Tag Archive | "technology"

Growing Pains: The Case of Kakao

By Juni Kim

The runaway success of Kakao’s mobile messaging app can be easily seen by its near universal use in South Korea. From high school students to working professionals, three-quarters of South Korea’s 50 million residents use Kakao’s free messaging service monthly with an additional 10 million monthly users outside of South Korea. Despite rapid growth over the past decade, Kakao faced a daunting hurdle when the South Korean Fair Trade Commission (FTC) labeled it and other similarly sized companies as “big business groups” this past April. The new designation subjected Kakao to the FTC’s antitrust regulations, which also applies to South Korea’s much larger chaebol conglomerates like Samsung and Hyundai.

The FTC designation illustrates the fear that smaller Korean companies hold of potentially being caught by tighter regulations after continued growth. Companies like Kakao are caught in the crossfire of the Korean government’s efforts to promote growth in smaller firms while simultaneously attempting to manage antitrust regulations.

Criticism and controversy surrounded the new designation, which also labeled companies Celltrion, Harim Group, Korea Investment Holdings, Kumho Petrochemical, and SH Corporation as big business groups. Industry analysts noted the unfair grouping of Kakao’s total assets with much larger companies. According to Kakao’s website, the company’s total assets are about 5.19 trillion won ($4.5 billion US), easily dwarfed by conglomerate companies such as Hyundai Motor’s reported total assets of 165 trillion won ($143 billion) and Samsung Electronic’s assets of 230 trillion won ($200 billion).

Kakao Graph

In the wake of the FTC designation, the Federation of Korean Industries (FKI), a lobbying group for South Korean companies, released a report critical of the new designation. It stated that the designation excessively regulates companies like Kakao, citing the total of 60 newly assigned regulations authorized through 27 acts. Lee Chul-haeng, the FKI head of corporate policy, publicly stated, “We demand that the government either raise the asset floor for large corporation from 5 trillion won to 10 trillion won, or limit the list of large companies to the top 30 in terms of asset size.”

Concerns of excessive regulations on companies like Kakao have not gone unnoticed by South Korean President Park Geun-hye. Since March 2014, President Park’s administration has held five top-level meetings to discuss and encourage deregulation reform in an effort to encourage economic growth among burgeoning industries. The most recent meeting occurred at the Blue House only a few weeks after Kakao’s designation as a big business group. President Park specifically addressed Kakao’s growth challenges in that meeting by stating, “Companies like Kakao will be restricted if they are labeled as big business groups. In this situation, what company would want to continue to grow?” She further added, “Labeling big business groups as conglomerates is a system only found in Korea, and it needs to change according to the times.”

The FTC ultimately yielded and announced this month that the designation of big business groups will be changed from combined company assets of 5 trillion won to 10 trillion won, which effectively removes Kakao from the list. FTC Secretary General Shin Young-sun acknowledged industry criticisms of the previous designation by stating, “If the same level of regulation is applied to all these companies, it could affect the growth of the smaller members of the group, and we have decided to raise the standard.”

Kakao executives surely welcomed the news of the raised FTC designation. Kakao’s current plans for a web-based bank would have been subject to stiff restrictions if the FTC designation remained in place. However, challenges still remain for Kakao as it continues to expand. Despite its relative small size compared to larger chaebols, Kakao has been investigated before for possible abuses of its dominant market power in South Korea. Any further similar actions by Kakao may put it under the scrutiny of the FTC again and justify restrictive measures. Although it may be far from becoming its own chaebol, Kakao is not immune to future antitrust regulations.

Juni Kim is the Program Manager and Executive Assistant at the Korea Economic Institute of America (KEI). Jiwon Nam, an Intern at KEI and graduate student at the University of Maine, also contributed to this blog. The views expressed here are the author’s alone. 

Photo from Ben Hancock’s photostream on flickr Creative Commons.

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Five Surprising Ways South Korea and the United States are Working Together

By Jenna Gibson

This week, South Korea became the first Asian country to sign a space cooperation pact with the United States, the first step for the two countries to collaborate on projects like Mars exploration, launching a moon lander, and expanding possible uses of the International Space Station. This announcement strengthens what is already a robust relationship between South Korea’s space program and NASA, which KEI has discussed extensively through our podcast and other research projects.

This announcement may come as a surprise to those who see the U.S.-Korea relationship mostly in terms of security cooperation. However, there are many arenas where the United States and South Korea work together outside of the military alliance. Here are five surprising places where these two countries collaborate.

 1.      Improving maternal and child health

The United States and South Korea have a long history of cooperation on development assistance, beginning with American help in the wake of the Korean War to South Korea’s entry into the donor community in the 1990. South Korea’s development assistance agency, which celebrated its 25th birthday recently, has close ties with USAID. A joint project launched in 2013 focuses on combatting maternal, newborn and child health concerns across sub-Saharan Africa. Another new project will look into ways to promote sustainable development in Southeast Asia through science and technology.

2.      Developing wireless charging technology for electric cars

A grant from the US Department of Energy is helping fund a project to develop wireless charging capabilities for electric vehicles. The Hyundai-Kia America Technical Center (based in Ann Arbor, Michigan) and American company Mojo Mobility are collaborating on the project, which aims to improve the speed and convenience of charging for electric vehicles.

3.      Curing cancer

In 2015, the Korean National Cancer Center signed an agreement with the U.S. National Institutes of Health to share information and work together on cancer treatment and prevention. According to the Korea Herald, “The NCC seeks to set up a database of medical records of its 1.2 million patients who have suffered or survived cancer. Once the database is complete, the NCC plans to analyze the ‘big data on cancer’ for preventive measures and post-recovery treatment of the disease.”

4.      Stopping wildlife traffickers

South Korea and the United States have been working on a range of environmental issues, from climate change to sustainable fishing. But one interesting area of collaboration is on wildlife preservation. According to a Work Program adopted by the two governments in 2013, they are working to “Improve collaboration and communication among judicial, law enforcement, customs, and border security personnel in seizing illegal shipments of wildlife products, investigating wildlife crime, prosecuting wildlife traffickers, and dismantling transnational organized criminal networks.” In a related field, the Work Plan also includes a provision to engage in information exchange and dialogue with the goal of fulfilling wildlife management responsibilities, with an emphasis on the preservation of waterbirds and their habitats, and the restoration of habitat. This includes birds that migrate between the United States and the Republic of Korea, and threatened and endangered species of birds.”

