A Different Focus on North Korea – Business Reunification Out Over the Horizon

 

A Different Focus on North Korea – Business Reunification Out Over the Horizon

May 31, 2009 by davidfday

Negotiating table for the 6 Party talks.

Negotiating table for the 6 Party talks.

 

This is what the real Six Party Talks looked like.

The recent nuclear and missile tests combined with threats bandied about by Pyongyang present an ominous, threatening view of attention-grabbing brinksmanship. It is worrisome, to be sure. Negotiations to handle North Korea, or get them back to the table at least, will be a new and different challenge for Special Envoy, Stephen Bosworth, who is no stranger to difficult negotiations—after all, as the America Ambassador in Manila in 1986, he was one of the principal players in successfully negotiating the Marcoses out of Malacanang Palace and eventually out of the country. Remember, the Philippine situation in the mid-1980’s was still a very touchy matter. There were a million people exposed in the streets sandwiched between the armed forces of Juan Ponce Enrile and General Ver. North Korea will be an entirely different ballgame for many reasons.

To be sure, there will be plenty of commentary about North Korea, its threats, and the destabilizing prospect it exhibits for Northeast Asia.

One thing is for sure. Beyond the nuclear tests, bellicose threats and serious potential for a regime implosion with its humanitarian crisis to follow, there are prospects for a stabilized and developing future for the country out over the horizon. We never hear much about this possibility. It is just that very few people focus on the opportunities that are coming as the country eventually stabilizes and begins to open up.

DHL is.

DHL Vans in service in Pyongyang

DHL Vans in Pyongyang

Given the current deteriorating health of the Dear Leader, we are now entering the transition period for the regime.

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The Real Nightmare of a North Korea Collapse & Implosion

The Real Nightmare of a North Korea Collapse & Implosion

June 1,  2010 by davidfday  

Some commentators suggest that this Cheonan incident may have created be the perfect storm to elbow the regime over the cliff. The consequences of such a “Diem” strategy towards the DPRK would be disastrous. Even without being elbowed, the regime is still going to implode. It is not a question of whether.  It is simply a question of when—and and serious economic sanctions run the terrible risk of shoving the DPRK right over the edge.

A DPRK implosion will cause a massive disaster crisis on a scale the likes of which the world has never seen before. On the human side, the disaster will involve hundreds of thousands of refugees seeking to breach the Chinese and Russian borders in the Northern part of the country and even greater numbers attempting to cross the heavily- mined DMZ to get to Seoul. There are multi-million numbers involved in human relief efforts that will have to be sustained for a lengthy period of time since there is no economy. Then there are the WMD weapons, expertise, nuclear materials, and rogue military issues also in the equation which will have to somehow be handled with lightening speed before being spirited away into undesirable hands. The current regime is already unstable and approaching a delicate leadership time—a collapse risks an implosion of epic proportions, making Haiti look like a garden party. Russia and China understand this and will not buy into any serious, biting economic sanctions that shove North Korea closer to the brink.

There are two critical points here. The first is that there can never be stability on the Korean peninsula until the DPRK can create a modicum of economic progress. Every day that the country can move a bit towards its 2012 economic goal of “A Mighty and Prosperous Nation” is a win and pushes the implosion nightmare back a notch or two. This will require heavier involvement of the private sector, not less. As a policy goal, Seoul and Washington must find ways to get more of the private sector underway in North Korea. The heroine for peninsula stability last year was Hyun Jung-Eun, chairwoman of South Korea’s Hyundai Group who successfully negotiated the reopening of North-South trade after the Dear Leader shut it down. Hyun Jung-Eun personifies the type of private sector leadership that can brunt or possibly block the implosion nightmare– if given enough time.

The second point is that the current disaster relief efforts in Haiti and the Gulf of Mexico do not even rise to the level of dress rehearsals for a collapse of North Korea. Seoul will have to bear the brunt of the implosion nightmare. Unless the Blue House is sufficiently satisfied watching Washington’s current response to the crises in Haiti and with the BP oil spill, and is convinced that Washington is fully capable of handling a multiple-fold Haiti with lightning speed and minimal hiccups, it would be well-advised to get a massive, DPRK disaster master plan in place yesterday. This means strategic disaster planning, the staging of huge amounts of supplies, disaster management training and development, and repeated, coordinating rehearsals. The response time will need to be in hours, not days or weeks and a blistering fast disaster response cannot be cobbled together on this massive scale when it occurs. It will be way too late.

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The Negotiations Master—Kim Jong Il still has it

The Negotiations Master—Kim Jong Il still has it

By David Day

Over the past year, we have watched the Dear Leader’s private train slide into China on several occasions with educated speculation that he was paving the way for a baton hand-off in Pyongyang to Kim Jong Eun. There was a need, it was argued, for Beijing to bless the heir apparent. Some of these China visits included factory tours, fueling the speculation that the Kim Regime was preparing to “open up” and was ready now for some type of economic liberalization. These visits were followed by, more recently, announcements of large China-fueled infrastructure projects just inside the North Korean border.

Kim Jong Il’s current trip to Russia was not just to provide a change of scenery or demonstrate that there are places he can visit other than the PRC. Despite his age and frail health, the Dear Leader still retains his tactical genius. The Russian trip suggests the timing and the key trump card that Kim Jong Il may soon play—the Trans- Siberia/Korean pipeline.

Russia and South Korea have already entered into a MOU for a huge US$90 billion deal between Russia’s Gazprom and South Korea’s state-owned KoGas. The latter, the world’s largest single buyer of natural gas, will take 10 billion cubic meters annually for 30 years – via a pipeline to be built across North Korea. The sticking point in this enormous energy deal is, of course, North Korea. This week, North Korea also inked the same accord.

