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PROSPECTS FOR REGIME CHANGE AND REUNIFICATION IN NORTH KOREA: A NATIONAL INTELLIGENCE ESTIMATE
Branch Chiefs Josh Johnson—Leadership and Economy Dan Saarinen—Military and Reunification firstname.lastname@example.org General Editor Sarah Boman Section Chiefs Silas Molino—Leadership Danielle Jones—Life Expectancy Keri Johnson—Economy and Infrastructure Nick Kelley—Conventional Military John Nydam—WMD Mathias Wakefield—Reunification Jason Lee—International Response to Reunification
California State University, San Bernardino March 29, 2009
KEY WORDS………………………………………………………………………………….....3 EXECUTIVE SUMMARY……………………………………………………………………...4 KEY JUDGMENTS……………………………………………………………………………..8 INTRODUCTION……………………………………………………………………………...11 APPROACH…………………………………………………………………………………….13 CHAPTER 1: Leadership and Succession………………………………………………..…...15 CHAPTER 2: Economy and Infrastructure…………………………………………………..25 CHAPTER 3: Military…………………………………………………………………...…….49 CHAPTER 4: Weapons of Mass Destruction…………………………………………………57 CHAPTER 5: Reunification……………………………………………………………………67 BIBLIOGRAPHY…………………………………………………………………………........81 ANNEX APPENDIX A: Kim Jong-Il’s Life Expectancy.……………………………………...86 APPENDIX B: Population Growth and Food Supply in North Korea…..…………87 APPENDIX C: Aid to North Korea……………………………………………...……88 APPENDIX D: Production and Transportation in North Korea…………………....89 APPENDIX E: North Korean Trade……………………………………………….....90 APPENDIX F: Energy and Fuel in North Korea………………………………….....91 APPENDIX G: Military Comparison Between South and North Korea…………...92 APPENDIX H: North Korean Missile Ranges………………………………………..94
Air Force, Army, ballistic missile, capital, capital consumption, capital goods, civil war, China, collapse, coup, counterfeiting, current expenditure, demilitarized zone (DMZ), Democratic People’s Republic of Korea (DPRK), doctrine, economy, factors of production, famine, foreign aid, heir, ideology, infrastructure, investment, Japan, Juche, Kim Il-Sung, Kim Jong-Il, Kim Jong-Un, Kim Jong Woon, Korean War, land, labor, market, material productive forces, military, National Intelligence Estimate (NIE), Navy, North Korea, nuclear weapon, occupation, proletariat, proliferation, propaganda, regime change, Russia, saving, six party talks, Songun, South Korea, succession, test, regime change, reunification, United States, weapons of mass destruction (WMD)
The Democratic People’s Republic of Korea is a totalitarian dictatorship under the personal control of Kim Jong-Il. Kim’s ultimate goal is regime survival, and he manipulates North Korea’s military, foreign policy, and his own people to ensure his survival as head of state. Although Kim’s health has begun to decline, he has not yet named an heir. This purposeful oversight may lead to serious instability, or even a total North Korean collapse if Kim dies without preparing for an orderly transfer of power to a son, another relative, or to high-ranking officers within the North Korean military. Since the United States has little control over Kim’s leadership style, American policymakers must prepare for the possibility that North Korea will become a failed state upon the death of Kim Jong-Il, with all the economic, military, and humanitarian issues that such a collapse will entail. To maintain personal control over North Korea, Kim Jong-Il must keep his health intact, his society closed, his people submissive, and his military well-nourished. Unfortunately for Kim, he is failing at each of these goals. Since his purported stroke in August 2008, Kim has had to cede much of his personal control over the country to members of his inner circle. He is also losing his informational hold over the North Korean people, as South Korean soap operas and Chinese cell phones are beginning to pervade North Korean society. Pyongyang’s inability to quash farmers’ markets around the country suggests that the DPRK’s internal security forces are losing the ability or will to police the population. Finally, even the military has begun to go hungry in the wake of North Korea’s ongoing food crisis—there are accounts of soldiers too malnourished to leave their barracks, and military units seizing seed rice meant for next year’s
6 crop in order to feed themselves now. In short, Kim’s personal hold over North Korea is beginning to weaken. Despite these facts, we believe that the Kim regime may still survive for many more years, due to Kim’s military backing and the lack of a viable alternative within the North Korean government. If Kim is able to designate a successor and give that successor the opportunity to ingratiate himself with North Korea’s military and political elites, it is possible that his policies will live on after his death. This kind of peaceful and orderly succession would effectively perpetuate the status quo: North Korea’s economy would continue to degrade; its people would continue to suffer from famine; its government would continue to export rocket and nuclear technology to provide the hard currency for its elites’ extravagant lifestyle; and its constant nuclear saber-rattling would deter its neighbors and placate its military. It is our judgment that this is the most likely outcome for North Korea over the next fifteen years. However, American policymakers should also prepare for the possibility that the Kim regime will fail sometime in the next five to ten years—possibly within a year or two. Although many North Korea observers have predicted imminent collapse and been proven wrong, the situation in North Korea at present is more serious than it was during the famines of the 1990s. This time, Kim Jong-Il himself is not healthy, and may not be completely in charge of North Korea’s government. The DPRK’s unusually aggressive behavior over the past two months suggests that either Kim himself has become more hard-line since his illness, or that another person or group is influencing North Korea’s foreign policy. Moreover, the food shortage in North Korea is now affecting not only the farmers and poorer citizens, but also the military. As a government that depends on military backing to enforce its decrees, the Kim regime’s inability to meet the basic nutritional needs of its soldiers may prove fatal, as it will likely lose the military’s
7 support, or worse, face the threat of a military coup, if the crisis continues. The food crisis shows no sign of abating any time soon. The fact that North Korean soldiers are beginning to eat seed rice meant for next year’s harvest means that the famine can only get worse next year. At some point, the North Korean military will probably reach a breaking point, and it will remove the regime whose policies are leading to the ongoing food shortage. Although we do not believe that this is the most likely outcome for North Korea, the ramifications of such a regime collapse are far-reaching enough that the United States must take this scenario into account as part of its longrange projections. To stave off collapse, the Kim regime will continue to invest in its missile program and nuclear program, and will attempt to use its nuclear program to exact concessions from its neighbors. It will also continue to export its missile technology to other powers in exchange for hard currency, which it can use to import vital goods and to support the elites’ lavish lifestyle. North Korea’s economy will continue to deteriorate, since North Korea lacks the ability to fix its crumbling road and rail infrastructure, expand its power grid, or motivate its underfed and technologically backward workforce. Famines will continue, unless the Kim regime makes foreign policy concessions in order to restart international food donations to the DPRK—an action that Kim is unlikely to take. North Korea’s military capabilities will continue to deteriorate, since North Korea does not have the hard currency to modernize or expand its conventional forces. This means that North Korea will have little chance of holding its own, let alone prevailing, in the event of a second Korean War. We believe that the possibility of reunification between North and South Korea is remote, especially while the Kim regime remains in control of the DPRK. No country in the region has the incentive to support reunification at this time—North Korea for the sake of regime
8 preservation; South Korea for financial reasons (the sheer cost of rebuilding the North would bankrupt even South Korea’s robust economy); and China for geopolitical reasons (it does not want to face a unified, American-backed Korea along its border). Despite Pyongyang’s nuclear saber-rattling and harsh rhetoric, the Kim regime poses less risk to its neighbors than the prospect of a hard-line military government, or worse, the utter collapse of North Korea’s government, which would lead to a military, economic, and humanitarian crisis of epic proportions. Because of this, North Korea’s partners in the Six Party Talks will continue to offer the DPRK food and economic aid in exchange for nuclear concessions. Unfortunately, a weakened Kim Jong-Il, facing threats to his leadership from the military or others within his inner circle, may be unable to make these concessions without losing his credibility as supreme leader of the DPRK. If the Kim regime does collapse, reunification could happen in one of the following three ways: forcible occupation by the South after a second Korean War; cooperative reunification under a new, reformist regime (i.e. a “North Korean Gorbachev”); or in the aftermath of a complete collapse of North Korea’s government (which would likely involve South Korea and China, as well as substantial food and economic aid from the world community). In any one of these scenarios, the United States will be asked to shoulder a significant share of the economic and military burdens associated with reunification. In the event that one of these scenarios occurs, American policymakers will have to decide how much they are willing to sacrifice to make Korean reunification possible.