5.      Cooperating on nuclear energy technology

In 2015 the United States and South Korea signed a new nuclear cooperation agreement, or 123 Agreement to replace the original agreement that had been in place since 1984. The two countries have already began to cooperate on “shared objectives such as spent fuel management, assured fuel supply, promotion of cooperation between our nuclear industries, and nuclear security.” An extensive KEI report written last year by former Department of Energy and Department of State official Dr. Fred McGoldrick delves into the details of this new agreement.

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from K putt’s photostream on flickr Creative Commons.

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10 Issues to Watch for on Korean Peninsula in 2016

By Mark Tokola, Phil Eskeland, Troy Stangarone, Jenna Gibson, and Kyle Ferrier

In the aftermath of North Korea’s nuclear test, 2016 has already begun with a new crisis on the Korean peninsula. As the United States, South Korea, and the rest of the international community work together to address the growing threat from Pyongyang’s expanding nuclear and missile programs, one of the top issues to follow for 2016 will be whether increased pressure through sanctions can bring North Korea back to the negotiating table. However, 2016 will also see elections in both the United States and South Korea, as well as Korea potentially playing an important role in China’s hosting of the G20 later this year. With that in mind, here are 10 economic and foreign policy issues to follow:

No Significant Progress with North Korea

North Korea’s nuclear test makes the need for progress both more necessary and increasingly difficult. However, even in the absence of North Korea’s nuclear test the structural nature of politics in the United States would have made significant progress difficult. With only a year left on President Barack Obama’s term in office there is little incentive for North Korea to engage in a sustained way and the Obama Administration may be increasingly tied up with the worsening situation in the Middle East.

At the same time, while South Korea has seen moments of potential progress with North Korea over the last two years, such as the surprise visit by senior North Korean officials to the Incheon Games, North Korea has quickly backed away from more sustained progress. While the Park Geun-hye Administration will continue to try and engage North Korea at an appropriate time in the future, expect Pyongyang to continue to back away from sustained engagement.

Key things to look for include whether talks restart with North Korea on its nuclear program, how potential unilateral sanctions by the United States impact North Korea, whether South Korea is able to separate humanitarian issues from the nuclear issue, and how North Korea responds to increasing pressure from the international community.

If There Will Be Another Round of Family Reunions

In October, around 100 South Koreans were able to cross the DMZ to reunite with members of their family that they haven’t seen since the peninsula was divided 65 years ago. The occasion was emotional for those who went, but also for the growing number of Koreans, now in their 80s and 90s, who may not have the chance to participate.

This has become a priority for the Park Administration, particularly after the August agreement. With the successful organization of one round of reunions a few months later, things seem to be looking up and there is a strong possibility of at least one proposed trip in 2016. The problem is precedent and North Korea’s nuclear test – although these reunions have happened sporadically over the past decade, no amount of dedication on the part of the South Korean government has made them a regular occurrence.

Whether we will see another reunion in 2016 depends on the willingness of the North Korean regime and the ability of the two governments to separate the humanitarian issue and the nuclear issue. Unfortunately, Pyongyang has tended to see these reunions more as a bargaining chip. This means these meetings, which are becoming more urgent by the day, may only happen as long as North Korea feels they can get something in return.

Could a China-North Korea Summit Still Happen?

Chinese President Xi Jinping has now met South Korean President Park Geun-hye six times, and remarkably has yet to meet North Korean leader Kim Jong-un.  Might 2016 be the year when President Xi finally meets the leader of the only country with which China has a military alliance?  Prior to North Korea’s nuclear test improving ties made it seem as though it could happen, but now there is no reason to believe that a meeting is in the offing, and probably would require a change of circumstances to occur.

Beyond the nuclear test, Kim Jong-un has shown a reluctance to travel outside of North Korea, having passed up opportunities in 2015 to attend high-profile World War II commemorations in both Moscow and Beijing.  In Beijing, President Park stood adjacent to Xi Jinping at the ceremonies, while North Korean representative Choe Ryong Hae was over forty protocol places away.  Some commentators believed that the appearance of China’s number five official, Liu Yunshan, next to Kim Jong-un at the October 2015 Pyongyang parade marking the 70th anniversary of North Korean People’s Party rule might have signaled a warming of Chinese-DPRK relations, but the Liu’s official ranking simply mirrored the relatively low level of Chinese Embassy attendance at official events in Pyongyang – showing more a frost than a thaw.  So long as North Korea pursues the acquisition of nuclear weaponry, a program which China opposes, association with North Korea will remain China’s preeminent foreign policy failing – one which China will be reluctant to spotlight.

Korea-Japan Relations

In 2015, Northeast Asia saw several steps to improving Korea-Japan relations during a year that marked the 50th anniversary of the re-establishment of diplomatic relations and the 70th anniversary of the end of World War II, celebrating the liberation of the Korean peninsula from Imperial Japan.  Two notable steps were a bilateral summit meeting held in November between ROK President Park Geun-hye and Japanese Prime Minister Abe Shinzo and the year-end agreement on the “comfort women” issue.  While these actions will help the two governments to work together on other issues of mutual interest, particularly in confronting the threat posed by North Korea to peace in the region in light of its fourth nuclear test, it is not a given that relations between Korea and Japan, particularly among its citizenry, will advance to the level sought by the United States.  Key benchmarks to look for in the coming year to determine the level of improvement will be action by the Japanese Diet to appropriate $8.3 million for the reparation fund; the receptivity of surviving Korean comfort women to accept the reparations (if approved) from Japan; and the status of the comfort women statute in front of the Japanese Embassy in Seoul.

How the U.S. Elections Could Impact Policy

The U.S. campaign season will kick into high gear shortly after the holidays when the first votes will be cast in the presidential caucus in Iowa on February 1st.  Unlike some other foreign policy issues, there is little difference between the two main parties in the U.S. regarding the U.S.-Korea alliance.  Relations between the U.S. and the Republic of Korea (ROK) are excellent and should not be an issue in the U.S. elections.  In addition, as the fastest growing racial group in the United States, candidates will make specific appeals to Asian-Americans for votes, particularly in the politically-sophisticated Korean-American community.

Nevertheless, the U.S. presidential elections will have a robust debate on the use of military force and diplomacy in response to terrorist and other national security threats (“hawks” vs. “doves”) and the stand-off on the Korean peninsula may be used to support their point of view.  However, because Kim Jong-un started the new year with yet another nuclear test, expect legislative action in Congress to strengthen sanctions against the DPRK and GOP presidential candidates (and, to a lesser degree, the Democratic candidates) to criticize the Obama Administration’s policy of “strategic patience” with the North as “benign neglect.”  Nonetheless, the underlying strategic importance of Asia will remain a cornerstone of U.S. foreign policy regardless of who is in office because America’s long-term challenges come from larger mega-trends that emerge from Pacific Rim, such as China’s assent on the world stage and various other economic, demographic, and environmental issues.  Also, because of the political sensitivity of trade agreements in the U.S., do not expect a Congressional vote on the Trans-Pacific Partnership (TPP) until the “lame-duck” session after the November 8th election at the earliest.  Finally, because of the lack of trust in the Obama Administration in numerous areas by the Republican-led Congress, no further legislative action on immigration reform (except more restrictions) is likely until a new president is sworn into office.

