Category South Korea

Kaesong and the North’s cellphone network – two indicators of conditions on the peninsula

UPDATE (8 Feb.) – Earlier this week, South Korea announced a possible increase in inspections of goods headed into Kaesong based on tightened UN sanctions of North Korea (due to the December rocket test). North Korea, in it’s typical calm, understated fashion, threatened to return the entire industrial complex to a military zone due to the provocations from the South’s “puppet Ministry” in charge of the inspections. By Friday, South Korea had backed down, announcing that the “government does not consider the Gaeseong Industrial Complex as a means of sanctions against North Korea.” The North’s reaction and the South’s move to calm the issue, all in less than a week, show both the importance and sensitivity to Kaesong in both countries.

In a previous column on heightened tensions between North and South Korea over the sinking of the Cheonan, a South Korean naval ship, and the North’s shelling of the South’s Yeonpyeong Island, I highlighted Kaesong as a key indicator. If the joint North-South industrial complex at Kaesong remained open, tensions were not that serious and would soon ease. If the South withdrew its people from the complex however, that would indicate relations were about to get much worse, including a possible retaliatory strike by the South on the North.

As we now know, conditions in the complex remained largely the same and tensions on the peninsula soon cooled.

With the upcoming rocket launch by the North, Kaesong remains a good indicator of actual relations between the two countries. Post-launch, if operations in the complex remain normal, then relations will soon return to an even keel. However, any withdrawal by the South, or expulsion by the North, indicate a much greater risk of instability and/or provocative actions.

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The Impossible State: North Korea, Past and Future

[Book Review] Surprisingly readable – I’d half-expected dense academia or right-wing politicizing (the author is a former Bush administration official), but instead found The Impossible State: North Korea, Past and Future engrossing, with a great overview of North Korea, new insights into the diplomatic make-work program 6-party talks, and solid policy takeaways on the importance of increasing outside information flow into the North.

The author pushes a theory, neojuche revivalism (“juche,” itself commonly translated as “self-reliance,” is North Korea’s governing ideology, pg. 410), which seems to have lost some saliency with the death of Kim Jong-il and the changes in personnel and governing structure taking place under his son. According to Cha, the new/updated ideology is a “return to a conservative and hard-line juche ideology of the 1950s and 1960s,” when the North was ahead of the South technologically and economically (pg. 410).

Though the theory sounds mildly interesting, North Korea’s opaqueness means it can’t really be tested, nor does it provide much policy-level utility, especially given the ongoing leadership changes.

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North Korea Entering Information Age with Cellphones, Domestic-only ‘Intranet’

Interesting article on cellphone and ‘Internet’ usage in North Korea – yes, there are both cellphones (now up to a million 3G subscribers, if the numbers are to be believed) and ‘Internet’ users in the North, though access to the outside Internet is limited to a very select few. Instead, North Korea has established a nationwide (mostly Pyongyang, but some connections in outlying areas), domestic-only, intranet for universities, research centers, and a few private homes/apartments.

The article, from The Diplomat, a leading provider of news and commentary on the Asia-Pacific, attributes the North’s acceptance of information age technology to a desire to attract and please international investors. While the concerns of international investors may play a role, I hardly agree that this is the driving force. Rather, the North, like any other country or group of people, wants to use the technology to communicate and share information, though, in the North’s case, with a heavy dollop of state control (none of the cellphones on the domestic network can access numbers outside the country) and propaganda messages from state authorities (taking spam texts to a whole new level).

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North Korea suddenly hikes taxes for businesses in Kaesong, threatens to make hike retroactive for up to 8 years

UPDATE (21 OCT): The Times had an article today on rising tensions between North Korea and China due to similar issues – North Korea’s mistreatment of outside firms doing business within the country. Hardly a surprise, and gets to the point people constantly make about getting China to “do something about North Korea.” In the end, the North doesn’t listen to the Chinese much either, and for the Chinese to bring them to heel would require Beijing to utilize the type of extreme measures (e.g. halt in oil shipments) they’ve rarely proven willing to employ.

I get it that the South’s government wants to reduce the eventual, astronomical costs of reunifying with the North by amortizing those costs over the longest period possible, but as a business owner, why on earth would you risk investing in the North?

Yesterday’s JoongAng Daily, a South Korean English language paper, carried a story on the North suddenly upping tax rates on South Korean businesses in Kaesong, the joint North-South industrial zone located just over the border inside North Korea. The North told the SK businesses and the South’s government it was unilaterally changing 117 out of the 120 clauses in the zone’s regulations on 2 Aug. – a move that violates the agreement governing the zone, which stipulates a bilateral agreement is required before any changes can be made. Anyone surprised by this sudden, unilateral change by the North, please begin holding your breath.

Not only did the North change the rules, it reserved the right to decide the tax rate on a product-by-product basis, as well as charge up to eight years of back taxes on the new rate (the zone opened in 2004). So the taxes are not just going up now and into the future, businesses may suddenly owe the new rate on all of their previous years’ taxes as well. Fun.

So, having started and helped run two businesses in the South, I know my answer if the South’s government ever comes calling, urging me to invest in the North – NO. While I can understand the South’s government, that the more businesses, jobs, infrastructure, etc. that is created now, the less they’ll have to create in the eventual post-reunification future, the North’s investment climate just isn’t good enough.

