Quotes of the Day:
"Popularity may be united with hostility to the rights of the people, and the secret slave of tyranny may be the professed lover of freedom."
- Alexis De Tocqueville
"All violence consists in some people forcing others, under threat of suffering or death, to do what they do not want to do."
- Leo Tolstoy, The Law of Love and the Law of Violence (1908)
“I think the reward for conformity is that everyone likes you except yourself.”
- Rita Mae Brown (b. 1944), author
1. Moon plans to end Korean War before leaving office
2. End-of-war declaration: What are US conditions, sequence, timing? (part 2)
3. End-of-war: No reason for US to back ‘end-of-rainbow’ pursuit (Part 3)
4. South Korea isn't likely to sign a peace treaty — nor should it
5. ＜Inside N. Korea＞ Growing Radicalization in People's Control
6. Most Korean Businesses in China Say Things Are Getting Worse
7. A More Isolated and Unpredictable North Korea in 2022
8. Once demonized, capitalist-style banking could be the future for socialist North Korea’s economy
9. N.Korea's Kim praises 'fresh heyday' in China relations as longtime envoy departs
10. A Decade of the Kim Jong Un Doctrine
11. South Korea holds talks with China amid spat with Taiwan
12. N.Korea's Kim praises 'fresh heyday' in China relations as longtime envoy departs
13. North Korea’s Signaling on Nuclear Weapons and Negotiations
14. Understanding Kim Jong Un’s Economic Policymaking: Pyongyang’s Views on Banking
15. Moon visits front-line unit on border island, encourages Marines
16. S. Korea to bolster 'future-oriented' cooperation with U.S. on supply chains, technologies in 2022
1. Moon plans to end Korean War before leaving office
Do not be misled by the headline. This does not necessarily mean he is going to unilaterally make such a declaration. He plans to try.
Thursday
December 23, 2021
Moon plans to end Korean War before leaving office
Choi Young-joon, vice minister of unification, center, Yeo Seung-bae, deputy foreign minister, left, and Yoo Dong-joon, a senior-ranking official of the Defense Ministry, right, host a joint press conference at the Office of the Inter-Korean Dialogue in central Seoul on the South's North Korea policies to come in the last five months of the Moon Jae-in administration. [YONHAP]
The Moon Jae-in administration will use its last five months in office to focus on restarting dialogue with North Korea, and use the end-of-war declaration as a tool to engage Pyongyang, announced the top officials of the unification, foreign affairs and national defense ministries in a joint press briefing on Thursday.
“We are at a critical time, when our efforts can have a lasting impact on the situation of the Korean Peninsula,” said Choi Young-joon, vice minister of unification, while addressing the press at the Office of the Inter-Korean Dialogue in central Seoul.
“The government is pushing for a declaration to end to the Korean War as a gateway to peace on the Korean Peninsula and as a catalyst for negotiations on denuclearization.”
The Moon government has been pushing for an official declaration to end the war. Seoul and Washington have been working on the wordings of such a declaration this year.
The 1950-53 Korean War ended with an armistice, not a peace treaty.
The armistice agreement signed by the U.S.-led UN Command, North Korea and China on July 27, 1953, brought a complete ceasefire to hostilities until a final peaceful settlement was achieved. Thus, the two Koreas remain in a technical state of war.
“The declaration of an end to the war could be a good starting point for resuming dialogue between the two Koreas and also between the United States and North Korea,” Choi said. “For the past four years, the Moon Jae-in administration has consistently made efforts to denuclearize the Korean Peninsula and establish lasting peace [...] In retrospect, the PyeongChang Winter Olympics provided the opportunity of three inter-Korean summits, two U.S.-North summits, and the Panmunjom meeting. I think that we have made important achievements in the peace process.”
The press conference was also attended by Deputy Foreign Minister Yeo Seung-bae and senior-ranking officials of the Defense Ministry.
When asked by a reporter about whether North Korean provocations such as missile and weapons tests would be a hindrance to the Moon government’s peace initiative with the North, a Defense Ministry official said the word “provocation” may be misleading for certain weapons tests.
“We consider tests of SLBM [submarine-launched ballistic missile] to be a threat, not a provocation,” said the official.
Defense Minister Suh Wook said the same during an audit meeting at the National Assembly on Oct. 21, noting that the North’s SLBM development is in its primary stages and is not necessarily a military provocation but a threat.
Two days prior, North Korea test-fired a new type of SLBM, marking the first of such tests since October 2019.
“Last year, there were situations that should not have happened, such as the bombing of the North-South Joint Liaison Office, the disconnection of inter-Korean communication lines, and the death of a South Korean public official in the West Sea,” Choi said. “However, since this year, there are more messages of dialogue than confrontation between the two Koreas and the U.S., and in October, the inter-Korean communication liaison office was restored again, raising the possibility of dialogue and involvement.”
BY ESTHER CHUNG [chung.juhee@joongang.co.kr]
2. End-of-war declaration: What are US conditions, sequence, timing? (part 2)
Below is part 2 with comments from me and others.
End-of-war declaration: What are US conditions, sequence, timing?
One critical precondition would be to reduce inter-Korean conventional tensions
Published : Dec 22, 2021 - 17:16 Updated : Dec 23, 2021 - 15:50
US President Joe Biden walks with national security adviser Jake Sullivan at the White House on Jan. 22, 2021. (White House)
Seoul has stressed time and again that its approach to North Korean issues are in sync with that of the US, but the allies appear far apart on Moon Jae-in administration’s latest play -- declaring the end of the Korean War.
The Biden administration essentially prefers to discuss an end of war declaration as a part of a broad and comprehensive process toward complete denuclearization and permanent peacebuilding on the Korean Peninsula.
Washington also wants to see upfront steps toward denuclearization from Pyongyang.
Mistrust stemming from Pyongyang’s repeated failure to implement agreements makes the Biden administration reluctant to issue an end-of-war declaration without any reciprocal measures by North Korea.
What are the US’ preferences on sequence, timing and preconditions?
Timing: When conditions are more opportune
Washington and Seoul are in agreement that that an end-of-war declaration could be used as a means to achieve the end goal, complete denuclearization and permanent peacebuilding on the Korean Peninsula.
However, the process preferred by the US differs from that of Seoul, as admitted by US national security advisor Jake Sullivan in October.
The Moon Jae-in government wants to use an end-of-war declaration as a diplomatic vehicle to bring North Korea back to the negotiating table.
The Biden administration, however, sees the current circumstances to be inappropriate for such a move.
“The US still wants to see signs that North Korea is serious about peace and denuclearization. At the very least, there should be some assurance that North Korea has ceased expanding its nuclear program, and a process in place to reduce hostilities,” Andrew Yeo, SK-Korea Foundation chair in Korea studies at the Brookings Institution, told The Korea Herald.
Sequence: Parallel to denuclearization process
Unlike Seoul, which is pushing for a declaration-first-talks-later approach, the US appears to favor discussing the matter as part of a comprehensive negotiation package and to sequence a declaration with other steps toward the agreed end state.
“The US preference appears to be to link an end-of-war declaration to a broader process of denuclearization and peace-building with North Korea,” said Ankit Panda, a senior fellow at the Carnegie Endowment for International Peace.
This approach would be in line with the Biden administration’s repeated emphasis on their commitment to the framework laid out in the US-North Korea Joint Statement signed at the Singapore Summit in June 2018.
Washington and Pyongyang agree on peacebuilding on the Korean peninsula in the four-point statement, which also includes North Korea’s commitment to work toward complete denuclearization of the Korean Peninsula.
Conditions: Denuclearization steps accompanied
US experts say Washington’s stance is that an end-of-war declaration needs to be accompanied by denuclearization progress rather than other corresponding measures from North Korea.
“The United States will want strings attached to a declaration. These strings could take several forms,” Eric Gomez, director of defense policy studies at the Cato Institute, told The Korea Herald.
“The Biden administration is sticking to the goal of denuclearization, so any concessions or incentives the US might offer such as an end-of-war declaration would likely be tied to nuclear-relevant reciprocal steps on North Korea’s side.”
The Biden administration pursues a “step-by-step,” incremental approach toward the ultimate goal of denuclearization of the Korean Peninsula, in which both sides exchange partial compensation in return for a partial dismantlement of North Korea’s nuclear weapons program.
But at the same time, Washington would likely want Pyongyang to take tangible upfront steps toward denuclearization before issuing what the US labels as an “end-of-war statement,” in light of continued failure in implementing bilateral and multilateral agreements.
“Without concrete and verifiable concessions from North Korea on the nuclear portfolio, it seems unlikely that Washington will be fully supportive of a declaration,” Panda said.
Gomez said the Biden administration would want to avoid the risks that an end-of-war declaration is issued without “North Korea doing anything beyond pocketing the move and asking for more.”
“Because of past US-North Korea mistrust and the way that previous agreements have faltered, I suspect that the Biden administration will want North Korea to do something first to show its seriousness rather than agreeing on a sequence where the US goes first but North Korea goes second.”
In Washington, there is widespread skepticism about end-of-war declaration leading to tangible progress toward denuclearization.
US experts point out that an end-of-war declaration must be tied to denuclearization efforts particularly in view of Pyongyang’s persistent pursuit of sophisticated nuclear weapons and international recognition as a de facto nuclear weapons state.
“Efforts to move toward ending the Korean War and achieving peace must be directly connected with the denuclearization of North Korea,” Evans Revere, a nonresident senior fellow at the Brookings Institution, said. Revere also served as acting assistant secretary of state for East Asian and Pacific affairs.
Conventional military threat reduction should precede
In general, Washington views that it is too early to declare an end to the Korean War, which would not reflect the realities on the ground.
The signing of the Korean Armistice Agreement resulted in a cessation of hostilities in 1953. But the two Koreas technically remain at war as the Armistice Agreement has never been followed by a peace treaty.
North Korea has continued to conduct hostilities, mainly against South Korea, in violation of the Armistice Agreement as well as the 1992 Inter-Korean Basic Agreement and the 2018 Inter-Korean Comprehensive Military Agreement.
Therefore, certain conditions should be met to declare an end to the Korean War.
One critical precondition would be to reduce inter-Korean conventional tensions in the heavily fortified Demilitarized Zone and North Korea’s mass artillery threats that can inflict significant damage on South Korea.
“My personal view is that it is necessary for the two Koreas to further reduce conventional tensions by turning the DMZ into a normal border and embracing mutually accepted conditions of peaceful coexistence before it would be appropriate to sign an end of war declaration,” said Scott Snyder, director of the program on US-Korea policy at the Council on Foreign Relations.
In particular, North Korea maintains one of the world’s largest conventional forces, which poses a direct threat to South Korea, the US Defense Intelligence Agency said in a North Korea Military Power report.
The DIA assessed North Korea can “launch a high-intensity, short-duration attack” on South Korea with thousands of artillery and rocket systems deployed across the full length of the DMZ. The attack could cause thousands of casualties in South Korea.
“There should be no end of war declaration until the threat from the North is sufficiently reduced,” said David Maxwell, a senior fellow at the Foundation for Defense of Democracies and a retired US Army Special Forces Colonel.
Also noteworthy, Pyongyang maintains military readiness for a “surprise attack” by deploying around 70 percent of Korean People’s Army Ground Forces south of the Pyongyang-Wonsan line, according to the 2020 Defense White Paper published by South Korea’s Defense Ministry.
“The security of the ROK must be paramount. Before an end of war declaration is made, the North must have its offensive forces redeployed a sufficient distance north of the DMZ,” Maxwell said, pointing to the intensive force deployment between Pyongyang and the DMZ.
“Paper and words do not trump steel, and there is a lot of steel in the artillery and tanks in the North Korean People‘s Army along the DMZ with their guns pointed at Seoul.”
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This is the second of a three-part series on Washington’s view of an end-of-war declaration. In the first part “Ending the Korean War: Risky gambit, with little chance of payoff,” the risks and opportunities surrounding a declaration are assessed. In the third part, The Korea Herald will examine the utility of a declaration as a means to reboot nuclear diplomacy with North Korea. Twelve US-based experts participated in on-the-record interviews.
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3. End-of-war: No reason for US to back ‘end-of-rainbow’ pursuit (Part 3)
Part 3 is below.
End-of-war: No reason for US to back ‘end-of-rainbow’ pursuit
The Biden administration is skeptical of Seoul’s diplomatic initiative to utilize an end-of-war declaration as a standalone measure to reboot nuclear diplomacy with North Korea.
Essentially, Washington’s doubts of the Moon Jae-in administration’s proposal have grown as North Korea began to raise the costs for declaring an end to the Korean War.
The US interprets North Korea’s move as in line with its apathy toward resuming nuclear negotiations and the denuclearization process.
In light of its reservations, Washington’s coordination on an end-of-war declaration with South Korea constitutes alliance management and goodwill gestures to its key ally in the Indo-Pacific region, whose importance is growing in the intensifying US-China rivalry.
More importantly, an end-of-war declaration as a standalone measure can neither solve the fundamental cause of the standoff and mutual mistrust nor narrow the gaps between the US and North Korea.
North Korea will not likely return to the negotiation table without further concessions in view of the country’s recalibrated nuclear calculus and its long-term strategy to prepare for a prolonged stalemate with the US.
Biden administration’s skepticism
The Biden administration is skeptical, cautious and restrained about Seoul’s proposal to utilize the declaration as a standalone measure to revive nuclear negotiations, US experts said in an interview with The Korea Herald.
"I believe the Biden administration would be receptive to an end-of-war declaration if it is part of a package that also advances the process of denuclearization, but not as a stand-alone measure," said Robert Einhorn, a senior fellow at the Brookings Institution.
"It is skeptical that such a declaration, on its own, would bring the North Koreans to the negotiating table," Einhorn, who also served as the US State Department’s special adviser for nonproliferation and arms control, added.
Washington’s skepticism stems from North Korea’s recent move to attach undue and specific preconditions for declaring an end to the Korean War.
Pyongyang clarified its preconditions by issuing a series of statements under the name of senior officials immediately after South Korean President Moon Jae-in reproposed an end-of-war declaration during his UN speech in September.