South Korean National Assembly Elections

On April 13, 2016, a national election will be held in South Korea to select all members of the National Assembly.  Because National Assembly elections are held every four years, and presidential elections every five, the two elections rarely fall in the same year and even when they do, they are not held concurrently because the former are in April and the latter in December.  The election to select President Park Geun-hye’s successor will be held in December 2017.  Presidents may only serve one term.

As in U.S. politics, South Korean National Assembly elections have the character of mid-term elections, with more attention paid to presidential elections.  They are nevertheless important because presidents have difficulty enacting legislative programs if control of the National Assembly passes into opposition hands.  The April 13, 2016 elections will be worth watching for three reasons:  (1) They will be a test of political sentiment heading into the 2017 presidential election year; (2) Because of a Constitutional Court ruling that the largest constituencies can have no more than double the population of the smallest constituencies, boundaries are now being redrawn with uncertain consequences for the parties and even the total number of National Assembly membership; and (3) They will test yet again whether the habitually riven center-left and left elements of South Korean politics are able to pull together to challenge the more unified, ruling Saenuri Party.

Cooperation Between Korea and China in the G20

Though China will utilize the G20 presidency to promote new agenda items that will prove to be far too ambitious, the need for cooperation in the forum on key issues will help foster closer ties between South Korea and China.

As the co-chair of the International Financial Architecture Working Group (IFA WG), South Korea will play an important role in China’s G20 presidency. The IFA WG is charged with advancing proposals in areas that are likely to be priorities for Beijing’s agenda, including strengthening the role of the IMF’s Special Drawing Rights and global financial safety nets.

Additionally, China and South Korea have incentives to work more closely on development and trade as slowing global trade disproportionately impacts the domestic growth of both economies. While resolving the divide on development-related trade norms continues to be too onerous, Seoul’s addition of development to the G20 agenda in 2010 help make it a potential mediator between advanced and emerging economies like China on trade issues in a period of uncertainty in the WTO.

K-Pop’s Next U.S. Breakthrough

People have been predicting the demise of the Korean Wave almost as soon as the term was coined. But there is no doubt that awareness of K-Pop has reached new heights in the United States in 2015 – with popular site Buzzfeed sending a team to LA’s KCon, Big Bang holding K-pop’s largest ever American tour, and of course Psy releasing his new video, which racked up more than 64 million views in under a month.

However, while awareness of K-pop has surely grown in the United States in the aftermath of Gangnam Style, we may not be hearing Korean on the radio again any time soon. Many Korean artists have tried and failed to make it big in the American market. 2ne1’s CL is the next at bat and may be the one to break this trend once her much-anticipated American debut album gets a release date. In many ways she is the ideal candidate to break the trend. Fluent in English, free from the bubblegum cuteness of many idol groups, and supported by some of the most successful producers and collaborators in the world. Her success will largely depend on how well she is able to mold herself to the American taste – but she may just bring a little bit of her Korean pop roots into the public awareness as well.

South Korea’s Trade Policy

Because of the aforementioned political reality in the United States, South Korea will not join the TPP in 2016.  In fact, it may take a few years for Korea to formally join the TPP because of the difficulties surrounding the ratification process in TPP member countries.  As a result, after ratifying Free Trade Agreements (FTAs) with China, Vietnam, and New Zealand in 2015, the ROK is expected not to wait for the TPP and continue to negotiate a free trade agreement with five countries in Central America, a trilateral FTA with China and Japan, and the Regional Comprehensive Economic Partnership (RECP).  Because overseas markets are critically important to Korea’s domestic economy, the ROK is expected to at least make measurable progress on concluding these talks in 2016.  Because the President Park Geun-hye only has two more years left in office, it is important for these talks to conclude before then; otherwise, the benefits of these agreements will be further delayed as the new administration will review previous policies for possible adjustment.  In addition, if Korea is not able to join the TPP by December 2017, a new Korean administration will take some time to review the efficacy of joining this agreement.

Has Samsung Turned the Corner?

After nearly two years of negative earnings, Samsung saw revenue and profits increase in the 3rd quarter of 2015. The increase in profits, however, was due to growth in Samsung’s semiconductor and display divisions. The smartphone division, which faces high end challenges from Apple and low end challenges from Chinese and Indian firms like Xiaomi and Micromax, saw revenues increase but profits continue to decline as it made a misstep by under producing the popular new Edge line of phones and the Galaxy 6 underwhelmed. At the end of 2015 Samsung replaced the head of its smartphone division with Koh Dongjin who previously headed up Samsung’s mobile research and development, to return the division to profitability. With increasing competition and two years of decline, Koh’s efforts to turn Samsung’s smartphone division around will be one of the key economic issues to watch in South Korea.

Mark Tokola is the Vice President of the Korea Economic Institute of America, Phil Eskeland is the Executive Director of Operations and Policy,  Troy Stangarone is the Senior Director for Congressional Affairs and Trade, Jenna Gibson is the Director of Communications, and Kyle Ferrier is the Director of Academic Affairs and Research. The views expressed here are the authors’ alone.

Image designed by Jenna Gibson of the Korea Economic Institute of America.

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T-ara, Titanic, and Taeyeon: Pop Culture and North Korea

By Lilka Marino

Recent tensions along the Demilitarized Zone have been notable for one reason: North Korea launched rockets at loudspeakers that broadcasted an array of propaganda from regional and international news, weather reports, and economic updates from both sides of the border. Curiously enough, the program also included certain K-pop songs chosen for their uplifting and inspirational lyrics. The contents of this broadcasts were enough for Pyongyang to threaten “strong military action” should they continue. While the rest of the contents of each program seem like a logical irritant to a regime that depends on maintaining factual silence from the outside world, the innocence of K-pop seems like an unlikely candidate to cause the recent “quasi-state of war”.

