Korea 2011 : Politics, Economy and Society [1 ed.] 9789004219359, 9789004218185

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Korea 2011: Politics, Economy and Society

Korea 2011: Politics, Economy and Society Volume 5 Korea Yearbook

Edited by

Rüdiger Frank James E. Hoare Patrick Köllner Susan Pares Associate Editors:

Charles Armstrong, Stephen Epstein, Moon Chung-in and Park Sung-hoon

LEIDEN • BOSTON 2011

This work was supported by the Academy of Korean Studies (publication grant AKS-2011-P-01). This book is printed on acid-free paper.

ISSN 1875-0273 ISBN 978 90 04 21818 5 Copyright 2011 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Hotei Publishing, IDC Publishers, Martinus Nijhoff Publishers and VSP. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change.

CONTENTS Preface ...............................................................................................xiii List of Refereed Articles Published since 2007....................................1 South Korea 1 Politics and foreign relations....................................................1 2 Economy...................................................................................1 3 Society......................................................................................2 North Korea 1 Politics and foreign relations....................................................3 2 Economy...................................................................................3 3 Society......................................................................................3 The Two Koreas: Connections and Comparisons ...........................4 Chronology of Events in the Korean Peninsula 2010...........................5 South Korea .....................................................................................5 North Korea .....................................................................................8 Inter-Korean Relations and Six Party Talks ..................................12 South Korea in 2010: Domestic Politics and the Economy................19 Patrick Köllner 1 Introduction ............................................................................19 2 Reforming the judiciary: no room for a bipartisan approach?...............................................................20 3 Parliament rejects revised Sejong city plan, and other municipal affairs.....................................................................22 4 GNP suffers setback in local elections: main parties pick new leaders .....................................................................24 5 Lee Myung-bak’s persistent personnel problems...................27 6 Regular but hardly orderly: the National Assembly session ..29 7 South Korea’s economy in 2010: the big picture ...................31 8 Equality issues come to the fore, again ..................................34 9 The China factor in the ROK economy and free trade ...........35 10 Nuclear ambitions ..................................................................37

vi

CONTENTS

North Korea in 2010: Domestic Developments and the Economy.....39 Rüdiger Frank 1 Introduction ............................................................................39 2 The 2010 joint New Year editorial.........................................40 2.1 Key topic: Improvement of the people’s standard of living...40 2.2 Ideology..................................................................................41 2.3 The leader(s)...........................................................................42 2.4 North Korea’s ‘normalisation’ ...............................................44 3 The annual parliamentary session ..........................................45 3.1 Overview ................................................................................45 3.2 Budget report..........................................................................45 3.3 The work of the cabinet..........................................................47 4 The KWP conference .............................................................48 4.1 The facts .................................................................................48 4.2 Analysis..................................................................................51 5 Other events............................................................................54 5.1 Upgrade of the Special Economic Zone in Rasǂn..................54 5.2 State Development Bank and Taepung Investment Group ....55 5.3 Other developments................................................................55 Relations Between the Two Koreas in 2010.......................................59 Sabine Burghart Introduction ...................................................................................59 1 Managing a crisis: the impact of Cheonan and Yeonpyeong ...........................................................................59 2 Limitations of Lee Myung-bak’s self-defined pragmatism....63 3 Kaesǂng Industrial Complex: troubled symbol of inter-Korean reconciliation?...................................................65 4 Humanitarian aid: reduced to a symbolic gesture ..................67 5 Other developments................................................................68 6 Outlook...................................................................................70 Foreign Relations of the Two Koreas in 2010....................................71 James E. Hoare Introduction ...................................................................................71 1 Republic of Korea ..................................................................71 1.1 Relations with the United States ............................................71

CONTENTS

1.2 1.3 1.4 2 2.1 2.2 2.3 2.4 2.5

vii

Relations with China ..............................................................74 Relations with Japan...............................................................77 Other relations ........................................................................79 Democratic People’s Republic of Korea ................................81 The Six Party Talks, the nuclear issue and relations with the United States ............................................................81 Relations with China ..............................................................86 Relations with Japan...............................................................88 Relations with Russia .............................................................89 Other relations ........................................................................89

Nation Branding in South Korea: A Modern Continuation of the Developmental State?........................91 Alena Schmuck 1 Introduction ............................................................................92 2 The Developmental State .......................................................93 2.1 The concept of the Developmental State................................93 2.2 The South Korean Developmental State ................................94 3 Nation Branding .....................................................................98 3.1 The concept of Nation Branding ............................................98 3.2 The practice of Nation Branding ..........................................100 4 Nation Branding in South Korea: the Presidential Council on Nation Branding.................................................101 4.1 Motives for Nation Branding in South Korea ......................101 4.2 Structure, goals and activities of the Presidential Council on Nation Branding.................................................105 5 Parallels between South Korean Nation Branding and the Developmental State ............................................................108 6 Conclusion............................................................................112 From ‘Cold Friendship’ to Strategic Partnership: The Transformation of South Korea’s Political Relations with India ...............................119 Niclas D. Weimar 1 Introduction ..........................................................................119 2 South Korea and India during the Cold War: from mistrust to ‘cold friendship’ ........................................120 2.1 India and the Korean problem ..............................................121 2.2 The role of India in the Korean War ....................................122

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CONTENTS

2.3 2.4 2.5 3

The prisoner of war debacle .................................................124 Post-war diplomatic rift between the ROK and India ..........126 ‘Cold friendship’ in the post-Rhee years..............................127 Political impetus of South Korean-Indian rapprochement after the Cold War ................................................................130 3.1 Countering the China-Pakistan-North Korea triangle ..........131 3.2 Defence and security co-operation .......................................134 3.3 Energy security and nuclear co-operation ............................136 4 Implications of the Indo-Korean strategic partnership: an axis in the making? ..........................................................137 5 Conclusion............................................................................140 Shopping Abroad the Korean Way: A Study in Resource Acquisition .....................................................147 Stefania Paladini 1 FDI in strategic materials .....................................................147 2 South Korean OFDIs and investments in strategic materials ...............................................................................150 3 Competing with other big players in Asia............................153 4 The South Korean approach and the roots of its success abroad ......................................................................158 4.1 Internal support ....................................................................158 4.2 External factors in Korean acquisition strategies: exploiting opportunities........................................................163 5 The Bolivian challenge.........................................................165 6 Conclusions: what to expect next.........................................170 Managing Labour Migration to South Korea: Policies and Problems Regarding Migrant Workers.........................175 Sarah Hasan 1 Introduction ..........................................................................175 2 Background to labour migration in Korea............................177 2.1 Profile of migrant workers in Korea.....................................180 3 Migrant-related laws in Korea (1993-2011).........................182 3.1 Kim Young-sam (1993-1998) ..............................................183 3.2 Kim Dae-jung (1998-2003) ..................................................184 3.3 Roh Moo-hyun (2003-2008) ................................................185 3.4 Lee Myung-bak (2008-present)............................................187

CONTENTS

4 4.1 5 5.1 6

ix

Effects of policies on migrant workers.................................187 Illegal migrant workers ........................................................189 Human rights of migrant workers ........................................196 Role of civil society and trade unions ..................................197 Conclusion............................................................................199

Vil(l)e Encounters: The US Armed Forces in Korea and Entertainment Districts in and near Seoul................................................................207 Elisabeth Schober 1 Introduction ..........................................................................207 2 Setting the scene: ‘If you are in a certain neighborhood ...’.209 3 The emergence of camp towns during South Korea’s militarised modernity ...........................................................212 4 From ally to aggressor: violent imaginations and urban entertainment districts ..........................................................216 5 Tongduch’ǂn’s Ville: imaginative and territorial space on the margins ......................................................................218 5.1 Early expansion ....................................................................218 5.2 Marginalisation and decline .................................................220 6 Hongdae and the everyday (de-)militarisation of urban space...........................................................................223 6.1 Hongdae’s reaction to GI visitors.........................................225 A Trajectory Perspective Towards Return Migration and Development: The Case of Young Korean New Zealander Returnees.................................................................233 Jane YeonJae Lee 1 Introduction ..........................................................................233 2 Linking return migration, development and trajectories ......234 3 Context .................................................................................238 3.1 1.5-generation Korean immigrants in New Zealand ............238 3.2 Korea’s search for global talents ..........................................239 4 Methodology ........................................................................240 4.1 Information about the study participants..............................241 5 Trajectories of the returnees’ working experiences..............243 5.1 Identification with the ‘privileged’ identity of Kyop’o (overseas Koreans) ...............................................................243

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5.2 Can Korean New Zealander return migrants be considered as agents of change?...........................................246 5.3 Conflict, exclusion and jealousy ..........................................248 6 Conclusion............................................................................250 Connecting East Asians in Europe: The Power of Korean Popular Culture .............................................257 Sang-Yeon Sung 1 Introduction ..........................................................................257 1.1 The popular cultural scene in East Asia ...............................259 2 Aims and methodology ........................................................260 3 East Asians in Austria ..........................................................260 4 East Asian pop culture: the background...............................262 5 Korean Wave and Korean Nation Branding.........................263 6 Assessment of Korean pop culture in Austria ......................265 7 Conclusion: Is Popular Culture Bonding the East Asian Community in Vienna? ........................................................270 From the ‘Soviet Era’ to the ‘Russian Renaissance’: Evolution of the Narrative about Russia and Russians in the North Korean Cultural Discourse .....................................................275 Tatiana Gabroussenko 1 Introduction ..........................................................................275 2 The discourse of Russia/Soviet Union in the era of Soviet influence (1945-1960): from self-humility to Korean ethnocentrism ..........................................................278 2.1 Changing attitudes as revealed in three texts .......................280 3 The discourse of the ‘Russian Renaissance’ (2000s): Koreans as the last warriors for socialism............................286 3.1 The reasons for perestroika: the loss of loyalty to one’s elders as the bearers of correct ideology.....................290 3.2 The effects of the collapse of the Soviet Union: ideological destruction as a loss of moral order ...................291 3.3 North Koreans as the embodiments of thriving morality .....293 4 Conclusion............................................................................298

CONTENTS

xi

Beyond Lips and Teeth: The Economics of the China-North Korea Relationship ..................303 Tim Beal 1 Introduction ..........................................................................303 2 The trading web as context...................................................304 2.1 China’s trade with North and South Korea ..........................305 2.2 North Korea’s foreign trade .................................................307 3 Investment ............................................................................317 4 Concluding remarks .............................................................323 The International Community and the North Korean Nuclear Programme ..........................................................................333 Sebastian Harnisch and David J. Roesch 1 Introduction ..........................................................................333 2 The North Korean nuclear programmes ...............................335 3 Model 1: the first nuclear crisis 1993-1994..........................337 3.1 Implementing the Agreed Framework: US leadership and the role of the UNSC and IAEA....................................340 4 The second nuclear crisis (2002-2004): waning US leadership and plurilateral conflict management without the UNSC ................................................................343 5 Model 2: regionalisation of the conflict, PRC leadership and Six Party Talks (2003-2008)..........................................344 5.1 Six Party Talks: from enthusiasm to rejection .....................348 6 Limiting the damage: the UNSC and control of the North Korean potential ...................................................................351 7 North Korea and the international nuclear order: A time to break down, and a time to build up? ....................353 About the Authors and Editors .........................................................361 Map of the Korean Peninsula ...........................................................367

PREFACE As editors of Korea: Politics, Economy and Society, we welcome readers to the 2011 edition of the yearbook, which forms the fifth volume of the Korea yearbook series. Since 2007, the yearbook has followed the same hybrid format. The first part contains a detailed chronology of events in both parts of the Korean peninsula in the year preceding publication plus four overview articles, which deal with domestic developments and the economy in both the Republic of Korea (ROK, South Korea) and the Democratic People’s Republic of Korea (DPRK, North Korea), inter-Korean relations, and finally foreign relations of the two Koreas. This first part of the yearbook is assembled and written by the editors with support from Sabine Burghart, who from this year on is the sole author of the overview article on intraKorean relations. The second part of the yearbook then presents a collection of eight or more peer-reviewed papers on political, economic and social aspects of both Koreas and on inter-Korean relations. These papers are written for the yearbook by both established and younger scholars from different parts of the globe. The editors take special pride in the fact that Korea: Politics, Economy and Society has emerged as a favoured outlet for fresh and original research, often based on intensive on-site research, by young doctoral students and recent Ph.D. recipients. But we are also happy that the yearbook continues to serve as a trusted publication outlet for more senior scholars in the field. We will try to keep this inter-generational balance in the years to come. To provide an overview of the topics dealt with in the refereed articles in preceding volumes of the Korea yearbook, we have decided to list all papers published so far in a special section in this year’s volume. This year’s issue is actually the largest to date: It features ten peerreviewed papers on topics such as the political relations between the ROK and India, immigration policies and challenges in the ROK, ‘nation branding’ South Korean style, the discourse on Russia in North Korean literature, and the economics of DPRK-Chinese relations—to name just a few. The papers come from scholars currently based in Australia, Austria, Germany, Hungary, New Zealand, South Korea,

xiv

PREFACE

and the United Kingdom, which again shows that Korea: Politics, Economy and Society is easily one of the most international publications on Korean affairs. Once again, the yearbook has been kindly supported by a publication grant from the Academy of Korean Studies (AKS), for which we are most grateful. Since 2009, AKS grants have enabled us to award an annual prize of 1,000 US dollars to the best paper published by a graduate student in Korea: Politics, Economy and Society. Last year the prize went to Dafna Zur, a recent Ph.D. recipient from the University of British Columbia, for her paper ‘Textual and Visual Representations of the Korean War in North and South Korean Children’s Literature’, published in Korea 2010: Politics, Economy and Society, pp. 271-303. Our thanks also go to our steady supporters at Brill, in particular Albert Hoffstädt, Patricia Radder, and Dagmar Vermeer. We would also like to thank Charles Armstrong in New York and Park Sunghoon in Seoul who served as associate editors for the past few years. Stephen Epstein of Victoria University of Wellington in New Zealand has already joined us as associate editor in the Oceania region, and as new associate editor we welcome Moon Chung-in from Yonsei University in Seoul, well known internationally as a scholar and editor of the journal Global Asia. We remain grateful to Emeritus Professor Keith Pratt and the Design and Imaging Unit at Durham University for making available the map reproduced in the yearbook. Special thanks are as always due to Siegrid Woelk, who has once more done a fine job of producing the camera-ready copy. Patrick Köllner, Rüdiger Frank, James E. Hoare, Susan Pares Hamburg, Vienna and London, July 2011

LIST OF REFEREED ARTICLES PUBLISHED SINCE 2007 SOUTH KOREA 1

Politics and foreign relations

Online Grassroots Journalism and Participatory Democracy in South Korea (Ronda Hauben), 2007: 61-82 Fission, Fusion, Reform and Failure in South Korean Politics: Roh Moo-Hyun’s Administration (Youngmi Kim), 2008: 73-94 Assassination, Abduction and Normalisation: Historical Mythologies and Misrepresentation in Post-war South Korea-Japan Relations (John Swenson-Wright), 2008: 95-124 The Disparity Between South Korea’s Engagement and Security Policies Towards North Korea: The Realist-Liberal Pendulum (Alon Levkowitz), 2008: 125-147 The South Korean Left’s ‘Northern Question’ (Joonbum Bae), 2009: 87-115 Conflict Management in Urban Planning: The Restoration of the Ch’ǂnggyech’ǂn River in Seoul (Annette J. Erpenstein), 2010: 85112 The Role of Think Tanks in the South Korean Discourse on East Asia (Thomas Kern and Alexander Ruser), 2010: 113-134 2

Economy

The Lone Star Scandal: Was it Corruption? (James C. Schopf), 2007: 83-111 Emergence of China and the Economy of South Korea (Joon-Kyung Kim and Chung H. Lee), 2007: 139-163 Changing Perceptions of Inward Foreign Direct Investment in PostCrisis Korea (1998-2006) (Judith Cherry), 2007: 113-137 Dynamics of Korean Industrial Relations: Challenges for Foreign Invested Companies in the Metal Sector (Peter Kloepping), 2009: 143-175 Cheju Island as a Medical Tourism Hub in Northeast Asia (Jürgen Mühl), 2009: 177-204

2

LIST OF REFEREED ARTICLES PUBLISHED SINCE 2007

South Korea’s Economic Policy Response to the Global Financial Crisis (Werner Pascha), 2010: 135-164 ‘Green Growth’: South Korea’s Panacea? (David Shim), 2010: 165187 South Korea’s Economic Relations with India: Trends, Patterns and Prospects (Durgesh K. Rai), 2010: 189-215 3

Society

New Ancestral Shrines in South Korea (Heonik Kwon), 2007: 193214 The Political Economy of Patriotism: the Case of Hanbando (Mark Morris), 2007: 215-234 Korean Modernism, Modern Korean Cityscapes, and Mass Housing Development: Charting the Rise of Ap’at’ǎ tanji since the 1960s (Valérie Gelézeau), 2007: 165-191 Higher Education Reform in South Korea: Success Tempered by Challenges (Peter Mayer), 2008: 149-170 The New Korean Cinema Looks Back to Kwangju: The Old Garden and May 18 (Mark Morris), 2008: 171-198 Scapegoat, Beggar and President for the Economy: The Image of Lee Myung-bak as Seen through Political Cartoons in Chosun Ilbo and Hankyoreh (Katharina Polley ), 2009: 205-225 The Korean Comfort Women Movement and the Formation of a Public Sphere in East Asia (Thomas Kern and Sang-hui Nam), 2009: 227-255 The Social Construction of North Korean Women’s Identity in South Korea: Romanticisation, Victimisation and Vilification (Mikyoung Kim), 2009: 257-275 On the Trail of the Manchurian Western (Mark Morris), 2010: 217246

LIST OF REFEREED ARTICLES PUBLISHED SINCE 2007

3

NORTH KOREA

1

Politics and foreign relations

Negotiating with North Korea: Lessons Learned and Forgotten (Robert Carlin), 2007: 235-251 A Brief History of the Sino-Korean Border from the 18th to the 20th Century (Larisa Zabrovskaya), 2007: 283-297 The US-DPRK 1994 Agreed Framework and the US Army’s Return to North Korea (C. Kenneth Quinones), 2008: 199-229 2

Economy

Benchmarks of Economic Reform in North Korea (Patrick McEachern), 2008: 231-249 3

Society

Perilous Journeys: The Plight of North Koreans in China (Peter Beck, Gail Kim and Donald Macintyre), 2007: 253-281 Statistical Explorations in Terra Incognita: How Reliable are North Korean Survey Data? (Daniel Schwekendiek), 2009: 277-300 Migration Experiences of North Korean Refugees: Survey Evidence from China (Yoonok Chang, Stephan Haggard and Marcus Noland), 2009: 301-328 A Meta-Analysis of North Koreans Migrating to China and South Korea (Daniel Schwekendiek), 2010: 247-270

4

LIST OF REFEREED ARTICLES PUBLISHED SINCE 2007

THE TWO KOREAS: CONNECTIONS AND COMPARISONS Trends and Prospects of Inter-Korean Economic Co-operation (Kyung Tae Lee and Hyung-Gon Jeong), 2008: 251-267 ‘Atoms for Sale’: From ‘Atoms for Peace’ (South Korea) to ‘Weaponized’ Plutonium (North Korea), 1955-2009 (John P. DiMoia), 2009: 117-141 Playing the Game? Sport and the Two Koreas (Brian Bridges), 2009: 329-348 Textual and Visual Representations of the Korean War in North and South Korean Children’s Literature (Dafna Zur), 2010: 271-303

CHRONOLOGY OF EVENTS IN THE KOREAN PENINSULA 2010

SOUTH KOREA 10.01.10

15.01.10

24-27.01.10 27-29.01.10 02-04.02.10

10-12.02.10

28.02.10 08-18.03.10 15.03.10 19-21.03.10

26.03.10 30-31.03.10

Jordan Atomic Energy Commission invites ROK to build 5-MW atomic research reactor in Jordan. Contract signed 30.03.10. ROK medical assistance team leaves for Haiti following earthquake. Two further teams leave later in January. President Lee Myung-bak makes state visit to India. Relations upgraded to ‘strategic partnership’. President Lee visits Switzerland, addresses 40th World Economic Forum in Davos, 28.01.10. US Assistant Secretary of State Kurt Campbell visits ROK, discusses ROK-US bilateral issues, DPRK’s nuclear ambitions. President Islam Karimov of Uzbekistan visits ROK, two countries sign agreements on building chemicals plant in Uzbekistan, developing gas field. 190 ROK peacekeeping troops, including engineers and medical staff, arrive in Haiti. Joint US-ROK annual military exercises, Key Resolve and Foal Eagle. National commemoration of 1960 pro-democracy uprising in Masan. French Foreign Minister Bernard Kouchner visits ROK, President Lee appeals for return of ancient Korean texts looted by French troops in 1866. 100th anniversary of execution of An Chung-gǎn marked in ROK and US. ROK protests to Japan over its description of Tokto as Japanese territory in primary school textbooks.

6

CHRONOLOGY OF EVENTS

Protests further, 06.04.10, over Japanese diplomatic Blue Book, which claims Tokto is Japanese territory. 12-13.04.10 President Lee attends Nuclear Security Summit in Washington DC. 15.04.10 ROK states it has pledged over US$47 million in relief aid to Haiti. 16.04.10 ROK offers US$1 million in emergency relief assistance to Qinghai province, China, after earthquake there on 14.04.10. 30.04-01.05.10 President Lee attends opening ceremony of Shanghai World Expo. 18.05.10 30th anniversary of Kwangju uprising commemorated in Kwangju. 29-30.05.10 3rd tripartite summit in Cheju, attended by President Lee and Japanese and Chinese prime ministers. Economic and political discussions. 04-05.06.10 President Lee attends 9th Asian Security Summit in Singapore. 09.06.10 ROK launches 2nd space rocket from Naro space centre, intended to carry scientific satellite into orbit. Device appears to have exploded soon after take-off. 15.06.10 Advance team of ROK troops arrives in Afghanistan to protect ROK provincial reconstruction team. 26.06.10 President Lee meets President Obama in Toronto. The two agree to postpone to December 2015 transfer of wartime operational control to ROK, discuss ratification of ROK-US Free Trade Agreement (FTA). 26.06-03.07.10 President Lee attends G20 summit in Toronto, then visits Panama and Mexico. 01.07.10 1000-strong ROK peacekeeping unit from Special Warfare Command inaugurated to assist UN-led peacekeeping operations. 19-22.07.10 US Secretary of Defence Robert Gates and US Secretary of State Hillary Clinton visit ROK for talks with ROK counterparts. 25-28.07.10 1st joint US-ROK naval and air readiness drills off east coast of Korea. 10.08.10 Japan issues statement expressing remorse and apology for Japanese colonial rule in Korean peninsula.

SOUTH KOREA

16-26.08.10

7

Annual joint US-ROK military exercise, Ulchi Freedom Guardian. 09-10.09.10 President Lee visits Russia, meets President Dmitry Medvedev. 26.09.10 ROK beat Japan to win FIFA U-17 Women’s World Cup, Port of Spain. 27.09-01.10.10 2nd joint US-ROK manoeuvres off west coast of Korea, including anti-submarine warfare exercises. 03-06.10.10 President Lee attends 8th ASEM meeting in Brussels. 06.10.10 ROK-EU FTA signed in Brussels. 10.10.10 Hwang Jang-yop, former defector from DPRK, dies in Seoul from heart failure. 25.10.10 ROK and US meet in Washington DC to discuss revision of ROK-US Atomic Energy Agreement, signed 1973, due to expire 2014. 25-27.10.10 President Lee attends ASEAN meeting, ASEAN+3 summit and East Asia Summit in Hanoi. 10-12.11.10 President Dmitry Medvedev makes state visit to ROK. 11-12.11.10 5th G20 summit held in Seoul. 13-14.11.10 President Lee attends APEC summit in Tokyo. 14.11.10 Japan and ROK sign agreement on return of 1,205 volumes of Korean archives seized during period of colonial rule. 15.11.10 ROK and Peru sign FTA during President Alan Garcia’s visit to ROK. 28.11-01.12.10 US-ROK joint naval exercises in Yellow Sea in response to shelling of Yeonpyeong (Yǂnp’yǂng) island. 29.11.10 Yeonpyeong island designated control zone by ROK military. 01-02.12.10 ROK foreign minister attends OSCE summit in Kazakhstan. 09-11.12.10 President Lee visits Indonesia and Malaysia, emphasises co-operation in energy and trade sectors. 30.12.10 Seoul court rescinds guilty verdict on 24 former student and labour activists in re-trial of their 1981 convictions for violating National Security Law.

