Korea: Kim Catches A Clue

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March 12, 2019: The negotiations between America and North Korea over nuclear weapons are now stalled even though today North Korea posted messages on international outlets that North Korea was willing to accept full denuclearization. For this to work the domestic North Korean media and internal advice to local officials has to also declare denuclearization the new goal. Considering all that is going on inside North Korea denuclearization suddenly seems a real possibility.

Until now the North Koreans refused to consider the American demand for full and verifiable denuclearization in return for lifting sanctions and providing economic aid. North Korea said that was unacceptable and offered to negotiate some intermediate steps. That has been a standard move by North Korea in the past and those intermediate steps provide North Korea with some concessions but they never go any further. The American negotiators realized this and, apparently to the surprise of the North Koreans, refused and that prematurely ended the February 28th meeting in Vietnam. The North Koreans were told that the agreements so far, for America and South Korea to halt joint training exercises, using troops and equipment, would cease in return for the continued halt of North Korean nuclear and missile tests. It is unclear if North Korea accepted that. If they don’t the Americans will probably come up with more ways to shut down North Korean smuggling efforts.

Now North Korea has to try and persuade China to help out because North Korea faces a major economic crisis that is largely self-inflicted. Essential investments in agriculture and infrastructure were halted for years to keep the nuclear and missile programs going and ensure that the few percent of the population that keeps everyone else under control is well taken care of. North Korea is running out of time, resources and options. Worse, China is also under economic pressure from the United States over decades of unfair trade practices and industrial espionage (stealing trade secrets and violating patents). The Chinese economy is also suffering self-inflicted problems because of corrupt practices that have now caught up with the officials behind them and the officials who tolerated it. Worst of all, China sees no advantage in helping North Korea become a nuclear power.

As sanctions on North Korea got worse over the years the North Korean leadership continued using their standard negotiating tactic. This set of ploys sought to deceive, distract and divide the nations involved (mainly South Korea, America and Japan). Korea offered little while regularly managing to get something. It was classic “bait and switch” which North Korea seemed to think it could get away with indefinitely. That attitude is now seriously threatened and North Korea is going through as many ploys as it can come up with the make sure the denuclearization demands are as firm, strict and determined as the American insist they are.

Meanwhile, the effectiveness of the North Korean non-nuclear military forces continues to decline because of food, fuel and other shortages. The halt in joint exercises by South Korea and the U.S. is much less of a problem for those two nations that continue command post exercises in which the staffs and commanders from each nation continue regular joint training. South Korean and American units can afford to continue training by themselves and that gives them a major advantage over North Korea which has neither the food, fuel, spare parts or anything else needed to enable its troops to train. North Korean troops spend most of their time growing their own food and operating as laborers, often for local businesses. Troops face seasonal cold weather similar to Canada and Scandinavia but without much fuel or proper clothing to stay warm. Sickness and deaths among troops in increasing because of all these shortages.

The food situation is so bad that North Korea has again appealed to the UN for major food aid. The UN agrees that the situation is getting worse with about half the population going hungry and many of them likely to starve to death if food shortages are not addressed in 2019. The problem, as always, is to what degree is the North Korea is willing to allow verification that the food aid sent gets to the hungry North Koreans. North Korea sees food aid, or part of it, as a source of military aid and cash. Despite all these efforts, North Korea is losing ground. The growing food and other shortages in North Korea are evidence of that, as is the growing dissatisfaction demonstrated by North Koreans for their situation.

