DPRK diverts aid….again.

According to the Choson ilbo:

Following a request from the North in July 2005, the Unification Ministry and the Korea Tourism Organization bought 8,000 tons of asphalt pitch and subsidiary materials with about W4.9 billion from the Inter-Korean Cooperation Fund to repair Mt. Baekdu runway.

But inspection by the KTO in December 2005 showed construction to be shoddy because an insufficient amount of asphalt had been used. The Unification Ministry and the KTO bought another 8,000 tons of asphalt pitch and other materials with W4.4 billion from the fund in January 2006 and delivered them to the North.

But an inspection in 2007 by the Korea Expressway Corporation found that the paving was no different from that in December 2005, and that 3,497 tons of asphalt pitch had not been used to repair the runway, the BAI said.

The BAI presumes that W2 billion worth of aid materials were diverted illegally for other purposes.

And how did the South Korean’s respond?

The [Board of Audit and Inspection] said agencies including the Unification Ministry “made no preparations to deal with shoddy construction or illegal diversion of the fund.” They took “no action even when a senior North Korean cabinet counselor publicly said in 2006 the North would use a shipment to Nampo Port out of the aid materials to pave the runway of Sunan International Airport in Pyongyang” rather than Mt. Baekdu Airport.

As discussed before (here and here), South Korean development efforts (as conducted via the Ministry of Unification) have been poorly administered.   There is little transparency and less accountability for poor decision making and results.  Given this institutional environment, we can predict that resources will continue to be frequently diverted. 

An alternative, and I believe more effective, economic development strategy which South Korea could adopt towards the DPRK is simply to end MoU structural development programs and allow South Korean businessmen to directly negotiate business opportunities with North Korean counterparts (as the Chinese, European, and others currently undertake).  In this way, business persons risk their own capital and they are fully incentivized to make sure their efforts are properly administred.  Even if some graft is necessary to get things done, at least it does not come from the South Korean Treasury.

Comments welcome.

Read the full article here:
N.Korea Diverted W2 Billion in Aid: BAI
Choson ilbo


2 Responses to “DPRK diverts aid….again.”

  1. CW2 Mark D. Gallagher says:

    Is Kim Chong Il (KCI) Saber Rattling again or could he go all the way this time?

    Every Intelligence Agency in the world agrees that there are more active indications that north Korea will attack South Korea with nuclear weapons than there have ever been to date . Additionally, every State Department agency in the world agrees that this winter will be the worst winter for the north since 1995 . If aid, in the form of fuel and food to the north is not increased soon, an estimated 500,000 to 800,000 people will die of famine in north Korea this winter alone, according to multiple sources , including the World Food Organization/Program (WFO/WFP). Estimates as high as 3 million people perished from famine and floods from 1995 through 1998 in north Korea, according to the myriad of sources within Wikipedia.

    All of this ties to the answers to a few key questions that may be indicators of why north Korea is again taking to a saber rattling campaign. Why is north Korea on the State Sponsor of Terrorism list any way ? Why not increase aid to north Korea? After all, Soldiers are people too. Aiding north Korea means feeding the military first, therefore allowing KCI to spend funds acquired through illicit activities on programs such as the proliferation of nuclear weapons and missile technologies. Playing this diplomatic, economic and political balancing act for the past 53 years eventually will come to an end. Lets all pray it occurs on peaceful terms and not through the use of violence. Finding a peaceful solution or at least maintaining the status quo is better than any other alternative. In my mind, ROK/US assistance and external aid organizations are indirectly responsible for the development of nuclear weapons and missile technologies in north Korea.

    The most dangerous situation on the Korea peninsula would be if KCI were to have a nervous breakdown or have a loss of control of his own mind. He would remain in control of the regime out of fear but be irrational in his decision making. Knowing up to half a million people will die in my country in the next 6 months would give me a nervous breakdown too.

    Well it did, because I am writing this from Allgood General Hospital in Seoul, South Korea. This predictive assessment and my questionable loyalty to my leadership got me a one way ticket to the ‘loony bin’. Even if I am crazy, everything I have had to say is 100% factual, not my opinion and did not come to me in a delusion, epiphany, or secret communiqué from KCI himself. I based my assessment on everything that my intuition tells me which is 18 years of military service, undergraduate in Global History (concentration in Asian Studies), 13 years of intelligence experience, nearly 5 years focused on north Korea, and subject matter expert in the 2nd U.S. Infantry Division on all that is north Korean. I helped revise the Peninsula Intelligence Estimate (PIE), co-authoring PIE Supplement 4 (Complex Contingencies before and after KPA Defeat). For me over the past 5 years, the sun rises in the East Sea and sets in the West Sea. The rest of the world goes on without me. Sometimes the sun rises outside the 2ID bunker and sets in the same place. Working in a bunker with no sunlight sometimes for 38 hours a day, puts a strain on my better judgment. Maybe that is what happened to me.

