NORTHEAST ASIA PEACE AND SECURITY NETWORK
***** SPECIAL REPORT *****

June 8, 2000

The following article was written by Stephen Noerper, an independent
researcher and Nautilus Senior Associate. Dr. Noerper reviews the recent
developments on the Korean Peninsula, and argues that while reversal is
still possible, the incremental steps toward reconciliation that have
thus far taken place could form the basis for an eventual solution to the
"last vestige of the Cold War."

-------------------------

The Two Kingdoms Period: Toward a New Stability on the Korean Peninsula

Stephen E. Noerper, Ph.D.


The Evolution of Openness

For four decades, modern Korea knew a South and North intent on the
ultimate collapse of its rival. The two states saw in the personages of
Kim Il Sung in the North and Rhee, Park, and Chun in the South strong
rulers with autocratic leanings. But in 1988, a newly democratic South
Korea cast aside the zero-sum and ushered in its Nordpolitik, or Northern
Policy, promoting in the words of one former ambassador, a "sacred
nation."1 In establishing cross-normalization with the former Soviet
Union and China and in joining the United Nations with North Korea, South
Korea orchestrated a heady diplomatic crescendo, which it followed with a
steady internationalization campaign in subsequent years.

South Korean President Kim Dae-jung's engagement approach has built upon
that opening, seeking to engage the North and draw it into the
international community. The infusion of South Korean business
investment and humanitarian assistance from church and other voluntary
organizations led a hesitant North Korea to slowly respond. Kim Dae-
jung's March 2000 Berlin Declaration held out the promise of direct
government-to-government assistance, leading North Korea to agree to the
historic inter-Korean summit to be held next week. North Korea, with the
consolidation of the Kim Jong-il regime in the wake of Kim Il-sung's 1994
passing, has tentatively embraced South Korea's approach, perhaps out of
increased trust but most certainly for economic viability reasons.

The de-facto result is a new and historic orientation toward gradual
integration, the sustenance, in at least the near-term, of two systems.
This period is marked by two leading personalities - Kim Dae-jung and Kim
Jong-il -- more constrained than those proceeding but definitive
nonetheless. While South Korea continues to democratize, institutions
and parties stand secondary to personality politics. North Korea remains
subject to the Kim (Il-sung/Jong-il) dynasty. Kim Jong-il derives
legitimacy from his father's rule, a reality Confucian not Communist.
Moreover, the prospects for enhanced inter-Korean dialogue speak to the
maintenance of both regimes, reliant on the impetus of the two leaders.
In the modern, globalized, post-Cold War, this period may prove limited
in duration, but for the purposes of analyzing Korean security dynamics
in transition, Korea at the turn of the century sites two entities that
may well assume the mantle of Confederacy.

Certainly, challenges to stability on the Korean peninsula remain, given
the massing of conventional and other capabilities, as well as North
Korea's continued reliance on military tension and diplomatic
brinksmanship. North Korea's periodic ratcheting of tensions -- through
missile firings, incidents at sea, incursions at the demilitarized zone
(DMZ) - constitutes a most dangerous game. Although problematic to the
international community, from a North Korean perspective, this approach
has won it a place at the negotiating table in New York, Beijing, Kuala
Lumpur, Geneva, Berlin, Honolulu, and Rome.2

North Koreans have relished their ability to keep the members of
international community, and most importantly the Americans, guessing -
whether about missile and nuclear capabilities, leadership succession, or
the extent of the famine's impact. Capturing international headlines has
afforded a poor and strategically disadvantaged state great attention.
North Korean rhetoric aside, the 1990s saw it impoverished given
structural deficiencies and the loss of its Cold War patrons, shocked by
the loss of its father figure, struck with natural disaster, famine, and
disease, and isolated in a global era.

We may yet see more threatening activity, incursions or the like,
tempering progress on diplomatic fronts and challenging an armistice that
the North Koreans, and increasingly others, regard as a legacy of the
past. Moreover, with the approach of Kim Jong-il's sixtieth birthday, it
is likely that competing entities - military and otherwise - in North
Korea may press for an honorific show of strength, possibly dangerous
given the ever-present potential for mishap. Precedence for such a show
of strength exists in the August 1998 Taepodong launch, which marked the
then-impending fiftieth anniversary of the Communist Party.

