By Jack Pritchard

There was a plausible scenario ready to work itself out with a successful launch of a missile by North Korea.  The Security Council would meet and issue a stern presidential statement condemning Pyongyang.  North Korea would push back rhetorically, claiming its sovereign right to space exploration while Beijing would send a high level delegation to Pyongyang to privately caution the North not to conduct a third nuclear test.  Because the Security Council presidential statement carries no actual new punishments, Pyongyang would have absorbed the criticism and reveled in its achievement of placing a satellite in orbit and, most importantly, would not have seen the need to conduct a third nuclear test – at least not in the near term.  Beijing would have been given credit for preventing the situation from escalating out of hand.

But that is not what happened.  Pyongyang gambled that it could successfully launch a satellite and in a grand gesture to spotlight the launch as the centerpiece in the celebration of the country’s founder’s 100^th birthday, the North invited the international press to witness the event. The consequences of that decision were immediately evident when Pyongyang was forced to publicly admit that the missile had failed.  In contrast to past failures where North Korea has declared success to its citizens, there was no possibility that Pyongyang could cover up this failure.  Journalists were in real time communications with their networks and within minutes of the missile failure being reported outside of North Korea, the invited journalists were pressing their North Korean minders for comments about the failure. While there are controls on the 1 million cell phones in North Korea, news of the missile failure was certain to spread quickly.

The embarrassment to the new regime cannot be over stated.  The failure will cast a dark shadow over the most important celebratory day in North Korean history.  The credibility and perhaps the survivability of the regime are at stake.  Pyongyang will need a spectacular achievement to overcome the national embarrassment it finds itself in now.  Declaring yourself a “strong and prosperous nation” requires that you be able to point to some kind of tangible achievement. What that means is that it is now much more likely that North Korea will move forward with its third nuclear test.  Unlike a missile launch that is observable and is either a success or failure, a nuclear detonation, regardless of yield, can be touted as an absolute success.

If Pyongyang does proceed with a nuclear test, it will also mean that North Korea has made the political calculation that it can do anything without fear of serious negative consequences from Beijing. It will have concluded that China has put itself in a position where it will not allow North Korea to collapse – no matter what.  And it will be right.

The precedent for this type of calculation was set several years ago.  In spite of the tough non-proliferation rhetoric coming out of the George W. Bush administration, Pyongyang calculated that it could cooperate with Syria in building a nuclear reactor (proliferating nuclear technology) and get away with it.  Unfortunately, that calculation proved correct.  There were no consequences. 

Now China finds itself in a difficult situation. What, if any, leverage can it exert to prevent a third nuclear test and not risk contributing to the collapse of North Korea?  For Beijing, the answer is: very little.  The need for Pyongyang to overcome the immense embarrassment caused by the very public failure of its missile and to quell any latent rumblings about the leadership of Kim Jong Un is far stronger than any unrealistic threat by Beijing to seriously punish the North.

While a successful satellite launch would have it its negative consequences regarding North Korea’s missile delivery program, it just might have precluded the need for a third nuclear test.  However much relief there is because of the missile failure, it just may mean that Pyongyang disregards any warnings from China and goes ahead with a nuclear test. 

Jack Pritchard is the former ambassador and special envoy for negotiations with the Democratic People’s Republic of Korea and the President of the Korea Economic Institute. The views expressed here are his own.

Photo from Joseph Turk Jun’s photo stream on flickr Creative Commons.

By Dr. Richard Weitz

During his campaign for the Russian presidency, Vladimir Putin wrote several lengthy articles detailing his views and policy recommendations. In his foreign policy treatise, Putin devoted a surprising amount of attention to North Korea.

Putin writes that, “We have consistently advocated the denuclearization of the Korean Peninsula – exclusively through political and diplomatic means — and the early resumption of Six-Party Talks.” At the same time, Putin says that. “I am convinced that today it is essential to be particularly careful. It would be inadvisable to try and test the strength of the new North Korean leader and provoke a rash countermeasure.

“In coming years, “We will continue conducting an active dialogue with the leaders of North Korea and developing good-neighborly relations with it, while at the same time trying to encourage Pyongyang to settle the nuclear issue. Obviously,” Putin adds, “it would be easier to do this if mutual trust is built up and the inter-Korean dialogue resumes on the peninsula.”

In some ways Moscow is well-situated to serve as a key mediator in international efforts to resolve the disputes between North Korea and South Korea. Not only does it have good relations with both Koreas, but Russian economic and security interests would be bolstered by a lengthy period of harmony and stability in the Koreas.

For starters, Russia shares ethnic and historical ties with Koreans as well as a 17-km long border with the DPRK. This proximity ensures Russian interest in participating, even indirectly, in any multilateral dialogue concerning the Koreas.

More importantly, Russian policy makers seek to enhance Russia’s integration with the flourishing East Asian region. Securing additional South Korean, Chinese, and Japanese investment and trade would help revitalize the Russian economy, especially the lagging but strategically significant region of the Russian Far East (RFE). Russia’s trade relations with the major East Asian nations of Japan, South Korea, and China falls far behind these three countries’ economic interactions with each other.