Kim Yo-jong said the withdrawal of the US’ “inveterate hostile policy” and “unequal double standards” against North Korea’s military buildup, including its missile tests, should precede an end-of-war declaration.
North Korean leader Kim Jong-un in September publicly confirmed the preconditions are the country’s “invariable demand” in his policy speech, targeting the domestic and international audience.
“Such statements reinforce the Biden administration’s skepticism toward the declaration as a means of getting negotiations underway,” Einhorn said.
In addition to the public statement, Pyongyang is said to have proposed the suspension of the South Korea-US joint military drills and partial lifting of the UN sanctions on refined oil, minerals, medicine and other necessities as the preconditions for resuming dialogue on a declaration, according to South Korea’s National Intelligence Service.
North Korea: Raising bar for dialogue
The move is in line with Pyongyang’s tendency of gradually raising the bar for resuming working-level negotiations, further fanning doubts on North Korea’s willingness to engage in the denuclearization process.
In particular, North Korea’s demand to withdraw the US “hostile policy” has made Washington doubtful as to whether an end-of-war declaration would lead to denuclearization steps.
The hostile policy is an undefined concept that has been used by Pyongyang to demand a broad range of US concessions.
“An end-of-war declaration would not achieve progress toward denuclearization,” said Bruce Klingner, a senior research fellow at the Heritage Foundation. “North Korea habitually demands an end to US ‘hostile policy’ and upfront concessions as a precondition for returning to talks.”
But US experts underlined that Washington would be willing to discuss an end-of-war declaration as part of comprehensive negotiations toward the end goal of complete denuclearization and peacebuilding on the Korean Peninsula.
In Washington, there is also the view that North Korea is “less incentivized itself to offer up major concessions” in return for a declaration given that the option is “not necessarily a costly signal” to the country.
“As a result, there’s skepticism that a declaration can be offered up early in a sequenced denuclearization process with North Korea,” said Ankit Panda, a senior fellow at the Carnegie Endowment for International Peace.
“Rather, a declaration may be considered as a show of goodwill early in the course of implementing a denuclearization road map.”
US: Alliance management
Against that backdrop, experts assess that the Biden administration’s ongoing engagement in extensive discussions on a declaration with South Korea could be more of an alliance management approach and a goodwill gesture to its key Asian ally.
“Washington will continue to engage the ROK in a dialogue about the end-of-war declaration in order to show good faith with its ally, but the US skepticism about the idea seems unlikely to fade,” said Evans Revere, a nonresident senior fellow at the Brookings Institution. Revere also served as acting assistant secretary of state for East Asian and Pacific affairs.
Frank Aum, a senior expert on Northeast Asia at the US Institute of Peace, pointed out the Biden administration “wants to try as much as possible to accommodate its South Korean ally’s preference” despite its skepticism in an end-of-war declaration.
“Its support might be more alliance management than a sincere intent to make such a declaration in the near future.”
The Biden administration puts an emphasis on coordination on North Korea policy with key Asian allies in the Indo-Pacific, whose significance would continue to grow as China seeks to further expand its diplomatic, economic and political influence across the region.
The cornerstone of Biden’s North Korea policy addresses North Korea’s threats in close coordination with allies, while simultaneously pursuing diplomatic engagement with a calibrated, practical approach and strengthening the US extended deterrence.
Can declaration reboot faltering nuclear diplomacy?
In Washington, the common assessment is that an end-of-war declaration is not sufficient to bring North Korea back to negotiations.
Andrew Yeo, the SK-Korea Foundation chair in Korea studies at the Brookings Institution, brought into question whether an emphasis on a declaration is the best approach to restarting dialogue in light of North Korea’s unwillingness to return to negotiation without additional incentives being provided.
“The ball’s in Pyongyang’s court,” Yeo said, pointing to South Korea and the US’ diplomatic outreach. “Both governments have tried to reach out in public and private, but North Korea is not ready to play ball at the moment.”
Pyongyang has remained silent to Washington’s repeated overtures to meet and discuss any aspect of denuclearization and lasting peacebuilding “anywhere, anytime, without preconditions.”
Mark Tokola, vice president of the Korea Economic Institute of America, took note that “North Korea has demanded an end to ‘hostile policies,’ not an end to the Armistice’s formalities.”
“The US may be concerned that an end-of-war declaration could lead to North Korea being disappointed and therefore even less inclined to negotiate constructively. What matters most to North Korea is what would follow the end-of-war declaration.”
Pyongyang would have a laundry list of demands: sanctions lifting, acceptance of North Korea as a nuclear power, withdrawal of US forces from South Korea, putting an end to the United Nations Command and a pledge to stop criticizing North Korea’s cyber activities and human rights record.
Therefore, North Korea would not see the value of a declaration as sole compensation to reengage in nuclear negotiations if additional concessions were not provided.
“North Korea has already asked for concessions as a price to be paid for its acceptance of an end-of-war declaration,” Tokola said. “That suggests that it sees the end-or-war declaration as something of value to South Korea and the United States rather than something it desires.”
But Tokola elucidated multifaceted aspects, including content, accompanying measures and format, will determine the utility of a declaration as a means to jump-start dormant diplomacy.
Aum of the US Institute of Peace suggested a declaration would work best if it can lead to facilitate the launch of a “new peace process that includes immediate confidence-building measures on both sides” based on close coordination among the parties.
“If it doesn’t include DPRK buy-in and is not accompanied by a process and immediate bilateral concessions, it would fizzle out quickly.”
Nonetheless, the question is raised on whether an end-of-war declaration could serve as a catalyst to resolve the fundamental causes of the yearslong stalemate and narrow widening gaps between the US and North Korea.
The chances of a breakthrough appear to be minuscule.
“The main issue of dispute is about the purpose and scope of proposed negotiations. The Biden administration seeks denuclearization; North Korea seeks acceptance of its nuclear program and demands the abandonment of perceived US hostility,” said Scott Snyder, director of the program on US-Korea policy at the Council on Foreign Relations.
“Mistrust in the US-North Korea relationship is mutual and pervasive, and there is at present not an intersection of interests capable of sustaining a negotiation process. Until that intersection of interests is identified and acted on, the most likely prospect is for continued stalemate.”
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This is the last of a three-part series on Washington’s view of an end-of-war declaration. In the first part “Ending the Korean War: Risky gambit, with little chance of payoff,” the risks and opportunities surrounding a declaration are assessed. And in the second part "End-of-war declaration: What are US conditions, sequence, timing?," the process preferred by the Biden administration is examined. Twelve US-based experts participated in on-the-record interviews.
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4. South Korea isn't likely to sign a peace treaty — nor should it
An end of war declaration is not a peace treaty. It is symbolic at best and not legally binding as it has no meaning in international law. What it does do is play into Kim Jong-un's objectives to drive a wedge in the ROK/US alliance and undermine the legitimacy of the alliance.
It would take years to negotiate a peace treaty and get it ratified. And both north and South Korea would have to change their constitutions so they could recognize the existence of the other ans both constitutions claim sovereignty over the entire Korean peninsula and all Korean people.
South Korea isn't likely to sign a peace treaty — nor should it
The Hill · by Donald Kirk, opinion contributor · December 22, 2021
The administration of South Korean President Moon Jae-in is doing everything possible to achieve the goal of getting signatures on a piece of paper affirming that the Korean War is over at last.
The problem with this quest for an end-of-war agreement is that it will only heighten tensions on the Korean Peninsula. The war really did end in July 1953 with the signing of the armistice at Panmunjom, but the truce was never replaced by a peace treaty as envisioned. In a real sense the truce has been a great end-of-war agreement — durable, long lasting and still in place.
It’s easy, of course, for advocates and foes of a treaty to argue that the Korean War is not over. Opposing armies face each other on either side of the Demilitarized Zone established by the truce, the North-South line remains closed to normal commercial traffic, and North Korea threatens foes near and far with nuclear weaponry.
Moon and his ministers and advisers are imploring all sides in the Korean War to sign this piece of paper. North Korea is not going to go along with any such agreement, however, unless the U.S. renounces sanctions imposed as a result of its nuclear and missile tests, and the North is also going to insist on an end to joint military exercises staged by U.S. and South Korean troops.
At the same time, North Korea is not doing away with its nuclear program while developing missiles capable of carrying warheads to targets as close as South Korea and Japan and as far as the U.S. In short, there is absolutely no point in an end-of-war agreement that provides no guarantees of anything while stripping South Korea of essential defenses. Ultimately, North Korea would want a “peace treaty” that calls for dissolution of the United Nations Command and withdrawal of U.S. troops from South Korea.
It’s difficult to know why Moon is so anxious to achieve a deal that obviously will destroy the historic alliance between the U.S. and the Republic of Korea. North Korea would be the sole beneficiary, and it’s easy to imagine the North building up its forces for potential attacks on the South on its way to placing all of Korea under its own dynastic rule, ostensibly communist but really a kingdom dominated by dictator Kim Jong Un.
In all the talk about an end-of-war declaration and then a peace treaty, we should recall that South Korea did not go along with the truce. The South Korean president, Syngman Rhee, refused to sanctify anything that he believed would lead to permanent division of the Korean peninsula between North and South. Instead, the agreement was signed by Lt. Gen. William Harrison Jr. for the United Nations Command, Gen. Nam Il, the North Korean commander, and Gen. Peng The-huai, who led the Chinese “People’s Volunteer Army” that saved the North Koreans from total defeat after the Americans and South Koreans had driven them from Pyongyang.
China has been slow to express full support for an end-of-war declaration but now is tentatively putting on a show of endorsing it. Or at least that’s the impression that a senior South Korean aide wanted to give after meeting Yang Jiechi, a member of the politburo of the Chinese Communist Party in Tianjin, the huge Chinese industrial port city east of Beijing. Suh Hoon, director of national security at the Blue House, quoted Yang as saying the end-of-war declaration would “contribute to promoting peace and stability on the Korean peninsula.”
Curiously, however, Yang himself was not reported to have made any such statement. China may see the agreement as a way to undermine the U.S.-ROK alliance but clearly is only lukewarm about it.
Then there’s the question of who would be expected to sign an end-of-war agreement. Would the paper need the signatures of military commanders? Or might President Biden, China’s President Xi Jinping, North Korea’s Kim Jong Un and President Moon all join hands, on paper, in declaring at last the Korean War is over?
That prospect is totally ridiculous. Much as Moon would love to see the U.S., Chinese and North Korean leaders all signing the document, that’s not going to happen. So, would there be a ceremony at the truce village of Panmunjom, and would the generals or maybe the U.S. secretary of State and the foreign ministers from China and the two Koreas sit down and put their names on the deal?
It's difficult to imagine anything like that happening, either. For one thing, the North Koreans aren’t even talking to the South Koreans and the Americans. Moon can go on pressing for something, anything, but he should accept the reality that this deal is too absurd, too deeply flawed, to be taken seriously.
Under South Korea’s 1987 democracy constitution, Moon cannot run for a second five-year term. It will be interesting to see how he and his aides go on pursuing their fantasy of peace until the election on March 9 of Moon’s successor. Voters have a choice between the liberal Lee Jae-myung — like Moon, an advocate of compromise with the North — and the conservative Yoon Suk-yeol, who calls for denuclearization as a condition for any deal.
Basically, it would be a good idea if all sides would accept the sad truth. No one’s gotten anywhere in what would be a sellout of South Korean democracy to North Korean dictatorship.
Donald Kirk has been a journalist for more than 60 years, focusing much of his career on conflict in Asia and the Middle East, including as a correspondent for the Washington Star and Chicago Tribune. He currently is a freelance correspondent covering North and South Korea. He is the author of several books about Asian affairs.
The Hill · by Donald Kirk, opinion contributor · December 22, 2021
5. ＜Inside N. Korea＞ Growing Radicalization in People's Control
An indication that the regime recognizes its internal threats. Are they growing? Is this a desperate measure because of the rise of the threats and potential resistance to the regime?
The other effect of this "program" is to reinforce the already existing seeds of distrust among the entire population. The scan has the effect of reducing resistance potential because any conspiracies are likely to be exposed.
＜Inside N. Korea＞ Growing Radicalization in People's Control (1). A sharp increase in revelations due to the implementation of the " tip-off reward" system. Many reports are coming in due to living difficulties. Mutual distrust spreads.
(Photo) Market management staff curses a young woman (left) doing business on the street, criticizing her products. Photographed in March 2013 in Pyongsong City, South Pyongan Province (ASIAPRESS).
Since the Kim Jong-un regime launched its strict measures against the coronavirus, control over the residents has been tightened day by day, and in particular, there has been a massive crackdown on what is considered "non-socialist and anti-socialist acts," with arrests, detentions, and deportations to remote areas. We'll be reporting in a series on the reality of "Growing Radicalization in People's Control." In this first article, we will discuss the institutionalization of tip-off rewards that have been rampant in the crackdown. It is said that the act of reporting the "inconveniences" of acquaintances for money in the hardship of life is replete, and a desperate atmosphere is spreading (Kang Ji-won / ISHIMARU Jiro).
◆ Implemented nationwide starting in September
"A lot of people came to the police station to report the incident because they could receive the prize money. It's because they are struggling to make ends meet. As a result, many people get caught. Residents began to look out for each other's faces, and they no longer even trust their relatives."
Our reporting partner, who lives in the urban area of North Hamkyung Province, told us about the grim and gloomy atmosphere there in early December.
Needless to say, this reward is a system initiated and implemented by the authorities to encourage snitching. As people's living conditions become more difficult, some residents aggressively seek out and report others to obtain quick money. As a result, suspicion and distrust spread among the people, causing neighbours and relatives to keep away from each other and frequent quarrels.
After receiving this news, ASIAPRESS conducted investigations in various areas. In Chongjin, Hoeryong, and Musan in North Korea, as well as in Ryanggang and North Pyongan Provinces, the snitch reward system has been implemented since September and has recently been found to be very "effective." The system seems to have been implemented nationwide.
◆ The Actual Operation System of the Secret Reward System
According to the investigation conducted by our reporting partners, the reward system's rules are as follows:
- The central command is the "Coalition Command for Non-Socialist and Anti-Socialist Sweeping Operations" (from now on referred to as the "Coalition Command").
