SENIOR EXECUTIVE INTELLIGENCE BRIEF

Created: 6/8/2000

OCR scan of the original document, errors are possible

Koreas: Beyond Ihr Fuse iutcr-Korcan Summit

BEYOND THE FIRST INTO KOREAN SUM]

Cornmon Ground, Endiiring Divisions

KoreanKorean President,

Kim

j iMon aadlna

cirlerml nation to build a

powerfol MeUUsosdMe, so UuU[ daread all Ok propktan..By doing so,trill be able to poorantM pioriiiooll rraoarco nece**ary for

owerful nation,

s not lo (ear anything."

"SauTa Korea'* nnpeodingot to attain mnfitatioQ but lo fbaoiPlto lb* Cold War itrafaia. Far (hii reason, tbe South KoreanUBbe to belp North Korea tn tbe spirit of cooperation andn Ote principle at separation of po&ucs and econeinj."

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outh Korean President Kim Dic-jtuig and North Korean leader Kknrcjoe, perhaf* fleeting, cocrelaoofl of postictal and conoouac (oreei Kven rt their meeting goes well, la long-term impact vnU depend on whether rhe Korea* injrrrnbofiaJiM eooperadon where pouibfc, on economics for example, and avoid intractable issues kite Korea's national identity. Any progress will be based on the Kims' shared conncuVio that North Korea should endure for tome time because of (be altcrnaorc'i unthinkable consequences. President Kimhe potentially calamitous gutatrQiry and oconocuac burden thatcome should Nor* Korea cofapse la (he near future, while Kimwasebed Romania go undea^-beaevea it would man ha ife(_

Presldeuf Kim sands alone among South Korean prcsktenii for lui dear engagement poitcy and akiU inomestic obstacles. Bfc smztfy for drawing fyoogyaaguatsiacd working retarionship invofres cinpTmxing lymbofae issues,amily reurnona and cconotnknd defeiting tough ptobiemi bkc security. Kan Chong-il knows that South Korea it the only parryosition to prcwide rhe massive eeooomk aid North Korea need*.

Their window of opportunity fot ad-arKongramed by tbe length of Pieaidcnterm, whkhnd by the Co which North Korea cap endure its current predicament

the pohllc'i hopenccrsunl

NORTH KOREA'S DETERIORATING ECONOMY

Industrial

Mtilim

' Grain Production, Imports, and

Japan to keep P'yongyang from exploiting perceived differences. Seoul will be inclined to play down any negative developments, such as new revelations about the North's missile or nuclear pfogrims.

A failed aumatt could force Kim Cheo rethink his riratcjrj

prep**'

For ha pan, North Korea will keep South Korean energy Assistance separate from US obhgancos under the Agreed Framework, including provision of heavy fuel oil and light water reactors. P'yongyang will threaten to walk away from North-South dialogue if it nidges Seoul is nuking aid toward US nonprouferanon

objectives.

aid and to

C jiPa ti

wUh

r

If the Summit Flops? President Kim's engagement policy wouldrievous setback. Public opinion polk* pointing to strong support for tough restricnons on aid if the summit fails would encourage South Korea's to harden their stance against further

oprxeaoon parties engagement. |

P'yongyang could find less enthusiasm hi Buropc and Japan for ia dipknsatk overtures. Thb could force Kim Oiong-il to rethink hii strategy for aoauiring ecooornic aid and encourage him to resurrect confrontational engagement with Washington over the missile launch moratorium and alleged US failure to deliver on Agreed h'ramework obhgatiom

BEYOND THE

For the sununat to marknimiogpcmtinwiD have to srcpthe cycfc offolk-wed by disiinKamnjeot that hasattempts al sustained engagement. Thewill beorkableforaecommodataag theirkeeping Kim Choruj-il sauaaSed that the effortachieve his dcertesrk goal*,

ommon Approach TowardThe South favors anto budd ecopention on broad banes.to work within the framework ofhich calls for joint eornmhaions onrcccexihation, nuEtary affcura, and socialexchanges. The North, forhe need frt agwerneniprinciples that definePTcoogyanga roadmap ishich states unification should bepeacefulmdepeaderrt ofand "through racial mnrrin Ideas, ideologies, andhethese "three principles"Sand ciiriumoon of Seoul'* anO

Overcoming Sunllarltlps. The Koreas' common history of independence punctuated by periods of subjugation has produced two countries whose cfisdain for cocopeooiise and penr bfA for yrnxum afMal calculations make

SELECTED NORTH KOREAN JOINT VESTURES WITH SOUTH KOREAN COMPANIES j |

North-Sonth1

Composition of South

omiaercUI tnde

Korean Export*,

IS - Million US-S

Ail fouk cwrtnlatoa

HnotjDt-flopofol

Ml. Kmngini and oka Jnlni

5 96 97 98 99

them less than ideal negotiating parraerj. Ax the same time, their shared ethnic and Uoguistic ideotity and resentmenr of foreigners drive their desire to icunitA admittedly on each country's own rcrrns.

