NORTHEAST ASIA PEACE AND SECURITY NETWORK ***** SPECIAL REPORT ***** [The following "DPRK Report" is the product of a joint project between the Center for Nonproliferation Studies (Monterey Institute of International Studies, Monterey, California, USA) and the Center for Contemporary International Problems (ICIP) (located at the Diplomatic Academy, Moscow, Russia). The report is funded by a grant from the Rockefeller Foundation and is written by Russian analysts associated with the ICIP. The report is distributed through NAPSNet in collaboration with the Nautilus Institute for Security and Sustainable Development in Berkeley, California, USA.] THE DPRK REPORT (March-April 1997) 1. Reaction in Russia to Hwang Jang-yop's Statements Since his arrival in Seoul, media reports have suggested that high-ranking North Korean defector Hwang Jang-yop has made statements about the DPRK's possession of nuclear weapons (and other advanced armaments) and Pyongyang's plans to attack the South. Experts in Moscow don't take Mr. Hwang's allegations of Pyongyang's imminent intention to attack the South seriously. It is true that war hysteria is employed internally to check popular discontent with the food situation. Citizens are told that the cause of their difficulties lies with Americans and South Koreans. They are advised to be prepared to fight against external isolation and sanctions imposed by the enemy. Military officers swear that--if their leader gives an order-they will set the enemy's territory on fire. Yet Kim Jong-il and his entourage are not crazy enough to launch a war. They know very well they will lose it and that no big brother is going to come to their rescue this time. To the contrary, Pyongyang is terrified of a possible attack from outside, as well as of subversive activities against it from within. As Russian experts note, Mr. Hwang makes the above-mentioned allegations to please his new friends and to avenge his former comrades. It is also presumed that Mr. Hwang is not in a normal mental state--otherwise he would not have left his entire family to the mercy of Kim Jong-il. In commenting on his alleged claims, however, Russian defense experts privately confirm that North Korea still possesses a rather strong military potential. Its armed forces have one million officers and soldiers, 3,600 tanks, 9,500 artillery pieces, 1,600 aircraft (including 850 combat aircraft (MIG-15s, 17s, 21s, 23s, 29s, and Su-29s)), upwards of 440 ships (including 25 submarines), and 100,000 commandos. In addition to the uniformed army, there are 2.2 million people serving in military reserve units: 1.4 million in the workers' (or peasants') Red Guard and 800,000 young people in the Youth Red Guard. Estimates suggest that 25% of North Korea's GNP is allocated to maintain this huge military machine. According to Russian estimates, over $10 billion has been spent on the North Korean nuclear program, in both its civilian and military aspects. Now the program is more or less frozen due to the Agreed Framework signed with the United States in 1994. However, it is believed that Pyongyang had already managed to acquire enough plutonium for 1-2 nuclear bombs. Russian experts believe that the DPRK continues to develop chemical and biological weapons. Specialized research centers work on anthrax, cholera, plague, and smallpox pathogens. Special priority is being given to the production of missiles. Relying on foreign technology and scientists (some of them from the CIS countries) Pyongyang has constructed a number of "Nodong- 1" missiles capable of flying over 1,000 km and carrying a nuclear or chemical warhead of 1,000 kg. However, serious problems persist with the missile's engine and guidance system. The weapon is inaccurate and slow. It can hardly as yet perform military missions, but rather serves as a means of deterrence. 2. The Military Component of Kim Jong-il's Regime The military has always played an important role in the political life of the DPRK. Kim Il-sung spent many years as a guerrilla fighter in Northeast China and then underwent military training in the Soviet Union. This experience made him a fan of military order in society. The Korean War, the continuous confrontation with the United States and South Korea since then, and the strategy of forced industrialization and "socialist transformation" of agriculture only reinforced Kim Il-sung's preference for the military and its methods. The collapse of communist states in Eastern Europe (especially, the violent ones like Romania) further influenced the militarization of Kim's regime. Preparing his son as an heir, Kim senior put his son in charge of the military and broadened its powers (constitutionally and in every other way). Kim Jong-il was elected chairman of the Defense Committee, which performs functions formerly entrusted to the president of the DPRK and the Central Committee of the ruling party. The promotion of his son to the highest military posts did not meet any discontent in the armed forces, since the process was supervised by Kim Il-sung personally and accompanied by regular purges among generals and officers. Nowadays, Kim Jong-il's power base in the military is even stronger. First of all, he keeps promoting loyal men in the armed forces. In April 1997, Kim Jong-il appointed 120 new generals. Secondly, the