- Reward money will be paid from 5,000 won to 200,000 won. People must sign and seal the form to receive the money.
- ※ 1 USD is about 4800 won, and 1 kg of rice is about 4700 won.
- There is a "Report Box" at government offices, where informants can write down their name, address, and phone number, in addition to the contents of the tip-off. It is also possible to go directly to the "Coalition Command" to report.
- It is claimed that the informant's information will be kept private and protected.
- The reward will be given if the information is accurate. Rumours are not acceptable; only exact details such as concrete photos, recordings, and scene observation will be accepted.
The "Coalition Command" is an organization that appears to have been established around December 2020, when the "Law on the Elimination of Reactionary Thought and Culture" was enacted. It is responsible for a wide range of law and order violations, including economic activities that deviate from North Korean-style socialism, viewing and retaining content such as dramas and songs from South Korea and other parts of the world, deviation from assigned workplaces, unauthorized travel to other regions, and use of Chinese cell phones. The department comprises personnel selected from Party agencies, police, and prosecutors.
◆ Specific Examples of Tip-off Rewards
So, what kind of "crimes" or inconveniences are rewarded for snitching? Here are some of the cases we received from our reporting partners.
"There are people around who have received 10,000 won ~ 30,000 won after reporting illegal activities such as illegal activities to make money, fake workplace registration, frequent contact with border guards, etc." (Ryanggang Province)
"There was a case where a 16-year-old student saw an unregistered computer and a movie in his/her friend's house and reported it and received 10,000 won." (North Hamkyung Province)
"In one of the districts in the city, a woman reported seeing a Chinese cell phone that was no longer working in her neighbour's house and received 200,000 won as a prize. As a result, the person who was informed was expelled from the Workers' Party, dismissed from the job, and banished to a remote area." (North Hamkyung Province）
"The officials said that only about 30 to 40 per cent of the reports were paid, and the rest were invalid due to lack of evidence. The money is paid in cash, not in 'Tonpyo.'" (North Pyongan Province)
※ "Tonpyo" refers to the temporary money coupons issued between the end of August and September when the Kim Jong-un regime was forced to suspend the printing of banknotes due to financial difficulties.
"Even the 'kochebi' (vagabonds) came close and listened to receive their prize money, even when we talked quietly in the market." （North Hamkyung Province）
"The "Coalition Command" receives so many reports that it is overwhelmed with work, even when they sit in silence. Everyone is having a hard time surviving, so people try to get money by reporting." (Ryangang Province)
◆ Disputes and Distrust... Grave Suspicion and Distrust among Residents
"At first, I thought they were trying to tighten control because of the current situation, but now I think their goal is to keep people apart. People are fighting over who reported and reported, and they don't trust each other anymore. Some people even say, 'I can earn two kilograms of rice' when they find something wrong with others."（North Hamkyung Province）
※ 10,000 won is equivalent to just over two kilograms of white rice.
The tip-off reward system is a very devious way of tightening control by taking advantage of hardships. Moreover, it is a malicious method of governance that creates mutual distrust among the residents, causing them to separate and divide.
" I used to share kimchi and other foods with my neighbours, but now I avoid it. Even if we are close to each other, we don't drop by each other's houses anymore." (North Pyongan Province)
"Even among family members and relatives, if there is any disagreement or problem, people threaten to report the past events and abuse each other. The world has become a depressing place where people keep each other at a distance and keep an eye on each other's face." (Ryangang Province)
"Recently, if someone you know finds something slightly inconvenient, you might say, 'You're not going to get the prize money, are you? It's not even a joke anymore." (Ryangang Province)
Those who are tipped off are naturally subjected to investigation and punishment. In minor cases, caution or reprimand is enough. Still, there have been reports of people being sent to free labour called "revolutionization," forced labour camps for less than a year called "labour training units," and exile to rural or remote areas. There will be cases of people being arrested and sent to indoctrination centres (prisons) in the near future.
※ ASIAPRESS contacts its reporting partners in North Korea through smuggled Chinese mobile phones.
Map of North Korea ( ASIAPRESS)
6. Most Korean Businesses in China Say Things Are Getting Worse
How does kowtowing to China help Korean businesses?
Chinese economic warfare:
A majority also said discrimination against foreign businesses has increased, be it through officials dragging their heels during authorization processes, punitive safety checks and environmental inspections, or being disadvantaged in terms of financial support and tax breaks.
Most Korean Businesses in China Say Things Are Getting Worse
More than eight out of 10 Korean companies operating in China say conditions there have deteriorated compared to a decade ago and they suffer discrimination.
The Federation of Korean Industries polled 131 Korean companies that set up business there.
The vast majority or 111 companies said investment conditions in China have worsened over the last 10 years. The biggest reason cited is risks related to Chinese government regulations, while others include discrimination, the trade war with the U.S. and tougher environmental regulations.
They are particularly worried about Chinese President Xi Jinping's "common prosperity" campaign imposing tougher regulations on big tech, cybermoney, private education and game companies that are blamed for income disparity.
Most of the Korean businesses said they were negatively impacted by the regulations and fear the campaign will only intensify in the next five years.
A majority also said discrimination against foreign businesses has increased, be it through officials dragging their heels during authorization processes, punitive safety checks and environmental inspections, or being disadvantaged in terms of financial support and tax breaks.
7. A More Isolated and Unpredictable North Korea in 2022
Excerpt:
Kim Jong Un made it clear during the 8th Congress of the Workers Party in January 2021, that the state must do a much better job caring for the people and improving the dire economic situation in the North. Prior to COVID-19 and the North’s self-imposed isolation, a United Nations and North Korea joint study reported that more than 40% of the population in the North was malnourished. One can only imagine what that number is now.
The Ambassador is of course correct above. However, I like to consider an analysis of the entire 8th Party Congress. This is my interpretation that I think telegraphs the regime's intent for its future.:
North Korea Strategy Reaffirmed by 8th Party Congress
- Political Warfare
- Subversion, coercion, extortion
- “Blackmail diplomacy” – the use of tension, threats, and provocations to gain political and economic concessions
- Example: Kim Yo-jong threats in June – ROK anti-leaflet law in December
- Negotiate to set conditions - not to denuclearize
- Set Conditions for unification (domination to complete the revolution)
- Split ROK/US alliance
- Reduce/weaken defense of the South
- Exploit regional powers (e.g, China and Russia)
- Economics by Juche ideology – the paradox of “reform”
- Illicit activities to generate funds for regime
- Deny human rights to ensure regime survival
- Continue to exploit COVID threat to suppress dissent and crack down on 400+ markets and foreign currency use
- Priority to military and nuclear programs
- For deterrence or domination?
A More Isolated and Unpredictable North Korea in 2022
Ambassador Joseph DeTrani is former Special envoy for Six Party Talks with North Korea and the U.S. Representative to the Korea Energy Development Organization (KEDO), as well as former CIA director of East Asia Operations. He also served as the Associate Director of National Intelligence and Mission Manager for North Korea and the Director of the National Counter Proliferation Center, while also serving as a Special Adviser to the Director of National Intelligence. He currently serves on the Board of Managers at Sandia National Laboratories. The views expressed represent those of the author.
OPINION — Kim Jong Un, during his ten years of authoritarian rule in North Korea, failed to accomplish his two primary objectives: normalization of relations with the U.S. and acceptance of North Korea as a nuclear weapons state.
When Kim took over from his father, Kim Jong il, who died reportedly of a heart attack in December 2011, there was hope that this young leader, who had studied in Switzerland, would pursue a policy of economic reform and political opening up to the outside world. To succeed, North Korea would be willing to commit to complete and verifiable denuclearization in return for security assurances and eventual normal relations with the U.S., which would provide the North with international legitimacy and access to financial institutions, for economic development purposes.
What we have seen over the past ten years was a leader determined to normalize relations with the U.S., but with a confidence that he can convince the U.S. to accept North Korea as a nuclear weapons state. This determination to retain nuclear weapons, while seeking normal relations with the U.S., has been the consistent strategy of North Korea for the past 28 years.
Dating back to Kim’s grandfather, Kim il Song, who approved the 1994 Agreed Framework that halted North Korea’s nuclear program at Yongbyon in return for two proliferation-resistant nuclear power reactors and a path to normal relations with the U.S. This agreement ended abruptly in 2002 when North Korea was confronted with U.S. information that they were pursuing clandestine Highly Enriched Uranium (HEU) for nuclear weapons.
After that, Kim’s father, Kim Jong il, approved the September 2005 Joint Statement of the Six Party Talks (6PT) that committed North Korea to complete and verifiable dismantlement of all nuclear weapons and facilities, in return for security assurances, economic development assistance and a path to normal relations with the U.S. This agreement also ended abruptly in 2009, when North Korea would not permit international monitors to leave the Yongbyon nuclear facility to visit other undeclared suspect nuclear facilities.
And in June 2018, Kim Jong Un, in an historic Singapore Summit with former President Donald Trump, agreed to the complete denuclearization of the Korean Peninsula, in return for a transformation of relations with the U.S. and a peace treaty to end the Korean War. This agreement also ended abruptly in February 2019, during the Hanoi Summit with Trump when Kim Jong Un would agree to halt nuclear activities only at the Yongbyon nuclear facility and not at other nuclear facilities in the North, as requested by the former President.
What’s constant from these years of negotiations and temporary successes, was North Korea’s determination to have and retain nuclear weapons, regardless of any agreement. What was also constant was the North’s determination to normalize relations with the U.S.
During Kim’s ten years in power, he has raced to become a formidable nuclear weapons state, launching over 120 missiles, to include two Intercontinental missiles (ICBM), the hwasong 14 and 15, and conducting four nuclear tests, to include a thermonuclear test in 2017. The North has a reported nuclear arsenal of 30 to 60 nuclear weapons that can be mated to ballistic missiles. If you’re living in South Korea or Japan or any where else in Northeast Asia, North Korea is an existential nuclear threat. Eventually, they could be an existential nuclear threat to the U.S.
Getting North Korea to denuclearize will continue to be a challenge in 2022, especially given the nuclear and missile progress that Kim has made with these programs during the past 10 years. And living with a nuclear North Korea will be an enduring nightmare for South Korea, Japan, the region and beyond. One should never disregard the potential for the accidental use of nuclear weapons due to miscommunication or misjudgment. A nuclear arms race in the region, with allies like South Korea and Japan pursuing their own nuclear weapons, despite U.S. extended deterrence commitments, is a real likelihood. An even more disquieting reality will be the potential for nuclear terrorism, with a nuclear weapon or fissile material for a dirty bomb getting into the hands of a rogue state or terrorist organization.
Kim Jong Un made it clear during the 8th Congress of the Workers Party in January 2021, that the state must do a much better job caring for the people and improving the dire economic situation in the North. Prior to COVID-19 and the North’s self-imposed isolation, a United Nations and North Korea joint study reported that more than 40% of the population in the North was malnourished. One can only image what that number is now.
Kim Jong Un also recently announced that North Korea, while focusing on economic challenges, will also develop “ultramodern tactical nuclear weapons, hypersonic missiles, submarine-launched ballistic missiles and cruise missiles.” And given what we’ve seen over the past 10 years, it’s likely that North Korea will be at least partially successful with these pursuits.
Even if we don’t see another ICBM launch or another nuclear test, North Korea appears determined to build more nuclear weapons and more sophisticated missiles to deliver these nuclear weapons.
Currently, North Korea’s lifeline continues to be China. If China implemented all the United Nations sanctions imposed after 2016, as they did in 2017, it would be hard for North Korea to survive economically. It appears, however, that China is now providing some of the energy and food aid necessary to keep the North afloat.
Hopefully, Kim Jong Un now understands that he can’t have both: normal relations with the U.S. and acceptance as a nuclear weapons state. And if Kim is concerned with the plight of North Korea’s economy and its devastating impact on his people, he’ll come back to negotiations to get sanctions lifted. He should finally realize that North Korea will never be accepted as a nuclear weapons state, thus requiring him to decide if normal relations with the U.S. and a path to economic well-being and international legitimacy are more important than nuclear weapons and missiles to deliver them.
If Kim decides that nuclear weapons are more important, then the U.S. and its allies and strategic partners have no alternative but to enhance containment, with additional sanctions, and increase deterrence efforts to counter the nuclear and conventional threat from North Korea.
Ideally, Kim Jong Un will return to negotiations for the complete and verifiable denuclearization of North Korea, in return for security assurances, sanctions relief and a path to normal relations with the U.S.
Read more expert-driven national security perspective, analysis and opinion in The Cipher Brief
Ambassador Joseph DeTrani is former Special envoy for Six Party Talks with North Korea and the U.S. Representative to the Korea Energy Development Organization (KEDO), as well as former CIA director of East Asia Operations. He also served as the Associate Director of National Intelligence and Mission Manager for North Korea and the Director of the National Counter Proliferation Center, while also serving as a Special Adviser to the Director of National Intelligence. He currently serves on the Board of Managers at Sandia National Laboratories. The views expressed represent those of the author.
8. Once demonized, capitalist-style banking could be the future for socialist North Korea’s economy
Hmmm. I will defer to the economic experts who watch north Korea (probably all three of them!)
If Kim is in fact interested in western methods of banking this might be the reason (it is all about control for KJU):
One of the reasons Kim may be interested in expanding the use of commercial banks is that the state could keep closer track of the flow of cash throughout the country, and get more people to save money in banks rather than stockpile it at home, Ward said. In addition, a more robust banking system would allow the state to redistribute that cash and use it for development projects, Ward said.
Once demonized, capitalist-style banking could be the future for socialist North Korea’s economy
TOKYO — In North Korea, commercial banking was once seen as the ultimate capitalist institution. But under leader Kim Jong Un, it evolved into a topic of fascination and debate as the regime’s top thinkers weighed how to adopt a robust commercial banking system of their own, new research shows.
Kim, who marks his 10th anniversary in power this month, has allowed the development of some free-market enterprises in North Korea — an effort to bring his country out of its deep isolation and to modernize the economy of one of the poorest countries in the world.
In 2015, Kim signaled he would accelerate an overhaul of the state-run banking system, an effort that began under his father but that he doubled down on as he worked to distinguish himself and show that he was serious about improving the country’s economy.
