THE OUTLOOK FOR KOREA

Created: 9/7/1961

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national intelligence estimate1

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THE OUTLOOK FOR KOREA

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eptember mi. Concurring were The Director ofand Research, Department of State; the Assistant Chief of Staff Jor Intelligence, Department of the Amy; the Assistant Chief oft/avalntelligence).of the Navy; the Assistant Chief of Staff, Intelligence, VSAF; the Director for intelligence, Joint Staff; the Assistant to the Secretary of Defense, Special Operations; and the Director of the National Security Agency. The Atomic Energy Commission Representative to the VS1B, and the Assistant Director. Federal Bureau of investigation, abstained, thebeing outside of their jurisdiction.

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TABLE OF CONTENTS

Page

THE

I.

IX. THE NORTH KOREAN IMPACT ON SOUTH

Subversive

The Unification

Economic

Military

International

IIL PROBLEMS AND PROSPECTS FOR SOUTH

IV. THE OUTLOOK FOR

THE OUTLOOK FOR KOREA

the problem

To estimate the major trends and prospects in South Korea, with particularto the impact of North Korea on the south over the next two or three years.

conclusions

its push to unify Korea undercontrol, the North Korean regime will continue to depend primarily ontactics and propaganda appealing to nationalistic sentiments and stressing the economic benefits of unification. Although these efforts have had little effect, the Communists probably believe their longer term prospectsavorable response to Its unification appeals are good and improving. In view of tbis and the automatic involvement of US forces in any resumption of hostilities in Korea, we believe the Communists are not likely to assume the grave risks of armed action against South Korea over the next several years. )

The greatest threat to South Korea, at least in the near term, comes from within South Korea. The countryense of national purpose and faces botheconomic problemsrittle political situation. The military junta seeks to provide the drive and stability which was lacking in the previous civilian government but Is subject to internaland lacks general publicin confronting these enormous

The prospect for South Korea over the next few years is therefore very cloudy and uncertain. US aid will probablyin preventing economic collapse. However, even under the most favorable circumstances, progress will be slow and South Korea will continue to require large-scale foreign aid for the indefinite future if it is to remain an independent nation allied with the West

The political situation is subject to sudden and rapid change. Muchon future actions of the junta, in particular, on its capacity toense of forward momentum among the Korean people. If the overall situation in South Korea fails to improveand the people lose hope forprogress, the continuedoffered by the North Koreancould lead to some movement in the south toward an accommodation with the north.

DISCUSSION

INTRODUCTION

5 division of the Korean peninsula was made for the administrative convenience of US and Soviet occupation authorities and was not meant, by the US at least, to last beyond the period necessary to organizeelections. In the early years thereair degree of movement of persons and trade, but the administrative line ath Parallel soon took on the character of adivision. This was largely owing to theof the USSR In promptly consolidating the Communist position in the north and in refusing to Join in holding national elections. On either side, indigenous regimes were set up, each claiming to represent all the Korean people. Byll trade between north and south had ceased. The Korean War, and the armistice which followed, reinforced the partition. The demilitarized zone became the de facto boundary between two competingsystems.

The economic and political development of the two regions proceeded in widely different fashion. Under the guidance of lis Soviet mentors, the regime set out to create aCommunist state, based on thedomination of the party over all aspects of national life. It was helped enormously In this effort by the advantage the northin having obtained through themost of the country's heavy industry and mineral resources. Despite setbacks suffered during the Korean War, the regime has very largely succeeded in imposing its will on the Korean people In the north and lnthe economic potential of the area.

Through purges andung, with the aidumber of Soviet-trained supporters, has attainedcomplete control of the Korean Laborommunist) Party and the government. The so-called "Yenanade up of Koreans who had been associated withChinaas been largely eliminated and the regime probably has no serious factional problems at present. The Korean labor Party has expanded to the point that it now claims nearly onealfmembers {outopulationhe strength of the party has enabled the regime to enforce strict controls and severe discipline on the North Korean people.