8

CHRONOLOGY OF EVENTS

NORTH KOREA Joint new year editorial from Rodong Sinmun, Chosǂn Inmingun and Ch’ǂngnyǂn Chǂnwi. 04.01.10 Rajin-Sǂnbong designated special city under name of Rasǂn. 14.01.10 Kim Yong Nam, president of presidium of Supreme People’s Assembly (SPA), sends message of sympathy to President Preval of Haiti, following earthquake. 20.01.10 Launch announced of State Development Bank at initiative of National Defence Commission (NDC). 28.01.10 DPRK reports investigation of Robert Park, US citizen detained on 25.12.09 for trespassing across border with China. 25.01.10 Further US citizen, Aijalon Mahli Gomes, crosses border from China into DPRK, is detained. 05.02.10 Robert Park released after investigation by DPRK, leaves for US, 06.02.10. 06-09.02.10 Wang Jiarui, director of International Liaison Department of Chinese Communist Party’s Central Committee, visits DPRK, meets Kim Jong Il. Kim reportedly repeats his commitment to denuclearisation of Korean peninsula. 09-12.02.10 Lynn Pascoe, UN under-secretary-general, visits DPRK, bringing message from UN SecretaryGeneral Ban Ki-moon to Kim Jong Il. 16.02.10 Kim Jong Il’s 68th birthday marked. 25.02.10 DPRK and China sign agreement on joint construction, management and preservation of new bridge over Amnok (Yalu) river. 10.03.10 State Development Bank holds 1st meeting of board of directors, appoints Jon Il Jun, representative of NDC, as director-general. 22.03.10 DPRK announces indiction of Aijalon Mahli Gomes for illegally crossing border. 25.03.10 100th anniversary of execution of An Chung-gǎn marked in DPRK. 27.03-07.04.10 Kim Yong Nam visits Gabon, Gambia and Senegal. 01.01.10

NORTH KOREA

29.03.10

9

DPRK announces it could build light-water nuclear reactor and produce fuel for it on its own. 29.03.10 DPRK criticises resolution of UN Human Rights Council, extending mandate for special rapporteur on North Korean human rights. 06.04.10 Aijalon Mahli Gomes put on trial, sentenced to 8 years’ hard labour and fine. 09.04.10 2nd session of 12th SPA held in Pyongyang. 09.04.10 DPRK protests against US Nuclear Posture Review, issued 06.04.10, which renounces use of nuclear weapons against non-nuclear states, but leaves way open for nuclear attack on countries such as DPRK. 15.04.10 98th anniversary of Kim Il Sung’s birth marked. 15.04.10 DPRK sends condolences to China over earthquake in Qinghai province. 26-29.04.10 Margaret Chan, director-general of WHO, and Massimo Barro, chair of standing commission of Red Cross and Red Crescent, visit DPRK. 29.04-01.05.10 Kim Yong Nam attends opening ceremony of Shanghai World Expo. 03-07.05.10 Kim Jong Il makes ‘unofficial’ visit to China at invitation of President Hu Jintao. 11.05.10 Israeli Foreign Ministry states that DPRK weapons seized at Bangkok airport in 12.09 were destined for Hamas and Hizbollah. 12.05.10 DPRK reports that its scientists had succeeded in creating a nuclear fission reaction. 15.05.10 DPRK criticises Israeli Foreign Ministry for listing country as part of ‘axis of evil’. 24.05.10 DPRK says country has legitimate right to reinforce its nuclear deterrent to protect its interests, claims DPRK is not bound to any duty under NPT. 07.06.10 3rd session of 12th SPA; Kim Jong Il attends, Choe Yong Rim appointed premier. 10.06.10 Xinhua reports DPRK’s regret for deaths of 3 Chinese citizens and injury to another on Amnok river. DPRK promises to investigate. 15.06.10 US extends restrictions on commerce with DPRK for further year.

10 25.06.10

CHRONOLOGY OF EVENTS

2 Chinese traders reported to have died, 20.06.10, while undergoing detention and investigation by DPRK on spying charges. 28.06.10 DPRK states country will boost its nuclear arsenal ‘in a newly developed way’ to counter US hostile policy and military threats. 12-19.07.10 Heavy floods in several provinces of DPRK; loss of life, damage to farmland and buildings; military aircraft sent, 05.08.10, to rescue stranded people. 20.07-07.08.10 Foreign Minister Pak Ui Jun attends annual ASEAN Regional Forum (ARF) meeting in Hanoi, visits Vietnam, Laos, Myanmar and Indonesia 21.07.10 US announces new sanctions against DPRK, aimed at preventing proliferation, halting illicit activities, discouraging further provocation. 23.07.10 US announces freeze on some 100 bank accounts with links to DPRK. 09.08.10 DPRK announces new ‘residential administrative law’, new labour protection law, and bill governing the country’s Chamber of Commerce. On 13.08.10, announces new laws to facilitate trade with other countries. 19-26.08.10 Heavy rains and flooding of Amnok river damage farmland and buildings in Sinǎiju area. Air force and navy mobilised for rescue operations. China offers relief aid, 25.08.10. 25-27.08.10 Former US president Jimmy Carter visits DPRK to negotiate release of Aijalon Gomes. Secures Gomes’s release. 26-30.08.10 Kim Jong Il makes unofficial visit to China, meets President Hu Jintao. Stresses importance of ‘rising generation’ in Sino-DPRK friendship. 30.08.10 US blacklists further 12 DPRK entities and individuals for activities banned by UN. 23.09.10 Rodong Sinmun criticises Japanese 2010 defence white paper for claiming sovereignty over Tokto. 28.09.10 3rd Korean Workers’ Party conference opens; Kim Jong Un elected to membership of KWP Central Committee and as 1 of 2 vice-chairmen of Central

NORTH KOREA

25.10.10

28.10.10 02.11.10

02.11.10 07.11.10 12.11.10

18.11.10

30.11.10 09.12.10 18-21.12.10

11

Military Commission; Kim Jong Il named as chair of CMC and general secretary of KWP. Kim Jong Il and Kim Jong Un attend rally in Pyongyang to mark 60th anniversary of entry of Chinese People’s Volunteers into Korean War. Xinhua reports 183,108 officers and men of CPV said to have died in war. DPRK and Brazil sign economic and technical cooperation agreement. Jack Pritchard, president of Korea Economic Institute, arrives in DPRK on private visit. On 16.11.10, after his visit, he reports DPRK was building what it claimed was an experimental LWR. Josette Sheeran, executive director of WFP, arrives in DPRK on visit. Death reported of Jo Myong Rok, 1st vice-chairman of NDC. Siegfried Hacker, former director of Los Alamos National Laboratory, reports he was shown uranium enrichment plant with 2000 centrifuges at Yǂngbyǂn nuclear site, while on visit to DPRK. UNGA 3rd Committee adopts resolution criticising human rights violations in DPRK; resolution cosponsored by ROK. DPRK rejects resolution, 20.11.10. DPRK announces it will increase its uranium enrichment activities for peaceful purposes. Dai Bingguo, member of China’s State Council, meets Kim Jong Il in Pyongyang. Governor Bill Richardson of New Mexico visits DPRK.

12

CHRONOLOGY OF EVENTS

INTER-KOREAN RELATIONS AND SIX PARTY TALKS 11.01.10 12.01.10 13.01.10

13.01.10 13.01.10 19-21.01.10

25.01.10

27-29.01.10 01.02.10

03, 04.02.10

08.02.10

09-13.02.10

20-22.02.10

DPRK proposes talks on peace treaty to ROK and US. ROK dismisses proposal, 12.01.10. ROK Red Cross proposes discussions with DPRK counterpart on resuming family reunions. Stephen Bosworth, President Obama’s special envoy for DPRK, says United Nations Security Council (UNSC) would consider lifting sanctions on DPRK only after the country returned to the Six Party Talks and made progress on denuclearisation. DPRK warns ROK against scattering anti-DPRK leaflets across border. ROK college lecturer sentenced to 10 years’ imprisonment for spying for DPRK over past 17 years. Inter-Korean working contact at Kaesǂng for revitalising Kaesǂng Industrial Complex (KIC); ROK resists DPRK’s request for wage increases for workers. DPRK designates 2 ‘no-sail’ zones near maritime border in West Sea until 29.03.10. On 31.01.10, designates further 5 ‘no-sail’ maritime zones off east and west coasts. DPRK and ROK fire shells in their respective waters around Northern Limit Line (NLL). DPRK and ROK fail to agree on steps to improve KIC, but agree to use future military talks to discuss border restrictions around KIC. DPRK temporarily designates further areas near eastern and western maritime borders as naval firing zones. DPRK and ROK resume talks on cross-border tours; ROK seeks to negotiate secure conditions for its tourists; talks end without agreement. Kim Kye Gwan, DPRK’s chief nuclear negotiator, visits China for talks with Wu Dawei, Chinese special representative for Korean affairs. DPRK temporarily designates 6 areas along maritime border as naval firing zones.

INTER-KOREAN RELATIONS AND SIX PARTY TALKS

23.02.10

23-28.02.10 26.02.10 02.03.10

10.03.10 14.03.10 24-31.03.10

26.03.10 08.04.10 16.04.10 17.04.10 19.04.10 20.04.10 21.04.10

22.04.10 27-30.04.10

13

ROK sends hand sanitiser worth US$866,000 to DPRK to help country combat spread of H1N1 flu virus. DPRK expresses gratitude for earlier donation of medication. Stephen Bosworth visits ROK, China and Japan to discuss resumption of Six Party Talks. KCNA reports DPRK had recently detained 4 ROK citizens who had illegally entered country. DPRK-ROK military working-level talks at Kaesǂng to discuss passage of goods and people at KIC. Fail to reach agreement. ROK Red Cross reports delivery of 20 tons of powdered milk to DPRK. ROK’s provisional task force on DPRK nuclear issue has mandate extended for further year. DPRK conducts survey of land and buildings at Mt Kǎmgang resort; ROK tourism officials and operators from Hyundai Asan Corp attend at DPRK’s insistence. Sinking of ROK naval corvette Cheonan (Ch’ǂnan) with loss of 46 crew in Yellow Sea. DPRK announces freeze of ROK assets at Mt Kǎmgang resort in 2 phases. ROK investigator concludes external explosion likely to have caused sinking of Cheonan. DPRK accuses ROK of fabricating suspicions of North’s involvement in sinking of vessel. DPRK commemorates 50th anniversary of April Revolution of 1960 in ROK. 2 DPRK spies arrested in ROK on charges of plotting to murder Hwang Jang-yop. DPRK pledges not to extend its production of atomic bombs beyond what it deems necessary, asks to be recognised as nuclear arms state before it joins denuclearisation efforts. 2nd inspection, by NDC delegation, of facilities at Mt Kǎmgang resort. 2nd seizure of assets at Mt Kǎmgang resort. Workers expelled, 02-03.05.10.

14 28.04.10 01.05.10 14.05.10 16.05.10 17.05.10 20.05.10

20.05.10

24.05.10

25.05.10

27.05.10

04.06.10 04.06.10

09.06.10

09.06.10

CHRONOLOGY OF EVENTS

Formation mandated of ROK joint parliamentary committee to investigate sinking of Cheonan. ROK activists send anti-DPRK leaflets over border. DPRK expels ROK worker from KIC for possession of training manual for DPRK workers at KIC. ROK military authorities conclude sinking of Cheonan was result of a torpedo attack by DPRK. DPRK commemorates 30th anniversary of Kwangju uprising. Joint Civilian-Military Investigation Group, composed of ROK and foreign experts, concludes Cheonan was hit by DPRK torpedo fired from submarine. DPRK National Defence Commission rejects Group’s findings, offers to send own investigation team, warns against ROK retaliation. ROK outlines measures against DPRK: suspension of trade, exchanges and humanitarian aid; interdiction of all DPRK vessels from South’s shipping lanes; suspension of investment in DPRK; resumption of propaganda broadcasts. DPRK outlines measures against ROK, which include: expulsion of all South Koreans from KIC and freezing of inter-Korean office; severance of all communications links between North and South; suspension of Red Cross work at P’anmunjǂm. DPRK will not engage in any inter-Korean dialogue during President Lee’s remaining term of office. ROK launches anti-submarine drill off west coast. DPRK threatens to cancel inter-Korean agreements on military co-operation. ROK requests UNSC to discuss sinking of Cheonan, issue censure. DPRK urges UNSC to call for new investigation into sinking of Cheonan, warns of retaliation if UNSC discusses punishment of DPRK. ROK army general arrested on charges of relaying military information to ROK spy recruited by DPRK. ROK authorises 2 civilian shipments of baby food to DPRK. Authorises 4 more shipments of humanitar-

INTER-KOREAN RELATIONS AND SIX PARTY TALKS

15

ian assistance, 15.06.10; and further shipment, 24.06.10. 09.06.10 ROK military complete installation of loudspeakers along border with DPRK. 10.06.10 ROK activists release DVDs and leaflets across border. 12.06.10 KPA threatens to destroy ROK propaganda loudspeakers along border in protest against ROK plan to resume anti-DPRK broadcasts. 12.06-20.08.10 Revd Han Sang-ryol, ROK pastor, visits DPRK on unauthorised trip. 19-27.06.10 DPRK designates ‘no-sail’ zone in waters near its west coast. 28.06.10 KPA accuses US of bringing heavy weapons into Joint Security Area on 23.06.10. US refutes charge, 29.06.10. 09.07.10 UNSC Presidential Statement condemns attack that led to sinking of Cheonan; takes note of varying responses, including that from DPRK, which had denied having anything to do with incident. 15.07.10 DPRK and UN Command hold 1st working contact at P’anmunjǂm, at colonel level, to set up higherlevel meeting over sinking of Cheonan. 23, 30.07.10 DPRK and UNC hold 2nd and 3rd rounds of talks at P’anmunjǂm. 30.07.10 ROK firms operating in KIC accept DPRK’s demand to raise workers’ wages by 5%. 03.08.10 DPRK military warns that ROK’s planned 5-day anti-submarine drills near Yellow Sea border amount to military intrusion, would be met with physical response. 09.08.10 DPRK fires around 130 shells into waters near sea border with ROK. 10.08.10 Ban on ROK companies from shipping goods and materials for consignment trade with DPRK to resume. 10.08.10 DPRK and UNC hold 4th round of talks on sinking of Cheonan, fail to arrange higher-level meeting. 16-18.08.10 Wu Dawei visits DPRK, reaches consensus with North on issues related to resumption of Six Party

16

17.08.10 20.08.10 27.08.10 31.08.10

01.09.10 10.09.10 16.09.10 17, 24.09.10

30.09.10

01.10.10

16.10.10

18.10.10

25.10.10 26-27.10.10

27.10.10

CHRONOLOGY OF EVENTS

Talks. Wu then visits ROK, 26-28.08.10, to promote reopening of Talks. ROK civilian relief group donates anti-malaria aid worth 400 million won to DPRK via Kaesǂng. Revd Han Sang-ryol leaves DPRK via P’anmunjǂm, is taken into custody by ROK authorities. 5 ROK religious organisations send 300 tons of flour to DPRK as aid. ROK Red Cross offers flood aid worth 10 billion won to DPRK. DPRK accepts aid, 04.09.10, requests rice, cement and heavy machinery. Wu Dawei visits US to discuss reopening of Six Party Talks. DPRK Red Cross proposal to ROK Red Cross on holding reunion of separated families over Chusǂk. DPRK and UNC hold 5th round of talks, fail to set date for meeting at general level. ROK and DPRK Red Cross talks on reunions for separated families fail to reach agreement on venue. DPRK introduces subject of resumption of tours. Inter-Korean military talks at P’anmunjǂm end without progress. ROK demands apology for sinking of Cheonan. ROK and DPRK Red Cross agree to hold temporary reunions of 100 families from each side at Mt Kǎmgang resort. DPRK reaffirms willingness to rejoin Six Party Talks, but says US and other countries not ready for them. ROK and DPRK airport officials re-establish hotline between Pyongyang and Inch’ǂn, following proposal from DPRK. Shipment of rice, financed by ROK government, leaves for DPRK via China. ROK and DPRK Red Cross officials discuss ways of expanding and regularising family reunions, but fail to reach agreement. DPRK and UNC hold further round of talks at P’anmunjǂm on Cheonan, but fail to arrange higherlevel meeting.

INTER-KOREAN RELATIONS AND SIX PARTY TALKS

17

29.10.10

Exchange of gunfire across ROK-DPRK border at Hwach’ǂn; no injuries. 30.10-05.11.10 2 rounds of family reunions at Mt Kǎmgang resort; total of 830 people brought together. 02.11.10 ROK states DPRK is thought to have produced some 40 kg of plutonium and to be miniaturising weapons. 21-23.11.10 Stephen Bosworth visits ROK, Japan and China to discuss ways to resume Six Party Talks. 23.11.10 DPRK shells Yeonpyeong island in West Sea, kills 2 Marines and 2 civilians; buildings destroyed in resulting fire. 23.11.10 ROK shells waters around Yeonpyeong in return fire, sends aircraft, causes damage on DPRK mainland. 24, 30.11.10 ROK propaganda leaflets sent across border. 25.11.10 KPA condemns ROK shelling inside DPRK territorial waters around Yeonpyeong; repudiates NLL, claims only DPRK’s maritime military demarcation line is valid in West Sea. 14.12.10 China reports DPRK has agreed to its proposal of 28.11.10 that all participants in Six Party Talks should meet to discuss ways of easing inter-Korean tension. 17.12.10 DPRK protests against leaflets sent across border. 18.12.10 Further leaflets sent across border. 23.12.10 Former ROK intelligence agent sentenced to 7 years’ imprisonment for passing information on ROK military to DPRK. 23.12.10 ROK conducts ground and air live-fire drill at Poch’ǂn near border with DPRK. 30.12.10 ROK defence white paper describes DPRK as ‘enemy’. Chronologies prepared by Susan Pares from the following sources: Cankor (CanadaKorea Electronic Information Service), Korea: People and Culture, North Korea Newsletter, Vantage Point, Yonhap.

SOUTH KOREA IN 2010: DOMESTIC POLITICS AND THE ECONOMY Patrick Köllner

1 INTRODUCTION In macro-economic terms, 2010 was a good year for the Republic of Korea (ROK—South Korea). The national economy, which had started to rebound from the 2008/09 economic and financial crisis in the latter part of 2009, continued to grow healthily in 2010. Driven inter alia by strong exports, overall GDP growth for the year reached 6.2 percent and thus the highest growth rate since 2002. President Lee Myung-bak, who had campaigned in 2007 on the basis of his CEO credentials and promises centring on economic performance, could certainly be pleased. The government and the Bank of Korea emerged from economic crisis-mode in the latter half of 2010, terminating a number of stimulus schemes and making a start on raising the base rate again in order to combat inflationary tendencies. The country’s leading conglomerates, which had been treated with kid gloves during the crisis, got criticised again by the government for not fulfilling their social responsibility in spite of handsome profits and for exploitative relations with small and medium enterprises. In some ways, it was thus back to normal with a renewed emphasis in government discourse on the fight against rising ‘inequality’ in South Korea’s society and economy. In political terms, 2010 was not so pleasant for President Lee and the ruling Grand National Party (GNP). Lee’s revised plan for what was once supposed to be South Korea’s new capital, Sejong city, in South Ch’ungch’ǂng province, got shot down by parliament in June, and the prime minister chosen in 2009 to promote the idea of turning the city into a science-and-business town, Chung Un-chan, resigned. The ensuing cabinet reshuffle turned messy when three of the candidates put forward by the president, including the prime ministerdesignate, were charged with gross unethical behaviour and finally

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withdrew from the nomination process. The good performance of opposition and independent candidates in the June local elections added further to Lee’s political woes. The GNP used its majority in parliament in late 2010 to force through the budget and a number of other bills. Overall, relations between the government and the opposition remained heated, resulting in another lost year in terms of policycentred parliamentary interaction. While South Korea is by now a consolidated democracy—one of the few in Asia—the state of the country’s parties and parliament continues to be a sorry one. Increasingly, the judiciary has also become a political battleground. Two severe crises connected to inter-Korean relations, but also the G20 Seoul summit attracted the media limelight in 2010. (All of these topics are covered in other overview articles in this volume.) To an extent these events overshadowed domestic political and economic affairs in the ROK, which are covered in this article, starting with judiciary-related controversies.

2 REFORMING THE JUDICIARY: NO ROOM FOR A BIPARTISAN APPROACH? Since South Korea’s democratic transition in 1987, the independence and integrity of the country’s judiciary has vastly improved. Courts, which tended to be a willing tool of the executive during the days of dictatorship, now often defy the wishes or preferences of the government. In particular, the Constitutional Court has built a reputation of standing above the political fray. Still, the judiciary has remained an object of constant political bickering. Neither the incumbent government nor the opposition tend to be happy with the state of the judiciary. While this shared feeling of unhappiness might be taken as a positive sign, the trouble is that both sides have grievances about different parts of the judiciary. The current conservative government has repeatedly accused local courts and judges of a leftist bias, while the progressive opposition criticises state prosecutors as overzealous when it comes to politically relevant cases and for having a penchant for ‘non-standard investigations’. Both sides might have a point, though it is more difficult to discern a dominant ideological bias on the part of courts and judges. Indeed, in January and February local district courts dismissed charges against defendants, who stood accused of having engaged, respectively, in

SOUTH KOREA IN 2010

21

violent protests against the parliamentary ratification of a free trade agreement (FTA) with the US, in anti-government protests despite their status as civil servants, in defamation of officials in a TV programme by alleging health risks from imported US beef, and in breaches of the National Security Law by taking schoolchildren and their parents to a local memorial for ‘martyrs for unification’.1 The ruling GNP fumed about the verdicts and called on the chief justice to take responsibility for what the government interpreted as biased rulings. Yet, on closer inspection, the alleged bias is not so clear at all. For example, in six rulings occurring during the first four months of 2010, all concerning teachers charged with having engaged in political activities (teachers are allowed to join unions but not to engage in political activities), local courts ruled in four cases against the defendants and only acquitted them in the other two cases. The politically charged atmosphere surrounding discussions about the state of the judiciary makes bipartisan approaches to reforming aspects of the judicial system all the more difficult. While the GNP and the Democratic Party (DP) established a joint ad hoc panel on judicial reform in March, there was little hope that both parties would actually find common ground. In the same month, a separate GNP panel on judicial reform put forward plans to increase the number of Supreme Court judges from 14 to 24 and, at the same time, to raise the age and experience-related requirements for becoming a Supreme Court judge. These proposals met with opposition from the Supreme Court itself, which argued that the plans lacked respect for the autonomy of the court. Later in March, the Supreme Court laid bare its own reform ideas, including publishing all judicial rulings, allowing online monitoring of the progress of trials and creating five new bureaus to speed up pending cases and thus reduce the existing backlog. While there is broad agreement in South Korea that parts of the judicial system are in more or less dire need of overhaul, there is currently little ——— 1 Prosecutors appealed against all these rulings and legal proceedings continued. In December, an appeal court in Seoul upheld the ruling in favour of four producers and a scriptwriter of the MBC TV programme ‘PD Notebook’, who had been accused of defaming, in 2008, the then agricultural minister over the health risks of imported US beef (see Korea Yearbook 2009: Politics, Economy and Society, pp. 19-21). While the appeal court agreed that the programme had contained ‘exaggerations, distortions and mistranslations’, it found no deliberate defamation to have taken place (Economist Intelligence Unit (EIU), Country Report South Korea, February 2011: 12-13, online: http://www.eiu.com/public). Earlier on in March, a personnel shake-up seemingly aimed at the removal of ‘leftists’ from the public TV station had occurred at MBC (EIU, April 2010: 14).

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PATRICK KÖLLNER

consensus on how to proceed in this regard (EIU, February 2010: 1213, March 2010: 12, April 2010: 13-14, May 2010: 11).

3 PARLIAMENT REJECTS REVISED SEJONG CITY PLAN, AND OTHER MUNICIPAL AFFAIRS

One of President Lee’s persistent domestic political headaches has not been of his own making but was inherited from the preceding Roh Moo-hyun administration. Roh, president from 2003 to 2008, had wanted to build a new capital around 150 km south of Seoul in order to address imbalances in geographical development in the southern part of the peninsula. The relocation had been approved by the National Assembly in August 2004 but was ruled unconstitutional only three months later. The Constitutional Court argued that an important national issue such as the relocation of the capital required a revision of the constitution or a national referendum. In response, the then government redesigned the planned city as an administrative hub, which would host 13 national ministries and government agencies. The GNP, at that time in opposition, at first resisted the administrative hub plan but changed tack before the local elections in 2005. When Lee Myung-bak campaigned for the presidency in 2007, the former mayor of Seoul also changed course, and with voters in the two Ch’ungch’ǂng provinces on his mind, voiced support for the administrative hub scheme. After he had won the presidency, however, Lee rescinded his support for the relocation of ministries and proposed instead to develop Sejong city into a science and business town. In 2009, Lee then charged the new prime minister, Chung Un-chan, with attracting corporations and universities to the new city and with overcoming national and local resistance to the new plan. The latter in particular proved exceedingly difficult, as not only opposition parties demanded adherence to Roh’s original plan. Moreover, a sizeable faction within the GNP, led by Park Geun-hye, Lee’s strongest intraparty competitor in the run-up to the 2007 presidential election and still hopeful of clinching the party nomination in 2012, continued to reject the revised plans and, perhaps for opportunistic reasons, voiced support for a grander scheme (Korea Herald, 6 July 2010).2 ——— 2

Korea Herald online: http://www.koreaherald.com.