Yet, despite concern about the North's approach, unprecedented consensus
exists over the need to maintain stability and curtail to what extent
possible the tremendous costs akin to unification. The impetus lies in
several directions. First and foremost, South Korean President Kim Dae-
jung's Sunshine approach not merely tolerates the North, but encourages
key allies and the international community to embrace its former
adversary. Secondly, North Korean leader Kim Jong-il's regime slowly,
but increasingly, appears more responsive to the reality that the North
Korean state will maintain itself only through opening to the outside.
Third, external elements are uniquely aligned in their desire for
peaceful transition on the peninsula.

Former South Korean Foreign Affairs and Trade Minister Hong Soon-young
characterized ROK-DPRK relations as "recently thawed...fluid and
dynamic."3 South Korea's engagement approach has seen steady progress,
with some one hundred and fifty South Korean businesses in contact with
the North and Hyundai corporation's investment in Mt. Kumgang tourism the
highest visability venture to date. Seoul speaks of further concrete
steps for reconciliation, such as free exchanges and travel across the
DMZ, and it is the divided family issue that figured prominently on the
inter-Korean summit agenda. Of recent significance is the steadily
growing web of informal contacts, with over five and a half thousand
visits by South Koreans to the North in 1998 and Hyundai reporting more
than two hundred thousand South Koreans having ventured to Mt. Kumgang.

Yet, President Kim Dae-jung's approach faces challenges. Any hostile
North Korean actions or postponement of the inter-Korean dialogue
threaten the salability of a pro-engagement stance. The challenges of
political consolidation have led to attacks at home on its viability.
The regime's inability to secure a parliamentary majority in 2000 speak
to potential difficulty of maintaining momentum, although Grand National
Party (GNP) leader Lee Hoi-chang's post-election sit-down with President
Kim spoke to bipartisan support for engaging the North. Differences
exist though in terms of interpretations of proper reciprocity, the
nature of trade-offs, and the conditions for increased assistance to
North Korea. The demands of economic restructuring in South Korea placed
engaging the North behind on the national agenda, yet also provided a
window of opportunity given that absorption by the South would prove
prohibitively costly to a public burdened in recent years by unemployment
and underemployment after decades of rapid economic growth. General
consensus toward gradual integration was an unexpected result of the
economic turmoil that gripped South Korea in the late 1990s.

So too, one must examine recent developments in the DPRK. As menacing as
some North Korean challenges have appeared, North Korea has displayed
positive movement on a several fronts. North Korea has abided by IAEA
safeguards and stands in seeming compliance with the 1994 Geneva Agreed
Framework. It has worked with the Korean Peninsula Energy Development
Organization (KEDO), even providing guarantees protecting South Koreans
working on the light water reactor project from prosecution, a compromise
of some significance given prior staunch claims to sovereignty. The
suspected development site at Kumchangri raised the specter of a non-
compliant North, but subsequent United States inspections received "good
cooperation" and alleviated some concerns. North Korea continues to work
with the United States on locating remains from the Korean War and has
engaged with the United States in discussion on missile issues. North
Korea has expressed its desire to be removed from the US terrorism list
and is in ongoing talks about sending a high-level representative to
Washington, DC. North Korea has participated in the Four Party talks
with South Korea, the United States, and China, agreeing to committees on
tension reduction and interim peace mechanisms.

Promotion of the Rajin-Sonbong Free Economic and Trade Zone, technocrats
studying business overseas, a growth in local markets, and reported
easing of internal movement reveal some, albeit limited, positive
movement on the economic front. A further sign of North Korean opening
is its permitting international aid organizations to help meet the needs
of the humanitarian crisis. The international aid community reports
increased access and some success in stemming the tide of famine,
malnutrition, and disease. Of course, there have been exceptions, with
CARE, Oxfam, and Doctors Without Borders prominent aid entities that have
opted out of North Korea. Early concerns about misappropriation of aid
to the DPRK military have lessened. North Korea has been more explicit
in describing its most recent drought and announcing a 1998 mortality
rate of 9.3 per 1000, a tacit acknowledgement of hundreds of thousands of
deaths since the mid-1990s and the first time the DPRK has made such
figures public. North Korean officials have afforded foreign media some
exposure, albeit limited by the predicament of wanting to show the best
of the worst.

The Role of External Facilitators

South Korea is requesting external elements to commit to a new
architecture on the peninsula. This marks a fundamental shift not only
in South Korean ambition, but in the explicit handling of affairs on the
Peninsula, with Seoul firmly in the driving seat. Seoul is pushing
Washington to normalize relations with Pyongyang. Improving relations in
exchange for DPRK missile and nuclear concessions figures prominently in
the comprehensive approach toward North Korea urged by former US
Secretary of Defense William Perry in his review of US North Korea
policy.

