Archive for the ‘Political economy’ Category

Nuclear North Korea: A Debate on Engagement Strategies

Friday, April 13th, 2007

Columbia University Press, 2007
Victor D. Cha, government, Georgetown University
David C. Kang, government/business, Dartmouth College

The regime of Kim Jong-Il has been called “mad,” “rogue,” even, by the Wall Street Journal, the equivalent of an “unreformed serial killer.” Yet, despite the avalanche of television and print coverage of the Pyongyang government’s violation of nuclear nonproliferation agreements and existing scholarly literature on North Korean policy and security, this critical issue remains mired in political punditry and often misleading sound bites. Victor Cha and David Kang step back from the daily newspaper coverage and cable news commentary and offer a reasoned, rational, and logical debate on the nature of the North Korean regime.

Coming to the issues from different perspectives—Kang believes the threat posed by Pyongyang has been inflated and endorses a more open approach, while Cha is more skeptical and advocates harsher measures—the authors together have written an essential work of clear-eyed reflection and authoritative analysis. They refute a number of misconceptions and challenge much faulty thinking that surrounds the discussion of North Korea, particularly the idea that North Korea is an irrational nation. Cha and Kang contend that however provocative, even deplorable, the Pyongyang government’s behavior may at times be, it is not incomprehensible or incoherent. Neither is it “suicidal,” they argue, although crisis conditions could escalate to a degree that provokes the North Korean regime to “lash out” as the best and only policy, the unintended consequence of which are suicide and/or collapse. Further, the authors seek to fill the current scholarly and policy gap with a vision for a U.S.-South Korea alliance that is not simply premised on a North Korean threat, not simply derivative of Japan, and not eternally based on an older, “Korean War generation” of supporters.

This book uncovers the inherent logic of the politics of the Korean peninsula, presenting an indispensable context for a new policy of engagement. In an intelligent and trenchant debate, the authors look at the implications of a nuclear North Korea for East Asia and U.S. homeland security, rigorously assessing historical and current U.S. policy, and provide a workable framework for constructive policy that should be followed by the United States, Japan, and South Korea if engagement fails to stop North Korean nuclear proliferation.

Press in Yohap:

N.K. likely to jump in growth if under open-minded regime: U.S. scholar
Yonhap
4/13/2007
Lee Dong-min

North Korea, once it adopts a normal political system, has the potential for 10 percent annual economic growth, an American scholar said Thursday.

The North’s economic openness, however, in the long run can create a contention between Seoul and Washington on how to deal with such growth, Prof. David Kang said.

Given the “inherent dynamism” in the region, North Korea would be able to achieve high growth, he said in a forum hosted by the South Korean embassy in Washington.

Kang is adjunct professor at Dartmouth University’s Center for International Business. He is a co-author of “Nuclear North Korea: A Debate on Engagement Strategies,” which he wrote with Victor Cha, currently director for Asia at the National Security Council.

“If North Korea can get rid of this horrible political regime, you have to guess the natural rate of growth for North Korea over the next generation… you have to put at 10 percent a year,” the professor said.

The task is to how best to take advantage of this national strength existing in the region in terms of education and development, Kang said, and an ideal situation is for a slow integration to weaken the psychological shock from embracing capitalism, he argued.

But once North Korea’s opening gets fully under way, coordination problems may arise between South Korea and the United States, according to Kang.

One example is Kaesong industrial complex, an inter-Korean pilot economic project, he said.

Located just north of the South-North border established at the end of the 1950-1953 Korean War, the complex houses manufacturing plants with capital from the South and cheap labor from the North.

Seoul tried to get Kaesong products covered under a free trade agreement (FTA) concluded with Washington earlier this month, which would have allowed them to be exported to the U.S. The two countries compromised by agreeing to consider establishing “outward processing zones” on the Korean Peninsula in the future.

Kaesong was able to be “papered over” because it is not yet a lucrative effort, Kang said.

“But it shows potential for conflicts on what to do if North Korea slowly begins to open up,” he said.

“What’s going to happen to those goods under the FTA? What would the U.S. think about it? We really have some coordination problems to get over.”

The professor also questioned the general assumption that North Koreans, should their regime collapse, would welcome South Koreans as their “liberators” and accede sovereignty.

Nationalism and outside pressure often strengthen the internal bond, he said.

“Often, it becomes us against them,” not unlike what is occurring in Iraq, said Kang, and without North Korea’s receptiveness, the situation “could become ugly very quickly.”

“As we start to think (through) these assumptions, it becomes far more complex,” he said.