Russian entrepreneurs envisage converting the DPRK into a transit country for Russian energy and economic exports to South Korea and other Asia-Pacific countries. Such a development would further Russia’s integration into East Asia as well as revitalize Moscow’s ties with North Korea. They have discussed linking a trans-Korean railroad with Russia’s rail system, which would allow Russia to become a transit country for South Korean trade with Europe, which now involves mostly long-distance shipping. Furthermore, Russian planners want to construct energy pipelines between Russia and South Korea across DPRK territory.

This bright scenario has one major problem: it cannot occur without a reduction of tensions on the Korean Peninsula. For this reason, Russian diplomats have regularly engaged in high-profile Korean diplomacy.

Unfortunately, a decade of Russian diplomacy has had little impact on regional affairs. Breaking with precedent, Vladimir Putin visited Pyongyang in July 2000 to bolster and reenergize ties. The new Russian president also hoped to bolster his diplomatic credentials. But his efforts failed to secure a tangible agreement, souring Moscow on Pyongyang for several more years.

Almost a decade later, both Russia and China each sent two high-level delegations to Pyongyang in 2009. The DPRK’s leader, Kim Jong Il, decided to meet with Premier Wen Jiabao and PRC Defense Minister Liang Guanglie, however, he did not so much as greet Foreign Minister Sergey Lavrov or Russian parliamentary leader Sergey Mironov.

Russia’s problem is that its economic and political influence in the Asia-Pacific region is too limited. The territorial dispute with Tokyo over the South Kuriles/Northern Territories excludes a genuine Russian-Japanese partnership. Although Russian ties with Beijing and Washington are better, Chinese and U.S. diplomats focus their Korean diplomacy on Pyongyang, Seoul, and each other. In order to increase their regional influence, Russian officials must become more conciliatory towards Japan, and less beholden to China.

Dr. Richard Weitz is a Senior Fellow and the Director of the Center for Political-Military Analysis at the Hudson Institute. The views expressed here are his own.

Photo from Jonathan Davis’ photo stream on flickr Creative Commons.

By Chad O’Carroll

With North Korea making a number of concessions related to its nuclear and long-range missile programs last week in Beijing, it now looks like a road-map back to the Six Party Talks is emerging.  For its part, the U.S. reaffirmed important positions regarding its intent and commitment to previous agreements with Pyongyang.  But to assume that this is all that motivated North Korea to accept the deal misses one fundamental issue – that Washington reached a monitoring agreement with Pyongyang that allowed it to proceed with setting up the logistics for a 240,000 ton delivery of nutritional assistance.  And while the State Department maintains that the proposed food aid remains completely separate from the deal, Marcus Noland has long shown that when it comes to North Korea, there is normally a linkage between food aid and talks.  But if there is too much food on the table, might Pyongyang become less inclined to negotiate?

Over the past year a number of voices have debated the true extent of North Korea’s food shortage. Some claimed the country faced an imminent famine that could kill up to six million people, while others suggested that things were actually improving.  As a result, there is naturally some disparity in the data available about how much food aid is actually needed in North Korea.  A recent graph by Stephan Haggard and Noland illustrates some of the discrepancies between their estimations and those calculated by the UN system. Noland’s team suggested that for 2011 / 2012, North Korea would face a shortfall of 146,000 tons of food, while UN estimates suggest a figure around the 259,000 ton mark.  While many suspect that Pyongyang could fill this gap through wiser spending, North Korea’s policy makers have instead made a habit of pleading to the international community to assist.

Following the death of Kim Jong-il, reports emerged which suggested that China had agreed to dispatch emergency aid that included 500,000 tons of food and 250,000 tons of crude oil.  A variation of that story said that China planned to deliver up to one million tons of aid, scheduled to coincide with 100^th anniversary celebrations in April 2012.   All of this was said to be China’s attempt at helping Kim Jong-un stabilize the country during a sensitive time.  Beijing did not confirm either story, but human rights activist Do Hee-yoon was quoted as saying that in January thousands of lorries “laden with rice” had been seen entering North Korea, lending some credibility to the reports.   

If the Chinese story was true, then some think the news could be a potential game-changer with regards to nuclear negotiations.  At the time rumors were circulating, Seoul was reported as having concerns that such a substantial amount of Chinese provision could have political implications, with one anonymous official warning that it would make Pyongyang less compelled to return to the Six Party Talks.  Indeed, 500,000 tons of aid would bring North Korea well above even the UN’s more conservative estimates of food shortage.  And when combined with the U.S. nutritional assistance (in the form of items that will be difficult to divert for military use), things might look even more rosy. 

But there is more – regardless of the Chinese rumors, it is important to remember that we already know several other actors have already contributed food aid to North Korea.  Here are the top five donors and their contributions as of Q3 / Q4 2011:

1. Russia completed the released of some 50,000 tons by the end of 2011
2. In December 2011, the WFP reportedly released 32,000 tons of food aid
3. In July 2011, the EU gave some 10 Million Euros in food aid
4. In November 2011, Tzu Chi volunteers distributed 13,000 tons of rice & 43 tons of infant formula
5. In July 2011, India sent $1million worth of soybeans

So even if Chinese rumors are false, when the above donations are combined with Washington’s confirmed donation, the DPRK currently seems more than capable of fulfilling its minimum dietary requirements for 2012. However, three factors suggest that this won’t impact on nuclear negotiations, as some currently fear.

