North Korean Economy Watch

According to Yonhap:

The joint South-North Korean industrial complex in the North’s border city of Kaesong saw its production expand 14.4 percent in 2011 from a year earlier, Seoul’s unification ministry said Monday.

The total production at the Kaesong Industrial Complex reached US$369.9 million during the January-November period last year, up from $323.3 million worth of production for all of 2010, according to the Ministry of Unification.

The output during the last month of 2011 has not been tallied yet, the ministry said, adding the on-year growth rate may be far greater.

Production for the first 11 months of 2011 marks a 25.7-percent growth from the same period in the previous year, the ministry also noted.

Monthly production hit $31.1 million in January last year and hovered near the $30-million mark every month last year, except in February, according to the ministry.

The ministry attributed last year’s output growth to an increasing number of workers at Kaesong.

North Korean laborers working at the complex reached a peak of 48,708 as of November last year, the ministry said. The comparable figure at the end of 2010 was 46,284, it said.

Yonhap also reports the following:

The provision of new laborers is seen as a signal of the new North Korean leadership attempting to maintain the joint industrial complex, the symbol of inter-Korean economic cooperation, despite the North’s repeated denunciations of the Lee Myung-bak administration for allowing only a former South Korean first lady and a businesswoman to visit Pyongyang to mourn Kim’s death.

“North Korea will provide about 400 more laborers to the Kaesong Industrial Complex on the 26th (of January) immediately after the Lunar Yew Year’s holiday,” a source at the Kaesong complex said.

A Unification Ministry official also said that he “heard that North Korea will soon increase the laborers at the Kaesong Industrial Park.”

The North had planned to increase the number of North Korean laborers late last month but suspended the plan due to the sudden death of Kim on Dec. 19.

Hundreds of South Korean factories in the industrial park employ 48,708 North Koreans as of the end of November last year, up 2,400 from a year earlier.

Read the full stories here:
Production at joint industrial Kaesong park expands 14.4 pct in 2011
Yonhap
2012-1-23

N. Korea to provide 400 new laborers to S. Korean firms in Kaesong: sources
Yonhap
2012-1-24

Pictured above (Yonhap): Food aid to be delivered to the DPRK (2012-1-27)

According to Yonhap:

Representatives of a South Korean charity group plan to visit North Korea next week to deliver 180 tons of flour aid to North Korea to help ease its chronic food shortages, officials said Friday.

The planned shipment by the Seoul-based Korea Peace Foundation marks the first flour assistance to the communist country following the death last month of North Korean leader Kim Jong-il.

The UNDP also made public that it will place a priority on the DPRK this year:

Radio Free Asia says the United Nations Development Programme will place a priority on improving food security in North Korea by reducing crop losses after harvests.

The U.S. based broadcaster said the UNDP plans to save more crops and improve seed production by revamping North Korea’s crop storage facilities and farm equipment such as threshers and grinders.

Around 15 percent of crops harvested in Pyeongyang are said to be damaged every year, while only 13 percent of the 150-thousand tons of seed produced meet international standards.

Food security is achieved by securing a certain amount of food, taking into account potential population increases, natural disasters and war.

Additional Notes:
1. I believe the “Korea Peace Foundation” is also the “Korean Conference of Religion and Peace (KCRP)”

2. Read about South Korea’s aid to the DPRK in 2011 here.

3. CNN also covered the story about South Korean food aid.

Read the full Yonhap article here:
S. Korean group to send first flour aid to N. Korea after Kim’s death
Yonhap
2012-1-20

UPDATE 2 (2012-1-20): The DPRK has released two Japanese men recently detained in Rason. According to the Associated Press:

Two Japanese men detained in North Korea 10 months ago have returned home, a minister said Friday, adding it could be a “positive” diplomatic sign from the reclusive state.

The two arrived back in Japan this week, said Jin Matsubara, head of the National Public Safety Commission.

“I think this could be taken as a positive message from North Korea,” he told reporters.

Police declined to comment on whether the two men paid any money or why they were released.

