Korea: This Could Get Messy


July 19, 2012: South Korea is pressuring the U.S. to drop range missile restrictions imposed on South Korea decades ago. If the United States does not agree, South Korea is apparently ready to just go ahead with building longer range missiles, to better deter China as well as North Korea. For the last 30 years the United States has been discouraging South Korea from developing long-range ballistic and cruise missiles. This was done to try and halt an arms race with North Korea but the north never took the hint. Meanwhile, the U.S. assured the south that America would show up for the fight if the north attacked.  Despite American opposition, South Korea began developing, but not mass-producing, ballistic missiles in the 1970s. South Korea certainly has the technical expertise and manufacturing capability to produce a more modern ballistic missile with a range of 300 kilometers. South Korea has signed an international treaty agreeing to not build ballistic missiles with a range greater than 300 kilometers, but public opinion in the south is calling for that limit to be broken, in order to make all of North Korea vulnerable to ballistic missile attack from the south. This also sends a message to China that South Korea is not to be messed with.

Another major change being pushed in the south is a closer military and intelligence alliance with Japan. This has proved difficult because of continued anti-Japanese feelings (for the harsh treatment Koreans received when Japan ruled Korea as a colony from 1910 to 1945) felt by most Koreans. Despite that, senior South Korea military officials believe such cooperation is essential.

China remains the foreign power with the most influence over North Korea but that isn't saying much. When given unwelcome advice from China, which represents nearly 80 percent of foreign trade and the only source of free food and fuel aid, North Korea still tends to adopt a suicidal attitude. For the northern leadership it's "death before dishonor" and that means Chinese demands, even backed by threats of aid cuts, are ignored. For this reason China is believed to be involved in the current reorganization of the senior North Korean leadership. China has long developed friends and relationships among the North Korean elite. As corruption became more of a factor in the last decade, China knew how to cope. China is awash in corruption and Chinese leaders have learned how to use it (even as they struggle to lose it). In effect, China's decade-long effort to overwhelm the "old school" faction in North Korea appears to have succeeded. But the "old school" crowd are still numerous, scared, and armed. This could get messy. This does not bother China, which has plenty of experience with messy.

In the last month or so North Korea's new leader (Kim Jong Un) has removed hundreds of military and government officials and promptly installed younger replacements. Un has made it clear, in public announcements, that it's time for a new generation. Many of the dismissed older officials were seemingly loyal to and supportive of Un, so this appears to be more a desire to shake up the leadership, than to purge opponents. Kim Jong Un isn't doing this by himself, as he has a small group of advisors he relies on a lot. This includes his uncle, Jang Sung Taek, who is married to Kim Jong Ils sister. Jang has long been a powerful government official and is believed to be quite wealthy. That's because Jang has a lot to say about how North Korea earns (by legal or illegal means) foreign currency. In a country so extremely poor, the man who controls the most money has a lot of power. Jang, for example, earlier this year ordered house searches of families believed to be hoarding foreign currency (Chinese or American), rather than, as the law demands, putting it in the bank. People do not want to put their foreign currency in the bank because the government pays you less for it (in North Korean currency) than the black market money changers (who give fair market value). Jang understands how the North Korean economy really works and is trying to increase government control over the "new economy." Yang and his wife have a lot more knowledge of, and experience with, the North Korea government and economy than their nephew Kim Jong Un and, for the moment, they have his ear and trust.

It appears that all this is part of a generational change to maintain the wealth and power of the few thousand families that control the country. No one is talking democracy here, just basic survival. There is much to be done because the economy is a mess and the police state is losing its ability to control the population. To that end, any officials who might oppose social and economic reforms are being removed from power. They are being retired, to a life of luxury, not purged and executed. Several weeks ago the government also distributed, to thousands of senior officials, details of new economic reforms. Although not as extensive as China is advising, the new reforms would give entrepreneurial managers more power to compete and do better. This includes more economic freedom for farmers. Alas, the new rules also provide more opportunity for corrupt officials to steal.

The food situation in the north is getting worse, with food prices (in the growing number of free markets) at record levels. Government distributions of food are declining. Worse, the government is printing more money, increasing inflation (because there's now more money chasing the same amount of food).

North Korean censors finally caught on to the fact that young North Koreans had been taking South Korean or Western popular songs, adding new lyrics that have a double (anti-government) meaning in the north and spreading them widely. North Korea doesn't have much Internet access but there are memory sticks, CDs, and floppy disks. Stuff gets around, and now the police have been ordered to crack down on a list of over 500 subversive songs. The cops love this sort of thing, as it creates plenty of new bribery opportunities. That's because many of those involved in this music conspiracy are children of ruling families and can afford a fine (rather than anger their parents by getting arrested).

July 18, 2012: North Korea announced the appointment of general Hyon Yong Chol as the new head of the armed forces (technically, the "Chief of Staff"). Hyon was promoted to vice marshal, while Kim Jong Un promoted himself to the highest rank (marshal) and assumed the official role of commander of the armed forces.

July 16, 2012: North Korea announced that the Politburo (a committee of senior officials that, technically, runs North Korea) had met yesterday and removed the head of the armed forces (Ri Yong Ho) from his command and all other government posts he held. The 69 year old Ri has been head of the armed forces for three years and a soldier for 53 years. Ri's predecessor as army chief only lasted two years, but the man before that held the job for twelve years (until he was 76, he died at 78). Communist dictatorships tend to let their military leaders stay in power for life (or at least until they are no longer able to show up for work). In the West, it's rare for the head of the armed forces to be older than 65.

July 12, 2012: North Korea said it would not halt its nuclear weapons programs and that it needed nukes to defend itself from American aggression.

July 10, 2012: South Korean president Lee Myung Bak's older brother was arrested and charged with corruption. The south also has problems with corruption but as a democracy is better able to deal with it.





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