Firstly, it is important to remember that 2012 is an important year for North Korea, being the 100^th anniversary of the birth of Kim Il Sung. Having made a promise to become a “strong and prosperous” nation this year, the Pyongyang government needs a food surplus to help prove that it has accomplished its stated goal. So while North Korea may now be capable of addressing its shortage this year, a  major boost in aid should not be confused as signaling an unwillingness to come to the table.

Secondly, Kim Jong-un is a new leader and needs to bolster his legitimacy to the people of North Korea. A significant boost in the provision of food is one way that he can achieve this.  If the state is able to resurrect its broken down food distribution service with good, new aid, Kim Jong-un will be able to bolster his credentials among many North Koreans.

Thirdly, because the U.S. is releasing its food aid in monthly increments, it will have leverage over the North Korean government throughout 2012. Even if China has given significant aid, the DPRK’s need to provide over and beyond minimum levels will necessitate its continued cooperation with the U.S. to gain its nutritional assistance. Even though it claims no linkage between nutritional assistance and nuclear talks, the U.S. will likely be able to find reason to shut off the supply should Pyongyang not cooperate. In addition, Pyongyang will probably appreciate the monthly arrival of food, lessening its burden in keeping it stored and in good condition.

Already North Korea forwent its demand of initially requiring 330,000 metric tons of food aid from the U.S and agreed to a lower amount. Some worried that because this previous demand had come under Kim Jong-il’s stewardship, Pyongyang would have been reluctant to budge on their former leaders’ request.  But perhaps it was the combined foreign assistance that facilitated North Korea’s acceptance of Washington’s nuclear proposals.  And while the DPRK may now be in a position to provide to its people at minimum levels, the new leadership of Kim Jong-un, wed with 2012 celebrations and a drip-drop provision of U.S. aid, suggest that there is little reason for Pyongyang to back away from further talks on its unclear program – for the moment at least.

Chad O’Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.

Photo from Peter Casier’s UN World Food Programme photo stream on flickr Creative Commons.

By Nicholas Hamisevicz

We now know that the “modest progress” after the U.S’s first meeting with North Korea after the death of Kim Jong-il actually meant that a deal regarding food aid, missile launches, and nuclear tests would be forthcoming. The statement on U.S.-DPRK discussions released today by the U.S. Department of State entails an understanding that the U.S. will provide nutritional assistance and North Korea will start a moratorium on long-range missile launches and nuclear tests as well as letting IAEA inspectors back to Yongbyon. The initial steps enclosed in the statement provide both North Korea and the U.S. short-term gains that allow each side to continue to move toward better relations and denuclearization talks.

For North Korea, the big gains from this statement are food aid and legitimacy. On top of the food aid it will reportedly receive from China, North Korea will now receive 240,000 metric tons of nutritional assistance from the United States with the potential for more. Both of these donations should help North Korea have some more food for its April celebrations of the 100^th anniversary of Kim Il-sung’s birth and help demonstrate the new government led by Kim Jong-un can help provide for its people. Even though the U.S. government insists that it tried to keep food aid separate from other discussions, especially nuclear issues, the linkages are clear and fully interpreted as together by the North Koreans. 

Moreover, North Korea will use the statement to illustrate the U.S.’s recognition of the new Kim Jong-un leadership. The first bullet point summarizing the understandings from the meetings in Beijing last week on the U.S. and the DPRK improving relations through “the spirit of mutual respect for sovereignty and equality” provides that need for the North Koreans. In a continual process of consolidating power, Kim Jong-un can use this phrase suggesting the U.S.’s recognition of his leadership to illustrate he is seen by outside powers as the leader in charge of North Korea.

For the U.S., the discussions and statement provide it time and space to move forward on denuclearization efforts. Fears lingered that in an attempt for stability under the new leadership or if the new regime felt threatened, North Korea would launch a long-range missile or test another nuclear device. The moratorium by North Korea will mitigate some of those fears, but doubts will remain on how long North Korea will sustain the suspension. Furthermore, the Obama administration can point to IAEA inspectors being allowed back to Yongbyon as a success and as an indication that it is committed to pursuing the denuclearization of North Korea.

The deal and understanding suggested in the statement also allows more access into North Korea under the new leadership of Kim Jong-un. Even though they are just to clear up “administrative details,” the U.S. and North Korea will continue to meet. Despite Glyn Davies, U.S. Special Representative for North Korea policy, suggesting there was no substantial difference from the North Korean negotiators now that Kim Jong-un has taken over, more meetings will help the U.S. understand any potential changes in future negotiations. IAEA inspectors will be back to Yongbyon, and there is supposed to be “intensive monitoring” of the nutritional assistance.