The men, reportedly in their 30s and 40s were detained in a special economic zone near the communist state’s border with Russia. They returned via China.

…

Three Japanese men had initially been taken into detention in March last year, but one of them, who was in his 80s, was freed and returned to Japan in April, Jiji Press news agency and public broadcaster NHK said.

Reports said the three men were employees of a machine maintenance firm in Tokyo who had visited Rason city near North Korea’s border with Russia in March to check machines at a food manufacturing factory.

They were reportedly detained on charges of hiding drugs in canned goods to be exported to China and currency counterfeiting.

The release of these men was also covered in Bloomberg.

UPDATE 1 (2011-5-4): According to KCNA:

Japanese Detained in DPRK for Their Crimes

Pyongyang, May 4 (KCNA) — The Korean Central News Agency Wednesday issued the following report:

Masaki Furuya, former representative managing director of JP Dairin Co. Ltd., Hidehiko Abe, representative managing director of Realise Co. Ltd, of Japan, and Takumi Hirooka, managing director of Sugita Industrial Co. Ltd, of Japan, were put in custody by a relevant body on charges of drug trafficking and counterfeit after entering Rason City of the DPRK on March 14.

They admitted their crimes and their gravity.

Masaki Furuya had already been expelled from the DPRK and the two Japanese are called to legal accounts.

What they did is a very grave violation of the law of the DPRK and international law and they will, therefore, face proper legal actions.

The Wall Street Journal also reports that the DPRK held a Japanese man for drug smuggling from 2003-2009.

ORIGINAL POST (2011-4-20): According to Yonhap:

North Korea detained three Japanese men on apparent drug smuggling charges in its special economic zone last month, but it later released one man, a news report said Wednesday.

The three Japanese employees of a machine maintenance firm in Tokyo visited the city of Rason, near North Korea’s border with Russia, in March to check machines at a food manufacturing factory, Japan’s Asahi Shimbun newspaper said, citing unidentified sources.

They were detained on charges that they hid drugs in canned goods to be exported to China, though the North later allowed one of them to return to Japan, the newspaper said.

The North has demanded a large bail for the two detainees, it said.

South Korea’s Unification Ministry, which handles inter-Korean affairs in Seoul, and the pro-North Korean association in Tokyo said they had no information.

The North’s state media have not reported on the case.

North Korea arrested a Japanese man on drug smuggling charges in 2003 before allowing him to return home on humanitarian grounds in 2009.

The news came days after North Korea confirmed the detention of a Korean-American man on a crime against the North.

The North said it will indict Jun Young-su, who was arrested in November, claiming he admitted his crime in the course of the investigation, the North’s official Korean Central News Agency reported Thursday.

According to the Korea Times the men were detained in Rason.

Read the Yonhap story here:
N. Korea detains two Japanese men: report
Yonhap
2011-4-20

Pictured above: The North Korean embassy in eastern Berlin and the hostel located on its embassy compound.

According to Der Spiegel:

In recent years, there have been numerous reports of foreign diplomats in Berlin abusing their diplomatic immunity by committing crimes. Traffic violations appear to be the most common offense, but diplomats have also been accused of exploiting domestic employees and even theft. Most of the time, all they have to do is show their diplomatic passport to get off scot-free.

This week, it would seem, a new transgression must be added to the list. Berlin newspapers are reporting that the North Korean ambassador to Germany did a bit of fishing on Sunday — albeit without a license.

According to reports in dailies Berliner Morgenpost and BZ, Berlin police discovered a man fishing on the Havel River in the city’s Spandau neighborhood on Sunday afternoon. When the officials asked to see the man’s fishing license, he apparently responded by saying he was the North Korean ambassador.

According to the reports, the angler did not have any proof of identity on him, nor did he have a fishing license. The police then asked their colleagues to bring them a current photograph of the ambassador and his personal details. When they arrived, the officers reportedly confirmed that the man was indeed the ambassador, Si Hong Ri, who took his current position in September 2011.