In the years that followed, top thinkers grappled with the complexities of commercial banking systems, at times struggling to make sense of how North Korea, a socialist country, could adapt decidedly capitalist concepts, such as private residents’ banking accounts accruing interest, according to a new report released Wednesday by 38 North, a research program at the Washington-based Stimson Center think tank.
For the report, researchers pored over two decades of North Korea’s premier economic journals, whose articles are among the few sources that reflect current polices and directions, and whose publication has been discontinued since January. While banking was rarely mentioned in statements issued by state media, it was a hot topic behind the scenes, researchers found.
Because commercial banking is so closely associated with capitalism, many of the articles treaded carefully on the topic, researchers found. Still, over time, the regime’s top scholars began to justify adopting new measures, engaging in a vibrant academic discussion about ideas that were once forcefully condemned, they found.
“I was amazed by the level of discussion that was taking place in the academic journals, the extent to which concepts that were once considered too capitalist were being offered as viable options for North Korea,” said Rachel Minyoung Lee, a former intelligence analyst based in South Korea and co-author of the report.
“Commercial banks are one key example,” Lee said. “They were once defined by the North Korean encyclopedia as parasitic and predatory. Now, academic journals are trying to persuade readers why these once-demonized banks are necessary for improving the country’s economy.”
Among the most intense moments of debate came in 2018, the year Kim shifted to direct diplomacy with the United States and South Korea for negotiations on denuclearization and sanctions relief.
As Kim made his foray onto the world stage for high-profile summitry with South Korean President Moon Jae-in and President Donald Trump, economic articles focused on what it would look like to broaden the role of banks in the country — a timely debate when diplomatic engagement could open doors for new foreign investments in North Korea.
These articles help inform policymakers about the internal economic calculations and opportunities Kim may have had in mind as he raised tensions in 2016 and 2017 with nuclear tests, then switched to a period of rapprochement to negotiate an easing of sanctions, researchers said.
“This is a critical point that gets to a weakness in, certainly, U.S. intelligence and U.S. policy formation,” said Robert Carlin, co-author of the report, who is a former intelligence analyst and one of the foremost North Korean researchers in the United States. “We don’t follow closely enough in real time the depth of these economic developments and therefore can’t see, or refuse to see, the links between foreign policy and the internal economic policy.”
“If we can’t understand how these things are yoked, we’re never going to be able to probe and take advantage of the window of opportunity” for diplomacy, Carlin said.
North Korea had one, central bank until the 1970s. Back then, money was nearly irrelevant because the state provided what its citizens needed — for example, by providing ration cards.
But in the early 2000s, more state-run and foreign investor banks began to emerge as a private sector and markets were established in the wake of an economic crisis following the deadly famine in the 1990s. After the famine, North Korean people began trading and bartering to survive, and such private markets became key to the country’s economic recovery.
Under then-leader Kim Jong Il, North Korea officially allowed state-sanctioned markets. Academic journals began studying foreign banking systems, writing neutral and explanatory research that read like “Banking for Dummies,” the report reads. There was an effort to start commercial banking at the time, but a full-scale system never took off. The commercial banks that exist today are technically state-owned and are largely geared toward wealthy elites and party and state interests.
With the recognition that economic reform is key to the long-term stability of his country and staying in power, Kim Jong Un has emphasized economic growth and enacted a new management system to enable the growth of private markets and businesses.
In 2015, Kim identified commercial banking as an area of potential growth, which prompted research and debate in the regime about whether and how to turn the idea into reality by decentralizing state control of banks, and increasing “creativity” in the banking system, research shows.
To be sure, there is a long way to go before North Korea can take on a banking overhaul. Since the nuclear negotiations fell apart in 2019, Pyongyang has retreated into isolation. During the coronavirus pandemic, North Korea has enacted a strict closure of its border, conducting dramatically less trade out of fear of spread of the virus and emphasizing self-reliance.
The North Korean banking system has also struggled with technical issues, including sometimes lacking electricity, and in the past, banks were not able to transfer money between each other or to any international financial institutions, said Peter Ward, a North Korean economy specialist who is not involved in this research project. There is distrust toward existing commercial banks, and wealthy elites who save money through them are not always guaranteed they can draw down money in the future, Ward said.
One of the reasons Kim may be interested in expanding the use of commercial banks is that the state could keep closer track of the flow of cash throughout the country, and get more people to save money in banks rather than stockpile it at home, Ward said. In addition, a more robust banking system would allow the state to redistribute that cash and use it for development projects, Ward said.
Read more:
9. N.Korea's Kim praises 'fresh heyday' in China relations as longtime envoy departs
China and north Korea - they are their only allies. Closer than lips and teeth.
N.Korea's Kim praises 'fresh heyday' in China relations as longtime envoy departs
North Korean leader Kim Jong Un speaks during the Eighth Conference of Military Educationists of the Korean People's Army at the April 25 House of Culture in Pyongyang, North Korea in this undated photo released on December 7, 2021. KCNA via REUTERS/File Photo
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SEOUL, Dec 23 (Reuters) - North Korean leader Kim Jong Un praised outgoing Chinese Ambassador Li Jinjun for helping to improve relations between Pyongyang and Beijing, state media reported on Thursday, as the envoy left office after seven years in the post.
Kim's comments were conveyed to Li by Choe Ryong Hae, a top official in the ruling Workers' Party of Korea, state news agency KCNA said. Li also met with North Korean premier Kim Tok Hun, KCNA reported.
"Kim Jong Un highly praised the ambassador for successfully assisting several DPRK-China summit meetings over the past seven years, making much effort to develop the friendly relations between the two parties and the two countries and sharing bitters and sweets with the Korean people," Choe told Li, using the initials of North Korea's official name.
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Kim is very satisfied that the North Korea-China relationship has entered a "fresh heyday" under the leadership of the ruling parties in each country, Choe said.
Li asked Choe to express his gratitude to Kim and congratulated the North Korean people on "making progress in all fields of socialist construction," KCNA said.
China has been North Korea's only major ally since the two signed a treaty in 1961, and international sanctions imposed over Pyongyang's nuclear weapons and ballistic missile programmes have made it more dependent than ever on Beijing for trade and other support.
Since Li was appointed in 2015, relations between the two countries have seen major ups and downs.
Kim sent China-North Korea relations to a historical low by prioritising nuclear weapons and missiles development, then harshly criticising Beijing when it supported international sanctions
Starting in 2018, however, Kim managed to quickly repair ties and made his first known international trip as leader to meet with Chinese President Xi Jinping in Beijing. Xi later visited Pyongyang, the first by a Chinese leader in 14 years.
Li was one of a diminishing number of foreign diplomats in Pyongyang, as many embassies closed during North Korea's strict anti-pandemic lockdown that blocked the rotation of new staff or ambassadors.
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Reporting by Josh Smith; Editing by Michael Perry
10. A Decade of the Kim Jong Un Doctrine
Will his health allow another decade? Will the internal situation allow him another decade? Will the elite allow him another decade? Will the military allow him another decade? Will the internal and external conditions allow him another decade?
Conclusion:
Kim Jong Un appears ready to make his mark on North Korea’s direction clearer in the months and years to come. A sign of that came at January’s Eighth Congress of the WPK, which was reportedly held without the normally required portraits of Kim Il Sung and Kim Jong Un as a backdrop. In this meeting, the party eliminated the term “military-first policy” from the preface of the party rules and inserted “people-first politics,” a concept introduced by Kim Jong Un. In a country where guiding slogans are important, this could be a signal that Kim Jong Un is prepared to tie his legitimacy to his commitment to improving people’s lives—a risky promise, given the North Korea’s economy is in a shambles due to mismanagement, pandemic-induced isolation, and sanctions imposed against the country for its bad behavior.
Much of the world underestimated Kim Jong Un in 2011. But over the years, the North Korean leader has managed to navigate the internal and external politics necessary to ensure the survival of his regime. In the process, he has also established his own leadership style. And at only 37 years young, he has a good chance of staying in office for years to come.
A Decade of the Kim Jong Un Doctrine
The North Korean dictator is just as brutal as his predecessors—but has instrumentalized that brutality to new ends.
By Naoko Aoki, a research associate at the Center for International and Security Studies at the University of Maryland and an adjunct professor at American University.
This month, North Korean Supreme Leader Kim Jong Un marks a decade since he succeeded his father, Kim Jong Il, who died of a heart attack on Dec. 17, 2011. At the time, Kim Jong Un had been in the public eye for only a year, following his September 2010 appointment as vice chairman of the powerful Central Military Commission of the ruling Workers’ Party of Korea (WPK). Though little was known about him then, Kim Jong Un’s grooming as future leader could have begun as early as late 2008.
Some observers speculated that a 27-year-old with no leadership experience would have to share power with guardians or be guided by regents. Others hoped that Kim Jong Un, who was educated partly in Switzerland, would implement economic and political reforms that would change the direction of the secretive authoritarian state.
Ten years later, Kim Jong Un is still at the helm of North Korea—and the country has neither collapsed nor opened up. Instead, Kim Jong Un has consolidated power domestically, built up North Korea’s nuclear and missile arsenal, and improved the country’s relations with its traditional ally and largest trading partner, China. Despite the COVID-19 pandemic, which has posed a major challenge to the country’s economy and could potentially cause a major health crisis, Kim Jong Un today appears more confident than ever.
This month, North Korean Supreme Leader Kim Jong Un marks a decade since he succeeded his father, Kim Jong Il, who died of a heart attack on Dec. 17, 2011. At the time, Kim Jong Un had been in the public eye for only a year, following his September 2010 appointment as vice chairman of the powerful Central Military Commission of the ruling Workers’ Party of Korea (WPK). Though little was known about him then, Kim Jong Un’s grooming as future leader could have begun as early as late 2008.
Some observers speculated that a 27-year-old with no leadership experience would have to share power with guardians or be guided by regents. Others hoped that Kim Jong Un, who was educated partly in Switzerland, would implement economic and political reforms that would change the direction of the secretive authoritarian state.
Ten years later, Kim Jong Un is still at the helm of North Korea—and the country has neither collapsed nor opened up. Instead, Kim Jong Un has consolidated power domestically, built up North Korea’s nuclear and missile arsenal, and improved the country’s relations with its traditional ally and largest trading partner, China. Despite the COVID-19 pandemic, which has posed a major challenge to the country’s economy and could potentially cause a major health crisis, Kim Jong Un today appears more confident than ever.
Like his father Kim Jong Il and grandfather Kim Il Sung, the founder of North Korea, Kim Jong Un is a dictator whose legitimacy is bolstered by the Kim family hagiography. The 37-year-old instrumentalizes the brutal tools of repression that he inherited from his father and his grandfather. But Kim Jong Un is far from a carbon copy of his predecessors. In fact, over the past decade, he has established his own distinct leadership style.
One feature of Kim Jong Un’s leadership style is his openness, including about his ruthlessness. The 2013 execution of Kim Jong Un’s uncle, Jang Song Thaek—a member of the leader’s inner circle who was married to Kim Kyong Hui (Kim Jong Un’s aunt and Kim Jong Il’s sister) and convicted of treason—was unusual not just because it was brutal, but also because it was so public. The details of Jang’s trial were reported in North Korean state media shortly after they took place, with a photograph of Jang bent over in humiliation—an unprecedented event in a country whose purged elites normally disappear from the public eye.
While both Kim Il Sung and Kim Jong Il consolidated their power by purging rivals, their actions were never made as overtly public. For example, Kim Il Sung executed or imprisoned members of factions that were under the influence of the Soviet Union and China to ensure his grip on power. We know about these events today not because of North Korean announcements, but because of scholars’ works using formerly confidential Soviet and Chinese material.
Kim Jong Un’s demonstrated his brutality again in 2017, when two women groomed by North Korean agents assassinated Kim Jong Nam, the leader’s half-brother, in Malaysia’s Kuala Lumpur airport with a chemical agent called VX. Kim Jong Un is not the first in his family to worry about potential contenders for power at home. Kim Jong Il was also concerned about the ambitions of his half-brothers Kim Pyong Il and Kim Yong Il when he became leader of North Korea. The elder Kim’s solution was to post his half-brothers to foreign countries, far away from North Korea’s center of power. (Kim Pyong Il returned to the country recently after 30 years living outside it as a diplomat. Kim Yong Il passed away around 2000.)
While Kim Jong Nam’s assassination was not publicized in North Korea—the official media reported that a North Korean citizen died in Malaysia of a heart attack and that South Koreans were spreading rumors that the cause was poisoning—it was nevertheless a bold and brutal move that almost certainly sent a message to the North Korean elite that dissent would not be allowed and contenders for power would be eliminated.
Kim Jong Un’s candor extends to other, less sinister matters. For example, when a North Korean rocket disintegrated after launch in April 2012, the country’s official media reported the failure, an extremely rare development. By contrast, when North Korea failed to put a satellite into orbit in 2009 under Kim Jong Il, state media falsely told its public that the launch was a resounding success.
Kim has also made public admissions of shortcomings in his policy programs. In August 2020, he admitted in a party meeting that North Korea was not meeting its economic goals. He did this again at the eighth WPK Congress in January, when he said that the country had fallen short of almost all the goals in its five-year economic plan due to “various external and internal challenges,” a reference to sanctions, natural disasters, and the nation’s border closures due to the COVID-19 pandemic.
Kim Jong Un’s candor may reflect his realization that it is becoming increasingly difficult to perpetuate lies about the economy to the North Korean people.
While these admissions may not be significant by Western standards, it is highly unusual for a leader of a country whose propaganda machine routinely tells its people they have everything. Kim Jong Un’s candor may reflect his realization that it is becoming increasingly difficult to perpetuate lies about the economy to the North Korean people, particularly when they rely on unofficial markets to procure food and basic goods—rather than rations from the country’s planned socialist economy, which has long been unable to provide for them.
It is also important to note that, while Kim Jong Un has been more open than his predecessors in some regards, those are the exceptions, not the rule. This also does not mean that he is loosening his grip on the North Korean people. In fact, Kim Jong Un has strengthened the country’s crackdown on foreign cultural influences this year, particularly those from South Korea. He told the country’s youth league earlier this year to regulate “anti-socialist” behavior, including foreign slang and foreign-influenced hair styles and fashion.