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Supreme People’s Assembly’s 2007 Budget… Financial Estimate $3.1bn

Friday, April 13th, 2007

Daily NK
4/14/2007
Park Hyun Min

Changes to the North Korean Cabinet Ministry, Kim Young Il elected as the new Prime Minister, Kim Young Choon as Vice-Chairman of the National Defense Commission

At the 5th round of the 11th Supreme People’s Assembly announced on the 5th, the change in economic policies that would in future concentrate on the people’s livelihood and suspend the advancement of technological skills.

In the report, the deputy Prime Minister revealed that the major economic task for the upcoming year included light industries and agriculture, which had already been completed, and the improvement of the people’s livelihood. He said that the issue of social economic management had been discussed and that it would be resolved “our way.”

The 2007 report by the Supreme People’s Assembly proposed to, i) improve the basic standards of living in relation to agriculture and light industries, ii) enhance the manufacture of potential energy starting with the prioritizing the department into 4 divisions, iii) modernization of public economy and iv) manage sosicalistic economy through the our own.

Furthermore, foreign collaboration was proposed to further investments into advanced technology. In relation, the third phase proposal was made over a 5 year period (`08~`12) to improve technological skills such as the advancement of basic skills, high technology and software.

In contrast to last year, North Korea estimated an increase in revenue at 433.2bn won ($30.9bn, $1=141won). Last year, 5.9% were considered the public revenue, whereas this year, this figure was raised to 7.1%.

As for tax resources, national business gains tax was increased to 6.4%, cooperative organizations fund set at 4.5%, depreciation amount 9.6%, real estate fees 15.4%, and social welfare tax at 15.1%

Regarding expenses, science-technological skills among people’s economic expense increased to 60.3%, net business income is estimated to be 2% which will aid new measures to develop enterprise skills. In addition, proposals were made to increase agricultural expenses to 8.5%, light industries to 16.8%, energy, coal, metalwork and railroad to 11.9%

In relation to this, a South Korean governmental official revealed, “At this Supreme People’s Assembly, economic improvement proposal was mainly revealed without any announcement on foreign policies or sort of legislation of reform or openness.

Since last year, there have been rumors that a change in government would occur amidst the North Korean Supreme People’s Assembly. While Park Bong Joo stepped down from his position, Kim Young Il, formally in charge of transportation was elected as the new prime minister. It has been three and half years since Park Bong Joo first took his prime ministerial post at the first round of the 11th Supreme People’s Assembly in September 2003.

Former Prime Minister Park is known to have ceased his duties since last year June. He has been suspected of transferring money from the agriculture’s oil funds. At the 20th High Level Cabinet Talks in Pyongyang in February, a South Korean representative did mention that Prime Minister Park had made a welcoming speech. However, it seems that he has been ousted from his position.

Additionally, with the death of Yeon Hyung Mook in October 2005, Kim Young Choon is known to have succeeded the position of Vice Chairman as well as taking on the role of military counselor.

Regarding, the new appointments, a governmental official said that the Cabinet’s Prime Minster, Kim Young Il would aim to solve the economic issue while Kim Young Choon as the new Vice Chairman would aim to organize the structure of the ministry and strengthen the military.

While Kim Jong Il did not attend the last round of meetings, the fact that he participated in the recent meeting has also gathered much interest.

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Kim Yong-il Elected North Korean Premier

Thursday, April 12th, 2007

Korea Times
Lee Jin-woo
4/12/2007
 
North Korea’s legislature on Wednesday elected Transport Minister Kim Yong-il as the country’s new premier, the North’s state-controlled news agency reported.

He replaces Pak Pong-ju who has been accused of embezzling some of the national budget, the report said.

According to the Korean Central News Agency (KCNA), Kim was elected as the new premier in a plenary session of the North’s Supreme People’s Assembly (SPA), a rubber-stamp legislature of the Stalinist state.

Kim, 62, rose to his position after starting his bureaucratic career as a rank-and-filer in the Ministry of Land and Marine Transport. He is known to have expert knowledge in economic affairs.

He accompanied North Korean leader Kim Jong-il twice in 2005 on trips to government facilities, and led a delegation of ministry officials to China, Cuba and Syria over the last seven years. He visited Syria in 2005 to conclude a maritime transport agreement.

After graduating from Rajin University of Marine Transport, he served in the military for nine years beginning in 1961. He has served in the minister post for more than 10 years since the early 1990s.

The SPA also tapped Kim Yong-chun, chief of general staff of the Korean People’s Army, as the vice chairman of the National Defense Commission (NDC), a position that has been vacant since the death of Yon Hyong-muk in October 2005.