The officers then apparently told the ambassador to cease his illegal fishing activities. According to the police report quoted by the Berliner Morgenpost and the BZ, “the ambassador politely acknowledged (the request) with a smile and continued with the offense.” The police were unable to do anything, given the man’s diplomatic immunity.

When contacted by SPIEGEL ONLINE on Thursday, a Berlin police spokesman confirmed that a report had been filed on Sunday but declined to comment on the identity of the person involved. Fishing without a license is a crime in Germany punishable with up to two years in prison or a fine.

Yonhap also reported on the incident.

Read the full story here:
North Korean Ambassador Caught and Released
Der Speigel
2012-1-19

Radio Free Asia posted the following information:

The latest UN statistics showed that in 2010, North Korea imported 430,000 mobile phones from China, its primary ally and biggest trading partner, a six-fold jump from imports the previous year.

North Koreans forked out U.S. $35 million to buy these mobile phones, six times more than the money spent in 2009, according to the UN figures.

At the same time, Koryolink, North Korea’s only 3G mobile phone network operator, saw a rapid increase in subscribers—from about 90,000 at the end of 2009 to 430,000 a year later and more than 800,000 in the third quarter of 2011, according to majority owner Egypt’s Orascom Telecom.

While the rapid increase in mobile phone users is allowing greater communications within and outside the country, there are various restrictions in usage and it does not signal any major opening up of North Korea, experts told RFA.

Read the full story here:
Cellphones No Signal Of Reforms
RFA
2012-1-19

Since the New York Times just published an interesting account of the Pyongyang Restaurant in Siem Reap, I thought I would write a quick post about my recent trip to the North Korean Restaurant in Vientiane, Laos (평양식당)–my first North Korean restaurant experience outside of the DPRK.

The restaurant is located just a couple of blocks from one of Vientiane’s most popular landmarks, Wat Pha That Luang:

I arrived at the restaurant on December 28, 2011, the date of Kim Jong-il’s funeral.  I was eager to see if the restaurant would be doing anything special to mark the occasion…and they did: they were closed for the week.  A sign on the door read in English and Lao something close to “Apologies, but we are closed for five days”.

As I stood at the front door reading the “closed” sign, one of the waitresses walked out and offered to serve me a drink in the adjacent outdoor seating area (where the grills are located). I accepted.

In what I believe was perfect Korean (sarcasm here), I asked if they served Taedonggang Beer.  But they only served “Beer Lao” (Which is just about the only beer you can get in the country—fortunately it is a tasty one). As I enjoyed my drink, I asked the waitress if the restaurant was closed because of the General’s death, and she made a sad face and nodded her head. So I finished my drink, paid, and continued on with my vacation.

On January 9, 2012, I returned to the restaurant for a proper meal. When I walked into the restaurant I felt like I was back in the DPRK. The decorations and smell came rushing back to memory.

There were no overt signs of propaganda in the restaurant—likely because the bulk of the customers are South Koreans.  The only subtle symbol that could be construed as propaganda would be the pictures of Mt. Paektu.  These, however, would likely be interpreted as just a symbol of Korea to the South Korean patrons. Mt. Paekdu was featured outside on a big sign posted to the front of the building and inside on a smaller painting…right next to the restaurant’s Christmas tree. The wall decoration and paintings primarily featured pictures of Korean landscapes, crashing waves, women in hanboks and of course Leonardo da Vinci’s Last Supper and Mona Lisa.

Surprisingly the menu featured several Tangogi (“Sweet” Dog meat) dishes. It was surprising to me because the Laotians  do not eat dog. But they probably do not eat here much either if only because of the prices. I ordered a Tofu and kimchi dish as a starter and topped it off with some Pyongyang cold noodles and Ryongthongsul (령통술) Soju (from Kaesong).

Of course there was dancing and karaoke as well:

The waitress/performers opened with Arirang, but then sang a couple of songs that the Chinese and South Koreans seemed to know.  I was also able to recognize “Pangap Sunmida” and “Whiperan”.  I requested a song but they just laughed and said no. I guess my tastes are out of date–even in North Korea.