The statement provides a way forward, but the potential for backsliding is always there. Disagreements between the U.S. and North Korea over nutritional assistance monitoring seemed to hamper earlier attempts at food aid.  With more monitoring, the North Koreans could get nervous and limit access; the U.S. and North Korea have had this history before over food aid. Access will be critical for the IAEA inspectors visiting Yongbyon. They should be allowed to see even more than what was revealed to KEI President Jack Pritchard in November 2010 and shown to Sig Hecker the week following Ambassador Pritchard’s visit.

The potential is there to get the monitors and inspectors into North Korea and have them return with their assessments in time for the U.S. to implement some next steps with North Korea before the final campaigning for the presidential election limits the Obama administration’s ability to maneuver policies toward denuclearization of North Korea. The statement provides some steps for future talks and action, but the details and commitments must be scrutinized and specifically followed. Otherwise, this statement can easily get set aside with numerous other attempts at bridging difficult U.S.-North Korea relations and creating a more peaceful Korean peninsula.   

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo from IAEA Imagebank’s photo stream on flickr Creative Commons.

By Nicholas Hamisevicz, Sarah K. Yun, Chad O’Carroll, and Troy Stangarone

Last year saw significant changes on the Korean peninsula. While 2011 ended with the surprise death of Kim Jong-il and the beginning of succession to Kim Jong-un, last year also saw Korea become one of only nine nations to surpass $1 trillion in total trade, the passage of the KORUS FTA, and a surprise election for the mayor of Seoul. With even more change set for 2012 in both Northeast Asia and on the Korean peninsula, here are twelve economic and foreign policy issues that are worth following in the coming year:

1.      The Transition and Public Events in North Korea: Kim Jong-un has been declared the successor to his father. The North Korean government is working hard to illustrate the unity of the nation and the loyalty of the elites to Kim Jong-un. There will likely be a formal meeting of the Workers’ Party of Korea where titles and positions will be made and adjusted. Kim Jong Un possibly has an advantage with the early schedule of public events where his new leadership will continue to be highlighted, such as the one hundred year anniversary of Kim Il Sung’s birth in April and the start of North Korea’s development as a prosperous and powerful nation. However, after those events, there could be more room for maneuvering if other North Korean elites do not like the direction of the country.

2.      Political Change in South Korea: While North Korea may have got the jump on political change in 2012, South Korea will conduct elections for both the National Assembly and the presidency this year. With South Korean presidents limited to a maximum term of five years, Lee Myung-bak will be ending his term in December.  Lee’s Grand National Party (GNP) has Park Geun-hye at the forefront of potential presidential candidates. However, she will likely face a significant challenge from Ahn Cheol-soo, founder of anti-virus software company AhnLab.  Although yet to declare his candidacy, there are growing signs that he will run as the opposition candidate – and recent polls suggest that he has strong support polling at 49.7 percent, some 7 percent more than rival Park Geun-hye.

Additionally, in April, all 299 seats of the National Assembly will be up for vote, with 245 in single-member districts and 54 seats determined through proportional representation. The ruling GNP has fared poorly in local elections recently and developments indicate that progressives may be uniting under a unified banner for the April elections that could seriously compound difficulties for the GNP.

3.      Kim Jong-un and China: In the early days of the transition, China has thrown its support behind Kim Jong-un. Who from China visits North Korea, and especially if Kim visits the new leadership in China, will likely provide clues to the relationship between Pyongyang and Beijing, as well as how secure the new regime feels in its position. Given that China will undergo its own leadership transition this year, 2012 will likely set the tone for both sides going forward.

4.     The Role of Social Media in South Korean Politics: Social media, including Twitter, are playing an increasingly prominent role in Korean political discourse. A recent Hankyroreh and Korea Society Opinion Institute poll showed politics to be one of the most retweeted topics by users in South Korea this year. This suggests that the conversations that take place on Twitter in 2012 will play a significant variable in this year’s presidential election.  South Korea’s Twitter community has an active user rate that is some two times higher than the world average, with nearly 10% of the nation signed up.  The important role Twitter plays in politics can be seen in a campaign that was credited with a higher than expected voter turnout among young voters during the during the April 2011 by-elections.

The team behind the one of the world’s most listened to podcast, Naneun Ggomsuda, may have a key role in determining the outcome of elections in South Korea this year.  Specializing in political satire, their podcast has to date taken a vehemently anti- Lee Myung Bak and Grand National Party position.  They have also developed a number of investigative stories that have attempted to highlight mis-steps by the ruling government, often with significant media interest.  Their feature on Na Kyung-won’s alleged visits to a luxury skin care clinic is said to have contributed to her loss of support in recent Seoul mayoral elections.

5.   The Euro Crisis: Strictly speaking, this isn’t about Korea, but with Korea heavily dependent upon trade for growth and Europe a major trading partner, the euro zone matters for Korea. If Europe is unable to restore market confidence and avoid a deepening of its debt crisis, a steep economic decline in Europe or the unraveling of the euro could hit the global economy hard. While Europe has managed to consistently fail to address the debt crisis in a comprehensive manner, there may be some tell tale signs early in the year regarding whether Europe has turned the corner or not. If France is able to maintain its AAA credit rating and Italy and Spain are able to roll over nearly $200 billion in debt in the first quarter of the year, Europe will likely have passed the most immediate dangers. When it comes to Korea, the stats to think about are this, the EU accounted for 10.2 percent of Korea’s exports and 9.6 percent of its total trade through the first 11 months of 2011.