Expectations

Most North Koreans did not expect much to come from the February meeting between Kim Jon Un and the American president. Many North Koreans are opposed to surrendering the nuclear weapons because they believe much of the privation they have suffered in the last two decades was because so much was devoted to the nuclear and ballistic missile programs. Economic reforms are seen as realistic because they are already happening and it is widely understood that China is demanding more such reforms. In the last week North Korea resumed work on nuclear and missile facilities. Worse, greater scrutiny of satellite photos has revealed additional nuclear and missile development sites that North Korea never admitted it had. America and their allies (South Korea and Japan) now have more reason not to trust North Korea. This makes it more difficult for North Korea to use their usual alternative plan and appeal to their “fellow Koreans” in South Korea to rescue ordinary North Koreans from the unjust wrath of the foreigners (usually the Americans but this time the Chinese as well because of the sanctions). South Korea usually comes through with something but South Korea has seen this response fail so many times in the past that North Korea may find itself with no way out. North Korea's leader is apparently planning a visit to Russia, which is the only neighbor left that can help with smuggling. Russia may not be able to help because Russia is increasingly an obedient client of China rather a somewhat equal ally. Russia cannot afford to defy China in such an obvious way by doing for North Korea what China refuses to do. If Russia cannot help North Korea is faced with growing economic misery and popular unrest at home while the United States and its allies continue to hunt down and disable the many smuggling operations North Korea still uses. Many of these overseas money-raising operations are risky to begin with and not as profitable to earlier efforts carried out with more cooperation from China and less scrutiny from the West.

The many UN personnel assigned to studying North Korea agree that hunger is a growing problem but so is the continued smuggling and money raising efforts by North Korea. The UN recently reported that North Korea has managed to continue many smuggling efforts, especially those for obtaining petroleum, but is also developing new criminal procedures. These work for a while, until discovered and disrupted by an international coalition, led by the United States, which has the authority to punish banks and other commercial firms involved in the scams. That means North Korea pays more and more to get petroleum and other sanctioned goods. The UN analysts found that North Korea has also come up with more ways to raise foreign currency. Computer hacking is a primary source and one major heist was a series of hacks on cryptocurrency operations that obtained several hundred million dollars of crypto cash perfectly suited to finance smuggling operations. That took place between 2015 and 2018 but after that, the spotlight was on North Korean efforts to keep at it and that ended their cryptocurrency jackpot. Foreign economists believe the increased sanctions have caused the North Korea GDP to shrink 5 percent so far and that decline is continuing. That percentage is increasing. Trends like this cannot be safely ignored.

North Korea is losing economically while other internal changes are also worrisome for the Kim dynasty. Some 20 percent of North Koreans now depend on the largely legalized market economy for survival. Another troubling growth area is the the number of government officials taking bribes. How does at police state maintain control if more and more of their subjects work for someone else and a permanent or “as needed” basis? Another serious problem is the growing appeal of South Korean culture. One aspect of that is the much greater wealth enjoyed by South Koreans, who now enjoy being the ninth most affluent nation in the world. The Chinese and Vietnamese obviously do better than North Koreans but South Korea and Japan are world class along with the Americans, Australians and many European nations. Kim Jong Un understands, more than most of his key subordinates, what this means. Alone among the senior North Koreans leaders, Kim lived in the West for years. He saw how that affected people. Kim’s secret police present him with the informer and intel reports showing more and more North Koreans, especially the younger ones, no longer believe the North Korean propaganda and openly yearn to be more like South Koreans. The Americans are offering a way out and the Chinese don’t oppose denuclearization or adopting a market economy.

The China Deal

China has not completely cut off North Korea. There is a very real, although unofficial arrangement with North Korea over sanctions that provide North Korea with some relief in return for some compliance on Chinese demands. Several meetings between North Korean leader Kim Jong Un and senior Chinese officials indicated that China was more interested in North Korea reforming its economy and becoming less of a financial burden and security risk for China. China also wanted the North Korean nukes gone but the major concern was preventing massive unrest in North Korea. Thus China has, since late 2018, unofficially eased up on some of the current UN economic sanctions. In return, North Korea has continued to go through the motions of negotiating denuclearization (not only getting rid of their nukes but allowing regular on-the-spot inspections to confirm compliance). The reality was that inside North Korea the official word (distributed to key officials and leaked) was that North Korea had no intention of getting rid of the nukes and was going through the motions convincingly in order to get the Americans to ease the sanctions a bit because North Korea was continuing to negotiate but not actually doing anything to denuclearize. This became obvious on February 28th when the meeting between the North Korea leader and the American president ended with the Americans refusing to ease sanctions unless North Korea made some real and verifiable progress on denuclearization. The next day China asked the UN to ease up on some of the sanctions because the North Koreans were at least making an effort.

