Korea: The Personal Touch


August 21, 2018: While North Korea is officially still seeking to work out a deal that would result in the dismantling of their nuclear weapons program, most North Koreans don’t believe this will happen. Part of that is national pride. One thing North Korea has done that South Korea and Japan have not is create nuclear weapons. There are no other achievements worth mentioning (certainly not the mass starvation, labor camps and an oppressive police state). Actually there is another unique aspect of North Korea that North Koreans can be proud of; all those tunnels. There are believed to be more than 10,000 of them. While most are relatively small (bomb shelters for people and material) many are quite large and built with multiple exits (some for assisting in air circulation for underground machinery). North Koreans take it for granted that there are sufficient tunnels to conceal (and protect) nuclear weapons production and storage. Same for ballistic missiles and much else besides. There is also the general belief that the Kim government would never allow treaty inspectors to check wherever they wished to validate compliance to a disarmament deal.

While North Korea has plenty of tunnels and secret police it is seriously lacking in other areas like food, energy and the ability to maintain infrastructure (transportation, electricity, sanitation and water). In mid-July, Kim Jong Un decreed that part of the problem was senior government officials being out of touch with what is happening throughout the country. Most of these officials live in the capital, which is quite comfortable compared to the rest of the country. To deal with this problem hundreds of senior officials have been dispatched in pairs to spend three months in some remote (outside the capital) farming or industrial area to live among the people, pay attention and make note of what needed fixing. These teams are allowed two short visits back to the capital during their 90 day assignment and are warned not to help themselves to any local resources (especially food). While Kim Jong Un regularly visits areas all over the country these visits are highly organized and brief. Kim usually brings gifts for the locals, like a rare allocation of food. Even so, Kim can see where things are not right and apparently hopes to get a more through, and personal, assessment from trusted senior officials. What is generally known is that unrepaired flood damage, a long and extreme heat wave and lack of resources for farmers has led to another failed harvest. But, as the old saying goes, “we think in general but live in detail”. Kim is going to get some gruesome news from his senior bureaucrats after their mandatory 90 day “live among the people and observe” assignments. This could shake things up in unpredictable ways.

There are some indications (recent Kim public denunciations of senior officials for bad management) that the government is finally facing the fact that the only way out of its economic death spiral is via the economic reforms China implemented in the 1980s. One thing Kim Jong Un learned during his recent meetings with the leaders of South Korea, America and China is all of them agree that nuclear extortion will not work. If North Korea becomes an immediate nuclear threat the response will be military and violent rather than economic and generous. Other neighbors, like Japan and Russia, agree.

Until North Korea makes a decision on its economic reforms the denuclearization negotiations are going nowhere. North Korea continues to churn out denunciations of American (and South Korean) demands for an official end to the Korean War and denuclearization. North Korea calls the Americans bullies and South Korea unpatriotic accomplices of the Americans. The official North Korean negotiating position continues to be demanding that the U.S. lift some sanctions first and, along with South Korea, provide some economic aid. Both America and South Korea have tried that before and know it is a con and say so to North Korean negotiators. Time is not on North Korea’s side because their economic conditions and they have little wiggle room in negotiating. No one appears able or willing to help North Korea out of this mess.

North Korea has hoped that China would ultimately back its old ally and protégé North Korea but that is not happening. Despite the current trade war the Americans and China are involved in, China is not going to change its mind on the need for North Korea to get rid of its nukes. Chinese officials are also trying to make Kim Jong Un understand that the Americans have the edge in the current trade war because Chinese banks are vulnerable, largely because of the large number of state-owned firms that have not been privatized and survive only because of cheap, and often uncollectable, loans from state-owned and (under government pressure) private banks. China is more dependent on exports to America than the U.S. is to getting those exports.

Kim Jong Un is not stupid and he was educated in Western (Swiss) schools where he learned the basics of Western economics. This is what China has followed, with great success, since the 1980s and is demanding that North Korea emulate. The Chinese are urging Kim Jong Un to learn from the Chinese experience, including mistakes the Chinese made and are in the process of fixing. The Chinese leader Xi has established a personal relationship with Kim Jong Un, something rare in Chinese-Korean history. This includes doing personal favors for Kim, like quietly shipping two generators (together producing 200,000 kw) to North Korea by ship, where they were quietly moved (without going through customs) to the North Korean capital, where they filled in for failing generating equipment that North Korea cannot afford to replace. Xi will enhance this relationship further on September 9th when the Chinese leader will visit the North Korean capital as a guest at the 70th anniversary of the founding of North Korea. The presence of Xi is a big deal for Kim Jong Un and it puts Kim even more in debt to his powerful patron. At this point, China has the best chance of getting North Korea to enact economic reforms and shut down the nuclear weapons program. The Chinese see this personal relationship as the best way to bring Kim Jong Un around. In this part of the world, that is how things are done.