6.    U.S. Defense Budget Cuts: The U.S. Department of Defense budget is expected to cut $260 billion over the next five years and more than $450 billion over the next decade. In the new budget strategy announcement on January 5, President Obama and Secretary of Defense Panetta presented a revamped U.S. military strategy with an emphasis on Asia and space and cyber capabilities, and preservation of missions in the Middle East.

With a reduced defense budget, partner relationships will become more important. Although the 5% increase in the 2012 South Korean defense budget may offset the potential challenges in the U.S.-Korea military alliance, uncertainties continue as both countries enter an election year. Despite reassurances from Obama and Panetta, the future shape of United States presence in Korea and Asia is still to be determined. With both nations preparing for op-con transfer in 2015, how the budget and strategy changes in the U.S. play out could play a role in the future force structure of the alliance.

7.    North Korea’s Interaction with the United States and South Korea:  Despite its current turn inwards, North Korea will likely turn its attention outwards at some point in 2012. North Korea and the United States seemed to be on the verge of a deal over food aid and possibly moving forward on nuclear talks before Kim Jong-il’s death, and there are early indications these may start back up at some point. As for South Korea, Pyongyang has said that it will not deal with the current administration in Seoul, but 2012 will also bring fresh elections for the National Assembly in April and the presidency in December, key points to watch for in North-South relations.

8.    Seoul Nuclear Security Summit: Seoul will be hosting the second Nuclear Security Summit in March with participation from over 50 national leaders. The agenda will consist of mainly three issues: international cooperation against nuclear terrorism, prevention of illicit transaction of nuclear materials, and protection of nuclear materials, nuclear power plants and other nuclear related institutions.

The appointment of Korea as the chair of the second NSS is both practical and symbolic – practical in that Korea is a close ally of the U.S., enabling smooth coordination; and symbolic in that Korea has been an active member of the Nuclear Non-Proliferation Treaty with advanced nuclear energy capabilities, yet facing a serious nuclear threat from North Korea.

Whereas the hosting of the G-20 in 2011 elevated Korea’s status as a world economic power, the Seoul NSS will elevate Korea as a world security leader. The NSS will be even more significant in light of Kim Jong-il’s death. President Lee Myung-bak had previously extended an invitation to Kim Jong-il to attend. It will be interesting to see how the new regime responds to the summit.

9.    The Implementation of the KORUS FTA: Now that the United States and Korea have passed the KORUS FTA the two governments are looking to implement the agreement. The agreement should come into force early in the year, but might slip until after National Assembly elections in Korea for political reasons.

10.  The Politics Around the KORUS FTA and U.S.-Korea Relations: Speaking of the politics of the KORUS FTA, prior to the death of Kim Jong-il, the opposition in Korea was turning the FTA into a major campaign issue, calling on Korea to renegotiate certain provisions such as those relating to investor-state dispute settlement. Some had gone so far as to suggest Korea should withdraw from the agreement. Korea’s relationship with the United States is a complex one, and anti-Americanism has played a role in previous elections. While North Korea is now likely to become the major campaign issue, look for the FTA and Korea’s broader relationship with the United States to remain caught up in domestic politics for the time being.

11.  South Korea-China FTA: China has become South Korea’s largest trading partner by a significant margin, with the two countries doing more than $200 billion in trade in the first eleven months of 2011. With the EU and KORUS FTA now concluded, Korea will look to start negotiations with its biggest trading partner in the next few months.

12.  World Expo 2012 – Yeosu, Korea:From May to August, Korea will host the 2012 Expo in the port city of Yeosu. Under the theme of “The Living Ocean and Coast,” the Yeosu Expo will share knowledge in maritime cooperation, marine science, and the proper use of ocean and coast. Korea is anticipating an international recognition of Korea as a leading maritime nation.

Hosting the Expo can be seen as a completion of Korea’s campaign as a world leader – the 2011 G-20 on economic issues, the 2012 Seoul Nuclear Security Summit on security issues, and the 2012 Expo on cultural and soft power issues.

Nicholas Hamisevicz is the Director of Research and Academic Affairs, Sarah K. Yun is the Director of Public Affairs and Regional Issues, Chad O’Carroll is the Director of Communications, and Troy Stangarone the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute. The views expressed here are the authors alone.

Photo from Rachael Towne’s photostream on flickr Creative Commons.

By Troy Stangarone

While 2011 will ultimately be remembered for the passing of Kim Jong-il, it was also a year of significant change and new milestones for both South Korea and the U.S.-Korea alliance.

In many ways, 2011 really began in the waning days of 2010 for South Korea. On November 23 last year, North Korea shelled Yeonpyeong Island, killing two civilians and two members of the South Korean military. The attack sealed a chill in relations between North and South Korea that would set the tone for the first half of 2011. By the time both sides began to make progress towards the end of the year that could have led to the resumption of the Six Party Talks, Kim Jong-il had passed away.

