it undermined the power of the liberal group in Pyongyang. I would not be surprised to learn that Kim Jong-il had a stroke last August after learning that US Congress refused to remove the DPRK from the list of terrorism-sponsoring states. Even now, despite in principle agreeing to go ahead with the denuclearisation plan, the North Korean military and the conservatives are creating as many obstacles to its realisation as they can.

Source: http://leonidpetrov.wordpress.com/2008/11/17/neo-cons-in-pyongyang/

3 responses to “Neo-cons in Pyongyang”

  1. It seems your sources are heavily southern and NGO, and also Russian.

    Something undefined has happened domestically in Pyongyang (aside from the ill-health of Kim Jong Il from August) since the start of this year, although I would not categorise it as you did of a “major retreat back to military communism” (sogun). And I don’t buy the story being put about in the south about Chang Sun-Taek (Kim’s brother-in-law). Equally an issue domestically is the DPRK’s reaction and response to the increasing hard line northern “policy” (actually … its not a policy, just hard line “do nothing”) of the ROK’s Lee Myung-bak, and its impact (frequent disruption) on southern grain & fertilizer aid and related steel supplies, and slowdowns/disruptions to 6PT-agreed deliveries of heavy fuel oil. There may be a (minor) conservative military-backed backlash in areas where the KPA call the shots on the ground, such as around the DMZ (it will close this coming Monday to ROK officials but not to business, cross-border trade, tourists and southern Kaesong investors and technicians), but its military command and all forces are acting normally (we would have heard otherwise from ROK sources).

    There has not been any dent to the fast-growing inter-Korean and China-DPRK trade and investment dynamic and expansion of Kaesong’s Industrial Estate. My UK JV bank colleague in PY (who speaks fluent Korean & has a southern wife in Seoul) continues to report to me better forex banking business, a more than usual feverish business activity throughout this year, improved power supplies, new investments, and rising living conditions, with new high rise buildings under construction in many quarters in PY. And PY’s 19 free markets continue to operate normally (i.e. busy).

  2. >It seems your sources are heavily southern and NGO, and also Russian.

    – American, Chinese, European, and Japanese sources should be added to this list.

    > I would not categorise it as you did of a “major retreat back to military communism” (sogun).

    – Should be “Songun” or Army First [Policy/Politics]

    >And I don’t buy the story being put about in the south about Chang Sun-Taek (Kim’s brother-in-law).

    – Read what Glyn Ford, Labour MEP for South-West England and Gibraltar who cannot be suspected of being “pro-South”, says about Chang Song-taek here:
    http://www.tribunemagazine.co.uk/2008/11/25/a-pause-for-change-in-pyongyang/

    >Equally an issue domestically is the DPRK’s reaction and response to the increasing hard line northern “policy” of the ROK’s Lee Myung-bak

    – That’s exactly what I meant in my op-ed.

    >There may be a (minor) conservative military-backed backlash in areas where the KPA call the shots on the ground, such as around the DMZ (it will close this coming Monday to ROK officials but not to business, cross-border trade, tourists and southern Kaesong investors and technicians)

    – The “military-backed backlash” is not minor – it’s major, particularly around the DMZ. Tourism to Kaesong City and the regular inter-Korean train service are already closed. Tourism to Keumgangsan resort is suspended indefinitely and will be badly affected by the new North-imposed DMZ-crossing regulation in the future.

    ROK is now withdrawing 1200 of its citizens from the Kaesong Industrial Park, leaving the decision about the remaining 1700 people at the discretion of DPRK government. On Monday, North Korea will reduce the daily number of DMZ crossings from 19 to 6 per day, and the maximum number of people allowed to cross the DMZ will be reduced from 500 to 250 people at a time.

    >There has not been any dent to the fast-growing inter-Korean and China-DPRK trade and investment dynamic and expansion of Kaesong’s Industrial Estate.

    – According to ROK Unification Ministry (Nov. 23), trade between South Korea and North Korea decreased 23.2% last month year-on-year due to worsening ties between the two sides. Inter-Korean trade volume totaled only US$160 million in October, 23.2% down from $210 million a year ago. It was the first time that trade across the heavily-armed border recorded a double-digit reduction on a yearly basis in recent months. This trend will continue.

    >My UK JV bank colleague in PY (who speaks fluent Korean and has a southern wife in Seoul) continues to report to me better forex banking business, a more than usual feverish business activity throughout this year

    – Nigel Cowie’s job is to stimulate foreign investment into North Korea and facilitate its external trade. He certainly registers the positive results of the previous 10 years of booming inter-Korean cooperation and the high interest of European business in North Korea’s experimentation with reforms. However, after the recent Kaesong and Keumgangsan disasters, foreign investors are bound to be more conservative in their business decisions. After all, would you invest your $1 million into North Korea?

    >improved power supplies, new investments, and rising living conditions, with new high rise buildings under construction in many quarters in PY. And PY’s 19 free markets continue to operate normally (i.e. busy).

    – Busy markets are a nightmare for Pyongyang (PY) retrogrades. The domestic policy of DPRK is as self-destructive as their attitude to the inter-Korean cooperation. The recent Cabinet Decision No. 61 (6 Nov.) stipulated that starting from 3 January 2009 all markets across the country will work only three days per month (on the 1st, 11th, and 21st day), as it was during the Yi Dynasty (1392-1910).

    DPRK government is now confiscating Japanese-made cars and mini-buses from small businesses, prohibits the sale of some consumer goods (including mobile phones and blank CDs and DVDs) and re-introduces the Public Distribution System, which dominated the retail sector from 1957 until 1998. The picture is grim and getting worse.

    LP

  3. Agreed, Glyn Ford, Labour MEP, cannot be suspected of being “pro-South” but the sources used by Ford are South Korean! So that does not help your point. If a British MEP uses a South Korean source then your source material is still South Korean, not British intel.

    Also, correct me if I’m wrong, but doesn’t the DPRK in shut out tourists in winter every year? This is for obvious reasons of not wanting people outside the DPRK seeing the poverty when things freeze over and dire situations get worse — not to mention tourists won’t be too keen to visit.

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