The SPA, which convenes once or twice a year at irregular intervals, is headed by Kim Yong-nam, the official president of the Presidium of the SPA. He also serves as the titular head of the communist state.

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N. Korea to focus on improving livelihoods this year

Thursday, April 12th, 2007

Yonhap
4/12/2007

Saddled with a severe food shortage problem, North Korea is poised to raise people’s standard of living this year by concentrating on agriculture and light industry.

In a session of its parliament held on Wednesday, North Korea said its major economic goal is “to improve the living standards of people on the basis of the existing foundations of agriculture and light industry.”

In a related move, the North replaced Prime Minister Pak Pong-ju, the control tower of its economy. It named Transport Minister Kim Yong-il as its new premier. Pak is believed to have been in conflict with senior North Korean officials over electricity supplies.

“Kim is in his early 60s, relatively young for North Korean cabinet members, and he has no prestigious political or educational background. He seems to be credited by his track record of economic expertise and achievement,” a senior Unification Ministry said, asking to remain anonymous.

The impoverished country has depended on international handouts to feed a large number of its 23 million people.

In a recent meeting with U.N. World Food Program officials, a North Korean vice agriculture minister acknowledged that the communist country has a shortfall of about 1 million tons of food and called for aid from the outside world.

“The cabinet will concentrate state efforts on agriculture this year, too, considering it as a mainstay, to thoroughly implement the WPK’s policy of agricultural revolution and make a signal advance in the efforts to settle the people’s problem of food,” Vice Premier Kwak Pom-gi said in a report to the delegates at the session. WPK is the acronym for the North’s ruling Workers’ Party of Korea.

To that end, North Korea plans to raise spending on agriculture by 8.5 percent and on light industry by 16.8 percent compared with last year.

North Korean leader Kim Jong-il also attended the meeting of the parliament, the Korean Central News Agency (KCNA) reported.

The North is officially headed by its titular leader Kim Yong-nam, the president of the Presidium of the Supreme People’s Assembly, the country’s parliament.

But Kim Jong-il rules the country with an iron grip. He is officially the chairman of the National Defense Commission and general secretary of the ruling Workers’ Party. He reserves the office of president for his late father as a way of showing filial piety.

The North also said it will kick off a drive to modernize major light industrial factories and reinforce the production of daily necessities, while state efforts will be channeled into the construction of houses in major cities, the KCNA said.

The North earmarked 40.8 percent of the total budget expenditure for the national economy this year, and in particular, spending on the development of science and technology will rise as much as 60.3 percent compared with last year.

Based on the report from the North’s parliament, South Korea’s Unification Ministry estimated the North’s 2007 budget at US$3.09 billion, up 5.9 percent from a year earlier.

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North Korea elected new premier

Thursday, April 12th, 2007

Korea Herald
4/12/2007

The Supreme People’s Assembly, North Korea’s legislature, elected Transport Minister Kim Yong-il as the country’s new premier, replacing Pak Pong-ju, at its fifth plenary session held on Wednesday, Yonhap News Agency quoted a state-run North Korean news agency as reporting.

The SPA also elected Kim Yong-chun, chief of general staff of the Korean People’s Army, as the vice chairman of the National Defense Commission, a position which has been vacant since death of Yon Hyong-muk in October 2005, the Korean Central News Agency said. Kim Jong-il is the NSC chairman, and the NDC has two vice chairmen.

The 62-year-old new premier has served as the land and maritime transport minister since 1994. He visited Syria in 2005 to conclude a maritime transport agreement.

The SPA convenes once or twice a year at irregular intervals. The SPA is headed by Kim Yong-nam, the official president of the Presidium of the SPA. He also serves as the titular head of the communist state.

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North Korea sacks prime minister

Thursday, April 12th, 2007

BBC
4/12/2007

North Korea’s parliament has sacked the country’s prime minister, reports say.

Pak Pong Ju, who had been prime minister since 2003, was replaced during a session of the Supreme People’s Assembly.

No reason was given for the decision to hand the position to former army and navy minister Kim Yong-Il.

North Korean leader Kim Jong-Il was present during the session of the Supreme People’s Assembly but did not comment on the decision.

Limited powers

Kim Yong-Chun was elected vice-chairman of the country’s National Defence Commission during the session, the state-run Korean Central News Agency reported.

The parliament meets once or twice a year to approve budgets or discuss policy but its power is limited. All power in the secretive state rests with the country’s reclusive leader, Kim Jong Il.

While the prime minister is the leader of North Korea’s government and cabinet, it is not the number two position.

That belongs to Kim Yong Nam, chairman of the Presidium of the Supreme People’s Assembly.

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I wonder what it was?