Of course, challenges abound, not least of which is the absence of
elements on Capitol Hill advocating engagement with North Korea. DPRK
missile tests and suspicions about Kumchangri alienated conservatives and
undermined liberal advocates, leading to difficult debate on funding for
the Korean Peninsula Energy Development Organization (KEDO). The lead-up
to the North Korea Threat Reduction Act spoke to further discord between
the US executive and legislative branches on engaging North Korea. Yet
the Perry Process succeeded in tempering the most ardent opposition and
the resulting Trilateral Coordination and Oversight (TCOG) group has
muted concerns over a lack of a coherent and coordinated approach among
the United States, Japan, and South Korea.

Any long-term rift in Sino-US relations also challenges forward progress,
at least by way of coordinated responses on the Korean peninsula. Yet
China has been consistent in its call for peaceful transition on the
peninsula, a position fostered actively by South Korea. National
Committee of the Chinese People's Political Consultative Conference
(CPPCC) Chair Li Ruihuan's May 1999 visit to Seoul underscored China's
commitment to the rapid development of Sino-ROK ties. Li observed to ROK
President Kim Dae-jung that it is a matter of time before the DPRK and
ROK unify and offered explicit support for Kim's engagement approach.
China agreed to open a North Korean consulate in Hong Kong later that
year, albeit after the opening of a South Korean consulate in Shenyang.
China welcomed the DPRK Supreme People's Assembly President Kim Yong-nam
to Beijing in June 1999 and committed to providing further food and fuel
assistance - a move Seoul welcomed. North Korean leader Kim Jong-il's
secret visit to Beijing last week further emphasizes China's prime role
in Peninsular affairs and speaks well for the prospects of the inter-
Korean summit. China has fostered ties with South Korea's defense
establishment, raising concerns in conservative circles in Seoul and
Washington, but has recognized the potential for cooperation with the
United States in the facilitation of peaceful transition on the
Peninsula.

South Korean President Kim Dae-jung also has welcomed Russia's
acceleration in contacts with both North and South Korea. During his
visit to Russia, Kim expressed hope that Russia too would draw North
Korea from its isolation. Russia resumed supplying the DPRK crude oil --
some 400,000 to 500,000 tons in 1999. Russian Foreign Minister Ivanov's
visit to Pyongyang resulted in a renewal of friendship arrangements,
although notably not a security guarantee. ROK President Kim's meetings
in Moscow featured common support for a six-nation summit on security in
Northeast Asia.

As with the United States, South Korea has pressed Japan on normalizing
relations with North Korea. President Kim Dae-jung's summit with Japan's
late Prime Minister Obuchi led to Japanese agreement in considering
compensation for North Korea, in line with events preceding the 1965
Japan-ROK normalization accords. Although talks resumed in the spring of
2000, little progress was made in the initial rounds, although the
promise of further dialogue speaks to Tokyo's broader support for
engagement. Concerns remain in Japan over the amount of remuneration
requested by North Korea, the perceived missile threat in light of the
August 1998 Taepodong launch, visits by Japanese wives of North Koreans,
and unresolved issues of Japanese abducted by North Koreans in the 1970s.
Yet Japan has committed significant food assistance to North Korea and
progress will likely be in line with Seoul's and Washington's
experiences.

Mid-level diplomatic powers and smaller powers both in and outside of the
region also facilitate peaceful transition on the Korean Peninsula. At
the behest of Seoul and with Pyongyang responsive to overtures, a number
of external powers have established contact with North Korea in an
attempt to draw it into the international arena. Italy normalized
relations in February 2000 and approved a Fiat license to a Unification
Church automobile initiative in North Korea. Australia normalized ties
in May 2000, advancing its contacts with and extensive analyses of North
Korea. Britain, France, Belgium, the Philippines, Canada, and others
have initiated discussions with North Korea. Mongolia has unique ethnic
and historical ties with the Peninsula, a political relationship with
North Korea since the latter's inception, and a burgeoning economic and
political relationship with South Korea. As host of the current Council
on Security Cooperation in the Asia Pacific (CSCAP) Northeast Asia
Working Group meeting, Ulaanbattar facilitates further discussion of
Peninsular affairs. Mongolia has hosted visits by North Korean citizens
groups, dialogued with South Korea on the issue of North Korean refugees,
and offered support for a more formalized security dialogue mechanism, in
keeping with South Korean President Kim Dae-jung's approach.