China was going along with the North Korean scam and was trying to persuade the UN to cooperate. At the same time, the Americans are putting economic pressure on China to halt its unfair, and often illegal trade practices. This included massive theft of American and Western technology and continued economic espionage on and data theft from the West. The Chinese economy is already in trouble for self-inflicted problems (corruption and falsifying economic data) and the North Korean mess is getting worse. North Korea is still in danger of a government collapse that would send millions of refugees into China and force China to either take control of North Korea and be stuck with huge costs (financial and otherwise) or allow South Korea to do it. The latter is considered an unacceptable option but it is there whether China likes it or not. So is the fact the Chinese aggression against neighbors (especially the South China Sea and Indian border) has created a growing (in numbers, power and resolve) anti-Chinese alliance.

China is willing to unofficially reduce sanctions as long as North Korea follows Chinese advice about reforming their economy and adopting more of the techniques that have enabled China to remain a communist police state while also benefitting from a free market economy. One reason China was so enthusiastic about Kim Jong Un going to Vietnam was because Vietnam also adopted Chinese style economic reforms and has had much visible success that Kim could personally inspect. Kim Jong Un is apparently succeeding in convincing China that North Korea will accelerate its adoption of Chinese economic practices. That includes being more open to economic cooperation with South Korea. Since the 1990s South Korea and China have become major trading partners. South Koreans are becoming more willing to help North Korea economically even though that will mean less incentive for North Korea to denuclearize. That requires persuading South Korea to break with the United States and Japan over sanction enforcement. China continues to tolerate a certain amount of North Korean smuggling and financial misbehavior. But North Korea must be discreet because China is officially backing (if not always enforcing) most of the economic sanctions on North Korea. Since a crackdown on Chinese banks a few years ago North Korea has moved most of its illegal finance operations out of China. North Korea has established a network of companies and banks that will act (for a fee) as middlemen in turning North Korean profits from foreign operations into products that can be shipped to North Korea without any real proof North Korea paid for it. Of course, it is obvious that these imports are not free foreign aid but the source of payment is difficult to trace, often more trouble than it is worth. But when the effort is made a new North Korea financial network is detected.

Who Do You Trust

While the increased sanctions are blamed for many of the food, medicine and other shortages that is not the case. Foreign nations are willing to send food and medical aid but they want to make sure it gets to the people who needed and not diverted by the government to the military or to be sold for cash. Meanwhile, North Korea is demanding more “voluntary” contributions of cash and food to help the government out. The only aspect of this that has wide popular support is the call for civilians to donate rice to alleviate food shortages in the military. Given the large proportion of young men serving their 6-10 years of conscript service, most families know the troops are not getting enough to eat. Voluntary rice donations to the military are actually an old tradition, dating back to the late 1940s. But now the calls for such donations are more frequent. Donors of large (over 100 kg) amounts of rice were publicly praised for their patriotism.

The government would also like to solicit donations of medicine but there is such a widespread shortage of medicines that that such calls are unrealistic. The medical shortages become very visible when young men show up for military service. A growing percentage are really unfit but are taken anyway and many units segregate these disabled soldiers into separate platoons where they are assigned work they can handle. A growing number of these recruits die from illness (usually tuberculosis or hepatitis) before their service is completed. South Korea has some statistics on this, obtained from interviews with male defectors and women who knew kin who were sickly and conscripted anyway. A growing number of donju (entrepreneur) families will come up with the hundreds of dollars in bribes that will get their son a certificate of poor health and exemption from military service.