North Korean Death Spiral

The biggest problem Kim Jong Un faces is his own economic problems, which are getting quite desperate. The North Korean economy is crumbling after several years of stabilizing and even growing (because of allowing some free market activity). Why this irrational and self-destructive behavior by North Korea? It is most likely that the long-simmering disagreements about economic reforms and relationships with China are at the heart of it. China has long complained about the chaotic and self-destructive North Korean leadership. It’s not just the ruling Kim family (who are quite odd but so are many politicians), but the whole paranoid, dysfunctional, unpredictable atmosphere in the north. China is particularly critical of the unpredictability and has been demanding more discipline and, to put it bluntly, obedience. Lacking that, there will be consequences. More Chinese troops have been moved to the North Korean border, and China is less discreet about its network of spies and agents in North Korea. The rumors of a ruthless "China faction" in the North Korean leadership have been given some official recognition by the Chinese. Thus the Chinese are attempting to use the "offer you can't refuse" gambit. It may work and bring about much-needed reforms. Otherwise, the Chinese threaten to pull the plug on all aid and political support and perhaps order the China Faction to take action, with help from Chinese troops, special operations forces and secret police. This would be an admission of failure by the Chinese although they could put a positive spin on it by referring to past interventions to deal with troublesome Korean rulers. At that point, China would have the primary responsibility for rebuilding North Korea. China could appeal to South Korea, Japan and the United States to join in. China would endeavor to make the North Korea economic recovery effort pay for itself by insisting that Chinese investments be respected along with growing Chinese ownership of North Korean economic assets. That will generate anger in North Korea but as far as the Chinese are concerned that is normal when it comes to China-Korean relationships.

China and other foreign states know that the situation is getting desperate in North Korea, both for the people in general (less food, electricity and so on) and the government. The growing list of enforced sanctions have shut down or reduced most legal and many illegal sources of foreign currency. This can be seen from the chatter on the black market, where North Korea is less active because they have not got the cash. North Korea has no credit when it comes to legal or illegal purchases from foreign suppliers. There are still North Korean smuggling operations underway but these generally involve basic goods (like oil and items required to maintain or repair things back in North Korea). To raise cash North Korea is leaning on its foreign workers and taking a larger cut of their pay. This policy has its limits because if you take too much the workers realize the job is not sustainable (not enough to send back home to keep kin alive). That will mean more foreign workers trying to defect and fewer suitable candidates for the foreign jobs.

China showed its approval of North Korean efforts at improving relations with South Korea and the Americans by allowing North Korean female workers back into China as well as relaxing its enforcement of sanctions when it came to sending all North Korea workers home. But North Korean workers are no longer allowed to wander around when not working. Most of these workers live in dormitories on factory property and now the North Korean workers are restricted to the factory/dormitory property. The North Korean security personnel who accompany groups of exported workers cooperate with local Chinese police to prevent anyone from leaving the compound. Anyone caught doing so is sent back to North Korea. These restrictions make it easier for Chinese police (and the few North Korean secret police working in China) to detect and arrest defectors. A growing number of the arrested defectors have tried or succeeded in committing suicide before they could be sent back to North Korea. Meanwhile back in North Korea Chinese visiting on business (from truck drivers to technical and management personnel) are complaining about growing harassment by North Korean secret police (who, among other things, keep an eye on foreigners) in the form of accusing the Chinese of minor offenses and demanding the immediate payment of fines. While this may have some legal basis in North Korea the Chinese see it as another questionable method of extracting more cash from visitors. Since these are commercial visitors a growing number are complaining to their bosses back in China and, as in the past, this eventually reaches senior officials who then demand that North Korea deal with the problem before China retaliates (which it has done with increasing frequency and ferocity since the late 1990s).

