Korea: The Lights Are Going Out

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May 16, 2019: The failed February 28 peace talks in Vietnam had more impact than generally believed. This meeting between the American and North Korean leaders had some serious, and largely secret, side effects that North Korea tried to conceal. Apparently some high-level North Korean officials working overseas quietly defected because the Vietnam talks failed. Such defections often do not become public for months because the Western nations providing asylum want to quietly question the defector first to obtain any information that requires quick and sometimes covert response. That means new information on the North Korean smuggling and overseas fundraising operations. In 2019 the crackdowns on these have been more intense and effective. In response, North Korea has ordered crippling levels of surveillance for those running smuggling operations and for secret police officials working in China. These high-ranking North Korean defectors apparently felt that the peace negotiations to end the sanctions were not going anywhere. As a result, the economic and political situation in North Korea was getting a lot worse and those with the means to get out were getting nervous.  

An example of how bad things are for North Koreans in China is that since March seven North Korean secret police (MSS) commanders stationed in northeast China have defected. This string of defections was triggered in March when a crackdown was ordered on MSS personnel serving in China because three of them had defected. These three acted after they found that their secret bank accounts in China (where they stashed cash obtained from bribes and other illegal activities) were under observation by Chinese and North Korean authorities. North Korea sent a larger team of agents to China with the order to apprehend the three MSS defectors “dead or alive.” This panicked other corrupt MSS officials who decided it was time to run. There will apparently be more defections as North Korea seeks to crack down on corrupt officials stationed in China. The key problem here is those North Koreans working in China are working on raising cash for the North Korean government or arranging the smuggling of key items.

Another factor in all this is the growing incidence of senior officials are being reported by subordinates to corruption investigators. The arrests and prosecutions of senior officials are visibly higher. Because so many officials have taken bribes and have assets hidden away (preferably outside the country) few people are above suspicion. Visible signs of growing corruption are more common. For example theft from factories and government facilities by workers and managers is becoming more brazen, and many factories have had to be shut down because the theft was so extensive that the factory could no longer produce anything. These shutdowns are often blamed on the sanctions but anyone close to the failing facility knows better.

Fear Of Returning

North Koreans working in China, when ordered to return home sooner than expected (because of sanctions) are increasingly refusing and risking arrest and possibly death (in a North Korean labor camp). The reason is loans they took out to bribe officials to get them a job in China. These North Koreans know the economic situation back home has gotten worse because they hear about the free markets offering fewer goods because North Koreans have less income in general. In areas where many factories or mines have closed most donju merchants are out of business or just scraping by.

The crackdown on smugglers who brought in large quantities of Chinese goods via truck and large bribes has meant more opportunities for Chinese-Koreans, who are still allowed to travel to North Korea and back and often do so carrying trade goods which they sell in the markets. This is not a big business because these merchants can really only smuggle what they can carry across the border and that still requires a bribe. Russia is apparently defying the sanctions and not only keeping its Korean workers but accepting more of them. Many Chinese cross the border to work in the Russian Far East province and while Russia needs the workers (few Russians want to live there). Korean workers are cheaper and less of a political threat. China has claims on the Russian Far East while North Korea does not.

Eye In The Sky Sees All

China is enforcing sanctions now and that has caused a visible economic decline throughout North Korea. Literally, the lights are going out. Commercial satellite photos that show the illuminated areas of northeast China and the two Koreas at night have been found to be an accurate measure of true (as opposed to reported) economic activity. The government recently announced that the last year had been a record low year for rainfall. It was 42 percent below average, a level not seen since 1982 and disastrous for food production and the electricity supply (because so much comes from hydroelectric). The power problems can be seen by commercial photo satellites which show record low night light emanating from North Korea. The electricity shortages are getting worse and this is felt by most everyone, except those living in the capital.

