-Caveat Lector- WJPBR Email News List [EMAIL PROTECTED] Peace at any cost is a Prelude to War! North Korea’s Economic Drive Risks Destabilizing the Regime 15 January 2001 Summary North Korea has fired 10 senior officers of the National Security Agency for “irregularities” in inter-Korean trade. The move follows several other personnel changes in the North Korean regime, particularly ones centering around issues of foreign trade and investment. The rapid shifts in Pyongyang – triggered by changes in the U.S. administration and economic and political pressures in Seoul – risk destabilizing factions within the North Korean elite only recently consolidated under Kim Jong Il. Analysis North Korea dismissed 10 senior officers of the National Security Agency over “irregularities” in inter-Korean trade activities, according to South Korea’s Yonhap news agency. Citing a source close to North Korean affairs, Yonhap said the officers, including two brigadier generals, worked for North Korea’s Paekdusan Container Company, which has been linked to delays in transporting raw materials from South Korea to factories in the North and transporting partially finished goods to the South. The move is just one in a series of recent personnel shifts and signals from North Korea that suggest a resurgence in focus on economic issues. Pyongyang’s concern is that shifts in U.S. leadership and growing political and economic pressures in South Korea may undermine the current trend of increased economic contact with North Korea. The rapid shift in personnel and policy, however, may spur internal factional competition, undermining the stability of the regime. The firing of the North Korean officers comes as South Korean Unification officials called for a sea transportation agreement with Pyongyang to prevent similar problems from hindering inter-Korean economic cooperation. In 2000, inter-Korean processing trade rose from $99 million a year earlier to $140 million, according to the South Korean Unification Ministry, accounting for more than 50 percent of total inter-Korean trade. Pyongyang recently changed several other key government officials relating to economic and trade policies. On Oct. 2, just days after Seoul and Pyongyang agreed to establish a joint economic cooperation committee, the North Korean government replaced the nation's finance minister and Central Bank president. In December, Pyongyang replaced the foreign trade minister and the ambassador to Beijing. The changes in North Korean officials shows a pattern of replacing the older, more conservative cadre with younger ones more familiar with the concepts of modern international trade. New Central Bank President Kim Wan Sun, for example, formerly served on the [North] Korean International Joint Venture Group, responsible for forging economic ties with outside parties. Choe Jin Su, the new ambassador to Beijing, is nearly 25 years younger than his outgoing predecessor, who served as a chief negotiator in North Korean-U.N. armistice talks in the 1960s. Choe, a career diplomat, was most recently vice director of the International Department of the ruling Workers Party of Korea. Perhaps most telling of Pyongyang’s personnel shifts is the new trade minister, Ri Kwang Gun, a 46-year-old who until last year acted as president of a trading firm. Ri was educated in East Germany and was chief economic councilor for the North Korean trade representative to Germany in the mid 1990s, according to Yonhap. South Korea's Unification Ministry greeted Ri’s appointment with optimism, saying he has expertise in trade with Western countries, while his predecessor was an out-of-date figure who believed in a state-controlled economy. A shift in rhetoric matches the recent series of personnel changes. In the annual New Year’s Day editorial carried in three official newspapers, the North Korean government emphasized, “There is no more important task before us today than to consolidate the national economic might commensurate with the 21st century,” according to a translation by Yonhap. In another article in the official Rodong Sinmun, North Korean leader Kim Jong Il said, “We entered a new epoch, so [we] should learn structures and rules existing in foreign countries,” according to a translation by the Russian economic news agency AK&M. Kim Jong Il further called for the North Korean people to “abandon old ideas and develop a new way of thinking and a new viewpoint,” according to the Korea Herald. Since Jan 1, Pyongyang has rapidly accelerated stalled contact with the South, proffering several economic and social meetings ranging from new fisheries talks to resuming Red Cross talks on family reunions. Even before New Year’s Day, an EU delegation to Pyongyang in November reported that North Korean officials are considering allowing multinational corporations to retain full control over investments in North Korea. The shift in focus to economic issues, particularly with foreign involvement, demonstrates a growing concern among the elite in Pyongyang that there will soon be a fundamental global shift in attitudes toward the regime. In rushing to gain maximum economic benefit from an apparently closing window of opportunity, however, the North Korean leadership risks fracturing along ideological and interest lines, as certain factions are rapidly elevated over others. The Strategy of Survival Pyongyang’s current economic and political opening to the outside is part of a larger strategy for survival without compromising political integrity and power. With China and Russia offering limited support over the past decade, North Korea has regressed economically. The flirtations with the South and other nations, then, is an attempt to gain short-term economic and technological