LEADERSHIP Five years: • High confidence that Kim Jong-Il’s personal influence in North Korea’s government is waning. • Medium confidence that there will be regime change. • Low confidence that Kim Jong-Il will be able to prepare a son to succeed him Ten years: • High confidence that Kim Jong-Il (or his family-line successor) will exercise only partial control over the DPRK. • Medium confidence that there will be regime change. Fifteen years: • Medium confidence that there will be regime change. • High confidence that this regime change will involve collective military leadership. • High confidence that the DPRK will survive as a state following regime change. ECONOMY AND INFRASTRUCTURE Five years: • High confidence that North Korea’s economy will continue to deteriorate. • High confidence that the DPRK will need foreign aid to avoid famine. • High confidence that black market activity and corruption will undermine the government’s totalitarian control. Ten years: • High confidence that the DPRK will remain dependent on foreign aid for food and fuel. • Medium confidence that famines will continue to occur. • Low confidence that the DPRK will allow substantial foreign investment and aid. Fifteen years: • Medium confidence that the successor or the new regime will allow substantial foreign investment and aid. • Medium confidence the economy will start to grow. • Medium confidence that the famines will cease.
10 MILITARY AND WEAPONS OF MASS DESTRUCTION Five years: • High confidence that conventional military capabilities will degrade compared to the ROK. • High confidence that ballistic missile and nuclear weapons development will continue. • High confidence that the conventional military forces will not modernize. • High confidence that the KPA cannot defeat ROK forces in the event of a second Korean War. • High confidence that the DPRK will continue to proliferate ballistic missile and nuclear technology. • Medium confidence that the nuclear reactors at Yongbyon and Taechon will be completed. Ten years: • High confidence that defense spending will consume higher proportion of GDP. • High confidence that WMD and ballistic missile programs will consume higher % of military budget. • High confidence that conventional military will not modernize. • High confidence that the KPA cannot defeat ROK forces in the event of a second Korean War. • High confidence that the nuclear reactors at Yongbyon and Taechon will be completed. • Medium confidence that the DPRK will continue to proliferate ballistic missiles, nuclear material and technology. • Low confidence that the DPRK will denuclearize. Fifteen Years: • High confidence that DPRK forces will continue to lag behind their ROK counterparts. • High confidence that DPRK will continue to proliferate ballistic missiles and nuclear technology. • High confidence that the ROK will be able to defeat the DPRK without American help. • High confidence that the DPRK will continue to increase its nuclear weapons stockpile. • Medium confidence that the DPRK will develop a solid-fuel ICBM. • Low confidence that DPRK will sell nuclear weapons. • Low confidence that there could be a nuclear war in Northeast Asia
REUNIFICATION Five Years: • High confidence that reunification will not occur. • High confidence that reunification would economically devastate the South. Ten Years: • High confidence that China (linking this issue to the Taiwan issue) will prop-up the Kim regime to avoid reunification. • High confidence that reunification will not occur. Fifteen Years: • High confidence that China will exert influence over new regime to prevent reunification on unfavorable terms. • Medium confidence that reunification will not occur. • Low confidence that reunification could occur as a result of a second Korean War.
Because the DPRK maintains tight control over its media and people, the Kim Jong-Il regime is almost opaque. This makes the analyst’s task especially difficult. We derived our conclusions from propaganda analysis, reports from defectors and missionaries, East Asian news services, and the past history of the Kim regime’s behavior and characteristics. Two factors that mitigated our difficulty include North Korea’s small size and its centralized government. Highly centralized power structures allow us to give more weight to anecdotal information that manages to escape the country. Unfortunately, these factors also give the Kim regime the ability to deceive us. Despite this risk, our NIE will attempt to answer the tough questions about North Korea (DPRK). We have decided to focus on what the Kim regime must do to survive. By first assessing the Kim regime’s long-term viability, we can better predict the direction that the country will go over the next fifteen years. Survival drives the decision-making process within the Kim regime. Kim Jong-Il and his inner circle believe that sheer, brutal force has kept them alive and in power. They live in fear of OPLAN 5027, which calls for the U.S. and R.O.K. forces to destroy the regime in the event of war. North Korea represented the hardest target in the so-called ”Axis of Evil,” which probably kept them from being overthrown by the Bush Administration after 9/11. This fact motivates the Kim regime’s strategic thinking, and leads to its conclusion that nuclear armaments are necessary to deter the U.S.-RO.K. Alliance. The sections below describe what the Kim regime must do to survive, as well as what it cannot do if it wants to remain in power. Based on these assumptions, we have predicted where
13 North Korea will go, militarily and economically, and what circumstances could possibly lead to reunification of the Korean peninsula. Unfortunately for Kim Jong-Il, the range of choices at his disposal right now is as bleak and barren as the rest of his country. There are few actions that the Kim regime can take to ensure its long-term survival. Instead, all the regime can do is attempt to postpone its inevitable collapse.