Over the past 10 years, Kim Jong Un has also shown his preference for a pragmatic, rather than ideological, approach to some issues. This includes his approach to North Korea’s nuclear and missile tests. The tests have always served both technical and political purposes, meaning that, while they are meant to contribute to the qualitative improvements of the country’s arsenal, they are also a demonstration of North Korean might—both for the international and domestic audience. The country has in the past chosen symbolic dates, such as U.S. Independence Day, to test-fire missiles to increase their political impact. Under Kim Jong Il, failed tests were reported as successes, underscoring their utility for political and propaganda purposes. Under Kim Jong Un, however, North Korea has admitted to test failures and made it a point to repeat test-firings of missiles until the authorities got it right.
This was demonstrated in the development of the intermediate-range missile known as the Hwasong-10, or BM-25 Musudan in the U.S. lexicon. North Korea began flight-testing the missiles in April 2016, but it took five failures before a successful launch in June 2016. In 2015, the country also experienced three failed test-firings of the Pukguksong-1 (known as KN-11 in the United States) submarine-launched ballistic missile before finally succeeding in April and August 2016.
North Korea under Kim Jong Un has conducted more than 120 missile tests, compared to the around 30 tests total carried out by his father and grandfather. Thanks to this persistence, North Korea now has a missile arsenal that covers a variety of ranges, some types of which could be equipped with nuclear weapons. This does not mean Kim Jong Un has never exaggerated North Korea’s capabilities—he has—but it is also true that North Korea now has much more technically sophisticated weapons that he can brag about.
In terms of foreign policy, Kim Jong Un showed a high tolerance for risk as well as a preference for leader-to-leader diplomacy in his dealings with the United States. In 2017, the North Korean leader carried out three intercontinental ballistic missile tests and a nuclear test, despite then-U.S. President Donald Trump’s threat to respond with “fire and fury” should North Korea threaten the United States. Once Kim Jong Un achieved his military goal, which was to acquire the capability to strike the U.S. mainland with a nuclear-armed weapon, he turned to diplomacy in 2018, and held a total of three in-person meetings with Trump. That, however, ultimately collapsed as Kim Jong Un demanded sanctions relief and Trump saw North Korea’s denuclearization step offer as falling short of what was necessary.
Read More
What the 27 mostly unpublished missives tell us about the future of U.S.-North Korean diplomacy.
Internal U.N. documents detail the burden foreign envoys face from sanctions and a stiflingly controlling government in Pyongyang.
Domestically, Kim Jong Un changed North Korea’s internal balance of power to ensure his control of the country. He did this by shoring up the power of the WPK and decreasing the country’s emphasis on the military, whose members had become influential under his father’s rule. To do so, he gradually distanced himself from his father’s “military-first policy,” which relied on the armed forces as the main support for the regime. In 2016, he disbanded the National Defense Commission, the policy’s command center, replacing it with the State Affairs Commission. This move was more than symbolic, as the new commission dropped some senior military members and included more civilians.
Kim Jong Un also cares about his image. He has been keen to be seen as a leader who cares about and spends time with his people. He revived an annual speech on New Year’s Day to explain his policies and rally his people, a tradition begun by his extrovert grandfather but avoided by his introvert father. The younger Kim continues to be portrayed in state media photographs, smiling widely and hugging children or surrounded by soldiers. Here, he is similar to his grandfather but not his father, who was not often photographed in situations that involved physical contact with ordinary North Korean people.
Kim Jong Un appears ready to make his mark on North Korea’s direction clearer in the months and years to come. A sign of that came at January’s Eighth Congress of the WPK, which was reportedly held without the normally required portraits of Kim Il Sung and Kim Jong Un as a backdrop. In this meeting, the party eliminated the term “military-first policy” from the preface of the party rules and inserted “people-first politics,” a concept introduced by Kim Jong Un. In a country where guiding slogans are important, this could be a signal that Kim Jong Un is prepared to tie his legitimacy to his commitment to improving people’s lives—a risky promise, given the North Korea’s economy is in a shambles due to mismanagement, pandemic-induced isolation, and sanctions imposed against the country for its bad behavior.
Much of the world underestimated Kim Jong Un in 2011. But over the years, the North Korean leader has managed to navigate the internal and external politics necessary to ensure the survival of his regime. In the process, he has also established his own leadership style. And at only 37 years young, he has a good chance of staying in office for years to come.
11. South Korea holds talks with China amid spat with Taiwan
Excerpts:
The meeting came at a delicate time as Taiwan has lodged a protest over South Korea's revocation of its invitation sent in September for Digital Minister Audrey Tang to speak virtually at a conference last week in Seoul.
China claims the democratically governed island of Taiwan as its own territory and has sought to isolate it diplomatically abroad, stepping up pressure to assert its sovereignty claims.
Taipei's foreign ministry called South Korea's cancellation of Tang's visit "rude" and summoned South Korea's acting de facto ambassador to express its displeasure.
An official at Seoul's presidential Blue House said on Wednesday that the meeting organisers cancelled the invitation in line with "our diplomatic principles, not because of China".
"Our position remains unchanged that we will continue promoting unofficial economic and cultural relations (with Taiwan), and practical exchanges through them," the official told reporters.
South Korea holds talks with China amid spat with Taiwan
1/2
South Korea and China's flags flutter next to Tiananmen Gate during the visit of South Korean President Moon Jae-In in Beijing, China December 15, 2017. REUTERS/Jason Lee
SEOUL, Dec 23 (Reuters) - Senior South Korean diplomats held talks with Chinese counterparts on Thursday after a diplomatic spat with Taiwan over Seoul's cancellation of an invitation to a senior Taipei official to take part in a business forum last week.
Vice Foreign Minister Choi Jong-kun and aides conducted an online meeting on Thursday with a team led by Chinese Vice Foreign Minister Le Yucheng, the first such talks since June 2017.
The sides discussed efforts to reopen stalled denuclearisation talks with North Korea, as well as Beijing's preparations to host the 2022 Winter Olympics in February, Yonhap news agency reported, citing South Korea's foreign ministry.
Choi reiterated that Seoul hopes the Olympics will be successful, the ministry said, without elaborating on any discussions of attendance by South Korean officials.
South Korea's presidential Blue House has said it is not considering participating in a U.S.-led diplomatic boycottof the Beijing Olympics, but that discussions had yet to be held with China on sending a delegation.
Seoul faces an increasingly thorny balancing act as the United States, its top ally, focuses on marshalling allies and partners to counter what it calls a coercive and aggressive China, South Korea's largest economic partner.
"We hope this meeting can have a positive effect on enhancing communication and mutual trust and the promotion of bilateral relations," Chinese foreign ministry spokesman Zhao Lijian told a regular press briefing ahead of the talks on Thursday.
The meeting came at a delicate time as Taiwan has lodged a protest over South Korea's revocation of its invitation sent in September for Digital Minister Audrey Tang to speak virtually at a conference last week in Seoul.
China claims the democratically governed island of Taiwan as its own territory and has sought to isolate it diplomatically abroad, stepping up pressure to assert its sovereignty claims.
Taipei's foreign ministry called South Korea's cancellation of Tang's visit "rude" and summoned South Korea's acting de facto ambassador to express its displeasure.
An official at Seoul's presidential Blue House said on Wednesday that the meeting organisers cancelled the invitation in line with "our diplomatic principles, not because of China".
"Our position remains unchanged that we will continue promoting unofficial economic and cultural relations (with Taiwan), and practical exchanges through them," the official told reporters.
Reporting by Hyonhee Shin with additional reporting by Ben Blanchard in Taipei and Yew Lun Tian in Beijing; Editing by Clarence Fernandez, Ana Nicolaci da Costa and Mark Heinrich
12. N.Korea's Kim praises 'fresh heyday' in China relations as longtime envoy departs
What is a 'fresh heyday?" Is the old heyday now stale? The Propaganda and Agitation Department (PAD) still needs work on their choices of English words and phrases for their translations. Someday I am going to gift a huge Thesaurus to the workers laboring in the PAD.
Excerpts:
"Kim Jong Un highly praised the ambassador for successfully assisting several DPRK-China summit meetings over the past seven years, making much effort to develop the friendly relations between the two parties and the two countries and sharing bitters and sweets with the Korean people," Choe told Li, using the initials of North Korea's official name.
Kim is very satisfied that the North Korea-China relationship has entered a "fresh heyday" under the leadership of the ruling parties in each country, Choe said.
N.Korea's Kim praises 'fresh heyday' in China relations as longtime envoy departs
North Korean leader Kim Jong Un speaks during the Eighth Conference of Military Educationists of the Korean People's Army at the April 25 House of Culture in Pyongyang, North Korea in this undated photo released on December 7, 2021. KCNA via REUTERS/File Photo
SEOUL, Dec 23 (Reuters) - North Korean leader Kim Jong Un praised outgoing Chinese Ambassador Li Jinjun for helping to improve relations between Pyongyang and Beijing, state media reported on Thursday, as the envoy left office after seven years in the post.
Kim's comments were conveyed to Li by Choe Ryong Hae, a top official in the ruling Workers' Party of Korea, state news agency KCNA said. Li also met with North Korean premier Kim Tok Hun, KCNA reported.
"Kim Jong Un highly praised the ambassador for successfully assisting several DPRK-China summit meetings over the past seven years, making much effort to develop the friendly relations between the two parties and the two countries and sharing bitters and sweets with the Korean people," Choe told Li, using the initials of North Korea's official name.
Kim is very satisfied that the North Korea-China relationship has entered a "fresh heyday" under the leadership of the ruling parties in each country, Choe said.
Li asked Choe to express his gratitude to Kim and congratulated the North Korean people on "making progress in all fields of socialist construction," KCNA said.
China has been North Korea's only major ally since the two signed a treaty in 1961, and international sanctions imposed over Pyongyang's nuclear weapons and ballistic missile programmes have made it more dependent than ever on Beijing for trade and other support.
Since Li was appointed in 2015, relations between the two countries have seen major ups and downs.
Kim sent China-North Korea relations to a historical low by prioritising nuclear weapons and missiles development, then harshly criticising Beijing when it supported international sanctions
Starting in 2018, however, Kim managed to quickly repair ties and made his first known international trip as leader to meet with Chinese President Xi Jinping in Beijing. Xi later visited Pyongyang, the first by a Chinese leader in 14 years.
Li was one of a diminishing number of foreign diplomats in Pyongyang, as many embassies closed during North Korea's strict anti-pandemic lockdown that blocked the rotation of new staff or ambassadors.
Reporting by Josh Smith; Editing by Michael Perry
13. North Korea’s Signaling on Nuclear Weapons and Negotiations
Yes, a " baseline of trust and mutual confidence." While the focus of pundits is always on challenging the US "hostile policy" as the reason for distrust, I would like to counter and ask those pundits if they can give an affirmative answer to these two questions:
1. Do we believe that Kim Jong-un has abandoned the seven decades old strategy of subversion, coercion-extortion (blackmail diplomacy), and use of force to achieve unification dominated by the Guerrilla Dynasty and Gulag State in order to ensure the survival of the mafia like crime family cult known as Kim family regime
2. In support of that strategy do we believe that Kim Jong-un has abandoned the objective to split the ROK/US Alliance and get US forces off the peninsula? Has KJU given up his divide to conquer strategy - divide the alliance to conquer the ROK?
Conclusion:
Since Biden has proposed “diplomatic talks” to the North on several occasions since April, from a US perspective, the ball is in North Korea’s court. Still, North Korea continues to reject US proposals for talks and instead continues to ramp up its defenses as the regime does not believe the US is offering anything concrete that would address its political, economic or security concerns. It sees only what it considers continued US hostile policy, double standards and two-pronged policies. As such, if the aim of the international community is to persuade North Korea to come back to the negotiation table, it needs to take the DPRK’s thinking and perceptions into greater consideration.
Amid distrust and differences in approaches and demands, some parallel, practical concessions are needed to resume talks. By looking at Pyongyang’s signaling, two issues can be identified as key entry points to kickstart this trust-building and dialogue process: military exercises and future missile development and testing. As such, the US and ROK could offer the halt of joint military exercises, and South Korea could offer a moratorium on its missile testing, and in response, the North could declare a moratorium on all missile tests as an entry point for future talks. Such a compromise may constitute a concrete action to narrow down the gaps and solve two contentious issues: a cessation of the next joint military exercise may then be positively seen by the DPRK as a partial lifting of the hostile policy, while a moratorium on all missile tests can convince the US of North Korea’s serious commitment to long-term denuclearization.
To achieve the common goal of peace and denuclearization on the Korean Peninsula, Washington and Pyongyang need to find ways to build a baseline of trust and mutual confidence necessary for further negotiations.
North Korea’s Signaling on Nuclear Weapons and Negotiations
The US-DPRK Summit in Hanoi in 2019 ended without a deal due to disagreements over the right mix of sanctions relief for the nuclear concession Kim Jong Un offered. After the US rejected the North’s request to lift a significant portion of the sanctions imposed since 2017, the Democratic People’s Republic of Korea’s (DPRK) Foreign Minister Ri Yong Ho explained, “…as we take steps toward denuclearization, the most important issue is security, but we thought it would be more burdensome for the US to take military-related measures, which is why we saw partial lifting of sanctions as corresponding action.” This rationale illuminates Pyongyang’s previous calculation: that partial sanctions relief for partial denuclearization would be an acceptable outcome.
The failure of the Hanoi Summit appears to have prompted North Korea to recalibrate its strategy for dealing with the US. This new policy seems to be based on what the North perceives as: US hostile policy, double standards and two-pronged policies. As such, the DPRK has been both demanding concessions and justifying its own behavior, such as the cessation of US hostile policy through the provision of security guarantees, the development and testing of missile technology and the refusal of diplomatic dialogue. In the meantime, Pyongyang has resumed its nuclear development based on a power-for-power policy to pursue a military balance on the Korean Peninsula and increase its leverage over Washington before returning to negotiations.
