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Desperation Focuses the Mind:

What Next on the Korean Peninsula?

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By Robert A. Manning*
Global Beat Issue Brief 19

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This Issue Brief was written just before the defection of Hwang Jang-yop, one of North Korea's top ideologists, to the South Korean Embassy in Beijing. At publication time this incident was far from settled, although clearly it has added further to the tension on the Peninsula, and further stressed US policy toward the North. (Ed.)

 

State of Play

 

The situation on the heavily armed Korean Peninsula, a leading global flashpoint, is entering a new and potentially more dangerous stage as the new Clinton administration gears up its second term Asia policy. The tension from the aftermath of the September 1996 North Korean submarine incursion into South Korea has subsided, only to be replaced by a more recent threat of large-scale famine and political gamesmanship over food aid.

As rare as snow in July, Pyongyang's recent "apology" reduced tensions on the Peninsula, vindicated President Kim Young Sam's "tough, but fair" approach, and perhaps opened new possibilities for peaceful reconciliation. But it's too early to pop those champagne corks. When evaluating apparent progress with North Korea, one should keep the words of that famous Sage of the East, Yogi Berra, in mind: "it ain't over til it's over."

 

One need only look at the steady stream of venom in Pyongyang's official press since its December 29 apology and its attempt to manipulate the situation to see the more complex reality. In the case of North Korea, what appears a victory for Seoul may be a case of tactical retreat by the North to consolidate a strategic gain.

North Korea's statement of regret did more than simply end the stalemate and return to the status quo ante. The apology was part of a package which loosened the US trade embargo, allowed the agricultural giant Cargill Corporation to barter 500,000 tons of grain, and committed Pyongyang to attend a US-ROK joint briefing and to resume cooperation on the 1994 nuclear agreement. Implicit in this package is the expectation of large-scale food aid from the US, South Korea and Japan in the new political atmosphere resulting from the apology.

 

The overall package explains why Pyongyang took the extraordinary step of apologizing. Behind North Korea's contrition is enormous and growing desperation. Over the next six months, North Korea faces the prospect of widespread famine and starvation. Moreover, it faces annual food deficits of one million tons or more for at least the next several years.

 

Following the September submarine incident, there was no hope of large-scale international assistance unless Pyongyang found a way to placate Seoul. In fact, all the North did was apologize and agree to show up at a meeting. Small price to pay for what likely will result in several hundred million dollars in food aid, resumption of the Light Water Reactor project, and a renewed flow of South Korean investment.

 

Nonetheless, difficult haggling with Cargill over the terms of a barter deal led Pyongyang back to its insufferable game playing. Just one day after his government announced it had produced only half of the 5 million tons needed to feed its 24 million people, the DPRK UN Ambassador Kim Hyong-u told CNN that North Korea had postponed a "joint briefing" by the US and ROK on proposed four party talks (US, China, North and South Korea) because the US was not "providing us food." This was a gross distortion. As State Department spokesman Nick Burns explained, "We did not promise to deliver food or to guarantee commercial shipments of food. But we recently approved an application by a private American company for a license to export grain to North Korea." This is one occasion where the U.S. did not move the goal posts.

 

Policy Dilemmas

 

It is not clear whether North Korea contrived the phony promise in hopes of forcing the administra-tion's hand on the food or simply to put off the "joint briefing." Either way, it raises an important issue for US policy: can food aid be purely humanitarian, separate from politics, when the recipient government is technically at war and threatens 37,000 American troops and their South Korean ally?

 

It is a profound question, as this is not merely a one-time crisis, but an on-going problem in a failing state. The new UN appeal for some $41 million in emergency aid is only a small fraction of North Korea's needs. Where do the U.S. and its allies draw the line? Is it acceptable to provide large-scale aid continually while North Korea maintains a million man army, with two-thirds of it and 11,000 artillery tubes and Scud missiles within range of Seoul? Many in Congress are skeptical.

 

This dilemma underscores what might be termed a "strategy deficit" on the part of the U.S. and its allies. Beyond the 1994 Agreed Framework, which halted Pyongyang's known nuclear weapons program, neither Washington nor Seoul have a clear-let alone coordinated-policy to achieve a much-hoped for "soft landing" for North Korea and a gradual reunification process.

 

Illustrative of this policy muddle is the fact that despite an economic embargo, North Korea last year was the third largest recipient of US aid in Asia. Food aid, funding for the Korean Economic Development Organization (KEDO) and technical assistance totalled more than $53 million. But the Republican-led Congress is unlikely to support current, let alone increased, levels of aid to North Korea if it remains unwilling to engage in a reconciliation dialogue with the South.

 

Unless the 1994 Agreed Framework accord on the nuclear issue is embedded in a larger policy designed to facilitate North-South dialogue and reduce the North Korean conventional military threat, the accord may be at risk. Democratic legislatures in the US South Korea and Japan are reluctant to continue financing this enterprise. In the case of the US, for example, over the next four years the Administration will need to conclude a Congress-approved nuclear cooperation agreement with North Korea, and Pyongyang will have to reveal its nuclear history to the International Atomic Energy Agency (IAEA) if the two Light Water Reactors are to be constructed.

 

Yet the December talks in New York which produced the North Korean apology allowed Pyongyang to avoid any direct contact with Seoul, and placed the U.S. squarely in the middle of inter-Korean affairs. If this were part of a larger US strategy for engineering peaceful reunification, there might be little cause for concern. But once again, US ad hoc-ery, driven by fears that North-South tensions from the submarine intrusion would undo the nuclear accord, has marginalized Seoul and plunged Washington into a central role in North-South relations.