APPROACH Terms of Reference: 1) What is the likelihood of regime change in North Korea? 2) Under what circumstances could reunification of North and South Korea occur, and how would this affect East Asian security? We approach these questions at 5, 10, and 15-Year intervals. To answer these questions, we studied four specific areas pertaining to North Korea’s future prospects: 1. 2. 3. 4. Leadership and succession Economy and infrastructure Military and weapons of mass destruction (WMD) Prospects for reunification We believe that North Korea’s leadership will determine the path that the DPRK follows over the next fifteen years. If Kim survives as head of state for five to ten more years, and he appoints a successor who follows a similar leadership style, then North Korea will continue to do what it has done for the past fifteen years. If North Korea undergoes a relatively peaceful regime change (like the USSR in 1991), then it is possible that it will open up to foreign investment. This would be a break from North Korea’s current Juche pseudo-religion, centered on the Kim dynasty. If a peaceful regime change occurs, the National Defense Commission would most likely carry it out. New leaders could begin to revive the DPRK’s failing economy and repair its crumbling infrastructure, while improving relations with North Korea’s neighbors and other major powers. This could eventually lead to peaceful reunification with the South. On the other hand, if North Korea undergoes a violent regime change, then it is possible that it could launch a
15 second Korean War, or that it could fall into anarchy and become a failed state like Somalia. Our purpose is to determine who will be in charge of North Korea over the next five, ten, and fifteen years, and to lay out the most likely scenarios for reunification during that time period.
16 Chapter 1 Leadership and Succession
Leadership plays a prominent role in our judgments. Most information on North Korean leadership trends comes from second-hand sources, which makes it difficult to assess its reliability. Despite this challenge, we have provided the following key judgments, based on what we believe to be the most credible information available.
We have medium confidence that there will be regime change. In the case of North Korea, it is important to differentiate between succession and regime change. Succession describes a peaceful transition of power between individual leaders, without a fundamental change in the regime’s ideology or policies. North Korea has undergone a succession before, when Kim Jong-Il took his father’s place as leader of the DPRK in 1994. Regime change, by contrast, involves a transfer of power that leads to new ideology and policies, as well as new leadership. Thus, if Kim Jong-Il appoints one of his sons or another member of his inner circle to the positions of General Secretary of the Korean Workers Party, Supreme Commander of the Korean People’s Army, and Chairman of the National Defense Commission, we would consider this to be a succession. For the purposes of this NIE, the issue of succession is essentially irrelevant—regardless of who calls the shots, if North Korea’s ideology and actions remain the same, then the United States response can remain the same, as well. However, if any of those
17 three primary positions of responsibility are split, or there is a general change in North Korea’s mode of government, we will consider it to be a regime change. A study of life expectancy trends1 suggests that Kim Jong-Il will still be alive after five years, and will probably be vigorous enough to continue serving as head of state. Kim Jong-Il relies heavily on military leaders from his father’s generation, many of whom served with Kim Il-Sung himself. By surrounding himself with members of the “old guard,” Kim effectively ensures that the DPRK will continue its hostility towards the South and follow in the Juche tradition established by the Eternal President, Kim Il-Sung. Kim’s recent promotion of older, hard-line generals also affirms that the Songun policy started in 1998 is still in effect. Gen. O Kuk-Ryol (age 78) was recently appointed Vice Chairman of the National Defense Commission.2 Vice-Marshal Kim Yong Chun (age 73) was named minister of the People's Armed Forces, and Gen. Ri Yong Ho (early 60’s) has been appointed Chief of the Army's General Staff.3 This ongoing reorganization of the military suggests that the Kim regime will continue to promote hostility towards South Korea. This may also indicate that Kim Jong-Il feels the need to have key supporters in place in order to ensure his own survival. It is possible that his individual power base is not strong enough to rule without consent from North Korea’s military leadership. We have evidence that Kim Jong-Il has relied increasingly on assistance from long-time secretary and consort Kim Ok to manage his affairs since his purported stroke in August 2008. Kim Ok manages many projects important to Kim’s inner circle, including Department 39—a government organization that oversees criminal activities such as industrial-scale
See Appendix C. “ NKorea’s Kim Picks Hawk for Top Military Post,” AFP, February 19, 2009; http://www.google.com/hostednews/afp/article/ALeqM5gGET8Vjr6rXCOUKkAbmHIP72kY_Q (accessed March 10, 2009). 3 Lee Jong-Heon, “Analysis: N. Korea Promotes Military Hawks,” United Press International, February 12, 2009;http://www.spacewar.com/reports/Analysis_N_Korea_promotes_military_hawks_999.html (accessed March 18 2009).
18 methamphetamine production, counterfeiting, and duplication of bootlegged movies and computer software. Kim Ok’s responsibilities put her in a powerful political position because these operations generate the hard currency that the Kim regime uses to purchase luxury items for the North Korean elite.4 She may also have the most up-to-date information on Kim Jong-Il’s health and whereabouts. There is evidence that she even signed documents on his behalf while he was incapacitated in the fall of 2008, and she may still be doing so to some extent.5 This places Kim Ok in position to manipulate North Korea’s decision-making process and even the Kim regime’s line of succession. We have low confidence that Kim Jong-Il will adequately prepare one of his sons to succeed him. During the North Korean election on March 8, 2009, Kim Jong-Un, the youngest son of Kim Jong-Il and reputed to be his most likely successor, was not selected for any positions within the Supreme People’s Assembly. 6 This is important because membership in the SPA only changes every five years. By comparison, when Kim Jong-Il was chosen by Kim Il Sung to be his successor, he was put into the SPA in 1980, and did not take full power in North Korea until 1998. This gave the younger Kim enough time to learn how to operate within the system, and to gain allies and prove himself to the court establishment. By not naming one of his sons to the SPA, Kim Jong-Il missed a crucial opportunity to ensure an orderly transfer of power following his death or medically induced retirement. This oversight also means that even if a son is chosen in the next SPA session in five years, the heir-apparent will have precious little time to assert control over the country’s instruments of power before Kim Jong-Il leaves the North Korean
Park In-Ho, “Kim Ok’s Influence on the Succession of Kim Jong-Il,” The Daily NK, June 3, 2008, available from http://www.dailynk.com/english/read.php?cataId=nk02300&num=3352, accessed March 16, 2009. 5 Hyung-Jin Kim, “Kim’s Consort: A Key Player in North Korea?” Associated Press, USA Today, September 18, 2008, available from http://www.usatoday.com/news/world/2008-09-18-3187721398_x.htm, accessed March 16, 2009. 6 Hyung-Jin Kim, “Kim Jong-Il’s Son Not Included on List of North Korean Legislators to New Parliament”, Star Tribune.com, March 9, 2009; available from http://www.startribune.com/world/40957937.html (March 10, 2009).