Inside North Korea the police are increasingly visiting homes of donju (entrepreneur) families and inspecting PCs usually present there, looking for illegal items. Users have found ways to hide the music and video files police are after. One thing police do not look for are South Korean, Chinese and Western video games. These video games are the cracked (copy protection removed) versions smuggled in from China. They then spread throughout the country on USB drives. Once a new game arrives in a town or neighborhood it is quickly acquired by most of the local PC owners. While the most popular of these games were designed for online play (not possible in North Korea) the local PC owners know about using LAN (Local Area Network) capabilities built into current PCs and laptops and the growing demand for LAN cables is mainly about gamers wanting to get together somewhere, use the cables to establish a local LAN and play as if they were online. A LAN requires a router or LAN switch and both of these can be obtained from China at little cost. Another technique, if all participants have PCs with wifi capability, is to link wirelessly in a confined space. Outside North Korea LAN parties became widely popular in the 1990s and are still popular, even though online games are more convenient. The North Korean government has not yet declared video games subversive and forbidden, but that is always subject to change.

Work Camps For Orphans

Since 2013 the government has ordered police to seize any homeless children spotted in the capital and a few other areas where foreigners are allowed to visit, or at least pass through. The children were confined to guarded facilities (farms or factories) until they turned 18. Here they were fed and forced to work but now more of them have been seen again on the street. These kids are begging again, just in areas where the police don’t constantly patrol. The kids are thin and report that there was less and less to eat at their government facility and that was because staff was stealing more and more of the food budget and some kids were literally starving to death. The security at these places wasn’t as heavy as at regular prisons and labor camps so the more enterprising kids have been able to escape and quickly learn the new rules cops use for picking up suspected orphans.

A lot more children in North Korea are becoming homeless, if not actual orphans. Since 2015 many poverty-stricken North Koreans have, in effect, been selling their children into slavery. The government is allowing orphans to be subject to slavery-like conditions, not just for their childhood but into their adult lives as well. This sort of thing is very unpopular in rural areas where the poverty is worse. Many North Korean men see themselves as serving as slaves for ten years of mandatory service in the military, but then you get out. The government is increasingly forcing poor or hostile (to the government) North Koreans into slavery for life. The government has also ordered the growing number of homeless children taken off the streets by any means. That usually means dealing with the slavers.

Since 2012 the government has seen the growing number of homeless kids as a problem and tried several ways to get them off out of sight. In 2013 the police were ordered to pick up the growing number of homeless children (seen begging or just running wild even by foreign visitors) and put them under the control of local government. This meant putting the kids into state-run orphanages. Because of the food and other shortages, the government didn’t have the resources to house and feed all these homeless kids adequately. As a result, many of those rounded up in 2013 ran away from the hard work and short rations at the orphanages, seeing their survival prospects better on the streets. Most of these kids are orphans, their parents having died or disappeared into prison camps, China or elsewhere in North Korea. The poverty and privation is so great in the north that the extended family no longer provides a safety net and there is often no kin to take in abandoned or orphaned children. So the children (many ten and under) just hit the streets and become a source of criminal activity and, more embarrassing for the government, defectors who get to China and commit a lot of crimes or worse yet, tell the truth about how life is in North Korea. Some North Korean officials want to just quietly kill these “worthless children” but senior officials know that could be a public-relations disaster and forbid it, officially, at least for now. The North Korean secret police often make people just disappear but if it is done on a large scale mistakes are likely to be made and the truth revealed. The current solution appears to capture the homeless kids and send them to the slave labor facilities where, unless they show themselves as extremely loyal to the state, they will spend the rest of their lives as slaves.

August 19, 2018: Japan continues to increase its defense budget, now planning to spend $48 billion in 2019. This is an increase from $45 billion for 2017 and is the seventh year in a row Japanese defense spending increased and much of the additional money is going towards ballistic missile defenses and additional ships to patrol offshore areas that China is aggressively claiming. Unlike Taiwan and South Korea, which continued to be threatened by China and North Korea, Japanese defense spending declined after the Cold War ended in 1991. But in 2013 that changed and every budget since then has increased. By 2015 Japan had its highest ever defense budget ever ($42 billion) it kept growing. Most of the recent increases have been to buy new weapons and upgrade existing ones to improve defense again Chinese or North Korean attack. South Korean spending is putting more emphasis on missile defense. Currently, this includes more F-35 stealth fighters, beyond the existing 42. The additional 20 F-35Bs would be for Japanese helicopter carriers and made in the United States. The first 42 are being assembled in Japan. South Korea has ordered 40 F-35As modified slightly for South Korean use. The first of these will arrive in South Korea in 2018 and all will arrive by 2021. South Korea is considering buying another twenty.

