Posted by DavidDay on Aug 27, 2011 in Articles, Blog, China, China, China, Energy, Energy, Foreign Policy/Geopolitics, International Business, Japan, Japan, Korean Peninsula, North Korea, North Korea, North Korea, Northeast Asia, Oil & Gas, Resource management/Extraction, Russia, Russia, South Korea, South Korea, South Korea | 0 comments
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.Read More
Posted by DavidDay on Jun 11, 2011 in All Southeast Asia, All Southeast Asia, Articles, Blog, China, China, China, Energy, Food Security, Foreign Policy/Geopolitics, Oil & Gas, Philippines, Regional Security/Flashpoints, Resource management/Extraction, South China Sea Claims, Vietnam, Vietnam, Vietnam | 0 comments
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.Read More