Desperate to extort more food, fuel and other goods out of South Korea and its allies (mainly Japan and the U.S.), North Korea spent most of last month threatening to invade South Korea again. No response, except for polite requests that North Korea comply with previous agreements to dismantle its nuclear weapons program, in return for food and fuel and food aid it had already received. Then North Korea declared all existing treaties with South Korea were cancelled. Still no response.
All this left the Chinese embarrassed, as North Korea was telling them that North Korea would not do anything to upset relations with the nations providing aid. Next thing the Chinese hears are more of these North Korean bombastic announcements. All one can assume is that no one is in control in North Korea, and factions each run their own foreign policy. But this time the North Koreans were told, by China, South Korea and the U.S. to shut up and straighten up. This was said publically and privately. North Korea apparently got the message this time. That's a big change.
In the last few days, the North Korea has cut out the threats, apparently realizing the rhetoric was doing no good. North Korean officials also played down rumors (apparently started in North Korea) that there would be more ballistic missile tests. The new South Korea president, who was elected on the promise that he would insist that North Korea kept the deals it made, has ignored the recent North Korean threats, and says he is ready to negotiate with the north. The U.S. has also told North Korea that the threats and rhetoric were having no effect. Someone up north is at least paying attention. And just in time, because North Korea is barely holding it together. North Korea can't afford the self-delusions anymore.
South Korea has more pressing problems. The global recession caused GDP to decline 3.4 percent in the last quarter of 2008, and it looks like 2009 will be a negative GDP year (with the economy contracting 5-10 percent), and the unemployment rate is headed up. OK, a 3.5 percent unemployment rate is not so bad, compared to 4.5 percent in Japan and 7.6 percent in the United States. But the culture is different, and a lot of South Koreans who still have a job, don't have any work. By the end of the year, a lot of them will not have a paycheck either, even though they may still, technically, have a job. This sort of thing will lead to large demonstrations, which is the traditional way South Koreans react to large scale disasters. South Korea has enjoyed two decades of steady economic growth and increased prosperity. Losing that, even temporarily, is not going to be popular. Suddenly, the antics up north are fading into the background. The sad fact is that North Korean military power has declined to the point where an invasion would hurt the north more than the south. The big fear from about an invasion is that it would cause a collapse up north, and suddenly, South Korea would be responsible for 22 million poverty stricken, brainwashed North Koreans.
Up north, people are starving. Those starving the least, are the kin of people who have escaped to South Korea. There are only 15,000 of these refugees in South Korea (who have to get to China, then go south to Thailand, where free passage to South Korea is available). These refugees are now sending over $6 million a year back to their families. They cannot do it legally, and use Chinese brokers, who, for a 20 percent fee, arrange to have a Chinese or North Korean merchant inside North Korea pay the remittance. Even then, you are not safe. If any local communist officials find out you are getting money this way, you can be arrested or, if you are lucky, hit up for a bribe.
In addition to starvation and food shortages in parts of North Korea, fuel shortages have led to water rationing. You need fuel to run the water purification and distribution system. In the Winter, areas that depend on hydroelectric power are often unable to generate electricity because the cold weather has frozen the reservoirs to the point that little water is going through the turbines. In addition, decades of money shortages has left many power plants shut down for lack of spare parts. The lack of fuel also makes it difficult to get food to remote areas, even when food is available.
North Korea dictator has been paying more attention to his ramshackle economy. Many public visits to factories lately. But it may be too late. The corruption and decay in the economy make it difficult to carry out any economic reform. People are used to scrambling and scheming just to survive. Reform is seen as an obstacle by many, another set of government lies. Another opportunity for government officials to plunder the people. The north is a land of lies and lethargy. Nothing works and nothing can be believed.
In light of that, the U.S. and South Korea are increasing their intelligence operations inside North Korea. China already has a strong network of merchants and commercial travelers inside the north. These are regularly debriefed by Chinese intelligence analysts when they come home. North Korea dares not go after these Chinese businessmen as "foreign spies," because the economic connections with China (both business activity and handouts) are essential. China could drive North Korea over the precipice quickly by simply closing the border. China knows it, North Korea knows. So China knows that is going in inside North Korea, and it's nothing good. The U.S. and South Korea are finding out the same thing, by putting more photo satellites and electronic monitoring over North Korea. Apparently there's been some tapping into the Chinese network as well. Everyone wants to know exactly when the patient will die, and millions of refugees will head for their borders. Everyone wants to be ready, for events they cannot otherwise control.
January 29, 2009: In an effort to calm down North Korea, South Korea has made it illegal to release balloons, with things (tiny bibles, radios, cash) attached, and let them float across the DMZ into North Korea. Church groups have been most active in this, and the North Korean government has made it clear that this sort of charity is not appreciated (at least by the government.) The church groups will probably continue with the balloon releases, and turn the trials into a media circus if they are arrested.