In Nothing to Envy, Barbara Demick reports the official party line towards foreign media and contraband, by a defector who received this lecture at work:

Our enemies are using these specially made materials to beautify the world of imperialism and to spread their utterly rotten, bourgeoisie lifestyles. If we allow ourselves to be affected by these unusual materials, our revolutionary mind-set and class awareness will be paralyzed and our absolute idolization for the Marshal [Kim Il-sung] will disappear.[1]

While a government such as the Kim regime does rely on its self imposed isolation, and keeping its people from outside influences[2], the reality does not reflect the regime’s expectations. In August, three North Koreans were executed for watching South Korean television programs on their mobile phones.  This execution, along with the threat to destroy the loudspeakers is indicative of the growing fascination with the outside world and pop culture, along with the recent demand for designer handbags and high heeled shoes, trends in East Asia that North Korean women began to emulate when Ri Sol-ju, wife of Kim Jong-eun, adopted them for herself. Foreign culture has settled into the isolated nation, and will not dissipate anytime soon.

While most foreign media and culture was discouraged in North Korea, the interest in foreign culture started with legal translations of Western classics in the mid-1980s. Kim Il-sung ordered these translations in limited quantities for writers to improve their ability; translations included Victor Hugo’s Les Miserables and Thomas Hardy’s Tess of the D’Urbervilles. A decade later, these books were made available for the general public to purchase.

Quite possibly the most popular work to be translated, and possibly the most famous example of Pyongyang’s fascination with foreign culture was Gone With the Wind, first translated in a three volume series and released along with other American novels from the 1900s-1960s. The novel permeates North Korean society. When teaching English at PUST, Suki Kim reported that the only American book her college students were aware of was Margaret Mitchell’s work. The typically restricted film adaptation is shown to upper class North Koreans to teach English; one defector reported that the film was a favorite of the elite. Consequently, when the Samjiyon tablet made its infamous debut in 2013, it came preloaded with not only a ported version of Angry Birds, but also Gone With the Wind.

The biggest indication of national fascination is shown by the people’s love of the novel. Gone With the Wind has even made an appearance in talks between North Korean envoys and the United States, with the former apparently quoting “Frankly, Scarlett, I don’t give a damn” during negotiations. One defector reported that for a time, one could not go into Pyongyang and not avoid discussing the work, and that everyone had an opinion about strong Scarlett O’Hara, swashbuckling Rhett Butler, and the destruction of the Confederacy by the Union’s hands. It is the latter that experts speculate that holds the most appeal to North Koreans, along with the plucky heroine, who manages to rebuild and prosper after losing everything to war.

Regardless of what message North Koreans heard from Mitchell’s work, it was clear that the average North Korean is hungry for information from the outside world. This hunger would not always be fed through legal means. In the jammadang open-air markets, one student bought and read a translated book from Russia regarding how capitalism had evolved since Marx wrote his Manifesto, and realized he was being kept in the dark on purpose. How could South Korea and China be worse off than North Korea if Chinese and South Korean goods were pouring into the jammadang?[3]  Another defector reported seeing pirated DVDs and portable DVD players. These DVDs were both Hollywood movies and episodes of South Korean dramas, which sold quickly.[4] A market grew from the demand for media in particular; by 2013, brokers would wait in markets for buyers, who would ask them for the next episodes, waiting only a few weeks after their initial airing in South Korea.

These brokers, usually working with a group known as the North Korea Strategy Center (which focuses on smuggling foreign media into North Korea), feed the demand for drams, movies, eBooks, and music. They are responsible for bringing 3,000 thumb drives into the nation annually. Founder Kang Chol-hwan likened this media to the infamous “red pill” from the Matrix franchise. One broker, a defector by the name of Jung Kwang-il, is another smuggler who deals exclusively with delivering foreign media to the jammadang. He has documented his practice of delivering laptops, radios, thumb drives, and DVDs to North Korean sellers on PBS Frontline. When asked why he risked his life to do this, Jung said:

[North Koreans are] sharing thumb drives a lot. Even officials have one or two. North Korea is trying to hunt them down because the thing that changes people’s mindsets is popular culture. It probably has the most important role in bringing about democracy in North Korea.

It’s been reported that almost half of the North Koreans who defect had watched foreign television, even though it’s illegal. Countless defectors cite foreign pop culture as the spark that made them start doubting North Korea. Park Yeon-mi credited the popular film Titanic as starting a “moral crisis”, as both the idea of a man sacrificing his life for a woman as well as the economic development of the early twentieth century being far more advanced than what she had in the twentieth-first century in North Korea would aid her family’s decision to leave.

Surveys of defectors suggest that more than a million North Koreans listen to illegal foreign radio. A fisherman accidentally picked up a South Korean radio program with two women arguing over a parking spot, which was an inconceivable notion to him, as he could not imagine a scenario where there were so many cars that anyone would have to fight over parking.[5] While mp3 and mp4 players are legal in North Korea, downloading foreign media to them is definitely not. Yet one defector theorized that if you “cracked down” on high school and university students who owned the devices in North Korea, all of them would have South Korean music on them.

South Korean dramas were especially powerful to defectors; the sheer beauty in the clothing of the actors and the bustling streets with healthy looking actors and flashy billboards advertising all sorts of goods made watching more addictive; it was fun to picture living in a trendy Seoul apartment until one realized that the reality reflected in Pyongyang’s propaganda did not match up to what they were watching on their portable DVD players. Expert Andrei Lankov has described the fascination with South Korean pop culture within North Korea as, possibly, “the single most important development of the last ten years”.

Seoul has even created media targeted at North Koreans in order to take advantage of this growing interest. One such example is Open Radio for North Korea, a radio station staffed by defectors that broadcast news and personal messages towards Pyongyang. Another is the television program known as Now On My Way to Meet You, which stars North Korean women who now live in Seoul. Part news, part variety show, and part beauty contest, the show aims to show North Koreans the truth about life in the outside world and to especially empower other female defectors. One star even said that she believed that her friends “back home” watch it, fantasize about life south of the DMZ, and even want to defect, too.

Despite the growing demand for foreign media, Kim Jong Un has reportedly sent his security forces house to house, searching for illegal DVDs, and in November 2013 ordered the execution of as many as 80 people, some for watching foreign television. Authorities punished thirty college students with hard labor for watching “Until the Azalea Blooms” on their cell phones last June. Despite the death toll attributed to consuming foreign pop culture, North Koreans still are willing to risk their lives distributing and owning music videos, DVDs, clothes, books, and so much more from the outside world. With this forbidden fruit comes knowledge, and with knowledge, agency.

A young defector summed the allure of pop culture to North Koreans best: “No matter how many people die, the sensational popularity doesn’t die…that is the power of culture.”

Lilka Marino received her Masters of Arts in Liberal Studies from Hollins University with a double concentration in leadership theory and social sciences. Her interests include North Korean politics, Korean history, and traditional Korean culture. The views expressed here are her own.

