Along with many of my close friends from my days as a research assistant at the Center for Strategic and International Studies (CSIS), one of my first bosses was a rather colorful retired Army Colonel who would respond to our youthful indecision with a metaphor involving bodily functions that more or less amounted to “fish or cut bait.” He worked a lot on North Korea issues, even briefly holding the KCNA-bestowed title of “human dreg” for suggesting the DPRK had a “human rights problem.” I can’t help but think fondly of Bill, sitting in his smoking office, as I wonder whether Kim Jong Un will pit or get off the shot, as it were.

Recent news stories are no particular help.

On May 7, 2013, citing a senior government source in Seoul, Yonhap reported that North Korea had “completely withdrawn two mid-range missiles from its east coast.” The next morning, Asahi quoted (sorry, it’s in Japanese) “several Japanese, South Korea, and United States Government officials” stating that North Korea had simply changed the deployment site, not withdrawn the missiles.

It was an amusing turn of events, since a week before on April 29 it was Asahi reporting that North Korea had withdrawn the missiles with Yonhap quoting officials denying the story.

Who the heck knows?

I suppose one possibility is that the North Koreans are—and I am going to use a term of art here—jerking our chain. In mid-April, The Korea Times’ Kang Seung-woo reported that North Korea was “constantly repositioning its transporter erector launchers (TELs) carrying Musudan missiles in South Hamgyeong Province” in order to evade US and South Korean surveillance. “Four or five TELs often shift from one place to another and we see the act as aimed at misleading missile monitors,” a government official told Kang.

Recall that, in the lead up to the December launch of the Unha rocket, North Korea announced that it was extending the launch window by ten days due to an unspecified “technical deficiency.” Yonhap even reported that the rocket had been disassembled on December 11, 2012.

When North Korea launched the rocket a few hours later, all hell broke loose. The Chosun Ilbo, admittedly not the most restrained publication in the free world, described the United States and Washington as “outfoxed by North Korea over the renegade country’s rocket launch,” quoting one rueful official saying, “We saw the trees but failed to see the forest.” Although I thought the circular firing squad was pretty silly—I mean we knew North Korea was going to launch the thing sooner or later—the press picked up the surprise meme. And the North Koreans were delighted with their “big surprise to the world.” As you know, the Premier loves surprises.

So, it is possible the missiles are still there. The late April report that North Korea had withdrawn the Musudans was the result of a poor inference based on signals intelligence—North Korea stopped sending telemetry and other communications from the unit responsible for the launch, leading some analysts to conclude North Korea had packed up the missiles and sent them home. In fact, it seems the missiles were still there. I was shocked to see such a frank discussion of sources and methods in the press by Presidential spokesperson Yoon Chang-jung—yes, the same Yoon Chang-jun who just resigned following allegations he sexually assaulted a 21-year old intern during President Park’s visit to Washington. Let’s hope this reduces the number of South Korean officials involved with leaking and groping.

On the other hand, there are other signs that the tension is slackening. The US Department of Defense had reportedly deployed the Sea Based X-Band Radar (SBX)—which looks like a giant ocean-going golf ball—to track a potential North Korean missile test. The SBX is now back in Hawaii. (How is this for an ambivalent lede in the Honolulu Star-Advertiser: “For whatever it means, the SBX now is back”?) The return of the SBX would seem to suggest a relaxation in tension, although it also possible that the SBX was hoping to get a glimpse of a Musudan test during a previously scheduled check out at sea, then didn’t linger too much past its scheduled return. For what it is worth, Pentagon spokes-bot George Little described the current situation as “a provocation pause,” which is not very reassuring.

What’s a wonk to do? Engage in a little speculation! Heck, there isn’t much else to pass the time while waiting to see if the Musudan works or not. Here are three scenarios for how this may play out. They are offered for free because, well, you get what you pay for.

• Scenario 1: The North Koreans are just jerking our chain and will conduct the launch sooner or later. In this scenario, the North Koreans are simply practicing their denial and deception tactics—a useful skill in the event they find themselves in a shooting war, with crews trying to launch missiles before US and South Korean strike aircraft find them. Think of this extended period of back-and-forth as a training exercise. If the North Koreans achieve a successful surprise launch, they’ll conclude their deterrent is relatively survivable. If not, well, the mortar teams might get some extra practice. In this scenario, the international press goes crazy when the launch occurs, after having repeatedly reported that the missiles had been withdrawn.

• Scenario 2: Having pushed the matter reasonably far, the North Koreans have decided not to further alienate the Chinese. US and South Korean officials have been making visits to Beijing in recent weeks reportedly asking Beijing to turn up the pressure on Pyongyang. That may have paid off. Last week, the Bank of China notified North Korea’s Foreign Trade Bank (FTB) that it “has closed [the FTB’s] account and has also halted all fund transfers related to this account.” In this scenario, the North Koreans have to weigh the level of provocation carefully against the costs of further irritating the Chinese. Usually, the Chinese only squeeze the North Koreans when there is a clear deliverable such as returning to the bargaining table. The fun aspect of this scenario is that, while the North Koreans comply, they’ll also be looking to even the score with the Chinese. If the Chinese need something from North Korea in the near future, IT IS FIREWORKS TIME. Chinese pressure doesn’t always work. On November 30, 2012, a Chinese delegation arrived in Pyongyang carrying “a letter from China’s new leader, Xi Jinping, which is said to have contained a simple message: Do not launch a ballistic missile.” KCNA released a picture of the Chinese handing over the letter. Then, the next day, KCNA announced the Unha launch. Thanks for the letter, Comrade Xi.

• Scenario 3: The celestial mechanics in Pyongyang have produced another unpredictable turn in North Korea’s policy. North Korea has a new Defense Minister, replacing another fellow after seven months on the job. This appears to be part of a broader shake-up of the military over the past year that hints at goings on behind the curtain. We are terribly ignorant about North Korea’s internal politics, although we might take comfort in the fact that the machinations of Pyongyang’s elite are probably also internally opaque to the participants as well. In this scenario, for whatever reason the North Korean leadership has decided that they have gone far enough. Pyongyang may have chosen to try something different, either because a different constellation of interests is ascendant at the moment or tension no longer serves the interest of those who pushed it. In this case—unlike the China scenario—the story plays out in response to unseen factors. North Korea resumes its fitful engagement with the West for some undetermined period of time. That either goes well, or more likely goes according the historical pattern: a short period of engagement; a breakdown amid mutual recriminations; an exchange of provocations, threats and demonstrations. Lather, rinse, repeat.

I lean toward the first scenario, although who knows. The pressure from the Chinese may be helpful, and I confess to not being much of a… whatever we call the North Korean analogue to a Kremlinologist. (A Kumsusanologist?) Perhaps Pyongyang has decided not to waste the political impact of a first Musudan flight test until it has something else, such as a KN-08 flight test, ready to go.

Really, it is anyone’s guess, which is what makes it so fun.

I am not President Park’s advisor, nor am I her speechwriter, but as an American citizen living in South Korea, here is what I would like her to say in Washington:

Mr. Speaker of House, Mr. President of the Senate, and Distinguished Members of the US Congress,

Thank you for this personal honor to address a Joint Session of the US Congress at the beginning of my term as President of South Korea. I want to outline my administration’s policy towards North Korea, a country that has recently received extraordinary media coverage. It is unnecessary to underline the urgency of addressing the dangerous situation on the Korean peninsula. With every crisis comes an opportunity for statesmanship and leadership. I urge you and President Obama to work with me to dissipate the existing stormy clouds so that the promise of a new era may dawn again on Korea, known to many as the land of morning calm.

I am the daughter of a mother who died of a North Korean assassin’s bullet on August 15, 1974. My parents were in a theatre leading a national celebration of our liberation from Japanese rule when she was killed. My mother was yet another victim of the tragedy of the division of Korea that has spawned such enmity, deep-seated mistrust and ideological rivalry and has led to diplomatic confrontation, military skirmishes and brinksmanship. The division of Korea has claimed millions of victims in the Korean War, many of whom died, and many more still cut off from separated families across the DMZ in an uneasy truce.

The 1953 Armistice was negotiated by the United Nations and therefore the world body has a special obligation with respect to the future evolution of the Korean peninsula. However, the destiny of Korea is preeminently in the hands of the Korean people. Neither South nor North can unilaterally decide the fate of our nation. Both are protagonists, and could become partners in shaping a Korea in which cooperation, non-aggression, and exchanges of all forms are the norm rather than the exception. We must discharge this sacred duty ourselves as Koreans. No outsider can or should perform this role or stand in our way.

The nuclear development of North Korea has been a special focus of international attention since the 1994 Agreed Framework negotiations. I have reiterated that North Korea must abide by established agreements. I am aware of the firm position of the United States on Complete, Verifiable and Irreversible Dismantlement (CVID) of North Korea’s nuclear program. Indeed, in the Joint Declaration on Denuclearization signed by the two Koreas in January 1992, both sides agreed not to test, manufacture, produce, receive, possess, store, deploy or use nuclear weapons; to use nuclear energy solely for peaceful purposes; and not to possess facilities for nuclear reprocessing and uranium enrichment. This remains a sound basis for the two Koreas to proceed.

In recent months, North Korea’s missile tests have heightened tensions around Korea dramatically. South Korea, Japan and the United States have responded to these provocations with nearly unprecedented military operations to show our preparedness, demonstrating determined unity to respond swiftly and effectively if necessary. North Korea must not doubt our resolve to stand together as allies nor test our military superiority and ability to launch a punishing retaliation.

Let me turn to key concerns about the current impasse in the North Korea situation.

First, should conflict break out, South Korea would suffer immediate and massive casualties because North Korea possesses potent conventional weaponry. The 27,000 American soldiers in South Korea today would be immediately drawn into the ensuing battle. Our nations remember vividly the enormous bloodshed caused by the Korean War. South Koreans certainly do not wish to experience a repeat of such destruction. The next time around, with ever more lethal weapons of mass destruction possessed by all of the direct and potential parties to the conflict, the military conflagration could indeed ignite what North Korea has described as a “sea of fire.” This is unthinkable and we must not even contemplate such a thing.

That South Korea, the economic miracle on the Han River, could emerge from the ashes of the Korean War was indeed amazing. It attests to the genius and fortitude of my people made possible by your generosity and assistance in guaranteeing that we can develop economically in the security of the ROK-US military alliance. We have transformed ourselves from being a poor beneficiary nation to a donor country in the Organization of Economic Cooperation in Development (OECD). Yet absent a durable peace this incredible accomplishment is ephemeral and in a real sense superficial. The prosperity that we now enjoy perches on a very fragile foundation of military insecurity.