Both Kim and the government he heads are essentially the creation of thend the USSR almost certainly continues to exertinfluence on the North KoreanAt the same time, however, there has been increasing competition from Communist China for Influence in both the economic and ideological spheres, and North Korea IsIn considerable degree on Peiping for military support and economic aid. Peiping and Moscow arc in agreement, however, on the need to maintain and strengthen North Korea's positionis South Korea.

The partition left South Korea with two-thirds of the agriculture, two-thirds of theand severe problems iniable economy. The loss of Japaneseskills, and tradeharp impact on the economy of the south which was also forced to absorb large numbers of refugees. Syngman Rhee became President of theof Korea8 but, until hehis control during the Korean War, his regime was too weak to cope realistically with

' Kimunior offlcer in the soviet occupation army when he returned to Korea Inlterears' absence, ne still went by his real name of Kim Sone-chu and was virtually unknown at that time. The Soviets assigned buninor post while they set about laying the groundwork for his emergencenationalhis occurred Inhen he was Introduced lo the Korean publiciberation celebraUon in Pyoneyanz under his present alias, which was In fact the nameenowned national hero of Koreanagainst the Japanese. Backed by theKim took over the Korean Communist Party from the local leaders. Upon establishment of the Democratic People's Republic Ine was placed at the head of the newly formed cabinet as Premier.

the social and economic problems of the south. Moreover, hisears of exile had littlehim for the task, and he was eitheror unable to impose the economicSouth Korea needed to make most effective use of the aid coming from the US. Following the Korean War, the popular base of the Rhee government narrowed, corruption flourished, and public dissatisfaction with official fraud, repression, and lack ofgrew.

collapse of the Rheenitialed the present period ofinstability in South Korea. Thegovernment which followed Rheeinstincts, but its political baseand its leadership timid andfailed to end excessive factionalism andIn the Assembly. Its record onand especially on measureswas extremely disappointingKoreans eager for changes thatseemed to promise. Among thesesmall group of disgruntled andofficers whose stated objectivesbring discipline into Korean societyhonesty to government, andthe country. Onhisa military coup d'etat with anand boldness seldom encounteredKorea. Political leadership lnpassed to the military for the firstthe founding of the Republic, Formilitary leadership, all the oldsocial problems remain. In addition,affecting politicalparticipation, and nationalbeen created At the same time.must continue to reckon with thethe north.

NORTH KOREAN IMPACT ON

n the decade that has passed since the start of the Korean War, the government of North Korea has continued to maintain formidable military forces, but has placedstress on propaganda and subversion as the weapons with which to bring about the collapse of authority in the south. The shattered North Korean economy has beenand the regime is seeking to make itsachievements known and envied by the people in the south. The political turmoil in South Korea over the past yearalf probably has given the North Korean leaders increased confidence in their approach.

A. The Subversive Threat

The North Korean regime has actively engagedrogram of subversion against the people and government ln the South since the partition. Prior to the collapse of the Rhee government, this program consisted mostly of infiltrating political action agents and propaganda, primarily aimed atSouth Korean dissatisfaction withmalpractices and inaction, selfishmaneuvering, and the continued presence of foreign troops on Korean soil. Following0 revolution In South Korea, the North Korean regime increased its efforts to Infiltrate agents, particularly through Japan, and since that time, North Korean agents sent into South Korea have probably numbered. Some of these were assigned the mission of subvertingofficials, college students, and teachers.

In general. North Korean efforts tothe populace in the south appear to have had limited success, The Korean Wareep anti-Communist conviction among most people in the south and the Rheewas highly effective In detecting and arresting North Korean agents and their local accomplices. Although agents havebeen better trained and financed than those in the past, they have faced the same difficult task of blending ln with the populaceountry into which there is almost no bona fide Immigration or refugee flow. We believe that most of these agents have been seized. Since the1 coup, there hasull In agent activity, probablysome North Korean uncertaintythe prospects for subversion under the military junta now ruling In South Korea.