North Korea has expressed a willingness to engage in more international
dialogue, most significantly in its 2000 bid to join the Association of
Southeast Asian Nations (ASEAN) Regional Forum (ARF), a body geared
toward political and security dialogue. The May 2000 Foreign Ministers
meeting yielded approval of North Korea's desire to enter into the
framework. For several years, the ARF has endorsed peaceful transition
and reconciliation on the Korean peninsula.

Nongovernmental initiatives also play a key role in enhancing stability.
The Council on Security Cooperation in the Asia-Pacific (CSCAP) includes
North Korean membership, and the Northeast Asia Cooperation Dialogue
(NEACD) has focused on Korean issues. The Bay Area-based Nautilus
Institute for Security and Sustainable Development initiated the
Northeast Asia Peace and Security network (NAPSNet) Daily Report, focused
on Peninsular and other Asian security concerns. It also launched a
North Korea windpower project, designed to foster exposure to alternative
energy sources, hosted DPRK energy specialists, and developed a water
purification project. Agricultural training initiatives in California,
Wisconsin, Georgia, and elsewhere have provided impetus for the
development of a Korean Peninsula Agricultural Development Organization
(KADO), much in the guise of KEDO. An NGO-initiated Beijing-based
business program orients North Korean technocrats toward the realities of
international business and trade and underscores the importance of the
rule of law in attracting foreign direct investment.

On other financial fronts, the East-West Center-based Northeast Economic
Forum has advocated a Northeast Asian Development Bank (NEADB). This
approach, borne of track-two, or unofficial dialogue, is aimed at
financing eventual Korean unification, as well as development of Mongolia
and the Russian Far East. Seoul views such a multilateral mechanism as
easing its eventual burden and providing for costly infrastructure and
other developments that the private sector would be less inclined to
finance. Proponents of a new financial institution point to the
tremendous cost, expertise, and focus of such development and cite
limitations of the Asian Development Bank (ADB), International Monetary
Fund (IMF), and World Bank in that direction. Regardless of the utility
of new or existing organizations, the financial demands associated with
transitioning North Korea are tremendous.

International consensus then has moved away from scenarios of North
Korean collapse and accepts the probability of a North Korea remaining
and in need of assistance. The United States Commander-In-Chief Pacific
Forces reflected this new pragmatism in his suggestion that we need
prepare for a range of futures on the Korean peninsula. This seems most
appropriate, for under any reunification scenario, Koreans from the north
will have an identity and history with which their brethren to the south
and any peacekeeping entity - US or otherwise -- must reconcile.

Troops and the Armistice

It is mention of altered US force roles that also marks a departure from
positions past. South Korea in public and North Korea in private have
expressed a willingness to maintain at least some US military presence
for purposes of peacekeeping on the peninsula. Some analysts have
suggested a rationale based on longer-term concerns about China and
Japan. President Kim Dae-jung's call for the maintenance of US troops
was mirrored in the Pentagon's 1998 East Asia Strategy Report. However,
the viability of such a presence must face the scrutiny of the US and
Korean legislatures, as well as the American and Korean publics -
formidable hurdles to those favoring the status quo or that with slight
revision. South Korean concerns about the perceived unfairness of the
current Status of Forces Agreement (SOFA), questions about the Korean War
massacre at Nogunri, and observances of the twentieth anniversary of the
Kwangju massacre highlight continued difficulties in the US-South Korean
security relationship.

Externally, the call for a United States troop withdrawal has widened.
In the United States, even a half-decade ago, the call was primarily
libertarian. Within a few short years, more mainstream scholars have
called into question the rationale for a continued US force presence.
Those arguing strictly the benefits of continued deterrence are now met
with arguments suggesting that South Korean capabilities provide
overwhelming deterrence in and of themselves. Russian Ambassador to
South Korea Evgeny Afanasiev recently described the US troop presence as
a "legacy of the past," and such descriptions and calls for US withdrawal
will only mount, especially with progress in inter-Korean dialogue.
Critics of a sustained United States troop presence also note the
significance of US arms sales on the Peninsula, suggesting that decisions
on weaponry are made more often in boardrooms in St. Louis than Seoul.
The argument suggests a US military industrial complex actively engaged
at the expense of peace on the Peninsula.