Eventually I was invited to sing a karaoke song as well.  In tribute to Shane Smith, I thought about singing the Sex Piltols’ “Anarchy in the UK”, but I was just too tired and not interested in making a scene.

Before I left, I asked the waitresses where they went to university. They attended the Pyongyang University of Music and Dance (평양음악무용대학)–which was rencetly refurbished:

ADDITIONAL INFORMATION:
1. I have marked many of the DPRK’s restaurants on Google Earth, but not all of them. If you visit one, or know where one is, please let me know.

2. I have posted many articles on the DPRK’s domestic, joint venture,  and international restaurants.  You can read them here.

The Congressional Research Service (CRS) is the research branch of the US Congress and the number one information source for congressional staff.  CRS is responsible for maintining updated research publications on numerous policy concerns and they recently published a report on the death of Kim Jong-il.

Download the full report here (PDF).

Here is the summary of the report:

North Korea represents one of the United States’ biggest foreign policy challenges due to its production and proliferation of nuclear weapons and missiles, the threat of attacks against South Korea, its record of human rights abuses, and the possibility that its internal problems could destabilize Northeast Asia. The North Korean government’s December 19, 2011, announcement of the death of the country’s Dear Leader, Kim Jong-il, has the potential to be a watershed moment in the history of the Korean Peninsula and the region.1 Ever since the death of his father, the Great Leader, Kim Il Sung, in 1994, Kim Jong-il had sat at the apex of a highly centralized, brutal regime. During his tenure, his regime subjected North Korea’s people to profound impoverishment and massive food shortages, developed nuclear weapons and long-range missiles, and sold technology related to both programs abroad.

The effect of Kim Jong-il’s death on North Korea’s stability is uncertain. Many experts doubt that his anointed successor, his third son Kim Jong-un, will over the course of time be able to maintain effective control over his country due to his relative inexperience and the mounting internal and external pressures confronting North Korea. Yet, the North Korean regime under the elder Kim proved to be remarkably resilient, and many of the forces that held it together will continue to operate even if the young Kim himself remains weak. A key to the Kim Jong-un regime’s stability will be its ability to continue obtaining and distributing funds, mostly from external sources. Of particular importance will be China’s willingness to provide commercial, financial, and other support for the regime. Over the years, China reportedly has resisted repeated U.S. and South Korean attempts to discuss North Korea contingency plans. It is unclear whether Kim Jong-il’s death will change this situation, though there have been calls to redouble outreach to Beijing. A possible opportunity for high-level dialogue could come in January 2012, when Chinese Vice President Xi Jinping visits Washington, DC. Xi is widely expected to be chosen as China’s top leader over the coming year.

Very little is known about the inner workings of the North Korean elite, as evidenced by the U.S. and South Korean intelligence services apparent surprise at the announcement of Kim Jong-il’s death. Even less is known about Kim Jong-un, who is believed to be in his late 20s and to have attended primary school in Switzerland in the 1990s. Kim Jong-un was being groomed to be the successor since his father’s August 2008 stroke that put a spotlight on the succession question.

In the days after the announcement, U.S. and South Korean officials issued statements that expressed support for the North Korean people, hope that the new leadership will continue recent diplomatic initiatives with Washington and Seoul, and a desire for a smooth transition in Pyongyang. (For the text of these statements as well as a joint message from several Chinese state and communist party organs, see the Appendix. U.S. and South Korean influence over events in North Korea is widely believed to be limited. In the coming weeks, the Obama Administration will be confronted with a decision of whether to persist with two proposed new agreements that reportedly were in the process of being concluded with the Kim Jong-il government in mid-December: a resumption of U.S. food assistance, and in return, a reported agreement by North Korea to shut down key sites of its nuclear program and open them to international monitoring. Members of Congress will have the opportunity to support or oppose these moves, as well as to propose new pressure and engagement tactics of their own.

I have kept an archive of all recent CRS reports on the DPRK.  You can see them here.

According to Business Week:

North Korea’s trade expanded more than 20 percent in 2010 to $6.1 billion on growing business with China even as the economy shrank for a second year, South Korea’s national statistics office said.