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B.he Unification Issue

The North Korean regime has had more success with its propaganda campaign urging unification of Korea. Theretrongfor national unification among the Korean people on either side of thezone. The North Korean regimethis nationalistic sentiment and plays on the desires for the restoration of family relationships and the renewal of traditional cultural and commercial contacts. Inthe regime stresses the opportunities that unification would provide for the integrated development of the country's economy.

The North Korean propaganda forIs coupledonstant demand for the departure of US and UN forces from Korea and the settlement of the unification problem by the Koreans themselves.to Pyongyang, there can be no unification as long as there Is "foreign interference" in South Korea. The North Korean regime has repeatedly denied the competence of the UN to deal with the Korean question and hasthe concept of UN-supervised elections in Koreatep toward unification. North Korea has proposed, at one time or another, all-Korea elections, development of north-south contacts, an international conference on the Korean question, and, mostoose federation of North and South Korea. Under the federation scheme advanced byung Inhe twowould retain their separate identities but,reliminary step toward unification, would appoint representativesupreme National Committee to supervise expansion of cultural and economic cooperation.

The North Korean campaign fortrades on the relative position of the two economies which are highly complementary. In recognition of this and the greater strength of the North Korean economy, the North Koreans have offered extensiverelude to unification.orth Korea haseries of comprehensive proposals to reopen trade, grant economic aid to South Korea, and establish close economic and cultural North Korea has proposed tovast quantities of electric power as well as to construct hydroelectric stations in South Korea; to build metallurgical, cement,and chemical fertilizer plants; tobroad irrigation projects, cancel all farmers' debts to their moneylenders, and to double the South Korean fish catch; to hire all unemployed South Korean collegetoouth Korean collegeln North Korean colleges, and to give financial assistancether South Korean students.

C. The Economic Contrail

The greater strength of the North Korean economy derives in large degree from theof resources in the partition of the Korean peninsulat that time, the North Korean regime acquired about two-thirds of existing heavy Industry, including electric power, mining, and metallurgicalAlong with these, the Communist authorities ln the north fell heir to most of Korea's hydroelectric potential and mineral resources. Including most of its iron ore and coal. By contrast, South Korea received about two-thirds of existing light industry and agriculture but almost no mineralexcept tungstenittle coal.

Population factors have also favored North Korean economic growth. The initial imbalance of population, with the northroughly one-third and the southtwo-thirds, has been further Increased by the pattern of subsequent population growth. The flight of refugees from North Korean oppressive policies held population growth during the period since World War II to less thanercent, relieving theof agricultural growth. During the same period. South Korea's population grew by more thanercent, eliminating itssurplus andeficit.

The economic policies of the two regimes have differed sharply: North Korea has been guided by an industry-first policy, asfrom the consumer-first orientation of South Korea.onsequence, the rate of advance in North Korea has been much the greater, with Its gross national product ap-

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proximately doublingompared with an estimated increase of only about one-quarter in South Koreahe amount allocated to investment in North Korea has been roughly equivalent to one-third of gross national product whereas in South Korea this amount has been equivalent to less than IS percent of gross national product.

0he amount ofgrants and credits which theBloc declares it has provided North Korea is equivalent to approximately3 billion. The USSR has supplied aboutercent. Communist China,ercent; thehas come from the EuropeanAn expandmg commercial tradeNorth Korea and other members of the Bloc has steadily supplanted economic aid.orth Korean exports financed only aboutercent of importsut0 exports financedercent of imports.ercent of gross national product the grants and creditsby North Korea droppedigh ofercentoercentn the other hand, North Korea is completely dependent on Imports of coking coal,and rubber, and Is deficient in rawmachinery, and equipment.

In contrast to South Korea whereand underemployment represent major problems. North Koreahortage of labor, particularly skilled labor. To cope with this problem, the regime has madeuse of female workers, using women In mining and metallurgical industries as well as in agriculturelight industry. Inthe regime has occasionally employed soldiers to supplement the civilian labor force.

