NORTHEAST ASIA PEACE AND SECURITY NETWORK *** SPECIAL REPORT *** [The following "DPRK Report" is the product of a joint project between the Center for Nonproliferation Studies (Monterey Institute of International Studies, Monterey, California, USA) and the Center for Contemporary International Problems (ICIP) (located at the Diplomatic Academy, Moscow, Russia). The report is funded by a grant from the Rockefeller Foundation and is written by Russian analysts associated with the ICIP. The report is distributed through NAPSNet in collaboration with the Nautilus Institute for Security and Sustainable Development in Berkeley, California, USA.] THE DPRK REPORT (November-December 1996) 1. North Korea may start reforms in 1997 Russian experts see some signs that North Korea might be preparing for a major turnabout in its internal and external policies in 1997. First of all, signals are coming from Pyongyang that Kim Jong Il will finally formalize his power by taking top positions in the party and the government this coming summer. This means that he will become much more secure as the leader of the DPRK and that the state will get a better defined and more accountable system of government. It is also evident that North Korean authorities have come to realize that the national economy does not and will not work any longer under the present juche guidelines and management system. This fact is admitted by functionaries of the regime in private conversations with Russians. The functionaries stress equally that the DPRK is eager to study the reform experience in other countries and to copy some of this experience. Another sign of forthcoming changes, according to Russian experts, is the visible eagerness of Pyongyang to normalize and promote ties with the United States. To achieve this goal, North Korea made an unprecedented concession to Seoul by apologizing for the submarine intrusion in September 1996. This move took Russian experts by surprise because it was completely out of line with all previous behavior of the DPRK vis-à-vis the ROK. There are new nuances in North Korean policies towards Russia. Pyongyang seems to be quite anxious to expand political exchanges as well as to promote economic cooperation. The DPRK has responded to the Russian draft of a new bilateral treaty and the response is rather flexible and sensible. The Russian Foreign Ministry believes that the two sides will be able to sign a new treaty in 1997. Similarly the DPRK is moving in the direction of closer ties with China. A number of delegations have visited China recently to examine in detail how reforms and the "open door" policy in that country work. Possible changes in North Korea are appraised in Russia as a positive development. However, concern is expressed that transformations in this completely closed, poor, regimented, and Stalinist country could be very painful. At a recent conference (December 24, 1996) organized by the Russian Foreign Ministry's Institute of Contemporary International Problems (ICIP), three scenarios on the evolution of the political and military situation on the Korean peninsula were drawn. Scenario No. 1. With economic reforms and an opening up of the DPRK to world markets, other changes will follow--the loosening of controls over the population, a decreasing respect for authority, a dramatic growth of crime and corruption, open criticism of the leadership by a swelling number of dissidents, spontaneous local uprisings, political debates over policy issues, and struggles in ruling circles for power--all familiar scenes observed in other former communist countries. The specifics of the North Korean situation will be that South Korea will soon get involved in the turmoil. There will be crossings of the 38th parallel in both directions; appeals by North Korean organizations to the South Korean government, people, and different political and social groups; and moves by South Korean official and nongovernmental organizations to help protesters and the unfortunate in the North. As a result, the situation could become even more complicated. Communist leaders, under the threat of the physical destruction of their system, could try to slow down and even stop the reforms. They may find some support, or at least sympathy, among leftists in the South. Fighting in various parts of the Peninsula could break out. Sooner or later, though, the communist regime in the North would collapse and even the Chinese "old guard" would not dare try to prevent it (and they would not be able to, in any case). After that, a new and quite painful chapter in the history of Korea would begin, that is, the accommodation and merger into one entity of two parts of a country that for decades has been split by opposing ideological, political, social and economic systems. Reunification will cause a halt in the momentum evident in the ROK's economy and will result in the Peninsula's disruption in economic and political terms. The accommodation of the military into a post-reunification Korea will present a problem of unparalleled magnitude, creating friction and even major dislocations within the society. Economic integration will pose serious problems due to the different levels of economic development of the DPRK and ROK, as well as the antagonistic economic systems and philosophies. Millions of communists and their family