October 20, 2013: Two decades of increasing shortages in North Korea have left some telltale signs that can be seen from the air (or space). With the freely available commercial satellite pictures, there are a lot more people scrutinizing this view of North Korea and noticing interesting patterns. For example, look at any residential area and you can pick out the buildings belonging to the government or government officials or those favored by the government, like successful athletes, entertainers, or scientists. These are the ones with roofs that are not falling apart for lack of maintenance or building materials for repairs. Most North Koreans are fixated on finding food, or something that can be exchanged for food. Building materials are produced but increasingly exported to China because the government needs the foreign currency to buy goodies and assure the loyalty of the few percent of the population that keeps everyone else in line. While South Korea and much of China has emerged from the feudal period, North Korea never did. The place is run by a hereditary aristocracy that monopolizes the wealth and stays in power with armed retainers. It’s all quite visible from the air, including the palatial homes and country estates of the most senior officials.

One thing North Korea learned from its decision earlier this year to close the Kaesong Industrial Complex (financed and run by 123 South Korean firms employing 53,000 North Koreans), in order to punish South Korea for trying to get the North Koreans to halt their nuclear weapons program, was that cash is king. Kaesong was shut down by the north in April, and the northern leaders soon discovered that the foreign currency generated by Kaesong was sorely missed. Few of the senior people in North Korea know much about accounting or how the world economy works, but the cash shortage created by the Kaesong shutdown got their attention. This was seen as an opportunity by China, who soon convinced the northern leadership to make up with South Korea and get Kaesong operating again. China also pointed out that it would be possible to create many more Kaesongs and have even more cash with which to keep the Kim dynasty in power longer. To further encourage the northerners to get smart, China threatened to further reduce food, oil, and other shipments if the North Koreans didn’t calm down and at least make an effort to get their economic act together. So the north agreed to let the South Korean companies revive production at Kaesong as soon as they could. At that point the northern leadership got another lesson in economics. Many of the South Korea factory owners did not want or could not return to Kaesong. Either they had lost the customers who bought the goods produced in Kaesong or simply no longer trusted the North Koreans. The Chinese explained to the North Koreans how that all worked and apparently the North Koreans now have some trusted officials who have actually become “business literate” and can understand what the Chinese are saying and explain it all to their bosses. So Kim Jong Un has ordered the men who run the nine provinces of North Korea to designate two areas in their largest cities to become additional Kaesongs. China will help foreigners willing and able to provide the money and managers to set up operations and North Korea will provide the cheap labor (and keep most of the wages paid for these workers). The North Korean leaders have been warned that these new Kaesongs will not be an overnight success and North Korea must pay attention to maintaining trust and good relations with their foreign partners. That is difficult for North Korean officials to do, as they tend to treat foreigners, including the Chinese at times, like serfs who exist to serve the North Korean leadership. Many North Koreans fear that the eighteen new economic enterprise zones will turn out more like Rasun City than Kaesong. Rasun City was another economic zone, like Kaesong, started in 2010, in the area where the North Korean, Chinese, and Russian border meet. Rather than just depend on one country (like South Korea in Kaesong) North Korea expected everyone to come looking to set up shop in Rasun City. That did not happen. Without the guidance of South Korean economic development experts the North Koreans scared off potential investors and mismanaged Rasun City badly. Most North Koreans see Rasun City as a failure, while Kaesong was a success. The Chinese are trying to persuade the North Korean leaders to recognize the difference between what happened at Rasun City and Kaesong and act accordingly. As if to encourage the North Koreans, South Korea has revealed that it is having a lot of problems getting South Korean companies interested in setting up operations in Kaesong and that it may take years of stability up there to return to the pre-shutdown level of activity. The shutdown will not soon be forgotten by South Korean businesses.