 

To Pyongyang, this helps compensate for its loss of face. With the political focus now on four party talks proposed by the US and South Korea in April 1996, direct North-South talks appears less urgent. This may be an important gain for North Korea, whose strategic goal is to use the US as its life raft and insurance policy against absorption by the South. It has sought to use its very weakness as a diplomatic tool, exploiting US and South Korean fears of collapse.

 

Unfortunately, nobody can save a failing state from itself, and little real progress towards peaceful reunification is likely to occur until North and South come to terms with each other. This will require a transformation in the "zero-sum" psychology on both sides which has plagued North-South relations for more than four decades.

 

Can the DPRK Reform?

 

Moreover, successful diplomacy will require a decisive move by Pyongyang to open and reform its moribund economy. The continued deterioration of North Korea is reflected in the floods and structural damage to its agriculture, food shortages, and six years of negative economic growth averaging about -5% annually.

In official statements, foreign investment laws, and the creation of the Rajin-Sonbong free trade zone in the far Northeast corner of the country, there is indeed ample evidence that Pyongyang recognizes the need to embark on a new course.

 

Yet the fear that Chinese-type reforms would undermine its ruling myths (KimilSungism) and political control has prevented the DPRK from substantially restructuring what may be the most distorted economy in the world. Instead, North Korea appears to be pursuing a "muddle through" strategy, experimenting at the margins with economic opening, and forced by the severity of its famine and economic decline to allow some decentralized activity. It will accept some aid and investment, but only on its highly restrictive terms: limiting foreign involvement to isolated export zones, and seeking to minimize economic situations which result in less controlled information flows.

 

Pyongyang's inability or unwillingness to systematically open and reform its economy on more than an experimental basis undercuts the logic of the nuclear deal. The assumption of the Agreed Framework was that with the right mix of incentives Pyongyang could be persuaded to make the least bad choice in a spectrum of very bad options. It would trade its ultimate insurance policy, its nuclear weapons program, for security assurances and a new economic and political engagement with the US, South Korea and Japan.

 

The nuclear accord thus suggested, in effect, the first phase of a bail-out for a failing state. The implicit premises of the deal were this: on the North Korean side, the need for security assurances, economic aid, trade and investment to revive its moribund economy as key to its survival; and on the US-ROK-Japan side, the desire to avoid a war or a collapse and achieve a 'soft landing' and gradual reunification process as well as to dismantle the DPRK nuclear weapons program.

 

As the situation has unfolded, the unstated premise of the nuclear deal appears increasingly problematic even as the accord, on its own terms, has been remarkably successful. The nuclear program is frozen and half the fuel rods have been canned. KEDO has reached detailed agreements with the DPRK allowing it to begin the process of building two Light Water Reactors (LWRs). But there has been an absence of substantive progress in North-South reconciliation, in U.S.-North Korean relations or in Japanese-North Korean relations. There have been no further deals curbing North Korean missile development or exports, neither on chemical weapons, reducing force levels or confidence-building measures such as pulling forces back from the DMZ.

 

New Policy Directions

 

The breakthrough offered by the unusual DPRK apology does present Seoul and Washington a new opportunity. In the North's willingness to accept the loss of face lie two important lessons. First, even Pyongyang has a breaking point. Second, it responds to incentives which meet its concerns. While the country is only gradually approaching any sort of implosion, North Korea's moribund economy does mean a new level of vulnerability, as revealed by the apology.

 

A more sophisticated approach engineered by Washington and Seoul may hold promise for the often discussed "soft landing," and for placing Seoul rather than Washington at the center of talks on the future of the Peninsula. This is crucial to a successful policy, as the core of the Korea problem revolves around North-South reconciliation. Any policy which creates even the perception, if not the reality, that Seoul is marginalized in diplomacy deciding its fate, will be unlikely to garner public support in South Korea, and almost inevitably will create tension if not a rift in the U.S.-ROK alliance.

 

Taking advantage of the current opportunity will thus require the US and ROK to engage in the sort of soul-searching dialogue necessary to devise a truly coordinated policy designed to produce parallel movement in North-South and US-DPRK relations -or none at all. There must be clear understanding in Washington and Seoul regarding what behavior both sides want from North Korea, and what price each is prepared to pay when it occurs. Rather than ad hoc responses to DPRK demands and provocations, the US and ROK need to offer the DPRK a clear road map to the future with reciprocal steps by each side to build confidence step-by-step.

For example, one obvious next set of tradeoffs would be reducing the North Korean military threat in exchange for substantial economic support, such as more ROK investment, perhaps DPRK membership in the World Bank and the Asian Development Bank, and a Korean Reconstruction window at the World Bank with funds for projects encouraging economic reform in the North. Specific steps by the North might include adhering to Missile Technology Control Regime, joining the Chemical Weapons Convention (CWC) and the Biological Weapons Treaty, and establishing a Seoul-Pyongyang hotline.

 

The Clinton administration would also be wise to appoint a prominent figure as high-level Special Envoy for the Korean Peninsula, a role like that of Dennis Ross in Middle East policy. Such a step would dramatize the importance of the issue to US national interests and provide sustained high-level focus on the issue, which may be the most likely major crisis affecting vital US interests during Clinton's second term. Combining the appointment of a Special Envoy with a new, comprehensive approach could spur diplomatic momentum and gain control of the agenda from North Korea.

 

Such a policy approach offers the best hope not only for fostering North-South reconciliation, but for placing Seoul at the center of a process in which the interests of all sides are advanced. Anything less will mean either that the momentum generated by the apology will evaporate or that DPRK provocations and US-ROK fear of collapse will continue to allow Pyongyang to set the agenda.

 

*Robert A. Manning, a former State Dept. advisor on Asia policy (1989-93), is a Senior Fellow at the Progressive Policy Institute in Washington.

 

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