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The Peril Brewing in Pyongyang

The Peril Brewing in Pyongyang

By Greg Sheridan - March 5, 2009

australianlogo.gifIF there's one thing the global financial crisis ought to teach us it is the extreme analytical difficulty of forecasting any big disruption in a well established pattern of relationships. This reflection is provoked by the visit of South Korean President Lee Myung-bak, a most welcome guest. His country is hard hit by the crisis, even though all the fundamentals of the South Korean economy were sound before the international banking system all but collapsed.

Lee's electorate will judge him primarily on how he deals with the economic crisis. But he is also expected to manage the demented regime in North Korea in such a way that it doesn't disturb South Korea's peaceful and prosperous life.

The South Korean attitude to North Korea is in some respects similar to Israel's attitude to the Palestinians. They know the problems of their neighbours must be solved one day. But it seems impossible to design incentives and disincentives that have any effect. So, apart from taking necessary security measures, they try to ignore the horrendous security challenge across the border.

The big problem for analysts of North Korea, as for economists before the outbreak of the global financial crisis, is that one day North Korea, like the world's banks, will change radically and suddenly. It will either explode, or collapse, or lurch into some grotesque new crisis.

When it does we will ask how we didn't see it coming and why we were so unprepared.

Over the past few months North Korea has been going through one of its bellicose, ultra-aggressive, much more demented than usual phases. It has systematically cut out almost all joint ventures and co-operation with South Korea, many of which earn the north precious foreign currency. Recently it has also engaged in elaborate and showy preparations for the launch of a missile that could reach the US (and Australia for that matter).

Such a launch would be in direct violation of a Security Council resolution that was passed after Pyongyang's test of a nuclear device; not that the resolution is likely to bother North Korea. It's impossible to imagine the UN imposing any sanction that would harm North Korea any more than it has harmed itself.

All of this has taken place against the background of possible rare leadership instability in Pyongyang. North Korea's "Dear Leader", Kim Jong-il, is thought to have suffered a stroke in August; a lifetime of sybaritic dictatorship tends to takes it out of a fellow. Kim is also believed to be diabetic and suffers from a range of other maladies.

A few days ago, just before he left for New Zealand and Australia, I asked Lee what he thought was behind North Korea's recent hostility, and whether Kim was still fully in charge in Pyongyang.

Lee, somewhat unusually for a South Korean president, was up front about the limits of South Korean intelligence on the north. He said: "When it comes to Chairman Kim Jong-il's health, we don't have accurate information. But judging from his recent activities he doesn't seem to have any trouble ruling the north. From South Korea's point of view it would be good for him to regain his health."

This is an important and no doubt sincere judgment by Lee. It is not that the South Koreans value Kim's health. But they do value stability in the north.

Of course they want North Korea to change, but they want it to change gradually. This was a significant difference between the South Koreans and the Bush administration, which always wanted regime change in Pyongyang.

Lee offered an explanation for the timing of the north's recent aggressive behaviour: "They pick their time to take aggressive action. They make a calculation so they can gain the upper hand in negotiations. That is the reason for such aggressive and bellicose statements.

"In the past they have got some benefits from that, but from our point of view they won't gain in the long term from it."

Lee believes not only South Korea but the international community generally is fed up with such behaviour from the north and won't be inclined to reward it. Pyongyang is also trying to gain the attention of the new Obama administration in the US, and, as Lee suggests, give itself some leverage with the Americans.

In a sense, South Korean governments always have the same basic policy towards the north: trying to change its behaviour at the lowest level of cost, in either security or economic terms, to their own society.

But within those parameters South Korean policy has evolved significantly. You can see three distinct phases. The first, following the Korean War which ended in 1953, lasted several decades and involved tremendous fear of and ideological hostility towards the north. It was only in the '80s that the south definitively pulled ahead of the north in economic development, and also became a democracy and therefore politically more self-confident.

Gradually a more benign view of the north developed in the south as it rid itself of the trappings of military rule. This benign view was good-hearted but based in part on illusions. It embodied a deep desire for Korean unity and the idea that if the south showered the north with kindness it would soon change its ways. Lee's two immediate predecessors as president were firmly wedded to this view. But the south got nothing for its kindness but contempt, betrayal, and a big bill.

Now Lee, a businessman politician, represents a new consensus. Under him, aid to the north, apart from emergency humanitarian aid, will be conditional on the north's behaviour. Agreements will be reciprocal. Seoul will do nothing to threaten the north but nor will it offer endless, free gifts. Lee's Government will concentrate on domestic economic renewal at home and a more expansive foreign policy abroad, one which concerns itself with much wider issues than just North Korea.

Nonetheless, my guess is some day soon enough a crisis will come. Given South Korea's economic, diplomatic and political importance to us, and its position in the cockpit of Northeast Asia, we are bound to be heavily engaged when that day arrives.

Greg Sheridan is foreign editor of The Australian.

Greg Sheridan

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