Second, our military insecurity is aggravated by high-stakes great power rivalries in East Asia. In territorial disputes over islands throughout the regional waters, powerful nations are locked in tense claims of sovereignty. War ships and fighter planes have been dispatched to the islands as they circle and stalk each other warily.

Korea was once invaded and divided by outside powers as though we were mere pawns on some big chessboard. Today, whether we like it or not, Korea is caught yet again in a web of complex geostrategic considerations of its neighbors and the United States. There will be no winners, only losers, should war break out again. The current prosperity of the region, the envy of the world, will vaporize in a flash.

Third, North Korea is ruled by a dictatorship, which, as we have witnessed throughout history, is not sustainable in the long run. The spirit of the people resists suppression. It yearns to be free, to enjoy freedom of speech, thought and movement. North Korean rulers have seen the march of history as the once colonized attained independence and as military juntas were overturned by the people in South America, in Africa and throughout Asia. Moreover, across the Socialist bloc, the preeminent role of the Communist Party has given way to multiparty elections, glasnost and perestroika. Eventually the North Korean regime will have to face its own Korean Spring. It is only a matter of time.

North Korea is nestled amid great powers whose economies are critical to global prosperity. An unstable North Korea threatens Northeast Asia’s stability, and creates an uncertain environment for businesses considering investments and joint ventures in the Korean peninsula, including the Rason and Tumen areas, which are vital to the North Korean economy. Above all, parents wonder if their children can grow and learn in peace and security.

Fourth, the insecurity brought about at once by the division of Korea, the historical animosities and legacies, and North Korea’s military dictatorship is further aggravated by the deepening humanitarian crisis. Just within the past few weeks, North Korea asked Mongolia for food aid and five United Nations agencies operating in North Korea issued an urgent appeal for $29.4 million to meet the most critical health and nutrition needs for the next eight months. The UN warned that some 16 million people remain chronically food insecure. With a chronic deficit in medicine and medical supplies, the health care services are unable to meet the population’s basic needs, and infrastructure such as water and heating systems desperately require repair. Health experts believe that an entire generation of North Koreans is malnourished. North Koreans therefore experience a triple jeopardy: dictatorship, widespread human rights violations and chronic food shortages and malnutrition.

The political impasse of the North Korean situation is unacceptable because it creates insecurity, instability and uncertainty, all of which exact a severe psychological toll on our people and a drain on our resources that we can ill afford.

Some policymakers argue that one should not negotiate with dictatorships and that they should be allowed to collapse through internal uprising and external encouragement. Korea’s geopolitical position and Northeast Asia’s economic prosperity can ill afford chaos that may lead to military adventurism. Negotiations and broad engagement should be attempted.

In our own lifetime we have seen dramatic reversals of attitudes and policies: witness the way the international community came to welcome into its fold leaders like Yasser Arafat and Nelson Mandela, together with the liberation movements they had led. China, long ostracized, now has a permanent seat in the United Nations and on the Security Council.

I am therefore seeking a new direction in my country’s North Korea policy. Lack of trust is a major factor that has undermined attempts at genuine reconciliation between North and South Korea. To be sure, North Korea has disregarded international norms. Precisely because mutual confidence is at a low point these days, South Korea has a chance to rebuild that trust. I have proposed a policy of “trustpolitik” that seeks to transform the Korean peninsula from a zone of conflict into a zone of trust, and to establish mutually binding expectations based on international norms. To ensure consistency and stability, trustpolitik should be applied from issue to issue based on verifiable actions, and steps should not be taken for mere political expediency.

The division of Korea, soon to be seventy years, lies at the vortex of multiple issues to be resolved in our region. South Korea and North Korea must forge a respectful partnership in creating the necessary political atmosphere conducive for nations to cooperate constructively in solving the seemingly intractable issues in Northeast Asia.

As a first step in my effort to reestablish trust on the Korean peninsula, I would like to announce today my willingness to meet anywhere and anytime with Kim Jong Un to discuss any and all issues that can put us on a path to peace and stability. Our respective predecessors met at times of great tension. In order to break the present spiral of threats and reprisals, I am prepared to meet with the North Korean leader as soon as possible without preconditions.

A summit would be an important turning point in our relationship. It would be a first step in pursuing a “Northeast Asian Peace and Cooperation Initiative” geared specifically to addressing the quandaries that we face. This new policy will be an alignment policy, undergirded by public consensus and will remain constant regardless of domestic political transitions and unexpected international turmoil.

My inspiration comes from the Helsinki Process of the Organization of Security and Cooperation in Europe. In the height of the Cold War, 35 Heads of State or Government signed the Helsinki Final Act on August 1, 1975. Overcoming ideological competition, these leaders set up a process to discuss and implement security, cooperation in economics, science and technology and environment, and cooperation in humanitarian fields.

However, first and foremost, Northeast Asia urgently needs a comprehensive approach to deal with the politico-military dimension of security—not just its manifestations like North Korea’s nuclear and missile programs—in order to work out mechanisms for conflict prevention and resolution. Essential ingredients must include trust-building measures such as the promotion of greater openness, transparency and cooperation among states. This implies that all countries in the region must welcome each other at the negotiating table with respect.

These steps should help Northeast Asia embark on a path of reconciliation and a more sustainable peace on the Korean peninsula. As leaders and decision-makers, you and I must exercise our solemn duty and responsibility to foster and nurture conditions conducive for enduring peace and economic development. Whether we like it or not, our destinies are intertwined. The globalization and interdependence of our economies, the military alliances and friendship treaties that exist, our capacity to do serious harm to one another with ever more dangerous weapons, the modern weaponry that have range and pinpoint accuracy, all suggest that good neighborly relations, rather than military confrontation, will pay high dividends.

I invite you to partner me in a joint pursuit for a lasting peace and prosperity on the Korean peninsula. None of us can do it alone, but with your support, we can succeed.

Denied access to international financial institutions, North Korea should have had a lot of trouble conducting trade. International trade usually requires a letter of credit issued by a bank to guarantee payment to a seller of goods by the issuer whether or not the buyer eventually pays, and often also to assure the quality of goods to the purchaser.

One myth widely accepted  in policy circles is that the US financial sanctions imposed on the North in 2005 were creating severe problems for Pyongyang and that the new sanctions will have a similar effect. Yet, North Korean trade has grown substantially since 2005—not just with its main partner China, but also with countries throughout South and Southeast Asia, Africa and Europe. Even its trade with South Korea set a record high in 2012 despite the South’s reduced engagement with the North. The transactions are often opaque, making calculations imprecise, but EU data puts North Korea’s trade with the world at 5553 million euros in 2011, up 26.7 percent from 2007. Its trade with Europe in 2011 was 159 million euros, one-third higher than in 2007.[1] Imports from India, much of it petroleum, reportedly topped 1 billion USD in 2010, a tenfold increase from mid-decade.[2] Some evidence compiled by Marcus Noland and Stephan Haggard even suggests that for the first time in its history, the North may have enjoyed a current account surplus in 2011—“bad news” for those who want to believe that economic pressure will bring North Korea to heel.[3]

So how has North Korean trade continued to grow despite sanctions intended to crimp it?

BDA and Beyond

The US Treasury first threatened to invoke Section 311 of the USA PATRIOT Act against the Banco Delta Asia (BDA) in Macao, which it accused of money-laundering for North Korea, in September 2005. So-called “Super 311” would bar BDA from correspondent relations with any US financial institutions. In short, BDA would be unable to transact business with US banks on behalf of its clients. The reputational risk to BDA of the mere threat to invoke Super 311was immediate: a run on the bank that prompted the authorities in Macao to shut it down.

From a broader perspective, the US Treasury’s action proved counterproductive. Interpreting the freezing of its accounts at BDA as a breach of the September 19, 2005 Six Party joint statement and a sign of US hostility, Pyongyang boycotted Six Party Talks until its funds were repatriated. In 2006, it test-launched seven missiles including the longer-range Taepodong 2, ending a seven-year moratorium on such launches first concluded with the Clinton administration. Pyongyang then conducted its first nuclear test. Within days of that test, the Bush administration began bilateral talks with Pyongyang to unfreeze its BDA accounts, but the US Treasury impeded resolution of the dispute for months.

This US Treasury action, euphemistically called “financial measures,” was ostensibly part of the Illicit Activities Initiative (IAI) initiated by the Bush administration. IAI was designed to crack down on North Korean counterfeiting of currency and cigarettes and manufacture of amphetamines.

Yet the US Treasury’s efforts extended far beyond BDA. It threatened to apply Section 311 to any bank in the world doing any business with North Korea.

In July 2009, Under Secretary for Terrorism and Financial Intelligence at the US Treasury, Stuart Levey, made public what he and other US officials had been telling banks in private for over three years—that the US Treasury was not only targeting the North’s illicit trade or its dealings with just one bank:

The bottom line is that because of this kind of deceptive conduct that North Korea engages in that obscures the nature of their transactions, it’s virtually impossible to distinguish between legitimate and illegitimate North Korean business. In the financial world, transparency is a fundamental value. … And North Korea acts in a way that is intended to be opaque. And so it’s for that reason that this has a powerful effect not only with governments, but with the private sector, and particularly banks around the world that have every incentive to protect themselves from this kind of illicit activity. They don’t want to get involved in illicit transactions, whether it’s a nuclear transaction, a missile transaction, whether it’s a transaction that involves the provision of luxury goods to North Korea, which is a violation of the Security Council resolutions. They don’t want to get involved in those transactions, both because they’re good corporate citizens, but also because they are very protective of their own reputations.[4]

The next month, Philip Goldberg, Coordinator for Implementation of UN Security Council Resolution 1874 on North Korea at the State Department, told the UN sanctions committee, “Financial companies must use caution in dealing with not only companies listed on the U.N. blacklist subject to sanctions, but all North Korean companies and individuals.”[5] Similarly, in 2010, Daniel Glaser, Deputy Assistant Secretary for Terrorist Financing, warned that banks that violate United Nations Security Council resolutions and help North Korea’s illicit trade “will be at the risk of falling on the wrong side of these measures and being targeted by these measures,” and added,

I think we’ve shown in the past that sanctions have been very effective in applying pressure on North Korea. I think we’ve shown in the past that we can take targeted measures with respect to North Korean entities involved in illicit activities and have those measures have a profound systemic effect on North Korea’s ability to engage with the international financial system.[6]

The ultimate risk for such banks is that they would be denied access to SWIFT, or the Society for World Interbank Financial Telecommunications. SWIFT transmits orders for payment from one bank to another to facilitate secure and rapid international settlements. Any bank that is shut out of SWIFT would, in effect, be put out of business. Banks exercising due diligence are supposed to ascertain the identities of those with whom they conduct business.