Given the great dissimilarities Ln economic resources and policies, price systems, andpatterns, lt is difficult to compare the living standards In North and South Korea. Economic conditions are favorable to North Korea In some respects and to South Korea in others. In North Korea grain and housing are strictly rationed, but madeat cheap prices, while clothing and other consumer goods are sold at extremely high prices; in South Korea, where the prices arc determined by the market, grain and housing are more expensive and other goods much cheaper. In South Korea the variety and quality of consumer goods is greater than that ln the north, and the extremes between wealth and poverty are also greater. In neither South nor North Korea is the living standard for the bulk of the peopleabove the subsistence level.

D. The Military Threat

The North Korean military establishment Is an effective, modern organization but given the present balance of forces ln Korea it does not In itselfevere threat to South Korea. Without outside assistance, the North Korean armed forces are capable only of maintaining Internal security and oflimited defensive and offensive operations. However, the introduction of Chineseor Soviet forces would greatlyNorth Koreas offensive and defensive capabilities.3

The North Korean Army, with an overall strength, Ls slightly more than half the size of the combined South Korean Army and Marine Corps strength. It Is organized intonfantry divisions and one tank division. There are no known plans for an increase in the size of the North Korean Army and, as long as the regime continues to push its economic program, any Increase ls

1 In areas near the Korean border, therehinese Communistivisions) andoviet. We estimate that asshinese divisions could be brought Into place along the present demilitarized zone withinoays. The Chinese Communist air and naval forces haveircraft based ln the Northern, Northeastern and Eastern Air Defenseet fighterset light bombers. The Soviet air forces have lustircraft in lis Far East and Transbalbal Military Districts consisting mainlyetet medium0 assigned to navalandeavy bombers. In close proximity to Korean waters, the Soviet far Eastern fleet hasruisers, andestroyer types. The Chinese Communists haveubmarines as well as coastal patrol forces.

unlikely. The capabilities of the army have been Increased, however, by reorganization and re-equipment with modern weapons. Its logistic capability has been largely restored since the armistice took effecthe North Korean Army's superiority in artillery and other combat support weapons partlythe South Korean Army's numerical superiority.

North Korean Air Force asthe South Korean Air Forcesimes as many; it hasas many aircraft of all types,three times the number ofJet aircraft.et aircraft and include threeone atlack/fighter division, andbomber division. Possessing anair facilities systemodernradar network, the NorthForceair to good capabilityattack, air defense, andview of the short distances involved,Korean Air Force has aforurprise attackKorean and UN military andThe North Korean Navy,smaller than the Southis little more than an inshorewith the mission of coastal patrol.important function since thebeen to smuggle agents Into South Korea.

E. Relative International Positions

recently, the North Koreanunrecognised outside the Sino-Sovietthe past year, however, the regime hasseeking diplomatic contacts withcountries. So far, three (Cuba,Mall) have recognized the Northand received North KoreanOnly Guinea has established aPyongyang. North Korea has placedin India and the United Araband signed trade agreements withand Austria. During the springyear, North Korea signed agreementsand Indonesia for the establishment

recent signing of formalwith the USSR and Communistwas intended to give Northsecurity guarantees and greaterwithin and outside the Bloc. Inthese treaties probably reflect aBloc leaders to present North Korea asdeveloped and independent state,international status comparable toAlthough North Korea's effortsits International ties have not yetImpact, the regime hasblurring South Korea's claim to be therepresentative of the KoreanMany countries, particularly thehesitate to recognize either Koreanwhether from indifference or fromto avoid cold war entanglements.turn has adversely affected Southwith the UN.

III. PROBLEMS AND PROSPECTS FOR SOUTH KOREA

A. Political Slobility

Situation in the Junta. Thethat seized control inChang Myon and bringing theudden end, was composed ofand field grade officers, some oforigin and some from the south.largelyense of disgust andwith the corruption and graft inand the upper ranks of lhethe more junior officers werethe planning and execution of thethe leadership of Lt. GeneralA number of the generalthe coup group after much of thehad been completed and wereto do so by personal ambition asa desire to reform. However, commonmembers of the Junta was nnconcern over the uncertainof the Chang Myon governmentalleged softness toward communismthe experimentailure and weregive South Korea the executive controlmissing under Chang Myon.there was little consensus on the methods

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extent of reform necessary to achieve these goals.