Meanwhile, the North Korean leaders have other economic problems that could get ugly. Namely the decision to cut food distributions to ordinary citizens. This is not “free” food but usually the only payment many North Koreans get for weeks of hard labor during harvest season or to repair roads and other infrastructure after natural disasters or simply to maintain minimum standards for what little economy is left. Although the government has always boasted of “taking care of the people” that is increasingly not the case, yet people are still expected to take care of the government. Winter is underway and with food and fuel shortages a lot of people are going to be angry, as well as hungry and cold. Some members of the senior leadership can see where this is going and the orders cutting food and fuel for the poorest North Koreans are often being countermanded. Someone is paying attention but many people at the top still ignore the suffering and believe their own propaganda, not what is actually happening at the local level.

The North Korean government is also concerned about how much ordinary North Koreans are learning about the outside world, especially the much higher living standards in South Korea. To deal with that, more secret police have been assigned to workers at Kaesong. For every hundred workers there will be sixty security personnel. This is part of a larger effort to keep news from spreading in North Korea. It’s too late to stop this sort of thing. That is believed to be why the government recently backed down on efforts to cut free food distributions in remote areas. In the past the news would not have spread and those affected would realize that and just suffer in silence. That has changed and that scares a government used to having all its orders followed promptly and without question.

While never considered the North Korean military a threat, it has viewed the increased capabilities of the South Korean military with alarm. Although China has the largest military in the region and is the most aggressive in using it, the devil is in the details. Most Chinese military personnel belong to the army. This is a threat to all neighbors China shares land borders with, especially Russia. While much is made of Chinese efforts to upgrade their navy and air force, these two services are still inferior to the Japanese navy and air force. The Japanese have more modern and effective ships and their crews are far more proficient than their Chinese counterparts. Same thing with the Japanese Air Force. Moreover, the Japanese naval forces are themselves overshadowed by American warships assigned to the Western Pacific. In addition to the Japanese and American forces, the Chinese have to worry about the formidable Taiwanese air and naval forces, as well those of South Korea. Technically, Russia is an ally, but the Russians keep most of their air and naval forces out of the Pacific and are inclined to continue their tradition of never having been at war with the United States. So China has to be careful. Any confrontations with Japan at sea or in the air have to be handled carefully because China is still playing with a weak hand. In Korea this becomes an issue if China has to move into North Korea to deal with a government collapse there. South Koreans expect to deal with this and finally unite Korea. China has expressed opposition to this. While the larger Chinese army would give China an edge on the ground, at sea and in the air things would be different. China would be blockaded and her economy crippled. This could cause major uprisings inside China. In this case, South Korea is the one who could pull the trigger and destroy the communist dictatorship that has run China for over sixty years.

South Korea recently launched the first of ten LST II class amphibious assault ships. These are seven-thousand-one-hundred ton vessels that can carry three-hundred troops as well as ten-twenty vehicles. There is a landing pad that can hold two helicopters. Two smaller landing craft that can run up on a beach are also carried. The first ship will enter service in 2015, and are part of an expansion of South Korea amphibious forces. The South Korean Marine Corps is being expanded from twenty-five-thousand men to thirty-two-thousand by the end of the decade.

The international hacker community is becoming less mysterious. Over the last decade Internet security firms (especially Kaspersky Labs and Symantec) have been increasingly successful at identifying the hacker organizations responsible for some of the large-scale hacker attacks on business and government networks. These commercial security outfits often cooperate with intelligence agencies to share their findings and get a better sense of who and what the threat is. Many of these hacker groups don’t really have a name and are often groups of hackers put together for a specific campaign and that particular effort is given a name by the security experts who uncover and publicize it. Such was the case with Icefog, which was notable for going on for a long time. Operations like Icefog are also called APTs (Advanced Persistent Threats) because they are well crafted enough to remain undetected for a long time and do serious damage. Icefog was directed at South Korean and Japanese military, and Internet targets and analysts have found that a single group of North Korean hackers, called Dark Seoul, is responsible for nearly a billion dollars’ worth of damage since 2009, via Internet campaigns like Icefog.