Rather than unwittingly risk a failure to do due diligence and thereby jeopardize correspondent relations with US financial institutions, many reputable banks abroad simply refused to do business with any entities dealing with North Korea.

Why Try to Curb Legitimate Trade?

Washington understandably wants to curb Pyongyang’s money-laundering and other illicit activities, but it seems perverse to impede its legitimate trade when North Koreans are relying more on markets than the state to meet their everyday needs. When North Korea revalued its currency in 2009, so widespread were the protests to the confiscatory measure that it forced the regime to reverse course—evidence that weaning the populace from dependence on the state is transforming its political-economic system.

The flow of goods into North Korea’s markets from outside, especially from China, facilitates that transformation. Isolation, by contrast, would only tighten the regime’s grip.

End Runs by Banks

Yet the question remains, how has North Korea managed to circumvent financial sanctions to conduct trade? As with many aspects of North Korea, it is difficult to know with much confidence, but in this case, educated guesses are possible. Talking to American bankers with many years of experience in Asia reveals several intriguing possibilities.

One way to circumvent financial sanctions, these bankers say, is to disperse funds into small accounts in many banks and keep transactions from each account small enough to avoid triggering the bank’s due diligence. Due diligence requirements in Asia are not always as stringent as those in the United States. Yet even banks operating in good faith, the bankers say, will have trouble vetting documents for trade that is re-invoiced, run through transshipment centers or conducted through one or more intermediaries.

Moreover, some banks knowingly run the risk because they can charge more for transactions with suspect entities or those without extensive correspondent relations with US financial institutions. Shady banks in the Balkans, Russia, Cyprus, the Middle East and China are suspected of doing such transactions, the bankers say, for which they charge 10-20 percent commissions. So are some private banks in Singapore, Hong Kong, Switzerland, Lichtenstein, Luxembourg and Austria.

Regional banks in China are suspected of doing substantial business with North Korea, although most of its trade with China does not use the banking system there at all. John Park, who has long studied the subject, says, “North Korea is doing all its transaction in cash via trading companies inside China, so even BDA-style sanctions will not be able to harm them.”[7]

China has signed on to UN Security Council sanctions curbing weapons-related financial transactions, but the US Treasury is reportedly now picking a fight with China over other transactions as well. As a US Treasury official put it recently,

Treasury has been using tools at its disposal to increase financial pressure on the North Korean regime by targeting individuals and entities responsible for facilitating payments connected to North Korea’s nuclear and ballistic missile program, as well as financial institutions such as the Foreign Trade Bank, which has served as a key node for the regime’s foreign exchange.[8]

Such action would impede the North’s legitimate trade—a step China is unwilling to take. Yet, even if the authorities in Beijing want to curb bank transactions, they may not find it easy to do so. Regional banks in China operate with considerable autonomy, thanks to political protection from powerful local party officials or provincial authorities. Their autonomy was evident after China adopted the world’s largest fiscal stimulus in response to the global financial meltdown. Regional banks put much of the money to work building office and apartment complexes—far in excess of existing demand. When Beijing ordered the banks to redirect investment to more productive uses, it was ignored. Central bankers had to resort to raising reserve requirements for the regional banks in an effort to pop the resulting real estate bubble.

If Beijing cannot control its regional banks’ allocation of domestic investment, will it have more success curbing the banks’ lucrative dealings with murky North Korean entities? That may be especially problematic for banks in the poorer provinces bordering on North Korea whose growth has been spurred in recent years by dealings with the North.

Worshipping at the Temple of Money Changers

Another way around the financial system, the bankers say, is hawala, informal networks of brokers or middlemen who transfer money for clients in countries with large Muslim populations like Malaysia, Indonesia and the Philippines, as well as Syria, Lebanon, the Gulf States and Iran—even India. Hawala operates on the honor system, eliminating the need for a paper trail.

According to a financier with experience in Asia, similar networks of money brokers or middlemen operate in China to facilitate the transfer of funds by Chinese trying to evade taxes and seeking safe havens abroad for their wealth—for a hefty fee. “A lot of the money passes through Hong Kong and Singapore, where I worked,” he said. Macao’s casinos have also been known to launder Chinese money. If so, Beijing may have trouble trying to turn off this flow of funds for North Korea as it does for its own people. “If we’re serious about going after illicit transactions, how do we do that if a lot of it takes place through Chinese firms?” a US official acknowledged in 2010. “I don’t know.”[9]

Another way around the banking system is to carry payment in the form of gemstones, specie or antiquities. North Korea has been known to sell gold for hard currency through shell companies and hire couriers or even use its diplomats to transport the bulk cash wherever it is needed. In 2006, the year after the US Treasury imposed financial sanctions, North Korean exports to Thailand shot up 82 percent to 163 million USD. The US embassy in Bangkok estimated that sales of gold accounted for some 30 million USD of that increase, up from nil the previous year.[10]

UN Security Council Resolution 2094, enacted this March, extends sanctions to bulk cash couriers suspected of involvement in prohibited weapons technology transactions, including DPRK diplomats. Tracking and intercepting them could prove difficult, however.

And finally, the North can circumvent the banking system by barter—exchanging goods without the use of money.

What works for legitimate trade would also enable North Korea to finance illicit trade—including exports and imports of nuclear and missile technology.

In a world where money flows like water, trying to plug all the leaks is doomed to fail. Circumventing the international banking system may make transactions more costly for North Korea, but financial sanctions have not slowed legitimate trade—or stemmed the trade in weapons-related technology that is rightly the focus of those sanctions.

North Koreans may condemn the financial sanctions as evidence of US hostile intent, but they’re crying all the way around the banks.

Summary

According to new commercial satellite imagery, North Korea is nearing completion of an experimental light water reactor (ELWR) that is primarily intended to generate electricity for civilian purposes. The North now appears to be putting the finishing external touches on the reactor and may be completing work inside the building as well. The key factor determining whether Pyongyang can then move on to the start-up period within the next few months—which precedes regular operation of the reactor—is the availability of reactor fuel. Pyongyang unveiled a uranium enrichment plant nearby in 2010 and experts believe that, if the facility has been operating over the past few years, it may have produced sufficient low-enriched uranium that can be used to power the ELWR for several years. This would mean start up activities could begin in the coming weeks. However, it remains unclear to what capacity the facility has been operating. Also unclear is whether the North has mastered the technology for producing the fuel assemblies necessary to power the reactor.

If the North has fuel on hand it will then need to conduct a number of activities during the start-up period which normally takes 9-12 months for commercial power reactors before moving to a full power test and the facility becomes operational. Before loading the nuclear fuel, extensive verification and validation steps will need to be taken to assure the design, manufacture, assembly of nuclear components and construction meet whatever requirements the North Koreans have set for the safe and successful operation of the reactor. But it is worth noting that since Iran has suffered repeated setbacks in operating its own light water reactor, North Korea may have similar troubles. If the start-up period proceeds smoothly, the ELWR could become fully operational during the first half of 2014.

Because North Korea lacks experience in designing, engineering, manufacturing and operating light water reactors, it may also run into difficulties operating the ELWR, which raises serious safety concerns. For example, if defective fuel is inserted into the core, the cladding may fail to maintain physical integrity and release fission products possibly into the pressure vessel and containment building, forcing a shut down. Iran recently unloaded the fuel from its Bushehr reactor, implying a serious safety problem. Operating the reactor cooling system may also pose challenges as the Iranians discovered when a faulty pump led to lengthy delays in 2011. Moreover, North Korea has no experience in the specialized task of fabricating the large steel pressure vessels that contain the reactor core. Considerable care must be taken to ensure that the welds holding the vessels together can survive the highly radioactive environment of a nuclear core or risk a catastrophic loss of pressurized coolant that would result in a meltdown. Finally, as the Fukushima event in Japan demonstrated, even a well designed, constructed and tested plant must be capable of addressing unanticipated contingencies such as natural disasters. It is unclear whether the North can deal with such events.

Installation of Reactor Equipment

North Korea has made rapid progress over the past year in building its ELWR. An important milestone was reached last year when Pyongyang placed a dome over the reactor containment building. At the time, some observers wondered whether North Korea had sufficient time to install heavy equipment inside the building, such as the pressure vessel to hold the reactor core, before the dome was put in place. However, it may have been possible for the North to complete that task more rapidly than expected given the small size of the reactor.

Figure 1. Dome emplaced by November 2012.

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Satellite imagery suggests that North Korea may have begun to install additional equipment in the reactor hall beginning in September 2012. Several large containers and possible equipment covered by tarps visible that month (see figure 2) were no longer present by November. The contents may have been unloaded and placed inside the reactor building. Since nuclear reactors contain equipment of all sizes, it is not possible to positively identify the specific components but they were of sufficient size—generally about three meters by three meters and of varying heights with one rectangular eight meter by four meter object—to contain items such as smaller pumps, piping and electrical equipment.

Figure 2. Possible containers for reactor components.

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Finishing Touches on Water Cooling System

After working for two years on the water cooling system designed to draw water from and return it to the river, the North now appears nearing completion of this system.[1] Google Earth imagery from May 2011 shows a pair of deep trenches most likely intended to accommodate piping that will bring and return water held in several man made ponds to the west of the pump house. (The trenches terminate at circular structures sitting in man made ponds for holding water.)

Figure 3. Piping trenches for water cooling system.

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By September 2012, the pipes were submerged, but the two circular structures are clearly visible, sitting in ponds holding the water that will be used to cool the reactor and then returned to the river.

Figure 4. Pipes submerged; only circular structures visible.

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In November 2012, a trench for piping appears to be visible connecting the pump house to the reactor (see figure 5). (One would expect, as we see here, that the feed and return systems will flow through the turbine hall.) In the snow-covered January image, the trench is covered, suggesting that the piping is in place (see figure 6).

Figure 5. New trench for piping visible.

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To the west of the reactor containment building, there are two large circular rings that appear to be for condensate or make-up water storage tanks—another important element of the cooling system. (Make-up water is recycled into the cooling system to compensate for evaporation losses.) In the January 2013 image, similar rings have been installed next to the spent fuel storage building.

Figure 6. Possible water storage tanks installed.