Outside the capital, most areas are down to only a few hours of electricity a day. In some areas, it is only one hour a day. Portable generators are not a practical solution because of the growing fuel shortages/distribution problems, and higher costs (over $30 a gallon) when it is available. More people are turning to solar panels. This power shortage has even crippled coal production. While North Korea can no longer export as much coal as it used to it is still a major producer. But the production has been cut back so much that there are now coal shortages throughout North Korea. The drought plus the sanctions have reduced economic activity to record lows. The result is record high, and very visible, unemployment in many parts of the country. The government has been making a real effort to conceal the unemployment and empty markets but the cell phone photos and video get out, as do personal accounts of the hard times. The UN estimates that 40 percent of North Koreans are suffering from malnourishment. Since the 1990s the government no longer has food reserves to deal with situations like this. Despite the lower food and fuel supplies, because of the increased poverty, there is much less demand for food and anything that requires cash. This has resulted in prices for rice and other staples actually declining because so many people cannot afford to buy. The market economy the government legalized in the last decade does not work in areas with numerous crop failures and many factories shutting down. 

Just Saying No

One item that is not in short supply is angry North Koreans. There are more and more incidents of outright refusal by North Koreans to comply with government demands for free labor, especially under unhealthy conditions. In remote work sites, the government supplied living quarters are unheated and poorly equipped. Food supplies are meager and these conditions are made much worse during cold weather months. This sort of defiant behavior was considered unthinkable a few years ago but now the government is faced with so much resistance, most of it subtle, that local security officials have been reluctant to crack down on a large scale.

The increasing corruption among government officials has reached the point where the victims (most North Koreans with any cash) are becoming more reckless and public with their anger over the constant bribe requests from police and local officials. Until 2018 growing anti-government anger and the visible dissent it produced was still low level. No more. A growing number of North Koreans are becoming very public about how they feel. Anger and frustration about the growing shortages and corruption among local officials is the cause. The public anger, which police usually back away from rather than crack down hard and risk escalation, continues to be local but is more frequent and fearless. As yet there has been no organized opposition to the government. But the way these things work it is obvious that a revolution is in its early stages and the growing economic problems are fueling it.

Police, soldiers and government officials are also feeling the shortages and attempting to solve that with the growing used of “fines” for the smallest infraction (real or imaginary). These fines are often imposed on people who are visibly thin from lack of food. That sort of “we have nothing to lose” anger has started revolutions. And when many of the hungry people are soldiers, and nearly all the male civilians age 18-35 are either former soldiers, in uniform or soon to be conscripted, you have a very dangerous situation. The senior leaders (including Kim Jong Un) have noticed the “fine abuse” and ordered measures be taken to reduce this sort of thing. Easier said than done because for many low-level officials the fine income buys necessities like food. If you aren't extorting cash from civilians you and your family won’t eat.

Kim Jong Un is visibly upset with the declining economic activity and growing bad behavior by North Koreans and government officials. Investigations of senior officials are ordered (and publicized) as are prosecutions and punishments of officials. The government has to go public with a lot of these investigations because the bad behavior being investigated is often very widely known. One recent (April) example was an outbreak of food poisoning of 150 new recruits for the army. This outbreak was particularly severe because many current conscripts are malnourished and in poor health when they enter the army. Parents believe being in the army might help with that because soldiers generally receive more food and on a regular basis. But food poisoning is often the result of corruption with some military official taking a bribe to accept contaminated food. The contaminated food (usually rice or other grains) cannot be sold in the markets because too many people will scrutinize before it is purchased and consumed. But that hasn’t stopped manufacturers of illegal booze from trying to get away with using cheap but contaminated, raw materials. There have been more cases of bad booze being sold. This is especially bad when the bootleggers put their product in bottles used by legal stuff and sell it as such. Factories that make the bottles and labels for legal stuff can be bribed to sell some of their bottles and labels on the side, at a premium, to the bootleggers.

Although the “recruits getting sick from food poisoning” incident was officially kept quiet, news quickly spread because avoidance of military service has become a major problem for the military. More parents are raising enough cash to bribe military officials to get their son exempted from service (which is now up to ten years for conscripts) and in response to that the military has eliminated exemptions from conscription for mental illness or bad behavior. New recruits expressing either of these conditions will not be quickly discharged but will remain in the military for “treatment.” Because so many recruits are misbehaving in an effort to get discharged, those who are doing so will either get well quick or risk being sent to military confinement or labor camp. There the military has no facilities for treating the mentally ill.