members will have to find a meaningful place in a unified Korea. Complaints will be heard from simple citizens of the former DPRK who are totally unprepared for life in a competitive capitalist economy. A certain nostalgia for Kim Il Sung and "socialism" could emerge. The population of the South will also feel dissatisfaction, as the burden of supporting North Koreans will cause the level of the South's material well-being to decline. Such reunification may result in real failure, with an extended period of political, economic and social dislocation. Scenario No 2. North Korea will not change after all. Taking into the account lessons of the communist regimes of Eastern Europe and of the Soviet Union, Pyongyang will continue to exercise rigorous political control over the population, not allowing any freedom of expression, restricting the inflow of information, and ruthlessly exterminating dissent. The cult of Kim Jong Il should help to facilitate the crushing of any opposition in the upper echelons of power, while war hysteria will allow the government to keep the population subdued. A stress on nationalistic sentiments will make up for the North's inferiority to the South in all fields. The ruling class will be further united by the fear of loosing power and becoming a victim of the victor (especially if the final victor might be the South Korean elite). This unity will be helped by the fact that Kim Jong Il is surrounded by relatives and loyalists and provides them with all imaginable honors and material benefits. Economically, the regime will search for low risk ways to increase productivity and improve the standard of living. However, state ownership and ideological aims will prevail over financial incentives in production drives. The DPRK's foreign policies will not necessarily be totally static, but changes will be strictly tactical, such as a more sustained effort to encourage foreign investment. Pyongyang will not abandon the nuclear and military "cards" and will thus satisfy the country's minimum requirements in technology, operating expenses, and material goods. North Korea will benefit from the unrelenting and even growing support of Beijing--due to the fact that China will become stronger economically and militarily and its rivalry with Japan and the United States will intensify, making the DPRK a more valuable ally for China. One should not exclude the possibility that--due to the expansion of NATO--Russia will engage in a renewed confrontation with the United States and Japan. If this occurs, the Kremlin will do its best to restore a close alliance with Pyongyang. Then, North Korean communism will further improve its chances for survival without serious reforms. In such a case, the DPRK will continue to project a Korean future in which the nation is united under communist leadership. The two Koreas will be frozen in a deeply antagonistic relationship; negotiations on security, political, and economic matters will stay locked in their present pattern. The North will preserve its "united popular front" tactics. It will go on dispatching saboteurs, guerrillas, and terrorists to the ROK and will provoke incidents along the DMZ. Both the North and the South will maintain large standing armies and a high degree of defense preparedness. The economic of the two Koreas will develop separately, with economic interactions remaining sporadic and unstable. Scenario No. 3. With help and advice from the China and (to a lesser extent) Russia, the DPRK will transform itself slowly and rather smoothly. The present leadership will introduce certain economic changes, putting an emphasis on special economic zones, the transfer of technology from abroad, the production of consumer goods for export, the promotion of tourism, enhanced economic transparency through the release of verifiable data, the relaxation of restrictions on in-country business-related travel, and other reforms. It will normalize relations with the United States and Japan and will seek to attract required capital and know-how from these and other developed countries. Pyongyang at the same time will keep a lid on political changes. Its compact territory and its extensive and experienced repressive organs will allow this strategy to succeed (after all, such strategies worked effectively in the 1960-80s in South Korea and Taiwan, and they continue to function in China and in Singapore). After a number of years, the North Korean economy will improve significantly. Communist cadres will play an important role in the spread of capitalist relations. At some point Pyongyang will start allowing people to enjoy certain freedoms and it will embark on a serious dialogue with South Korea, Direct trade, mutual investments, and exchanges of delegations will be followed by the reunification of families, tourism, student exchanges, and joint participation in international sports competitions and multinational organizations. Seoul and Pyongyang will facilitate the establishment of railroad, postal, and telecommunications links between their two states. The North and the South will start setting up joint companies to excavate and utilize raw materials, to produce equipment, machinery, and transportation links and to promote other forms of cooperation. Economic integration will pave way for movement towards political and military rapprochement. The