Trade volume increased 22.3 percent in 2010 after a 10.5 percent decline in 2009, Statistics Korea said in its annual report today in Seoul. Commerce with China accounted for 57 percent, or $3.5 billion, of North Korea’s foreign trade, up from 53 percent in the previous year. The totalitarian state doesn’t report economic statistics.

North Korea’s gross domestic product contracted 0.5 percent to 30 trillion won ($26.1 billion) in 2010, compared with South Korea’s 1,173 trillion won, the Bank of Korea said in November. Per capita income was 1.24 million won compared with South Korea’s 24 million won.

Kim Jong Un took over as leader of North Korea in December after the death of his father, Kim Jong Il. The regime has relied on economic handouts since the mid-1990s and an estimated 2 million people have died from famine, according to South Korea’s central bank. The United Nations and the U.S. increased sanctions on the country aimed at curtailing its nuclear weapons program after 2010 attacks that killed 50 South Koreans.

Chinese aid to the stricken country will probably increase as the government in Beijing seeks to avoid a flood of refugees from crossing the 880-mile (1,416 kilometer) border it shares with North Korea, analyst Dong Yong Sueng said. While food shortages have contributed to rising defections, North Korea has shown no willingness to ease sanctions by abandoning its nuclear weapons program.

Economic Dependence

“North Korea’s economic dependence on China will inevitably increase for the time being unless there’s some resolution to the nuclear situation,” said Dong, a senior fellow at the Samsung Economic Research Institute in Seoul. “China wants a stable North Korean regime and succession to avoid a potential influx of refugees.”

North Korea had a shortfall of as much as 700,000 metric tons of food last year, which could affect a quarter of the population, according to the United Nations Food & Agriculture Organization. China provides almost 90 percent of energy imports and 45 percent of the country’s food, according to a 2009 report from the New York-based Council on Foreign Relations.

China is preparing to consent to a North Korean request to provide 1 million tons of food in time for the April 5 anniversary of the birth of the country’s founder, Kim Il Sung, Japan’s Fuji Television said on its website. The report didn’t say where it obtained the information.

Providing Assistance

Chinese Foreign Ministry spokesman Liu Weimin today told reporters in Beijing that while he wasn’t aware of the report, “we have always been providing assistance to the DPRK within our capacity which we think will be conducive to the stability and development of the country.” DPRK is an acronym of North Korea’s formal name, the Democratic People’s Republic of Korea.

Kim’s military had over one million soldiers in active duty and 7.7 million reserve troops as of November 2010, today’s report said, citing South Korean Defense Ministry figures. The North operates under a military-first policy and has remained on combat alert since the Korean War ended in 1953 with a truce and not a peace treaty.

North Korea’s population rose to 24.2 million in 2010 from 24.1 million in 2009, about half of South Korea. Inter-Korean trade rose 13.9 percent from a year earlier to $1.9 billion last year, Statistics Korea said.

South Korea plans to set up a fund to raise as much as 55 trillion won to pay for eventual reunification with North Korea, Unification Minister Yu Woo Ik said in an interview with Bloomberg last October.

Read Sangwon Yoon’s full article in Business Week here.

The data in this article was pulled from a recent publication by Statistics Korea (Korean, English). You can read a press release of the publication here (in Korean). You can read the press release in English here (via Google Translate). It is not very good, so if a reader would care to take the time to translate this article, I would appreciate it. You can also download the press release as a .hwp file at the bottom of the article (download a .hwp reader here).

Statistics Korea did set up a North Korea Statistics page which you can see here. Unfortunately, it is only in Korean! I have, however, added it as a link on my North Korean Economic Statistics page.

UPDATE 1: The Daily NK also covered this story with the following report:

The income gap between North and South Korea is becoming ever wider, according to statistics released yesterday by Statistics Korea showing that South Korea’s per capita Gross National Income (GNI) in 2010 was $27,592, 19.3 times that of North Korea at $1,074. Last year the gap was 18.4 times.