19 political scene. Because none of Kim’s three sons were placed into a leadership position within the SPA, there is no evidence that Kim Jong-Un or any of his brothers are currently being groomed as a successor to Kim Jong-Il. We have high confidence that Kim Jong-Il’s influence is waning. After the Korean Central News Agency (KCNA) announcement in February that Kim’s third son would stand for election, his name did not appear on the results of the March 8th Supreme People’s Assembly election. The KCNA is the official mouthpiece of the regime, which means that its pronouncements often indicate the regime’s intentions and motivations, or suggest decisions that have already been made at the highest levels of the DPRK’s government. The discrepancy between the KCNA’s February announcement (Kim Jong-un’s notable absence from the ballot on March 8) suggests that there may be an ongoing power struggle within North Korea’s government, or at least that Kim Jong-Il cannot rule by fiat the way he did in years past. Without a designated heir-apparent, the Kim dynasty cannot continue after the death of Kim Jong-Il. There are three possible explanations for this turn of events. The first would suggest that the Kim regime’s grip on power is precarious—perhaps Kim fears that naming one of his sons as successor would allow for the possibility of a military coup, with his successor serving as a puppet for the new regime after Kim Jong-Il’s demise. A second explanation holds that the son did something to embarrass his father or otherwise cast doubt on his ability to lead the country. However, so far there is no evidence to support this second explanation. If the first explanation in fact holds true, it would indicate that Kim Jong-Il’s hold on power is weaker than anyone previously thought. A third, more sinister possibility, is that a faction of the National Defense Commission vetoed the continuation of the Kim dynasty. Although Kim Jong-Il has shored up his position on
20 the NDC by appointing close associates and supporters to the NDC, there are probably others within the NDC who don’t share the hard-liners’ loyalty to the Kim family. If Kim did not personally decide to remove his son’s name from the SPA ballot, then other members of the NDC are the only ones with the power to do so. Each of these three explanations indicates that Kim Jong-Il’s personal position is weaker now than it was several years ago.
We have medium confidence that there will be a succession in North Korean leadership. Due to Kim Jong-Il’s declining health, he may not be capable of leading the DPRK in 10 years, even if he is still alive. Although Kim is currently not preparing a successor, he will probably attempt to do so as his health continues to fail. In the event that a successor is chosen, recent statements from the military suggest that the Korean People’s Army will support a successor who has a direct familial relation to Kim Jong-Il. However, it would be unwise to assume that the entire North Korean military, or even its entire senior leadership, agrees with this sentiment. North Korea’s pervasive propaganda machine makes it impossible for any propaganda to appear that does not wholeheartedly support Kim Jong-Il. At a recent rally for Kim Jong-Il’s birthday, a general promised the army’s loyalty to the Kim “bloodline.” Pak Jae Kyong, a senior general of the North Korean Defense Ministry, stated, “We will firmly carry on the blood-line of Mangyongdae and Mount Paektu with our guns, faithfully upholding the leadership of our supreme commander.”7 On Sunday, March 8th 2009, an election-day poem was published urging
Richard Lloyd Parry. “Kim Jong-Il Anoints Next Leader of North Korea-His Youngest Son,” Times Online, February 20, 2009; http://www.timesonline.co.uk/tol/news/world/asia/article5766802.ece (accessed March 10, 2009).
21 North Koreans to rally around the "bloodline of Mount Paektu," a common reference to Kim's family.8 Such evidence supports the idea that a blood relative to Kim Jong-Il would be supported as a legitimate heir to lead the DPRK. However, these propaganda pronouncements may not represent the opinions of other power centers within the DPRK. We have high confidence that Kim Jong-Il (or his family-line successor) will exercise only partial control over the DPRK. Unless Kim Jong-Il acts quickly to appoint a successor and allows that successor to begin exercising power under the elder Kim’s watchful tutelage, the person who succeeds Kim Jong-Il will be beholden to the powerful National Defense Commission. If Kim Jong-Il is still alive in 10 years, his power will have decreased significantly. He will be 77 years old, and his staunchest allies—the elderly senior military leaders who served with his father—will have died off by then. Replacing them in the NDC will be a third generation of military officers, all of whom are too young to have served under Kim Il-Sung. They will show less loyalty to the Kim dynasty, especially as Kim’s inner circle becomes increasingly unable to deliver the basic foodstuffs and other supplies to keep the army fed and in fighting condition. Since the military has taken powers unto itself that were formerly allotted to the Korean Workers Party, it is in a position to counter arbitrary, tyrannical decisions from Kim Jong-Il to some extent. Whoever becomes head of state after the Dear Leader will find himself in a much weaker position than Kim Jong-Il, because the powerful barons of the DPRK’s National Defense Commission cannot risk being purged arbitrarily by a new, inexperienced leader. This would lead North Korea to move into a post-totalitarian form of government, and would constitute a regime change.
Choe-Sang Hun. “Portents of Future Sought in North Korean Election,” International Herald Tribune, March 8, 2009; http://www.iht.com/articles/2009/03/08/asia/north.php (accessed March 10, 2009).
22 Fifteen-Year Judgments
We have high confidence that Kim Jong-Il will no longer be in power. We have medium confidence that there will be a regime change within fifteen years. As mentioned earlier, Kim Jong-Il’s life expectancy, based on his current health and risk factors, does not give him more than 5-10 additional years. We have high confidence that a regime change will lead to a collective leadership, because Kim has not prepared any of his sons to be his successor. This will force other members of North Korea’s ruling elite, including most likely a sizeable military component, to run the country. When Kim dies, his third son, Kim Jong-Un, is the only realistic dynastic successor on the horizon. However, his inexperience will likely relegate him to playing a minor role in leading the DPRK; collective leadership would be necessary. Chang Seong-Taek, Kim Jong-Il’s brotherin-law, is highly favored by Kim Jong-Il, and has significant influence within North Korea because of his responsibilities over North Korea’s internal security forces.9 Due to his experience and longevity in leadership, he may serve as an assistant or mentor to Kim Jong-Un in the event of a family-line succession. Vice-Marshal (Chasu) Jo Myong-rok (age 73), a high profile general who is considered to be Kim Jong-Il’s right hand man, could serve as an interim leader. However, his age will not permit him to lead for very long. The venerable General O Kuk-Ryol (age 78) could also serve as an interim leader. Placing a high-level military official within the leadership circle would be an effective way to maintain North Korea’s military-first policy and continue the Juche tradition.10
Becky Branford. “Who Will Succeed North Korea’s Kim Jung-Il,” BBC News, January 16, 2009; http://news.bbc.co.uk/2/hi/asia-pacific/7720345.stm (accessed March 11, 2009). 10 Alexander V. Voronstov, North Korea’s Military-First Policy: A Curse or a Blessing,” Brookings Institute, May 26, 2006; http://www.brookings.edu/opinions/2006/0526northkorea_vorontsov.aspx (accessed March 12, 2009).
23 However, both of these generals are already old, and may not even outlive Kim himself. If the Kim regime persists into the 10-15 year time frame, it will not have the services of loyal aides like these men any longer. Kim’s successor will have to contend with the next generation of generals, many of them unknown to the outside world at this time. There is a remote possibility that Kim Jong-Il’s secretary and consort, Kim Ok, may have a place within the DPRK’s collective leadership circle in the event that Kim Jong-Un is allowed to succeed his father. There is some evidence that she has been backing Kim Jong-Un as a successor, and having Kim Jong-Un in a place of power may ensure her political survival in a post-Kim Jong-Il North Korea.11
We have moderate confidence that there will be no regime change in five to ten years. There is evidence that Kim Jong-Il’s health will not permit him to live much longer. However, if Kim does manage to live another five to ten years, we are confident there will be no regime change. Kim has created a structure of top military and political confidants to ensure his political survival as Chairman of the National Defense Commission and dictator of the DPRK. History has proven that even overwhelming starvation and military unrest has not been able to knock him out of his position. He quelled unrest during the 1990’s famine through public executions and military force.12 He also discovered a coup in 1992 planned by top military leaders. Those that did not escape were executed.