The Internal power structure of the junta has altered since May,asic problem of control and authority remains. Lt. General Pak Chong-hui is the dominant figure.Kim Chong-pil, head of the centralbureau, is the second strongest man in the group and has so far worked inwith Pak. Several members of thenotably its original front man. Lt. General Changbeen ousted. The most serious potential source of division In the junta lies in the more radical and extreme outlook of the junta's younger members.

Since the coup, this group has pressed the hardest for punitive action against civilians and military officers accused of corruption and has been the least willing to move towardof the government to civilian control. Its hardnosed attitude has been reflected In its suspicion and distrust of US motives in South Korea and in the initial difficulties in restoring fully the US-Korean militaryexisting before the coup. As Pak has been drawn by South Korea's dependence upon the US toward closer relations with US authorities in Korea, it is possible that some members of the colonels group have become suspicious of his dedication to the objectives of the coup and of his own ultimate ambitions.

There will probably continue to beshifts and maneuvering within the junta as various groups vie for influence and as Pak strives to consolidate and extend his power. As long as political and economic pressures on the junta do not become too great, Pak and the other junta members will probably be able to prevent their internalfrom breaking out into open conflict. However, if the leadership began to encounter serious public resistance to its policies and public law and order started to disintegrate, the divisive forces within the group would probably cause lt to fall apart. At that point, the various faction leaders might appeal to their supporters in the South Korean armed forces for help and armed clashes between different camps could result.

The junta has staled that It does not plan to return the government to civilian control until after corrupt and selfish elements have been removed. The time of the transfer is now scheduled for the summerthe adoptionew constitution and general elections earlier In that year. Tofor the elections, political parties will be allowed to resume activities Inorrupt and evil" politicians will be prohibited from participating. The Junta plans to return to the presidential system and unicameral legislature that characterized the Rhee government,

The Korean public has reacted to this schedule with disappointment and skepticism. From the junta's point of view, the date is sufficiently far In the future to be easily changed if political or economic developments over the next two years so warrant. Weit is highly unlikely that the junta would of Its own accord advance the date of transfer and the odds are only even that3 schedule will be met. If the Junta appeared unlikely to meet this schedule, highly adverse public reaction would probably result. The junta may attempt to avert this difficulty and guarantee lis control through such means as forming its own political party and running military or ex-military officers for political office. In any3 promises toritical year, with the possibility of serious turmoil over the formulationewand the holding of elections.

The Junta and the People. The coup initially received some welcome from many Koreans who had grown impatient with the apparent inability of the politicians into forego the game of politics and settle down to Korea's urgent economic and political problems. However, public disenchantment with the new regime has appeared ln the cities and is spreading in the rural areas,avorable attitude can still be found among many farmers. The authoritarianism andto police rule have adversely affected the Junta's standing among intellectuals andmany of whom regard the military junta as little better than the Rhee regime they overthrew.

The junta has made full use of its powers under martial law to close newspapers, jail politicians, educators, and businessmen, and impose curfews and censorship. Theof fear and Intimidation thus created has so far prevented demonstrations of public opposition to the Junta. The junta's actions against potential opposition leaders has greatly reduced the chances for organizedStudent groups probably represent the most significant potential opposition to the Junta, although there has not yet been any serious effort among the students toA student-led uprising is not likely as long as the Junta appears to be unified and determined to suppress antiregime activity.

All official proclamations by the junta have stressed the anti-Communist nature of its objectives. As part of its alms, the Junta hastringent anti-Communist law under which the government can take rapid and forceful action against those it considers to be Communist or Communist influenced. Moreover, the junta has centralized and strengthened the counterintelligenceof the government, under the direction of Colonel Kim Chong-pil, and has demonstrated its readiness to arrest persons, high and low, for "antistate" activities.