SOUTH KOREA IN 2010

23

Seemingly unfazed, Chung Un-chan announced on 11 January that Sejong city would become ‘an economic hub for science and education’. By then construction of the new ‘hub’ was already underway— with the total costs of the project estimated at US$15 billion—and four leading business conglomerates had committed themselves to investing a total of US$4 billion and to move parts of their operations there. Calls from within the GNP to open a full intra-party debate on the revised Sejong city plan went unheeded, but a representative of the dissenting faction led by Park floated the compromise idea of relocating important organs of the state such as the Supreme Court, the Constitutional Court and the Fair Trade Commission, but not ministries, to the new city. There were, however, no takers for such ideas, and on 29 June push came to shove when the National Assembly voted on a bill to make Sejong city ‘an economic hub for science and technology’. Only 105 legislators voted for the bill while 164, including many of Park’s followers, voted against it (EIU, February 2010: 11, March 2010: 11; Korea Herald, 29 June 2010). President Park accepted parliament’s decision and the government announced in mid-July that, in line with earlier plans, a total of 35 state agencies would be relocated to Sejong city by the end of 2014. The relocation plans include the Prime Minister’s Office, the ministries of finance, education and culture and the National Tax Service, while the National Assembly, the Office of the President and the ministries of defence and foreign affairs will remain in Seoul (JoongAng Ilbo, 13 July 2010).3 In South Kyǂngsang province, a merger of three industrial cities took place when Masan and Chinhae were incorporated into Ch’angwǂn on 1 July. The new city, with a population of about 1.1 million, will have a combined annual GDP of around 21.8 trillion won (around US$18 billion), i.e. surpassing that of the two autonomous metropolitan cities of Taejǂn and Kwangju. More such mergers are expected amidst urban growth, competition between larger agglomerations and the desire for greater allocative efficiency. Yet, in a number of cases, local politicians and other vested interests have resisted such moves, fearing a loss of power and influence. In one instance, nonetheless, the neighbouring cities of Sǂngnam and Hanam (combined population: 1.53 million) in Kyǂnggi province had already agreed to a merger, which was supposed to take place on 1 July. The planned merger, which would have resulted in South Korea’s fifth-largest city after ——— 3

JoongAng Ilbo online: http://joongangdaily.joins.com.

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PATRICK KÖLLNER

Seoul, Pusan, Taegu and Inch’ǂn, was, however, blocked by the opposition DP in February. City mergers require not only the approval of the respective city councils but also of the National Assembly’s Committee for Public Administration and Security. In this instance, the GNP grudgingly accepted a halt to the envisaged city merger in Kyǂnggi in order to get at least a green light from the DP for the above-mentioned city merger in South Kyǂngsang, which had been pending since 2009 (EIU, January 2010: 12, February 2010: 12; JoongAng Daily, 24 February 2010).

4 GNP SUFFERS SETBACK IN LOCAL ELECTIONS: MAIN PARTIES PICK NEW LEADERS

South Korea’s fifth round of local elections since the (re-)institution of such elections in 1995 took place on 2 June. The electorate, slightly more than 38 million voters, had a chance to cast their votes and 54.5 per cent, more than in any other local election since 1995, did so in the end. Local voter turnout ranged from 46 per cent in the metropolitan city of Taegu to 65 per cent on Cheju island. It has been suggested that web-based social networks such as Twitter and Facebook played a role in mobilising young voters, who tend to favour the DP, to cast their votes.4 At stake were 3,991 posts as governors, mayors, councillors and education superintendents, for which 9,942 candidates competed (EIU, June 2010: 13-14, July 2010: 11-12). While the powers of local government are limited in South Korea, local elections are meaningful in a number of ways and serve, inter alia, as barometers of public support for national parties. Also, success at the local level can lead to later careers at the national level all the way up to state president, as testified by the career of current President Lee Myung-bak, who earned his credentials in the political world as mayor of Seoul. The last local round of elections in 2006 had heralded the beginning of a conservative turn in South Korean politics, with the then opposition GNP winning 12 of the 16 posts of governors and mayors of ———

4 A few weeks after the elections, the Pusan district court fined two local citizens who had illegally used Twitter to mobilise votes for their preferred candidates. The verdicts were in line with new regulations of the National Election Commission, first applied to the 2010 local elections, which prohibit candidates and their supporters from using Twitter for promotional activities within 180 days of an election (Korea Times, 11 July 2010. Online: http://www.koreatimes.co.kr).

SOUTH KOREA IN 2010

25

metropolitan cities at stake. While it is too early to tell whether the tide is turning again, this time the GNP suffered a number of defeats, with only six of their incumbents winning and six other losing their jobs as local political leaders. The DP, on the other hand, which had just managed to gain two gubernatorial posts in 2006, was this time successful in seven high-profile contests. In Kyǂnggi province however, a candidate jointly fielded by the DP and its splinter group, the People’s Participation Party (PPP), founded earlier in the year, was the loser. Here, PPP chief Rhyu Si-min, a popular but divisive follower of the late former president Roh Moo-hyun, was defeated by the GNP incumbent, Kim Moon-soo. The GNP and the DP won mostly in their traditional regional strongholds, with the posts of governor in North Kyǂngsang province and mayoral posts in Taegu, Pusan and Ulsan going to the governing party, and the posts of governor in the two Chǂlla provinces (but also in the northern province of Kangwǂn) and mayoral posts in Kwangju (but also in Inch’ǂn) going to the DP. The Liberty Forward Party claimed the post of mayor in the city of Taejǂn but the governorships in the two Ch’ungch’ǂng provinces went to the DP. Independents were able to become governors in South Kyǂngsang province and on Cheju island (EIU, July 2010: 11-12).5 The most watched electoral race concerned the mayoral slot in the capital Seoul where the incumbent, Oh Se-hoon from the GNP, prevailed in the end, but only narrowly, against a former prime minister, Han Myeong-sook from the DP, who had recently been acquitted of (somewhat dubious) bribery charges levelled against her. Mayor Oh, who is considered one of the favourites for the GNP’s intra-party race to succeed President Lee Myung-bak in early 2013, now faces a DPcontrolled city assembly. (In October, the assembly rejected plans by the mayor to build a new opera house on an island in the Han river and a domed stadium in southwestern Seoul.) Overall, the DP managed to get 360 assembly members at the provincial and metropolitan levels elected—in 2006 the party gained only 80 such seats—while the GNP went down from 557 to 288 such posts. In total, 761 assembly members got elected and the election results consolidated a virtual two-party system at the local level in South Korea (EIU, June 2010: 13-14, November 2010: 11). ———

5 See also Hannes B. Mosler, ‘Regionalwahlen 2010 in Südkorea’ [Local elections in South Korea], briefing paper, Friedrich Ebert Stiftung, June 2010. Online: http://library.fes.de/pdf-files/iez/07319.pdf (accessed 30 June 2010).

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After the party’s poor showing in the local elections, a number of high-level GNP officials, including party chairman Chung Mong-joon, who had led the GNP since September 2009, tendered their resignations. While Chung’s ambitions to gain approval as the party’s candidate for the Blue House in 2012 have thus been dented, he is still considered a possible contender. On 14 July, the caucus of the GNP elected Ahn Sang-soo, the 64-year-old four-term lawmaker and former prosecutor, as new chairman of the party. Ahn had first gained public recognition for exposing efforts to cover up the torturing to death of a student activist in 1987. Ahn, twice former floor leader of the GNP, is considered loyal to President Lee. The other four members of the supreme council of the GNP, all elected for two years, consist of Hong Joon-pyo, who had fought a close leadership race against Ahn, Na Kyung-won, a female National Assembly member, two-term lawmaker Chung Doo-un and finally Seo Byeong-soo, who belongs to the intra-party faction led by Park Geun-hye. Park’s faction grew in size when eight lawmakers who had failed to become GNP candidates in the 2008 national election but who had been elected at the time running on the ticket of the ‘Pro-Park-Geun-hye Alliance’ (later renamed ‘Solidarity for Future and Hope’) re-joined the GNP at the convention in July. As a consequence, the GNP increased its absolute majority in the 299-seat National Assembly to 176 seats. The main task of the new party chairman consists of increasing party unity in the GNP ahead of the 2012 race to determine the GNP’s next candidate for the presidency. Given the virulent factionalism inside the ruling party, which pits the supporters of President Lee, the GNP’s current mainstream factions, against Park Geun-hye’s faction, 50 to 60 members strong, this is no easy task. It gets even more difficult due to the fact that since 2002, GNP chairpersons have seldom lasted for more than a year in office (EIU April 2010: 12, July 2010: 12, July 2010: 11; Korea Herald, 14 July 2010). The DP also elected a new party leader in 2010. Chung Sye-kyun, chairman of South Korea’s main opposition party since May 2008, stepped down to take responsibility for the party’s disappointing results in eight National Assembly by-elections held on 28 July. The DP was only able to win in three districts, the other five going to the GNP. Critics blamed Chung for a poor selection of candidates. In the end, 16 candidates ran for the six party leadership posts, including the party chair. Based on the on-site votes cast by 360 party delegates and the results of surveys, the final roster of candidates was reduced to nine.

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27

In a tight race on 3 October, the former Kyǂnggi governor Sohn Hakkyu gained 21 per cent of the votes cast, narrowly defeating a former presidential candidate Chung Dong-young, who gained 19 per cent. Sohn, a political scientist with a Ph.D. from the UK, is considered a centrist—when he served as governor of Kyǂnggi from 2002 to 2006, he in fact still belonged to the GNP—and harbours ambitions to run as the official candidate of the DP in the 2012 presidential election. Sohn took over a party that shows signs of divisions between lawmakers hailing from its traditional base in the southwest of the country and those groomed by the late president Roh Moo-hyun. Opinion polls in October 2010 put Sohn at 12 per cent, trailing by far the GNP’s Park Geun-hye, who led all potential candidates, scoring around 30 per cent in polls in the autumn of 2010 (EIU, November 2010: 11, December 2010: 5; Korea Times, 2 August 2010).

5 LEE MYUNG-BAK’S PERSISTENT PERSONNEL PROBLEMS In South Korea’s presidential system of government, the head of state has the authority to either appoint or nominate personnel to a host of public positions (a decision which is then subject to parliamentary approval). The ROK’s current president, Lee Myung-bak, has over the past three years shown a certain ‘talent’ for making controversial personnel choices—choices that were seen as favouring people with regional, religious and other ties to the president or decisions that probably would have been avoided if the nominees in question had been thoroughly screened in advance. Lee’s problems in terms of making high-level appointments or nominations continued unabatedly in 2010. A first personnel decision of the president, which did more than just raise eyebrows, concerned the appointment of a new governor of the Bank of Korea (BOK), the country’s central bank, in March. In recent times, governors of the independent BOK have been chosen from among the senior staff of the bank. As successor to Lee Seong-tae, whose four-year term ended in early 2010, Lee, however, chose Kim Choong-soo, a 63-year-old economist with a long career in government, who had, inter alia, served as a presidential advisor in 2008. In an interview published in early 2010, Kim stated that it was the president’s job to decide the economic priorities of the nation, including whether to focus on the stimulation of growth or the stabilisation of prices. This could be taken to mean that the role of the BOK

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was to support government priorities rather than to approach monetary matters from an independent angle, and thus, in the final analysis, to compromise the integrity of the BOK. Small wonder then that both the opposition and representatives of organised labour decried the appointment of Kim (EIU, April 2010: 14, September 2010: 11-12). Much more explosive and ultimately doomed was Lee’s decision in early August to nominate the 47-year-old former governor of South Kyǂngsang province, Kim Tae-ho, as new prime minister after the resignation of Chung Un-chan (see above). Kim’s nomination seemed at first a great move: Firstly, the prime minister-designate, handsome, charismatic, down-to-earth and seemingly clean, would help to rejuvenate Lee’s administration and also herald a new generation of politicians in their forties and fifties in high-level government offices. Secondly, Kim, who hailed from a poor background, could ideally be groomed as a successor to Lee himself and perhaps thwart Park Geunhye’s ambitions to assume the president’s mantle. Such plans, if they existed, came to nought when, during the relevant parliamentary hearings, some of Kim’s former behaviour, which included influencepeddling and accepting donations from a shady businessman, emerged and was judged unsavoury. The revelations ultimately disqualified him for the job. The same happened to Shin Jae-min, the ministerdesignate of culture, and to Lee Jae-hoon, the minister-designate of knowledge economy. Both also faced charges of unethical behaviour, including real estate speculation, and they finally, together with Kim Tae-ho, withdrew as nominees in late August. The forced resignations came as an embarrassment for President Lee, who had made ‘integrity’ one of the key criteria in selecting new ministers. It also reminded citizens—if they needed any reminder—how widespread unethical behaviour was among members of the country’s power elite. In the end, the president was able to get only seven new ministers and heads of state agencies appointed in the August cabinet reshuffle.6 After having been vacant for more than 50 days, the job of prime minister was finally filled again when the National Assembly on 1 October endorsed President Lee’s second nominee for the post. Here, the president played safe by nominating the former Supreme Court justice Kim Hwang-sik as prime minister. Kim had not only survived ———

6 Choe, Sang-hun, ‘South Korea Cabinet Reshuffle Goes Awry over Ethics’, International Herald Tribune, 30 August 2010, p. 2. See also Korea Herald, 29 August 2010, p. 9, and Korea Times, 8 August 2010.

SOUTH KOREA IN 2010

29

earlier hearings when he joined the Supreme Court in 2005 and also later on, when he became chairman of the Board of Audit (BAI), a post he held prior to becoming prime minister, but he also hailed from the traditionally pro-DP South Chǂlla province, making him the first South Korean head of government to come from that province.7 A week later, on 8 October, South Korea also finally got a new foreign minister. The old one, Yu Myung-hwan, had resigned in early September over allegations that his daughter had received preferential treatment when she applied for a job in the ministry her father headed. Hardly a month before the G20 summit in Seoul, the 57-year-old Kim Sung-hwan, a career diplomat and a former senior presidential secretary for security and foreign affairs, was sworn in as foreign minister. While he was questioned during the confirmation hearings about why—like so many other members of the ROK power elite—he was able to avoid conscription and thus lengthy service in the military, Kim was able to pass the hearings. Among his top tasks will be a gradual reform of the foreign ministry in terms of personnel acquisition and training (EIU, October 2010: 11-12, November 2010: 10; Korea Herald, 31 August 2010).

6 REGULAR BUT HARDLY ORDERLY: THE NATIONAL ASSEMBLY SESSION On 1 September, the National Assembly started its regular 100-day session. Given the arena character of South Korea’s parliament and the festering, if somewhat ritualised, conflicts between government and opposition, the session was again dominated by confrontations between the ruling GNP and the DP as the main opposition party. Arguably, President Lee did little to smoothen relations between the two camps in 2010 as he avoided meeting with the leader of the DP for the second year in a row. The GNP had selected a total of 161 bills for the regular session, including a bill related to the ‘unification tax’ proposed by President Lee in mid-August, the ratification of the FTA ———

7 In December, President Lee nominated Chung Tong-ki, a former prosecutor and known political ally, as new BAI chairman. Given the BAI’s independent status, this choice of personnel, which seemed to confirm Lee’s ‘unerring instinct for picking the wrong man’ (EIU, February 2011: 11), made even GNP lawmakers rebel. As a consequence, Kim withdrew from the nomination process in mid-January 2011 (ibid.: 1112).

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with the United States, and another bill aimed at barring outdoor protests between 11 p.m. and 6 a.m. The government also needed to gain parliamentary approval for the 2011 budget, which included funds for the controversial refurbishment of South Korea’s main four rivers (work had been started in November 2009 despite the absence of an environmental impact study), and there was also the expectation that talks on constitutional revisions centring on boosting the power of the prime minister in exchange for allowing a re-election of the president might begin (Korea Herald, 31 August 2010). In the end, the regular session proved (once again) dysfunctional in the sense that the genuine results-related policy discussions across the aisle and within committees remained the exception to the rule. Bitter wrangling over presidential nominations for various public posts characterised the first few weeks of the session. While the president’s past misguided personnel choices could partly be blamed for the sorry state of affairs, the opposition’s inclination to reject presidential nominations for the sake of rejection also played its part. The shelling of Yeonpyeong (Yǂnp’yǂng) island by North Korean artillery in late November brought further disarray into parliamentary affairs. Shortly before the end of the session on 9 December, the government pushed not only the 2011 budget of 309 trillion won (US$270 billion, up 5.5 percent from 2010) but also 41 bills through parliament. For the third year in a row, no compromise was sought with the opposition over the national budget. Opposition lawmakers boycotted the budget vote after much commotion and melee-like action around the speaker’s podium. The DP accused the government of the ‘worst budget review ever in the 60 year history of the Assembly’ and charged the Blue House and the GNP with ‘crumbling’ parliamentary democracy, while the GNP lashed back by accusing the DP of procrastinating the deliberation of bills (Korea Times, 8 December 2010). The bills and motions passed in early December included a motion to extend the antipiracy mission off the coast of Somalia, a motion to despatch 150 troops to the United Arab Emirates, and a bill encouraging the development of areas within two kilometres of the four main rivers. Many other bills and the ratification of the FTA with the US had, however, to be put on hold as they could not be dealt with during the regular session (EIU, January 2011: 12; Korea Times, 25 January 2011).

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31

7 SOUTH KOREA’S ECONOMY IN 2010: THE BIG PICTURE Driven by fast-expanding exports, by strong capital investment but also by improved consumer spending, the South Korean economy grew by a dynamic 6.2 percent in 2010, confirming that the country had indeed weathered the financial and economic crisis in 2008/09 better than most other major economies. Also reflecting base effects, i.e. the comparatively weak state of the economy in the equivalent period one year before, growth was strongest in the first and second quarter of the year. Factory utilisation reached a record high of nearly 85 percent in July. For the year as a whole, the ROK’s merchandise surplus expanded to US$41.9 billion (from US$37.9 billion in 2009, see Table 1). Led by semiconductors, consumer electronics and batteries for electric vehicles, electronic exports reached a record high of US$154 billion in 2010. Exports of smart phones went even up by 217 percent, with Samsung Electronics and other companies selling smart phones on the global market worth US$6.5 billion. South Korean carmakers also had a very successful year, producing over 4.2 million vehicles in total and selling 2.8 million vehicles abroad. Kia, South Korea’s second-largest car-maker after Hyundai, sold 485,000 units at home, thus bringing its local market share above the 30 percent mark for the first time in 15 years. Kia also sold another 1.6 million units overseas, boosting its global market share to a record 2.9 percent in 2010. Officially approved inward direct investment (DI) increased to US$12.9 billion (from US$11.5 billion in 2009), while ROK outward foreign DI jumped by 8.5 percent to US$32.5 billion, with Asia (US$13 billion), Europe (US$7.7 billion) and Latin America (US$4 billion) constituting the main investment destinations (EIU, February 2011: 16, March 2011: 16; German-Korean Chamber of Commerce and Industry/German Embassy Seoul, Wirtschaftsrundbrief/WRB, 7/2011, 25 February 2011).8 In view of the continued upturn of the economy, the government reduced stimulus spending to an estimated 1.1 percent of GDP in 2010. One year earlier, such spending, including a supplementary budget worth US$23 billion, had amounted to 3.6 percent of GDP. Despite the extra spending, South Korea’s fiscal performance still looks sound in absolute and relative terms. Government debt grew by ——— 8

Wirtschaftsrundbrief online at http://www.seoul.diplo.de/Vertretung/seoul/de/05/ Aktuelles/rbs.html.

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9.5 percent in 2010 to US$340 billion, though this still equalled just 33.5 percent of GDP (compared to 30.7 percent in 2007).9 South Korea’s total short-term debt to foreign creditors reached around US$135 billion in 2010. This amount equalled slightly more than 46 percent of foreign currency reserves, marking the lowest level since 2005 (WRB, 6/2011, 18 February 2011, 7/2011, 25 February 2011, 13/2011, 8 April 2011). While job creation remained a priority in 2010 in view of a nearly unchanged unemployment rate of 3.7 percent on average and a much higher unemployment rate among 15- to 29-year-olds,10 price stabilisation increasingly turned into another priority (though inflation in 2010 still remained well within the BOK’s target range of 2 to 4 percent during the 2010-12 period). The central bank, for the first time since August 2008, raised the base rate, first in July from 2 to 2.25 percent and then again in November to 2.5 percent. The BOK also started to tighten rules concerning new foreign-currency borrowing to ward off volatile capital movements. Overall, economic policy switched from crisis to routine mode in the latter part of the year. Positive sentiments about the state of the ROK economy were also visible elsewhere: with a view to the country’s international creditworthiness, Moody’s Investors Service upgraded South Korea’s rating from A2 to A1 in April, and Korea’s key stock index, the KOSPI, in mid-December reclaimed the 2,000-point-mark, coming close to the earlier all-time high reached in late October 200711 (EIU, May 2010: 13, July 2010: 13-14, February 2011: 13-14; Korea Herald, 22 December 2010; Yonhap, 7 June 2010).12 ——— 9

Pressure on South Korea’s public finances is, however, certain to increase in view of South Korea’s fast-ageing society. According to the Korea National Institute of Health, those over 65 years old accounted for 11 percent of the country’s by now 50 million citizens in 2010, but the relevant share could reach 40 percent by 2050 if the low birth-rate and low immigration numbers continue. (At the end of 2010, 1.26 million foreigners were officially registered in the ROK. While this represents a 2.4fold increase since 2005, the overall share has remained fairly low, with foreigners accounting for just 2.5 percent of the overall population.) South Korea’s National Health Insurance Corporation (NHIC) already registers annual deficits which, in the absence of substantial reforms, might swell to over US$14 billion in 2020, according to NHIC’s own estimates (WRB, 3/2011, 21 January 2011, 7/2011, 25 February 2011, 14/2011, 15 April 2011; Korea Times, 3 January 2011). 10 In March 2011, the relevant unemployment rate reached 9.5 percent. 11 Foreign participation in South Korea’s capital markets continued to be strong: At the end of 2010, foreign investors’ assets accounted for 31.2 percent of stockmarket capitalisation, which was however much lower than the historical high of 42.1 percent registered in July 2004 (Korea Herald, 4 May 2011). 12 Yonhap online at http://english.yonhapnews.co.kr.

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SOUTH KOREA IN 2010

Table 1

ROK basic economic data 2006

2007

2008

2009

2010

GDP (billion won, at current prices)

908,744

GDP (billion US$)

951

1,049

931

834

1,014

GDP growth (%)

5.0

5.1

2.3

0.3

6.2

Per capita income (GDP base, in US$)

19,692

21,655

19,296

17,193

20,759

Exports (billion US$)

325.5

371.5

422.0

358.2

464.3

Imports (billion US$)

309.4

356.9

435.3

320.3

422.4

+16.1

+14.6

-13.3

+37.9

+41.9

+14.1

+21.8

+3.2

+32.8

+28.2

260.1

383.2

377.9

401.9

370.1

238.4

261.8

200.5

265.2

286.9

11.2

10.5

11.7

11.5

12.9

Consumer prices (%)

+2.2

+2.5

+4.7

+2.8

+2.9

Producer prices (%)

+2.3

+1.4

+8.6

-0.2

+3.8

827

783

769

889

920

3.5

3.2

3.2

3.6

3.7

Trade balance (billion US$) Balance of payments (current account, bn US$) Gross external debt (billion US$, end of year) International reserves (billion US$, end of year) Inward foreign direct investment (bn US$, notification basis)

Unemployed (in thousands) Unemployment rate (%)

975,013 1,026,452 1,065,037 1,172,803

Note: Data for 2010 provisional. Sources: Bank of Korea, Monthly Statistical Bulletin, 4/2011 and earlier editions; German-Korean Chamber of Commerce and Industry, Wirtschaftsrundbrief, 27 May 2011; Ministry of Strategy and Finance, Republic of Korea Economic Bulletin, April 2011; Invest Korea, online: www.investkorea.org (accessed 29 April 2011).

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8 EQUALITY ISSUES COME TO THE FORE, AGAIN With the economy and economic management in South Korea emerging from crisis mode in 2010, more structural, equality-oriented problems have (again) come into focus. While the government treated South Korea’s business conglomerates with kid gloves during the crisis, it adopted a much harsher tone vis-à-vis the chaebǂl in the latter half of 2010. Reflecting a renewed government emphasis on stemming rising inequality in South Korea’s economy and society, President Lee accused business conglomerates in July of failing to fulfil their social responsibilities. Lee argued that economic disparities should narrow, not widen, when the economy grew and demanded from the chaebǂl that they did their bit to reduce the growing gap. At the same time, the government announced a crackdown on illegal or unfair business practices by investigating business transactions between large conglomerates and their suppliers and by boosting the number of tax audits by some 30 percent from about 2,700 such audits in 2009. Lee’s tirade against exploitive business practices on the part of business conglomerates continued in September when he accused leading chaebǂl of buying up promising SMEs instead of co-operating with them for the good of the economy.13 While critics wonder whether Lee, himself a former chaebǂl CEO, is really serious about his campaign for a ‘fair society’, it is undeniable that splits within South Korea’s economy and society have increased in recent years. By and large, big conglomerates and wellconnected elites have prospered, while the vast majority of citizens— and many SMEs for that matter—are facing increasing challenges. In illustration, the number of subsidiaries of the ten biggest conglomerates grew in just three years by nearly 50 percent to reach 649 at the end of March 2011, and the combined wealth of these enterprises climbed by nearly 60 percent during the same period to reach around US$800 billion, equivalent to close to 76 percent of South Korea’s GNP (in 2008, the share was 55 percent) (WRB, 14/2011, 15 April 2011). On the other hand, South Korea’s middle class is increasingly under pressure (cf. Korea 2010: Politics, Economy and Society, pp. 22-23), with high levels of indebtedness and low levels of savings ———

13 Christian Oliver, ‘President tells chaebol sharks to stop snapping up the small fry’, Financial Times, 22 September 2010, p. 7. See also Yonhap, 29 July 2010, and EIU, August 2010: 14-15.