Countermeasures

The national government is trying, without success, to deal with the growing problem of government employees and their families going hungry. Key government employees long depended on the government for free food, which is less available now. Even the families of career army officers are receiving only about a third of the government food they were used to until a few years ago. Over the last decade, military units have been ordered to spend more time growing their own food and renting out troops to work for civilian enterprises that could pay. Most of that money or goods were taken by the officers to keep their families fed and living a lifestyle that always made a military career attractive.

The angry and hungry people are largely present outside the cities. The capital, Pyongyang, was always better fed and regularly supplied with electricity. Tourists and most other foreign visitors are kept away from areas where hunger and privation are most obvious. In some rural areas, the security forces are visibly afraid of the growing public anger. Despite the efforts to hide the problem, there are still Chinese, especially ethnic Korean Chinese, who do business in rural areas and regularly chat with a wide variety of North Koreans. So they know and pass that on when they return to China. Same with North Koreans who travel to China on business. Despite being warned to not talk about such embarrassing information, enough of these visitors do provide a regular and reliable stream of accurate information about what is actually going on inside North Korea.

The latest reports describe increasingly hungry, cold and angry soldiers who are driving civilians away from the vicinity of their bases. That’s because these soldiers are more frequently allowed to leave their bases and steal what they can from local farmers and villagers. As long as no one is killed or crippled there is little effort to halt this foraging (“living off the land and local population”). This practice is strictly illegal and was unthinkable a decade ago. Now is it common and officers are warned about keeping weapons and ammunition secure to prevent undisciplined and angry troops from starting an armed insurrection. South Korean military analysts, who have a steady supply of North Korea defectors coming to South Korea, hear details of how most soldiers are getting little military training and have come to see their bases as little more than prison camps. Not a healthy attitude for a police state.

In contrast, the growing “donju” (entrepreneur) class have more money and an understanding that you get more work done when you pay people and treat them right. Case in point is donju couples hiring women to look after the children while the parents are at work rather than using the free child care centers supplied by the government. Donju families can also afford to pay bribes to get their sons exempted from conscription. Donju can also afford to put money aside as an escape fund and a growing number of them are getting out because the current round of sanctions has meant less business for entrepreneurs, especially in parts of the country hardest hit by unemployment and crop failures.

With the reduction in economic activity and the apparent success of fuel (diesel and gasoline) smuggling, the retail price of these fuels has actually gone down in the last year. These fuels have always been expensive in North Korea (up to $12 dollars a liter, or over $40 a gallon). But so far this year retail fuel prices have declined about 40 percent. There has been much less demand but North Korean smuggling efforts have kept up with and surpassed demand.

Getting more food into the country is another matter. Food shortages are increasing even as the government demands higher portions of harvests. Less of this government stockpiled food is being distributed to hungry North Koreans. The government is apparently trying to get more food to military and other security services. Local police, like regular army divisions (as opposed to the elite units), have been getting less food over the last few years and this has been producing morale and discipline problems that the government has apparently decided to solve at the expense of the civilian population. The government may even be trying to rebuild the war reserves of food, which have been reduced over the last decade to ease the impact of bad harvests. The war reserve is meant to feed the troops for the first 30 or more days of a major war. During such periods transportation is expected to be disrupted and troops must either have war reserve food supplies or go hungry.

One segment of the population that is most in need of additional food, the 100,000 or so labor camp inmates, are apparently getting so little food that deaths from malnutrition and related diseases have suffered a notable increase in deaths. This is eventually made public when the family is notified that someone, especially young men and women, has died in the labor camps. Prisoners recently released confirm this trend.

May 15, 2019: North Korea has lifted the April 2nd ban on reunification and similar groups in the north communicating with similar groups in South Korea. This indicates the temper tantrum of the northern leader, because of stalled peace talks, is over. The tantrum did not have the desired effect and the American president is as demanding as ever. The north has to modify its playbook because many of the traditional moves no longer seem to work. While the north still has a lot of support in South Korea for less demanding negotiating methods, the Americans have the lead here and they are more determined and unrelenting than ever in the past. Recent South Korean opinion polls show that most (51 percent) of southerners are willing to settle for dialogue and compromise. The South Korean president has assured his American counterpart that this time they would follow the American lead, no matter how many South Koreans lost enthusiasm for that approach.