Progress in inter-Korean dialogue and the eventual dissolution of the
North Korean threat have far-reaching implications for stability on the
Peninsula. They rob proponents of Theater Missile Defense (TMD) and
National Missile Defense (NMD) of the fundamental argument of a North
Korean "rogue" state threatening American shores. They call into further
question the rationale for sustained US troop presence and weapons sales
on the Peninsula and in Northeast Asia. Yet suggestions of the
eventuality of US troop withdrawal also raise questions concerning a
security vacuum in Northeast Asia - the specter of which some observers
fear could lead to an arms race or open conflict. Mirroring such issues
are questions of demilitarization and demobilization of militaries North
and South, the development of autonomous capabilities on and off the
Korean peninsula, and missile and other power projection developments in
a Confederate or United Korea. When considering Korean security dynamics
in transition, these medium and longer-term questions warrant careful
consideration and debate, even at this transitional stage.

In the near-term, revisiting the armistice and arriving at a peace treaty
or interim peace mechanism appear ready challenges at hand. A set of
simultaneous nonaggression pacts between parties to the Korean conflict
is one supposed outcome, leading to a new, truly peacekeeping function
for United Nations troops rather than the military role of United Stated
Forces Korea (USFK). Achieving normalization and a peace treaty are
integral to North Korea's ultimate willingness to abandon nuclear weapons
ambitions, including the resolution of processing discrepancies that
precipitated the 1990s nuclear dispute. The need to transcend the
armistice remains, and the Four Party talks process, inter-Korean
dialogue, and US-North Korean normalization talks will advance the agenda
beyond the once-sacrosanct armistice arrangement.4 The legal,
logistical, and administrative dimensions of revisiting the armistice are
fodder for continued academic and policy discourse and examination.

Generational Change and New Opportunities

When weighing new arrangements and a new stability on the Korean
peninsula, one ultimately need consider the impact of developments on
young Koreans in this two kingdoms period. An affluent and independent
youth in the Republic of Korea lack memories of the Korean War and post-
War development and accordingly may embrace new solutions. They voice
greater concerns about US and other external interests. Some South
Korean scholars question the younger generation's resolve in the event of
conflict or the need to pay for reunification. Less is known about North
Korea's youth in the Kim Jong-il era, yet one wonders how young North
Koreans might alter or fill the ideological void should his and his
father's dynasty pass. There are indications that the food crisis has
lead to stunted growth and other developmental limitations that could
impact future leadership. So too, reactions among a new generation in
neighboring countries hinge on a lack of memories of old conflicts,
impressions of new conflicts emerging, and demands attendant to the
challenges of pluralism and globalization.

Unique opportunity exists at this stage in peninsular affairs,
particularly given the historic inter-Korean summit and promised follow-
on. Timing is key, as South Korea forges a post-economic crisis identity
and as North Korea scrambles for economic viability and consolidates
itself along military lines. The hurly-burly of electoral politics in
the United States and South Korea could temper resolve or politicize
events. Prolonged tensions in the Sino-US relationship could inhibit
external efforts at facilitation. But the South Korean call for steady
engagement, measured change, and patient response remains the only viable
solution where alternatives could spiral dangerously out of control. The
United States and others need abandon paternalistic instincts old and
triumphalism new and let the two Koreas decide the pace, scope, and
content of continued inter-Korean dialogue. There exists great danger in
failing to do so, given the long and complicated legacy of external
influence on the Peninsula. External players need embrace as partners
and facilitators the South Korean lead and recognize North Korean
progress, however limited - thereby backing a Korean solution to the
Korean divide and laying to rest the last vestige of the Cold War.


Dr. Stephen Noerper is an independent analyst and a senior associate of
the Nautilus Institute. He served in recent years as Associate Professor
of International Relations at the Asia-Pacific Center and Visiting Fellow
at the East-West Center. Professor Noerper lectures widely on Korean
Peninsular affairs, Northeast Asian politics and security, globalization
and governance, and political transition and generational change. He may
be contacted at noerpers@hotmail.com

1 See Stephen Noerper, The Tiger's Leap: the South Korean Drive for
National Prestige and Emergence in the International Arena, St. Kliment
Ohridski University Press, 1996, pp. 49-50

2 See Stephen Noerper, "Regime Security and Military Tension in North
Korea," in Moon Chung-in (ed.) Understanding Regime Dynamics in North
Korea, Yonsei University Press, 1998, p. 167

3 See Hong Soon-young, "Thawing Korea's Cold War: The Path to Peace on
the Korean Peninsula," Foreign Affairs, Volume 78, Number 3, May/June
1999, p. 8

4 See Peter Hayes and Stephen Noerper, "The Future of the US-ROK
Alliance," in Peter Hayes and Young Whan Kihl (eds.) Peace and Security
in Northeast Asia: The Nuclear Issue and the Korean Peninsula, ME Sharpe,
1997, pp. 265-266