Tuesday, April 10th, 2007

It will probably be on display in the International Friendship Exhibition soon…

Gift to Kim Jong Il from American
KCNA
4/10/2007

General Secretary Kim Jong Il was presented with a gift by the visiting governor of New Mexico State, U.S. 

Governor Bill Richardson handed the gift over to Kim Yong Dae, vice-president of the Presidium of the Supreme People’s Assembly of the DPRK, Tuesday

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N.K. defectors launch new political body

Tuesday, April 10th, 2007

Korea Herald
Annie Bang
4/10/2007

Twenty organizations of North Korean defectors established a politically unified group in Seoul yesterday and pledged to lead activities to democratize the North.

The group also revealed satellite photos of 17 private houses in the North owned by the North Korean leader Kim Jong-il.

“The defectors, who experienced living under the dictatorship of North Korean leader Kim Jong-il, must seek more systematic ways to democratize North Korea,” said Sohn Jung-hoon, secretary of the newly founded Committee of Democratizing North Korea.

The committee was formed by almost all the organizations of North Korean defectors in the South, including Democracy Network against North Korean Gulag, and Association of the North Korean Defectors.

“It is impossible for North Korea to recover its economy and resolve the shortage of food without freedom,” the committee said in a statement. “Democratizing North Korea is a must to bring peace on the Korean Peninsula, to improve inter-Korean relations and to recover the North Korean economy.”

Hwang Jang-yop, chairman of NKD, who was secretary of the Central Committee of the North Korean Workers’ Party, will lead the unified group.

There are over 100,000 North Koreans who defected from the North as of February, and the Seoul government believes the number will exceed 200,000 in five years.

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Customs Officers “Losing Face” in Pursuit for Bribes

Monday, April 9th, 2007

Daily NK
Kang Jae Hyok
4/9/2007

Since the nuclear experiment last year trade between North Korea and China had dwindled. However, lately, business is prospering thanks to the friendly moods between the U.S. and North Korea. Nonetheless, the frequent change in customs officers and their unreasonable requests are disturbing the businessmen.

Some Chinese merchants travel into and out of North Korea everyday, or at the least every couple of days. One businessman, Han Chul Ryong (pseudonym, Korean-Chinese, 42) who had recently visited North Korea for business, expressed his feelings in a concerned voice in a telephone conversation with the DailyNK on the 6th.

Han currently lives in Jilian and has been trading goods with North Korea for 4 years now. With a 2.5 ton truck, he imports and sells North Korean seafood and herbal medicines in China.

Han said, “Nowadays, I don’t want to trade anymore because of the customs officers. They make our lives so difficult… It’s like they have some sort of steel plate over their faces or something. They have no dignity, nothing.”

He added, “Customs officers are so competitive and make so many demands that I cannot remember them all unless it is written down in a notebook. They request a variety of goods such as food, fruits, medicine and electronic goods. Alcohol and cigarettes are a must.”

Another tradesman, Kim Chan Joo (pseudonym) who was traveling with Han said, “Some customs officers go as far as demanding materials for home renovations such as cement, iron rods, window panes, windows, doors and nails.”

When asked what kind of privileges customs officers give after receiving bribes, Kim responded, “Of courses there are privileges… Sometimes they reduce taxes or place a blind eye to goods that should not pass through.”

He said, “There is a saying, ‘A cow fed also gives dung.’ A customs officer who has been fed bribes cannot possibly enforce strict control” and added, “Though customs officers have helped increase trade, as time goes by, the standard of their demands are also rising.”

“That’s not the only annoying problem. After going to all that trouble developing friendly relations with customs officers, they are replaced by new ones and hence there are many losses… It takes double time and money to acquire friendly relations with newly replaced customs officers,” Kim said.

Being a customs officer is considered one of the upper middle-class jobs in North Korea. Unlike an average office worker, customs officers are treated similar to the army. The National Safety Agency is even in charge of some of the customs officers.

Often these people are greedy to accumulate funds for retirement or for their children and as a result, try to gather as much as they can while in office. Even in a chaotic North Korea society, the position of customs officer is considered the yolk of an egg. Consequently, officers go to all means to confiscate as much money as they can from Chinese tradesmen and relatives visiting family.

North Korean authorities are strengthening control over customs officers, however it is difficult to obliterate the problem as it is so deeply rooted. Rather, than the situation dying out, it seems that their unreasonable attitude will increase.

If a customs officer makes receives too many anonymous complaints, he/she is given a warning or penalty. When the situation worsens, the customs officer is then demoted to a different office or in the worse case, dismissed from duty.