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Construction of Electrical Substation

To the east of the turbine building,North Korea appears to be nearing completion of an electrical substation, sometimes called a “switchyard,” where all electric transfers are done. (Reactors not only generate electricity for the power grid, but also need offsite power to operate and a backup system of diesel generators in case power is lost.) Construction started around fall of last year.

Figure 7. Electrical substation components.

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In addition to the possible switchyard, there are several tall structures on what remains of the sandbar in the river that are connected by dirt road to the main complex. One of these appears to be tower for large power lines leading out of the reactor complex to connect it to the power grid.

Figure 8. Possible tower for large power lines.

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Satellite imagery from February 7, 2013, shows the external construction of the building is complete. The large crane on the east side of the building is being disassembled on the ground by a crane and was removed by late March. The cooling pipes from the pump house near the river to the reactor have been buried. The electrical substation on the east side of the building is not yet finished and has not yet been connected to the power line a little further to the east. The driveways leading into the entrances to the reactor have nearly been paved with some more work to be done on the east side. The majority of work is now being done inside the building precluding any insight from commercial imagery.

Figure 9. Completed reactor building.

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By March, the North Koreans seem to be in the clean up phase of finishing the ELWR. The electrical substation on the east side of the building is nearing completion, while work seems to be continuing on the bare ground where the cooling pipes make the right angle turn and go into the reactor building. The large crane that had been taken down in February but not removed is now gone, and at the south end of the reactor building a trench for a pipe to return water to the river is now seen. On an April 4 image (not shown), another trench was seen leaving the reactor on its east side and running to the north. Most of the current work is probably being done inside, but they are not yet finished installing the reactor’s water and electrical connections.

Figure 10. New trench visible.

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Conclusion

Pyongyang appears to be in the final “clean up” stage of completing the ELWR. However, producing fuel for the reactor remains an important and difficult hurdle. North Korea publicly disclosed an enrichment facility at Yongbyon in late 2010 and has claimed that it has begun enriching uranium at very low levels that could be used for manufacturing fuel rods, though these claims have not been confirmed. Moreover, developing technology for manufacturing fuel assemblies is a demanding task requiring in situ tests to validate safety performance before producing credible assemblies for the reactor. If the North has solved these problems and fuel is indeed available, the facility could begin a start-up period by mid-2013 that precedes the facility becoming fully operational.

If the North is ready to move forward, the start-up period, which typically lasts 9-12 months, will be used to conduct activities including fuel loading and physics tests before moving to a full power test. Prior to the nuclear fuel loading, extensive verification and validation steps will need to be taken to assure the design, manufacture, assembly of nuclear components and construction of major structures meet operational requirements. Given Pyongyang’s lack of experience in building this type of reactor, delays are quite possible during this phase. However, under a best-case scenario, the ELWR could become fully operational by the first half of 2014.

When the reactor starts operating, there is a danger that North Korea may experience difficulty in operating it safely. For example, if defective fuel is inserted into the core, the cladding may fail to maintain physical integrity and release fission products possibly into the pressure vessel and containment building, forcing a shut down. Iran recently unloaded the fuel from its Bushehr reactor, implying a serious safety problem—one of a series of delays that have afflicted its first light water reactor. Operating the reactor cooling system may also pose challenges as the Iranians discovered when a faulty pump led to lengthy delays in 2011. Moreover, North Korea does not have experience in the highly specialized task of fabricating the large steel pressure vessels that contain the reactor core. Considerable care must be taken to ensure that the welds holding the vessels together can survive the highly radioactive environment of a nuclear core or risk a catastrophic loss of pressurized coolant that would result in a meltdown. Finally, as the Fukushima event in Japan demonstrated, even a well designed, constructed and tested plant must be capable of addressing unanticipated contingencies such as natural disasters. It is unclear whether the North can deal with such events.

While the reactor seems designed to produce electricity for the civilian economy, it will have a residual capability to produce plutonium that can be used for nuclear weapons.[2]

Recognizing this situation as an unprecedented national crisis and her first political challenge, South Korean President Park Geun-hye will visit Washington on May 6-8, 2013, for her first summit with US President Barack Obama. It is generally agreed that the two leaders will discuss how to rein in an increasingly hostile North Korea among other issues critical to US-ROK relations such as the Korea-US Free Trade Agreement (KORUS FTA) and maintaining peace in Northeast Asia.[1] The US visit will be President Park’s first overseas trip since taking office in February and symbolically demonstrates the significance of the ROK-US alliance.

Shortly after the announcement of the upcoming summit, North Korea’s National Defense Commission (NDC) and the Committee for the Peaceful Reunification of Korea asserted on April 18 that South Korea and the US should immediately halt all hostile actions and further provocations if they want to engage in dialogue and defuse tensions on the peninsula.[2] And while the ROK’s Unification Minister Ryoo Kihl-jae has in the past called for dialogue with the North to terminate gridlock, he dismissed the latest warning from the North as “irresponsible” and “hackneyed.” The ministry’s shift in tone is seemingly reflective of President Park’s firmness in her policy toward the rival country.

At the same time, Seoul and Washington see the necessity of trying to walk the young North Korean leader, Kim Jong Un, back from the brink. President Park has reportedly said, “We have a lot of issues, including the Kaesong Industrial Complex. So should we not meet with them and ask, ‘Just what are you trying to do?’”[3] Similarly, US Secretary of State John Kerry underscored on April 12 in Seoul that the US was open to negotiations with North Korea if it committed itself to eventual denuclearization. Prior to this, the US had rescheduled an intercontinental ballistic missile test of its own scheduled for mid-April to May, in an effort to avoid any misperception or chance of manipulation from the North. Kerry also said on April 14 in Japan, that “before talks could begin, North Korea needed to take tangible steps to demonstrate that it was serious about denuclearization.”[4] Unfortunately, given South Korea’s dismissal of North Korea’s recent announcement and the US’ conditional rhetoric, the two allies are unlikely to rush to bring North Korea back into talks to defuse tensions on the peninsula.

However, it does raise the question: Are we witnessing a gradual shift in the foreign policies of South Korea and the US, giving the North Korean leader, Kim Jong Un, some sort of off-ramp while saving face? Or is it safe to say that North Korea has decided to launch a full-scale war against South Korea and the US in one way or another to save face, rather than live by bluffing? In either case, what’s certain is that time horizons, short or long, are functioning as key drivers of action in inter-Korean relations, as if the two rivals are exploring how they would actually make tradeoffs.

For the great majority of North Korea experts, the prospects for a dramatic change in the inter-Korean relationship appear dim,[5] especially now that the North Korean regime has declared that its nuclear capability is regarded as the nation’s “life” and would never be abandoned. In truth, Park’s administration feels no need to redouble its efforts to engage the highly militarized North. Dispatching a special envoy is not on the table at all in consideration of her national security aides—not only because many were previously military generals but also because of the politically conservative domestic atmosphere. Certainly, any chance for a diplomatic resolution of the high tensions caused by the North’s nuclear program has receded for the foreseeable future. Furthermore, armed conflict with the Stalinist regime is always possible. If a reminder were needed of that reality, the tragic sinking of the South Korean naval corvette, the Cheonan, on March 2010 and North Korea’s shelling of Yeonpyeong Island in November 2010 provide telling examples. South Koreans seem to be getting both nervous and impatient with the steady progression of North Korea’s nuclear advancement.

Nevertheless, there are some important variables that could bring about a dramatic rapprochement in inter-Korean affairs. First, sensing intuitively that the current situation remains under control, more policymakers now feel compelled to open a path to a dialogue through so-called back channels. They judge wisely that diplomacy backed by force is more effective than force with no diplomacy.

Second, it is fortunate that no countries, including the US, have moved to internationalize the North’s bellicose rhetoric. Washington takes it with a big grain of salt, albeit it is not clear whether South Korea, China, Japan and Russia, member states of the dormant Six Party Talks, share this view.

Third, if North Korea moves in the right direction, the Park government has good reasons to make a deal with Pyongyang. The recognition that South Korea’s hoary policies toward North Korea will not satisfy a nuclear-armed Pyongyang does not mean that there is nothing the conservative Park government can do to reduce the danger on the peninsula. On the contrary, with the majority of the global market closed to the isolated North Korea, there are a number of mutually worthwhile projects South Korea could initiate to help build inter-Korean economic cooperation and improve North-South relations.

In May 2002, for example, Ms. Park (then National Assemblywoman) met the North Korean leader Kim Jong Il in Pyongyang, where they discussed a range of issues, including the Trans-Siberian and Trans-China rail lines. As a pragmatist and deal maker who understands the political and economic value of inter-Korean negotiations, she believes that once the two Koreas are able to overcome confrontational relations, the peninsula will likely emerge as a hub of cooperation and mutual prosperity. This has clear implications for pundits concerned with inter-Korean diplomacy and crisis bargaining.

In electing Ms. Park, South Koreans voted for stability and peace on the peninsula. They are tired of North Korea’s endless threats, although so far, the election of President Park has not instilled confidence that the country is safer, especially from small-scale conflicts.[6] To this end, the question of whether the quest for a breakthrough with North Korea should be the first diplomatic priority for Park’s term is a no-brainer.

President Park understands that her ambitious mission will be difficult without cooperation from the United States, in part because Washington’s relationship with China, South Korea’s strategic partner, could help strengthen a more positive inter-Korean relationship and vice versa. In this light, the Obama administration’s continued strategic patience with North Korea on denuclearization will be unhelpful in the long run. This first summit between Presidents Park and Obama should be the venue for finding a new path toward a nuclear-free Korea, while discussing how to cajole China to press for change in North Korea. In addition, since pressure alone is not going to stop North Korea’s nuclear program, the two leaders need to talk about how to respond in the event that Pyongyang comes seriously to the table.

Today there are real risks of inappropriate action but it is certain that coercive bombing is by no means enough to stabilize the peninsula’s shaky security architecture. Even if people believe that attacks from the North appear extremely unlikely for the time being, the magnitude of a small-scale crisis on the peninsula could trigger a full-scale war. We saw this happen in August 1914 when inter-state conflict was ignited, sparking the First World War. Getting the peace regime in order will require significant and tangible resources and strategic cooperation from the international community. To this end, let’s hope that the upcoming US-ROK presidential summit will be successful, and that in the process of meeting, Seoul and Washington learn to deal with the rash young leader as he is, not as they may wish him to be.