SOUTH KOREA IN 2010

35

characterising the overall state of household finances.14 Moreover, while South Korea’s per capita GDP recovered in dollar terms to over US$20,000 in 2010, it continues to be relatively low for an economy that is, according to the IMF, the 15th largest in the world. Regardless of whether the renewed emphasis of the current South Korean government on ‘fair society’ is a fluke or not, (in-)equality will remain a pressing issue for years to come.

9 THE CHINA FACTOR IN THE ROK ECONOMY AND FREE TRADE South Korea has been a main benefactor of China’s economic rise. In particular, trade relations have developed dynamically over the past years, with demand from China contributing to the tripling of the ROK’s trade volume over the past ten years. China is South Korea’s main trading partner, with Korean exports to China accounting for a quarter of all ROK exports in 2010 and imports from the PRC accounting for a sixth of total ROK imports. In fact, South Korea’s bilateral trade surplus vis-à-vis China in 2010 (US$45.3 billion) was bigger than the ROK’s total global trade surplus. China has also become an important buyer of Korean government debt, with a net purchase of Korean assets reaching around 2.9 trillion won (US$2.54 billion) in the first eight months of 2010 alone. While South Korea’s growing dependence on China is received by many in the ROK with mixed feelings, the government in Seoul would like to see China’s role expand in the one major area where it is still far below potential, that is, in terms of Chinese DI in the ROK economy. In 2009, South Korea attracted only US$160 million of such investment, amounting to only 0.3 percent of China’s total overseas DI of around US$200 billion in that year. South Korea expects Chinese DI in the ROK to rise to US$1 billion in 2012 and to US 2 billion in 2015, which could make China the biggest foreign investor in Korea in terms of annual ———

14 Household debts to disposable income reached 143 percent at the end of 2009 (up from 87.4 percent in 2000), one of the highest levels in the world. Mortgages account for a high portion of this debt and unlike home owners in, say, the UK, home owners in the ROK are not much used to swings in the value of their property. Household savings to disposable income amounted to just 2.6 percent in 2010, far below the OECD average of 6.1 percent. Small wonder then that some economists are very much concerned about the effects of a possibly bursting housing bubble (Deutsche Bank: South Korea Newsletter, February 2011, 7 March 2011: 2, March 2011, 31 March 2011: 2; EIU, January 2010: 14-15).

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inflows. To promote Chinese investment, the Korea Trade-Investment Promotion Agency (KOTRA) created a new China desk at its headquarters in Seoul. There do indeed seem to be untapped opportunities. While the number of Chinese companies operating in South Korea rose from 118 in 1998 to 445 in 2008, this pales in comparison to the 2,373 Japanese and 1,854 US-owned companies operating in the latter year in the ROK (Yonhap, 21 February, 8, 30 August, 30 September 2010). China is the most important economic player with whom South Korea aims to establish an FTA. The government in Seoul plans to draw up a road map for an agreement with China in 2011. A similar road map is to be established with respect to Japan. Here, bilateral freetrade talks have stalled since late 2004, in large part due to Japan’s reluctance to lower tariffs on agricultural imports. More progress has been achieved with a view to establishing an FTA with Australia: five rounds of negotiations were held up to the end of 2010, and South Korea remained hopeful of initialling an agreement during the first half of 2011. The ROK had FTAs with 16 nations in effect at the end of the year and aims at starting negotiations with selected partners in Africa and the Middle East in the near future. South Korea was moving closer to implementation of the FTA with the US in late 2010, when a breakthrough was reached in negotiations about a revision (sought by the US side) of the original agreement signed in 2007. Seemingly against the backdrop of the increased threat posed by North Korea—North Korean artillery had just shelled the island of Yeonpyeong—South Korea acquiesced in concessions in the automotive sector, raising to 25,000 the number of vehicles per US manufacturer that can be imported from the US without meeting ROK safety standards. South Korea also agreed to the US retaining its 2.5 import tariffs on most ROK cars until the fifth year of the implementation of the FTA, while South Korea will reduce relevant tariffs from 8 to 4 percent on the implementation of the agreement and to zero after four years. In return, despite initial pressure from the US for more concessions in this area as well, the stipulations of the original FTA concerning US beef imports remained intact (EIU, January 2011: 1516; Yonhap, 26 December 2010). While the concessions might suffice to clear remaining hurdles in the US congress, it remained unclear when the FTA with the US would be ratified in the National Assembly. The same was true for the FTA with the European Union, signed, after a year’s delay, on 6 October.

SOUTH KOREA IN 2010

37

10 NUCLEAR AMBITIONS The South Korean government has big plans with respect to nuclear energy. The country’s first commercial reactor went online only in 1978, but now the ROK is the fifth-largest nuclear power operator in the world, with 20 commercial reactors in operation. According to the Korea Energy Economic Institute, 14 additional reactors are scheduled for completion by 2024. The South Korean nuclear industry hopes to become self-sufficient in technological terms in the latter half of 2012, when the Korea Hydro & Nuclear Power Co. is scheduled to complete its ‘Nu-Tech’ programme, aimed at designing and manufacturing indigenous fission reactors. In a poll conducted in January 2010 (i.e. well before the nuclear disaster that hit Japan in March 2011) by an interested party, the Korea Nuclear Energy Foundation, 95 percent of respondents thought that nuclear energy was ‘needed’, while 71 percent believed that nuclear energy was ‘safe’. The Ministry of Knowledge Economy (MKE) hopes to increase the country’s self-sufficiency in uranium-based fuels from 6.7 percent of demand in 2010 to 25 percent in 2016 and to 50 percent by 2030. The ministry, which views nuclear power as a ‘new growth engine’ for the economy, thinks that the ROK could sell 80 reactors by 2030. The ROK managed to seal a potentially trail-blazing agreement in December 2009, selling four reactors to Abu Dhabi, but has since failed to win other key contracts in Lithuania, Turkey and Vietnam. Seemingly undeterred, MKE wants South Korea to become one of the top three atomic energy powers in the commercial field by 2030 and aims at a South Korean share of the global market of 20 percent by the same year. In order to reach this ambitious goal, South Korea will not only have to show great diplomatic acumen but will also have to demonstrate to potential buyers that it can handle projects on this large financial scale.15

———

15 Christian Oliver and Song Jung-a, ‘Seoul’s powers wane over nuclear reactor export potential’, Financial Times, 27 April 2011, p. 16. See also Yonhap, 6, 13 January, 24 March, 7 December 2010.

NORTH KOREA IN 2010: DOMESTIC DEVELOPMENTS AND THE ECONOMY Rüdiger Frank

1 INTRODUCTION This overview aims at shedding light on domestic developments in the Democratic People’s Republic of Korea (DPRK—North Korea) in the year 2010. It starts with a systematic analysis of the main regular events, the joint New Year editorial and the annual session of the Supreme People’s Assembly (SPA), based on official publications provided by the Korea Central News Agency (KCNA). The editorial, published simultaneously by the major media of the DPRK including the Party newspaper Rodong Sinmun, is studied intensively in North Korea. It provides insights into the strategic planning of the leadership, even though these are often cloaked behind repetitive and propagandistic phrases. The annual parliamentary session is the only regular official meeting of the top North Korean leadership that the public is informed about. Rare information on economic issues is provided, most importantly on the state budget. The parliamentary session is also a time for the announcement of personnel changes. The major domestic event in 2010 may be judged to be the September conference of the Korean Workers’ Party (KWP). Considering the looming succession issue, the growing economic and political pressure and the fact that the last KWP conference took place in 1966, the importance of this meeting cannot be over-emphasised. Finally, the overview examines other outstanding events of the year, with a focus on the economy but also going beyond. The areas of interest common to all these analytical endeavours are leadership, ideology, and general development trends, which may be identified as

40

RÜDIGER FRANK

‘neoconservative’1 or ‘neo-orthodox’ trends in North Korea in recent years.

2 THE 2010 JOINT NEW YEAR EDITORIAL 2.1 Key topic: Improvement of the people’s standard of living The key topic of the 2010 New Year joint editorial was the ‘improvement of the people’s standard of living’. This theme was connected to a number of other goals and issues. Kim Jong Il was quoted saying that through an improvement in the standard of living, the gate towards a great and prosperous country (kangsǂng taeguk) would be opened.2 The focus on living standards was said to have become possible because of the enormous successes in industrial development. The editorial declared North Korea was an ‘economic giant’,3 a status that was achieved not least thanks to the 100- and 150-day campaigns of intense labour in 2009.4 In order to reach a higher living standard, the focus should now be shifted to light industry and agriculture. The message to the people was relatively clear: you had to suffer because we had to concentrate first on other areas, but now you will finally be able to reap the benefits of this endurance. The actual effect of such promises is, however, questionable, as it is not the first time that these have been made. A few potentially remarkable details should be stressed. These include the mention of local or rural industries (chibang kongǂp kongjang), in particular in connection with the production of consumer goods. This points at two issues: the realisation that consumer goods matter, itself a tribute to the changing preferences in North Korea’s society that were accelerated by the economic reforms of 2002; and a parallel to the Chinese experience and its early stage of reform, when ——— 1

See the author’s overview articles on North Korea in Korea Yearbook 2009: Politics, Economy and Society, pp. 35-55, and Korea 2010: Politics, Economy and Society, pp. 29-53. 2 Note that the wording has changed over time; kangsǂng taeguk is not going to be achieved in 2012, but a gate to kangsǂng taeguk will be opened (my thanks to Brian Myers for this observation). 3 This is a somewhat odd translation in the English KCNA version; the Korean original kyǂngje kangguk simply means ‘economically strong country’. 4 For details on these campaigns, see the author’s overview article on North Korea in Korea 2010: Politics, Economy and Society, pp. 40-43.

NORTH KOREA IN 2010

41

the development of local industries was the major factor in preventing unemployment in agriculture brought about by radically improving efficiency, and the first motor in improving China’s overall economic output.5

2.2 Ideology A clear ‘no’ to the market principle, once at least tolerated, is found in calls for ‘maintaining socialist principles in commodity circulation’ and in the demand to establish a strict discipline in planning, financial management and labour administration ‘so as to give full play to the superiority of the highly organized, socialist planned economy’. Similar passages were contained in the 2009 editorial too. However, the frequency of the use of key ideological terms has dropped compared to the 2009 editorial; in the 2010 version, sǂn’gun (songun) was used 13 times (2009: 26), chuch’e (juche) appeared seven times (14), and socialism/socialist 11 times (27). For a programmatic document like the editorial, this is a rather obvious expression of changes, although we do not completely understand all their aspects. Graph 1 illustrates the development of the use of these terms in all KCNA articles over the past years. With the exception of ‘chuch’e’, which is also used for dating (as in ‘Juche 99’ for the year 2010), we see a similar trend over the year: the frequency of the use of ‘sǂn’gun’ and ‘socialism/socialist’ dropped as compared to 2009 but remained high if compared to the reform period at the start of the 21st century. Drawing conclusions would be preliminary at this point; however, we can at least suspect an increased emphasis on nationalist policies along with a certain stagnation regarding the propagation of conservative socialist values and the Military First Policy.

———

5 For a discussion of rural industries in China and their role in development, see Kate Xiao Zhou (1996), How the Farmers Changed China: Power of the People, Boulder CO: Westview Press.

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Graph 1 Number of English KCNA articles with the terms 6 ‘socialism’, ‘juche’ and ‘songun’ (1997-2010, weighted)

Source: Author’s calculations based on www.kcna.co.jp.

2.3 The leader(s) Unlike the 2009 editorial, which followed what was thought to be a stroke suffered by the North Korean leader in August 2008, the 2010 editorial does not contain any unusual references to Kim Jong Il’s inexhaustible energy or his on-the-spot guidances. A popular exercise in ‘Pyongyangology’ is to look at the titles used for Kim Jong Il. In 2010, he was mentioned 19 times in the editorial; in the Korean version, he was addressed with the titles ‘General’ (changgun, nine times), ‘Leader’ (ryǂngdoja, three), Supreme Com———

6 As the overall number of articles each year is different, we weighted our results by dividing the number of articles with the terms in question by the total number of that year’s KCNA articles. We then multiplied the result by 4,000 and were thus able to restore a value on the y-axis that comes close to the original numeric dimension. Example: For the term songun, we counted 935 articles in 2009, out of a total of 4,852 articles. The weighted value for songun in 2009 is 935÷4,852=0.1927; we multiplied this result by 4,000 and reached 771 (rounded), which is the numeric value we used in the graph. This procedure was applied to all graphs analysing KCNA articles in this overview.

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mander (ch’oego saryǂnggwan, two) and no specific title (great/ Comrade/respected Kim Jong Il, five). Although ‘General’ seems to stand out, five out of the nine instances appear in just one paragraph. In other words, we cannot find any clear preference for a specific function in the editorial. Rather, the titles chosen for him seem to reflect particular parts of the editorial. The English translation of the titles is, as usual, not very precise. The title ‘General’ appears only once, four times Kim Jong Il is addressed as the leader, and five times his name is mentioned without any title or honorific. Most notable is that in both languages, not a single time was he addressed by his Party title General Secretary (ch’ongbisǂ) in the 2010 New Year editorial. This seems counterintuitive, as Rodong Sinmun is the Party newspaper and one with a view on the re-creation of the Party’s leadership structure a few months later during the Party conference (see below). Graph 2 Number of English KCNA articles with Kim Jong Il’s titles (1997-2010, weighted)

Source: Author’s calculations based on www.kcna.co.jp.

A look at graph 2 confirms that the editorial was rather unusual with regard to the titles of Kim Jong Il. In accord with the trend of the past years, in 2010 his Party title ‘General Secretary’ was used above all

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others in the English-language version of the KCNA website. Why not in the editorial? We don’t know.

2.4 North Korea’s ‘normalisation’ In general, a number of signs emerged in the editorial that North Korea is becoming more ‘normal’, i.e. more as other socialist countries used to be before they either reformed or collapsed. One example is the explicit emphasis on foreign trade. It is stressed that ‘we should gain access to more foreign markets, and undertake foreign trade in a brisk way’. This does not mean that North Korean enterprises are free to directly deal with foreign partners; rather, trade is to be conducted through specialised state institutions. However, and this is important far beyond the economy, the North Korean leadership has understood and once again acknowledged the need to generate hard currency income to finance imports, and to gain access to foreign technology. The same can be said for the emphasis of the editorial on ‘peopleoriented policies’ (inminjǂk sich’aek). We should not forget that the so-called ‘unity of economic and social policy’ (‘Einheit von Wirtschafts- und Sozialpolitik’), propagated by East Germany’s Erich Honecker, was, after 1989, identified as one of the major factors behind the disastrous economic situation of his country—among others by his successor Egon Krenz.7 There are indications that the North Korean state is following a similar path and has decided to fight for the hearts of its people by more intensely emphasising social benefits such as free education or free medical care. The actual provision or the quality of these services notwithstanding, it should be noted that similar policies in other socialist countries not only resulted in the ruin of the economy but also failed to achieve their objectives. Only now, with the benefit of hindsight and tacitly forgetting about the price they had to pay, East Germans seem to appreciate the social safety network provided by their long-gone socialist state.8 This network did not prevent them from overturning their government and system in a matter of weeks 21 years ago. It is to be expected that the effects, or non——— 7

See his autobiographical book on the events of autumn 1989; Egon Krenz (2009), Herbst 89, Berlin: Edition Ost. 8 A detailed analysis inlcuding opinion surveys can be found in Gerhard A. Ritter (2007), Der Preis der Deutschen Einheit: Die Wiedervereinigung und die Krise des Sozialstaates, München: C.H. Beck.

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effects, of the state’s spending on social policies will be similar in North Korea. We feel yet another déjà vu when reading in the editorial about an emphasis on science and technology, in particular on CNC technology.9 Almost like a magic bullet or a cure-all, CNC and semiconductors were emphasised in the last few years of East Germany’s existence as if they could save the sinking ship.10 We could even draw parallels to Hitler’s various ‘Wunderwaffe’ projects, including Wernher von Braun’s infamous V-2 rocket, that were supposed to avenge defeat in an already lost war. Does history repeat itself, again?

3 THE ANNUAL PARLIAMENTARY SESSION 3.1 Overview The second session of the 12th Supreme People’s Assembly, the North Korean parliament, was held in Pyongyang on 9 April 2010. Premier Kim Yong Il (Kim Yǂng-il) gave a report on the work of the cabinet (see below). Pak Su Gil, vice-premier and Minister of Finance, presented the report on the state budget. The third agenda item was a constitutional change, on which no details were provided. Finally, Pyon Yong Rip (Pyǂn Yǂng-rip) was elected to the vacant seat of General Secretary of the Presidium of the SPA, and Jang Pyong Gyu (Chang Pyǂng-gyu) was appointed as director of the Supreme Public Prosecutors Office.

3.2 Budget report As each year, an extensive report on the state’s budget was presented during the parliamentary session, on this occasion by Pak Su Gil. (In 2009, Kim Wan Su presented the budget report.) It should be noted that these budgetary reports represent the only official information on the status of North Korea’s economy. Considering that the state owns ——— 9

CNC stands for ‘computerised numerical control’ and refers to the automation of machine tools. 10 For a review of East Germany’s technology policy, see Manuel Schramm (2008), Wirtschaft und Wissenschaft in DDR und BRD: Die Kategorie Vertrauen in Innovationsprozessen, Köln: Boehlau.

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the economy, the state budget comes close to resembling the North Korean GDP, minus the sectors that are treated separately including, as is widely suspected, a large part of the military economy. A look at Graph 3, updated on the basis of the 2010 budget report, indicates that after a recession following the economic reform period, North Korea seems to be catching up—at least on the showing of its own statistics. Graph 3 Economic growth in North Korea according to the DPRK budget (growth rates in %)

Source: Author’s calculations based on www.kcna.co.jp.

According to the budget report, it was possible to avoid a deficit by carrying out the plan for budgetary expenditure by 99.8 percent. The official growth rate of the North Korean economy in 2009 was 7 percent, as this was the rate at which state budgetary revenue was ‘overfulfilled’ if compared to the previous year. At the core of the investment strategy were the metal industry, power and coal industries and railway transport. The key data of the report are summarised in the table below, providing the data for the previous two years for comparison. Note the inconsistency of the structures of the annual reports.

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Table 1 Comparison of state budgets 2008/2009/2010 Plan for 2008 State budgetary revenue Profits of state enterprises Profits of cooperative organisations Fixed asset depreciation Real estate rent Social insurance State budgetary expenditure Local budgetary revenue National defence Priority sectors of the national economy (metal, power, coal, railway) Coal and mining Development of science & technology Agriculture Light industry City management/ construction Popular policies Education Culture and arts Public health Sports

+4% +4.7%

Achieved in 2008 101.6% +5.7%

+0.4%

+2.5%

99.99%

Plan for 2009 +5.2% +5.8%

15.8%

+49.8% +6.1% +5.5%

+5.4%

Plan for 2010 +6.3% +7.7%

+3.1%

+4.2%

+6.1%

+2.5%

+3.6% +1.6% +7%

+2% +1.9% +8.3%

117.1% 15.8%

Achieved in 2009 101.7% +7%

99.8%

15.8% +8.7%

‘overfulfilled’ 15.8% ‘huge investment’

15.8% +7.3%

+8%

+7.2%

+8.5%

+6.9% +5.6% +11.5%

n.a.

+9.4% +10.1% +8.6% +6.2%

+4.2% +5.9%

+8.2% +3.2% +8% +5.8%

Source: KCNA.

3.3 The work of the cabinet Kim Yong Il praised the indomitable mental power of the Korean people, which was instrumental in overcoming a number of difficulties that were not detailed any further. In particular, he claimed that the 150-day and 100-day campaigns contributed to a significant

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growth in industrial output. As in the editorial, the specific achievements he mentioned included chuch’e steel11 and CNC technology. He added space, nuclear and bio-technology. The focus on domestic sources of production and the need for the two speed battles was provided so as to ‘foil the foolish sanctions of the imperialist reactionaries and their followers.’ Unlike the editorial, Kim Yong Il showed no discernable preference for a specific sector of the national economy. Agriculture, light industry, electricity, coal, iron and steel and railways were emphasised as much as technological development and the modernisation of industry. If anything could be identified as at least standing out somewhat, it would be the emphasis on upgrading and modernisation. In our analysis of the editorial (see above), we argued that signs of a ‘normalisation’ of North Korea are visible. The report on the work and future tasks of the Cabinet contained one more instance of this phenomenon,12 when Kim Yong Il announced that ‘a new “sports myth” [ch’eyuk sinhwa] of Songun Korea is created in international games’. Later in 2010, news about the creation of a number of sports universities in North Korea was published by the Japan-based Chosǂn Sinbo.13

4 THE KWP CONFERENCE 4.1 The facts By far the major event of the year in terms of domestic developments in North Korea was the third-ever conference [taep’yojahoe] of the Korean Workers’ Party, announced on 26 June and held in Pyongyang in late September 2010. ——— 11

When visiting the Three Revolutions Exhibition Centre in Pyongyang in 2010, the author received the following explanation: The main feature of chuch’e steel is that it can be produced using domestic coal, rather than imported coke. 12 In East Germany, sports were a top priority of the government; they were even mentioned in Article 25 of the GDR’s constitution. The huge successes were brought into discredit after unification by various reports on systematic doping. See, for example, Udo Scheer, 'Nimm, das ist gut für Dich’, in: Die Welt Online, 1 September 2001. Online: http://www.welt.de/print-welt/article473240/Nimm_das_ist_gut_fuer_ dich.html, accessed 11 March 2011. 13 See http://www.korea-np.co.jp.

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One day before the conference, on Monday, 27 September, Kim Jong Il’s third official son Kim Jong Un (Kim Chǂng-ǎn) was for the first time mentioned in North Korean media when, as a civilian, he was promoted to the rank of general. On the same day, Kim Jong Il’s sister Kim Kyong Hui (Kim Kyǂng-hǎi) was promoted to the same military rank. On 28 September, after a mysterious delay, the first KWP conference in 44 years and the biggest gathering since the last (sixth) Party congress in 1980 opened. It had originally been announced for ‘early September’. Contrary to Western media speculation, Kim Jong Il did not step down nor did he hand over any of his powers to his son. Rather, he was confirmed as the current leader of the party, the military, and the country. From 1945 until 1980, the KWP had six Party congresses and two Party conferences; this means on average one major Party event every 4.4 years. For the next 30 years, it had none. The 21st and so far last plenum of the KWP was held in December 1993. With the 2010 Party conference, the defunct leadership structure of the KWP has been restored. The delegates elected 124 members of the Central Committee and 105 alternate members. From among the members, 17 were named to the Politburo of the Central Committee, and 15 as alternates. The Politburo is headed by the Presidium or Standing Committee of five persons, with Kim Jong Il at the top as the General Secretary of the KWP.14 It also comprises Kim Yong Nam (82 years old),15 Choe Yong Rim (80 years old), Jo Myong Rok (82 years old) and Ri Yong Ho (68 years old). The latter was promoted the day before the KWP conference to the post of vice-marshal. He ranks above Kim Jong Un and his aunt Kim Kyong Hui and is rumoured to be a member of the Kim family which if true, implies a particularly strong base for loyalty. All three known close relatives of Kim Jong Il received posts in the KWP. Kim Jong Un became vice-chairman of the Central Military Commission. Kim Kyong Hui became a member of the Politburo and ——— 14 Note that he is not the General Secretary of the Central Committee of the Party, as would be standard in other socialist countries. This implies that he stands above the Central Committee, which cannot elect him or vote him out. 15 For more details on the leading individuals and the KWP conference, see Rüdiger Frank, ‘Hu Jintao, Deng Xiaoping or Another Mao Zedong? Power Restructuring in North Korea’, in: 38 North, (10/2010), US-Korea Institute at the School of Advanced International Studies, Johns Hopkins University. Online at: http://38north. org/2010/10/1451.