Yank Jung A. “Kim Jong-Il’s Wife Kim Ok pursues ‘Kim Jong Woon as Successor,’” The Daily NK, February 6, 2008; http://www.dailynk.com/english/read.php?cataId=nk02300&num=3672 (accessed March 16, 2009). 12 Andreas Lorenz, Joyful Dancing, Spiegel Online, October 30, 2004; http://www.spiegel.de/international/spiegel/0,1518,325971,00.html (accessed March 18, 2009).
24 Kim Jong-Il personally oversees the Ministry for Protection of State Security, a counter intelligence agency tasked with internal espionage. Kim surrounds himself with long-time friends and old military personnel who still hold to the Juche and military-first ideologies. Amongst the overwhelming majority of North Koreans, Kim has successfully legitimized his position as heir to Kim Il-Sung and leader of North Korea. Whether from fear or successful indoctrination, Kim Jong-Il has been elected to the same position in every election with 100% of the vote.13 As has been often observed, it is not who votes that matters, but who counts the votes. In the event that there is a regime change in five, ten, or fifteen years, collective leadership will be established. The sooner the regime changes, the more powerful the military will be within this leadership. This is due to Kim Jong-Il’s failure to select an heir, and the significant need for strong leadership over a powerful military. However, if Kim Jong-Il lives long enough to appoint a successor and ingratiate that successor with North Korea’s elites (especially the military), then the military may play a smaller role within a future North Korean collective leadership government structure. Unfortunately, Kim ignored, or was coerced into ignoring, a golden opportunity to appoint a successor, when his third son was not named to the Supreme People’s Assembly during the March 8 election. In the event that regime change occurs, the military has stated that it would support Kim Jong-Il’s family-line heir. Although this may just be empty rhetoric to impress Kim Jong-Il, the cult of personality surrounding Kim and his family may force the military to accept a son, at least as a figurehead, in order to please the masses. In short, although the Kim dynasty’s influence is
Hyung-Jin Kim, “Kim Jung-Il Unanimously Re-Elected to Parliament with 99.98 Percent Turnout:State Media” Huffington Post, March 9, 2009; http://www.huffingtonpost.com/2009/03/09/kim-jong-il-unanimouslyr_n_172975.html (accessed March 18, 2009).
25 definitely on the decline, it is likely that it will continue to exert at least some influence over the DPRK’s government for many years to come.
26 Chapter 2 Economy and Infrastructure
We have high confidence that North Korea’s economy will continue to deteriorate. North Korea continues to tighten control over its economy, placing emphasis on the self-reliance or Juche. Because of North Korea’s strained diplomatic relations with many of its most logical trading partners, and as well as its general lack of exportable goods, the DPRK has been increasingly forced to survive off of its own resources. Pyongyang continues to crack down on the inflow of foreign goods and culture, and is attempting to solve its perpetual food problems by rebuilding its crumbling infrastructure.14 However, these efforts will not help North Korea to avoid the effects of yet another severe famine. The question remains: how long can this failing state sustain its elite and its military-first policy while maintaining its failing economic policies? The immediate future of North Korea’s economy and infrastructure depends on Kim Jong-Il’s willingness to cooperate with the international community on denuclearization and opening his borders. Despite a few years of positive growth after 1999, the nuclear crisis and resulting sanctions against North Korea have again thrown the economy back into negative growth since 2006. As scholar Robert Litwak argues, “The country’s status as a failed state has created strong pressure for expanding economic contact with the outside world. The nuclear program is an impediment to that process, but it is also the Kim regime’s sole source of
Yonhap News Agency, “Can Their Economy Sustain The Middle Class?” Yonhap News Agency, February 19, ,2009, Thursday; http://english.yonhapnews.co.kr/northkorea/2009/02/19/59/0401000000AEN20090219004300315F.HTML (accessed March 6, 2009).
27 bargaining leverage.”15 If the food shortage and economic crisis are not properly addressed, they will eventually destabilize the regime. This section examines the current state of North Korea’s economy, and gives predictions for the economy in five, ten, and fifteen years.
We have high confidence that the DPRK will need foreign aid to avoid famine. The biggest economic and health concern facing North Korea today is the ongoing food crisis. Low crop yields and diminished aid from foreign countries are pushing North Korea to the brink of another major famine. One key difference between the current crisis and the famine of the 1990s is that the elites and military are also suffering its effects this time around. The Kim regime’s inability to meet the basic nutritional needs of the military could be a catalyst for regime change. In short, the current food crisis has the potential to severely destabilize Kim’s regime. Current trends indicate that North Korea is facing the probability of another devastating famine. Rising grain prices inside North Korea, compared to world grain prices as a whole, are evidence that food is again in short supply. Estimates for 2009 project that North Korea’s food supply will be 1.17 million tons short of demand.16 Last year, North Korea produced 4.31 million tons of grain, which is actually a 7 percent increase from the previous year, but this still does not come close to the 5.48 million tons of food needed to sustain its 24 million population. Since a record harvest of 4.5 million tons in 2005, there has been a downward trend in food production.
Robert Litwak, Regime Change (Washington, D.C.: Woodrow Wilson Center Press, 2007), 246.
Yonhap News Agency, “Can Their Economy Sustain The Middle Class?” Yonhap News Agency, February 19, ,2009, Thursday; http://english.yonhapnews.co.kr/northkorea/2009/02/19/59/0401000000AEN20090219004300315F.HTML (accessed March 6, 2009).
28 Even with commercial imports, the country still faces a cereal deficit of 836,000 tons.17 In addition to the existing food shortage, the World Food Program expects that North Korea will need further aid in the coming months due to a projected low crop yield this year.18 Despite good weather and hard work by farmers, North Korea cannot overcome the food shortage due to “critical shortages of fertilizer and fuel.”19 The World Food Program estimates that North Korea will fall back into famine unless it is given about $500 million in aid in the next 15 months.20 Within the last year, there have been increasing reports of farmers and others of the general population suffering and dying from malnutrition. In North Korea, the general population is the first to suffer during times of famine because the military takes its share of the grain harvest first, and the rest is left for the state to distribute as food rations. This year, however, the remaining grain stockpile is so low that mass starvation is practically guaranteed. For instance, in November 2008, after the military took its share of the harvest from Kaesong City, the remaining grain was not enough for even four months’ worth of food.21 If the army continues to take its full share of provisions, North Korean farmers will be left starvation rations this year and no seed for next year. Due to the food shortage, North Korean elites have begun to hoard grain, while cracking down on the general population’s ability to do the same. According to a source inside the South Hwanghae Province, hoarding grain by general farmers was almost impossible in the latter half of 2008 due to an increase in the number of security guards on farms, monthly house searches,
Ibid. Shim Sun-ah, “U.N. Says N. Korea Faces 836,000, Ton Food Shortfall,” Yonhap News Agency, December 8, 2008, Saturday, http://english.yonhapnews.co.kr/northkorea/2008/12/08/93/0401000000AEN200812 08006100315F.HTML (accessed March 6, 2009). 19 Ibid 20 Ibid 21 Good Friends, “North Korea Today No. 253, November 2008”, Good Friends: Centre for Peace, Human Rights and Refugees, November 26, 2008, http://www.reliefweb.int/rw/rwb.nsf/db900sid/YSAR-7LRQQH?OpenDocument&rc=3&cc=prk (accessed on March 6, 2009).