However, this power-for-power principle is only one half of the equation. It is coupled with a goodwill-for-goodwill policy as well, giving Pyongyang the option to restart diplomatic talks with Washington under the right conditions. Hence, to engage North Korea, the US could consider proposing to jumpstart diplomacy with a concrete offer that begins to address North Korea’s major concerns. This is a practical way to convince Pyongyang to come back to the negotiations table and stop their military provocations.
Pyongyang’s Perspectives
There are three key themes that have emerged in North Korean rhetoric since the failed Hanoi Summit that help illuminate the North’s thinking about its relations with the US and the prospects of restarting nuclear negotiations.
First, is North Korea’s perception of a hostile policy. Although the US has offered to resume talks with North Korea, Pyongyang has rejected them, instead asserting that it will not return to the negotiating table until Washington withdraws what it calls its “hostile policy.” This calculus can be observed when analyzing Pyongyang’s behavior after the Hanoi Summit. While North Korea has often used this term to describe US actions toward the regime and a number of political and economic grievances, there is a very large security component to “hostile policy” as well. Should the US still push for a “big deal” again—North Korea commits to complete denuclearization—then the North will likely ask for a package of security guarantees, such as the withdrawal of all US hostile policies toward the country, as part of that exchange. While this term is rather ambiguous, the DPRK might demand, for instance, normalized relations with the US, which could include the withdrawal of all US forces in South Korea. That is, before Pyongyang can go through with complete denuclearization, its security situation needs to be resolved first.
Under this rubric, Pyongyang has viewed continued joint military exercises between the US and South Korea as a major aggression toward the North. These annual exercises are performed to practice the defense against a North Korean attack, and have, occasionally, included offensive components as well. The termination of these exercises has become part of the demands for the regime to resume negotiations with Washington. For example, Kim Yo Jong—Kim Jong Un’s powerful sister—warned the Biden administration to scrap future military exercises with South Korea “if it wants a good night’s sleep for the next four years, it would be good for them not to seek something to do unseemly that may not make them sleep properly.”[1] Therefore, the first step toward addressing North Korea’s perception of US hostile policy could be an offer to stop future US-ROK joint military exercises, as it did in 2018 when negotiations were ongoing. That said, the suspension of joint military exercises in concomitance with a change in Washington’s strategic calculus regarding denuclearization are a small component to the general precondition of ending US hostile policy. There is also a risk that North Korea would not take any action for denuclearization even if joint military exercises are terminated by the US and ROK.
Second, Pyongyang has expressed frustration over the international community’s reactions to its pursuit of increased military capabilities, especially the United Nations (UN) criticism over missile testing, while remaining silent about South Korea’s missile developments. North Korea argued that the international community holds a “double standard” against its missile testing and development of conventional weapons. Ri Pyong Chol, vice chairman of the Central Committee of the Workers’ Party of Korea (WPK), stated that the tests are the regular exercise of North Korea’s right to self-defense.[2] Both the US and South Korea can test and develop conventional weapons without fearing backlash from the international community, while North Korea, even if testing unsanctioned hardware, always encounters bashing and is labeled as a threat. Through this rhetoric, Pyongyang appears to be trying to both justify and normalize the strengthening of its military capabilities through regular tests of missile and strategic weapons, labeling them as a reactionary measure imposed by the geostrategic situation in the region.
Third, given these developments, the Biden administration’s offer for talks “anywhere, anytime” is not likely to be accepted by Pyongyang any time soon. North Korea believes that the US is employing a two-pronged policy: that on the one hand, the US is offering diplomatic dialogue as a way to demonstrate a peaceful measure, while, on the other hand, it is still pushing them with military and economic pressures. As such, any attempt of outreach or proposal of engagement from Washington is perceived as nothing more than a farce in Pyongyang. Choe Son Hui, first vice foreign minister, dismissed these attempts to establish dialogue as a “delaying-time trick.”[3] Kim Jong Un has probably concluded, based on the last round of negotiations and messaging since Hanoi, that, at least in the near-term, Biden is not interested in meeting the regime’s primary demands, such as ending US hostile policy and providing sanctions relief to the North. Case in point, on December 10, Washington imposed the first new sanctions on Pyongyang under President Biden. North Korea argues that if the US really intended to solve problems through dialogue, then it would have refrained from any hostile actions toward the North, like imposing new sanctions. In brief, the North sustains that the US says it wants dialogue but does nothing to reinforce these statements nor follows up with practical proposals of engagement.
Further North Korean Missile Tests Likely
Since North Korea was unable to obtain concrete and sustainable concessions from the US—such as the termination of US-ROK joint military exercises or some level of sanctions relief—during the last round of negotiations, it appears to have concluded its current nuclear weapons capabilities cannot change US strategic calculus. Consequently, Pyongyang’s behavior and government officials’ statements show that the qualitative and quantitative upgrading of its nuclear and conventional capabilities are necessary to achieve concessions from the US concomitantly with ensuring national security.[4] The regime appears to have returned to the policy of nuclear and national defense strengthening, the so-called “power-for-power” to counter US military threats and its hostile policy.
This decision was once again confirmed by announcing the five-year military plan at the Eighth Congress of the Workers’ Party of Korea, held in January 2021. Kim Jong Un emphasized that “completing the national nuclear force project is a strategy that North Korea must preemptively occupy in the construction of a powerful socialist state.”[5] In other words, North Korea will continue to work towards the development of stronger nuclear weapons and the strengthening of its national defense capabilities to overcome fundamental security issues with the US.
In line with the five-year plan, North Korea has conducted eight missile and strategic weapon tests this year, starting with two short-range missile tests on January 22—the first tests in six months and just two days after the inauguration of US President Biden. Furthermore, the cruise and short-range ballistic missile tests conducted in late March were largely seen as a signal to the new US government, before its North Korea policy review was complete, that the DPRK would continue developing its nuclear weapons program.
However, Pyongyang stopped testing for five months from April to August as the regime seemed to need some time to evaluate Biden’s new North Korea policy, which was unveiled at the end of April. During the Third Plenary Meeting of the Eighth Central Committee, held on June 17, Kim Jong Un analyzed in US administration’s revised North Korea policy and stressed:
…the need to get prepared for both dialogue and confrontation, especially to get fully prepared for confrontation in order to protect the dignity of our state and its interests for independent development and to reliably guarantee the peaceful environment and the security of our state.[6]
Since September, though, the regime has resumed more regular missile testing. In September and October alone, North Korea conducted five missile tests, demonstrating a new long-range cruise missile, a railway-launched short-range ballistic missile, a hypersonic missile and a “new-type” of submarine-launched ballistic missile (SLBM).
Furthermore, South Korea’s recent testing of numerous missile technologies and systems has highlighted a growing arms race between the two Koreas. During September, South Korea conducted two SLBM tests, a long-range air-to-surface missile test, and revealed previous progress on building a supersonic cruise missile. In many ways, North Korea’s most recent missile advancements have also focused on capabilities to counter South Korean defense improvements in recent years, including ballistic missile capabilities and missile defenses. Indeed, perceived military inferiority would mean an inability to defend its own sovereignty and national security, which would, in turn, become an existential threat to the North Korean regime.
Another observation can be made by looking at the arms race on the peninsula: North Korea’s recent missile tests were also conducted shortly after South Korea’s testing of similar missile technologies and systems. In late October, North Korea test fired a new SLBM after South Korea’s first underwater-launched ballistic missile in mid-September. Furthermore, on September 28, North Korea tested a new hypersonic missile, called Hwasong-8, that came after South Korea’s own supersonic cruise missiles developed sometime last year. Therefore, through this behavior, North Korea seems to be implying that its tests are an inevitable measure, matching recent South Korea’s missile developments. This also means North Korea’s development of missile technology will continue at least until the five-year military plan ends, using South Korea’s military development as a convenient excuse for such efforts.
Taking all the above into consideration, Pyongyang is likely to continue carrying out more missile tests in the coming months to demonstrate advancements in its missile technologies according to the five-year military plan’s “5 top-priority tasks…facing the strategic weapon sector.”[7] However, among others, new technologies associated with a solid-fuel intercontinental ballistic missile (ICBM), hypersonic missiles and a nuclear-powered submarine are more likely to be on its future agenda. Those are also the areas for arms racing between the two Koreas, and North Korea seems to be trailing behind its competitor. Seoul has revealed that the country conducted a combustion test of a solid-propellant engine for space launch vehicles on July 29 and has plans to begin testing a prototype for a ground-launched hypersonic cruise missile in 2022.
In particular, North Korea’s plans for further SLBM development raises concerns, as SLBMs on a minimum trajectory could be fired from an undetected point outside of US missile defense system radar range. As a result, one possible upcoming test could be firing multiple long-range SLBMs from a new 3,000-ton-class submarine, which may be nearing completion or is ready to be rolled out in the near future, according to North Korean media.
Prospects for Future Negotiations
While North Korea is likely to continue pursuing nuclear and missile developments, negotiations haven’t been fully ruled out. Pyongyang might be aware that future missile tests are unlikely to convince the Biden administration to change its policy toward North Korea. However, it might have decided to increase its leverage over Washington with further missile provocations in an attempt to push the US to propose more favorable conditions for the North’s return to dialogue than the current Biden’s proposal. One of Choe Son Hui’s statements to North Korean state media supports this view: “We already clarified that we will counter the US on the principle of power for power and goodwill for goodwill.”[8] Albeit not groundbreaking nor novel in nature, these perceptions and this idea of exchanging power for power and goodwill for goodwill help us both understand the reasoning behind North Korea’s actions and gauge its strategic calculus for nuclear development and negotiations.
Although resumption of more intense dialogue might simply have to wait until the global pandemic crisis is over, North Korea’s economic situation may impact its willingness to resume negotiations with the US, even under less-than-ideal terms. North Korea is currently facing serious economic difficulties due to a combination of sanctions, natural disasters, COVID-19 containment measures and a history of economic mismanagement. North Korea’s real GDP fell by 4.5 percent in 2020, according to estimates by South Korea’s Bank of Korea (BoK) at the end of July. Meanwhile, Kim Jong Un himself, at the Third Plenary Meeting of the Eighth Central Committee of the WPK, admitted that “the people’s food situation is now getting tense as the agricultural sector failed to fulfill its grain production plan due to the damage by typhoon last year.”[9] Furthermore, the arms procurement and competition will force Pyongyang to spend more on its conventional weapons and nuclear programs than perhaps it anticipated to avoid falling behind Seoul. Thus, the unabated pursuance of arms procurement and development could have dire repercussions, given North Korea’s current economic condition.
Conclusion
Since Biden has proposed “diplomatic talks” to the North on several occasions since April, from a US perspective, the ball is in North Korea’s court. Still, North Korea continues to reject US proposals for talks and instead continues to ramp up its defenses as the regime does not believe the US is offering anything concrete that would address its political, economic or security concerns. It sees only what it considers continued US hostile policy, double standards and two-pronged policies. As such, if the aim of the international community is to persuade North Korea to come back to the negotiation table, it needs to take the DPRK’s thinking and perceptions into greater consideration.
Amid distrust and differences in approaches and demands, some parallel, practical concessions are needed to resume talks. By looking at Pyongyang’s signaling, two issues can be identified as key entry points to kickstart this trust-building and dialogue process: military exercises and future missile development and testing. As such, the US and ROK could offer the halt of joint military exercises, and South Korea could offer a moratorium on its missile testing, and in response, the North could declare a moratorium on all missile tests as an entry point for future talks. Such a compromise may constitute a concrete action to narrow down the gaps and solve two contentious issues: a cessation of the next joint military exercise may then be positively seen by the DPRK as a partial lifting of the hostile policy, while a moratorium on all missile tests can convince the US of North Korea’s serious commitment to long-term denuclearization.
To achieve the common goal of peace and denuclearization on the Korean Peninsula, Washington and Pyongyang need to find ways to build a baseline of trust and mutual confidence necessary for further negotiations.
- [1]
”Kim Yo Jong, Deputy Director of CC, WPK, gives statement to media,” Voice of Korea, March 16, 2021.
- [2]
See: “Ri Pyong Chol Expresses Deep Apprehension over U.S. President’s Statement Faulting DPRK’s Regular Testfire,” KCNA, March 27, 2021; and “N.K. says Biden’s remarks on recent missile launches a ‘provocation’,” Yonhap News Agency, March 27, 2021, https://en.yna.co.kr/view/AEN20210327000800325.
- [3]
“Statement of First Vice Foreign Minister of DPRK,” KCNA, March 18, 2021.
- [4]
“Kim Jong Un Makes Commemorative Speech at Defence Development Exhibition,” KCNA, October 12, 2021.
- [5]
Author translation of “조선로동당 제8차대회에서 하신 경애하는 김정은동지의 보고에 대하여,” KCNA, January 9, 2021.
- [6]
“Third-day Sitting of 3rd Plenary Meeting of 8th Central Committee of WPK Held,” Rodong Sinmun, June 18, 2021.
- [7]
“Hypersonic Missile Newly Developed by Academy of Defence Science Test-fired,” Rodong Sinmun, September 29, 2021.
- [8]
“Statement of First Vice Foreign Minister of DPRK,” KCNA, March 18, 2021.
- [9]
“3rd Plenary Meeting of 8th Central Committee of WPK Opens,” Rodong Sinmun, June 16, 2021.
14. Understanding Kim Jong Un’s Economic Policymaking: Pyongyang’s Views on Banking
Excerpts:
A close reading of the journal articles that followed Kim Jong Un’s December 2015 letter on banking shed light on the pattern that Kim has established for rolling out his new economic policies. There is no instantaneous jumping through hoops. After some discussion of fundamental direction (discussion that we almost never see), Kim issues overarching policy guidance. It is then up to others to fill in the blanks, work out details, clarify what is ambiguous, and resolve disputes about how best to operationalize the concepts. In the case of the banking sector, this was a long process, at least four years from the time Kim issued his guidance, and undoubtedly some time—perhaps a year or even more—spent in formulating the new concepts, building on ideas already under discussion from the Kim Jong Il era.
Given the complexity of banking issues that North Korea apparently is still trying to work out, it seems unlikely that central media like the party and government dailies will publicly discuss commercial banks or their operation until the regime has made substantial progress in that realm. Even details of the country’s central bank, whose history goes back to 1946, remain scarce in central media, reflecting the highly sensitive nature of the North’s banking policy in general.