May 14, 2019: U.S. RC-135 electronic reconnaissance aircraft flew over Seoul, either for a training exercise or because it was seeking to collect electronic data related to increased North Korean military activity along the nearby DMZ, where most of the North Korean military is concentrated. There were similar RC-135W flights for three days in April.

May 9, 2019: North Korea fired two short-range ballistic missiles from a west coast location towards Japan. One missile went 420 kilometers while the other went 270 kilometers into the Sea of Japan. It was later confirmed that the “rockets” (as North Korea described them) fired four days ago were the same model as the “ballistic missiles” fired today. South Korean and American intel analysts believe these missiles are of a new design with characteristics similar to that of the new Russian Iskander system. In February 2018 a North Korean parade to commemorate the 70th anniversary of the North Korean military was smaller than expected and only displayed one new missile system. This one was an SRBM (Short Range Ballistic Missile) that seemed similar to the Russian Iskander or South Korean Hyunmoo-2. The Iskander is an export item while the South Korean missile is not. South Korea developed a 180 kilometer range ballistic missile (Hyunmoo 1) and a 300 kilometer one (Hyunmoo 2) in the 1980s. Both are about 13 meters (40 feet) long and weigh 4-5 tons. Both of these were based on the design of the U.S. Nike-Hercules anti-aircraft missile, which South Korea used for many years. Recently it was announced there was now a longer range (500 kilometer) version; Hyunmoo 2C. North Korea hackers have stolen a lot of South Korean defense secrets in the last decade and that might have included details of the Hyunmoo 2. This is a missile North Korea is more likely to build than the more modern and complex Iskander. Japan said it was not concerned about the new North Korean missile because it did not have sufficient range to reach Japan. But the new North Korean missile, if it was based on the Iskander, would also be more difficult for existing anti-missiles systems to stop.

In the Central Pacific, the United States seized a North Korea cargo ship (the 17,000 ton Wise Honest) off the American island of Samoa. The ship was seized on the high seas using American laws that allow the seizure of such assets that were used in illegal activity. This type of seizure has long been used against international drug smuggling gangs. The Wise Honest has been caught smuggling several times but North Korea thought the Americans would not go so far as to seize it, or any of the dozen or so North Korea tankers, bulk carriers and freighters used for illegal activities. The Americans adopting these seizure tactics can do major damage to North Korean smuggling efforts because the Americans, Japanese, South Koreans and Chinese have made no secret of the fact that they are tracking and identifying North Korean ships engaged in smuggling. The Americans have a list and most of North Korea’s small merchant marine fleet is on it. North Korea demanded that its ship be returned and was ignored.

May 4, 2019: North Korea fired two “rockets” from a west coast location. One rocket went about 200 kilometers while the other went 70 kilometers into the Sea of Japan. It was revealed that a commercial satellite firm that was observing the North Korean west coast missile test center caught one of these launches happening. That was pure luck because the surveillance of this site was not 24/7. The photos of the launch and lift off were published within days of the launch.

May 3, 2019: In Japan, a recent opinion poll showed that a majority (64 percent) of Japanese oppose changing the constitution to allow for weapons exports or engaging in an offensive-minded defense strategy. Japan has been increasing its defense spending as a direct result of the increasing threat from North Korea. So has South Korea but Japan, because of a much larger economy, still spends about 20 percent more each year on defense than both Koreas combined. South Korea is now in the top ten of national economies, something which annoys North Korea but is admired by the other neighbors (including China). Meanwhile, Japan is expanding its military capabilities. Japan, like China and the U.S., are among the top five economies on the planet. Japan, because of the post-World War II constitution the United States insisted on (and Japan did not much object to) Japan has been largely demilitarized considering the size of its economy. That is changing and the U.S. has dropped nearly all restrictions on what weapons it will export to South Korea and Japan and is ignoring treaties it has with both nations that restrict what types of advanced weapons (like ballistic missiles and nukes) they can develop. The Americans would still prefer that South Korea and Japan not build nukes (which both these nations could easily and quickly do). China and Russia would also prefer that Japan and South Korea remain non-nuclear weapon nations. But if North Korean military ambitions and threats (especially against South Korea and Japan) are not curbed popular opinion in South Korea and Japan is becoming more comfortable with them having their own nukes.