Photo from Darrell Miller’s photostream on flickr Creative Commons.


[1] Demick, Barbara. Nothing to Envy: Ordinary Lives in North Korea. New York. Spiegel and Grau, 2009. Print.  p 255.

[2] Myers, B. R. The Cleanest Race: How North Koreans See Themselves and Why It Matters. Brooklyn, N.Y.: Melville House, 2010. Print. p 55-75

[3] Demick, pg. 260.

[4] Demick, pg. 255.

[5] Demick, pg. 260

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Should the Proposed New Cyber Norms Address North Korea?

By Troy Stangarone

Recent news reports have indicated that the United States and China hope to announce an initial code of conduct governing the use of cyber weapons in advance of President Xi Jinping’s summit meeting with President Barack Obama, while President Xi in Seattle stated that he was willing to work with the United States to address cybercrime. Although short of being a treaty, the agreement would represent the first attempt to develop an arms control agreement for cyberspace and could have longer-term implications, including for addressing cyber threats from North Korea.

Unlike nuclear, chemical, and biological weapons, there are no international norms or agreements governing the actions of state actors in cyberspace.  Instead, cyberspace in a sense is a modern version of the Wild West – an ungoverned land of promise. While the internet has changed the way people communicate and shop, it also holds the potential to be weaponized in the case of war between states. However, because damage from cyber attacks is difficult to attribute and disputes exist over what are legitimate forms of espionage through the internet and what crosses the line into belligerency, states have been unable to craft norms for the use of cyber weapons.

As the United States and China begin to shape an informal, and perhaps later formal, understanding of what is and not acceptable in cyberspace, North Korea should receive special attention in any discussions and ought to be a topic that President Obama raises in his meeting with President Xi. If President Xi is sincere about cooperating with the United States on cybercrime, North Korea is one area where China could play a unique role as North Korea’s access to the internet primarily runs through China with a satellite link to Germany sometimes used to boost the connection. It is also believed that Pyongyang’s cyber division, Bureau 121, operates out of China.

While last year’s attack on Sony Pictures and subsequent threats by North Korea to go after theaters that showed “The Interview” are well known, a study of cyber incidents between states from 2001-2011 indicates that after China most come from North Korea. Of the 111 cyber incidents initiated during that period 14 were initiated by North Korea. Ten were against South Korea, three against the United States, and one against Japan. In the case of South Korea, North Korea is believed to have previously attacked South Korea’s banking and media outlets in 2013.

In the cyber discussions between the United States and China, the talks are believed to focus on a code of conduct put forward earlier this year by the United Nations. While the two sides may not embrace all aspects of the UN recommendations, two could potentially apply to North Korea if adopted in the upcoming summit or in future talks. The first deals with the rules and norms of cyberspace and calls for states to “… not knowingly allow their territory to be used for internationally wrongful acts using ICTs.” The second, dealing with confidence building measures, calls on states to “Cooperate, in a manner consistent with domestic and international law, with requests from other States in investigating ICT-related crime or use of ICTs for terrorist purposes or to mitigate malicious ICT activity emanating from their territory.”

These norms and confidence building measures could apply to North Korea in two ways. In regards to norms, the United States and South Korea should encourage China to not allow its territory to be used for “wrongful acts” and to close down Bureau 121’s operations inside China. While from the perspective of confidence building measures, it would be a positive step in addressing potential cybercrime if China were to agree to cooperate in investigating suspected North Korean attacks and to shut off North Korea’s access to the internet if there is a strong evidence that an ongoing attack is emanating from North Korea.

Of course, even if China were to take these steps North Korea would have other options for conducting cyber warfare. North Korea also borders Russia which could provide potential internet access if China were to curtail Pyongyang’s access and other states, such as Iran, could potentially offer to host North Korean cyber units. However, despite these challenges, steps by the United States and China to develop international norms for conduct in cyberspace could in the long-run help to address the problem of North Korean cyber attacks.

Troy Stangarone is the Senior Director of Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from U.S. Embassy The Hague’s photostream on flickr Creative Commons.

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How North and South Korea Have Changed Since the Korean War

With the 70th anniversary of the end of World War II over the weekend, KEI takes a look back at what has changed on the Korean Peninsula from the 1945 to today. The three boxes compare a unified peninsula before the Korean War to North and South Korea in the 2010s. By looking at GDP, economic production, the number of radio stations, literacy and urban population, it becomes clear how far the peninsula has come in the past seven decades and how far apart its two halves remain today.

SK-NK Graphic1

Graphic created by Jenna Gibson, Associate Director for Communication Technology and Programs at the Korea Economic Institute of America, with assistance from Bradley Sancken, Jina Shin, Christopher Kang, and Lilka Marino at the Korea Economic Institute of America.

Photo a composite of photos by bradhamonds of Seoul and lawrenceyeah of Pyongyang on flickr Creative Commons.

Sources:

CIA World Factbook

38 North

“Japanese Colonialism and Korean Economic Development, 1910-1945”

Maddison Project

“The Population of Korea”

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What Might a Proportional Response to North Korea’s Sony Hack Look Like?

By Troy Stangarone

North Korea’s cyber attack on Sony Pictures Entertainment and the subsequent threats to target theaters that screened “The Interview” have had a chilling effect beyond Sony’s decision not to release it on Christmas day. The decision to withdraw “The Interview” from release has raised important questions regarding freedom of speech and how best to approach future cyber attacks by North Korea or other actors.

What We Know About the Hack

In October, hackers, unidentified at the time but suspected to be North Korean, attacked Sony’s computer network and stole a large trove of documents and released five movies on-line causing the studio financial harm and embarrassment as internal documents and e-mails were slowly leaked. At the time, other suspects included disgruntled former employees who had indicated that Sony was vulnerable to cyber attacks or that the Guardians of Peace, who claimed responsibility, could be an unknown group of hackers. However, an investigation into the evidence has now indicated otherwise. In his press conference on December 19, President Barack Obama confirmed that it was North Korea that engaged in the attack while the FBI announced that it had reached this conclusion based largely on the following information:

  • Technical analysis of the data deletion malware used in this attack revealed links to other malware that the FBI knows North Korean actors previously developed. For example, there were similarities in specific lines of code, encryption algorithms, data deletion methods, and compromised networks.
  • The FBI also observed significant overlap between the infrastructure used in this attack and other malicious cyber activity the U.S. government has previously linked directly to North Korea. For example, the FBI discovered that several Internet protocol (IP) addresses associated with known North Korean infrastructure communicated with IP addresses that were hardcoded into the data deletion malware used in this attack.
  • Separately, the tools used in the SPE attack have similarities to a cyber attack in March of last year against South Korean banks and media outlets, which was carried out by North Korea.