29 and increased punishment for hoarding grain.22 Hoarding grain has been a main tool of survival for many who have not being getting sufficient public provisions. The recent crackdown on grain hoarding is another indication that food stockpiles are low. Moreover, rice is not the only commodity that is disappearing from North Korean markets. The wealthy are also buying up stockpiles of corn and tofu peas in anticipation of a worsening famine.23 Because of this, the food supply in North Korea is even more constricted than the famine alone would dictate. One significant difference between this food shortage and the food crisis in the 1990s is that the military is now being affected. Currently, many North Korean military officers subsist on porridge with maize meal twice a day,24 while in some provinces, officers’ families go without rations altogether.25 One official stated, “this [is] the first time in the history of our country that the military is eating porridge.”26 In January 2009, reports stated that some military units cannot secure 100% of their allotted food provisions. This shortage has led to frequent quarrels between military collectors and local Korean Workers Party officials.27 There have also been reports of soldiers not being able to participate in military training due to malnutrition.28 As a short-term
Jung Kwon Ho, “No More Hoarding Grain,” The Daily NK, February 26, 2009, Thursday, http://www.dailynk.com/english/read.php?cataId=nk01500&num=4645 (accessed on February 26, 2009).
Good Friends, “North Korea Today No. 253, November 2008”, Good Friends: Centre for Peace, Human Rights and Refugees, November 26, 2008, http://www.reliefweb.int/rw/rwb.nsf/db900sid/YSAR-7LRQQH?OpenDocument&rc=3&cc=prk (accessed on March 6, 2009). 24 Good Friends, “North Korea Today No. 142, June 2008” Good Friends: Centre for Peace, Human Rights and Refugees, June 11, 2008 http://www.reliefweb.int/rw/rwb.nsf/db900sid/MUMA-7FJ3EC?OpenDocument&rc=3&cc=prk (accessed on March 6, 2009) 25 Good Friends, “North Korea Today No. 176, July 2008” Good Friends: Centre for Peace, Human Rights and Refugees, July 30, 2008, http://www.reliefweb.int/rw/rwb.nsf/db900sid/SHIG-7H2HS6?OpenDocument&rc=3&cc=prk (accessed on March 6, 2009) 26 Good Friends, “North Korea Today No. 142, June 2008” Good Friends: Centre for Peace, Human Rights and Refugees, June 11, 2008 http://www.reliefweb.int/rw/rwb.nsf/db900sid/MUMA-7FJ3EC?OpenDocument&rc=3&cc=prk (accessed on March 6, 2009) 27 Good Friends, “North Korea Today No. 264, February 2009” Good Friends: Centre for Peace, Human Rights and Refugees, February 12, 2009 http://www.reliefweb.int/rw/rwb.nsf/db900sid/CJAL-7P7MH5?OpenDocument&rc=3&cc=prk (accessed March 6, 2009)
Good Friends, “North Korea Today, No. 262, January 2009,” Good Friends: Centre for Peace, Human Rights and Refugees, February 3, 2009, http://www.reliefweb.int/rw/rwb.nsf/db900sid/MYAI-7NW3LT?OpenDocument&rc=3&cc=prk (accessed March 6, 2009).
30 solution to the food shortage, many wives and families of military officials have been sent to their extended families’ homes. This, in turn, has led to a loss of morale among front-line soldiers who are separated from their families for long periods of time. In short, the food shortage is causing not only physical harm, but also contributing to serious morale and discipline problems among members of the North Korean military. In the coming months, the food crisis will only get worse. In addition to depleting civilian food stockpiles, starvation has led soldiers and other officials to begin using emergency rations meant for times of war. Even more alarmingly, some military commanders have been given rice seed to eat that is meant for next year’s crop, because local food distribution officials could not ignore the military’s request for food and had nothing else to give them.29 If this continues, the North Korean people will have no seed to plant for the upcoming year. Already, the Ministry of the People’s Army Forces has ordered the release of food stockpiled for the wartime.30 One officer stated, “Because this country does not have any reserved food or foreign countries do not give enough food aid, we are compelled to use temporarily the army provisions for wartime.”31 The officer also added that this emergency food could be the last supply, and when all of this food is gone, the army’s “next meal will be when people give [them] food for patriotic purposes.”32 If the army is relying on patriotic donations from people who themselves are starving, there is little hope that mass starvation and dramatic societal instability can be averted. Furthermore, if the military class does not receive even basic foodstuffs and other essential supplies, Kim Jong-Il’s regime may become threatened. As famine begins to take its
Good Friends, ”North Korea Today No. 218, September 2008”, Good Friends: Centre for Peace, Human Rights and Refugees, October 2, 2008 http://www.reliefweb.int/rw/rwb.nsf/db900sid/MUMA-7K377V?OpenDocument&rc=3&cc=prk (accessed March 6, 2009) 30 Ibid 31 Ibid 32 Ibid
31 toll on the military itself, Kim Jong-Il will need to open his borders or accede to conditions that allow aid to his country. If Kim Jong-Il does not find an outside source to appease the food crisis, at least enough to meet the basic needs of the elites and the military, his power will be threatened from within. North Korea currently faces tremendous pressure from its neighbors to open up economically. Chinese officials have demonstrated the benefits of opening up to foreign investment and trade, and have lobbied Kim Jong-Il to make significant changes to alleviate the DPRK’s economic crisis.33 In January 2006, Kim Jong-Il traveled by train to Shenzhen China, which is the special economic zone where China first experimented with capitalism. This visit allowed Kim to see that, like China, he can open up economically while still maintaining political control of his regime.34 However, despite pressure from foreign countries, Kim Jong-Il remains reluctant to open the DPRK’s economy to the rest of the world. Recent strained relations with the North have led South Korea and the United States to practically halt all aid donations to the North. North Korea has continued to warn the South that the two Koreas are on a path toward war, and that sour relations has been brought on by South Korea’s President Lee Myung-bok.35 President Lee Myung-bok in turn has taken a harsher stance with North Korea, and the South’s previous sunshine policy has been replaced by the aid-fordenuclearization policy.36 As a result, North Korea did not request its annual humanitarian shipments of 400,000 tons of rice and 300,000 tons of fertilizer from the South this year.37 This is