It Is likely that one reason for the junta's exaggerated expressions of concern regarding Communisthas resulted, for example, in charging ex-Premier Chang Myon, South Korea's leading Catholic layman, with beingto convince the Korean people that the coup d'etat wasGenerally speaking, the people of South Korea are strongly disposed againstOver two million refugees fled from North Korea before and during the Korean War and most adults In South Koreatheir exposure to Communist invasion and occupation. However, if increasinglyunemployment were accompanied by mounting inflation, food shortages, andeconomic disintegration, the Southwould become more vulnerable lapropaganda which promised material and economic improvement.

the past year or so, there hasslight increase in South Koreana new look at the unificationSome of this grew out of theKorean nationalism resulting from theexperience in overthrowing theand the new freedom ofElements of younger,groups who have matured in theyears have especially been attracted tothat unification, with all itscan somehow be achieved ln annonpolitical way. Even thefelt called upon to includesouth for unification as one of its sixgoals. However, barringof organized government andeconomic chaos, we do notthe South Korean people will giveto unification onor become significantly moreCommunist subversion in the next twoyears.

b. Economic Development

Korea's economic situation atof the coup was shaky and it hasUnemployment has increased,system Is In turmoil, traditionalin the rural areas have beenand the business community isof the junta's aims and reluctant toan uncertain future. Manybeen arrested on charges of illegalof wealth through taxof bank loans, and politicalof these have been released, but areto confiscatory back paymentsThese moves againsta decree limiting interest ratesercent per year have resulted incommercial, and financiallowered business activityoup is much worse than thatafter the0 revolution andthe most severe since the founding ofAlthough the coup andof the military junta are by nosole cause of the present economicSouth Korea, it is the junta that nowthe national leadership to deal with It.

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Pak and the other leaders of the Junta came to power with meagerof the complexity and magnitude of South Korea's economic problems They have quickly become aware of the politicalof economic progress, however, and are now showing signs of coming to grips with the necessary planning and decisions.personnel initially placed In government posts dealing with economic matters are being replaced by more knowledgeable civilians. Civilian ministers have been appointed to head the two key economicuper-ministry, known as the Office of Economic Planning, has been createdivilian director holding rank in the government as Vice Premier.

The economic problems that the junta faces are the ones that have long plagued South Korea, seriously compounded by two successive years of national turbulence. There is little the military government can do to make up for South Korea's basic shortage of all resources except manpower. Although the economic situation in South Korea Is grim, it Is not hopeless. The junta Is able to pursue its announced program of using outside aid effectively without acceding to the pressures of the legislative and special groups that harassed the previous government. Muchon the weather and continued good harvests of rice and summer grains. These, plus uninterrupted US economic assistance and some increase in business activity, will probably prevent economic collapse.

ven under the most favorableprogress will be slow. Almostobstacles will prevent South Korea fromelf-supporting economy in the foreseeable future. Unification of the peninsula,ore equitableof the people and utilization ofwould greatly improve the economic position of the countryhole, but this also is highly unlikely at any time in thefuture Korea's economic prospects would undoubtedly improveeduction in military forcesonsequentof available resources, but there is little likelihood that the junta will undertakereductions In the nearther domestic alternatives available are anprogram to Increase forced savingseneral increase In productivity, or both.arked increase in productivity can be realized only after continued effort and investment combinedisciplinedprogramong period. In sum, the most likely prospect Is that South Korea will continue to require large-scale foreign aid into the indefinite future If it is to exist as an independent nation allied with the West.