The Fallout from the Hack

The fallout from the hack has been significant. On the financial side, Sony has likely lost hundreds of millions of dollars in lost revenue from pulling “The Interview” and other films that have been released on-line. Shortly after Sony announced its decision, two other movie studies took similar actions. Paramount Pictures has pulled screenings of 2004’s Team America from theaters, while Fox has pulled the plug on the Steve Carrell movie “Pyongyang” which was set to start filming next year. The capitulation to North Korea’s threats have raised questions about freedom of speech and how best to respond to cyber attacks.

Green lighting a film that portrays the assassination of a sitting world leader was likely unwise from the beginning, even one from a regime with the human rights record of North Korea. North Korea has previously demonstrated a willingness to use cyber attacks against private entities that believes portray it unfairly. In 2013, it attacked South Korean TV networks who it had accused of covering it unfairly.

However, Sony’s subsequent decision to give into North Korean pressure after theaters began to pull out raises larger issues regarding free speech and cyber intimidation. As the President noted, what precedent does this now set for other leaders who do not like how they are portrayed in a documentary or in the news. Will studios and news agencies start self-censoring their films or reporting on controversial world leaders to avoid being the targets of attacks? Additionally, has Sony now signaled to other groups that cyber attacks on entertainment and news agencies could be an effective tool for achieving their goals? How this ultimately affects artists’ ability to express themselves and reporters’ ability to report stories accurately may be the biggest fallout from North Korea’s attacks.

What Would Be a Proportional Response?

President Obama in his press conference indicated that the United States will respond to this attack in a proportional manner at a time of the United States’ choosing. As the United States considers its options, there are likely a range of things that will come into consideration.

While we now know that North Korea conducted the attack, its attack was on a private institution rather than an attack on the government. Does that mean that any response should be proportionally less than if a government institution was attacked, which could be considered a direct act of war? In the age of cyber warfare, this is a gray area. The United States has not previously come to the defense of U.S. businesses that have been hacked through means other than law enforcement. Then there is the question of the nature of a cyber attack on a business. Is a cyber attack on a business the same as a kinetic attack on a business? As the administration draws up it plans, it will likely seek to demonstrate to North Korea and other potential attackers that there are costs for attacking private institutions as well as a direct attack on government institutions.

There is also the question of escalation. How does the United States design a response that extracts a cost from Pyongyang for its actions, but that does so in a manner that will not lead to an escalation of attacks? This means that a kinetic attack is likely off the table as it would come with a high probability of a response against the United States or one of its allies. More likely would be some combination of cyber attacks against North Korea, likely in ways that will not be publically noticeable, and increased pressure on banks to cut off North Korea’s finance. The United States will also likely privately pressure China to shut down North Korean cyber facilities operating inside Chinese territory.

Unlike many of the previous cyber attacks on U.S. businesses or websites of government or private institutions around the world that were designed to acquire financial resources or intellectual property, North Korea’s attacks on Sony are the most politically motivated since Russia’s suspected attacks on Estonia in 2007. They are in essence an attempt to change the policy of a company to one more liking to the regime in Pyongyang and we have already seen the chilling effect they could have on free speech. While Paramount may simply be trying to avoid controversy by cancelling showings of the previously released “Team America,” Fox’s decision to cancel the as yet filmed “Pyongyang” shows the potentially farther reaching implications. For this reason, it is appropriate that the United States take more direct action to discourage similar attempts by North Korea or other actors in the future.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Cristal’s photostream on flickr Creative Commons. 

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Is Free Wi-Fi All the North Korean People Really Need?

By Nicholas Hamisevicz

From the Hack North Korea contest to smuggling in USBs and launching balloons over the DMZ, there have been many ways people have tried to get outside information to the North Korean people. Recently, an effective strategy was simply to have a powerful wireless Internet signal that anyone can access. This move, made by embassies and foreign NGOs, possibly even changed the real estate market in Pyongyang as some elite citizens apparently tried to move to residences closer to the free Wi-Fi signals coming from the embassies and foreign organization buildings. While North Korea has taken steps to discourage the practice and limit access to embassy and NGO Wi-Fi signals, the positive sign is that the North Korean people are still trying to find ways to get more information, and in turn, learn about the outside world. It will still be extremely difficult for outside information to bring down the North Korean regime, but providing access to uncensored outside information can help the North Korean people survive and be willing to try a future on the Korean peninsula without the Kim regime when the time comes.

In response the appearance of Wi-Fi networks, North Korea’s State Radio Regulatory Department recently sent a notice to embassies and foreign organizations telling them that they now must consult the department and possibly get a license in order to use a wireless network in North Korea. This seemingly ties into the story about people in Pyongyang trying to move closer to these foreign buildings because of the Wi-Fi access. These moves suggest that unfiltered access to outside information, even for the elites in Pyongyang, makes the North Korean regime very uncomfortable.

In addition to trying to limit the Wi-Fi coming from foreign organizations and embassies, the North Korean leadership also appears to be cracking down on other ways its citizens try to access the Internet and get information. Reuters reported that North Korea has made the SIM cards for mobile phones used by tourists active only during the time they are in North Korea; the concern appeared to be that SIM cards were being left behind for local North Koreans to connect to the outside Internet via the separate network in North Korea for foreigners. Radio Free Asia had a story earlier this year that the North Korean government began ordering its trade officials abroad to stop using the Internet and sending emails to friends and associates back in North Korea.

The North Korean leadership has also been vocal with its displeasure of balloon launches from South Korea, threatening to attack the South Korean citizens dispatching the balloons. The balloons carry leaflets criticizing the Kim family and often include money and other supplies for the North Korean people that find the balloons. Reportedly, North Korea has also updated its criminal code, revising punishments and re-codifying offenses, many that relate to accessing outside information from South Korea or foreign contacts.

Lastly, North Korea might be planning to demolish structures in Ryanggang Province close to the border of with China; the stated reason is to build a new road, but skeptics think North Korea might be trying to better secure the border and prevent “defections, smuggling, and a growing influx of information from the outside world.” On top of all of that, the North Korean government is very good at using information technology to actually limit the flow of information and control its own society.

A recent piece by Choson Exchange’s Geoffrey See for The Guardian illustrates the impact of North Korea’s control of the Internet at the personal level. Choson Exchange organized a workshop for “North Korean researchers and businesspeople” which “focused on helping build an entrepreneurial culture and a supportive environment for startups in North Korea.” As became clear from a pitch by some of the North Koreans for an optical character recognition app, connectivity and access to the Internet is a huge roadblock toward this goal. One can sense the disappointment the small group of North Koreans must have felt when they pitched their idea to a workshop leader, who in turn showed them similar app that had already been on the market for one year and had better quality. Choson Exchange is doing the hard work of building connections and teaching business skills to the North Koreans; unfortunately for the North Korean people, their government is holding them back by withholding access to the Internet and outside information.