When Shinzo Abe earned a second chance to govern Japan as prime minister in December 2012, his return was received with anxiety in Beijing, Seoul and even Washington. Focused on Abe’s conservative views and his perspective on Japan’s wartime past, pessimists were concerned that the new government might make policy decisions that would aggravate Japan’s relations with China and South Korea. Optimists who focused more on Abe’s pro-US stance were encouraged that consultation between Washington and Tokyo under the new prime minister would improve. Whether one has a pessimistic or optimistic foreign policy outlook, one thing was clear from the very beginning: Abe’s return would likely shift the government’s focus back to Japan-DPRK relations.

In three years of rule by the Democratic Party of Japan (DPJ), there was little development in that relationship. On every issue, from how Japan would re-vitalize its attempt to carve out a role in the Six Party Talks to addressing bilateral issues with Pyongyang, there were few indications that the DPJ was thinking through its policy. There was also little engagement between Tokyo and Pyongyang, although the Noda government finally began bilateral talks with the North in August 2012. By then, however, it was “too little, too late” to lead to anything meaningful.

While none of the DPJ government leaders—Hatoyama, Kan or Noda—were known for their interest in North Korean issues, Shinzo Abe’s personal stake is very clear. After all, he became a national political figure because of his commitment to the “abduction issue” as the Deputy Chief Cabinet Secretary for then Prime Minister Koizumi. What is also known is Abe’s strong interest in making Japan’s defense capability more robust. He has already made clear that he intends to address legal obstacles that restrict the activities of the Japan Self-Defense Force (JSDF), to increase Japan’s defense budget—reversing a trend that has been ongoing for more than a decade—and to stress alliance cooperation with the United States to buttress Japan’s security. This does not mean that Abe intends to make Japan into a country with aggressive intentions. It does mean, however, that he intends to send a message that his Japan will not be threatened by anyone, including its neighbors.

Since his inauguration, Prime Minister Abe has already demonstrated that his government will take a tough stance vis-à-vis North Korea. First and foremost, the abduction issue remains a high priority. On January 25, 2013, Abe convened the first government-wide meeting on that issue and appointed a longtime political ally Keiji Furuya, who shares his strong interest, to be the cabinet minister in charge. Also, in Abe’s first policy address to the Diet in January, he identified “resolution of the abduction issue” as one of the government’s foreign policy priorities. He even mentioned the issue in a speech during a visit to Washington in February, stressing that his government would not lift sanctions against North Korea, and stating that “unless they give up on developing a nuclear arsenal, missile technologies, and release all the Japanese citizens they abducted, my government will give them no reward.”[1] Moreover, working with the European Union (EU) and others who have concerns for human rights violations in North Korea, Japan was instrumental in establishing a committee of inquiry in the United Nations.

Crafting an effective response to North Korea, however, is a serious foreign policy challenge for Abe. First, Japan lacks leverage vis-à-vis Pyongyang. Tokyo has already imposed international as well as unilateral sanctions, enacting in 2006 a blanket import ban on all goods in response to North Korea’s first nuclear test that was expanded to a complete trade embargo in 2009 when Pyongyang conducted its second test. In response to the February 2013 nuclear test, Japan introduced additional sanctions, placing stringent restrictions on travel by North Koreans and their sympathizers between the two countries. This combination of multilateral and unilateral sanctions has completely stopped trade between Japan and North Korea, including financial flows from Pyongyang’s sympathizers in Japan. As a result, Tokyo has very little economic leverage left to use against its neighbor.

On measures to bolster Japan’s own security, there is not much more Abe can do under the current legal framework. To be sure, he has indicated an interest in bolstering Japan’s defense capabilities, including acquiring preventive strike capabilities that could be used against North Korea. However, that mission will first require an amendment to the existing law, which is very time-consuming and also fiscally unrealistic, at least for the short-term. Finally, acquiring a preventive strike capability would be diplomatically problematic since it would probably complicate Japan’s already tenuous relations with South Korea and China.

While there are a host of other political, economic and social constraints, given the renewed “nuclear allergy” among the Japanese public after the Fukushima nuclear accident in March 2011, pursuing an independent nuclear capability is also completely out of the question. Popular sentiment is unlikely to change even if Pyongyang continues down the path towards building a larger more sophisticated WMD arsenal by producing highly-enriched uranium (HEU). Although Pyongyang’s provocations continue, North Korea gaining the capability to put nuclear warheads on missiles is still seen as such an extreme scenario that it is simply unfathomable for most Japanese including its leaders. For the time being, therefore, continuing to invest in ballistic missile defense, further strengthening defense cooperation with the United States and trying to improve US-Japan-ROK trilateral security cooperation are the only realistic military measures that Abe’s government can take.

Limited in its ability to influence North Korean behavior either through sanctions or military means, the only viable tool Japan has is its diplomacy. But the government is also handicapped here. If Japan attempts to play a meaningful diplomatic role in responding to North Korea’s provocations, Abe will have to find a way around the abduction issue that hamstrings Japan’s policy options. This requires him to tread carefully between demonstrating his commitment to see the abduction issue through to its satisfactory resolution (Abe himself must define what that looks like) while opening the possibility of a more flexible approach to North Korea in case Pyongyang’s behavior improves. Establishing the benchmarks for Japan to loosen sanctions against North Korea, while politically difficult in the current situation, might be a good practical first step in that direction; although pursuing this path is still likely to be politically difficult. Being unable to do so will leave Japan marginalized in the efforts to denuclearize North Korea.

A bigger and—with North Korea abrogating the armistice—a more urgent question for Japan is what it will do if the diplomacy with North Korea never revives. Will Japan reach a point where it will no longer be satisfied with the reassurances from the United States on the effectiveness of its extended deterrence? Will Japan begin to explore its own options? If it does, will the circumstance be so significant that an independent nuclear option—unthinkable in the short-term—will become an option?

The most decisive factor that will affect Japan’s course is the state of the US-Japan alliance, particularly the level of confidence between Tokyo and Washington. The more confident Japan feels about its alliance relationship with the United States, the more likely it is for Tokyo to be reassured by the US commitment to its defense. A Japan that has confidence in US extended deterrence will likely be restrained in its response to a North Korean threat, continue to focus its efforts in investing in ballistic missile defense and on deepening its defense ties with the US. However, if Japan’s confidence with Washington should falter, it will likely drive Tokyo to buttress its indigenous defense capability without considering the potential destabilizing impact such measures may have on the East Asia security environment.

For instance, although legally, diplomatically and fiscally unfeasible in the short-term, acquiring a limited capability for preemptive attack is the most probable step Japan would take in the medium-term as an effort to strengthen its defense capability against Pyongyang’s growing missile threat. The term “point-of-origination attack capability” (sakugen-chi kogeki), referring to the capability to attack North Korea’s missile launch sites, was already introduced in Japanese debate when North Korea conducted its first nuclear test. Whether Japan should acquire such a capability is likely to be seriously considered as Japan sets out to revise its National Defense Program Guidelines (NDPG)—its mid-term defense program document.

When North Korea’s provocation began earlier in the year, Prime Minister Abe signaled that, while it will take steps to carefully increase its defenses, he will pursue dialogue with North Korea as well. But now that Pyongyang has ramped up its belligerent rhetoric and poses to test another missile, the Abe administration’s interest in exploring the opening for dialogue seems all but disappeared. During his meeting with Secretary of State John Kerry on April 15, Abe reportedly shared his pessimism for North Korea honoring any international agreement. While Washington can take all necessary steps to maintain a high degree of confidence in the US-Japan alliance, if the dead end of diplomatic efforts is reached, ensuring that Tokyo’s response remains measured and avoiding an arms race in Northeast Asia may prove difficult.

On the other hand, the March 31 plenary session of the Korean Workers’ Party (KWP) adopted a policy of economic development to run parallel with a further build-up of the country’s nuclear forces. This event was followed by a session of the Supreme People’s Assembly (SPA), which re-appointed former Prime Minister Pak Pong Ju, a supporter of economic reforms, to head the cabinet.

These developments suggest that, rather than unleashing an all-out war, Pyongyang is in fact keen to develop its economy. Of no less importance is the fact that, for the time being, people in both countries continue to live their normal daily lives.

In analyzing the current Korean escalation we must specifically look at two major recent events: North Korea’s announcement on March 8 that it was invalidating the 1953 Armistice and all associated agreements with South Korea; and also Pyongyang’s cutting of military hotlines between Seoul and Washington.

International media reports have been primarily focusing on Pyongyang’s increasingly belligerent statements that an order had already been issued to deliver nuclear strikes against US military bases in different regions of the world and that North Korea is now at war with South Korea. This news certainly cannot leave anyone indifferent.

However if we discard emotions and scrutinize the North Korean documents that are being cited by the media, we will find the following. First, just as was the case with similar statements Pyongyang has made in the past, the fresh threats clearly state that any military action would be entirely reciprocal, only to be resorted to if the country was subjected to an outside aggression. For example, the Special Statement issued by the DPRK on March 30 “declaring” the state of war with the ROK pointed out the following:

If the U.S. and the south Korean puppet group perpetrate a military provocation for igniting a war against the DPRK in any area including the five islands in the West Sea of Korea or in the area along the Military Demarcation Line, it will not be limited to a local war, but develop into an all-out war, a nuclear war.[1]

Or the same statement regarding the US:

If they make a reckless provocation with huge strategic forces, the KPA should mercilessly strike the U.S. mainland, their stronghold, their military bases in the operational theaters in the Pacific, including Hawaii and Guam, and those in south Korea.[2]

The very strong warning and menacing statement issued by the General Staff of the Korean People’s Army (KPA) spokesman on April 4 was full of threats towards the US like the following:

We formally inform the White House and Pentagon that the ever-escalating U.S. hostile policy toward the DPRK and its reckless nuclear threat will be smashed by the strong will of all the united service personnel and people and cutting-edge smaller, lighter and diversified nuclear strike means of the DPRK and that the merciless operation of its revolutionary armed forces in this regard has been finally examined and ratified.[3]

However even in such case the final conclusion of this belligerent document looked like the appeal for a dialogue: “The U.S. had better ponder over the prevailing grave situation.”[4]

Therefore, there are grounds to perceive these public statements as a strong warning to North Korea’s opponents not to cross the “final line” and, in fact, Pyongyang does not appear to be harboring plans for a pre-emptive strike against its potential adversaries.

Moreover, in considering the risky game that has again brought the two Koreas to the brink of open warfare, we should assess the role of all the parties involved, and their contribution to the present standoff. The US and South Korea have been fueling the tensions with just as much fervor. In fact, while North Korea has so far been limiting itself to rhetoric (although admittedly fairly belligerent rhetoric), its opponents have been taking actual steps towards greater escalation of the conflict.