C. Military Reodinets

upported by US military aid, South Korea continues to maintain the world's fifth largest military establishment. The previoushad initiated steps to reduce the army's size somewhat and was planning to Invest the funds saved thereby in economic development. The junta has yet to spell out its militarybut its early actions suggest that it will not proceed with the reductions proposed by the previous administration. The junta has. however, forced the retirement of aboutlag and general officers, mostly on the basis of ineffectiveness, and has separated morehousand junior officers for incompetence or corruption. The combat efficiency of the armed forces may suffer temporarily by the turnover in personnel but morale among those remaining on duty will probably rise as the

'The Director of Intelligence and Research.of State, believe* that this paragraphtooourth sentence! the possibility that the Junta may consider substantial reductions In military forces in the near future. There Is no evidence to date that the junta Is commuted toits military forces at their present levels, while there is considerable evidence of itslo adopt measures that would improve South Korea's economic prospects Although the questionedaction of force levels would probablya difficult conflict ol interest for the Junta, the Director believe* that the Junta mightreductions If it were convinced that to do so would promise substantial economic benefit without undue jeopardy to South Korea's securitythe Junta has indicated Its desire to raise military pay levels; and if additional US aid tor this purpose Is not forthcoming, reduction in force levels may appearossible altcrnaUve means to this end.

T FiT

junta takes advantage of the promotionit has created.

The South Korean armed forces total. The army hasfficers and men organizedieldorps, andnfantry divisions. Despite logistic shortcomings and inadequatedefenses, the army is well equipped, well trained, and combat ready. The air force,0 personnel,ircraft, over half of6 jet fighter-bombers, andrained pilots. The air forceood capability for close-support andbut hasair capability for air defense under visual flight conditions. The navy hasscort, patrol, mine warfare, and amphibious ships. While itimited mine warfare and amphibiousthe navy's present primary mission is coastal surveillance and patrol. The marine corps, with0 men, Is trained in the techniques of amphibious assault with alanding team. In addition, UN ground forces ln South Korea

South Korean armed forces, which have the support of two US Army divisions now in position, couldorth Koreanon the northern boundary. In view of North Korea's limited offensive capability, however, we believe that the Communists would supplement North Korean forces with Chinese or Soviet forces in such an attack. In this event South Korea would require prompt and extensive US reinforcement for adequate defense.

The early actions of the military juntarelations with the UN Command in Korea and resultedonsiderable compromise of CINCUNC operational authority. The junta has since accepted the principle of theof the South Korean armed forces to the UN Command. However, theirto Implement fully agreements on the command structure cannot yet be taken for granted. The junta probably Intends toa larger degree of independence In Its command of South Korean forces, at least in peace time. Moreover, the military type of organization and subordination within the junta and its relationships within the armed services in effecthain ofseparate from the UN Command. This increases the danger that complete obedience to CINCUNC authority will not occur under all military exigencies.

D. Foreign Relations

After an initial period of preoccupation with domestic affairs to the exclusion ofconsiderations, the military Junta has begun to show concern for its image abroad. It has dispatched goodwill teams to some fifty states. It hasew envoy to Japan and indicated its willingness to reopen the negotiations underway before the coup. It has announced its support for the present UN formula on unification. And the junta leadership has begun efforts consciouslyto better its relations with the US.

The Chang Myon government wasin improving relations with Japan but was hampered by the often violent criticism of its steps by anti-Japanese elements in the press and in Parliament. The Junta, on the other hand, Is less influenced by criticism and hasrowing understanding of the desirability of coming to terms with Japan. For its part, the Ikeda government is disposed to go slow until the military Junta hasits position and established soundwith the US. Nevertheless, somein Korean-Japanese relations may be forthcoming, particularly If theeconomic situation in South Korea causes the junta to soften previous Korean stands on wartime compensation claims and fishing rights in return for Japanese economic

With the assumption of power by the junta, US relations with South Koreaew phase. At least initially, suspicion and distrust marked the attitude of many junta members toward the US. General Pak,no longer holds himself apart from US authorities in Seoul and has recently requested andersonal US advisor onmatters. The Junta leadership is fully aware of Korean dependence upon the US and iselationship with the US which will not endanger South Korea's major source

Df Gconomic, military, and diplomatic support. At the same time, however, the Junta leaders probably intend toelationship which reflects their desire (or full control of Korean affairs. Although the Junta willbe generally cooperative ln mattersthe economy, It will be less responsive to US advice on political and military matters, particularly If It Interprets such advice as incompatible with Its Immediate interests.