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Security issues knocking on South Korea’s door

A North Korean soldier slipped across the DMZ the night of 2 October, getting through a fence on the North’s side, followed by an electrified fence, then a barbed-wire-topped South Korean fence, before finally … walking up to a South Korean army barracks door and knocking, telling the soldiers inside he wanted to defect.

Until he literally knocked on the front door, no one in the South had detected his presence – a problem that is getting a great deal of attention in the South Korean press (a brief story in English here, a longer summary in Korean here, an editorial complaining of the situation here).

Coming so soon after another man swam across the border undetected, only to be discovered drunk and half-naked after breaking into someone’s home and stealing their soju, serious questions are being raised in the SK media about the security of the South’s border with the North.

Coming only a year after the South installed a pricey new electronic monitoring and information collection system along the border, the two lapses in security raise questions about the ease with which the North can infiltrate the South. As the editorial said, it was lucky the North Korean soldier came to defect, had he been armed and bent on creating trouble, the outcome for the soldiers in that barracks would have been far worse.

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Want to make millions from North Korea? Become a luxury goods exporter in China during the next succession

An interesting story has been making the rounds of South Korean media the past couple of days (in English, in Korean) about a sudden, large jump in luxury goods imported into North Korea.

Using trade stats from Chinese customs (the North’s main trading partner), a parliamentary committee in the South found North Korean imports of vehicles (Northern elites tend to prefer German iron, especially Mercedes); TVs, computers, and other electronics; liquor; and luxury watches (gifting expensive watches on important occasions is a cultural trait the North actually shares with the South) went from roughly 300,000,000 U.S. dollars in 2008 and $322,530,000 in 2009, to $446,170,000 in 2010 and then $584,820,000 in 2011.

The large jumps in 2010 and 2011 (and presumably this year as well) overlap with the sudden appointment and rushed power transition from Kim Jong-il to his son, Kim Jong-eun. In essence, the North’s 0.001% has been throwing around a few hundred million dollars worth of hard-to-obtain luxury items to keep Pyongyang’s 1% satisfied, or at least mildly mollified, during the latest dynastic succession. An effort that, to date, appears to be working, plus furnishing a nice bump to Northeast Asian sales of Hennessy, Rolex, and the rest of the dictator chic product line.

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Tried Reading ‘Current History’?

I’m not sure how many people actually read Current History (a dozen?), which, while still quite wonky, is normally more readable and less arduous than Foreign Affairs, though their website offers next to nothing for non-subscribers.

I bring up the magazine here because the September issue is on East Asia and includes worthwhile articles on South Korea, China, and the rest of the region. As a bonus, there’s also an article on North Korea by curmudgeonly old Bruce Cumings – anyone wishing to relive the 60s/70s is urged to pop in a good 8-track, spark up their grooviest bong, and read the Cumings piece. You won’t learn much about North Korea (apparently, they bow less than the South Koreans), but you will get a jarring blast of old-school leftism.

Check it out if you have a chance, though again, the Current History website is nearly useless.

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South Korea’s Ministry of Defense to double size of cyber command in face of cyber attacks from North; effort unlikely to succeed

I’ve been following North Korean cyberattacks on the South for several years, so it was interesting to see the South’s Ministry of Defense announce (English, Korean) yesterday that it was already doubling the size of its Cyber Command, to 1000 people. Given it just launched the command in January 2010, deciding to increase the size already indicates the seriousness with which it views the threat of North Korean cyber attacks, plus the easy availability of funding for this new arena of conflict.

North Korean cyber attacks on the South include jamming GPS signals (forcing planes at Inchon international airport to use alternate systems when landing and taking off), locking up to 30 million account holders (a number which seems awfully high, but I’m quoting the article) out of Nonghyup, the South’s main agriculture and cooperative bank, and hacking the email accounts of Korea University’s Graduate School of Information Security (one of the South’s top schools). With public, embarrassing attacks such as these, the North has certainly caught the attention of the South’s defense and cyber establishments, helping drive the expansion in funding and personnel resources.

The added capabilities are to include both defensive and offensive programs, with the second being the more interesting of the two. Given North Korea’s much more limited use of the Internet – essentially a few elites conducting research and military/intel groups looking for information and opportunities – the well-wired South has far more to lose in an online confrontation than the hardscrabble North. Combine Southern reliance on the Internet with the difficulty of definitively tracing the origin of a cyber attack, and, expanded capabilities or not, the South looks to lose a few more rounds of this battle.

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Living in the past: South Korean Defense Ministry steps up radio broadcasts into DPRK

The South Korean Defense Ministry reportedly (North Korea Tech) stepped up shortwave radio broadcasts into North Korea from 9 August.

Why?

The North jams most, if not all, of the signals, few North Koreans own shortwave radios, and decades of similar expense and effort have resulted in … well, nothing.

Instead of spending money on radio programs no one can listen to, using signals the North will jam, it’s time for a new tool. The South should be investing in cellphone towers along the DMZ and in supporting efforts by defectors to infiltrate phones into the North (read more on those efforts from The Asahi Shimbun or The Atlantic).

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Censored in South Korea?

As you can see from the flag graph to your right, I get my second largest number of visitors from South Korea. Go figure, given how many of my posts are about the Koreas.

However, according to How to Get Censored in South Korea, a 13 August article in the New York Times on growing Internet censorship in South Korea (never mind the North), certain content can get your site banned in the South. The Times article not only carries some of the banned content, it offers to share it with other websites.

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