    Based on all of these factors and many others I have assessed that KCI will order the use of north Korea’s nuclear arsenal as a desperate act from an unstable world leader with capable nuclear weapons on or about 16 October 2008. Where is unknown, but common sense is would indicate that in order to protect his own interests KCI would order the detonation of a nuclear weapon as far south as possible but still meet the intended objective of killing thousands. It is how I came to this conclusion that got me a one way ticket to the ‘booby hatch’.

    Thinking even further down the road, depending upon the results of such an attack, this may open the door for ground forces to seize or isolate Seoul at some later point in time. Reunifications of the Korean peninsula under a communist regime led by Kim Jung iI may be possible but would likely cause WWIII and certainly would not be tolerated by neighbor Japan. Even China would likely condemn such an attack, although surprisingly did not condemn north Korea’s nuclear test 2 years ago .

    Let’s watch from a distance to see what does occur between now and then to foil such an attack. That is about all I will be able to do. What does it take to ensure KCI and the nK people survive through the winter? One thing is for sure, in order to stabilize the north through the winter; the world will have to pay 4x as much as they did last winter due to rising food and fuel costs. WFP is already bracing for a rough winter in north Korea .

    Through all of what has happened to me in the past week and a half I have sought advice from close friends. One of them is a published author and north Korea expert, Joe Bermudez . I asked Joe what he though about all of this. Below is his response.

    “I believe that before KCI goes all the way we would see a very significant if not unprecedented rise in “noise” and threats (possibly very pointed ones) and a great deal of activity within the KPA. At the open source level there is nothing but the usual (if there is such a thing) blustering. I believe also that, currently, KCI is what is known in political science as a “rational actor.” Which means that he will do anything that is necessary to maintain his power and position. Which, in turn, suggests that at this point he would not go
    all the way, because it would start a war that he would lose – thus loosing his power and position (not to mention his life). This all, of course, could change in the future.” – Joseph S. Bermudez Jr.

    I certainly don’t disagree with Joe but, what Joe doesn’t know is what we are collecting through intelligence means at a national level and through our allies at the global level. If the first sentences of this my assessment and Joe’s assessment are true, what are the politicians doing to sway the tide away from KCI having a nervous breakdown and ending up in my situation. Below are a few factors we should look for in the intelligence community and in open source press reports.

    KCI Personality Indicators:
    – Falling out with family
    – Increased activity
    – Irrational demands
    – Erratic / Delusional behavior
    – Disorganized speech
    – Depression
    – Reduction in attention span / memory
    – Difficulty effectively solving problems
    – Reduce perception of self esteem

    nK Regime Indicators:
    – Derailment of diplomatic / political agreements
    – Yongbyon nuclear activity starts again
    – Activity at external nuclear or missile related sites picks up
    – Activity in the KPA becomes erratic, outside of historical norms
    – Location of regime officials
    – WFO / WFP support activities

    ROK/U.S. Military and Government Indicators:
    – NEO rehearsal (Ulchi Focus Lense (UFG))
    – Removal of nK from State sponsor of Terrorism list
    – Increase food and/or fuel shipments
    – Disposition of military and families in ROK
    – Leadership and intelligence continuity gap (leave, PCS, etc)
    – Location of key leaders

    The U.S. Intelligence Community has failed to detect such attacks in the past. 911, the Cole Bombing, Khobar Towers, the list goes on . Detecting such an attack would take finding the same needle in a hay stack that existed in each case but was overlooked. I lost a certain degree of faith in my leadership and the intelligence community in general for a myriad of reasons, which brought me to this assessment and got me sent to an institution to assess my mental well being. My priority now is to get healthy again but adding to my list of indicators is about all my brain wants to think about.

    If I were the President of the United States for a day I would first remove north Korea from the State sponsor of Terrorism list. Then I would launch the largest humanitarian assistance mission in global history during the first couple of weeks in October 2008. Simultaneously, I would destroy or send special operations forces into nK to seize control of every possible nuclear facility in north Korea. I would ask China to offer asylum to the regime and elite socialites and allow for peaceful stabilization of the Korean peninsula under United Nations, eventually South Korean leadership. The United States would only be a contributor and supporter.