Pride In The Name Of Light

More efficient solar panels have made the use of solar panels more common in many urban areas. In the last few years, the less efficient solar panels were most noticeable in rural areas where there is more prosperity, which can be seen in the refurbished or newly built homes as well as the widespread use of solar panels, cell phones and electrical appliances in general. But solar panel design became more efficient as the power shortages in North Korea became more frequent and widespread. Only the capital can depend on power nearly all the time. The government noticed the use of solar panels and made an unsuccessful effort to force people using solar panels (an expensive, but legal, way around electricity shortages) to buy an electrical use meter and pay a tax on the electricity generated. This was seen as an absurd scheme on several levels and a growing number of solar panel owners are overtly or covertly refusing to cooperate. The government, as the solar panel owners suspected, was not willing to go to war against “solar electricity bandits” and the “meters for solar panels” plan was quietly dropped. The government also realized that the growing use of solar panels reduced the popular anger the energy shortages were creating. It was a way for newly affluent North Koreans to show off their new wealth in a politically acceptable way. While most of the solar panels are sold to entrepreneurs or those working for them, the growing number of government employees enjoying higher bribe income have also become fans of solar panels. The latest panel designs enable a home owner not just to provide a little light while charging gadget batteries but to operate a TV and turn on several lights. In this case users also take advantage of the new, low-power, LED light bulbs and panels. While this tech takes the edge off popular anger it only works if the sanctions impact is eased. Increasingly effective sanctions mean fewer people can afford solar panels and LED lights North Korea will be less willing to tolerate the sacrifices they make to keep the nuclear and missile programs going.

Taxman Trickery

North Korea does not have taxes in the normal sense but there are a lot of mandatory fees and “voluntary contributions.” Many of these fees, which normally were small amounts most families could easily afford, have been going up and the government has apparently ordered many of these nominal fees increased to painful levels. The amounts demanded are often supposed to be the same nationwide but in practice vary because local add surcharges which the local tax collectors keep. The national government has increased audits of how accurate local tax collections are and in some cases has found massive fraud. Punishments are usually severe and increasingly include some executions and sending entire families to labor camps for long (and often fatal) periods. This level of retribution no longer produces as much compliance as it used to. That’s because the corruption is so widespread that even auditors and prosecutors are more often open to discussing a bribe. Auditors are usually sent out in the expectation of bringing back a certain minimum amount of cash and guilty officials. More auditors are realizing that once they meet their quota, anything else is “profit” for them.

March 11, 2019: The U.S. confirmed that the third meeting between Kim Jong Un and the American president had been agreed to but the date and location was still being negotiated.

In Malaysia, four unidentified  men wrote “free Korea” messages, in Korean, on the outer wall of the North Korean embassy. The CCD (Cheollima Civil Defense) group, consisting of Koreans living outside of North Korea who calls for a free and united Korea and also seek to assist North Koreans trying to escape. Little is known about who the CCD members are and the group has only been around for about two years.

Later in the day one of the two women charged in the 2017 assassination, in Malaysia, of Kim Jong Nam, the older brother of Kim Jong Un, had the charges dropped and the trial of the second woman was postponed. This murder was widely and publicly criticized in China and South Korea and privately among North Koreans. Later in 2017, China arrested two North Korean agents who had apparently been sent to China to assassinate Kim Han Sol, the 22 year old nephew of Kim Jong Un and son of Kim Jong Nam, the older (45 at his death) brother of Kim Jong Un. It is unclear what is going on with the late 2017 murder plot. Most North Koreans believed that it was shameful for a brother to murder his older brother, especially when the elder brother was not a real threat to the younger one. All the older brother wanted to do was get out of North Korea, which is what most North Koreans want to do. Thus the details of what happened to the older brother were big news in North Korea, even if it could only be discussed in whispers. Many North Koreans were not surprised that the older brother was murdered in Malaysia on February 14th using droplets of VX nerve gas. North Koreans are amazed at the lengths the younger brother has gone to try and suppress the details and get the body back to North Korea where it could be destroyed. Most North Koreans saw Kim Jong Nam as the tragic victim of a paranoid and vicious younger brother, who happens to be the hereditary ruler of North Korea. Kim Jong Un was apparently unsure how this would all work out. Kim Jong Nam and his family have been living in China since 2002 because his father lost faith in his ability to become the next Kim to rule North Korea. This break became official in 2003. Kim Jong Nam was seen as too independent-minded and undisciplined for the job. The Chinese quietly granted Kim Jong Nam sanctuary (and citizenship) and blocked any North Korean attempts to get him back or kill him.