What’s Next?
The next paper in this series will examine North Korea’s “economic management methods of our style,” Kim Jong Un’s economic reform package that is broadly composed of agricultural reform (“field responsibility system”), enterprise reform (SERMS) and financial reform. Specifically, it will review how these concepts were rolled out in North Korean academic journals, what appeared to be the point of contention, and how the key concepts may have evolved over the years.
Understanding Kim Jong Un’s Economic Policymaking: Pyongyang’s Views on Banking
As the third project in our series on understanding Kim Jong Un’s economic policymaking, we examined how North Korean academic journals treat the concept of banking.[1] We did so, in part, because of the surprisingly large number of articles touching on the banking issue in recent years. That intense focus suggested that new policies on banks—signaled by Kim Jong Un’s letter to a banking conference in December 2015—had presented the regime with a complicated challenge, engendering considerable research and discussion.
Indeed, that turned out to be the case. The deeper we got into over 40 journal articles, not only in Kyo’ngje Yo’ngu and the Journal of Kim Il Sung University (Hakpo) but also Sahoe Kwahagwo’n Hakpo (the Journal of the Academy of Social Sciences), the more threads there were to pull, the more angles to understand, and the more links to be followed. It also seemed worth noting that, although the banking issue was a focus in the journals, it was—and still is—almost completely absent from the two major central media sources targeting the general domestic public—Rodong Sinmun and Minju Joson.[2]
In many ways, it appears that the issue of banks was more complex than the defense versus civilian spending conundrum we discussed in the second installment of this series. As sensitive as the regime considered the defense spending issue, the banking problem was perhaps even more so. The enlargement and reform of the banking sector, which is what the regime has been attempting under Kim Jong Un, seems to have forced Pyongyang to deal with a number of new, thorny questions about how, practically and realistically, to push the economy to grow. In the process, explicitly or not, the regime had to justify adopting measures that, only a few years ago, were roundly condemned as capitalism in its worst forms. Charging interest for loans became one approved way banks could earn funds for operating capital; credit cards became portrayed as a way to increase money circulation and to ease the burden on consumers of traveling to the bank.[3]
There is an assumption sometimes expressed by outside observers that the North’s efforts in the banking sector have been primarily aimed at increasing control over funds accrued outside of central control. To the contrary, the bulk of the articles in the journals we studied focused on the opposite: how to increase “creativity” in banks, lessen rigid control from the center, and make space for bank officials—and the sector as a whole—to respond to conditions and developments at the local and enterprise levels without undue restrictions.
Tracing the Banking Narrative
As with our study of defense versus civilian spending, we started this research by examining articles back to the early 2000s to ensure that what we have seen under Kim Jong Un was not previously discussed during Kim Jong Il’s time in power. What we observed was that under both leaders, there was a long stretch of educational articles in Kyo’ngje Yo’ngu about banks, banking and the international financial system, very much focused on preparing North Koreans for business relationships with capitalist actors outside the country and entry of capitalist companies or investors into the North. Many of these articles were nonjudgmental and illustrative, in a sort of “Banking for Dummies” approach. In some cases, the authors felt compelled to justify their treatment of what would otherwise be controversial topics by explaining:
Correctly understanding the economies of other countries and the international market is the first step in external economic activity and as such is important work for its success. This is because when [we] know the economies of other countries and the international market well can we proactively carry out external economic transactions and guarantee actual profits [silli; 실리].[4]
North Korean academic journals had dealt with foreign economic practices since at least 1990, but it was not until 2000 that they started to pay attention to foreign banking and financial practices and institutions in a non-ideological, educational manner. That was no accident. It was in 2000 that there was significant progress in Democratic People’s Republic of Korea-Republic of Korea (DPRK-ROK) and DPRK-US relations, all part of the lead-up to Kim Jong Il’s 2002 economic reforms. The study of foreign banking practices continued into the first few years of Kim Jong Un’s rule, signaling that research was still underway about more encompassing internal financial and banking reform.
One early sign that a policy change was in the works but not yet fully approved came with a spring 2014 article in Kyo’ngje Yo’ngu. Apparently still not on firm ground to advance new thinking, the article employed a traditional tactic journal authors use to protect themselves from criticism, beginning the article as a paean to orthodox thought before switching in an effort to push the envelope with new ideas. In this case, the article began by stressing the importance of money circulation for defense spending before pivoting to make what was really the main point: “If a money circulation strategy is implemented, it would generate more monetary income in the hands of the working people, and their purchasing power would rise systematically.”[5]
After Kim’s 2015 letter, article after article in the journals seemed to reflect a clear understanding that fresh, to some extent independent, thinking at the bank level was critical to the success of Kim’s efforts to transform management policies through the socialist enterprise responsibility system (SERMS), Kim’s key reform measure of giving individual enterprises greater latitude in planning, production, and management of resources and profits. For example, the first journal article exclusively dedicated to expounding on a new concept known as the “accounting system of financial institutions”—essentially the equivalent of SERMS for the banking sector—noted that one of its purposes was to increase the sense of responsibility and creativity of commercial banks.[6] An article that appeared the following year went beyond simply espousing the goal of banks’ creativity and advocated measures to make sure that was not impeded: “Legal provisions and regulations related to commercial bank activities as a whole should be reviewed on a state level, and too many shackles tying down commercial banks should be rectified.”[7]
After Kim Jong Un’s December 2015 guidance on banking reform—instructions which made no reference to a link between such reform and military spending—journal authors were freed from the burden of having to protect their flanks by rationalizing the new policies on grounds other than improving the economy.
Kim’s December Letter
The issues of concern enumerated in Kim’s December 2015 letter—issues subsequently tackled in the journals—were: the role of banks in support of SERMS; currency circulation and stability; and the use of “idle funds.” In fact, the major purpose of the banking reforms appears to have been to support SERMS from all angles, making banks profitable so they could provide more loans and keep money in circulation, utilizing “idle funds” and thus ensuring funds for enterprises on their own—i.e., with least state money—to compensate workers, purchase new equipment and additional materials as output grew.
There was a curious gap of nearly a year in which the journals did not pick up on the ideas set forth in Kim’s letter, a rather long hiatus for North Korean journals to start expounding on the leader’s guidelines. When they did, it was Hakpo, whose writers are generally assumed to be Kim Il Sung University faculty, that took the lead in expanding on and explaining many of the key themes Kim set forth in his letter, suggesting that the university may have played an instrumental role in researching and conceptualizing these ideas.
In that vein, a Hakpo article in late 2016 led the way for explaining or building on instructions in Kim’s letter that left room for interpretation—and, not surprisingly, there were several points in the instructions that needed fleshing out.[8] Central to the banking issue was the role of commercial banks in a socialist setting. Exclusively about commercial banks, this article was pivotal in that it went beyond introducing the outside world’s banking policies and sought to adapt commercial banks to North Korea’s needs.
Commercial Banks
At the center of the banking sector overhaul was the issue of expanding the role of commercial banks—defining how these banks differed from the central bank, and crucially, how much “creativity” commercial banks were to exercise apart from central control and instructions. Prior to Kim Jong Un’s financial and banking reforms, North Korea operated a “monobanking system” common in socialist planned economies: The central bank performed all key banking functions, namely note issue, currency control, deposits and loans. Pyongyang enacted a Commercial Law in 2006 under Kim Jong Il to create commercial banks, likely to support his new economic policies, but the plan did not make headway and faded—although not completely—along with his initiatives.
Commercial banks had long been regarded as the epitome of capitalism, as reflected in the North Korean encyclopedia’s characterization in 2005:
In order to obtain as much interest and commission as possible, commercial banks even pour funds into loans with unproductive, parasitic, predatory, and aggressive purposes, suck up a portion of the profits the capitalists have acquired, and direct them to dividends and reserves.[9]
Switching to a full embrace of commercial banks—indeed, converting existing branches of the central bank into commercial banks—was not an easy sell. It is no wonder, then, that the 2016 Hakpo article on operationalizing commercial banks in North Korea went out of its way to try to distinguish between capitalist and socialist commercial banks:
In a capitalist society, commercial banks are exploitative and profit-making businesses that will resort to any means and methods to achieve their profit-pursuing objectives. In a socialist society, however, commercial banks carry out their mission and duties as state institutions that financially guarantee the people’s economic development and control business activities for their improvement, including currency control work and management of state property in their regions.[10]
North Korean journals intensified their attention to commercial banks starting in 2018—more than two years after Kim’s letter clearly blessed the role of these banks and as Kim was shifting to direct diplomatic engagement with Seoul and Washington. The articles focused on explaining the function of commercial banks and described ways to improve their operation.
Why this spate of articles? It is possible that difficulties developed internally over accepting the broadened role of such banks, especially the idea that in order to fulfill their function as a spark plug for economic growth, they needed to be freer to operate, especially in what was beginning to look like a favorable external environment that could present new opportunities for the economy. Possibly in response to criticism or political pushback from within, an article in Hakpo introduced the term “socialist commercial banks” as if to distinguish the new, good version of banks from the capitalist variety.[11] At the same time, much as Kim Jong Un had done in his letter, articles frequently took care to point out that the commercial bank initiative was completely in line with previous policies by Kim Il Sung and Kim Jong Il, though an important, transformative step beyond.[12]
A key concept associated with commercial banks was the “accounting system of financial institutions.” As noted above, this was the companion in the banking sector to SERMS in the enterprise sector. Kim Jong Un briefly introduced the new accounting system for banking in his 2015 letter:
The accounting system of financial institutions is a mode of business activity where commercial banks compensate for their expenses with revenues from financial business and give benefits to the state.[13]
That was a bare-bones reference to something so important, and so journals eventually—though not until 2018—expanded on it, explaining the differences between this new concept and the old “budget system,” which had been the former mode of operation for North Korean banks:
In the operation of banks, the budget system method is an operational method of offering all the work income generated in the process of operating banks toward the stage budget and [pay for] all the expenses incurred during the work process by receiving [money] from the state budget. Whether banks are operated through the budget system method or the accounting system method is one of the fundamental issues raised in the operation of banks. That is because this issue is an issue of boundaries in the economy of bank operation and thus is an issue of whether banks themselves take responsibility for compensating for bank operating costs, or whether the state compensates for them.[14]
The delay in more fully discussing the new accounting system for banks could well reflect sensitivities about the concept—even though Kim Jong Un himself had introduced it.[15] By contrast, it is worth noting that North Korean academic journals started mentioning SERMS in October 2014, only five months after Kim introduced the terminology. As recently as 2020, a journal article on the bank accounting system took care to note it was keeping with the late Kim leaders’ “behest.”[16] That the writer felt the need to reassert this point long after the policy had been promulgated suggested there were, and probably are, ongoing problems.
Idle Funds
Kim Jong Un’s 2015 letter contained only the barest instructions on the issue of “idle funds.” That term would seem to be self-explanatory but turned out to be more complex than first appeared. If commercial banks were, according to the new accounting system, supposed to obtain funds apart from the state budget to sink back into the economy, where were they going to find them? Defining, locating, utilizing and increasing “idle funds” all had to be tackled. The first journal article that picked up Kim’s letter, in Hakpo’s final volume for 2016, only scratched the surface on idle funds, noting:
“In order to develop the deposit business to meet actual requirements, the business system should be perfected so that the idle cash tied down to the hands of not only individual residents but also businesses can be mobilized to the maximum.” For that, banks “should revitalize the residents’ savings work.”[17]
The article offered no speed bumps to commercial banks getting control of idle cash: “In particular, if banks cannot use credit levers properly, they will not be able to take control of the cash in the hands of residents or the idle cash in the hands of businesses.”
Other than passing mentions, the issue then lay fallow in the journals for more than a year when it was again tackled, this time in more detail by a series of articles in 2018. A Hakpo article in 2018 emphasized the importance of cash “in the hands of residents” and thus the need for “ensuring smooth money circulation and improving the people’s living standards by mobilizing to the maximum residents’ idle money to banks.”[18] The same article added for the first time in the journals’ discussions of new banking policy the warning: “In addition, commercial banks should regard credit with residents as the law and keep it without fail, and accept various forms and methods of savings suitable for the income levels, living conditions, and needs of residents.” While not citing Kim, this came directly from Kim Jong Un’s December 2015 letter.
The concept of “idle funds” apparently continued to be a source of at least confusion, if not controversy. As with the introduction of the new terminology on banks (“socialist commercial banks”), an article published at the end of 2018 that dealt with idle funds tried something similar, reintroducing the term “temporarily” idle funds:
The fund mobilization and utilization function is one of the basic functions of commercial banks, as it concentrates into banks the temporarily idle funds that are not being used for production or consumption by residents, institutions, and businesses and supplies them to businesses that are short of funds.[19]
Fiddling with terminology, apparently, did not settle the issue. Consequently, a much more detailed treatment of idle funds appeared, this time in Kyo’ngje Yo’ngu by Nam So’k-ch’un, though it strained to define which funds could be considered “idle” that commercial banks could utilize. The problem was that since virtually all money in the system had to be derived from some form of “socialist ownership,” what funds could a commercial bank utilize on its own, in a sense outside of state purview?
To address this, the article went through a tortured explanation of how the money in socialist commercial banks was different from that in capitalist banks, how that of the socialist banks “largely” fell under socialist ownership, and thus, implicitly, what was important was not the theoretical sources of the funds but how they were utilized.
The various natures of funds concentrated in commercial banks in a socialist society are funds raised on the basis of social production. As such, they are guaranteed materially and accordingly are utilized in a planned manner. Even the idle monetary funds absorbed by commercial banks are funds raised on the basis of social production and concentrated in commercial banks due to their function of mobilizing funds. By utilizing the monetary funds collected into their possession in a way that is suited to their character, commercial banks actively contribute to accelerating the social reproduction process.[20]
Nam’s first article left too many questions, apparently, and more needed to be done in defining what constituted idle funds that banks would use and what they could not.