At the same time, barely two weeks after the shelling of Yeonpyong Island, the United States and South Korea reached a supplementary agreement on the KORUS FTA that paved the way for the agreement to be passed four years after originally being concluded. Despite political delays over remaining political issues in Washington and in Seoul, the long stalled agreement was passed by Congress on October 12 during President Lee Myung-bak’s summit visit and the National Assembly during a surprise session on November 22.

Having resolved long-standing concerns over the FTA, it is now set to coming into effect early next year. Representing a significant deepening of U.S.-Korea relations, the FTA signifies an important milestone for both sides in remaking the alliance into a broad based 21^st century partnership that extends beyond mutual concerns about North Korea. However, despite the importance of the agreement politically and economically, the politics surrounding it may seep into 2012 as the opposition in South Korea has continued to call for the agreement’s renegotiation.

Korea also saw success on the Olympic front in 2011. After bidding previously for the 2010 and 2014 Olympic Games, Pyeongchang easily beat out Munich and Annecy for the 2018 Winter Olympic Games.  With the International Olympic Committee awarding Korea the 2018 Winter Games, Korea will join the United States, Italy, Germany, France, Japan, and Russia as the only nations to host both Winter and Summer Olympic Games.

Despite lingering concerns regarding the KORUS FTA, 2011 was an important year for South Korea when it comes to trade. On July 1, the EU FTA came into force, making it the world’s largest bilateral free trade agreement and in early December South Korea overcame the headwinds of uncertainty from the euro zone crisis to pass the $1 trillion threshold in total trade for the first time.  South Korea reached the $1 trillion mark in total trade in a short six years after first crossing the $500 billion threshold and during some of the worst economic times since the Second World War. Barring a meltdown in the euro zone, which remains a real possibility, the EU FTA and newly implemented KORUS FTA will likely help South Korea to continue to expand its trade volume in the coming year.

On the diplomatic front, there were a series of milestones. The summit meeting between Presidents Lee Myung-bak and Barak Obama in October was universally seen as a high water mark in U.S.-Korea relations and representative of a strengthening of ties in recent years.  South Korea continued its efforts to become more of a global player as it hosted the 4^th High-Level Forum on Aid Effectiveness in Busan and is set to host the next Nuclear Security Summit in 2012. On a bilateral level, Ambassador Sung Kim became the first Korean-American to be posted to Seoul, capping a year of deepening ties between Washington and Seoul.

At the same time, the future holds uncertainty for the relationship. Like much of the world, South Korea is beginning to feel the effects of political change. In the November Seoul mayoral election, the Grand National Party (GNP) was unable to hold on to the mayor’s office, but the Democratic Party (DP) was unable to capitalize on the GNP’s difficulties. Instead, social networking and a desire for change from politics as usual led to the surprise victory of the independent Park Won-soon in the mayor’s race and the failure of the DP to gain any traction in the election. The aftershocks have already seen the DP merge with a party of supporters of former President Roh Moo-hyun to form the new Democratic Unity Party and a push for greater change in the GNP.

Despite the prospect for political change in South Korea, the most sweeping changes of 2011 have occurred in North Korea. With the surprise death of Kim Jong-il, the succession process put in place during the September, 2010 Workers Party Conference was unexpectedly pushed forward. In recent days the regime has worked to choreograph a smooth transition to Kim Jong-un as the military has publically referred to Kim-Jong-un as its “supreme commander”  and he has been promoted to top post in the Korean Workers Party Central Committee.  However, it is still unclear if Kim Jong-un will govern with complete authority as his father did, or North Korea will move towards a collective leadership structure where Kim Jong-un serves as a figure head. What does seem clear, despite uncertainty about the future ability of the regime and Kim Jong-un to maintain its hold on power, is that the passing of Kim Jong-il will presage a change in how North Korea is governed.

On a lighter note, South Korea saw the debut of Saturday Night Live Korea (SNLK), a spinoff of the popular U.S. satire. While early indications are that SNLK will be as irreverent as its American counterpart, that might not be a bad thing. Given the uncertainty that lies ahead in North Korea with the death of Kim Jong-il, many Koreans might just need a good laugh in 2012 as many of the events of 2011 linger into next year and they ponder their own future.

Troy Stangarone is the Senior Director of Congressional Affairs and Trade for the Korea Economic Institute. The views expressed here are his own.

Photo from David Hepworth’s photostream in flickr Creative Commons.

By Troy Stangarone

The sudden death of Kim Jong-Il has created the potential for significant uncertainty surrounding both the North Korean leadership and North Korean intentions. While all signs pointed to Kim Jong-un as the designated heir after the 2010 Party Conference, it is unclear if the succession process has fully taken hold and how much internal support Kim Jong-un has for his leadership going forward. As this process plays out with interaction both internally and externally over the coming weeks and months, here are ten issues that will likely provide insight into how the process is unfolding:

Internal Issues

1. The Stages of Succession – While Kim Jong-Il had seen to it that Kim Jong-un was promoted to four star general in 2010, along with other positions within the party, he has not had the time or ability to build the ties that his father acquired on his way to power by placing key individuals loyal to him in position of authority. What is unclear at this moment is what steps may still need to be put in place a completed succession of power from Kim Jong-Il to Kim Jong-un, but there are early indications that Kim Jong-un will rule as part of a collective leadership with the military rather than on his own.  If that is the case, he will likely serve more as a figurehead for a collective government, at least in the near term.