Washington’s decision to deploy interceptors in Alaska as a measure against a possible North Korean missile attack by Pyongyang’s non-existent intercontinental ballistic missiles is one such step. Another is the deployment of nuclear-capable B-52 strategic bombers (for the first time in many years) and a B-2 stealth bomber close to North Korea’s borders in the on-going joint US-South Korean exercises Key Resolve and Foal Eagle. The scenarios of these exercises include practice bomb runs to imitate nuclear strikes against North Korea. This is no longer just rhetoric but actual military activities aimed, among other things, at intimidating and demoralizing the opponent. Any country would view such behavior as an act of provocation, and would react accordingly.

It is also important to realize that the North Koreans have actually nowhere to retreat. Since displaying any sign of weakness will have a devastating effect, there must be no doubt left that it will fight to the end using all the means at its disposal in case an attack is launched.

However Washington and Seoul have recently announced plans for yet another exercise, a third one in the span of the last two months. It will involve the two countries’ Marine Corps troops and will last the better part of April. The exercise will be staged in a disputed sector of the Yellow Sea on the border between the two Koreas, roughly in the area where North Korean artillery bombarded South Korea’s Yeonpyeong Island in 2010 in an exchange of fire during a South Korean military exercise. China’s recent moves to increase its military presence along the border with North Korea may be a response to US-ROK military exercises as well as to emphasize that the PRC-DPRK military alliance treaty is still in force.

Regarding China, we are now witnessing an obvious contradiction in US policy. On the conceptual level, Washington is trying hard to persuade Beijing to give up Pyongyang as a troublemaker harmful to Chinese interests. However, contrary to what some in US policy circles may believe, the American deployment of additional forces near PRC territory and increasing the military threat not only to North Korea but also to China may have the opposite effect, compelling Beijing to postpone (or skip) addressing the actual contradictions in its policies—supporting a troublemaker—and its desire to punish an unruly partner in favor of consolidating alliance ties.

In the light of the current situation on the Korean peninsula, and in order to prevent the worst-case scenario, the international community should immediately and unambiguously call on all parties either side of the 38th Parallel to exercise maximum restraint and to weigh their actions against the possible consequences. As initial steps to stop further escalation all participants should first cool the highly belligerent rhetoric, reduce the scale of military exercises and remove them from direct vicinity of the DMZ and the most sensitive zones, such as disputed areas in the Yellow Sea.

The rapid aggravation of the crisis should remind us of the successful experience of direct US-North Korea “unofficial” contact in order to prevent the worst-case scenario. Many observers do not understand the importance of former US President Jimmy Carter’s visit to Pyongyang in June 1994, when in the course of intensive talks with the late North Korea leader Kim Il Sung, he succeeded in helping the Clinton administration escape a seemingly unavoidable military conflict and turn the situation in a positive direction.

From a broader perspective, we can also argue that empirical data in dealing with North Korea demonstrates the following: strong-arm tactics, isolation and sanctions alone, including the US policy of “strategic patience,” have failed to bring positive results and to stop Pyongyang’s nuclear and missile programs. To the contrary, only a policy of diplomacy and strategic compromise has proven successful. Talks placing the parties on an equal footing and taking into account their legitimate mutual concerns have succeeded in delaying or freezing the situation at different points in the development of North Korea’s nuclear program, and in some cases have even resulted in a cessation of nuclear activities. We should also not ignore a growing appeal to focus on nonproliferation in negotiations with North Korea, not disarmament, at the present time, while not abandoning disarmament as an ultimate, long-term goal.

Moscow has already committed to preserving peace in the region and has strongly urged stopping the dangerous rhetoric and military drills and working to create the conditions for restarting the Six Party Talks. At the same time, Russia has strongly condemned the decision at the recent KWP and SPA meetings to adopt the ordinance, “On Consolidating the Position of Nuclear Weapons State for Self-Defense.” The Russian Foreign Ministry emphasized that such step “extremely complicated the six-party talks resumption prospects.” Foreign Minister Sergey Lavrov, commenting on recent events in Pyongyang, outlined on April 5, “We maintain close contacts with our Chinese, American, South Korean, Japanese partners—parties to six-party talks.”

Of course Russia can play its conciliator role. Considering its historic strong interests on the Korean peninsula and vast experience as a mediator, now may be the right time for Moscow, working closely with its Chinese partners, to take an initiative designed to end the current tensions and help the concerned parties move back to more peaceful diplomacy and negotiation.

U.S. Secretary of State John Kerry’s visit to Asia is an important opportunity to start fashioning an off-ramp from the crisis on the Korean peninsula. “We are seeking a partner to deal with in a rational and reasonable way,” he said upon landing in Seoul Friday. But if Kerry is to succeed in his mission, the United States will need to discard two historical myths: that Pyongyang has used bellicose behavior to squeeze aid out of a cringing United States, and that the North always cheats on its agreements. This caricature is not only wrong but also hamstrings America’s ability to deal effectively with a dangerous adversary.

Exhibit A is the 1994 U.S.-North Korean Agreed Framework negotiated by Amb. Robert L. Gallucci, who was then my boss at the State Department. Under the agreement, Pyongyang pledged to dismantle its large plutonium production program and return to the Non-Proliferation Treaty in exchange for two light-water reactors and heavy fuel oil. Although the arrangement was reached after a crisis triggered by North Korean brinksmanship, the results were a success for U.S. foreign policy. At the time, U.S. intelligence estimates predicted that North Korea could build up to 100 nuclear weapons by 2000. Fast-forward to 2002, when the agreement collapsed, and the North only had fissile material for a handful of bombs. Moreover, key nuclear facilities had deteriorated so much that they could not be salvaged. The North still has not recovered from that setback.

As for the assistance provided to North Korea, even on that count Pyongyang came up short. Not only did the North Koreans trash their multi-billion dollar nuclear program, but all they had to show for it were two incomplete concrete-filled holes in the ground that can still be seen on Google Earth. No money was given in cash to Pyongyang. North Korea did receive a few hundred million dollars worth of heavy fuel oil under the framework agreement, but that seems a small price to pay for gutting a program on the verge of churning out 100 bombs.

Another deal, cited by a conservative scholar during our recent joint appearance on the Lehrer Report, was reached in 1998 when, according to him, “the Clinton administration paid North Korea almost $200 million worth of food aid for the empty privilege of inspecting an empty cave in the aftermath of North Korea firing a long range missile over Japan on Aug. 31, 1998.”

Since I led the inspection, I know what happened. The whole episode was a self-inflicted wound, not the result of Korean pressure tactics. The Clinton administration made a deal to inspect the “empty cave” when the conclusions of one intelligence agency that thought the North Koreans were violating the 1994 agreement by hiding a secret nuclear facility (most agencies didn’t think so) were leaked the to the New York Times. Even though the North Koreans warned American diplomats that there was nothing there, the administration had to cover its domestic flank. Sure enough, there was nothing there and there never had been. The intelligence agency’s analysis was simply wrong.

Food aid was indeed part of the deal, but the scholar neglected to say that the United States had planned to give it to the North Koreans anyway. The administration was not providing aid because of Pyongyang’s bluster, but rather for humanitarian reasons since the North’s population was suffering from a famine that may have killed as many as one million people. When the nuclear story broke, the decision was made to fold it into the inspection deal to avoid having to fork over any new assistance. That sounds to me like a smart move.

As a postscript, afterwards the Clinton administration reached a deal with Pyongyang imposing a moratorium on tests of long-range missiles and space-launch vehicles that lasted seven years until 2006. What did we give the North Koreans in return? The United States promised only to continue diplomatic dialogue, not to provide economic assistance. Just think how much worse the missile threat would be today if the North had not lost all of that valuable time.

Do the North Koreans cheat on agreements? Pyongyang’s pursuit of a uranium enrichment program beginning in the late 1990s violated the spirit of the Agreed Framework, but the United States detected these activities early on. Had Vice President Al Gore won the election, plans were already in place to confront the North. Unfortunately the George W. Bush administration did nothing and allowed the problem to fester. The North Koreans did, however, abide by agreements to implement the Agreed Framework. (Many covered the construction arrangements for building the two reactors and one established a joint U.S.-North Korea project to safely store spent nuclear fuel rods at its Yongbyon facility that contained plutonium.) The same applies to a host of other arrangements until the framework ended in 2002.The bottom line: Whether with the Soviet Union or North Korea, as President Ronald Reagan said, the key is to “trust but verify.”

Some may point to the February 2011 Leap Day deal that quickly broke down as an example of how you cannot reach agreements with North Koreans. But that episode was really a lesson on how knowing history is important. Even before the ink was dry, private experts noticed that the unilateral statements issued by Washington and Pyongyang allowed a big loophole, only banning “long-range missile tests,” a formulation the North had long insisted did not include space-launch vehicles. Sure enough, the North claimed the agreement did not cover space-launches, fired off an Unha rocket with a satellite on top, and the agreement collapsed.

The fact is diplomacy, if conducted with care, can and must play an important role in finding solutions, even with North Korea. Contact with the North Korean leadership can clarify its intentions in a way that cannot be done by parsing the words of Pyongyang’s bellicose press releases. We might learn that there are peaceful paths forward or that the North is indeed bent on confrontation. Either way, clarity is essential given the seriousness of this situation. Diplomacy is also an important tool in building coalitions; it could garner support from China, which is desperately interested in reinvigorating the diplomatic track, and also would be welcomed by our allies who have the most to lose from any confrontation with Pyongyang. That is certainly true for South Korea, whose new president has signaled her desire to reengage Pyongyang.

In addition to echoing public warnings against aggression, at the appropriate time, Washington could use meetings with North Korean diplomats stationed at the United Nations (the so-called New York channel) to signal a willingness to engage in unconditional discussions to see if there is a path forward. If Pyongyang agrees, subsequent discussions should involve higher-level officials to insure the close attention of the North’s leadership. Those discussions should explore a broad agenda, including Pyongyang’s concerns — reaching a peace treaty and lifting sanctions — and Washington’s priorities — ending the North’s nuclear and missile programs. If all goes well and common ground is identified, the exploratory talks could be used as a platform to spin off more formal negotiations. U.S. allies and the Chinese, all of whom might eventually join the talks, would be kept closely informed.