benefits to rebuild the nation into a powerful independent nation, or to position itself as a useful lever for China or Russia, thus regaining its former economic, technological and military concessions. North Korea’s economic openings were only possible due to a convergence of events. First, Kim Jong Il had finally consolidated power several years after the death of his father, former North Korean President Kim Il Sung. This offered the younger Kim greater latitude in his policy decisions, as he had little to fear from internal political factions. Second, South Korea’s new president, Kim Dae Jung, has based his presidential legitimacy to a large part on reconciliation with the North. After performing an apparent economic miracle in South Korea upon taking office, with South Korea one of the fastest nations to recover from the Asian economic crisis, Kim began an intensive campaign to ease relations with the North. The pinnacle thus far has been a series of reunions between divided families in the North and South, and the June inter-Korean summit, for which Kim Dae Jung became the first South Korean president to fly to Pyongyang. In the United States, the government during this time was largely amenable to Kim Dae Jung’s Sunshine Policy toward North Korea, so much so that policy recommendations of the administration’s special envoy to the Koreas were seen as mere copies of the Sunshine Policy. Much of this international framework is shifting now, limiting Pyongyang’s ability to gain economic concessions from the international community without having to give up concessions in return. Kim Dae Jung’s political honeymoon is long past. There was little fanfare in South Korea when Kim left to receive his Nobel Peace Prize; instead public questions rose about how he would pay for the trip. Kim’s party, in coalition, holds the slimmest majority in parliament. Facing continued opposition pressure for his one-sided North Korean policy, Kim promised in early January to give no further assistance to the North without public consent. South Korea’s economy is again slipping, and continued economic reforms require more painful closings and mergers of major businesses. The Hyundai Group, the unofficial economic arm of the Sunshine Policy, faces tightening economic troubles and has suggested it may be unable to maintain its Mount Kumgang tourism program, which has been one of the biggest South Korean investments in the North. In the United States, the shift to the new administration is perhaps the most significant factor in North Korea’s sudden race to appear economically prepared for change. The incoming U.S. administration is already signaling the North that it will take a firmer hand in dealing with Pyongyang. Advisors to the new administration have said Washington’s policy toward North Korea has included “too many carrots and not enough sticks,” according to the JoongAng Ilbo. North Korea’s Dilemma Pyongyang is now rushing to demonstrate a desire for continued economic contact through changing key personnel and shifts in rhetoric. This in itself, however, presents a serious potential problem for Pyongyang. While Kim Jong Il has successfully consolidated power among the North Korean elite, loose factions remain within the North Korean leadership based on ideology, personal interests and age. The North Korean regime includes three generational strata. Oldest are the remaining contemporaries of the late Kim Il Sung, who were active revolutionaries, fighting for the independence of Korea from the Japanese and later the Americans. Second is the Kim Jong Il generation, children of the elite raised in relative luxury, receiving training and education in the Soviet Union. The third, and rising, stratum comprises contemporaries of Kim Jong Nam, son of Kim Jong Il. These princelings are even further removed from the revolution, war and ideology. Within these generational divides are cross-factions, based on personal interests and connections. The long-standing old guard, former associates of Kim Jong Il, has little to gain by changing the economic or political system. There, power within the nation relies on their very longevity. Contrarily, the younger generations of the elite have the most to gain through economic openings with the outside. Having a general knowledge of capitalism and a taste for the expensive, they are much more likely to be able to forge economic deals with foreign companies, thus increasing their worth and power by comparison. By throwing the economic drive into a higher gear and weeding out the older, less adaptable elite from top economic positions, Pyongyang risks destabilizing the balance struck among the elite during Kim Jong Il’s consolidation of power. The rapid shift toward younger, more market-oriented elite will not pass without countering pressure from the older, more conservative elite. Kim Jong Il may already be consulting North Korea’s former sponsor, China, on how to deal with factional infighting spawned by economic policy changes. Having visited Beijing’s embassy in Pyongyang and Beijing itself before difficult decisions were made in North Korea’s policy with the South last year, JoongAng Ilbo reports that Kim arrived on a secret trip to Beijing on Jan. 15 of this year. Unless Kim Jong Il can balance competing internal forces in Pyongyang, the destabilization of the North Korean regime becomes a very real possibility. The very methods employed to maintain strict political control, however, will probably require sealing off the country to reconsolidate power, thus ending the economic openings designed to maintain the viability of the regime. *COPYRIGHT NOTICE** In accordance with Title 17 U. S. C. 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