The tactical genius of Kim Jong Il is now beginning to surface.  2012 is a Presidential election year in South Korea and President Lee Myung-bak, an uncomfortable hard-liner for the North, is now on his way out. 2012 is also the magical, propagandized, “Mighty and Prosperous Nation” year (the 100th anniversary of the birth of the Great Leader, Kim Il Sung, the 70th birthday of the Dear Leader, Kim Jong Il, and the 30th birthday (give or take) of the heir apparent, “Brilliant Comrade,” Kim Jong Eun—the 100, 70, 30 numbers are significant in the North Korean culture).

There is one other piece to this puzzle and that is Japan. Fukushima and Japan’s nuclear domino shutdowns/decommissionings have left certain parts the country desperately short of energy. This Summer, Tokyo Electric has been able to manage as a result of drastic austerity measures. In the reasonably short term future, Japan will find it impossible to fill its resulting power gap with renewables. Natural gas and coal are the only practical alternatives, with the cleaner, natural gas being the preferred choice. Russian natural gas piped to Busan, South Korea is going to open up critical and easier access for Japan.

As for the tactical genius, Kim can balance China’s growing influence on North Korea with both Russian and South Korean financial influence in the form of a mixture of pipeline lease rent and energy which the North Korean grid sorely needs. A deal to move forward with a pipeline has the added bonus of fitting squarely with the needs of the Pyongyang “Mighty and Prosperous Nation” propaganda machine to have something significant to announce for 2012.

A key issue which Russia and South Korea will undoubtedly have to be concerned with is the pipeline “valve” question (see, the North Korean shutdown of the Mt. Geumgang resort as an example).

Perhaps the economics will force the valve to remain open, but they need to be prepared that Pyongyang will be maneuvering to retain control. Yet another flash of Kim Jong Il’s tactical genius is in the works.

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Yet Another China Foreign Policy Stumble: The South China Sea

China has had a number of foreign policy gaffes over the past couple of years and its very recent attempt at imposing a fishing ban in the South China Sea (known to the Vietnamese as the “East Sea”) is yet another stumble.  Attempting to protect and encourage the replenishment of fishing stock during the spawning season, China announced on May 11, 2011 a fishing ban to run from May 16 through August 1 over an area hotly contested by several South East Asia countries, most notably by Vietnam.

While replenishing the fishing stock may well be a noble ideal, China’s unilateral action is guaranteed to gin up a firey defiance by the Vietnamese, with fishermen ignoring the ban, boat seizures and violent confrontations– all too predictable.

Vietnam has a 1000 mile coastline to protect and its Eastern Sea is an essential part of its defense perimeter that it has, and will continue to jealously protect. China knows this all too well– given its historical battles and scrapes with Vietnam in these same waters over the millennia.

China’s unilateral muscle-flexing in the South China Sea is hardly simply to protect the  fishing stock which Vietnam’s marine industry depends upon. China had to know full well that its fishing ban would necessarily force a response from Vietnam  and give the PRC an opportunity to reinforce its imprimatur over the disputed waters.

For Vietnam, the Eastern Sea is its “line in the sand.”  Vietnamese public opinion will not stand for any moves by China to nip bites out of Vietnamese waters. China knows this but its policymakers blundered ahead anyway.

Defiance by little colorful Vietnamese fishing boats is one thing. China did not anticipate, however, the announcement by the Vietnamese Navy that it now intends to conduct live firing exercises off of Vietnam’s central coast directly into waters affected by the fishing ban.

Such are the perils of unilateralism–especially when you have a little sleeping tiger to the south.

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China Takes a Swing at Corruption, Executing One of Its Al Capones

China Takes a Swing at Corruption, Executing One of Its Al Capones

July 16, 2010 by davidfday

The senior judicial official for the huge metropolis of Chongqing in Southwestern China was executed by lethal injection during the first week of July, 2010. Wen Qiang’s indictment, arrest, trial, sentencing and now execution this Spring and early Summer exploded into the public consciousness and media, opening up the dirty underbelly of China’s corruption-plagued legal system. Wen was convicted of multiple rapes, protecting underworld gangs & mobsters, bribery and had large unexplained amounts of cash and luxury villas. He was emblematic and symptomatic of big political bosses in the Judiciary and the CCP on the take. His sister-in-law, Xie Caiping, known in Chongqing as “The godmother of organized crime in Chongqing,” was sentenced to 18 years for running illegal casinos.

China’s corruption has become so rampant that the credibility of the CCP has been called into question. One commentator has noted that if China “wants to maintain the pace of rapid development, there needs to a purge to wipe out all the corrupted officials in the Communist Party.”

The Chinese courts are controlled by the Communist Party, and the massive corruption in the judicial system reflects directly upon the Party. With the credibility of the Party at stake, Chongqing’s massive anti-corruption crackdown has been led by an ambitious local party chief, Bo Xilai, who initiated a crackdown in Chongqing, arresting several other top judges for graft, including Huang Songyou, formerly vice president of the country’s highest court, The Supreme People’s Court (earlier this year, Huang received a life sentence for bribery and embezzlement).

The Chongqing anti-corruption crackdown has not only resulted in the execution of Wen Qiang, the former Director of the Chongqing Justice Bureau, but also to the prosecution of 90 other local officials. Of that number, interestingly, 42 were found guilty of sheltering mafia-like criminal gangs just like their big boss, Mr. Wen Qiang.

An intense, sustained anti-corruption effort over a generation or two (perhaps more) will be required for China to significantly curtail its endemic and systemic corruption problems. It remains to be seen whether the Wen Qiang execution will mark the beginning of that quest or whether it is eyewash.

For a short preview of a televised program on this topic, click on this picture. 

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