So let’s hope that Kerry will use this trip to go beyond reciting standard, boilerplate talking points. A new diplomatic offensive, which might open an avenue to peaceful resolution of the current crisis, would demonstrate that the United States understands that exercising leadership means more than just flexing military muscle. What’s the alternative? More threats, more instability, and possibly even a war that nobody wants.

From left to right: Col.-Gen. Ri Yong Kil, Director of Operations Bureau of KPA General Staff Department, Lt.-Gen. Kim Rak Kyom, Commander of KPA Strategic Rocket Forces, Kim Jong Un, General Hyon Yong Chol, Chief of KPA General Staff Department, and General Kim Yong Chol, Director of KPA General Reconnaissance Bureau (Photo from KCTV).

Why is Pyongyang engaging in such reckless and confrontational behavior? Is there anything Seoul and Washington can do to alter this stance? Or is this mission impossible?

Pyongyang’s Tactical Motives

Most experts are quick to dismiss the current round of North Korean threats and warnings as typical examples of Pyongyang’s rhetorical grandstanding. They argue that the North is bluffing to get attention and compel Washington and Seoul to return to the dialogue table on terms favorable to the North. They may be right. Pyongyang’s tough talk is not likely to translate into hard-hitting action this time around. One sure sign is that there are no ominous indications on the ground of imminent military action such as the general mobilization of forces or troops concentrating in the border areas.

Nonetheless, these reckless and provocative threats should be taken seriously not only because they reflect the immaturity and shortsightedness of the new North Korean leadership, but also because they reveal the unambiguous “hostile intentions” the regime harbors towards Washington and its allies. We have always known about these “hostile intentions,” but now they have stated them on the record loud and clear. The recent barrage of pronouncements from Pyongyang has left an indelible negative impression in the minds of the American people, which will be hard to undo through any exchanges or negotiations any time soon, especially as long as the current regime stays in power in Pyongyang.

Bearing in mind that the North Korean system of governance still operates on the basis of a unified guidance principle and that there have been no visible signs of factionalism or internal political conflict, Kim Jong Un is the real mastermind behind these threats. There is no evidence that he is being manipulated by some aging grey cardinal or clique of military hardliners from behind the scenes. As the man in charge, Kim Jong Un, not his advisors, has to take full responsibility for orchestrating the North’s ongoing psychological offensive against the West and subsequent escalation of tensions on and around the Korean peninsula. Moreover, the DPRK’s official propaganda is using this artificially induced confrontation to highlight his crisis management skills and build a new legend of Kim as a super-hero who has the guts (배짱) and will power (의지력) to face down the “Almighty Evil Empire.”

The real problem is that in contrast to his father, Kim Jong Un does not have a track record yet. At least Kim Jong Il had a record of stepping back from the brink. We knew basically what his limits were and what buttons to push to keep him behaving. We don’t know Kim Jong Un’s limits, how far we can push him or whether or not he has any brakes. Hence, we must take his brinkmanship more seriously.

Is Kim Jong Un’s primary audience domestic or the international community? Given how well he performed at home last year, it does not appear that Kim is instigating the current crisis to boost his domestic legitimacy, strengthen his leadership credentials or further solidify popular support for his regime. His main audience is international. While insisting that it is not seeking Washington’s attention or trying to bid up the price for its strategic jewels that may be put up for sale eventually, the North Korean regime seems to be motivated by a desire to establish Kim Jong Un’s international reputation as a tough guy, to create more favorable external conditions for domestic development and an unimpeded strategic arms buildup by raising the cost of sanctions enforcement for the international community, as well as to secure better deals in any future negotiations by projecting enhanced power and confidence.

By switching from the “test-talk-test” mode to the “test-exercise-test” mode and incessantly employing bellicose rhetoric, Kim Jong Un may be trying to force the West to blink first and to recognize North Korea as a nuclear weapon state. He is hurling threats at the United States and its allies to dissuade them from enforcing international sanctions and punishing the DPRK for repeatedly violating UNSC resolutions so that Pyongyang can continue to develop and test its WMD capabilities with impunity. His moves are designed not only to compel the international community to think twice before enforcing existing sanctions, but also before voting for new ones after future missile and nuclear tests because of the now seemingly certain risk of escalation of confrontation.

Since the US and its allies believe Kim Jong Un is engaged in psychological warfare, they are responding in kind by playing the same nuclear game with him and trying to teach him a lesson in the process. But, we really do not know yet how he prefers to play the game. In other words, even if this is a simple game of chess, we should be worried about Kim’s next move. He may indeed move this piece or that one. But there is also a chance that he may be thinking of hitting us with the chessboard instead.

Changing Strategic Calculus in Pyongyang

In the long run, Kim Jong Un may not stop at psychological warfare. There may be a reevaluation of Pyongyang’s strategic calculus that could increase the North’s willingness to engage in military action. That reevaluation is due to three factors.

First, the North Korean leadership increasingly fears that the KPA’s aging conventional capabilities make the country less secure. They invite aggression, and if war comes, the North is likely to lose. Moreover, the North’s traditional long-range artillery deterrent may not be as credible as it used to be because ROK-US alliance transformation initiatives over the past decade have significantly reduced the number of possible military and civilian casualties from the KPA’s initial artillery barrage.

The Iraq and Libya wars convincingly demonstrated to the North Korean military planners the technological superiority of the US-led Western air forces against any indigenous conventional air defense capabilities. From the North’s perspective, the United States can now attack KPA positions and other strategic targets inside the DPRK from the air and sea with impunity. Moreover, the “use it or lose it” dilemma with respect to the KPA strategic arsenal may push the North Korean political and military leadership to seriously contemplate preemption of any punitive US strikes. Although the introduction of mobile missiles may make the KPA strategic rocket force more “survivable,” unless they are used quickly, these mobilized assets might be detected and eliminated by far superior US conventional forces.

Second, the recent passage of additional punitive UNSC Resolutions 2087 and 2094—the latter invoking Chapter Seven (Article 41) of the UN Charter for the first time—coupled with high-profile demonstrations of American strategic nuclear assets during the ongoing US-ROK combined war drills, has aggravated North Korean fears about possible aggression by the US and its allies. Pyongyang seems convinced that by intensifying international pressure and sanctions and moving the North Korean issue under the umbrella of Chapter 7, the US is applying the same strategy that was used in the Balkans, Iraq and Libya. That’s why the North Korea’s Ministry of the People’s Armed Forces (MPAF) spokesman emphatically stated on March 5, 2013, “the DPRK is neither the Balkans nor Iraq and Libya,” and threatened “to counter the US imperialists with diversified precision nuclear strike means of Korean style.”[1] Add to this mix serious fears that Kim Jong Un may be the target of a US commando raid like the 2011 operation conducted against Osama Bin Laden.

The North Korean leaders believe that “the US is ‘intoxicated’ with ‘successful wars’ in Iraq, Afghanistan, and Libya” and assert that “the DPRK was forced against its will to develop a nuclear deterrent and now to take a stand and fight back in order to stop the encroachments of US imperialism.”[2] They stress that “any country could not but be concerned about its fate when thinking of what the U.S. and the West did against Yugoslavia, Iraq, Afghanistan, etc.” They believe that “had North Korea failed to acquire nuclear weapons, it would have been leveled to the ground like Yugoslavia and Iraq.”[3]

Third, the acquisition of nuclear weapons may have endowed the North Korean regime with a false sense that this new capability offers a solution to its deteriorating security predicament and a perception of invincibility. In his speech at the military parade held on April 15, 2012, Kim Jong Un, for the first time, stated, “Military technological supremacy is not a monopoly of imperialists any more, and the time has gone forever when the enemies threatened and intimidated us with atomic bombs.”[4] This official statement has been repeated since then in many North Korean pronouncements. Less than a year later on March 13, 2013, the MPAF spokesman took that message further by asserting, “An army of the nation and people possessed of nuclear weapons can always win a victory in the struggle against formidable enemies and reliably guarantee the grandeur and security of the country.”[5] These authoritative statements, which almost certainly form the conceptual foundations for revised operational plans, show that the North Korean leadership may now believe that, thanks to the acquisition of the capability to deliver “diversified precision nuclear strikes of Korean style,” the North currently possesses an offensive advantage which is sufficient to offset their aging military and perhaps even overwhelm a defending conventional force.

Part of Pyongyang’s reevaluation may also entail a belief that launching a preemptive strike makes sense if an American attack appears inevitable and imminent. Moreover, from Pyongyang’s perspective such an American attack is quite possible. Serbia did not have nuclear weapons, but came under the US-led NATO attack under a pretext invented by its enemies. The same excuse—“the right to protect”—can easily be applied to the North Korean case, especially now that the UN Human Rights Council has established its first commission of inquiry into widespread human rights violations in North Korea.[6] Iraq did not have nuclear weapons, although Saddam pretended that he did to keep his enemies at bay. But he failed in his strategic deception and dissuasion campaign, and Iraq became the target of US attack. Although Libya disarmed unilaterally and gave up its weapons of mass destruction, it did not help Qaddafi to stave off the US-led NATO attack. The North Korean leaders saw what happened in the Balkans, Iraq and Libya, and they repeat loud and clear that they will not let that happen to them.

However, while the North Korean doctrine is moving in the direction of a new emphasis on preemptive strikes, judging by the results of the March Plenum of the Korean Workers’ Party (KWP) Central Committee—the introduction of a new strategic line of “parallel economic construction and nuclear arms development”—the North Korean leaders have decided that such a strategy requires more time to further develop their WMD arsenal. The new party line is reminiscent of a similar strategy of parallel economic and military construction initiated by Kim Il Sung in December 1962 at a time when he had lost confidence in the Soviet nuclear shield after the former USSR struck a deal with the US to end the Cuban missile crisis. At the same time, the DPRK’s relations with Mao Zedong deteriorated dramatically amidst the Chinese Cultural Revolution. It is worth remembering that the policy of parallel economic and military construction dramatically increased the influence of military hardliners in North Korean politics and culminated in the Blue House raid—an unsuccessful attempt by KPA commandos to assassinate ROK’s former president Park Chung-hee on January 21, 1968—and the subsequent USS Pueblo crisis on January 23, 1968.

The Bottom Line

The United States and North Korea have entered a dark tunnel from opposite sides and may be moving towards a head-on collision in the years to come. The evolution of this relationship is now set on a certain trajectory, which is potentially dangerous and destructive. Are Washington and Seoul willing and ready to fight the second Korean War with nuclear arms in the coming years?