military is getting more and more clout in the political and economic life of the country. Its influence is growing in all party and state organs. Thirdly, military men get the highest material rewards: salaries, food rations, apartments, etc. As a result, the military component plays a decisive role in preserving the totalitarian system in the DPRK. The military brass, citing the example of East Germany, opposes any reforms that could can undermine the existing order and its personal power and privileges. The opinion of the military has been consulted in no small measure in working out strategy and tactics in negotiations with the United States over the nuclear issue. The crisis regarding the DPRK's nuclear program was exacerbated by the uncompromising stand of the North Korean military. It repeatedly undermined the realization of the understandings reached by advancing unacceptable conditions. The military establishment takes up a very harsh stand over the issue of an inter-Korean dialogue. Having signed the Agreement on Reconciliation, Non-aggression, Cooperation, and Exchanges and the Declaration on the Nuclear-Weapons-Free Status of the Korean Peninsula, Pyongyang refused to implement these documents because of opposition from its generals. They have blocked implementation of the military articles of the reconciliation agreement and the nuclear-weapons-free declaration and have declined to participate in the joint military committee, whose task is to discuss problems of detente on the peninsula. The North Korean military flatly spoke against debating Seoul's proposal for joint inspection of 40 nuclear projects on both sides in the Committee for Nuclear Control (set up for the implementation of the nuclear-weapons-free declaration). The North Korean military also rejected an initiative on increasing joint transparency regarding military activities. Furthermore, the military is blocking any serious steps towards relaxation of tensions with South Korea, realizing that it will weaken its influence in society and bring about an overall slackening of the hold of the totalitarian regime over the North Korean people. Summing up, it is important to emphasize that the North Korean military occupies a privileged position in the political system of the DPRK. Its position has been noticeably strengthened since Kim Jong-il's assumption of power. The new leader is making good use of the armed forces to reinforce the foundations of the totalitarian regime and adopt it to present-day realities. In the foreseeable future, the role of the military in the DPRK is likely to grow, due to a number of factors: A. Being a pillar of Kim Jong-il's regime, the military will play a leading role in defining possible ways of rescuing economy from its present deep crisis. But the military establishment will block possible attempts to curtail defense expenditures and the scope of activities of the military-industrial complex. B. The military elite will strive for a further militarization of North Korean society and will employ military-administrative methods for regulating all the aspects of social activities. C. In the area of inter-Korean relations, military circles will still take up conservative positions, impeding real progress in the Pyongyang-Seoul dialogue. The confrontational environment will justify high expenditures and privileges for the armed forces. D. The foreign policy of the DPRK will remain under the control of the military, which will try to prevent any concessions to its adversaries. 3. Appraisals of Russia's Present and Future Role in Korea At a seminar held on April 23, 1997, at the Diplomatic Academy in Moscow, prominent Russian diplomats and scholars advanced a number of arguments underlining Russia's importance for the two parts of Korea before and after their unification. Their arguments are typical of the entire Russian elite and therefore deserve attention. Russian analysts at the seminar noted that the Kremlin has already made a significant contribution to the relaxation of tensions in Korea. Thanks to the Kremlin, it was argued, Pyongyang agreed to enter the United Nations (simultaneously with South Korea); China agreed to recognize South Korea; and the DPRK agreed to sign two very important inter-Korean documents (the reconciliation agreement and the nuclear-weapons-free declaration in December 1991). As a goodwill gesture to Seoul, Moscow also decided to terminate its security pact of 1961 with the North. Russian analysts believe that the usefulness of Moscow to both parts of Korea on the issues of settlement and unification is likely to increase: Russia is more interested in these issues than any other major power involved in the Far Eastern politics and it has a number of serious and concrete reasons to look forward to the complete untying of the current Korean Peninsula political and strategic knot. Unlike other major powers, Russia has absolutely nothing to lose from the reunification of the Korean nation. A unified Korean state would help Moscow balance the activities of the two Far Eastern giants--Japan and China. Moscow could expect Korean support in its conflicts with other neighbors (for example, in its territorial disputes with Japan and, possibly, those with China over border issues). Russia would get other benefits as well: - Peace in Korea would