It will be interesting to see how this attention on foreign organizations’ use of the Internet and the efforts to stop the other ways North Korean citizens access information will affect attempts to get the Internet elsewhere in North Korea. South Korean companies are requesting Internet capabilities in the Kaesong Industrial Complex. The Park Geun-hye administration has also focused on Internet access in its negotiations with North Korea to help entice foreign companies to invest in the zone. North and South Korea apparently agreed to have the Internet in Kaesong; however, it appears that stalling and disputes by North Korea have prevented the implementation of the agreement. If the North Korean government is concerned about the embassies and NGOs blasting out free Wi-Fi, one could see a similar concern arising from the North Korean leadership that South Korean companies in Kaesong would undertake similar actions with broadband wireless access.

The North Korean regime wants to “reap the positive benefits of the technology while limiting the ideological pollution associated with the use of cell phones, the intranet, and the Internet.” These reports and actions suggest that while Kim Jong-un and the North Korean leadership talk a lot about the need for science and technology to help North Korea develop, they really don’t want the outside information that would truly help its society and bring about the economic change they are hoping for. If North Korea is cracking down on something, it is most likely working; the U.S. and other countries should be encouraged by this news to continue to fund and support programs and policies that provide more access to outside information to North Koreans. Moreover, now these countries should realize that one more small option is just to try to get wireless Internet access into country and then let the citizens of North Korea connect to it.

Pumping information and access to the Internet into North Korea should be more of a priority for the U.S. and other countries in their policies toward North Korea. Information and communication technology gives North Koreans the ability to compare actual prices of goods, work with others, and connect with family and friends inside and outside of North Korea. This information also lets the North Koreans see the contradictory nature of their government, especially how many of those contradictions are detrimental to the North Korean people themselves. The call for more science and technology so far has been one of these contridictions. This knowledge is needed for the North Koreans to build themselves a better society, and be more willing and able to work with the outside world, including interacting and eventually unifying with South Korea.

Nicholas Hamisevicz is the Director of Research and Academic Affairs at the Korea Economic Institute of America.  The views expressed here are the author’s alone.

Photo from comradeanatolii’s photostream on flickr Creative Commons.

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Installing THAAD in Korea

By Kenneth Lee

In recent years, the United States expressed interested in deploying the Theater High Altitude Area Defense missile system or THAAD, onto the Korean peninsula to counter North Korea’s growing missile threats.  Earlier in June, General Curtis Scaparrotti of United States Forces Korea was quoted in Yonhap News saying he personally “recommended the deployment of the THAAD missiles to South Korea”; yet, South Korea’s response to the General’s suggestion was rather bleak.  South Korea’s former Defense Minister Kim Kwan-jin stated that Korea has “no plans to purchase the missile system” and will rely on their own domestic missile defense (MD) system.  Many believe Korea’s growing economic cooperation with China to be the key factor in Seoul forgoing THAAD, but this assessment seems rather simplistic.

No one denies China’s economic leverage played a factor in Korea’s decision, especially when considering the proposal for THAAD came around the time when President Xi Jinping was scheduled to visit South Korea in July to discuss bilateral cooperation, but it is unlikely that Seoul would compromise an essential element of its security even for China.  For example, South Korea regularly purchases various high-end weapons platforms such as Lockheed Martin F-35s and Aegis class ships, and Seoul participates in various military exercises with the U.S. on a regular basis. In addition, South Korea and the United States have always assured the global community that all military exercises in the region are in response to North Korea and not China.  Therefore, Korea’s reluctance to purchase THAAD doesn’t seem to be solely a matter of Chinese intervention, but even if Seoul were to select a new MD system, the perpetuating threats by the North provide enough legitimacy for Korea to purchase THAAD despite Chinese concerns.  Lastly, South Korea’s decision to donate a warship to the Philippines on August 5th suggests that Seoul continues to make military decisions based on its perceptions of its own national security interests. So, if China’s influence over Seoul is somewhat exaggerated, why is South Korea reluctant to purchase THAAD?

Cost is perhaps the most prominent deterrent for South Korea when it comes to purchasing THAAD. According to a thediplomat.com, a single THAAD system can cost between $800 to $950 million, which is roughly the price of a South Korean Sejong the Great-class Aegis destroyer.  Logistically, maintaining and upgrading the system is not only costly, but implementing THAAD will require Korea to integrate their MD system with Japan and the United States.  This aspect is particularly difficult since Korea-Japan relations are at an all-time low and since Seoul is fretful of Tokyo’s recent decision to exercise collective self-defense.

The effectiveness of THAAD is another debated issue.  On one hand, South Korea realizes that a reliable MD system is needed against the North, but THAAD is not the most practical system for several reasons.  First, THAAD is intended to intercept missiles in high-altitudes, yet most missiles North Korea possesses are low to medium altitude missiles that are airborne for a short period of time, thus countering these missiles are very difficult.  Second, the United States’ and Japan’s advocacy for THAAD and an integrated missile defense system is to provide early warning mechanisms against ballistic missiles intended for Washington and Tokyo, but not necessarily for Seoul.  Finally, North Korea posses some 13,000 artillery as well as 300 missiles stationed near the DMZ and the payload from these weapons can reach Seoul within minutes.  The sheer number of these weapons combined with their proximity to Seoul means that Korea is reluctant to purchase even cheaper and battle tested systems.  For example, since 2011, South Korean military officials have sought to acquire the Israeli made Iron Dome system, which has an impressive 80 percent knock down rate against incoming rockets.  Priced around $50 million, Iron Dome is significantly cheaper than THAAD, yet while Seoul continues to flirt with the idea of purchasing the Israeli MD system, the North’s ability to launch 7,000 projectiles per hour means that no MD system can completely prevent missiles or artillery from striking Seoul.