parliaments of the two parts of Korea will hold joint sessions and set up joint committees to solve issues of common concern. Combined delegations will participate in international political fora. Later, the two Koreas will establish a single federal parliament to take care of issues of nationwide importance. The armed forces of the two states will begin exchanges. Within 10-15 years, South and North Korea will overcome their present-day suspicions, and their societies will become quite compatible as their levels of economic development get closer to one other. By that time, a generational change will take place; old enemies will be replaced by those who are not burdened by the past. Such a policy will bolster the DPRK's economic position and will subsequently serve to reinforce the political position of the North Korean elite. The collapse of the DPRK will be postponed. This will mean that reunification will come later, but the path towards reunification will be much smoother. 2. Arms procurement in the DPRK North Korea continues to adhere to a policy of self-reliance in arms production. However, it has been stepping up lately efforts to acquire advanced weapons from other countries through various channels, including unofficial ones. One of Pyongyang's targets is Russian arms. A decision has been made to modernize the North Korean Air Force. Specialists have started to work on the improvement of MiG-21 planes by installing more powerful engines and new navigational equipment. Partly, this is done through collaboration with India, which has considerable experience in upgrading MiG-21s and maintains close relations with Pyongyang. Another North Korean partner is China, where F-7 planes, similar to the MiG-21, are produced. The DPRK has also made approaches to New Delhi in hopes of gaining access to other types of Russian military equipment--the "Tunguska" anti-aircraft system, the S-300 missile defense system, 2S19 "Msta-S" howitzers, and others. Pyongyang has also been studying Indian experience in maintaining Russian-made weapons under hard weather conditions. North Korean authorities are seriously concerned over current deliveries of Russian armored equipment to the ROK: T- 80U tanks and BMP-3 combat infantry vehicles. Since the DPRK does not have similar types of advanced armored equipment, it has firmly decided to acquire such equipment or its analogies from abroad. India, Pakistan, and China are the principal countries where North Korea has been searching lately for the advanced types of armored equipment. Among Pyongyang's proposals is joint production of such systems in the DPRK and subsequent exports of a portion of the product. Russia itself was approached by North Koreans on the same subject. However, talks have been stalled due to the fact that Moscow demands payments in cash, while Pyongyang requests credits. North Korea is after Russian automatic infantry weapons-- "Kalashnikov" machine guns (AK-101, -104, and -105), "Bison," "Kedre," and "Gurza." Most of them are available in the world market and that is where Pyongyang is attempting to acquire them (especially samples, which could be used to start domestic production). Some of these samples have been found by the DPRK in Angola, Mozambique, Ethiopia, India, Syria, and Libya. Others are taken from Russia itself, in most cases illegally. Experts detect an equal interest on the part of North Koreans in laying their hands on Russian air defense systems, such the "Buk-MI" and "Top-MI." Another target of Pyongyang is Russian submarines: the "Kilo" (diesel-electric, low-noise 877 EKM), the 636 "Amur," and the "Triton" and "Piranya" types (these latter two are of a super-small class convenient for secret landing operations of a limited number of agents). There are a number of signs that North Korea is searching for equipment and armaments for these submarines in China, India, Iran, as well as in Russia itself. The DPRK has also made certain steps to obtain samples of Russian advanced landing ships--the "Tsaplya" and "Pomornik." Pyongyang is paying special attention to promoting its missile program in order to compensate for the weaknesses of North Korea's armed forces. An impressive group of foreign and Korean specialists, trained abroad, has been assembled to realize these plans. The DPRK now produces 10-12 "Scud-B" and "Scud-C" missiles per month. The Scud-C's range is 520-780 km, depending on the weight of the warhead. This missile is being deployed in brigades and regiments, with up to 12 launch systems in each unit. Another missile, the Nodong I, is being put into a regular production. It is a much more advanced weapon with a range of 1000 km. The DPRK already has the potential to forming military unit equipped with various missiles. Pyongyang plans to give missile units their own structure and command under the DPRK Defense Commission. Previously, it was envisaged to install nuclear warheads on new ballistic missiles like the Nodong II. However, at this point, the program has been at least slowed down, if not altogether frozen. North Korea is also striving to increase the firepower of its Air Force's planes. Designers are working on "air-to-air" and "air-to-ground" guided missiles for the destruction of various targets. The military's goal is to install such missiles on modernized MiG-21 aircraft. ICIP Moscow 6 6