_ These attitudes are boUrcred by their Confucian

rharacteriied by hierarchy

the North* Massive Needs. North Korea's cccoornkleak. Indeed,regardless of its political deobcos, cannot escape structural impediments to growth. Tbe North cannot produce enough food to meet minimumailure

:icms as much trorr. such iirimaVahfc fflDalntited arable land and pox climate ai bora misguided derations.!

Us polld ral decisions, cannot escape riructaral Impediments to growlh.

North has cortsjoerablc natural "resources, inrhtdfog coal, other minerals, and iwrderrous rnerals. Acute energy shortages, however, stand in the way of their extraction and use.

President Kim's primary resource to address these needs is the South North CooperaOosi Pund. in which the Ministry of Unifkanon0 million on hand tbr rmm,if irilnd ramify reunions.

finance exwnsjve infrasiructurc projects. Kim's options for additional resources include the National Asaembiy, state cntcrptises, and die large conglomerates. Senior opposition members, however, say they will not allowparty does notegislativeunlimited access to public finances for the North.

The AssemblyiU last year toercent surtax on ckxsneiry earmarked for the

The oppc*irion will be emboldened by

[voter concern that they wiD have to shoulder an increased aid burden regardless of whether the summit improves inter-Korean rclatioas. Many younger voters say they do not share the ernooocal attachment of their elders to reunification and worry more about domestic issues,

particularly the economy.

Kim's ability to channel the resources of state enterprises to Northern aid programs is also limited. He has already tapped them to bail out financially troubled investment

He could seek donations fioto the-industrial conajornerares bitencourage them to Hms more io rhe North. The relatively small rmesement* they hare undertaken soolbci by what the pressaxnot burdensome, but debt-laden chaebol would be baed pressed to unefcxtake the barge projects thai Km envision*.

wifl look abroad lor resources, but he would still want coorroi- South Koranr pubodythr pojiibiBcy ot" rapping thedhou that many eipeci fapan would give the North asPyongyang would oppose. Seoul has pushed for North Korean membership in the Asian Dcvclopcnciit Bank aad other mterratxxui aid and loan organization!.

statu of US tJBBB tn Sooth. Kotwa is bc4 co the namnli agenda, but thb tasns will Inevitably become part of aa

ISSUES: US MILITARY PRESENCE IJKELY FOCAL POINT

The reams of US forces in Southot on the summit agenda, bur as it did during the prime inlnitTcrial talks of tbehai issue will inevitably become part of any rcstaltiag dialogue. By rnstaing on2 joint coecmunkjue as the bats* foe rmproredoogyang Is already signaling that it* baskn US troopnchanged anday link progress In North -South relations to the elimination of what ir views as foreign interference in Peninsula affurs.

Presidentnclined to stick lo his pemtioo that theatter between Seoul and Waihiragtoo,uccessful summit would tempt hhn to cemtidermodifying military arrangements wiih the US to

reflect andew iorcr-Korean dialogue- Seoul couldeduction in jointof irritation to die North Koreanthe most immediatem President Kim could cite the decision in theo suspend Team Spirit as precedent and claim that such joint exercises are less vital, given the military's increasingly sophisticated training

.VafllBesW.

The South last year publicly debated changing US troopseacekeeping force that wouldore equidistant role.

North Korea would see these as desirable first steps toward total withdrawal, which P'rongyang almost certainly realizesemote likelihood. It would also seek to undermine the legitimacy of the UN Command by arguing that the mandate to protect South Korea from North Korean attack is an unfair and ouroared remnant of the Cold War. P

Inter-Korean Relations

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Sol foftHi www reefannt*

LONG ROAD TO THE SUMMIT:

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Thirty Years of Progress and Setbacks

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Original document.

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