Korea: Cleaning Up The Mess

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December 27, 2009:  Chinese officials who deal with the North Korean government report that there is still no official decision on who will succeed the sickly North Korean leader. Generals and Communist Party officials discreetly are lining up behind the oldest son (a playboy, but ruthless and power hungry) and the youngest (smart, and young enough to be controlled by a committee of older officials, for a while, anyway). Since there has been no official announcement about who the heir is, if Kim Jong Il died tomorrow, there could be a power struggle, that could get very violent. There are indications of that from Chinese reporting North Korean officials increasingly arranging to establish second homes in China, and sending children, and even wives, there. Defectors report that there is an escape tunnel, from the capital, to the port of Nampo, which would enable officials, in an emergency, to secretly flee to China by sea.

South Koreans are expressing their concern over the deteriorating conditions up north, by spending more time discussing how South Korea will handle absorbing North Korea. It's become accepted that the north will eventually collapse in chaos, and South Korea will be largely responsible for taking care of the mess. This is not expected to turn out well.

Prices in the North Korean markets are still higher than those the government has mandated, despite the recent currency exchange (which took billions of dollars in currency out of circulation by limiting how much of the old currency you could exchange for the new). The government introduced the markets, thus legalizing the black market, in 2002, to provide a way for people with money to spend it, and enable the government to tax this activity. The markets have been too successful, making thousands of entrepreneurs rich, and embarrassing the government, by making it clear how inept the centrally controlled communist economy was supplying goods people needed and wanted. The markets also created inflation, because the government just printed more cash when it needed it, ignoring the basic rules of running an economy. Many senior North Korean officials really believe that the laws of economics don't apply to them, and are surprised when they discover otherwise. The usual reaction to this is to look for a foreign conspiracy. But reality has a way of changing some minds. Take, for example, the widespread public disorder that followed the December 1st currency exchange. The government thought that the population would meekly submit to having their "excess" (anything over 100,000 won, or about $4) wiped out, because 100,000 of the old won was all you could turn in, for a thousand new won. The public protests were so widespread and threatening that the government is now saying that people will be able to exchange all their old currency, if they deposit it in a government controlled bank. This may not work either, because the people do not trust government banks (which often restrict how much of your money you can withdraw.) The government has, for the last two decades, been living in fear of how suddenly the communist governments of Eastern Europe fell in 1989. Some North Korean officials are thinking that 1989 has arrived in North Korea, and it's time to implement the escape plan. One rumor coming out of North Korea is that the officials who came up with the currency exchange plan have since been arrested and executed. However, these guys would be scapegoats, as it is widely believed that the currency exchange idea came straight from leader Kim Jong Il. North Korean officials are also warning Chinese officials that foreigners will soon be banned from North Korea for a month or so, in order to help maintain order, by preventing the outside world know about the unrest.

The South Korean military is alarmed about how hacker attacks, apparently coming out of China, are hitting military computers and getting defense secrets. The Chinese hackers are mainly looking to loot back accounts and credit cards, but the attacks have increased so much, and South Korean troops are sloppy with their military computers often enough, that the hackers get away with some military secrets. The generals have to accept the possibility that sometimes the hackers will realize what they have and offer to sell it to North Korea. The latest document to get stolen was a twelve page briefing document on U.S.-South Korean military defense plans. Not all the details, but an overview for senior South Korean officials. Pretty embarrassing, and gone because an officer plugged a USB drive into a top secret PC, after using the drive on an unsecured one.

The North Korean government now claims that the harvest produced five million tons of food, enough to feed the country for a year. Not everyone believes those numbers, and 10-20 percent of the population cannot afford to buy any supplemental food at the markets. The official food supplies are not enough to survive on, and you have to either live in the country and grow additional food, or have money to buy it. Up to 20 percent of the population is too ill, old or poor to do that. More of these people are being found dead, from starvation.

It appears that the recent economic moves in North Korea are an attempt to return to complete state control of the economy. That, alas, is impossible, given the poor state of the economy. North Korea is beyond broke, and unable to produce enough food or goods to survive. But the government is desperate to remain in control, and willing to try anything.

The U.S. and the UN believe that the current sanctions on North Korea, which allow ships at sea, and transport aircraft to be searched, are hurting North Korea's weapons export business, and that this will force the North Koreans to negotiate an end to their ballistic missile and nuclear weapons programs. That hasn't happened yet, but optimism is in the air.

December 26, 2009: The government has banned the use of foreign currency in the country. This is partly to try and calm the population, because government officials are the ones who most frequently use dollars or euros to pay for things. These officials made huge profits because of the currency exchange, as that greatly increased the value of dollars and euros on the black market currency exchange.

For the first time in five years, farmers have been paid in cash, not just food. This means farmers get less food in payment, and have to buy their food at market prices.

December 25, 2009: A prominent Christian missionary, Robert Park, crossed the frozen Tumen river, into North Korea, to protest the over 150,000 North Koreans held in prison camps. Park has long worked among and for North Korean refugees, and is risking his life to directly confront the North Korean government. Of Korea ancestry, Park was quickly arrested by North Korean police, and his fate is unknown.

December 22, 2009: North Korea declared that it would have its warships fire into disputed fishing waters off the west coast. North Korean warships have proved no match for their South Korean counterparts, so apparently the new North Korean strategy is to make sure no one fishes the disputed waters.

December 12, 2009: The U.S. alerted Thailand that a Georgian Il-76 transport, flying from North Korea, would stop to refuel in Thailand, had false documentation, and other problems worth looking into. When the transport arrived, and Thai police checked, they found that the manifest listed the cargo as oil drilling machinery, but the stuff was actually 35 tons of weapons. The crew was arrested, for carrying weapons, and false documents, and the cargo was removed to a safe location for more thorough inspection. After going through all the containers (mostly wooden boxes marked "oil drilling equipment"), the Thais found ballistic missile components, apparently for North Korea's most recent, 6,000 kilometer range, missile. These were apparently headed for Iran (which can pay big bucks for such stuff, and North Korea needs the money). The documents found on the transport, and interrogations of the five man crew, revealed that North Korea went to great lengths to try and hide who owned the aircraft, what the cargo was, and where it was headed.

 

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