Litwak, 275. Ritter 35 The Institute for Far Eastern Studies, “NK Brief Monthly Recap: February,” The Institute for Far Eastern Studies, March 3, 2009, Tuesday, http://ifes.kyungnam.ac.kr/eng/m05/s10/content.asp?nkbriefNO=266&GoP=1 (accessed on March 6, 2009). 36 Ibid 37 Shim Sun-ah, “U.N. Says N. Korea Faces 836,000 Ton Food Shortfall,” Yonhap News Agency, December 8, 2008, Saturday, http://english.yonhapnews.co.kr/northkorea/2008/12/08/93/0401000000AEN200812 08006100315F.HTML (accessed March 6, 2009)
32 significant because more than 65 percent of the fertilizer used by the North in the last ten years came from South Korea38. South Korean fertilizer donations have helped to boost grain production by 600,000 tons annually39. In anticipation of declining South Korean aid, the DPRK has been buying up stockpiles of chemical fertilizer from China. In fact, from November 2008 to January 2009, North Korea has bought about 40 times the amount of chemical fertilizer that they bought from China during the same period the year before.40 Unfortunately, the amount of fertilizer that the DPRK has bought from China is not enough to sustain its grain harvest at previous levels. Ironically, North Korea’s hostility towards the South comes at the exact time when the North desperately needs to promote friendlier relations with its food donors. In addition, North Korea recently rejected food aid from the United States, and told five American NGOs operating in North Korea to leave41. In May 2008, the United States said it would give 500,000 tons of food aid to the DPRK, but so far only 169,000 tons have been delivered.42 North Korea decided in the meantime to reject the remaining food aid and expel current NGO workers. The consequences of this decision on North Korea’s general population will be devastating. In marked contrast to North Korea’s relationship with South Korea and the United States, 2009 marks the 60th anniversary of the establishment of diplomatic relations between China and North Korea, and both countries have designated the year as a “year of friendship.”43 Not only is
The Institute for Far Eastern Studies, “DPRK Preparing for Spring Fertilizer Shortage,” The Institute for Far Eastern Studies, march 17, 2009, Tuesday, http://ifes.kyungnam.ac.kr/eng/m05/s10/content.asp?nkbriefNO=259&GoP=1 (accessed March 19, 2009) 39 Ibid 40 The Institute for Far Eastern Studies, “DPRK Preparing for Spring Fertilizer Shortage,” The Institute for Far Eastern Studies, march 17, 2009, Tuesday, http://ifes.kyungnam.ac.kr/eng/m05/s10/content.asp?nkbriefNO=259&GoP=1 (accessed March 19, 2009) 41 Associated Press, “North Korea Rejects U.S. Food Aid,” The International Herald Tribune, March 18, 2009, Wednesday, http://www.iht.com/articles/2009/03/18/asia/north.php (accessed March 19, 2009)
The Korea Times, “NK Premier to Visit China in March,” The Korea Times, Feb 28, 2009, Saturday, http://www.koreatimes.co.kr/www/news/nation/2009/03/113_40442.html (accessed on March 2, 2009)
33 China the DPRK’s largest trading partner, but it is also a key contributor of international aid given to North Korea. China wants stability in North Korea because it knows that a total North Korean collapse, with or without war, will lead to hundreds of thousands of refugees flooding the border, and a possible spillover conflict that could affect China’s economy and destabilize its society.44 In order to revitalize North Korea’s roads, ports, and electrical grid, it will take billions of dollars – money that other countries are currently unwilling to lend.45 Because of this fact, Kim Jong-Il is attempting to modernize his economy without international support. However, this effort to revitalize internally cannot overcome North Korea’s failed economy and deteriorating infrastructure. Thus, we have high confidence that the economy continue its downward trend over the next five years. In the past several months, Kim has stridently emphasized the need to revitalize, modernize, and improve economic conditions within the DPRK.46 In March 2009, for example, the Central Committee of the Worker’s Party circulated a secret document called the “red letter” that urges party members to build a strong and prosperous state by 2012.47 The red letter asserts that by 2012 electrical power production will reach 7.76 million kilowatts, metal production will top 33 million tons annually, agricultural products will reach 7 million tons annually, and the volume of freight distribution will remain at about 7.2 million tons.48 The party is currently
William H. Overholt, Asia, America, and the Transformation of Geopolitics. (New York: Cambridge University Press, 2008), 165. 45 Peter Ritter, “The World’s Most Dangerous Investment,” Time, September 20, 2007, Thursday, http://www.time.com/time/magazine/article/0,9171,1663635,00.html (accessed on March 6, 2009). 46 The Institute for Far Eastern Studies, “DPRK Outlines Region-Specific Economic Growth Plans,” The Institute for Far Eastern Studies, January 23, 2009, Friday, http://ifes.kyungnam.ac.kr/eng/m05/s10/content.asp?nkbriefNO=259&GoP=1 (accessed March 11, 2009) 47 Lee Sang Yong, “Top Secret Goal: Reach 1980s Production Targets,” The Daily NK, March 12, 2009, Thursday, http://www.dailynk.com/english/read.php?cataId=nk01500&num=4691 (accessed on March 18, 2009) 48 Ibid
34 stressing reforms in steel, power, coal, railway, and other areas that are considered “priority sectors of the people’s economy.”49 In addition, North Korea is calling for increased organic fertilizer production to help with the food crisis.50 In the beginning of 2009, Kim Jong-Il made several public appearances at factories and companies in part to monitor their production and improvements.51 Kim has been publicly giving field advice on how to increase production and stimulate the economy.52 Because of tense relations with his aid donators, the public appearances appear to be a propaganda stunt to reinforce the Juche ideology—North Korea’s ability to overcome its economic woes through its own efforts. In addition to the food crisis, North Korea’s transportation and electrical infrastructure continues to deteriorate. Since 2005, the production of fertilizer, grain, rice, and steel has fallen.53 Over the last ten years, North Korea’s railroads, roads, and harbor capacities have remained about the same, thus indicating no substantial increase in transport ability.54 In the last couple years growth rates for agriculture, forestry, and fishery have severely dropped and were -9.4% in 2007.55 Growth rates for mining and manufacturing have also gone down since 2005.56 Since production fell even in years when North Korea received significant foreign aid and imports, production rates will only worsen as the DPRK becomes increasingly isolated from the outside world.