2. The Dynamics Between the Heir and the Regent – When Kim Jong-Il first became ill during 2008, Jang Song Taek and Kim Kyong Hui served as co-regents for Kim Jong-un. It is unclear if they will continue to serve in that capacity, but because of Jang’s support within the military and ties to China, he could see himself in a guiding role. Will he try to assert his authority and will Kim Jong-un resist?

3. What is the Potential for a Coup? – Because of his young age and unsecure hold on power, Kim Jong-un may be vulnerable to a coup either from within the military or from someone well connected such as Jang Song Taek. However, if indications of a collective leadership in Pyongyang are accurate, it would reduce the prospect of anyone trying to seize power.

4. Who Will Be the Key Players in Succession? – However the process unfolds, it will be driven by a small number of elites who will guide the process. Identifying those individuals and tracking their actions will be key for follow the transition.

5. Defections and Purges – Be they high level officials or an increase in ordinary individuals crossing the border into China, defections could be the proverbial canary in the coal mine that the succession is faltering or that the new regime is planning major changes. Purges could be a similar indicator for the future of the regime if they are for reasons of insufficient loyalty or policy preferences.

6. The Strong and Prosperous Nation – Next year will provide the regime with public opportunities to present a confident and stable front to the world. While this was always going to be an exercise in propaganda, festivities tied to North Korea being a strong and prosperous nation will provide the regime with opportunity to present a confident and stable image to the outside world. 

External Issues

1. How Seoul Reacts –As would be expected, South Korea placed its military on high alert after news of Kim Jong-Il’s death. If South Korea maintains a heightened posture or takes actions that seem to bolster its defenses against North Korean provocations, it would indicate that Seoul is not yet convinced that the transition will lead to stability in North Korean.

2. What Steps Does China Take? – China will be a key player in all of this and there are already indications that it’s inserting itself into the process by deepening contacts with North Korean officials, especially in the military. While China is unlikely to be able to control the transition, it may be able to provide key support should there be problems in the transition.

3. The Next Moves on the Six Party Talks – Just before Kim Jong-Il’s passing there were indications that talks over North Korea’s nuclear program could resume shortly. If Pyongyang were to engage on this issue and the United States take part, it would be a sign that the new regime is confident in its position and that the United States believes its dealing with a stable regime.

4. The Politics in South Korea – The death of Kim Jong-Il comes as South Korea prepares to gear up for a year of elections. North Korea is always a significant topic in Korean elections and depending on how the transition occurs it could play an outsized role in National Assembly elections in April and presidential elections in December.

Troy Stangarone is the Senior Director of Congressional Affairs and Trade for the Korea Economic Institute. The views expressed here are his own.

Photo by Zennie Abraham

By Nicholas Hamisevicz

A new report with satellite images shows North Korea’s progress constructing a new light water reactor at Yongbyon. The North Koreans revealed the facility to Ambassador Jack Pritchard, KEI’s President, and in subsequent weeks, Dr. Siegfried Hecker of Stanford University in November 2010. Dr. Hecker in his trip report expressed his surprise at how quickly the North Koreans got the 2,000 centrifuges working along with the modernity of the control room, suggesting significant progress had already been made on uranium enrichment. The new report from the 38 North blog analyzes satellite imagery and provides a timeline of two to three years for the potential start of operations of the light water reactor. This short timeframe becomes even shorter when put up against the Asia-Pacific clock. The U.S. and its allies can quickly lose almost two years just based on next year’s election cycles and transitions. It could be all the time North Korea needs.

Knowing that 2012 would be a year stacked with elections and transitions, the impetus should have been on getting things done in 2011. However, North Korea’s provocations from the sinking of the Cheonan and shelling Yeonpyeong Island damaged the opportunities for progress. The U.S. and South Korea rightfully had to respond and attempt to address these actions in their discussions with North Korea. There have been bilateral meetings this year between the United States and North Korea and the two Koreas respectively to work through all of these concerns; however, both the United States and South Korea have sought more positive actions from North Korea, which seems to be trying to run out the clock on the current administrations. At the same time, the satellite images show  North Korea has been upgrading their facility at Yongbyon.

The impetus for action from the United States and South Korea will continue to grow. With elections set for the National Assembly and presidency in South Korea combined with the presidential election in the United States in 2012, policy toward North Korea could be delayed due to election cycles and domestic politics, giving North Korea a year to work on its light water reactor. Additionally, the uncertainty of diplomatic engagement with North Korea could fuel political attacks  from the opposition against the incumbents in South Korea and the United States. This electoral dynamic could limit diplomatic efforts to get North Korea back on a path toward denuclearization.