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her husband Jang Song Thaek (Chang Sǂng-t’aek) an alternate member. The names of regular and alternate members were not provided in alphabetical order, indicating a certain hierarchy. Kim Kyong Hui’s name was listed last out of 17 and Jang fifth out of 15. A day later, he was 14th out of 15 on a list of short CVs of regular and alternate Politburo members. Kim Kyong Hui was the only member in addition to Kim Jong Il on whom no details were provided. Except for the Central Committee, there is not a single leadership organ where all three close relatives of Kim Jong Il hold a post; only Kim Jong Il himself does. Kim Jong Un is excluded from the Politburo altogether; Kim Kyong Hui is not on the Central Military Commission; and Jang Song Thaek is only an alternate Politburo member. We could speculate that Kim Jong Il wants to prevent too much of a concentration of power in the hands of one of his relatives. He has made sure that the most crucial instruments of power are staffed with the most loyal of his followers, who will be ready to walk the extra mile and fulfill his strategic decisions with all the energy of a family member and co-owner. As was to be expected, Kim Jong Un has not (yet) become a member or an alternate member of the Politburo, the leading organ of the party. However, he received a high-ranking post in the KWP’s Central Military Commission. As far as we know, this is essentially the organisation through which the Party controls the military, and hence the most powerful of the KWP’s organs. It is no coincidence that this commission is chaired by Kim Jong Il himself. His son comes next in the hierarchy—he is the first of the commission’s two vice-chairmen. Jang Song Thaek is a member, too, but the one with the lowest rank, as it seems. His name was listed last out of 19. Kim Kyong Hui is not a member of the Central Military Commission. On 29 September, an unusually long and detailed KCNA article was published with profiles of all Politburo members. In addition, a large group picture was printed that showed the delegates and the complete Central Committee, including Kim Jong Un. The photo rather openly revealed the true hierarchy within the Party leadership; only 19 people were sitting in the front row, the others were standing. Kim Jong Un sat just one space away from Kim Jong Il, Kim Kyong Hui sat five spaces away from the centre. In a KCNA report on the taking of this picture, Kim Jong Un’s name came fourth after the Politburo Presidium members Kim Yong Nam, Choe Yong Rim and

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Ri Yong Ho. Kim Kyong Hui was number 18, and Jang Song Thaek was number 23 on that exclusive list of 33 leaders. A total of 14 department directors of the Central Committee were appointed, among them Jang Song Thaek and Kim Kyong Hui. However, contrary to predictions by many analysts, Kim Jong Un does not seem to have been appointed director of the Organisation and Guidance Department (OGD), a post his father held before he was announced as Kim Il Sung’s successor.16 This could be due to a number of reasons. Either, Kim Jong Un was already effectively holding that post—we may not know, since the last time such positions were given officially was 1980. Or the division of labour (and power) within the party has changed, for example, in the context of the Military First Policy. In that case, the OGD post may simply not be as important as it used to be. This would imply that the Central Military Commission now makes all the important appointments, and the OGD is merely an administrative unit like any human resources department. The North Korean media published a message from China’s leader Hu Jintao only a day after the delegates’ meeting. Hu stressed the deep and traditional friendship, close geographical relationship and wide-ranging common interests of the two countries. He pledged to defend and promote the bilateral relationship ‘always holding fast to it in a strategic view under the long-term discernment no matter how the international situation may change’ (KCNA, 29 September 2010). This was a message to the North Korean people and the international community: China is going to support the new North Korean leadership (model).

4.2 Analysis Against the background of the rumours that Kim Jong Il was terminally ill and incapable of running the affairs of his country, the KWP conference proved that he is still able to control North Korea. His health will remain subject to speculations, as he is approaching his 70s and nature will eventually take its course. As Graph 4 shows, the spike in guidance trips (and official reports thereof) in 2009 has now flattened, hinting at less nervousness about the leader’s health. However, ——— 16

This department is basically responsible for the Party’s personnel policy and hence regarded as being a key post.

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Kim Jong Il is still extraordinarily active, about three times more if compared to 2004. This can be interpreted both as an attempt to show how healthy he is, and as an expression of his effort to maintain order and stability. The latter would point at some kind of tense domestic situation. Graph 4 Number of English KCNA articles about Kim Jong Il’s guidance activities (1997-2010, weighted)

Source: Author’s calculations based on www.kcna.co.jp.

Kim Jong Il has paved the way for a new leadership without turning himself into a lame duck. He has done so by not leaving any important posts to somebody else—although at the same time he has not monopolised those positions. He has distributed power among a core group of family members and his father’s loyalists, while also ensuring that none of them can be certain of being significantly higher ranking than any of their colleagues. The most important decision regarding human resources has been the introduction of Kim Jong Un as a member of the top leadership of the Party and of the military. He will now have to quickly develop a record (at least on paper) of spectacular achievements, so that he can be presented to the people as the most logical and capable candidate for the next leadership post. Kim Jong Un was appointed with a clear

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reference to the military, as evidenced by his appointment to the rank of general a day before the KWP conference and his position as vicechairman of the KWP’s Central Military Commission. Kim Jong Il appears to be following the same strategy as his father did after 1980. At that time, North Korea analysts noticed that the late O Jin U as the top military official was always standing close to Kim Jong Il. It would now be logical to expect that like his father before him, Kim Jong Un will be responsible for the promotion of top military officers, thereby ensuring their loyalty. In terms of strategic decisions, it seems that the succession from Kim Jong Il to Kim Jong Un will be different from the last changing of the guard in 1994. As early as 2008, it seemed likely that the role of the Party would be strengthened substantially.17 The restoration of the KWP’s formal power organs and the many biographical details that were provided on the top leadership circle including the group photo indicate that the new leader will not be as autocratic as his predecessors. The new leadership will have more faces. This is the reflection of a trend, not a spontaneous event. Most notable is what seems to be a renewed emphasis on Kim Il Sung as the sole source of legitimacy in North Korea.18 The events at the KWP conference suggest that Kim Jong Il is not going to replace him, which would be a precondition for the perpetuation of the current system of leadership. Therefore, Kim Jong Un and all those who come after him will be, like Kim Jong Il, primarily successors of Kim Il Sung and not of their respective predecessor. As expected, a multi-stage approach is unfolding in the process of power transfer. At least one more stage will be needed. The chances are good that this will be the seventh Party congress, the date of which is as yet unannounced. The coming year 2012 would be a good time, considering the health of Kim Jong Il and that year’s auspicious significance as the 100th anniversary of Kim Il Sung’s birth. As emphasised in earlier issues of Korea: Politics, Economy, and Society, many signs point in the direction of North Korea returning to ——— 17

See Rüdiger Frank, ‘Has the Next North Korean Leader Been Announced?’, in: Japan Focus, no. 43, (27 October 2008). Online: http://www.japanfocus.org/Ruediger-Frank/2930. 18 It should be noted, however, that the author observed the beginnings of a more independent emphasis on Kim Jong Il as a leader during a visit to the DPRK in October 2010. Kim Jong Il’s transition from dependent to independent legitimacy needs to be further observed, as it is still an ongoing process.

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the path of orthodox socialism, or at least to its North Koreanised version. Rule by the Party—a collective with a first among equals at the top—is not only a key component of any socialist textbook case; it is also a characteristic of the Chinese model since 1978. After two leaders of the Mao Zedong-type, North Korea may now be getting ready for one similar to the position that the current Chinese president, Hu Jintao, occupies in China, i.e. a strong leader who rules as the head of a collective. With some luck, Kim Jong Un might even turn out to be a Deng Xiaoping, a man who has the power and vision to use this post to initiate and execute crucial reforms.

5 OTHER EVENTS 5.1 Upgrade of the Special Economic Zone in Rasǂn Apart from the succession issue, among the most crucial problems facing the North Korean leadership is the economy. The food shortage rightly receives particularly large international attention. However, it is only the tip of the iceberg. As a typical socialist economy, and being under constant pressure through economic sanctions, North Korea also suffers from a permanent shortage of hard currency and hence a limited capability to import goods and services that are not domestically available. The country has for many years relatively successfully applied self-sufficiency, also known as import substitution, as a counter-strategy. However, with the growing sophistication of its industrialised economy and the growing demands on the consumer side, the limitations of this strategy are now becoming more and more obvious. Accordingly, we can observe efforts at expanding foreign trade and international co-operation, while at the same time making sure that the state remains in control of these activities. The events in this section are a clear evidence of such a strategy. On 4 January 2010, the DPRK designated Rasǂn, the country’s first free trade zone formed of the northeastern cities of Rajin and Sǂnbong, as a ‘special city’. The area was designated as an economic free trade zone in 1991 and touted as ‘Northeast Asia’s Golden Triangle’. Kim Jong Il visited the city in December 2009. Russia invested 140 million euro (US$202 million) in the Rasǂn project in late 2008, mainly for the restoration of railways. China is allegedly involved in developing the zone’s port facilities.

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5.2 State Development Bank and Taepung Investment Group In obvious relation to the upgrading of the Rasǂn zone, on 20 January 2010, KCNA announced plans by the National Defence Commission to launch the State Development Bank to fund its development projects and ‘to provide investment on major projects to be carried out according to state policy’. The Pyongyang-based bank would be capable of conducting ‘transactions with international monetary organizations and commercial banks’. The Korea Taepung International Investment Group, which has close connections to China, will provide funding for the bank. The bank was officially launched on 10 March 2010. It was reported that it was initially capitalised at US$10 billion and has 25 subsidiaries. The South Korean news agency Yonhap,19 quoting the Japan-based newspaper Chosǂn Sinbo, in early March 2010 reported that the Korea Taepung International Investment Group was pushing ahead with a ten-year plan to set up the country’s economic infrastructure, including development projects dealing with food problems, railways, roads, ports, electricity and energy. The projects include the development of the road between Pyongyang and Sinǎiju along the west coast, effectively a link to China. Pak Chol-su, a Chinese resident and president of the investment group, was quoted as stressing the principle of state ownership in the group. He refuted any comparisons with companies in capitalist countries.

5.3 Other developments A few months later, in July 2010, KCNA reported that the Joint Venture and Investment Guidance Bureau had been reorganised into the Committee of Investment and Joint Ventures of the DPRK. This represents a significant upgrading in status and thus signals a renewed commitment to using FDI and joint ventures as a way of modernising North Korea’s economy. North Korea also continued to expand the legal base for international economic co-operation. On 13 August, KCNA announced that it had enacted new laws to facilitate trade with other countries, improve labour rights and protect the interests of economic entities under state supervision. Other administrative organs ——— 19

See www.yonhap.co.kr, 11 March 2010.

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that underwent reorganisation or upgrading in 2010 were the Ministry of Education and the Ministry of State Security. In December 2010, KCNA reported that the State Guidance Bureau of Resource Development was reorganised into the Ministry of State Resource Development. This upgrading points at an even greater emphasis on the development and export of the country’s rich mineral resources, most of which go to China. The latter also seems to be the main partner for the necessary investments.20 The final opening of the Pyongyang University of Science and Technology (PUST) in October 2010 can be seen in this larger context of the DPRK’s attempts at upgrading and modernising its economy through increased international co-operation. PUST, with a sister institution in Northeast China (Yanbian University of Science and Technology—YUST), is a science university founded by American evangelical scholars. PUST had been opened a couple of times before; however, this time actual classes started, although at first limited to a few subjects such as technical English and for a small number of students (about 200). There are, however, plans for significant expansion.21 At the same time as North Korea was trying to secure outside support in the modernisation of its technological standards and expertise, an expansion of the mobile phone network in the DPRK was reported.22 Koryolink, the local mobile phone operator owned by the Egyptian company ORASCOM, was able to gain an additional 34,000 subscribers in the first quarter of 2010, increasing their overall number to over 125,000. Having a mobile phone is a status symbol, as various reports by visitors indicate. However, North Korea is no usual market for mobile phones. It seems that there are at least three parallel networks: one for foreigners, one for ordinary North Koreans, and one for the elite. According to reports from diplomats, so far these networks do not inter-operate. ———

20 For a detailed report on China’s activities in the North Korean minerals sector, see Drew Thompson (2011), ‘Silent Partners: Chinese Joint Ventures in North Korea’. Online: http://uskoreainstitute.org/research/special-reports/silent-partners-chinesejoint-ventures-in-north-korea/ (accessed 14 March 2011). 21 See Hanguk Ilbo, 21 April 2011, ‘Puk ch’oego myԁngmun sahagԃro uttuk p’yԁngyang kwakidae’; for more information on PUST, see http://pust.kr/. 22 See Financial Times, 3 February 2011, ‘N. Korea Mobile Phone Operator Expands’; and PC World, 13 May 2010, ‘Cell Phone Demand Stays Strong in North Korea’.

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These limited but hopeful developments stand, however, in sharp contrast to security-related events that determined the international image of North Korea in 2010.23 These include the sinking of the South Korean corvette Cheonan (Ch’ǂnan) in March and the shelling of Yeonpyeong (Yǂnp’yǂng) island in November. In the same month, the DPRK showed a US expert what seemed to be a uranium enrichment programme, the existence of which had long been denied. The domestic developments in North Korea in 2010 thus form a mixed picture. Within the overall context of an ongoing return to orthodox pre-reform positions, there are signs of a strong interest in international economic co-operation to resolve the country’s deeprooted problems in the food and energy sector, including a further improvement of the related institutional and legal structure. There are also cautious signs of a slow economic recovery. The succession issue has not yet been resolved, but the long overdue rejuvenation of the Party’s leadership organs has finally taken place. At the same time, the use of force and the show of military strength raise questions over domestic political stability, the chances for an amelioration in the international attitude towards North Korea as an economic partner, and the regime’s credibility, and, as a consequence also over the chances for a peaceful and co-operative solution of the many open problems surrounding the DPRK.

——— 23

See the chapters on the DPRK’s foreign relations and on inter-Korean relations in this volume.

RELATIONS BETWEEN THE TWO KOREAS IN 2010 Sabine Burghart

INTRODUCTION The year that saw the 60th anniversary of the beginning of the Korean War (25 June 1950), and the tenth anniversary of the first inter-Korean summit, turned out to be one of the most conflict-ridden of recent decades. At its end, not much remained of the euphoria and optimism over the rapprochement between the Republic of Korea (ROK—South Korea) and the Democratic People’s Republic of Korea (DPRK— North Korea) that had marked the years 1997-2007. In 2010, verbal threats and provocations turned into violent actions and deadly incidents. Although the year started with a few positive signs, its end saw the DPRK military firing artillery shells at South Korea’s Yeonpyeong (Yǂnpy’ǂng) island that killed four people, among them two civilians, and caused much damage.

1 MANAGING A CRISIS: THE IMPACT OF CHEONAN AND YEONPYEONG On 26 March 2010, the neglected conflict on the Korean peninsula was back in international headlines. The sinking of the South Korean patrol combat corvette Cheonan (Ch’ǂnan), claiming the lives of 46 seamen, marked a peak in a period of escalating political and military tensions in the region. The 1,200-ton warship sunk at 9.45 p.m. after an explosion in the Yellow Sea, about a mile south of Paengnyǂng Island and close to the Northern Limit Line (NLL), the maritime border that was unilaterally drawn by the US-led UN forces in 1953 and which was never recognised by the DPRK. Although there were suspicions about a North Korean attack, in a first cautious reaction, ROK

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officials said that it was ‘unlikely’.1 Two months later, an investigation team consisting of South Korean, Australian, British, Swedish and US experts, who were joined by a Canadian group towards the end of the enquiry, reported that they had found evidence of a North Korean torpedo attack. There were rumours that, on the available evidence, not all members of the multinational investigation team were convinced by the evidence offered. In South Korea and beyond, the composition of the expert group, which was drawn from states friendly to the ROK and which were mostly critical of the DPRK, drew adverse comment. A separate Russian investigation into the causes of the sinking appears to have concluded that the explosion was probably caused by a mine. While the ROK government holds the DPRK responsible for the torpedo attack, the latter vehemently denied any involvement in the deadly incident. In a statement published on 20 May 2010, the DPRK National Defence Commission called the investigation results of the multinational group a ‘fabrication’ (naljo).2 In this statement, the South Korean government and its representatives, particularly President Lee Myung-bak and the then Defence Minister Kim T’ae-yǂng, were denounced as ‘traitors’ and ‘gangsters of the puppet military’. The DPRK also demanded that it be allowed to conduct its own investigation into the incident, a demand that the ROK rejected. The ROK government referred the case to the United Nations’ Security Council (UNSC) but proved unable to get a condemnation of the DPRK. Instead, the UNSC issued a presidential statement on 9 July 2010 that condemned the attack, but which took note of both the results of the ROK’s international investigation and the DPRK’s denial of any involvement in the incident.3 The UNSC statement could be seen as a result of diplomatic bargaining that reflects power relations in Northeast Asia rather than any real examination of the issue. In South Korea, the Lee administration faced criticism from both the conservative and the liberal camp about the way it had handled the crisis. The ROK’s official reaction to the sinking of the Cheonan came late. One may only speculate about the reasons for the government’s ——— 1

Joongang Daily, 28 March 2010, ‘Rescue operations continue in search of survivors from sunken ship’. Online: http://joongangdaily.joins.com/article/view.asp?aid= 2918414 (accessed 14 February 2011). 2 KCNA, 20 May 2010. Online: http://www.kcna.co.jp/index-k.htm (accessed 14 February 2011). 3 UNSC, S/PRST/2010/13, 9 July 2010. Online: http://www.un.org/News/Press/ docs/2010/sc9975.doc.htm (accessed 5 April 2011).

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cautious reaction and its decision to publish the report of the international investigation team shortly before the local elections on 2 June 2010. According to a survey published by the South Korean private commercial broadcaster SBS, 67.2 percent of respondents believed that the ruling Grand National Party (GNP) had mainly political reasons for its behaviour.4 However, if the conservative campaign strategists had hoped that the fear factor would pay off for them in the polls, such hopes were disappointed (see the overview by Patrick Köllner on South Korea in this volume). President Lee on 24 May announced a number of countermeasures following the Cheonan incident. These included a ban on North Korean ships using South Korean waters, and the suspension of interKorean trade and economic co-operation with an exception for the Kaesǂng Industrial Complex (KIC). Humanitarian assistance to the North, already much curtailed, was eventually reduced to a minimum for infants, children and the elderly. Scholars, opinion leaders, and businessmen questioned the appropriateness and effectiveness of the ROK government’s decision, which led to a drastic reduction in interKorean exchanges and created further headaches among the business community, particularly among those who had investments in the KIC. The presidential statement urged the North Korean leadership to take full responsibility and to apologise for the sinking of the Cheonan, and also emphasised the ROK’s right of self-defence in case of any violation of its territory by the DPRK. Furthermore, propaganda loudspeakers, which had been removed in 2004 following the 2000 summit, were re-installed along the Demilitarised Zone. The North threatened to shoot them down, and they were not turned on. More importantly, a sequence of joint military drills was held with the US and Japan (the latter taking an observer status). On 25 July 2010, under the code name of ‘Invincible Spirit’, the US and ROK forces started a four-day massive joint military exercise in the East Sea. A few months earlier, in March, both countries had already conducted their regular military drills ‘Foal Eagle’ and ‘Key Resolve’ in the West Sea. Previous plans to hold exercises scheduled for July as a response to the Cheonan incident in the Yellow (West) Sea were cancelled, following security concerns raised by the Chinese government. ——— 4

SBS, 30 May 2010. Online: http://news.sbs.co.kr/section_news/news_read.jsp? news_id=N1000752699 (accessed 21 July 2010).

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The opposing positions regarding the Cheonan incident were reaffirmed during the inter-Korean military talks—the first in two years— that were held in P’anmunjǂm at the end of September and which ended without any tangible agreement. The ROK side demanded that the North admit and apologise for the attack, while the DPRK side repeated its request to allow North Korean experts to verify the results of the international investigation team. According to ROK media reports, the DPRK representatives also articulated continuing concern over the propaganda leaflets sent by South Korean activists into the North denouncing the North Korean leadership. In the past, the ‘leaflet affair’ has been repeatedly on the agenda of official talks between the two Koreas. The propaganda leaflets are part of the revived psychological warfare between the two Koreas. In November, the ROK navy began a live firing exercise in the West Sea, despite North Korean protests. On 23 November 2010, some 150 North Korean artillery shells landed on the South Korean island of Yeonpyeong, which lies only 12 km from the DPRK mainland. In the attack, four South Korean nationals were killed, two soldiers and two civilians, and about seventy homes damaged. While collateral damage in similar clashes in the past was limited to military personnel and facilities, the Yeonpyeong incident violated the ‘principle of distinction’ by attacking ROK territory and its civilians through military means. In contrast to the Cheonan incident, the DPRK government admitted its involvement in and responsibility for the artillery attack on the island a few days later. In South Korea, contradictory official statements by the Blue House and the defence minister about the course of the event and the effectiveness of ROK counter-fire created confusion and finally led to the dismissal of Defence Minister Kim T’ae-yǂng. Kim had survived calls for his resignation at the time of the sinking of the Cheonan. In a rarely seen display of military power, the American nuclear carrier, the USS George Washington, was brought into the West Sea to take part in the military exercises. Despite rising tensions, verbal threats by the DPRK and strained relations with China, ROK-US joint military exercises continued until the end of 2010. Artillery drills were held on both sides of the inter-Korean border: ROK marines held livefire exercises close to the NLL, and the DPRK military conducted similar drills not far from the South Korean island of Paengnyǂng.

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2 LIMITATIONS OF LEE MYUNG-BAK’S SELF-DEFINED PRAGMATISM A survey published by the Institute for Peace and Unification Studies (IPUS) in October showed that, since it took office in 2008, the current ROK government has been losing public support with regard to its North Korea policy. The course of events revealed the limitations of President Lee Myung-bak’s self-defined pragmatism. What was widely perceived as inappropriate or incompetent crisis management by the ROK leadership had an impact on the latter’s credibility. To many conservatives, the ROK’s reaction to the North was too soft. Liberals, however, claimed that it was the government’s hardline policy that had provoked the attacks. For example, Lim Dong-won, former chief of the ROK National Intelligence Service during the Kim Dae-jung administration, in an interview emphasised the necessity of a North Korea policy with a ‘more long-term vision’ and criticised the government for ‘suffering big losses for small gains’.5 Considered a routine measure for incumbent South Korean governments, the drafting and modification of contingency plans for an eventual collapse of or military attack by the North has been on the agenda of the Lee administration since its inauguration. Related issues such as means to finance future unification were also part of President Lee’s pragmatism towards inter-Korean affairs and North Korea policy. In 2010, Lee came up with controversial measures and ideas, such as the introduction of a unification tax. Addressing the nation on Liberation Day, 15 August (marking the 65th anniversary of liberation from colonial rule), Lee proposed the introduction of a unification tax in order to be able to cope with the socio-economic challenges of future unification.6 Research conducted by the Korea Development Institute, estimating the costs of unification, concluded that, depending on the progress of unification (collapse versus gradual unification), union with the North would cost between US$10 billion and US$72 billion annually for a period of thirty years, depending on how ———

5 Hankyoreh, 20 October 2010, ‘Korea Peace Forum Leader Calls for New Direction in N. Korea Policy’. Online: http://english.hani.co.kr/popups/print.hani?ksn= 444714 (accessed 5 January 2011). 6 Ch’ǂngwadae (Blue House), 15 August 2010, ‘Bonmun sijak I taet’ongnyǂng, che 65 chunyǂn kwangbokchǂl kyǂngch’uksa’ (opening of the official text by President Lee, celebration of 65th Liberation Day). Online: http://www.president.go.kr/kr/ president/news/news_view.php?uno=1137&article_no=256&board_no=P01&search_ key=&search_value=&search_cate_code=&order_key1=1&order_key2=1&cur_page _no=1&cur_year=2010&cur_month (accessed 18 August 2010).

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unification was achieved. Lee’s tax proposal did not meet with much support or enthusiasm. According to media reports, GNP members had not been consulted about this proposal, and opponents criticised it as inappropriate. Most observers doubted the necessity of introducing a unification tax in addition to the inter-Korean co-operation fund, a state-managed fund that was established in 1991.7 Up to the end of 2010, the Lee administration had spent less than 6 percent of the available funds that are annually earmarked by the National Assembly (compared to a spending rate of 37-92 percent between 2000 and 2007). The money, about US$55 million, was mainly used to finance loans for inter-Korean economic projects and humanitarian exchanges. Other observers were concerned that the unification tax would further damage inter-Korean relations because it presumed an imminent collapse of the DPRK. In reaction to public criticism, Lee announced via his spokeswoman that the introduction of the unification tax was not imminent and that he would seek the consent of the opposition party on the question. Different models to finance Korean unification have been discussed among South Korean scholars and government officials, such as an increase in Value Added Tax from currently 10 percent to 17 percent (the OECD average), and earmarking 1 percent of the fiscal budget for measures supporting unification. In his speech on Liberation Day, Lee also emphasised the need for a paradigm change (saeroun p’aerǂdaim) in inter-Korean relations and sketched a three-stage roadmap for unification. The first goal was the achievement of a peaceful community through denuclearisation. The second stage would see an expansion of inter-Korean exchanges and co-operation that would lead to an economic community. The final stage of the unification process would be reached by the creation of a community of the Korean nation in which fundamental rights and freedoms were guaranteed. At first sight, Lee’s roadmap is similar to the unification blueprint formulated by Kim Yǂng-sam, president from 1992 to 1997. However, the approaches differ: whereas Kim pursued a two-fold approach of peace and economic co-operation, Lee emphasised peaceful coexistence and denuclearisation as a precondition for economic co-operation. According to media reports, the ROK’s ‘Presidential Council for Future and Vision’ is drafting a master plan for unification. In December 2010, President Lee voiced his ——— 7

Under the Roh Moo-Hyun administration (2003-08), the fund was increased from US$500 million to US$1 billion.

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belief that outside information and awareness about South Korea’s prosperity in the North would bring unification closer.