Recently, it seems that North Korean authorities have become more aware of the situation and are making efforts to enforce control. One method is removing the officers who are dependent on this corrupt system to different locations.

Han said, “If customs officers don’t do this, it is hard for them to eat and live… Though the demands by Chosun customs officers are increasing by the day, in order to trade there is no other way.”

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Territory Unknown

Sunday, April 8th, 2007

Korea Times
Andrei Lankov
4/8/2007

It is a sort of commonplace statement that the U.S. forces which landed in Korea in early September 1945 had almost no local knowledge and no plans of what they were going to do. But it is sometimes stated, that the Soviet forces which had arrived two weeks earlier had some plans. Such statements are especially common on the political right. This is understandable: Human beings tend to see themselves as disorganized and unprepared while believing that their opponents possess diabolic foresight and an uncanny ability to exercise the utmost control over events. Fortunately or not, such a perception, the basis of all conspiracy theories, is usually wrong.

So did the Soviets have a plan when their forces fought their way to Korea in mid-August 1945? Obviously, not. At least this is what I can say from my frequent talks with the participants of those events, and also from the papers which I have seen.

Actually, Korea did not feature prominently in Soviet international strategy before 1945. For decades, Moscow’s policy toward Korea was subordinated to what appeared to be much more important _ its relations with China and Japan. The Soviet Union secretly subsidized and supported the Communist movement in colonial Korea, but this was a relatively small-scale operation seen, first and foremost, as a part of the larger efforts to undermine the Japanese empire.

The situation was exacerbated by Stalin’s Great Purge of the late 1930s. Before that, the Soviet citizens of Korean extraction played a prominent role in formulating the Soviet policy toward the peninsula. However, in the great slaughter of the bureaucrats and military officers that took place in the late 1930s, ethnic Koreans enjoyed especially bad survival chances. Their ethnicity made them suspicious, and few of them survived the bloodbath of 1937-38. As a result, the Soviet Foreign ministry, intelligence agencies, and armed forces lost what little Korea-related expertise they had possessed in earlier days. Those people who were responsible for the Korean policy in the 1920s and early 1930s were mostly shot or had died in various prisons by 1940.

There was also another reason for the Soviet reluctance to draw up plans for the political future of Korea. Nobody expected that the victory over Japan would be that swift. The Soviet military remembered their protracted and bloody battles with the Japanese during the undeclared border wars of the late 1930s, and so they were prepared for a campaign that would drag for many months.

However, the Japanese military machine collapsed in a week. Western readers believe that the reason was the nuclear attack on Hiroshima and Nagasaki _ a claim that was never particularly popular in Russia. Irrespective of their contribution to the outcome of the war, the nuclear bombs hardly changed much in Manchuria and North Korea. The Russian forces had experienced engagement with the Nazis in Europe, while the Japanese troops in the area were weakened by frequent withdrawals of their best forces to the Pacific theater.

Thus, in late August 1945 the Soviet generals suddenly found themselves responsible for a large territory of which they knew almost nothing. The army had few Korean speaking interpreters, and virtually no local political intelligence. Not only was it the local army headquarters that was lacking in this regard, even Moscow itself had only vague ideas about the political forces active in Korea _ and even this inadequate knowledge was largely about Seoul, not the areas of the North.

In the greater context of the post-war world, the future of Korea remained undetermined. The Kremlin expected that its relations with the U.S. would deteriorate ? on the generally correct assumption that any major victory brings about a greater rivalry between the winners.

However, the shape and intensity of this confrontation remained to be seen. In those days, the Soviets also felt a profound insecurity about Japan: the rebirth of Japan as a great power was seen as a potential threat, so Stalin wanted to make sure that Japan would never be able to threaten the Russian Far East if it somehow regained its military and/or economic power in a distant future. Thus, uprooting the Japanese influence in Korea was a major task for the Soviet leaders.

Thus, in late August, the Soviet forces had quite nebulous tasks in front of them. They wanted to ensure law and order (incidentally, threatened first and foremost by their own soldiers), get rid of the Japanese influence, and lay the groundwork for a future friendly Korean government.

The first instructions arrived only in late September, when Stalin sent his famous secret cable to Korea. His cable envisioned a “bourgeois democratic government” for the Soviet zone of occupation, and explicitly warned against attempts to export Communism to Korea. The cable obviously talked about a government in the North, and this can be seen as the first sign of future division. Nonetheless, this was only the first step: Coherent ideas about Korea’s future developed in the Kremlin only in early 1946.

The “September cable” also implied that the Soviets would have to cooperate with the local Right _ and indeed they soon recruited Cho Man-sik, a prominent Christian nationalist _ to act as a leader of the local administration.

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