South Korean intelligence analysts are now convinced that Kim Jong Un replaced the head of the army last August. The outgoing commander was seventy-five years old and appointed by Kim’s father. The new commander, Ri Yong-gil, is believed to be at least ten years younger and has won the confidence of Kim Jong Un over the last two years. In that time Kim Jong Un, usually on the advice of his aunt (his father’s sister) and uncle, has replaced over two-hundred senior military commanders. This was mainly to get men considered more loyal to the new, much younger, head of the country. 

October 18, 2013: South Korea has agreed to speed up delivery of twelve jet fighters to the Philippines. The aircraft is the FA-50, which is the combat version of the South Korean designed and manufactured T-50 jet trainer. This aircraft was developed over the last decade, at a cost of over two billion dollars. The first test flight of the T-50 took place in 2002. The thirteen ton aircraft is actually a light fighter and can fly at supersonic speeds. With some added equipment (radars and fire control), the T-50 becomes the FA-50, a combat aircraft. The Philippines retired the last of its ancient F-5 jets in 2005, and now expects to get its first FA-50 by late 2014 and all the rest by 2015.

October 15, 2013: The Philippines upgraded its military ties with South Korea. The new agreement implements exchanges of military personnel for familiarization and training. This is also meant to exchange information about how each nations’ troops handle disaster relief and peacekeeping operations. Less publicized were the parts of the new agreement dealing with more detailed planning for cooperation against growing Chinese aggression in the sea areas between China and all its neighbors (particularly the Philippines, Japan, South Korea, Taiwan, and Vietnam). All of these Chinese neighbors are strengthening military alliances with each other and the United States, to better deal with the Chinese tactics of gradual but persistent pressure.

October 10, 2013: Panama has revealed that the illegal Cuban weapons found on a North Korean cargo ship last July were not “scrap” but were fully operational. The two-hundred and fifty tons of Cuban SA-2 anti-aircraft missile systems and MiG-21 components (including over a dozen jet engines) were buried under a cargo of sugar trying to get through the Panama Canal. North Korea at first denied any knowledge of the weapons but eventually admitted that they were obtained from Cuba and not declared. Such weapons shipments are forbidden by international sanctions and were seized. Cuba tried to explain it away as a shipment of military surplus that was non-functional and basically scrap. Panama called in experts who concluded that the stuff was operational. Cuba was being paid over one-hundred million for these weapons and others already shipped. The North Korean ship and its thirty-five man crew is still being held in Panama because North Korea refuses to pay a million dollar fine to get them released.

October 8, 2013: South Korean intelligence confirmed that it is quite certain North Korea has resumed operation of the Yongbyon nuclear reactor. North Korea announced it would restart Yongbyon last April. This reactor can produce nuclear material for bombs and had been completely shut down since 2007, and partially dismantled in 2008. It was believed that it would take at least six months (and possibly years) to resume production at Yongbyon. This reactor was shut down as part of an aid deal. But the northerners refused to completely dismantle their Yongbyon nuclear reactor. They insisted on leaving some of the structure intact and would not surrender unused nuclear fuel. This sort of double dealing is so typical of the North Koreans. In response, South Korea increased its defense spending.

October 4, 2013: Despite North Korean efforts to improve relations with South Korea, old habits die hard. Today North Korean media launched a vicious personal attack on the South Korean leader.

October 3, 2013: Japan and the United States agreed to expand their military alliance. This means an American missile defense radar system would be built in Japan and the U.S. would station large (Reaper and Global Hawk) UAVs in Japan. The X Band radar the U.S. will install near Kyoto will give Japan anti-missile systems more warning that a missile is headed towards Japan. This is mostly directed at North Korea, which generally threatens Japan whenever South Korea is warned about where North Korea ballistic missiles might be aimed. The American UAVs would help Japan monitor offshore areas where Chinese warships are showing up with greater frequency.