3 KAESǁNG INDUSTRIAL COMPLEX: TROUBLED SYMBOL OF INTER-KOREAN RECONCILIATION? The countermeasures announced by the ROK government on 24 May as a reaction to the Cheonan incident had an immediate impact on inter-Korean co-operation and exchanges. By the end of May economic, social and cultural exchanges between the two Koreas were suspended and visits by South Koreans to the North banned. As a result, interKorean trade decreased by 30 percent. This also hit South Korean companies in the KIC, which accounted for 70 percent of total trade.8 As a consequence, several of the 700 South Korean companies with established trade relations with the North faced bankruptcy. Business leaders affected by the trade ban demanded compensation from the ROK government. The Lee administration reacted to the pressure and provided low-interest loans (2 percent interest rate) to the troubled companies. The KIC, once regarded as a visible symbol of inter-Korean cooperation and rapprochement, was also affected by the rising political tensions and escalation in inter-Korean relations. Although business activities at the KIC were to a certain degree exempted from the government measures of May 2010, the policies had an impact on daily business operations. For example, the Lee administration reduced the number of ROK personnel allowed to work at the KIC by half, citing unspecified ‘security reasons’.9 Facing operational challenges and financial difficulties, KIC businesses sought new ways of representing their interests. In an attempt to become more independent from politics, executives of the KIC companies established a corporate representative council as a direct, though not independent, channel to the DPRK authorities. It planned to hold direct talks related to issues such ——— 8

Already in March 2010, the ROK government had reduced import quotas for agricultural products from the DPRK, including shrimp, crab, peanuts, etc., by half. The number of trips by cargo ships serving between Pusan and Rajin decreased from three to one per month. 9 The National Assembly of the Republic of Korea, 2010, ‘Amendment to the Act on the Support of Kaesong Industrial District’, recently enacted laws. Online: http:// korea.assembly.go.kr/res/tra_read.jsp (accessed 6 May 2010).

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as wage and taxes with the DPRK’s ‘General Bureau for Central Guidance to the Development of the Special Zone’, while keeping in line with the ROK authorities. Previously, all communication between KIC companies and the North Korean side ran via the South Korean government channel. By decentralising and de-politicising the discussion and solution of technical issues related to infrastructure, telecommunication and customs at the KIC, some hoped for a stabilisation of business operations in the industrial zone. Despite rising political tensions, the number of North Korean workers at the KIC increased by a few thousand, to around 45,000, who were employed by more than 140 companies. Another inter-Korean economic project, the Mt Kǎmgang tourist resort, which opened in 1998 and is operated by Hyundai Asan, remained suspended for the second consecutive year. All tourist tours to the mountain resort have been halted since July 2008 after a South Korean citizen was shot by a North Korean guard, after she reportedly entered a militarily restricted area. The DPRK government has been putting pressure on the ROK to resume the tours, which represented a source of stable income and foreign currency. Between 1998, when the first tours were offered, and the tragic incident in 2008, about two million tourists had visited Mt Kǎmgang. In summer 2009, Kim Jong Il and the Hyundai Group chairwoman, Hyǂn Chǂng-ǎn, agreed to resume the stalled inter-Korean tourism projects. However, the ROK government refused to allow tours to resume until the shooting incident was fully investigated and the safety of its citizens guaranteed. The North Korean authorities increased pressure on the Lee administration by threatening to seek new business partners, possibly Chinese tour operators. In April 2010, after confiscating ROK government-run facilities and freezing most of the privately owned ROK assets, the DPRK authorities expelled most of the South Korean employees. Hyundai Asan and other private companies holding longterm leases of land and buildings of more than US$300 million in the tourist area were faced with financial losses. According to Yonhap news agency,10 Hyundai Asan’s monthly losses amounted to about US$2 million in 2010. In the section of Kangwǂn province that lies in South Korea and borders North Korea, income from the tourism sector is also reported to have decreased substantially. Since the suspension ——— 10

Yonhap news agency, 13 May 2010.

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of the tours, the facilities of the Mt Kǎmgang resort have been used to host the separated families during the official reunions.

4 HUMANITARIAN AID: REDUCED TO A SYMBOLIC GESTURE Since Lee Myung-Bak took office in 2008, large-scale ROK humanitarian assistance to the DPRK has stopped. The current administration has repeatedly emphasised that it would not give such assistance, considered as political aid, to the North. The ROK minister of unification, Hyǂn In-t’aek, stressed that the government had no plans to change its policy in this regard: humanitarian aid would only be provided to ‘those truly in need’, i.e. infants, children and the elderly.11 The ROK’s position became evident when it rejected demands by the DRPK to provide 500,000 tons of rice and 300,000 tons of fertiliser. In a symbolic move the South Korean government sent 5,000 tons of rice and three million packs of instant noodles as well as 10,000 tons of cement as emergency flood aid to the DPRK in August 2010. In contrast to the seemingly unconditional engagement policies of the Kim Dae-jung and Roh Moo-hyun governments,12 the current South Korean administration has linked the provision of massive humanitarian and economic aid to progress in the DPRK’s denuclearisation. In 2010, the ROK government added a further precondition and announced that official aid to the North would only be resumed after the DPRK authorities took full responsibility for the sinking of the Cheonan. Smaller humanitarian projects such as shipments of food and medicines have been implemented by South Korean non-governmental organisations (NGOs) (see the assessment for 2009 at pp. 60-62 of Korea 2010: Politics, Economy and Society). These projects, however, are not carried out without the prior consent of the government. Any shipment to the DPRK needs approval from the ROK Ministry of Unification (MOU). In February 2010, the North Korean government accepted 10,000 tons of corn aid that had been offered by the South in October 2009. After the first cases of H1N1 infection were reported in ——— 11

Seriworld, 18 October 2010, 'Government Drafting Plan for Unification Tax by mid-2011: Hyun'. Online: http://www.seriworld.org/06/wldNewsV.html?mn=D& mncd=0406&key=20101018000005§no= (accessed 31 January 2011). 12 The previous governments sent 300,000-400,000 tons of rice and fertiliser annually to the DPRK.

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North Korea, 200,000 hand antiseptics worth US$880,000 were provided to prevent the spread of the virus. In addition, the MOU approved shipments of infant nutrition and anti-malaria aid by South Korean NGOs. Twenty tons of powdered skim milk worth US$139,000 and anti-malaria aid kits worth US$340,000 were delivered by private organisations to the DPRK in August. The provision of the latter marked the first visit of ROK citizens to the DPRK after the travel ban was imposed. South Korean NGOs have been trying to respond to demands from their donors for more transparency and accountability. To monitor the distribution of aid in the DPRK, the Korea NGO Council for Cooperation with North Korea (KNCCK, Taebuk hyǂmnyǂk min’gan tanch’e hyǂbǎihoe), which represents about fifty South Korean NGOs sending aid to the DPRK, sought to open an office in the North but the MOU turned down the request.

5 OTHER DEVELOPMENTS Polarisation over the ROK government’s North Korea policy is reflected in society and in the academic sphere. Insiders were alerted by the decision to merge two research institutes, the Sejong Institute and the Korea Economic Research Institute, an affiliate of the Federation of Korean Industries. When further details about the restructuring plan became known, it spurred public controversy. Under the new arrangements, both research institutes would dissolve to create an economy-focused corporate institute. Since many researchers at the Sejong Institute acted as advisors or even served as high-ranking officials to the former liberal governments of Kim Dae-jung and Roh Moo-hyun, the underlying motivation of the merger was regarded by many as clearly political. While most scholars working at the Sejong Institute perceive themselves as reformist and progressive, opponents call the Institute pro-North Korean and a ‘hotbed of leftism’ (chwap’a sogul). Opposition by the Institute’s labour union and public criticism have put the plans on ice, at least for the time being. Amid political tensions, the national Red Cross societies of both Koreas agreed to hold family reunions between 30 October and 5 November. It was the 18th round of face-to-face meetings between more than 550 South Koreans and their family members in the North. The meetings took place at the family reunion centre, a ROK governmentrun facility built in 2005 and located at the Mt Kǎmgang resort. The

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first family reunions in the form of home-town visits negotiated and organised by the national Red Cross societies were introduced in the 1980s. With few exceptions the meetings have been held in the DPRK, particularly at the Mt Kǎmgang resort. Apart from the official face-to-face meetings, video reunions were also introduced several years ago. Although privately organised family reunions (e.g. via brokers) in third countries, mainly China, are an option for some South Koreans, for most of the 80,000 ROK citizens who are registered with the ROK’s Integrated Information System for Separated Families (Isan kajok chǂngbo t’onghap sisǎt’em) there is little hope that they will be able to meet with their relatives in the North before they die. According to South Korean sources, the South’s proposal to establish regular family reunions was accepted by the DPRK side, but agreement on the frequency of the meetings is still to be reached. The North Korean delegation is reported to have linked the approval of additional meetings to the resumption of tours to Mt Kǎmgang and to food aid deliveries from the South. Another humanitarian issue of concern to the ROK government is the repatriation of the several hundred South Korean prisoners of war and abductees allegedly held in the DPRK. South Korean officials have been considering a programme similar to the ‘Freikauf’ policy pursued by the West German government from the 1960s. West Germany paid a ransom of 40,000-95,000 Deutschmark for each of the 35,000 GDR citizens released. Critics of the policy pointed at the fact that these cash flows further strengthened the GDR government. The ‘Freikauf’ model (hangukp’an p’ǎraik’aup’ǎ) and the North Korean human rights law (pukhan in’gwǂn pǂp) have been discussed among members of the ROK National Assembly’s Committee on Foreign Affairs, Trade and Unification. By the end of 2010, the number of North Korean refugees in the ROK reached 20,000. Most people enter South Korea via a third country and after a long journey that lasts between several weeks and few years. DPRK citizens rarely enter the South directly by boat. In 2010, a few North Koreans managed to reach ROK territory in a wooden barge. The increasing number of refugees has prompted the South Korean authorities to build further facilities to support the new settlers. Scholarly work on the hurdles faced by many North Korean refugees in South Korea point at socio-economic difficulties, social discrimination and wage discrimination. The compulsory re-education programme at Hanawǂn, a government-run facility, does not seem suffi-

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cient to prepare them for integration in South Korean society. Additional training and mentoring by ROK voluntary groups is needed. According to a survey conducted in 2010, 62 percent of the respondents expressed their general willingness to volunteer in such programmes; of those, 7.7 percent indicated that they really intended to volunteer (active), 54.3 percent responded that they would participate if there was an opportunity (passive), and 37.8 percent responded that they were not willing to volunteer in such programmes.13

6 OUTLOOK Amid speculations about negotiations for a third inter-Korean summit meeting, it might be argued that the year 2010 represented a peak in rising political and military tensions between the two Koreas. It seems that the incidents and the countermeasures taken by the Lee administration have further consolidated the polarisation of South Korean society. Opinion leaders and scholars remain divided over the question of an appropriate North Korea policy, i.e. containment versus engagement. According to a survey conducted two weeks before the Cheonan incident, South Koreans were ambiguous about the impact of a possible inter-Korean summit meeting: 45.2 percent of the respondents believed that a third inter-Korean summit could lead to an improvement in bilateral relations and peace on the Korean peninsula, while 41.8 percent expressed their scepticism with regard to the effectiveness of such a meeting. However, by linking the resolution of the Cheonan incident to other bilateral issues such as humanitarian aid, economic co-operation and the resumption of the stalled Six Party Talks, the options regarding rapprochement towards the North seem relatively limited for the current ROK government. Having denied any involvement, the DPRK is unlikely to comply with the ROK demand to take responsibility for the alleged torpedo attack and to punish those responsible. It is hard to see how this stalemate can become a turning point in inter-Korean relations.

———

13 Minju p’yǂnghwa t’ongil chamun hoeԃi (National Unification Advisory Council), March 2010, ‘Taebuk chǂngch’aek ch’ujine kwanhan chǂngch’aekkǂnԃi’ (Proposal on the promotion of North Korea policy), p. 119.

FOREIGN RELATIONS OF THE TWO KOREAS IN 2010 James E. Hoare

INTRODUCTION At the beginning of the year, most commentators would have predicted that the dominant themes in the foreign relations of the two Koreas in 2010 would be continued concerns over nuclear matters, and perhaps the anniversaries of the 1910 Japanese annexation of Korea and the 1950 outbreak of the Korean War (1950-53). In the event, although the nuclear issue was never far away, it was the sinking of the Cheonan (Ch’ǂnan), a naval corvette of the Republic of Korea (ROK—South Korea), in the West (Yellow) Sea in March and the shelling of the ROK island of Yeonpyeong (Yǂnp’yǂng) in November, that led to diplomatic and military activity far beyond the peninsula.1 The Democratic People’s Republic of Korea (DPRK—North Korea) was held responsible for the sinking of the corvette, and widely condemned for both incidents, and there were claims that the peninsula was on the brink of a second Korean War. But despite the rhetoric and the sabre-rattling, neither of the Koreas nor their supporters allowed the wilder demands for action to prevail.

1 REPUBLIC OF KOREA 1.1 Relations with the United States Although the Lee Myung-bak government somewhat exaggerated the deterioration in relations with the United States (US) that it claimed had taken place under presidents Kim Dae-jung and Roh Myoo-hyun between 1998 and 2008, there was no doubt that by the end of 2010, ROK-US relations were at their closest for many years. Any lingering ——— 1

See Sabine Burghart, ‘Relations Between the Two Koreas’, in this volume.

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doubts that a US Democratic president would be ‘soft’ on the DPRK disappeared, as the US rallied in support of the ROK over both the sinking of the Cheonan and, at the end of the year, the shelling of Yeonpyeong island. US experts took part the investigation into the Cheonan sinking (see below). When the results were declared, US Secretary of State Hillary Clinton in May fully endorsed the findings at a press briefing in Seoul, and the US also endorsed the subsequent ROK decision to refer the matter to the United Nations Security Council (UNSC). Indeed, on most issues relating to the DPRK, it would have been hard to find any differences between the two. There were frequent meetings between President Lee and US President Barack Obama, and many other frequent high-level exchanges between the two sides. In addition to the usual annual joint military exercises, ‘Key Resolve’ and ‘Foal-Eagle’, which took place just before the sinking of the Cheonan in March, a series of naval exercises in the West Sea were designed to make the point that further provocative behaviour by the DPRK would meet with a united response. Both countries ignored the hostile Chinese reaction to the exercises, which while well outside Chinese waters, were staged in an area that seems uncomfortably near to the Chinese. The closeness of ROK-US relations allowed the Lee government to go ahead on another military-related issue, the postponement of the planned transfer of wartime operational control over ROK forces from the US. The arrangement dates from the Korean War, when the then ROK president, Syngman Rhee, placed ROK forces under the authority of the United Nations Command (UNC). The arrangement continued after the 1953 Armistice Agreement, but in 1978, a ROK-US Combined Forces Command took over the role formerly assigned to the UNC. Negotiations to end the arrangement began during the presidency of a former general, Roh Tae-woo, and in 1994, peacetime command passed to the ROK, with the arrangements for wartime command remaining in place. Negotiations began for the transfer of wartime control, and agreement was reached in 2007 that this would take place in 2012. Although the negotiations had begun under conservative governments, their completion under the liberal Roh Myoohyun raised conservative suspicions and a demand for postponement, a demand that grew stronger as relations between the two Koreas deteriorated. It came as no great surprise, therefore, that in the margins of the June G20 meeting in Toronto, Lee and Obama agreed that the handover would be postponed until December 2015.

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Two other moves that pleased the US were the return of ROK troops to Afghanistan in June, and an increasingly active ROK role in the proliferation security initiative (PSI). The first decision ignored a pledge made to the Taliban in 2007 to secure the release of a group of detained ROK missionaries that ROK forces would no longer operate in the country.2 The Lee government indicated in 2009 that it would not be bound by this undertaking, and the first troops arrived in June 2010. By the end of the year, there had been no repercussions. Becoming more active in the PSI was also the fulfilment of a pledge made in 2009. Although in favour of the principles behind PSI, which aims at the restriction of proliferation of weapons of mass destruction by sea, the ROK had not joined on its inauguration in 2003 because of fears that it would be seen as unduly provocative by the DPRK and concern at what might happen if a DPRK vessel was stopped. Even though the Lee government said in 2009 that it would in future take part following a DPRK rocket launch, it did little until the sinking of the Cheonan. That changed its approach. During 2010, the ROK navy began to take a full part in PSI activities, including exercises. It organised the ‘Eastern Endeavour 10’ exercise from 13 to 14 October, and was host to the Asia Pacific Workshop from 28 to 29 October, which 12 countries attended. It became a member of the PSI Operational Experts Group at the latter’s meeting in Tokyo at the beginning of November. All of this was coupled with a more robust attitude towards DPRK shipping, which was banned from ROK waters from May. Even the closest alliances have their moments of stress, however. The ROK-US Free Trade Agreement, originally signed in 2007, remained unratified. President Obama promised at the Toronto G20 meeting that the US would complete the necessary processes by the time of the next G20 meeting, scheduled for Seoul in November, but this deadline also passed without the agreement being finalised. Beef and automobiles remained sticking points. Another issue was the question of sanctions on Iran over its nuclear programme. Given the ROK’s concerns about the DPRK nuclear programme and the persistent reports of DPRK-Iran co-operation on nuclear issues, support for sanctions seemed a logical step. But when the US State Department co-ordinator on Iran and North Korean assets, Robert Einhorn, called for action in August, including the freezing of the Iranian Bank Mellat ——— 2

For background, see Korea Yearbook 2008: Politics, Economy and Society, pp. 63-64, and Korea 2010: Politics, Economy and Society, p. 68.

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assets in Seoul—one of three foreign outlets of the Bank—the ROK government seemed reluctant to comply. The problem is that there are 18 major ROK companies involved in Iran and it is the country’s fourth largest supplier of oil.3 On a previous occasion when the ROK agreed to impose sanctions in 2008, the Iranians had reacted by cancelling some contracts. Eventually, however, the ROK complied, blacklisting some 102 Iranian companies and 24 individuals, and closing the Bank Mellat branch. However, measures were put in place to allow some trade, especially in oil, to continue, which the US appeared to accept. By the end of the year, there appeared to have been no Iranian countermeasures against the ROK. One issue that may cause difficulties in coming years is the question of the revision of the 1973 ROK-US Atomic Energy Agreement, due to expire in 2014; discussions began in October in Washington DC. Already there are signs that the ROK and the US have different agendas on the issue, and there is likely to be more divergence as negotiations continue.4 Hints from a few ROK commentators that it might be a good idea if the US were to reintroduce nuclear weapons, withdrawn in 1991, found little US support.

1.2 Relations with China The ROK wants good relations with the People’s Republic of China (PRC). China’s close proximity and the long historical links between China and Korea have had a major impact on how Koreans view the world. Since the establishment of diplomatic relations in the early 1990s, trade and other exchanges between the two have grown at a fast rate. South Korean companies are to be found all over China, and much that once was made in Korea is now made in China. It is, however, a complex relationship. The division of Korea in 1945, the Cold War and the Korean War, in which the newly established PRC came to the assistance of the beleaguered DPRK and prevented reunification of the peninsula under ROK auspices, have all left their mark. Close ———

3 See Reuter’s report of 8 September 2010, online: http://in.reuters.com/article/ 2010/09/08/idINIndia-51351520100908 (accessed 26 May 2011). 4 John P. DiMoia, ‘“Atoms for sale”: From “Atoms for Peace” (South Korea) to “Weaponized” Plutonium (North Korea), 1955-2009’, in: Korea Yearbook 2009: Politics, Economy and Society, pp. 117-41, gives some background to the original agreement.

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economic involvement with the ROK, and apparent growing political ties, have not prevented the PRC from continued support for the DPRK. Rather than persuading the latter to see the folly of its confrontational policies, as the ROK (and many other countries) would wish, the PRC has argued for restraint and engagement. At the same time, that support and in particular Chinese economic investment in the DPRK have raised ROK suspicions about China’s ultimate intentions. (No matter that one of the reasons for the success of recent Chinese investment in the DPRK is the effective ROK government prevention of alternative investment by ROK companies.)5 The Chinese reaction to the two defining events of 2010 in NorthSouth relations fed ROK concerns and fears. Rather than go along with the view that it was clear that the DPRK was behind the sinking of the Cheonan, and that action was required, China urged restraint. It eventually deplored the attack and the loss of life, and Chinese Premier Wen Jibao said during a visit to Seoul in May that China would not protect those who had sunk the corvette. Whatever ROK hopes were raised by this statement were doomed to disappointment as China refused to apportion blame. When the ROK brought the matter before the UNSC, the Chinese and the Russians worked to prevent a resolution that would specify the DPRK as the attacker. The most that could be agreed was a Presidential Statement, which condemned the attack but assigned no blame to any particular party. The PRC also strongly objected to the US-ROK naval exercises that followed the attack. ROK (and US) demands that China should behave ‘responsibly’ (i.e. accept the view of the ROK and its supporters), were regularly repeated but brought no change in the Chinese position. A steady stream of two-way visitors discussed the issue, and the ROK regularly raised it with the Chinese at international meetings, but the Chinese did not alter their public position, continuing to urge the resumption of North-South dialogue and engagement. If there was possible ambiguity over responsibility for the Cheonan sinking, which allowed the Chinese to avoid condemning anyone in particular, the same was not true over the shelling of Yeonpyeong island. Once again, however, the Chinese attitudes seemed to be that the shelling, while regrettable, was the sort of result one might expect if live ammunition exercises where conducted close to a disputed bor——— 5

See the paper by Tim Beal, ‘Beyond Lips and Teeth: The Economics of the China-North Korea Relationship’, in this volume.

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der. The Chinese continued to urge restraint and the resumption of engagement. A planned visit to Seoul by Chinese Foreign Minister Yang Jiechi was cancelled, and China attacked the joint ROK-US naval exercises that followed the shelling as provocative, as well as claiming that were staged without Chinese approval even though they infringed on China’s Exclusive Economic Zone. The ROK-US side rejected the claim, saying that China had been informed that the exercise would take place. As it began, Wu Dawei, a member of a Chinese delegation in Seoul, and also vice-foreign minister and Six Party Talks (SPT) delegate, called for the resumption of the SPT, a refrain that he had made several times during the year. (Wu was not popular in the ROK. In one of the ‘Wikileaks’ cables from Seoul, Chun Yung-woo, then vice-foreign minister, described him as an ‘arrogant, Marxist spouting, former Red Guard’, who knew nothing about Korea or about proliferation matters.)6 Since President Lee Myung-bak had shortly before ruled out any such move until the DPRK apologised for its actions, and since ROK officials made little secret of their dislike of Wu and his approach, the message fell on very stony ground indeed. December brought further tensions. The West Sea is a fertile ground for fish, which partly explains some of the North-South clashes of recent years as competing fleets search out the best areas. The Chinese too are involved in this contest, and there have been numerous incidents over the years as ROK coastguards attempt to keep Chinese trawlers out of ROK fishing grounds. On 18 December, one such incident took place in the ROK Extended Economic Zone. The ROK Coastguard claimed that Chinese trawlers were fishing without permits, but when they tried to board one of the trawlers, the crew responded violently. A second Chinese trawler rammed the coastguard vessel and then sank. In the struggle, eight Chinese fishermen were lost overboard. Six were rescued, one was later recovered dead, and one was missing, presumed dead. The ROK coastguards detained three. There followed charges and counter-charges. The Chinese said that the boats had been acting in accordance with the Sino-ROK Fisheries Agreement, and that neither side was allowed to interfere with the other’s vessels. They demanded that the Koreans do more to search for the missing fisherman, apologise for the incident and pay ———

6 The Guardian (London), 1 December 2010, online: http://www.guardian.co.uk/ world/us-embassy-cables-documents/249870 (accessed 28 May 2011). The cable dated from February 2010.

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compensation. The Koreans insisted that the Chinese were to blame and demanded that those concerned be punished. Neither side formally backed down, but the ROK released the detained Chinese in late December, and the issue faded from view for the moment. While these high-profile developments attracted much attention, in many other ways it was business as usual. Chinese trade statistics showed the ROK as overall number four among China’s trade partners, with a total volume of US$207.2 billion. ROK exports to China were US$13.4 billion, an increase of 35 percent on 2009, which put the ROK in second place for imports to China. Chinese exports to the ROK were US$68.8 billion, up 28.1 percent, making the ROK China’s fourth largest market.7 One straw in the wind about future trade issues was the news at the beginning of the year that in 2009 China had overtaken the ROK as the world’s largest shipbuilder. Another was that the ROK ambassador in Beijing said in April that the two countries might begin talks on a free trade agreement in 2011.8 Ironically, 2010 had been designated ‘Visit China Year’ in the ROK. The South Korean pavilion at the 2010 Shanghai World Exposition was a spectacular construction with major displays by leading ROK companies. Despite the political problems, President Lee attended the opening ceremony, and large numbers of South Koreans did visit China for the exhibition. Towards the end of the year, perhaps concerned at growing anti-Chinese feeling in the media and apparently among people at large, President Lee stressed that the ROK needed good relations with China. But for so long as China continues to support the DPRK and appears to be insensitive to ROK concerns, suspicion is likely to remain.