As shown, there are factors other than China that deter Korea from purchasing THAAD, the most prevailing being that the system’s enormous cost yields relatively little added benefits.  However, if the U.S. is adamant about installing THAAD on the Korean Peninsula, certain measures can be taken to make this a possibility.  First, the U.S. and Japan should reduce the price of the system and not look to offload the expense onto Korea since the latter two countries have the most to benefit from THAAD.  Second, convincing Korea for the need for an effective and interoperable MD system with Japan and the U.S. should be another key priority.  The North’s current inability to attack the U.S. mainland prevents Pyongyang from carrying out more brazen attacks on Seoul, but if the regime were to obtain the existential ability to reach the U.S., provocations against the South could escalate both in frequency and intensity.  A reliable MD system such as THAAD will deter North Korea from reaching the U.S. mainland and by extension help to limit Pyongyang’s aggression towards the South.  As for integrating the system, this will require the Korea-Japan relationship to improve not only on a political level, but Japan would have to take genuine steps assuring their recent military expansion is not a threat to Seoul, but an opportunity for greater collective security and cost sharing opportunity.  Third, the U.S. should wait until the political climate in East Asia is in legitimate need of a new MD system. Currently, China’s objection to a MD system and the shortcomings of the North’s missile capabilities, as well as the relative stability of the region, are potential reasons to move more cautiously on installing THAAD.  However, there is little doubt North Korea will continue to conduct missile tests; thus waiting for the appropriate moment of regional instability can legitimize the need for THAAD to all objectors.

Kenneth Lee received his Bachelors in Political Science from New York University and his Masters in International Relations from Seoul National University. His interests include: East Asian Security, Military Security and Inter-Korean Security. The views expressed here are his own.

Photo from the U.S. Army Space and Missile Defense Command’s photostream on flickr Creative Commons.

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Will North Korea Participate in the Ultra-modern Asian Super Grid?

By Diane Stevenson

In a future with the Asian Super Grid, renewable energies gathered in the steppes of Mongolia would be transported through an integrated, multi-national power grid to reach energy needy cities in China, Russia, on the Korean Peninsula, and Japan. According to the most recent UN Sustainable Development Solutions Network report, South Korea, at a minimum, must seriously explore the Asian Super Grid as a significant piece in achieving its part in the international effort to prevent global temperatures from rising more than 2°C by 2050.

Clearly, executing this project will require high levels of multilateral cooperation, technological prowess, financial capital, and years of effort to complete. However, perhaps more daunting is the  prospect of integrating the isolationist state of North Korea into this post-modern undertaking. To be sure, the power grid could entirely skip North Korea and the transmission lines could be buried underwater. But, based on the distances for the projected routes, the undoubtedly cheaper and more expedient option is to negotiate North Korea’s entrance onto the grid itself. So before this project moves out of the planning stage, the question of North Korea’s participation must be answered.

First, though, would North Korea’s neighbors want to integrate North Korea into a project of capital infrastructure like the Asian Super Grid? The benefits of including North Korea into the grid are clear. Running the grid through the Korean Peninsula on land will require less money, time, supplies, manpower, and every other input into the process than installing undersea transmission cables on the route between China and Korea. This means the project will require less initial investment and less long-term maintenance, thus improving its overall feasibility. Additionally, integrating the grid into North Korea will inherently improve the Soviet-era North Korean energy infrastructure, limiting the need for international energy assistance and most likely improving the country’s standard of living. Both of these effects will decrease Pyongyang’s reliance on international aid and thereby relieve long-term burdens on South Korea and China.

On the other hand, South Korea and Japan would be vulnerable to North Korean sabotage or energy blackmail. However, undersea transmission cables would be susceptible to North Korean antics as well. Even if North Korea were physically excluded, South Korea and Japan will not join without assurances about a unified response and alterative supply to any North Korean misbehavior regarding the grid. As a result, including North Korea does not mean the difference between an impenetrable grid and a vulnerable grid, any permutation of a complete grid will be vulnerable to North Korea, so the gains from excluding North Korea do not necessarily outweigh the gains from including it.

The second facet of this issue is if North Korea would want to participate in the grid. Traditionally, the concept of integrating North Korea so heavily into the outside world would be anachronistic to the regime’s ideology of self-reliance. However, Kim Jong-un’s goal of establishing 19 new Special Economic Zones (SEZ) and the fervor with which the North Korean regime is seeking Chinese investment implies that economic improvement, at the moment at least, is the focus of the regime, as opposed to isolationism. Participation in the grid would undoubtedly lead to infrastructure investments, and if the grid corresponded to the locations of the SEZs, North Korea would be able to address one of the challenges of encouraging investment in those areas. This indicates a possibility for promoting the grid as an economic opportunity as opposed to a form of international integration.

Significantly, many of the potential benefactors of the grid, including Russia and China, enjoy historically influential relationships with North Korea. Mongolia, who arguably stands to gain the most from investment and infrastructure building, also has a close relationship with the North Korean regime. In addition, Japan and North Korea have recently been taking steps to improve their relationship that could enhance the prospects for cooperation on the project.

Providing cheaper renewable energies to North Korea would lessen its dependence on heavy fuel aid and would undoubtedly decrease the cost of basic living expenses like fuel and electricity.  Given North Korea’s energy needs and its potential vulnerability to climate change due its dependence on subsistence farming, a regional Super Grid that facilitated the advancement of renewable energy could be in North Korea’s interest. In one striking example of North Korea’s environmental challenges, from 1995-2005, North Korea planted over 10 billion trees in a reforestation effort to protect farmland from the consequences of soil erosion. Comparatively, South Korea’s herculean reforestation effort is calculated at 11 billion trees from 1961-2008.

So there are clearly arguments useful for cajoling the North Korean regime into participating in such a project.

However, North Korea’s continued pursuit of nuclear weapons could be an obstacle to its participation in the Asian Super Grid. For more than two decades proposals for a pipeline to bring Russian gas to North and South Korea have set unfulfilled because of North Korea’s provocative behavior. While the nuclear program has not been the only obstacle to the pipeline, an energy project on the scale of the Asian Super grid could raise concerns about North Korea reaping significant economic benefits if it has not given up its nuclear program. To deal with these concerns, one path forward could be to embed the project in South Korean President Park Geun-hye’s policy of Trustpolitik and present it as an inducement for greater change in North Korea.

Under Trustpolitik, President Park Geun-hye presented a vision for engaging North Korea based on a firm response to any North Korean nuclear and military threats, but that at the same time prioritizes flexible negotiation options in other areas to build trust. By prioritizing confidence-building President Park’s policy allows for more flexible and issue-specific interactions with North Korea. This flexibility, combined with Trustpolitik’s strong rebuttal on the nuclear problem, could provide a pathway for accepting North Korea into the Asian Super Grid. As President Park argues, global powers must “be prepared to offer North Korea a new beginning.” The Asian Super Grid could be a part of that new beginning.

Diane Stevenson is currently finishing her Masters of Arts in Security Policy Studies at George Washington University. The views expressed here are her own. 

Photo from NASA Goddard Space Flight Center’s photostream on flickr Creative Commons.

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About The Peninsula

The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.