August 17, 2018: Aerial and satellite photos indicated that the northeastern North Korean Simpo shipyard was experiencing some increased activity. Simpo is where a North Korean SSB (diesel-electric submarine carrying ballistic missiles) is being built. This was confirmed in early 2015 when aerial photos clearly (despite a camouflage net) showed an SSB under construction. Based on what was known in 2015 it appeared that North Korea could have an operational SSB (carrying reliable missiles) by 2018 if they completed and successfully test the new 2,000 ton SSB under construction as well as complete development of the SLBM. But construction activity in Simpo declined after 2016, apparently due to lack of resources. The current increase in activity does not indicate completion of the SSB anytime soon.

August 16, 2018: Following a January agreement that the military hotline between the two Koreas would be revived that process was completed as the hotline (fax and telephone) on the eastern end of the DMZ was restored. The hotline on the western portion of the DMZ was restored in July.

August 15, 2018: The United States imposed sanctions on three shipping companies (in China, Singapore and Russia) for taking part in smuggling oil and other items to North Korea. A recent UN audit found that North Korea was maintaining many illegal joint ventures with China (215) and Russia (30). Not all these joint ventures are with companies as some are with individuals.

August 13, 2018: North Korea has canceled all tourist visas until September 9th. This is apparently a last-minute security decision because of the large number of foreign leaders (and their entourages) to attend the 70th anniversary of the founding of North Korea celebrations.

August 9, 2018: North Korea went public to make it clear that it will not comply with the American demands that denuclearization comes first before sanctions are lifted. The Americans have insisted on this and made it clear that it wants verification as well. While China has eased up sanctions a bit, North Korea is still in bad shape because many of the latest sanctions are still working and the Americans are finding out which Chinese and Russian firms are involved in violating these sanctions and publicizing the details. Those discovered assisting North Korea to evade sanctions are themselves sanctioned. If nothing else this makes it even more difficult, and expensive, for North Korea to evade the sanctions.

August 4, 2018: Russia is allowing thousands of additional North Korean workers to enter the Russian Far East. This is in violation of the sanctions but Russia is ignoring that and insisting these workers are an economic necessity in the Russian Far East. Left unsaid is the fact that Russia would rather bring in North Koreans for this than offer higher wages and find that there are no Russians available but Chinese will cross the border do the job (and eventually be the majority of the population in the region).

July 31, 2018: Once more a Japanese Navy patrol aircraft photographed a stationary North Korean tanker tied up to a Chinese tanker off the Chinese coast and apparently transferring petroleum. This makes at least three times Japanese aircraft detected (and photographed) North Korean tanker doing these transfers in the East China Sea. The UN has put sanctions on s growing number of cargo ships and tankers but these vessels can still do transfers at sea. This takes longer, is still illegal and is increasingly being witnessed (and photographed) by American, Japanese or South Korean patrol aircraft. China responded with new rules making it more difficult for Chinese companies to get away with the false paperwork, turning off the automatic ship tracking devices and other scams North Korea uses to illegally export items to China. At the same time, China and Russia are blocking UN efforts to investigate this sort of violation.

July 27, 2018: South Korea complained to China that another Chinese military aircraft had violated South Koreas’ ADIZ (Air Defense Identification Zone) and remained in the ADIZ four hours before leaving. South Korea is also seeing more ADIZ activity because of Chinese intrusions. In 2013 China announced a new ADIZ that overlapped South Korean, Philippine and Japanese airspace. China demanded that any foreign military or commercial aircraft request permission before flying into this zone. South Korea and Japan protested while the United States quickly flew some B-52s into the disputed zone without asking for Chinese permission. China protested and the United States ignored them just as China ignores South Korean protests.

July 26, 2018: North Korea held another (the fifth) War Veterans conference in the capital. These are veterans of the 1950-53 Korean War and all the surviving vets are in their 80s and 90s. The government transports (often by air) the veterans to the capital for a weeklong stay. The veterans know this is all propaganda, especially since the last one was held three years ago and the vets know how it goes. It works out well for the vets, who are treated well and sent home with gifts (including food and booze).


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