    Maybe it is still a bit too early for this kind of operation. With recent events in Georgia, and ongoing operations in Iraq and Afghanistan, I think KCI is jealous. This may also be a ploy to influence Presidential Elections on 4 November. He saw how quick we were to rush in and provide humanitarian support to Georgia .

    In recent news it appears that north Korea and the Laotian government are firming up bilateral ties . The two countries together are still the poorest in Asia. It will be interesting to see what bilateral activities are cooked up between these two communist countries. In the past the two countries have closely aligned on numerous issues, to include tourism and other illicit activities .

    A somewhat humorous but sad story recently came out in the news describing how a north Korean spy was captured in South Korea. Before she was caught, the female north Korean agent was using sex tactics in order to coerce high level intelligence officers to provide her useful information . There is an undisclosed amount of sleeper agents, active agents and nK sympathizers who continue to operate in the ROK, attempting to drive a wedge between the ROK/ US alliance, gather useful information, and provide it back to the Kim regime.

    In other news, BG Ramirez handed over the reigns of the Assistant Division Commander (Maneuver) ADCM to move on to be the J5 U.S. Army Europe at Stuttgart, Germany . General Ramirez is an artillery Officer and a skilled collaborator in joint live, virtual and constructive simulated training environment of the 2nd Infantry Division. His expertise was paramount in ensuring readiness of U.S. forces on the Korean Peninsula.

    Interestingly enough I am not the only one in the world concerned about what the future holds in regard to north Korea. Condoleezza Rice for the first time ever met with her counterpart in north Korea . The report does not go into much detail but I am sure that the looming food crisis and nuclear disarmament were topics on either side. Removal from the State Sponsor of Terrorism list was probably discussed as well. Removal may give nK the opportunity to increase trade and help take care of those who are at risk this winter. It will be interesting to see what the ROK / US offer the north to avoid inevitable confrontation prior to this winter.

  2. nuc free korea says:

    It is apparent why this guy was committed to the hospital. This, ahem, analysis is a poor smoke screen for his personal diatribe against those he works for. He would have been better served doing some professional work that would really have helped 2ID combat the threat from NK. The most useful thing in Mr. Gallagher’s comments was the quote from Joe Bermudez (who, as usual, hit the issue right on the head), which the author promptly discounts. If he’s really Mr. Bermudez’s friend he would have taken heed of the advice he got, instead of dismissing it. In any case, the author does not stick to nor attempt to prove his thesis merely grinds his ax over many hundreds of words.

    NK, as they often do, utilize brinksmanship tactics to sway the course of negotiation. The fact that they are willing to see through their provocations to the end does not mean that NK wouldn’t settle for intermediate or lesser goals. In this case NK would agree to a verification protocol that was not the virtual equivalent of a colonoscopy (see the recent Glenn Kessler WP article on this –note to the author above, this is the sort of open source analysis you should do) and no sovereign nation would ever agree to it. I am no commie or NK lover, but diplomacy requires pragmatism and this is not it.

    A compromise needs to be in the works (e.g., trade the inspections for the sampling requirements –this is really the heart of the matter. instrusive inspections can be done to verify denuclearization). A declaration of 38 specific sites should have inspections at those sites, no need to go anywhere else at this point.

    NK would never use nuclear weapons to aid the offense, anyone who’s studied nuclear strategy knows this is not practical, especially in the compartmentalized terrain of Korea (an intel analyst would know this, especially one who works for 2ID). Their best use is in aiding the defense or threatening major world powers like the US.

    Oh by the way, if the US is not in a position to defend the ROK, no one else will be in a position to oppose forced reunification by the North. Certainly not Japan’s Self Defense Force. Though this would be a good reason for Japan to go nuclear (which they can in a heartbeat).

    North Korea will continue their current line of “negotiations,” perhaps reprocess more plutonium and, if the climate doesn’t favor them, test another nuclear device. If you want to find quotes from credible sources on this topic, surf on over to armscontrolwonk.com

    By the way, if you want to compare creds I have over 17 years in the military, 3 tours in Korea (2 in 2ID where they look at the world with blinders on), a Masters degree in Physics (I minored in nuclear engineering), have worked in the nuclear weapons field for over six years, and have been married to a native Korean woman for more than 15 years.
    And I know that Joe Bermudez’s opinion is to be taken seriously even if he is not my “close friend.”

    Mr. Gallagher, if you ever left the bunker and saw the real Korea you would know what I’ve posted (Koreans are Koreans by the way, north or south). Perhaps its the stale air of the bunker that lead to the nervous breakdown not starving NKs (by the way, KJI doesn’t even think about them, he’s not going to have a breakdown even if his heart fails).