Depending on the speed of transition, it will take the new presidential leadership in South Korea some time to get organized and start implementing its own North Korean policy. This transition in North Korean policy would be exacerbated if President Obama is unable to win re-election and a new president takes office in the United States. North Korea could potentially gain at least another six months from these leadership transitions; all of the sudden, the two to three year time frame becomes a current reality.

The new images of the facility at Yongbyon highlight the need for the United States, South Korea, and other allies and partners to push for denuclearization and look for ways to change North Korea’s calculations about the need for nuclear weapons. Two years can quickly evaporate in an Asia-Pacific region featuring an already packed diplomatic calendar combined with a year of wide-ranging  elections, leadership changes, and their subsequent transitions. North Korea will likely use this time to complete its light water reactor at Yongbyon. Facing this real prospect, the United States and South Korea must not neglect denuclearization efforts during this time as well.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. The views represented here are his own.

Photo by DigitalGlobe

By Chad O’Carroll

After nearly three years of interruption, a flurry of recent diplomatic activity has suggested that signifcant efforts are being made to restart the Six Party Talks.   In July, officials from Pyongyang and Seoul met in Bali for the first time in months, with a second meeting taking place in Beijing just a few weeks ago.   Washington had direct contact in July through Ambassador Stephen Bosworth in New York – and now looks set to hold a second meeting with North Korean negotiators in Geneva later this month.   But do these four meetings, coupled with recent State visits by Kim Jong-il to Russia and China, give cause for optimism on a swift resumption of Six Party Talks?  A closer look at the key parties’ current positions suggests otherwise.

North Korea withdrew from the Six Party Talks in April 2009, unilaterally declaring that it would “never again take part in such talks” and would “not be bound by any agreement reached at the talks”.  Never say never though, because when Ambassador Bosworth met his counterpart Kim Kye-gwan in September 2009, he was told that Pyongyang was actually interested in resuming talks, but on condition that the U.S. first discussed a peace treaty and lifted sanctions.  Fast forward to August this year, and these preconditions were dropped all-together after a two hour meeting between Kim Jong-il and Russian President Dmitry Medvedev, bringing North Korea full circle.

Following the second nuclear test, the sinking of the Cheonan, and the shelling of Yeonpyeong, it was easy to understand why South Korea was originally so insistent on North Korea apologizing for its belligerence as a precondition to resuming any disarmament talks.  However, in January leaks from the government made clear  a change in position – that Pyongyang would no longer have to apologize first.  According to a senior ROK government official the current position is now that “The six-party talks will come back to life only if North Korea shows its sincerity by taking the required pre-steps, including a monitored shutdown of its uranium enrichment program”.

As a result of strong ties between Presidents Barack Obama and Lee Myung-Bak, the U.S. position has closely mirrored that of Seoul since the nuclear and missile tests of 2009.  Most recently, this position was articulated in three steps that North Korea would have to take to reinitiate dialogue – on issues related to nuclear weapons, missiles, and its relations with the South.  Predictably, North Korea rejected these, saying that they too should be entitled preconditions if such an approach were to be considered.

In contrast to the major differences between the DPRK, ROK and U.S. positions, Russia and China appear to be on the same page.  Recent initiatives such as the Medvedev – Kim Jong-il summit in Ulan Ude and Beijing’s September hosting of North and South Korean nuclear negotiators underscores a shared Sino-Russian desire to see the Six Party Talks resumed as quickly as possible.  And while little is known about Japan’s current position due to recent political turbulence, some scholars have suggested that Tokyo might be following the lead from the U.S. and South Korea.

As the current narrative would suggest, if next week’s U.S. – DPRK bilateral meeting is to achieve anything, flexibility is going to be critical.  But where will we see the motivation to show flexibility?

From the North Korean perspective, it appears unlikely that Pyongyang will be motivated to dilute its current position.   Making the type of credible gestures required to prove “sincerity” to South Korea and the U.S. would entail at least some foreign inspection presence on DPRK soil to work.   This was something previously achievable only after copious injections of cash or aid through protracted negotiations.  Without material payoff in return, it is hard to understand why Pyongyang would acquiesce to such a demand.  Having been the country to so vocally quit the Six Party Talks in 2009, it’s hard to see why North Korea might feel any burden to prove “sincerity”– after all, it is the one who can take or leave these nuclear negotiations.

The U.S. and South Korea are both in a difficult position regarding the resumption of talks.  With the North Koreans having declared a uranium program, tested a nuclear device and killed South Korean nationals, it is easy to understand why there is so little appetite in Seoul or Washington to water-down current positions.

But at the same time, there is a growing fear that if negotiations remain frozen, North Korea may be motivated to carry out a third nuclear test or attempt to cause further regional agitation.  In addition, left unchecked North Korea is now enriching uranium, improving the accuracy of its long-range missiles, and post-Fukushima, endangering the region through its aging nuclear infrastructure.   As a result, it would appear South Korea and the U.S. have the most to lose should negotiations remain stalled.  The major difficulty lies in facilitating this from a political perspective.

Chad 0’Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.