1.3 Relations with Japan It could have been a difficult year for ROK-Japan relations, since it marked the 100th anniversary of Imperial Japan’s annexation of Korea as a colony in 1910. But while the Cheonan sinking and the Yeonpyeong island shelling pushed the ROK and China apart, they had the ——— 7

Figures from US-China Business Council, online: http://www.uschina.org/ statistics/tradetable.html (accessed 28 May 2010). 8 For more on the Sino-ROK economic relationship in 2010, see the survey article on, ‘South Korea in 2010: Domestic Politics and the Economy’, by Patrick Köllner, in this volume.

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opposite effect on ROK relations with Japan. Japan’s dislike and distrust of the DPRK (see below) meant that it was very willing to support the ROK over both incidents. There were suggestions of closer intelligence co-operation and even of defence co-operation. The latter may be some way off, but common concerns about the DPRK and about China, as well as the two countries’ close relationship with the US, may be pushing them more and more in that direction. As it was, Japan firmly supported the ROK position vis-à-vis the DPRK throughout the year. Even the difficult anniversary passed off well, with Japanese Prime Minister Kan Naoto issuing a fulsome apology in advance of Korean Liberation Day (15 August), in which he said, inter alia: I would like to face history with sincerity. I would like to have courage to squarely confront the facts of history and humility to accept them, as well as to be honest to reflect upon the errors of our own. Those who render pain tend to forget it while those who suffered cannot forget it easily. To the tremendous damage and sufferings that this colonial rule caused, I express here once again my feelings of deep remorse and my heartfelt apology.

He also promised to work for a ‘future-orientated’ relationship with the ROK and to take measures to restore various works of art, archives and other materials taken from Korea during the colonial period.9 Some work to implement these promises got under way later in the year. Inevitably, Kan’s statement, which was in line with earlier apologies, did not go far enough for some in the ROK, while it went too far for some Japanese. Equally inevitably, not all the thorny issues that have bedevilled relations went away. The Japanese Ministry of Education approved five primary school textbooks in the spring that firmly asserted that the disputed Takeshima islands (Tokto in Korean) were Japanese, a move that meant all Japanese primary school textbooks carry the same message. There were a few splutterings on the ROK right-wing but the moment passed. It revived briefly with the publication of the Japanese diplomatic Blue Book in the early summer. But support over the corvette sinking and the shelling went a long way to counter these negative reactions. ———

9 Statement by Prime Minister Naoto Kan 10 August 2010 (Provisional Translation), at www.kantei.go.jp/foreign/kan/statement/201008/10danwa_e.html, accessed 30 June 2011.

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Two-way trade grew, reaching US$33.51 billion, but the balance remained firmly in Japan’s favour. The rise in the Japanese yen helped the ROK. Its goods were cheaper in Japan and the ROK was cheaper for Japanese tourists, who continued to be the largest single group visiting the ROK. But it made the Japanese components, on which so much of ROK industry is still dependent, more expensive. There were reports that ROK automobile manufacturers had managed to pick up some of the business lost by Toyota as a result of its need to recall many vehicles during the course of the year, but this made little difference in the overall picture. There was no movement on a possible free trade agreement; some form of East Asian free trade community may still be on the cards. It was discussed at the Cheju Summit of ROK, China and Japan held in late May, which was attended by President Lee, the then Japanese Prime Minister Hatoyama, and the Chinese Premier Wen Jiabao. They agreed to work towards ‘strategic cooperation’ to which end a secretariat would be established in Seoul and also to work for closer economic cooperation; the latter idea did not progress during the year.

1.4 Other relations ROK resource diplomacy continued to be very much in evidence.10 It was the major factor in the ROK reluctance to implement sanctions on Iran (see above), not just because of the possible effect on ROK-Iran relations but also because it might give the wrong signal to other partners. Free trade agreements were signed with the European Union in October and with Peru in November. Both await ratification in 2011. Relations with India were raised to a ‘strategic partnership’ during President Lee’s state visit to that country in January. Quite what this means is not clear. ROK-Indian relations have not always gone smoothly, but they do share a common concern about China’s role in Asia.11 ———

10 See Korea 2010: Politics, Economy and Society, p. 72-73, and the paper by Paladini in this volume, ‘Shopping Abroad the Korean Way: A Study in Resource Acquisition’. 11 For background on the up and down relationship between the ROK and India, see the paper by Weimar in this volume, ‘From “Cold Friendship” to Strategic Partnership: The Transformation of South Korea’s Political Relations with India’.

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The ROK began to take a higher international profile. As well as returning to Afghanistan (see above), it sent teams to assist Haiti following the devastating earthquake in January. Later, following the Qinghai earthquake in China, it offered financial assistance and aid teams. In addition to taking part in a variety of international meetings, the ROK achieved a breakthrough when in November it hosted the G20 summit in Seoul. Not only was this the largest ever diplomatic event held in Seoul but it was the first time that an Asian country had played host to the G20. It was also the first time that a non-G7 country had presided over the gathering. In presentational terms, the summit went well but the difficulties associated with many of the issues discussed, including the question of Chinese exchange rates, meant that the occasion was perhaps somewhat less sparkling than the organisers had hoped. Following the sinking of the Cheonan, the ROK invited a number of countries to take part in what was described as an ‘international investigation’ of the incident. In addition to the US, Australia, Britain and Sweden appeared to play a full role in the investigation, while a Canadian team arrived just before the conclusion of the investigation was announced. It was not very clear what role the ‘74 civilian and military experts’ actually played in the investigation, but they endorsed the ROK claim, based on the alleged discovery of a propeller and markings in magic marker that had somehow survived the blast, that the ship had been sunk by a North Korean torpedo. Russia carried out its own investigation. This was not published, but according to an account that appeared in the (relatively) left-wing ROK newspaper Hankyoreh, it concluded that the ROK claims were not proven. In particular, the Russians queried whether the DPRK had the technical ability to carry out such an attack on the grounds that its submarines used both dated and noisy technology, and that it did not have modern torpedo technology either. The report apparently concluded that the ship struck a mine. The ROK brushed these points aside, insisting that the ‘International Investigation’ left no room for doubt. When the ROK ‘final report’, which endorsed the earlier findings, was announced in September, there was no mention of the Russian investigation. The Russian report was probably a disappointment to the ROK, which otherwise seemed to have good relations with Russia. President Lee visited Russia in September, and Russian President Dmitry Medvedev made a return visit in November. The Russians

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were less ambiguous over the Yeonpyeong island shelling than over the Cheonan, but still urged ROK restraint. The Lee Myung-bak government’s tougher line on the DPRK was increasingly in evidence internationally, with reports of pressure being brought to bear on academics and journalists. Websites were blocked if they were thought to give any form of support to the DPRK. The UN Special Envoy on Freedom of Opinion and Expression, Frank La Rue, visited the ROK in May and issued a statement on his departure that indicated that, in these two areas, the ROK had gone backwards under the Lee government. Successive ROK governments have usually been willing to co-operate with the UN and its agencies, but La Rue reported an unwillingness to receive him among ministers and officials, while the National Intelligence Service had followed him on such calls as he had been able to make. He indicated that it was a pity that a government that was taking a more active role in human rights’ issues internationally appeared to be regressing at home.12 La Rue’s full report is due to appear in June 2011. There was no comment from the ROK government on his press statement, although it will receive an advance copy of the full report and may comment then.

2 DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA 2.1 The Six Party Talks, the nuclear issue and relations with the United States While the nuclear question continued to the subject of great international concern, the Cheonan and Yeonpyeong island incidents tended to receive more international coverage. The Six Party Talks remained in abeyance. The need for the DPRK to ‘return to the Six Party Talks’ has become something of an international mantra, with many countries stressing that this would be a necessary step before there could be any change in bilateral relations. By the end of the year, the US and ———

12 ‘Full text of the press statement delivered by the UN Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression, Mr. Frank La Rue, after the conclusion of his visit to the Republic of Korea Seoul, 17 May 2010’, online: http://www2.ohchr.org/english/issues/opinion/docs/ROK-Pressstate ment17052010.pdf (accessed 28 May 2011). For a critique of the ROK’s involvement with the UN, see Sung-Haek Kang (2011), Korea’s Foreign Policy Dilemmas: Defining State Security and the Goal of National Unification, Folkestone, UK: Global Oriental, chapter 14.

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the ROK had turned this around. Instead of the SPT being a device to bring the DPRK and the US together around the negotiation table, which had been the original purpose during the Bush administration, now allowing the DPRK to return to the SPT was presented as something that would only happen if the DPRK undertook its commitments under the 2005 agreement; the other parties’ commitments were not mentioned. The DPRK, for its part, sometimes said it would return to the SPT and sometimes said it would not. It frequently referred to itself as a nuclear weapons’ state and demanded recognition accordingly; it sometimes indicated that it was only on such a basis that it would return to the SPT. It was not clear how far this was accepted. US Secretary of State Hillary Clinton, in Toronto in April for the G20 meeting, appeared to concede that the DPRK was such a state. She said to journalists covering the meeting that: ‘We recognize the new threats that are coming ... from rogue regimes like North Korea that already has nuclear weapons, and regimes like that in Iran that are clearly seeking nuclear weapons …’. Speaking in Beijing, later the same month, Mohamed El Baradei, the former head of the International Atomic Energy Agency (IAEA) (his term ended in November 2009) said that ‘North Korea has nuclear weapons, which is a matter of fact’, and that while he did not like to acknowledge any country as a nuclear weapons’ state, ‘we have to face facts’.13 Apart from the secretary of state’s comment, no US government representative has formally acknowledged that the DPRK is a nuclear weapons’ state. From time to time, there were press reports that the DPRK was preparing for another nuclear test, but these proved unfounded. There were also reports of attempts to restore the facilities at the Yǂngbyǂn complex, the main known DPRK nuclear facility, which was partially decommissioned in 2008.14 When Jack Pritchard, the former US ambassador for North Korean affairs and current head of the Washington-based Korea Economic Institute, visited the complex in November, he saw some sign of new building but no indication of any nuclear activity in the original complex. However, later the same month, Dr Siegfried Hecker, a former director of Los Alamos National Labo——— 13

Korea Times, 1 April 2010, online: http://www.koreatimes.co.kr/www/news/ nation/2010/04/113_63462.html (accessed 29 May 2011); Daily Telegraph (London), online: http://www.telegraph.co.uk/news/worldnews/asia/northkorea/5212630/NorthKorea-now-fully-fledged-nuclear-power.html (accessed 29 May 2011). 14 Korea Yearbook 2009: Politics, Economy and Society, pp. 78-79.

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ratory (1986-97) and now co-director of Stanford University’s Centre for International Security and Cooperation, who had made a number of trips to the DPRK, visited the site with Stanford University colleagues, John W. Lewis and Robert Carlin. According to Hecker’s report, they were shown a 25- to 30-megawatt-electric experimental light-water reactor (LWR) in the early stages of construction. This was presented as the DPRK’s first attempt at LWR technology. The visitors were told that it had been developed with indigenous resources and talent. The target date for operation was said to be 2012, which Hecker and his colleagues, who were apparently impressed by what they saw, thought too optimistic. The target date ties in, of course, with the 100th anniversary of Kim Il Sung’s birth, when the DPRK is due to become ‘a strong and prosperous country’. Hecker’s view was that the facility was designed to produce low-enriched uranium for the light-water reactor, which North Koreans are now building themselves since they had failed to get such a reactor either from the Soviet Union in the 1980s or from the US in the 1990s.15 Although to some, this confirmed the suspicions that had led the Bush administration in 2002 to negate the 1994 Agreed Framework, the Hecker revelations did not make a big impact, perhaps because they came at the time of the Yeonpyeong island shelling. One voice from the past, however, was John Bolton, a former US Ambassador to the UN, who in the light of the Hecker revelations demanded that there should be no return to the SPT or bilateral US dealings with the DPRK, and called for the US and China to co-operate to bring about Korean reunification.16 There was concern that the DPRK, whatever the exact state of its nuclear programme, was engaged in some forms of nuclear proliferation. All through the year, there were leaks and hints about close cooperation in this field with Iran, but the many stories produced little clear evidence. DPRK-Myanmar relations and possible co-operation on nuclear matters were also of concern, as they had been in 2009.17 A Myanmar ‘rocket engineer’, who defected in June, claimed to be aware of two sites that were being constructed with DPRK help. Later ———

15 Hecker’s report is available online at: http://cisac.stanford.edu/publications/ north_koreas_yongbyon_nuclear_complex_a_report_by_siegfried_s_hecker (accessed 29 May 2011). 16 Los Angles Times, 23 November 2010, online: http://articles.latimes.com/2010/ nov/23/opinion/la-oe-bolton-northkorea-20101123 (accessed 29 May 2011). 17 Korea 2010: Politics, Economy and Society, pp. 82-83.

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in the year, the Wikileaks’ revelations contained US diplomatic cables from 2004 that reported contact with a businessman who claimed to have seen suspicious activity linked to the DPRK. It was never very clear from any of the reports whether there really was a Myanmar nuclear programme involving the DPRK, possible assistance with a missile programme, or that Myanmar was used as a transhipment point to evade sanctions. Given Myanmar’s level of development, some saw a nuclear programme, even with DPRK help, as unlikely. For those of a conspiratorial cast of mind, a visit by DPRK Foreign Minister Pak Ui Chun to Myanmar in July-August indicated close links between the two. Concern about proliferation led to additional US sanctions at the end of August, directed at a number of DPRK companies and individuals. Not surprisingly, bilateral relations with the US saw little progress. The Joint New Year Editorial, which sets out policy proposals for the year ahead, was positive. It called for better relations with the US and an end to enmity. The fundamental task for 2010 was the ‘end of the hostile relationship between the DPRK and the US’. It proved to be a pious hope, and it found few takers in the US government, which was not prepared to act without movement on the nuclear issue. That said, a steady stream of academic and other groups visited the DPRK, and the DPRK relaxed some of the restrictions in place against US tourists visiting the country during the course of the year. This was probably more to do with the need for foreign exchange rather than any great desire to see floods of US tourists arriving. In early February, the DPRK released Robert Park, a KoreanAmerican missionary who had entered the country on 25 December 2009, apparently carrying a letter calling on Kim Jong Il to release political prisoners. Park was pale and withdrawn on his return to the US, but in October claimed that he had been sexually assaulted while in detention. In January, a man who claimed to be a friend of Park, Aijlon Mahli Gomes, also crossed illegally into the DPRK. He had been teaching English in the ROK. In April, he was sentenced to eight years’ hard labour and fined US$700,000, but there were hints that if a suitable high-level dignitary came to seek his release, he would be freed. Then the DPRK indicated that it might subject him to a harsher sentence if US criticism over the Cheonan continued, and in July announced that he had attempted suicide. An American consular envoy was sent to Pyongyang but failed to get him released. In the end, former President Jimmy Carter went to Pyongyang and secured his re-

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lease; much was made of the fact that Carter, who had met Kim Il Sung in 1994, did not meet Kim Jong Il, who instead went to China during the visit. The US government distanced itself from the visit. A State Department spokesman said on 26 August: President Carter’s trip was a private, humanitarian, and unofficial mission solely for the purpose of bringing Mr. Gomes home and reuniting him with his family. The former President travelled at the invitation of the DPRK Government. The U.S. Government did not propose or arrange the trip. Based on our assessment that Mr. Gomes’ health was at serious risk if he did not receive immediate care in the United States, the U.S. Government concurred with former President Carter’s decision to accept the North Korean proposal.18

A final major visitor at the end of the year was Bill Richardson, the outgoing governor of New Mexico, and a relatively frequent visitor to the DPRK. There was no indication that this was anything other than a personal initiative, from which the US government studiously distanced itself. Richardson said on his return that the DPRK was prepared to allow IAEA inspectors back into the country, but neither the US nor the ROK governments showed much interest. A rare positive sign was the announcement in early September by the US special envoy for North Korean Human Rights, whose main task is to criticise the DPRK’s record, that the US would give some US$750,000 in emergency aid following severe flooding along the Yalu river. This was to be primarily medical supplies, to be distributed by US Non-Governmental Organisations (NGOs), including Samaritan’s Purse, Global Rescue Service and Mercy Corps. Also in September, the US administration distanced itself in public at least from the world feeding frenzy over the possible succession to Kim Jong Il, when a spokesman said that the US approach to the DPRK was not personality based. If true, this would mark a new departure in the light of former President Bush’s negative comments about Kim Jong Il, and Hillary Clinton’s references in 2009 to Kim’s ‘spoilt child’ behaviour. In a further sign of a restrained approach, the administration indicated that it would not put the DPRK back on the list of sponsors of state terrorism.

——— 18

Philip J. Crowley, 26 August 2010, online: http://www.state.gov/r/pa/prs/ps/ 2010/08/146346.htm (accessed 20 May 2011).

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2.2 Relations with China In December, the British newspaper the Guardian carried the headline: ‘US embassy cables: China “would accept” Korean reunification’.19 From this and other Wikileaks’ material, the world’s media had a field day speculating about the end of PRC support for the DPRK. But even as the stories appeared, it was hard to detect such a development in China’s behaviour towards its neighbour during the year. As we have seen, the Chinese refused to assign blame to the DPRK for the sinking of the Cheonan, and indeed worked to prevent a UNSC resolution that would have done so. The level of exchanges and visits was as high as ever, and ranged across government, party and military. Kim Jong Il made two visits. In May, around the time that the ROK formally accused the DPRK of sinking the Cheonan, he visited Dalian, Tianjin and Beijing, supposedly seeking increased Chinese food aid. In August, Kim was back in China, visiting Heilungjiang and Jilin provinces (and avoiding Jimmy Carter—see above). At a meeting with Chinese President Hu Jintao in Changchun on 27 August, Hu proposed an even closer relationship, with even more high-level contacts, re-enforced strategic co-operation, increased personnel exchanges and co-ordination on international and regional matters.20 Although the PRC deplored the loss of life as a result of the Yeonpyeong island shelling in November, it indicated that there had been provocation, a position it maintained in spite of calls from President Obama and others that it should take a stand against what Obama called the ‘serious and ongoing threat’ posed by the DPRK; the Chinese response was a phone call to Washington from Hu Jintao suggesting that there should be a ‘cool and rational’ response. Throughout the year, this Chinese message had remained constant: do not isolate the DPRK, do not rush to judgement, and sit down and talk. It found few takers. At the same time as some tried to distinguish divisions between the PRC and the DPRK, others, especially in the ROK, continued to believe that the Chinese were becoming too powerful in the DPRK, and there were those who discerned a long-term Chinese plan to take over the DPRK as another Chinese province. It was true that the DPRK’s ——— 19 The Guardian (London), 1 December 2010, online: http://www.guardian. co.uk/world/us-embassy-cables-documents/249870 (accessed 28 May 2011). 20 Statement by PRC Ministry of Foreign Affairs, online: http://www.fmprc.gov. cn/eng/zxxx/t736661.htm (accessed 30 May 201).

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economic links with the PRC increased. Trade between the two went up by 22 percent, with the balance heavily in China’s favour. Chinese exports to the DPRK reached US$2.6 billion, while imports were US$1.5 billion. According to the (South) Korea Trade-Investment Promotion Agency, some 80 percent of the DPRK’s trade in 2010 was with the PRC. DPRK coal was the largest export item, while DPRK imports included fuel—mainly oil and oil products—machinery and electrical goods.21 While China’s economic influence has undoubtedly increased, some of the wilder claims about its extent were just that—wild. Much of the increase in DPRK-PRC trade is the direct result of the sanctions and other restrictions that have reduced potential partners. While Chinese and Chinese-Korean entrepreneurs from the PRC’s north eastern provinces are clearly interested in what the DPRK has to offer, particularly minerals, there is no sign of wider interest from China’s bigger companies. Claims that the PRC has plans to take over the Rasǂn port to build a naval base appear farfetched; there has been some Chinese investment in this, the oldest of the DPRK’s attempts at special economic zones, and the Chinese are apparently building a pier, but nothing more. The Chinese have also shown interest in building a new bridge across the Yalu (Amnok) river. Since most DPRK-China trade currently goes by the single road and rail bridges at Sinǎiju, which are clearly overstretched, this would be an important development. It too has been criticised as evidence of long-term Chinese plans to dominate the DPRK.22 There were signs that the relationship between the two is not always smooth. The DPRK apologised after a Chinese protest when three Chinese were killed by DPRK border guards; they may have been smugglers. Two other Chinese detained on the border were reportedly tortured by DPRK officials. But while such incidents are unfortunate, they are not likely to alter the PRC-DPRK relationship in any meaningful way.

———

21 Jung Seoung-hyun, ‘North Korea’s Economic Dependence on China Deepens’, JoongAng Daily, 28 May 2011, online: http://joongangdaily.joins.com/article/view. asp?aid=2936809 (accessed 28 May 2011). 22 Again, see the paper by Beal in this volume.

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2.3 Relations with Japan Even with a new government in Japan, there was no progress of any sort in relations between the DPRK and Japan. Japan had no hesitation in blaming the DPRK for both the Cheonan and the Yeonpyeong island shelling. It extended trade sanctions imposed after the DPRK’s first nuclear test in 2006, and then ratcheted them up following the preliminary report on the sinking of the Cheonan, even though officials admitted that there was little else that could be sanctioned. The new measures were aimed at the pro-DPRK community in Japan. The amount of undeclared cash that could be carried to the DPRK, previously 300,000 yen (about US$3,300) was reduced to 100,000 yen, while remittances were reduced from ten million yen to three million yen. None of this is likely to have much effect on the DPRK, whose revenue from Koreans in Japan was steadily dropping before sanctions were introduced, but it makes life more difficult for the Korean community in Japan. Trade between the two has dwindled to virtually nil. Siegfried Hecker’s revelations about the DPRK enriched programme that he was shown in November (see above) added to Japanese concerns over the DPRK nuclear programme but did not lead Japan to reconsider its single-minded concentration on the abductees’ issue. The Japanese apology for its colonial record in Korea was pointedly addressed only to the ROK. The DPRK protested, with the Ministry of Foreign Affairs stating that Japan should apologise to ‘all the victims of the past, without pre-condition and discrimination’. There was no disposition on the part of the Japanese to extend any olive branches in that direction. Like the ROK, the DPRK criticised Japan over Takeshima/Tokto, which the Japanese ignored. In October, Japanese Prime Minister Kan told an Extraordinary Session of the Diet that the DPRK should comprehensively settle the abduction, nuclear and missile issues. This drew a predictable retort from Sung Il Ho, DPRK ambassador for negotiations with Japan, that it was Japan that should be making moves to normalise its relations with the DPRK. Clearly the year ended with no meeting of DPRKJapan minds.

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2.4 Relations with Russia Relations with Russia continued to be essentially low key. Expectations at the start of the decade that Russia would play a major role on the peninsula had long since faded. The Russians had failed to provide the much-needed funds for transport and other infrastructure development and Kim Jong Il, who had once frequented the Russian Embassy, had switched his attention to the Chinese. That said, as we have seen, the Russians had not supported the conclusions of the ‘International Investigation Team’ on the Cheonan, and like the Chinese had called for restraint on the issue. However, they had condemned the Yeonpyeong shelling, and during a visit by DPRK Foreign Minister Pak Ui Chun to Russia, the Russians made it clear that they did not approve of the attack, a position which presumably came as no surprise to the foreign minister. When Russian President Medvedev was in Seoul in November, he expressed unease that the DPRK’s nuclear testing facilities were only 100 km from Vladivostok. Russian trade with the DPRK, which reached US$50-60 million in 2009, was expected to double, but remains a long way behind that of China. Russia also uses the Rasǂn port.

2.5 Other relations Apart from the regular diplomatic meetings and other exchanges in which the DPRK engages, which include the UN General Assembly and the ASEAN Regional Forum, the DPRK’s interaction with the rest of the world was, as usual, somewhat limited. There was much international interest and speculation about the succession, with occasional highly optimistic reports about the effect of a couple of years’ Swiss schooling on Kim Jong Un. The sinking of the Cheonan was widely condemned. The shelling of Yeonpyeong and the deaths of two civilians led to some wild claims about the ‘worst outbreak since the Korean War’. This showed more a lack of knowledge of the often fraught nature of relations on the peninsula than any understanding of the history of the tensions that have marked it since the end of the Korean War. To argue that the deaths of four people on Yeonpyeong was the most serious breach of the Armistice Agreement that had ever taken place meant ignoring the artillery duels of the late 1960s, the periodic DPRK raids on the ROK that involved civilians’ and

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officials’ deaths, the Yangon bombing of 1983, the Andaman Sea bombing of 1987 or the DPRK submarine raids of the 1990s. This level of ignorance might not have mattered but it was often accompanied, especially among some US commentators, by demands that the response should include retaliatory attacks on the DPRK. Sitting in Washington or New York, this approach might have made sense, but it looked very different if you were in Seoul. Earlier in the year, other events had caught world attention. The two Koreas participated in the FIFA Football World Cup in South Africa in June, some of which was broadcast live on DPRK television. Neither did very well, and the DPRK team lost out 2-1 to Brazil, 7-0 to Portugal and 3-0 to Ivory Coast. As the team returned home, there was unsubstantiated speculation that they would be punished for their lack of success. Exhibitions of DPRK art in Vienna from May to September and in Moscow from mid-December to January 2011 led to a certain amount of controversy and heated debates over the nature of art.23 In April, a vast ‘Monument to the African Renaissance’, created by the Pyongyang-based Mansudae Art Studio, was opened in Senegal—this too was not without controversy. The EU continued to maintain a small aid presence in the DPRK, with European NGOs carrying out a number of small-scale projects. A British women’s football team visited the DPRK in October. Amateurs, they suffered a major defeat at the hands of their Korean counterparts, who were drawn from the military. In a curious end to the year, on 26 December, DPRK television carried the British film ‘Bend it like Beckham’, also about female football players, to mark the tenth anniversary of DPRK-UK diplomatic relations.