Nam followed up with a second article a few months later, using this passage from Kim’s 2015 letter:
[Commercial banks] need to meet the demand for funds in their given regions with their own sources of funds, strike a balance between revenue and expenditure, and enable currency to circulate smoothly revolving around banks by utilizing deposits and loans, payment methods, and interest rate levers in a diverse manner.[21]
While this citation did not specifically mention idle funds, Nam used the quote as a jumping-off point to deal with that issue, taking a reader through the maze of funds, something beyond “state versus nonstate” or “temporarily idle versus productive.” While some funds were in commercial banks, they were not to be considered a source of funds the banks could utilize as loans or forms of credit.
The sources of commercial banks’ funds are either idle monetary funds that commercial banks mobilize from residents, organs, and enterprises through credit methods for financing, or their own funds raised in the process of their financial business activities. In this vein, not all funds in commercial banks are commercial banks’ sources of funds: those funds mobilized through credit methods or commercial banks’ own funds raised during financing processes serve as sources of funds for commercial banks.[22]
In sum, Nam said that commercial banks’ “sources of funds consist of their own funds, revenue from savings mobilized from residents, revenue from deposits mobilized from organs and enterprises, and financial organs’ loans,” and that, “among the important characteristics of commercial banks’ sources of funds is, above all, that they are idle monetary funds of a temporary character.”
That might seem enough, but Nam was compelled to add a wrinkle:
Idle monetary funds of a temporary character refer not to funds that are functional in reproduction processes in reality, but funds that are temporarily idle outside reproduction.
Enough already! But Nam had to go deeper, balancing and clarifying what seemed to be competing claims to “idle funds”:
Temporarily idle funds in the hands of residents, organs, and enterprises are idle monetary funds but are not sources of funds for commercial banks. That is because such funds are not idle monetary funds mobilized for commercial banks but are idle monetary funds in the hands of residents, organs, and enterprises.
In other words, not all temporarily idle funds are the same, and not all are equally available for bank use.
Temporarily idle monetary funds existing among residents, organs, and enterprises are not sources of funds for commercial banks, but these funds pose the possibility of being mobilized and used as sources of funds for commercial banks in the future, because they are not being utilized for productive or consumptive objectives.
Even Nam didn’t have the courage (or permission) to go any further in explaining how “in the future” it would be possible for commercial banks to figure out how to use these funds. It is possible that issue had not yet been clarified in regulations or legislation. Even so, Nam was not through but moved on to take up what was an extremely sensitive issue of how much control banks had over some of their funds, and which ones, in Nam’s words, needed to be seen as “of a returned character.” Not stated was the fact that this was a key issue in any effort to restore confidence among the public in banks. Idle funds not being used for production or consumption, Nam said, “are usually of a returned character” and thus “must” be returned to the owners of the funds “once a certain period has passed.”
This was obviously a point he felt he needed to drive home several times:
Commercial banks’ sources of funds must be returned without fail once a certain period has passed, though the period of their use may be different depending on the characteristics of their composition…Not only residents’ funds but also organs’ and enterprises’ funds included in commercial banks’ sources of funds must be returned to the owners as per their demand when the time is up…Idle monetary funds mobilized from residents, organs, and enterprises are absolutely not spare funds but are temporarily unemployed idle monetary funds. Every monetary fund movement in a socialist society dovetails with goods or commodities. Due to factors such as the characteristics of monetary fund uses, the irregularity of materials and commodities supply, and others, some funds of residents, organs, and enterprises are not used for their consumptive or productive expenses—they remain in the hands of residents, organs, and enterprises. Hence, such funds must be returned at any time to residents, organs, and enterprises when they ask for them.
Conclusions
A close reading of the journal articles that followed Kim Jong Un’s December 2015 letter on banking shed light on the pattern that Kim has established for rolling out his new economic policies. There is no instantaneous jumping through hoops. After some discussion of fundamental direction (discussion that we almost never see), Kim issues overarching policy guidance. It is then up to others to fill in the blanks, work out details, clarify what is ambiguous, and resolve disputes about how best to operationalize the concepts. In the case of the banking sector, this was a long process, at least four years from the time Kim issued his guidance, and undoubtedly some time—perhaps a year or even more—spent in formulating the new concepts, building on ideas already under discussion from the Kim Jong Il era.
Given the complexity of banking issues that North Korea apparently is still trying to work out, it seems unlikely that central media like the party and government dailies will publicly discuss commercial banks or their operation until the regime has made substantial progress in that realm. Even details of the country’s central bank, whose history goes back to 1946, remain scarce in central media, reflecting the highly sensitive nature of the North’s banking policy in general.
What’s Next?
The next paper in this series will examine North Korea’s “economic management methods of our style,” Kim Jong Un’s economic reform package that is broadly composed of agricultural reform (“field responsibility system”), enterprise reform (SERMS) and financial reform. Specifically, it will review how these concepts were rolled out in North Korean academic journals, what appeared to be the point of contention, and how the key concepts may have evolved over the years.
Note: translated journal articles cited in this report will be published in the coming weeks.
- [1]
- [2]
For that contrast in coverage, we still don’t have an explanation. It might reflect the sensitivity of the banking issue; it might also be explained by the fact that as changes to banking policies are under internal discussion, the issue is not yet deemed appropriate for either the party or government dailies.
- [3]
Forms of electronic money, including credit cards, were extensively and at least implicitly explored favorably in Hakpo articles as early as 2013. See Ri So’n, “Understanding Electronic Financial Services and the Direction of Their Development,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 2, (2013); and Ryu Ch’o’n, “Types of Electronic Money,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 3, (2013). For the issue of loan and savings interest, see Nam So’k-ch’un, “Composition of Commercial Banks’ Funds in a Socialist Society and Their Characteristics,” Kyo’ngje Yo’ngu 2, (April 2019).
- [4]
Quote translated from Pok Po’m, “Several Issues Drawing Attention Regarding Changes in International Financial Market at the Present Time,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 2, (2013).
- [5]
Kim Ch’o’l-so’ng, “Accurately Drawing up and Implementing a Money Circulation Strategy Is an Important Requirement for the Construction of an Economically Powerful Socialist State,” Kyo’ngje Yo’ngu 2, (April 2014).
- [6]
Han Yo’ng-ch’o’l, “Accounting System of Financial Institutions and Important Issues Arising in Its Operation,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 1, (2018).
- [7]
Quote translated from Pak In-so’n, “Basic Principles Arising in Management of Socialist Commercial Banks,” Kyo’ngje Yo’ngu 3, (July 2019).
- [8]
Ko Ku’m-hyo’k, “Important Issues Arising in Turning Banking Institutions into Commercial Banks at the Present Time,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 4, (2016).
- [9]
Translated excerpt of the “commercial bank” entry in the electronic version of the Korean Encyclopedia, compiled by the Encyclopedia Press Group and created by the Samilp’o Information Center, 2005.
- [10]
Ko Ku’m-hyo’k, “Important Issues Arising in Turning Banking Institutions into Commercial Banks at the Present Time,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 4, (2016).
- [11]
Hong Chu’ng-po’m, “Unique Ideas and Theories on Socialist Commercial Banks,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 3, (2018).
- [12]
Ibid.
- [13]
Kim Jong Un, Let Us Vigorously Accelerate Powerful State Construction by Bringing a Turnabout in Financial and Banking Work—Letter Sent to Participants in the Third Conference of National Financial and Banking Functionaries—December 13 Juche 104 (2015) (Pyongyang: Workers’ Party of Korea Publishing House, 2017), 15-16.
- [14]
Quote translated from Hong Chu’ng-po’m, “Unique Ideas and Theories on Socialist Commercial Banks,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 3, (2018).
- [15]
Cho’n Ryong-sam, “The Consolidation of Currency Circulation and the Method of Its Realization,” Kyo’ngje Yo’ngu 1, (January 2017); and Han Yo’ng-ch’o’l, “Accounting System of Financial Institutions and Important Issues Arising in Its Operation,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 1, (2018).
- [16]
Ch’oe Yo’ng-nam, “The Essence and Characteristics of Financial Institutions’ Accounting System,” Kyo’ngje Yo’ngu 2, (April 2020).
- [17]
Ko Ku’m-hyo’k, “Important Issues Arising in Turning Banking Institutions into Commercial Banks at the Present Time,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 4, (2016).
- [18]
Han Yo’ng-ch’o’l “Important Issues Arising in Accounting Systems of Financial Institutions and Their Operation,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 1, (2018).
- [19]
Quote translated from Kim Yo’ng-ryo’n “Important Issues Arising in Improving the Functions and Operation of Commercial Banks at the Present Time,” Kim Il Sung Chonghaptaehakhakpo (Ch’o’rhak, Kyo’ngje) 4, (2018).
- [20]
Quote translated from Nam So’k-ch’un, “Composition of Commercial Banks’ Funds in a Socialist Society and Their Characteristics,” Kyo’ngje Yo’ngu 2, (April 2019).
- [21]
Quote translated from Nam So’k-ch’un, “Commercial Banks’ Sources of Funds in Socialist Societies and Their Characteristics,” Kyo’ngje Yo’ngu 2019 4, (October 2019).
- [22]
Ibid.
15. Moon visits front-line unit on border island, encourages Marines
(LEAD) Moon visits front-line unit on border island, encourages Marines | Yonhap News Agency
(ATTN: REPLACES photo)
SEOUL, Dec. 23 (Yonhap) -- President Moon Jae-in visited a front-line military unit on a western border island on Thursday and hailed Marines there for their hard work, Cheong Wa Dae said.
Moon flew by helicopter to Baengnyeong Island near the western sea border with North Korea and began his visit by paying his respects at a memorial dedicated to the 46 sailors killed in the North's sinking of the Cheonan corvette in 2010, his spokeswoman Park Kyung-mee said in a written briefing.
Moon then visited the headquarters of a Marine brigade to be briefed on the unit's work and mounted a forward observation post to encourage the troops there.
He extended his special thanks to the troops for serving in one of the most important military areas where they must constantly remain on high alert without being able to leave the island easily.
During a meal with the brigade's commanders, the president stressed the importance of looking after the troops' human rights and welfare.
"I ask that you make sure these servicemembers, who are working in difficult conditions, return to their families healthy and more mature," Moon said, according to Park.
The president was accompanied on the trip by first lady Kim Jung-sook.
hague@yna.co.kr
(END)
16. S. Korea to bolster 'future-oriented' cooperation with U.S. on supply chains, technologies in 2022
Some apparent good news.
S. Korea to bolster 'future-oriented' cooperation with U.S. on supply chains, technologies in 2022 | Yonhap News Agency
By Song Sang-ho
SEOUL, Dec. 23 (Yonhap) -- South Korea will expand "future-oriented" cooperation with the United States on supply chains, technologies and other areas next year while reinforcing "conflict prevention" efforts with China, the foreign ministry said Thursday.
The ministry delineated the plans in a written policy report for 2022 to President Moon Jae-in as Seoul seeks to craft an optimal diplomatic strategy amid a hardening Sino-U.S. rivalry on technological primacy, security, trade and other fronts.
Delivered jointly with the unification and defense ministries, the report was the last annual government briefing on diplomatic, security and North Korea policies to Moon before his single, five-year term ends in May.
"We will further expand the horizons of cooperation between South Korea and the U.S. by continuing to push for future-oriented cooperation projects in areas, including public health, climate change, supply chains and cutting-edge technologies," the ministry said.
As part of its "science and technology diplomacy," the South will strengthen strategic cooperation with the U.S. on artificial intelligence, information and communications, quantum technology and space development, the ministry said.
Since the White House summit between Presidents Moon and Joe Biden in May, the allies have moved to broaden their partnership beyond its security focus to cover an array of global issues, such as supply chain resiliency, climate change and infectious diseases.
On China, the ministry said Seoul will seize on the 30th anniversary of the establishment of bilateral ties next year to strengthen high-level exchanges and ramp up efforts to prevent any future conflict with Beijing.
Concerns have persisted that the U.S. efforts to rally its democratic allies against China's growing assertiveness could potentially take a toll on relations between Seoul and Beijing.
Capitalizing on the "Year of Korea-China Cultural Exchanges" from 2021-2022, Seoul hopes to achieve the "full restoration" of the two countries' cultural and people-to-people exchanges, the ministry said.
Bilateral cultural exchanges have been impeded by China's perceived restrictions on Korean entertainment and other industries that came in the wake of Seoul's 2016 decision to host a U.S. anti-missile system.
On diplomacy with Japan, the ministry said Seoul will maintain its "two-track" approach of separating tricky historical issues from its efforts to pursue "practical" cooperation with Tokyo.
The unification ministry, meanwhile, voiced concerns that security uncertainties could deepen if the current impasse on the North stretches into the early part of next year. It vowed to focus on resuming its stalled initiative for lasting peace on the Korean Peninsula.
"We will strive to create an unwavering driving force for peace on the peninsula through comprehensive progress in our efforts for cross-border relations, denuclearization and a peace regime," the ministry said.
The ministry said that it would seek to encourage the North's denuclearization through the proposed declaration of a formal end to the 1950-53 Korean War, which Seoul has pitched as a key trust-building measure to help bring Pyongyang back to dialogue.
To ensure "safe" inter-Korean dialogue in the COVID-19 era, the ministry plans to build a videoconference system for future cross-border talks.
The ministry also reiterated that it would pursue humanitarian cooperation with the North "regardless of political and military situations." To that end, it plans to prioritize pushing for face-to-face or video-linked reunions of the families separated by the Korean War.
In its policy report, the defense ministry stressed a plan to substantially bolster space security capabilities by increasing personnel with expertise, securing a military satellite and expanding related international cooperation.
It also plans to accelerate the process for the envisioned transfer of wartime operational control (OPCON) from Washington to Seoul through the full operational capability (FOC) assessment slated for next year. The FOC assessment is the second part of the three-stage program designed to assess Seoul's capabilities to lead the allies' combined forces.
At the two countries' annual defense ministerial talks expected to take place in October, Seoul hopes to carry out the verification of the FOC assessment results to move the transfer process forward, according to the ministry.
sshluck@yna.co.kr
(END)
V/R
David Maxwell
Senior Fellow
Foundation for Defense of Democracies
Phone: 202-573-8647
Twitter: @davidmaxwell161
FDD is a Washington-based nonpartisan research institute focusing on national security and foreign policy.