In the (legal) foreign trade sector, the two Koreas also lived very differently. South Korea’s 2012 trading volume was $891.6 billion, 212.3 times North Korea’s $4.2 billion. North Korea’s exports were worth just $15 billion, its imports $27 billion.

As expected, North Korea’s trade reliance on China was highly significant (56.9%), partly because as strained inter-Korean relations started to bite, so inter-Korean trade declined as well: from 33.0% in 2009 to 31.4% in 2010.

Meanwhile, 61.0% of adults in South Korea are economically active, a number which rises to 70.2% in North Korea. Conversely, there are 3,134,000 college students in South Korea, but only 510,000 in North Korea.

In the energy industry sector in 2010, South Korea imported 872,415,000 barrels of crude oil, 226.4 times more than North Korea’s 3,854,000. The electricity generating capacity of South Korea is 10.9 times more than that of North Korea, too, though the generated amount was actually around 20 times bigger, the statistics allege.

Automobile production was no better; in South Korea (4,272,000), 1,068 times more than North Korea (4,000). Steel production in South Korea was 46.1 times that of North Korea, cement was 7.6 times more, and fertilizer 6.1 times.

UPDATE 2: The Hankyoreh adds some critiques of the data:

“With inter-Korean relations so tense, it is no longer possible for us to do the kind of North Korean grain production estimates that were possible under the previous administration,” a government official explained on Tuesday.

2010 production figures for rice, corn, barley, beans, and other major grains were left blank in a Statistics Korea report on major statistical indicators in North Korea. The numbers were included in statistical data released in 2008, 2009, and other years.

A Statistics Korea official said, “We made several requests to the organization in charge, but they didn’t provide materials, so we couldn’t print them.” The Rural Development Administration is responsible for investigating North Korean grain production. Early every year, it has estimated and released North Korean grain production figures for the previous year. Since 2011, however, it has failed to release figures.

A government official explained, “Since inter-Korean relations were decent during the previous administration, it was possible to go to the North and get samples to use as a basis for estimates.”

“With inter-Korean exchange all but completely halted under the current administration, the basis for releasing estimates has disappeared,” the official added.

Some observers said the decision was motivated by concerns that South Korean public support for food aid to North Korea could grow if low figures are presented. The argument is that there is no reason the kind of grain production estimates that were possible in 2008 and 2009, while the Lee administration was in office, would not be so for 2010 alone. Observers are also expressing bafflement at the fact that only agricultural products were omitted from estimates at a time when even the number of cars is being estimated in the area of industrial products.

Kim Yong-hyun, a professor of North Korean studies at Dongguk University, said, “Recently, food aid negotiations have been taking place between North Korea and the US, and I suspect the government may have decided not to announce [the estimates] because it was too concerned about public sentiment in South Korea.”

The North Korea figures released Tuesday also showed South Korea‘s per capita gross national income of $20,759 to be 19.3 times North Korea’s $174 for 2010.

A reader sent me a link to this Chinese-language story about Chinese student experiences in the DPRK. You can read the article in Google Translate with decent results here.

Below are several facts I pulled from the article:

1. The Chinese ambassador held meeting at the embassy to calm Chinese students after the DPRK’s nuke test, but told them to prepare for contingencies by stocking up on water and instant noodles.

2. The Chinese can go to two DPRK universities: Kim Il-sung University and Kim Hyong-jik University of Education. NOTE: Although the article does not mention it, I personally also know a Chinese person who attended the DPRK’s University of Light Industry a few years ago.

3. It is not not easy for the Chinese to make NK friends

4. Chinese students have free reign of the city.

5. Chinese students share rooms with party member families.

6. Korean students envy Chinese student posessions: computers, e-books, etc.

7. Holding hands common at North Korean universities now, however, bith control is not visibly for sale anywhere…

8. North Korean studends enjoy “adult content”

9. The story mentions a relationship between a Chinese student and a North Korean.

More information is apparently available here (in Chinese).