IV. THE OUTLOOK FOR KOREA

The North Korean regime of Kim Il-sung is stable, well entrenched, and energetic. It faces no serious internal opposition and is probably accepted, if not enthusiasticallyby most of the North Korean people. It will probably continue to concentrate, with some success, in building up its economy and may be able toubstantial increase in North Korean living standards in the next few years. It will continue Lo seek ways to undermine governmental authority in South Korea, employing every trick of subversion, propaganda, and political maneuver at Its command. Although it probably does notto realize Its goal of unification ln the near future, the regime probably is preparing toollapse of authority, law, and order in South Korea, if it should occur.

North Korea Is not likely to resort to armed action against South Korea in thefuture North Korea almost certainly would not undertake such action without the support of both the USSR and Communist China. We believe that the USSR,that the reopening of hostilities in Korea would automatically Involve US military forces, would be concerned over the difficulty of controlling the risks ofonflict. At the same time, the Communists probablyas promising the long-term prospects for fomenting disaffection and spreadingamong the South Korean people. We therefore believe it unlikely that thewill risk reopening hostilities in Korea over the next several years.

Over the short term. North Korea'sthreat as such is probably not great. After moreecade of operating against

South Korea, Pyongyang still does not possess an effective organization In South Korea. The vigorous anti-Communist measures of South Korean governments have played anpart in this. But more importantly, the people of South Korea have so far provedImpervious to the solicitations and urgings from the north. Although much will hinge on the future development of relations between the junta and the people, we do not anticipate an early change in the attitude of South Koreans toward the Communists.

However, the economic accomplishments of the North Korean regime and itsproposals may In time exertInfluence in the south. With help from the USSR and other members of the Bloc, the North Korean regime probably could in fact make good on most of Its offers of economic assistance to South Korea North Korea has the electricity and is capable of constructing the plants, provided the heavy generating equipment and other machinery were supplied by the Bloc. In particular, the offer to give financial assistance to students and to employ kHe college graduatesery sensitive part of South Korean society. If the South Korean Government, together with US aid, can keep the economy going, the Impact of tbe North Korean claims and accomplishments will be blunted However, the margin of safety probably Is small.

In sum, the greatest threat to South Korea, at least In the near term, does not come from North Korea. It comes. Instead, (rom within South Korea Itself: from theshaky economy and its almost perpetual state of crisis; from the unresolved political questions that arise out of the leadership's demand for authority versus the people'sfor self-expression and freedom; from the lack of social cohesion and effectivefor economic development; and finally, from the people's capacity for revolt once their patience has been pushed to Its limit. The South Koreans have so far developed no clear sense of national direction and purpose. It is this lack of national purpose which makes dangerous the variety of Communist appeals for unification on Communist terms and their

ot economic and culturaltrong, cohesive Ideology is being matchedirtual ideological vacuum

he prospect lor South Korea over the next few years is therefore very cloudy and uncertain As serious as the economicIs. It will probably not be the mostcause of future difficulties. US aid will probably be able to keep the economy going. It is In the political arena that the greatest danger lies. The present government has not yet gained any great measure of publicThe students have been quiet so far. intimidated by the junta's readiness to show the mailed fist; this quiescence probably will not continue long. The army is not united in Its altitude toward the junta and willan Important potential source ofstrength. The political situation isand It would probably not take muchto precipitate another major crisis in Korea.

ajor crisis, if it occurred, could take any oneariety of forms, rangingrastic change in the membership of the military juntaew popular uprising. One thing seems fairly clear; both the South Korean people and the leadership face many disappointments, frustrations, and failures in the years ahead. Inituation, thefor economic progress and for an end to hopeless temporizing, rising interest inand continued enticements offered by the North Korean regime could lead to some movement in the south toward anwith the north.

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