There are no easy answers to the challenges that Kim Jong Un presents. But, the US would be well advised to remember that the North Koreans are motivated by strategic considerations and long-term goals, not just tactical action-reaction concerns. This is America’s first real crisis with North Korea under Kim Jong Un’s leadership. We are establishing an important precedent now in terms of what payoffs or penalties Kim can expect from his reckless bullying in the future. In the end, the current round of DPRK-US confrontation may be just about reputation—the reputation which Kim will rely on to settle the accounts with his enemies in the future.

We need to start thinking several moves ahead like the North Koreans do. What will happen after they conduct another strategic missile test and a fourth nuclear test, and we go to the UN Security Council to get a new sanctions resolution invoking Article 42 under Chapter 7, and they step up their highly provocative brinkmanship again with the expectation that their threats of outright military confrontation will compel the US to back down, just like in the past?

The United States and South Korea should stop playing Kim’s brinkmanship game and re-take the diplomatic initiative. President Park Geun-hye can make a real difference if she stays true to her own beliefs and engages Kim Jong Un’s government on the platform of her “trust-politik,” regardless of what the new president’s critics may say about her or her new policy. It is high time for President Park to step in and bring the situation under control by reaching out to Kim Jong Un directly and inviting him to sit down and talk with her—perhaps in Panmunjom or Switzerland or Beijing or wherever—about a future for the Korean peninsula without mutual threats of total annihilation.

Critics may say this is appeasement and a sign of weakness, which will help Kim Jong Un boost his domestic legitimacy and international stature. We need to look beyond that and argue that President Park needs to stand up to Kim’s bullying and demonstrate to him that his attempts to break her will by putting Kaesong into play will not work, but she does stand ready to show him another way leading to a real breakthrough in inter-Korean relations. Such forceful and imaginative leadership will be a sign of President Park’s true strength, self-confidence, maturity, and wisdom. In the end, it might well be the “swishing of the skirt” that might bring peace to Korea. But, if she blinks and puts on the iron-clad shoes of her predecessor, it may be hopeless. History tends to repeat itself. It takes a really great man or woman to break its spell and save peace. Perhaps, she is the one.

I. KWP Central Committee Meeting

The KWP plenary session, announced by the Political Bureau five days ahead of its convocation, was held on March 31, 2013. This meeting provided Kim Jong Un an opportunity for personnel housekeeping[1] and was the first shuffle of the Central Committee’s membership since the 3rd Party Conference in September 2010. Under Kim’s direction, personnel changes were made to the Political Bureau, the Central Committee and the Central Committee Departments.

Political Bureau

The first order of business was to elect members of the Political Bureau,[2] the party’s leading collective organization, which directs political, policy and personnel decisions. Political Bureau members are the upper echelon of the North’s political and security elite. Shifts made during the March 31 meeting elevated an official viewed as a reformer while downgrading members of the military faction. Based on the list of Political Bureau members and alternates released after the 4th Party Conference in April 2012, the number of full Political Bureau members has been reduced from 19 in 2012 to 17 in March 2013. After the March 31 meeting, full Political Bureau members now include five from the military/security faction and 12 from the party/government faction. Three key generals were appointed as alternate members, de-emphasizing the role of the military without marginalizing it completely since their predecessors were full members.[3]

The Reformer: Pak Pong Ju

Pak Pong Ju was elected to the Political Bureau replacing Vice Marshal Kim Jong Gak, a member of the military faction. Pak was the Premier (Prime Minister) from September 2003 to April 2007. Pyongyang watchers view him as a major reformer in the DPRK’s political and economic life, particularly since he presided over the implementation of a number of modifications to the country’s economic policies as Premier. In addition, Pak has close political ties to Kim Jong Un’s uncle and aunt—Jang Song Thaek and his wife, Kim Kyong Hui, sister to the late Kim Jong Il.

The Alternates: Gen. Kim Kyok Sik, Gen. Hyon Yong Chol and Gen. Choe Pu Il

Gen. Kim Kyok Sik, who has served as the defense minister since November 2012, was elected an alternate, or candidate member, of the Political Bureau. It is worth noting that the previous two defense ministers served as full members of the Political Bureau. Prior to being minister, Kim was commander of a forward-deployed unit on the controversial inter-Korean maritime boundary—the Northern Limit Line—and was in charge of the units that may have launched the attack on the ROK naval corvette Cheonan and fired artillery shells on South Korea’s Yeonpyeong Island in 2010. He also served as military advisor to Kim Jong Il and Chief of the KPA General Staff from 2007 to 2009. Despite an illustrious military career, Kim was denied full membership to the Political Bureau in favor of government and party officials.[4]

Gen. Hyon Yong Chol, the Chief of the KPA General Staff, was also elected as an alternate member of the Political Bureau in contrast to his predecessor, Ri Yong Ho, who was a full member of the Political Bureau and its standing committee, the Presidium. Hyon received his fourth star as a KPA general in September 2010 in the batch of promotions that elevated Kim Jong Un to a general, indicating a close political tie between Hyong and the supreme leader.

Like Hyon, Choe Pu Il was elevated to four-star general (though later reduced in rank) in September 2010 and has both political and personal ties to Kim Jong Un. A member of the KWP Central Military Commission, he was also elected an alternate member of the Political Bureau at the March meeting, replacing Gen. Ri Myong Su.

Party Central Committee Departments

Central Committee Departments formulate and implement the KWP’s political, economic, internal security and military policies; they make or regulate personnel appointments within the party, government and military; they also regulate the DPRK’s press, media and cultural institutions.[5] According to state media, at the March 31 Central Committee meeting, “upon authorization of Kim Jong Un, two department directors were replaced.” One change represents a shift in focus to the DPRK’s commercial economic development.[6] The other creates a new force to shape the public image of the DPRK more in line with the new supreme leader.

Commerce: Paek Kye Ryong

Paek Kye Ryong, previously party chief secretary in Kangwon Province, was appointed to replace Pak Pong Ju as Director of the KWP Light Industry Department. The Light Industry Department is in charge of a network of factories, owned either directly by the party or by Cabinet Ministries, which produce food, clothing and consumer goods. Paek’s previous position was in a province bordering the South Korea; he now directs the main commercial output of the DPRK.

Image Maker: Yun U Chol

Yun U Chol was appointed Editor-in-Chief of the KWP’s daily newspaper, Rodong Sinmun.[7] Yun has long been a fixture in the KWP’s Propaganda and Agitation Department (PAD), and his last known position was as deputy director of the Party History Institute.[8] He replaced Kim Ki Ryong, who was appointed editor at the 3rd Party Conference in September 2010. Such a rapid turnover may indicate that Kim Jong Un desires his own appointment for this position, bringing about a new message and image, not one initiated by his late father.

Figure 1. Comparison of the Korean Workers’ Party Central Committee in April 2012 and April 2013

II: Seventh Session of the 12th Supreme People’s Assembly

When the Supreme People’s Assembly convened in its 7th session on April 1, 2013,[9] further clarity was provided on personnel changes made during the KWP Central Committee meeting. The SPA, among its eight agenda items,[10] also made several significant changes. According to KCNA, “some members of the Cabinet were relieved of their posts,” and their replacements were “appointed at the session.” KCNA did not, however, disclose the names of those Cabinet members.

The DPRK Cabinet Premier

Pak Pong Ju was appointed Cabinet Premier replacing the 84-year-old Choe Yong Rim, who despite his age, was very active, conducting dozens of site visits to factories, farms and construction projects as well as taking several trips abroad. Because Pak has a reformer’s reputation,[11] his appointment attracted a great deal of external media coverage.[12] Pak was politically resurrected in the summer of 2010 when he was appointed deputy director of the KWP Light Industry Department, and then promoted to director in April 2012. He is likely to be just as publicly active as his predecessor and his appointment could indicate the DPRK has formulated a long range plan for economic improvements.

The National Defense Commission

Generals Kim Kyok Sik and Choe Pu Il were appointed as members of the National Defense Commission (NDC), the country’s supreme power organization. Gen. Kim is the defense minister, or Minister of the People’s Armed Forces, and was appointed to that post in November 2012. Gen. Choe Pu Il[13] was appointed as the DPRK’s top cop, the Minister of People’s Security, in February 2013. These appointments reflect the continued strengthening of Kim Jong Un’s influence since both are close supporters.

Secretary General of the Presidium

Hong Son Ok was appointed as the SPA Presidium’s Secretary-General, the first female ever to hold that position. She previously served as the SPA Vice Chairwoman and as the Vice Chairwoman for the Committee for Cultural Relations with Foreign Countries. Both jobs allowed Hong frequent contact with foreign delegations and travel abroad.[14] While Secretary-General is a largely ceremonial position, her appointment may point to a new emphasis on women as key players in the DPRK’s relatively male-dominated political culture. Her public profile might compare to the public duties of Kim Jong Un’s wife, Ri Sol Ju, who has greeted diplomats and other foreigners based in Pyongyang on at least three occasions. Additionally, Hong’s experience with foreign relations may represent a shift toward international openness of a different sort from the past.

Figure 2. The Korean Workers’ Party Political Bureau as of April 2013

Conclusion

Kim Jong Un continues a trend begun during his first year in office, replacing senior officials elevated by his father and appointing his own people to senior positions in the party and government. This new batch of personnel appointments show Kim flexing his political muscle, independent of his father’s influence. Important developments in this round of appointments are:

• The election of a well-known reformer as a full member of the Political Bureau and subseuqnetly as Premier. While Pak Pong Ju’s appointment probably does not mean major policy reforms can be expected in the short-term, it does show that the DPRK intends, over the long term, to modify its economic policies and attempt to expand its foreign trade relationships. In short, Pak can be expected to plant the seeds which will eventually bloom into major policy modifications.
• The appointment of three senior military and internal security officials as alternate, not full members of the Political Bureau as their predecessors were. As a result, the KPA’s role and influence in the affairs of the party and government have been siginficantly reduced. This most likely represents the party’s reassertion of control over the military.
• The appointment of Hong Son Ok, as the first female Secretary-General of the SPA Presidium, which may indicate a new openness on the part of the leadership, and an attempt to transcend the predominant patriarchy of the past.

These personnel appointments make a great deal of sense in the context of Pyongyang’s declarations during the March 31 KWP Central Committee meeting and 7th Session of the SPA on April 1 that its economic policy will be modified by introducing systemic reforms while also continuing the development of nuclear weapons. This approach contradicts conventional wisdom that the DPRK cannot simultaneously develop both, although it may find it difficult to achieve these goals given financial and trade sanctions. Nevertheless, these appointments appear to be important steps in moving key economic development projects and production away from the control of the military to the party and government.