Source:
在朝鲜留学的日子
作者:南方周末记者 张哲 雷磊 实习生 师小涵 沈茜蓉
2012-01-12 12:11:39

Lankov writes in the Korea Times:

This year, President Lee Myung-bak’s New Year address paid much attention to North Korea issues. The South Korean President warned the North against fresh provocations but the general tone of his speech was conciliatory.

Lee said that now is the time to put aside past problems and start to rebuild relations anew. Tellingly, he did not repeat that Seoul expects Pyongyang to apologize for the two military incidents of 2010 ― the sinking of the Cheonan and the shelling of Yeongpyeong Island.

Are there chances that Pyongyang will react to this charm offensive and rush to resume talks with Seoul? Don’t hold your breath ― such chances are very remote. Pyongyang decision makers understand perfectly well that an immediate detente is not in their long-term interests.

Pyongyang’s foreign policy goals are surprisingly easy to describe: They are regime security and obtaining unconditional aid (the former is an absolute priority with the latter a rather distant but still significant second). In other words, North Korea’s foreign policy makers want to squeeze as much aid as possible from the outside world but only so long as this aid comes without too many conditions which might have impact on regime security.

Since 2008, the North Korean state has found itself in a rather unpleasant situation: U.S. aid stopped almost completely while the amount coming from South Korea has dramatically decreased. In this new situation, North Korea has been left with just one aid provider ― that is, China. This is not a situation that Pyongyang’s elite is happy about.

Since the 1960s, North Korean diplomats have worked hard to ensure that their country would always have at last two overseas sponsors. It was preferable if the two sponsors had uneasy, if not hostile, relations, so that their rivalry could be used to ensure that only limited concessions would be given in exchange for aid.

For the early 1960s until the late 1980s, China and the Soviet Union were the sponsors. From the early 1990s, the Chinese continued and the Soviet Union was replaced by South Korea and the United States.

In order to decrease their dangerously high dependence on China, North Korean diplomats now want South Korea to resume large-scale aid ― in other words, to re-implement a version of the “Sunshine Policy,” the North Korean-directed policy of Kim Dae-jung and Roh Moo-hyun when they were president in 1998-2007.

North Korean leaders are careful observers of the ever-changing South Korean political scene. They have to be, since milking the South has long since become their major source of revenue. They hope that the coming parliamentary and presidential elections will be won by the Korean nationalist left.

This is understandable, since left-leaning politicians in South Korea have always been more willing to provide the North with aid, without asking too many awkward questions. In recent years, it seems that the left has lost part of its earlier enthusiasm for such a policy, but one should still reasonably expect that a left-leaning (or as it would proudly style itself, “progressive”) administration will indeed be more receptive to Pyongyang’s demands.

So what should North Korea do to increase the chances of the South Korean left-leaning parties? Pretty much the only thing they can do is to “not” help the right, and this is exactly the reason why the recent conciliatory remarks by President Lee are likely to fall on deaf ears.

While the North Korea issue is marginal in South Korean politics, the left-leaning opposition can blame the Lee administration for its real (or alleged) mishandling of the North and the resulting instability on the Korean Peninsula (admittedly, this type of electoral rhetoric has a kernel of truth to it). Therefore, if the North agrees to play according to Lee’s rules, it will help the South Korean “conservatives” in presenting themselves as people who, at the end of the day, know how to maintain stability on the Korean Peninsula.

Of course North Korea would be rewarded if it were to talk right now. But from Pyongyang’s point of view it makes a great deal of sense to wait another year, in anticipation of the electoral success of the South Korean left. If the left is not successful in the end, then they can still easily make a deal with the next right-leaning administration. It is telling that in recent months the presidential contenders of the right have also indicated that they would be softer in their approach towards the North.

Therefore we should not expect a dramatic diplomatic breakthrough anytime soon. Fortunately though, we also do not have to be that afraid of fresh North Korean provocations. Consideration of South Korean electoral politics will probably mean that the North will try to avoid clashes with the South.

Read the full story here:
N. Korea’s political calculations
Korea Times
Andrei Lankov
2012-1-15