March 10, 2019: South Korean reporters have concluded that the seemingly mysterious activities of North Korea security personnel in the hotel Kim Jong Un stayed while in Vietnam for the recent summit meeting were an effort to remove any biometric (hair, fingerprints, saliva) materials left behind by Kim Jong Un after he left on March 2nd. The North Korean security team sealed off areas where Kim Jong Un stayed for five hours and when hotel staff were allowed in it was noted that the North Korean agents had done a thorough cleanup. It is believed that the biometric material of Kim Jong is now a state secret.

March 8, 2019: Even as news of what actually happened during the recent denuclearization negotiations between Kim Jon Un and the American president seep in from China the state-controlled North Korean media imply that the meeting was a success. Today was the first time North Korean media had acknowledged that the recent meeting was not all North Koreans had been led to believe it would be (some lifting of sanctions). The North Korean propaganda ministry has apparently been ordered to develop effective ways to spin this bad news, especially since Kim has shown no willingness to actually eliminate the nukes and allow that to be verified by the Americans. More changes are apparently on the way because Kim Jong Un has ordered Korean media to dial down the god-like adoration usually accorded to the three Kim dynasty rulers. Kim wants to appear more as a man of the people. He will have to lose a lot of weight to pull that off. If he does go on a diet it won’t be announced as the results will speak for themselves.

Another more common problem is that despite energetic efforts to curb the flow of news across the Chinese border and thence throughout North Korea the outside versions of events are showing up all over North Korea more and more quickly. While that fuels growing anti-government activity this visible dissent is still low level. Anger and frustration about the growing shortages and corruption among local officials is reaching dangerous levels. The public anger, which police usually back away from rather than crack down hard and risk escalation, continues to be local. As yet there has been no organized opposition. But the way these things work it is obvious that a revolution is in its early stages and the growing economic problems are fueling it. Economic relief is the antidote but the government so far is unwilling to pay the price.

March 6, 2019: Commercial satellite photos show that North Korea has resumed work on the Sohae missile launch facility since the collapse of denuclearization negotiations a week ago. Some work had taken place to dismantle facilities at Sohae but that effort never went far and appeared to be just for show and not a serious effort to accomplish anything. Resumption of construction on nuclear weapons and ballistic missile sites will make the shortage of construction materials even more acute. Stalled construction projects are increasingly common all over North Korea, even in the capital. North Korea is now more dependent on China than ever because only China can assist in evading the sanctions to increase exports (mainly raw materials) and imports (of food and industrial goods).

March 3, 2019: In a surprise move, the African nation of Zimbabwe expelled several North Korean “businessmen” who ran operations to raise cash for the North Korean government. Zimbabwe did this to avoid sanctions. Even though Zimbabwe is an old friend of North Korea they are not immune to the threat of sanctions. North Korea provided military trainers and weapons in the 1980s to create a brigade of locally recruited troops who would be more effective and ruthless than any other military unit in the country. The North Koreans gave practical advice on how to suppress dissent and eliminate political opponents. This helped the government a great deal but a new government (still a corrupt dictatorship) feel less beholden to North Korea and is now a difficult place for North Korean operatives to do business. After 2015, when African nations were threatened with sanctions for buying weapons and military services (training of commandos and secret police) it became more difficult for North Korea smuggling, business and banking operations to continue there. To survive in Africa North Korea cut their prices and said they would be more discreet and much of this lucrative business continued. North Korea made deals wherever it could to keep sources of hard currency producing and that usually meant cutting prices and getting less. But that was better than nothing.

A Russia bulk carrier visited a North Korea port and began unloading 2,092 tons of wheat that has been donated to North Korea as emergency aid. That much wheat costs about $450,000 and will be a lifesaver if it goes to the most malnourished North Koreans. The Russians put no restrictions on what North Korea does with the wheat, so it will probably go to hungry, and increasingly angry, military personnel.