April 30, 2019: In the capital a new luxury goods store opened. This one was different because it was larger (and called the Taesong Department Store) and unlike other luxury goods stores in the capital photos could be freely taken inside the store. The state-controlled media gave this store a lot of coverage. The message appears to be that despite sanctions the state can still deliver the goodies to those who can pay. North Korea made deals wherever it could to keep sources of hard currency producing and that usually meant cutting prices and getting less. The hard currency is a priority item and essential for maintaining the loyalty of senior leadership. For example, South Korean intelligence estimates that North Korea has spent at least $4 billion on imported luxury goods since current leader Kim Jong Un took over in 2012. Despite growing sanctions, those luxury imports have continued and in 2017 averaged about $50 million dollars a month. Analyzing Chinese customs data it was found that about half the money spent since 2012 went for consumer electronics, a third went for luxury cars. The rest went for items like liquor, non-electronic consumer gadgets, high-end appliances, luxury home furnishings, clothing (fur coats and quality materials for custom made suits and dresses), cosmetics, luxury watches and jewelry. The Taesong Department Store had much of this stuff and it was displayed in a stylish fashion that rivaled any high-end Chinese, Japanese or South Korean high-end retail outlets.

North Koreans are hungry in part because of these imports. If, in 2017 North Korea had diverted the luxury imports cash to basic foods that would have tripled the tonnage of rice imported. One reason more North Koreans are not enraged by these luxury imports is that over half the senior officials and their families live in Pyongyang, the capital, which has always been the modern looking and affluent area in the country. Most North Koreans never get to visit the capital and personally witness all that wealth. Residence in the capital requires official permission and that is difficult to get. Police are constantly tracking down and arresting those living in the capital without permission.

April 29, 2019: South Korea has decided to order three more 7,600 ton KDX III ships. These are similar to American Aegis destroyers of the same size. These ships are equipped with the Aegis air defense system, which can also intercept ballistic missiles. Each of the new ships will cost $1.1 billion and be in service by 2028.

April 27, 2019: In eastern South Korea, the first of three hiking trails along the DMZ were opened. This is seen as another sign that tensions between the two Koreas are subsiding. Since 1953 civilians have been kept away from the DMZ.

April 25, 2019: North Korean leader Kim Jong Un met with the Russian leader in the Russian Pacific coast city of Vladivostok. They talked longer than planned but nothing was accomplished.

April 21, 2019: Japanese media revealed details of a secret North Korean planning document from 2016. The most surprising item was the North Korean decision to reduce military and economic dependence on China. The 2016 document made it clear this would not be easy. It cited that fact that in 2014 72 percent of foreign trade was with China, followed by 4.2 percent with Russia and .8 percent with Germany. The 2016 document demanded greater efforts to establish trade relationships with nations other than China. This plan was officially adopted in 2016 and explains the more energetic efforts to find other trading partners. Trade with Russia has indeed increased but because of the additional sanctions after 2016 much of that new trade with Russia is illegal. Sanctions have interfered with efforts to interest other nations in the regions (especially Southeast Asia). The 2016 document indicated that once sanctions were lifted North Korea would substantially increase economic ties with Russia. One shortcoming with this strategy is that Russia has a much smaller economy than China and is also suffering from economic sanctions and rampant corruption. The ideal trading partners would be Japan and South Korea but North Korea has terrible relations with both.

April 13, 2019: In western Syria (Hama province), Israel launched another airstrike, from Lebanese airspace, on Iranian guided missile facilities. This site is rumored to be where Iran is carrying out nuclear weapons research. Foreign technical experts have been seen at the site, including some North Koreans and “Russian speakers.” Several people were killed, including two Iranians, and possibly other foreigners. North Korea has been selling weapons development consulting to Syria for over a decade. This involves help improving ballistic missile design and building protected firing positions. North Korea also provided help in developing chemical and nuclear weapons.

 

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