secure peace in Northeast Asia, which in turn would stabilize Russia's position in the region. These developments would benefit Russia as it faces its own transitional difficulties in politics, economics, and military affairs. - The development of the coastal sector of Russia's Siberia is a major national objective. But such development cannot be realized without peace in Korea. Stability and international cooperation in neighboring areas are therefore necessary for Russia's own development. - In the development of Siberia and its coastal areas, Russia needs Korean participation and collaboration. This, in turn, necessitates the unification of Korea. - A security benefit could be envisioned by the creation of a Northeast Asian regional security system. Russia may lead an initiative to develop a new peace structure in collaboration with Korea, Japan, and China. East Asia needs such a common security organization to resolve various internal conflicts. It equally should be noticed that Russian ambitions in Korea are now quite limited and cannot be compared with those of the other major powers. While Stalin might have longed for domination over the entire Korea Peninsula, and his immediate successors maintained ambitions over the North, present-day Russia simply wants to be a presence in Korea (it does not mind, incidentally, U.S., Chinese, or Japanese advances in Korea, as long as they don't undermine Russian positions). Another important point is that Moscow's posture vis-a-vis North Korea is quite favorable to the true security interests of South Korea. Russia does not provide any military aid to the DPRK and it is against a build-up of the North Korean armed forces. It categorically opposes any designs by Pyongyang to create a nuclear arsenal. At the same time, Russia supplies advanced military hardware to South Korea and is ready to continue doing so. The Kremlin will oppose in an active fashion any attempts of the North to provoke an armed conflict on the Korean Peninsula. As for Russia's current efforts to normalize relations with the DPRK, they also should contribute to the security of the South-- by making the North more self-confident and consequently more flexible and more prepared for a real dialogue with the Seoul. Russian analysts also believe that Moscow could be very helpful in the transition period to a reunified Korea, when North Koreans will have to adjust to new economic, political, and social realities. It is clear that immediately after unification, most North Korean plants and factories will be rendered uncompetitive and have to close down. Russia could alleviate this problem by modernizing these plants and factories, since most of them were built by the Soviet Union according to its designs. After their renovation, Russia could become the principal consumer of the output of these enterprises. At the same time, Russia will be the only country able and interested to absorb the North Korean work force, which will be left without jobs (due to the difficulties with the old economic system). Millions of North Koreans will be looking for suitable jobs and the labor-poor Russian Far East will be interested in taking many of them. Russia could also become a major supplier of spare parts for North Korean enterprises (they are needed now, but Pyongyang does not have money to buy them). Russia will be the cheapest and the most convenient exporter of oil, gas, and electricity to the northern part of Korea (which will become possible through the budget of a unified Korea). Moscow may be instrumental as well in other fields, such as: surveying mineral deposits in the North (Russia already has in its possession large numbers of surveys done in the 1950s); reeducating North Korean workers; teaching North Korean students; modernizing the armed forces of the North; buying agricultural products; developing special economic zones; and supporting a unified Korea in its dealings with Japan and China (where problems could crop up). After the transition period is over, Russia and Korea may become major economic partners. Here are some objective factors that are certain to help make this prediction come true: - Russia and Korea are close geographical neighbors in the Far East. - Russia and Korea structurally and technologically complement each other in the economic field. Russia lacks (and will lack for decades to come an effective consumer goods sector). This applies especially to the Far Eastern regions of the Russian Federation. Russia will have to rely on external sources for these products, with its Far Eastern regions importing them from neighboring countries. Among these sources, Korea may certainly become the number one supplier. Chinese goods have a very low reputation in Russia and this reputation continues to decline. At the same time, Japanese goods are too expensive. Korean electrical appliances, cars, clothes, textiles, and other products are well- positioned to gain an ever-increasing share of the Russian market. It is worthwhile to remember in this connection that Russia's population is almost 150 million and most of these people are potential customers of Korean products (no similarly interested market of likely consumers can be found in China, Japan, Taiwan, or any other country geographically close to Korea). - There is no other country in the