March 2, 2019: South Korea reported that China, which accounts for nearly a third of South Korean export sales, continued to cut orders for South Korean goods.In February overall South Korean exports declined 11 percent compared to February 2018. Chinese orders have been declining sharply since late 2018. This is all about the massive economic changes China is going through.

February 28, 2019: The peace talks in Vietnam between North Korean and American leaders ended abruptly when the American told the North Koreas that the only acceptable deal was complete and verifiable denuclearization in return for the lifting of sanctions and foreign aid.

February 26, 2019: In the days before Kim Jong Un left by train for the Vietnam meeting with the American president and for the duration of his absence, security nationwide was increased. There were more curfews and patrols as well as restrictions on travel. Government wiretapping activities were increased by calling in more loyal party members to temporarily expand the number of landline and cell phone calls monitored. This is often done at random, just to make phone users wary of discussing anything disloyal. The purpose of this was to reduce the possibility of any increased anti-government activity. Kim traveled to Vietnam by train, using his own private armored train consisting of the best maintained railroad equipment in North Korea. Even so, the train can only do about 80 kilometers an hour and it took Kim nearly three days to cover the 4,500 kilometers between North Korea and Vietnam. He took the same route both ways.

The increased telephone wiretapping is more common as the secret police have found that these monitored conversations often yield hints of government corruption that leads to a more thorough investigation.

February 23, 2019: For the first time in 2019 Chinese military aircraft violated South Koreas’ ADIZ (Air Defense Identification Zone) and flew in and out of the ADIZ three times before leaving. South Korea sent warplanes aloft to confront the intruder. South Korea complained to China and, as usual, was ignored. There were eight such intrusions in 2018. In 2013 China announced a new ADIZ that overlapped South Korean, Philippine and Japanese air space. China demanded that any foreign military or commercial aircraft request permission before flying into this zone. South Korea and Japan protested while the United States quickly flew some B-52s into the disputed zone without asking for Chinese permission. China protested and the United States ignored them just as China ignores South Korean protests.

February 20, 2019: As if North Korean farmers didn’t have enough problems North Korea has another outbreak of hoof and mouth disease. This one came in via China, which can afford to cope with these outbreaks. North Korea cannot, especially not just now. Worse, the first cases, which were near the Chinese border (where the virus can get across the rural border areas because it is airborne) the cattle deaths were diagnosed as from malnutrition. Thus this early misdiagnosis led to the rapid spread of hoof and mouth. Most (about 80 percent) of North Korean farmers use cattle for plowing and, very rarely as a source of milk and meat (which fetches a high price on the markets) but cattle that die from hoof and mouth must be buried or burned for the dead animal harbors the virus. Killing cattle without government permission is a capital crime in North Korea thus an uncontrolled hoof and mouth outbreak is a potential disaster.

There is no cure and outbreaks are handled by killing and destroying animals infected or suspected of being infected. Meanwhile, you have to use effective quarantine of infected areas until all infected animals are destroyed and areas where they lived disinfected. In 2014 North Korea asked the UN for help in dealing with an outbreak of hoof and mouth disease among the pigs North Korea depends on for much of its meat. It’s expensive to treat such outbreaks and even more expensive if you don’t (and lose a lot of animals). That outbreak was very costly. In 2001 an accidental introduction of hoof and mouth disease to Britain’s livestock herds cost billions of dollars to clean up. Hoof and mouth disease is a virus that is spread by infected animals exhaling it. South Korea fears that North Korean inability to control this outbreak will enable it to spread to the DMZ which means South Korea will have to spend a lot of money establishing a sanitary zone along most of the DMZ until the danger has passed.

February 19, 2019: An American Internet security firm revealed it had found evidence of North Korean hackers going after economic targets in Russia. Since North Korea has and is trying to maintain, good relations with Russia this attack seems odd. Further investigation may reveal the culprit trying to appear like North Korean hackers. Russia now knows about this so the outcome of this will be interesting one way or another. A third possibility is that the truth of what is actually going on here may remain hidden for a while, which is common in situations like this.

 

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