“DPRK Outlines Region-Specific Economic Growth Plans,” The Institute for Far Eastern Studies, January 23, 2009, Friday, http://ifes.kyungnam.ac.kr/eng/m05/s10/content.asp?nkbriefNO=259&GoP=1 (accessed March 11, 2009) 50 Ibid 51 Jeong Jae Sung, “Kim Jong-Il Focuses on On-site Inspections in Economics,” The Daily NK, February 10, 2009, Tuesday, http://www.dailynk.com/english/read.php?cataId=nk01500&num=4536 (accessed on February 15, 2009)
Ministry of Unification, “Tables and Charts,” From North Korea Section, http://www.unikorea.go.kr/eng/default.jsp? pgname=NORtables (accessed February 20, 2009) 54 Ibid 55 Ministry of Unification, “Tables and Charts,” From North Korea Section, http://www.unikorea.go.kr/eng/default.jsp? pgname=NORtables (accessed February 20, 2009) 56 Ibid
35 North Korea’s power generation capabilities continue to decline, while coal production has steadily increased in the last ten years, but is still short of demand. There are frequent blackouts, and the electrical shortages in the last year have supposedly been the worst since the mid-1990s.57 In parts of North Korea, up to 70 percent of electricity is hydroelectrically generated. Unfortunately, due to low water levels, especially during the winter, pumping facilities and turbines cannot operate properly, which leads to low electrical output and even fresh water shortages.58 The North Korean government often cuts off residential water access in order to keep hydroelectric plants running, and citizens are then left to find their own sources of water from local rivers59. In addition, petroleum imports have slowly decreased over the last several years.60 Only iron ore and cement have continued to show growth in the past decade. Because of these deficiencies, North Korea lacks the power generation capability and the mineral resources to repair its infrastructure and expand its economy. Foreign direct investment continues to be limited by the current political situation. However, there have been some recent international attempts to invest in North Korea. For example, Orascom (an Egyptian telecommunications company) recently signed a $115 million deal to buy a stake in a North Korean cement company61 and Chinese Tianjin Digital invested $650,000 to open a joint-venture bicycle plant in Pyongyang.62 Unfortunately, despite these and other similar attempts to invest in North Korea, most joint economic ventures with the DPRK tend to fall apart.63 For instance, Orascom Telecom got permission from the North Korean
Lee Sung Jin, “Now Even Drinking Water is a Festival Ration,” The Daily NK, February 10, 2009 http://www.dailynk.com/english/read.php?cataId=nk01500&num=4532 (accessed February 11, 2009) 58 Ibid
Ministry of Unification, “Tables and Charts,” From North Korea Section, http://www.unikorea.go.kr/eng/default.jsp? pgname=NORtables (accessed February 20, 2009) 61 Ritter 62 Ibid 63 Ibid
36 government to begin offering cell phone service to North Korea’s general population.64 However, as soon as local citizens attempted to purchase a cell phone, the North Korean government expanded its regulations on cell phones. Through a combined effort from the North Korean National Security Agency and the North Pyongan Provincial Security Agency, the government has made far-reaching efforts to monitor and regulate cell phone use, distribution, and transmission. In addition, the government only offered cell phones at the rate of US$200-235, which is too expensive for the general population.65 Foreign investments, like Orascom Telecom, are hindered by the government’s own policies. Many foreigners have stayed away from investing in North Korea due to its 2006 nuclear test, and the United States’ listing of North Korea as a terror-sponsoring state.66 Thus, desperately needed foreign investments cannot thrive within North Korea’s current political climate. The hurdle that North Korea cannot overcome alone is, as Robert Litwak puts it, “two decades of mismanagement and decline [that] have left few resources and little unused capacity to exploit in order to jump start the economy.”67 In recent months, North Korean companies have had to close or claim bankruptcy due to the lack of raw materials, lack of fuel, and/or lack of financial backing to run operations.68 In addition, many companies inflate numbers in order to meet the unrealistic goals set by DPRK policymakers. In February 2009, Kim Jong-Il inspected the Heungnam Fertilizer Factory and discovered that the plant had inflated its numbers. Instead of reaching its goal of 600,000 tons of fertilizer, the plant is only capable of producing 120,000
The Institute for Far Eastern Studies, “NK Brief Monthly Recap: February,” The Institute for Far Eastern Studies, March 3, 2009, Tuesday, http://ifes.kyungnam.ac.kr/eng/m05/s10/content.asp?nkbriefNO=266&GoP=1 (accessed on March 6, 2009). 65 The Institute for Far Eastern Studies, “NK Brief Monthly Recap: February,” The Institute for Far Eastern Studies, March 3, 2009, Tuesday, http://ifes.kyungnam.ac.kr/eng/m05/s10/content.asp?nkbriefNO=266&GoP=1 (accessed on March 6, 2009). 66 Ritter 67 Litwak, 277. 68 Good Friends, “North Korea Today No. 267, March 2009,” Good Friends: Center for Peace, Human Rigths, and Refugees, March 9, 2009, http://www.reliefweb.int/rw/rwb.nsf/db900sid/MYAI-7PY2V7?OpenDocument&rc=3&cc=prk (accessed on March 19, 2009)
37 tons.69 In truth, North Korea’s unrealistic economic goals push many factories and other state-run industries to report wildly inflated numbers in order to please Pyongyang. Ironically, these goals are not nearly as high as production goals that North Korea actually reached in the 1980s. The DPRK’s infrastructure will continue to deteriorate unless Kim Jong-Il further opens his borders and allows for more foreign direct investment. Otherwise, the infrastructure and economy are too weak to effectively bring about revitalization from within. North Korea needs years of trade and aid to help revitalize its economy and infrastructure. We have high confidence that black market activity and corruption will undermine the government’s totalitarian control. Some North Korean corruption is governmentsponsored. For instance, the efforts of Bureau 39, which oversees North Korea’s counterfeiting and illicit export activities, will not only continue, but will be expanded as much as possible in the next five years. In order to compensate for its limited exports, North Korea has sold military hardware, drugs, and counterfeit products to get some hard cash. The earnings from these criminal activities are essential to helping sustain the lavish lifestyles of the Kim family as well as government and military elites. Some Western experts estimate that the sale of these illegal products may net Kim's regime up to $1 billion a year, which would be equivalent to one-fourth of the country’s legitimate exports.70 Kim Jong-Il created Bureau 39 to direct the operations of his criminal activities. Bureau 39’s counterfeiting operations include currency, such as the US $100 “super-note,” US cigarette brands, and pharmaceutical drugs.71 It also conducts drug trafficking, including distribution of
Moon Sung Hwee, “Kim Jong-Il: Traitorous Lies!” The Daily NK, February 17, 2009, http://www.dailynk.com/english/read.php?cataId=nk01500&num=4576 (accessed on February 17, 2009)
Ritter Robert, 278.
38 opium, heroin, and methamphetamines.72 Despite violating the Vienna Convention laws governing diplomatic relations between states, North Korea has used its foreign embassies as a front for criminal activities, including drug smuggling to Asia and Europe.73 According to Asian Intelligence, Bureau 39 has accumulated a hard currency reserve of $5 billion.74 Bureau 39 uses its funds to oversee the purchase of luxury goods for party and military elite as well as high tech components for North Korea’s nuclear and missile programs.75 By doing so, Bureau 39 helps Kim Jong-Il to sustain his power both internally a