Asian-Pacific region besides Russia that can provide Korea with such a variety and such quantities of energy and raw materials. The economy of Korea is mainly dependent on imports of oil from the Middle Eastern countries and gas from the Southeast Asian countries. Imports of these products from Russia's Far East would offer significant reductions in cost and risk. Sooner or later, Russia and Korea will begin practical realization of a project for transporting natural gas from Yakutia (especially the Irkutsk region) to the Korean Peninsula. The project itself involves investments of $40 billion and will provide work (in the building of a thousands-of-kilometers-long gas pipeline) for quite a few Korean companies for many years to come. After the project is completed, Korea will have a stable supply of cheap natural gas for at least two centuries. Another concrete project is tapping of enormous coal deposits in Buryatia (and Mongolia) with coal exports to Korea. Again, this project will involve some $30-40 billion of investment, work for Korean companies, and a stable supply of energy for Korea. There are hundreds of other potential large-scale projects of tapping Russia's natural resources in the Far East and Siberia. Especially important is the fact that the Russian government is deeply interested in developing extraction and processing of its natural resources with the help of foreign firms (oil, metals, timber, fertilizers, cotton, gold, etc.). According to President Yeltsin and Prime Minister Chernomyrdin, South Korea is regarded in the Kremlin as a principal strategic partner in these development projects, as it possesses the necessary technology, financial resources, and skilled labor. It also needs Russian raw materials more than any other country in the vicinity of Russia's borders. - Russia possesses an enormous variety of unique technologies, both of military and civilian use. Until recently, Russia (as the Soviet Union) did not figure prominently among exporters of technologies, due to the closed character of its economy. Now, the situation is changing. According to some estimates, in the next 15 years Russia will become one of the leading sources of technologies for the world market. This tendency will be helped by the determined efforts of Moscow, low prices, and a liberal export regime (much more liberal than that of the United States). To date, Russian technology exports have not been successful, due to a number of reasons: a lack of financing for transforming R and D into actual products, a lack of marketing experience, and a lack of knowledge of the particular conditions in foreign markets. Quite often, Russian producers practically give away their technologies to competitors in the West. South Korean companies, making modest investments into marketing, could tap these Russian technologies. One of the possibilities is to invest funds in Russian technologies at sites outside of Russia, where market conditions are more favorable. The infrastructure to tap Russian technologies and to convert them to civilian purposes could be developed, for example, in Korea or in any other country with the participation of Korean capital. When market conditions in Russia (especially legal protections) improve, Korean businessmen will have ample opportunities to invest in various consumer branches of the economy: stores, restaurants, hotels, business centers, housing, factories assembling electrical appliances and cars, communications, transportation, maritime products, and other areas. It is worthwhile to note that foreign investments into the Russian economy grew considerably in 1996 and, according to estimates by leading European exporters, will grow at an accelerating rate in 1997. In 1995, for example, total foreign investment was $2 billion; in 1996--$7 billion; and in 1997 is estimated to reach $10-11 billion. The Russian market is still underdeveloped in most branches, it is hungry for capital, and such opportunities should be used before it is too late and all openings are occupied by competitors. If we take into account the fact that South Korea faces increasingly tough competition in world markets (including from neighboring countries, among them China), Russia will surely in the long-term become a principal economic partner of Korea. - Russia and Korea complement each other in the field of foodstuffs. The latter depends to a large degree on fishing in the Russian economic zone in the Sea of Okhotsk and on the Pacific coast of Kamchatka. Russia is interested in Korean investments in the development of Far Eastern agriculture as well. - Russian small-time traders (nicknamed "shuttles") have chosen South Korea as their main destination. Every year they buy about $400-500 million worth of consumer goods there. In addition to this, they help South Korean airlines, hotels, restaurants, and other enterprises to make money. - The basic Russo-South Korean documents on economic cooperation have created a solid foundation for trade-- better than for many other countries-involving investment guarantees, most favored nation treatment, customs legislation, and measures to avoid double taxation. These points indicate that Russia and Korea make natural partners and would provide unique benefits to one another in a post- reunification environment on the Korean Peninsula.