———

23 These were by no means the first such exhibitions; others involving the DPRK government included Rotterdam in 2004, Genoa in 2007, Berlin in 2008 and Brisbane in 2009. The catalogue of the Vienna exhibition was published as Peter Noever (ed.) (2010), Blumen für Kim Il Sung: Kunst und Architektur aus der Demokratischen Volksrepublik Korea/Flowers for Kim Il Sung: Art and Architecture from the Democratic People’s Republic of Korea, Nuremberg: MAK Vienna/Verlag für moderne Kunst Nürnberg. Papers from a related academic conference, edited by Rüdiger Frank, will appear in 2011.

NATION BRANDING IN SOUTH KOREA: A MODERN CONTINUATION OF THE DEVELOPMENTAL STATE? Alena Schmuck1

ABSTRACT This article places the current South Korean Nation Branding project, which was institutionalised by the Lee Myung-bak administration in the Presidential Council on Nation Branding (PCNB) in January 2009, in the context of Chalmers Johnson’s concept of the Developmental State (DS). It assumes that Johnson’s model of a plan-rational, capitalist, interventionist state continues to serve as an explanatory tool in regard to South Korea’s political economic strategies. In this connection, the South Korean government’s efforts to improve the country’s international reputation (Nation Branding) are understood as an example of the country’s continued developmental orientation, since they display important parallels to the South Korean DS as far as their institutional set-up, actors and objectives are concerned. This hypothesis is investigated on the basis of an analysis of material published by the PCNB, as well as personal interviews conducted with members and associates of the PCNB. Key words: developmental state, nation branding, country image, international reputation, Lee Myung-bak, governance

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1 Earlier versions of this paper were presented at the 2011 AKSE (Association for Korean Studies in Europe) Conference at Moscow State University in Moscow, Russia, June 17-20 2011 and the 7th KSGSC (Korean Studies Graduate Students Convention) at Babes-Bolyai University in Cluj-Napoca, Romania, 27-30 July 2010. My thanks go to the discussants for providing insightful suggestions for revisions. Furthermore, I would like to thank my professor and thesis supervisor Rüdiger Frank for his continuing support and advice throughout my research, as well as former Chairman Euh Yoon Dae, Planning Director Youn Jung-In and all other associates of the PCNB that I interviewed for this study for giving me the opportunity to get a firsthand insight into the South Korean Nation Branding project.

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1 INTRODUCTION Chalmers Johnson’s theory of the Developmental State (DS) is one of the central concepts in explaining the economic growth of the Republic of Korea (hereafter South Korea) in the second half of the 20th century. According to this model, late industrialised (East Asian) countries,2 such as South Korea, Japan and Taiwan managed to achieve economic growth through the active, market-conforming, planning and directing role of the state and its bureaucratic institutions (Johnson 1982). While some scholars regard the East Asian, and in particular the South Korean DS as defunct—be it due to the completion of its main objective, the promotion of rapid economic growth and development,3 or as a result of liberalisation and deregulation measures taken since the 1980s4—others argue that the key elements of the DS are adaptable to changing conditions5 and continue in the form of an ‘internationalised model of development’ (Kong 2000). This study places the current South Korean Nation Branding (NB) project, which was institutionalised by the Lee Myung-bak administration in the Presidential Council on Nation Branding (PCNB; Kor. kukka pǎraendǎ wiwǂnhoe6) in January 2009, in the context of the Developmental State. In the course of an internship at the PCNB in spring and summer 2010, I became aware of striking parallels that exist between the South Korean NB endeavour as an effort towards improving the country’s international reputation, and the South Korean DS, as far as their institutional set-up, actors and objectives are concerned. This paper investigates the hypothesis that NB in South Korea is an example of the way in which some of the key ideas and ———

2 Despite its focus on East Asian economic growth, the DS concept has been applied to country cases around the globe. These countries include France (Loriaux 1999), Finland and Austria (Vartiainen 1999), South Africa (Edigheji 2010), India (Sinha 2003), Brazil (Weyland 1998) and even the post-Cold War United States (Block 2008). 3 This argument is supported by Kim (1993), Evans (1989, 1995, 1998), Moon (1999), Minns (2001), Pekkanen (2004), and Beeson (2004). 4 For authors taking this position, see Pang (2000), Thurbon (2001), Pirie (2005, 2008), and Kalinowski (2008). 5 Theorists arguing that the DS is flexible and sustainable under new conditions are amongst others Johnson (1999), Woo-Cumings (1999), Woo (2007), Weiss (2000), Wong (2004), Uttam (2006), Hundt (2009), Park (2009), Stubbs (2009), and Hayashi (2010). 6 The official Korean equivalent of PCNB is actually ‘taet’ong’nyǂng chisok kukka pǎraendǎ wiwǂnhoe’; the reference to the president (taet’ong’nyǂng) is, however, usually omitted. All translations are by the author unless otherwise indicated.

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institutions of the South Korean DS have been adapted to fit changing conditions and is thus ‘a modern continuation’ of the DS. This assumption is supported by the fact that other East Asian DSs, such as Japan, Taiwan, Singapore and Malaysia, display a similar commitment to NB.7 The argument is developed in four sections. After an introduction to the DS theory, the first section identifies the main features of the South Korean DS. In the second section, the key concepts of NB and its practice are introduced. In the third section, I investigate the application of NB by the South Korean PCNB on the basis of material published by the PCNB, as well as interviews conducted with members and associates of the PCNB in spring and summer 2010. Finally, the current South Korean NB project is analysed in the context of South Korea’s DS legacy. In this way, I show that the DS concept continues to serve as an explanatory tool in regard to South Korea’s political economic strategies.

2 THE DEVELOPMENTAL STATE 2.1 The concept of the Developmental State Chalmers Johnson was the first to summarise the key features of the (East Asian) DS in his 1982 book, MITI and the Japanese Miracle. Based on his observations of the Japanese political economy from the 1920s through to the 1970s, Johnson created the model of an interventionist, capitalist, ‘plan-rational’8 state to explain the rapid economic growth in post-war Japan. According to his model, the Japanese state had generated economic growth through its combination of ‘a small, inexpensive, but elite state bureaucracy staffed by the best managerial talent available’; ‘a political system in which the bureaucracy is given sufficient scope to take initiative and operate effectively’; ‘the perfection of market-conforming methods of state intervention in the economy’; and ‘a pilot organisation like MITI’ (Ministry of International ———

7 For literature on NB in these countries see Dinnie (2008) for Japan and Taiwan, Koh (2011) for Singapore, and Sya (2005) for Malaysia. 8 Johnson (1982: 18) employs the term ‘plan-rational’ to emphasise the contrast between the planning role of the state in the capitalist DS and the command economy of the ‘plan-ideological’ or ‘plan-irrational’ (Woo-Cumings 1999: 2) Soviet-type states.

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Trade and Industry), which is in charge of industrial planning and of monitoring the sectors connected to industrial policy9 (energy, domestic production, international trade, finance and government funds) (Johnson 1982: 314-20). Johnson later extended his DS concept to the political economies of South Korea and Taiwan, which, as former colonies of Japan, had been influenced by the Japanese pattern of economic governance (Jones 1998: 176) and which Johnson (1987) defines as ‘strong’ DSs. According to this concept, South Korea could be characterised by six main features during its high-growth phase from the 1960s to the 1980s: access to and state control of developmental capital; harmonious labour relations; bureaucratic autonomy; autonomy of the state; administrative guidance; and successful state supported conglomerates (Johnson 1987). In his comprehensive summary of the DS debate, Richard Stubbs (2009: 5-7) contends that while there is no common definition of the DS amongst its theorists, there are three central aspects to the concept, which can also be derived from Johnson’s model (1982): firstly, the institutional aspect, which emphasises ‘a cohesive set of institutions with a relatively autonomous capacity to implement a planned strategy for capitalist economic growth’ (Stubbs 2009: 5); secondly, the relational aspect referring to the close linkages between politicians, the bureaucracy and the business sector; and thirdly the ideational aspect of the DS, which places attitudes such as nationalism, (neo-) mercantilism,10 economic transformation, rapid industrialisation and performance legitimacy at the centre of the DS.

2.2 The South Korean Developmental State South Korea’s post-war developmental orientation started with the establishment of the Economic Planning Board (EPB) as its develop———

9 Industrial policy has been defined as ‘a nation's declared, official, total strategic effort to influence sectoral development and, thus, national industry portfolio’ (Graham 1994: 3). 10 Mercantilism, which was originally associated with pre-industrial Europe, is a nationalistic conception of the role of the state which involves governmental manipulation of the economy ‘through reducing imports, stimulating home production, and promoting exports’ (Malmgren 1971: 119-120). Neo-mercantilism refers to the resurgence of these ideas in industrialised or industrialising countries in the 20th century (Petras 2002: 53).

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mental pilot agency in 1961, following the coup d’état which installed General Park Chung-hee as president. Fuelled by nationalism and legitimised by the North Korean Communist threat, Park’s authoritarian regime set—and achieved—the economic goal of advancing from import substitution towards export-led growth through industrial policy (Jones 1998: 176; Cumings 1987). Under Park’s rule the South Korean bureaucratic elite, composed of the EPB, the Ministry of Commerce and Industry and the Ministry of Finance, all of which had close relations to the president, was insulated from social demands and could plan, direct and implement its industrial policy autonomously and continuously (Jones 1998: 176). According to Johnson (1982: 317-19), the government’s primary method of intervention was through the bureaucratic elite’s ‘administrative guidance’, which Ginsburg defines as a legally unfounded ‘form of pressure on regulated parties to modify their behaviour’ (Ginsburg 2001: 593). Through administrative guidance, the government could direct the management of privately owned enterprises towards its designated developmental goals. The government, however, also shared the corporate sector’s risks (Minns 2001: 1026). Because the government favoured economies of scale, the chaebǂl (private, family-run conglomerates) were granted easier access to credit and became particularly assertive (Jones 1998: 176). This credit was partly financed through the economic aid South Korea received from its main Cold War ally, the United States (Minns 2001: 1027). As this aid declined in the 1960s, the Park regime turned towards foreign borrowing as a source of capital (Minns 2001: 1027). The nationalisation of the banking sector, the preference for foreign borrowing over inward foreign direct investment, the restriction of currency trading, and the undervaluation of the won, further ensured governmental control of the developmental capital (Jones 1998: 176; Thurbon and Weiss 2006: 5). From the 1980s, the external and internal conditions that had originally facilitated the emergence of the South Korean DS11 were changing with the maturing of its political economy, increasing economic globalisation, and the winding down of the Cold War. These changes altered the power relations between the government and the corporate sector as well as civil society, partly undermined the state’s autonomy, ——— 11 Johnson (1989: 4) summarises the facilitative conditions of the East Asian DS as: a weak society; prevailing ideas that promote the concept of the DS; the context of the Cold War and the threat of Asian communism; and economic and military aid by the US and open US-markets.

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limited its access to developmental capital12 and led to adjustments to the government’s economic policies. As a result, discussions as to whether South Korea could still be considered a DS became more prevalent. This was especially the case in the aftermath of the Asian financial crisis (AFC) of 1997-98, which struck South Korea particularly hard. South Korea’s post-crisis dependence on the prescribed neo-liberal agenda of the International Monetary Fund and the World Bank furthered the orientation towards economic liberalisation and deregulation, which had begun under President Chun Doo-hwan in the early 1980s. In particular, the implementation of neo-liberal measures, such as the liberalisation of capital account transactions and the privatisation of state-owned financial institutions (Ha and Lee 2007), was regarded as leading to the undermining of the government’s role in directing and regulating the economy (Pang 2000; Thurbon 2001; Pirie 2005, 2008; Kalinowski 2008). Against this view stands the argument of authors such as WooCumings (1999), Woo (2007), Weiss (2000), Wong (2004), Uttam (2006), Hundt (2009), Park (2009), Stubbs (2009) and Hayashi (2010), who contend that the DS is a flexible concept. According to this perspective, the South Korean DS did not succumb but rather adapted to the changing conditions and continues to play an important role in co-ordinating the direction of the political economy. Judith Cherry (2005) even detected a revival of the state’s interventionist role in the course of the implementation of neo-liberal measures after the AFC. Indeed, with regard to the adaptability of the DS, Johnson thinks of industrial policy, which he defines as central to the DS, as a continuous orientation: Unlike traditional fiscal and monetary policies, industrial policy demonstrates no clear relationship between its objectives and the means of attaining them. Its conception, content, and forms differ, reflecting the stage of development of an economy, its natural and historical circumstances, international conditions, and its political and economic situa-

——— 12

According to Stubbs (2009: 11-16), externally, the decline of the Communist threat undermined the legitimisation of the state’s autonomy and caused a shift from the United States’ Cold War preference of authoritarian states towards favouring democratisation and economic liberalisation. The globalisation of the world economy brought neo-liberal ideas into the bureaucratic elite. Internally, the economic growth achieved by the South Korean DS not only contributed to the formation of a civil society with political and economic demands, it also meant an expansion of businesses and increased economic and political leverage of the major corporations. Democratisation and political fluctuation led to a further decline in the autonomy of both the state and bureaucracy and also meant an end to consistent economic policies.

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tion resulting in considerable differences from nation to nation and from era to era (Johnson 1984: 6).

This line of thought, according to Woo-Cumings (1999: 31), leads us to the realisation that ‘industrial policy is first of all an attitude, an orientation and only after that a matter of technique shifting with the changing needs of time’. In this connection Stubbs (2009: 9) notes that certain ‘ideas and institutions’ associated with the period of the emergence of the East Asian DS continue to exert influence on policymaking ‘even after the circumstances that elevated them to prominence have changed’. More specifically, neo-mercantilist ideas of home market protection and state intervention, which were pivotal to the DS, became entrenched in the government’s formal and informal institutions and ‘continue to have their adherents in key locations in the bureaucracy and in many firms and quasi-governmental institutions that have benefited from the state’s interventionist policies’ (Stubbs 2009: 12). In this context, Ha and Lee (2007: 896, 913) observe that, unlike the restructuring of the financial sector (which was increasingly influenced by foreign capital), the South Korean government’s reforms in the corporate sector, in labour market flexibility, and in the public sector in the aftermath of the AFC were only implemented half-heartedly because of resistance from stakeholders. They argue that, for this reason, the chaebǂl and labour system remain intact and continue to rely on government intervention (Ha and Lee 2007: 896, 914). Stubbs states that one important reason for the persistence of developmental ideas and institutions is that ‘they were associated with the transformation of the economy from poverty and social dislocation to a measure of prosperity few had dreamed could be attained’ (Stubbs 2009: 10). Furthermore, the time-span in which the South Korean DS could be regarded as dominant encompasses about two decades. This, according to Stubbs ‘was enough time for a set of institutions and relationships that buttressed the DS to be formed and themselves to become entrenched’ (Stubbs 2009: 12). He further contends that the DS ‘was more than simply a set of key institutions and policies that were put in place under the label of the DS; a whole system of social, political and economic institutions became embedded in the life of specific countries’ (Stubbs 2009: 13). Although the setting of the South Korean DS has experienced important changes since the 1980s, it can be assumed that, as Stubbs

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(2009: 13) notes in regard to the East Asian DS in general, the success and resulting support of the South Korean DS increased the government’s pressure to sustain its original path towards economic growth. While South Korea’s political economic power relations, economic objectives and methods of intervention have shifted from governmental and bureaucratic autonomy over businesses and civil society to a more horizontal and democratic relationship, from a catch-up strategy of exporting manufactured goods to the promotion of R&D-based exports (Uttam 2006), and from protectionism and direct intervention towards free trade, internationalisation and a more collaborative mode of co-ordination (Park 2009), the orientation towards industrial policy, as well as the key institutional settings—if somewhat adjusted13— remain intact.

3 NATION BRANDING 3.1 The concept of Nation Branding The concept of Nation Branding as a nation’s efforts to improve its international reputation by employing branding and marketing communications techniques (Fan 2005: 6) has been adopted by numerous countries since the late 1990s. As such, it has become an increasingly important factor in governmental expenditure, particularly in newly formed states or among those trying to counter an unsatisfactory country image. The main assumption behind the term, coined by the British government advisor Simon Anholt in 1996 (GfK Roper 2008), is that the reputations of countries influence how they fare economically and politically and, in that sense, function like corporate brand images (Anholt 2008a: 22). A further claim underlying the concept is that under the conditions of global market competition, countries are increasingly dependent on achieving a competitive advantage in order to sur-

——— 13

The key role of the EPB, which was abandoned in 1994 in the course of its incorporation into the Ministry of Finance and Economy (MOFE), is now taken by the Ministry of Strategy and Finance (MOSF; established in 2008 as the result of a merger of the MOFE and the Ministry of Planning and Budget). The MOSF, amongst other tasks, is in charge of planning and co-ordinating mid- and long-term socioeconomic development goals and setting the direction of economic policy (MOSF n.d.).

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vive and that this competitive advantage can be distinguished and enforced by means of NB (Rainisto 2003: 12). Although Anholt (2008a) and Wally Olins (2002), two of the field’s most prominent practitioners, acknowledge that nations should not be equated with products,14 the assumption that corporate branding techniques can be applied to influence the reputation of nation states provokes criticism. According to Nadia Kaneva,15 who has published a comprehensive study of the NB literature, the marketing approach to NB, which makes up the majority of the scholarly writing on the subject, ‘unapologetically espouses a form of “social engineering” that allows elites to manipulate national identities. It ignores relations of power and neglects the implications of nation branding for democracy’ (Kaneva 2011: 121). Further criticism concerns the actual impact of NB campaigns. According to Kaneva (2011: 121), the effectiveness of NB remains to be proved empirically and has hitherto relied on anecdotal ‘success stories’ for the most part. This paper, however, does not seek to discuss moral and political implications regarding the concept of NB, and neither does it aim to validate its performance. Instead, it argues that the practice of NB in South Korea is to be understood as an example of the government’s continued developmental orientation. In order to analyse South Korean NB in this context, the practice of NB is defined according to the understanding of proponents of the marketing approach, who usually advise governmental institutions engaging in NB.

——— 14

To counter misconceptions related to the term ‘branding’, Anholt introduced the more neutral concept of ‘Competitive Identity’ (CI) in 2007 to replace ‘NB’ (Anholt 2007). Nevertheless, ‘NB’ remains the dominant term in the field. 15 As Kaneva (2011) found in her recent study on the NB literature, the majority of the scholarly writing can be categorised as technical-economic, referring to the work of authors from a marketing, management and tourism background who offer ‘a functionalist perspective that sees nation branding as a strategic tool for enhancing a nation’s competitive advantage in a global marketplace’ (Kaneva 2011: 120). This is followed by political approaches to NB, which tend to focus on ‘the impact of national images on nation-states’ participation in a global system of international relations.’ Finally, cultural studies of NB make up the smallest and most recent part of the academic discourse on NB. These studies mostly deal with ‘the implications of nation branding for national and cultural identities’ (Kaneva 2011: 120).

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3.2 The practice of Nation Branding According to Kaneva (2011: 118), practical approaches to NB range from ‘“cosmetic” operations, such as the creation of national logos and slogans’, to ‘efforts to institutionalise branding within state structures by creating governmental and quasi-governmental bodies that oversee long-term nation branding efforts’. The more comprehensive institutionalist approach corresponds to Anholt’s preferred implementation of NB as a ‘component of national policy’, integrated into the nation’s planning, governance or economic development (Anholt 2008a: 23), and best describes how NB is practiced in South Korea. While the definitions and recommendations in regard to its application differ, there is a general consensus on the goals of NB amongst scholars from the field. According to Dinnie (2008), Moilanen and Rainisto (2009: 11), Govers and Go (2009: 5), NB’s main objectives are to attract businesses, foreign investment, tourism and talent (skilled workforce and foreign students); to promote public diplomacy; to support exporting industries; and to strengthen national identity and self-respect by distinguishing the country’s core assets (in terms of its political, economic and cultural attributes) from those of other nations. In this connection, Fan (2005: 6) conceives of NB as the process of creating and employing ‘a consistent and all-embracing national brand strategy which determines the most realistic, most competitive and most compelling strategic vision for the country, and ensures that this vision is supported, reinforced and enriched by every act of communication between the country and the rest of the world.’ More specifically, and in analogy to Blain et al. (2005: 331-32), NB can be defined as: all of a nation’s policy measures, firstly that support the creation of a name, symbol, logo, word mark or other graphic to identify and differentiate the nation; secondly, that are employed to convey the promise of value in regard to the nation’s trade, investment potential, tourism, exports, governance, culture, people and immigration; thirdly, that are thought to serve to consolidate and reinforce the positive association with the nation, all with the intent of creating an image that influences the target audiences’ decisions to trade with, invest in, travel to, consume exports of, work/study/live in, or generally engage with that nation; and fourthly, that aim to enhance the domestic population’s national identity and pride. Anholt (2008a, 2008b), who favours governmentally institutionalised NB, says that NB measures should be taken on a long-term basis

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and through the collective endeavours of government, business and civil society, which should follow a common cause and consensus, in order to bring the desired results.16 While this emphasis on long-term orientation has also been interpreted as an excuse for the lack of empirical proof regarding the effects of NB initiatives (Kaneva 2011), it reveals a general attitude that is very much compatible with the planrational ideas underlying the DS concept.

4 NATION BRANDING IN SOUTH KOREA: THE PRESIDENTIAL COUNCIL ON NATION BRANDING 4.1 Motives for Nation Branding in South Korea The current South Korean Nation Branding project started with the launch of a government agency, the Presidential Council on Nation Branding in January 2009. There had, however, already existed efforts to promote South Korea’s image under the previous presidents Kim Dae-jung and Roh Moo-hyun. In preparation for South Korea’s cohosting of the 2002 FIFA Football World Cup, a large-scale image campaign was launched by the Kim Dae-jung administration. The National Image Committee (NIC; Kor. kukka imiji silmu wiwǂnhoe) was established in 2001 to monitor promotional activities under the prime minister’s office (Kim 2006). In the course of the campaign, ‘Dynamic Korea’ was developed as a national slogan (Cheng 2008: 75; Lee 2005), which continues to be used.17 The Roh Moo-hyun administration has maintained the efforts of the NIC, albeit with less priority and budget, as Lee Chang-hyun, Korean Trade-Investment Promotion Agency (KOTRA) representative and PCNB associate, said in a personal interview in June 2010. In 2003, a committee supervising the ———

16 In this connection Anholt remarks that, ‘if brand management is put into a silo of “communications” or “public affairs”, there is little it can do. But when it informs policymaking and becomes implicit in the way the country is run, it can dramatically accelerate change’ (Anholt 2008a: 23). 17 The slogan, however, also led to unwanted associations. As Cheng (2008: 77) states, ‘“Dynamic Korea” resonated positively among Asians’ but conjured the image of a country still trapped in industrialisation in European and developing countries. Former PCNB Chairman Euh Yoon-dae, on the other hand, contends that ‘the slogan induces images of violent demonstrations’ (AFP 2009). For this reason, Euh prefers the slogan ‘Miraculous Korea’ (referring to the rapid South Korean post-war economic growth sometimes termed the ‘Miracle on the Han’) (AFP 2009), which was used on the PCNB-run website www.koreabrand.net in 2010.

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development of Korea’s nation brand was established within the Government Information Agency (Cheng 2008: 75-76). Amongst other activities, it conducted international surveys on the value of Korea’s nation brand (Kim 2006). In 2007, the controversial slogan ‘Korea, sparkling’18 was created as a tourism brand jointly with Anholt (Lee 2005). The Committee’s efficacy was, however, questioned in light of its sporadic meetings (Gim 2006) and the lack of an integrated brand strategy followed by the institutions involved (Kim 2006). When the Lee Myung-bak administration took office in February 2008, it initially did not plan on continuing the previous governments’ image and national brand-related promotional activities (source: personal interview with Lee Chang-hyun, 19 June 2010), presumably as they were associated with their political opponents. This attitude, however, changed in the course of the president’s first year in office. While the previous governments’ initiatives could be categorised as communication-based NB, the Lee Myung-bak administration took NB to a new level by institutionalising it in the PCNB in January 2009. According to official statements by President Lee and Euh Yoon-dae, then chairman of the PCNB, the main motivation behind the establishment of the PCNB was the divergence between South Korea’s economic status, as a country with the 15th biggest national economy, and how it is perceived internationally (Cheng 2008; PCNB 2009a). This disparity, as reflected in international country perception studies (BBC News 2010: 22), or in the Anholt GfK Roper Nation Brands Index (NBI), one of the internationally most cited instruments for measuring the nation brand, is believed to have serious economic implications. On the NBI, which has been conducting surveys about country perceptions in 40-50 countries since 2005, South Korea has ranked in 29th place on average, with even the Korean respondents themselves ranking their country no higher than 9th place19 (Anholt 2008a). In an analogy to the country-of-origin effect,20 the PCNB assumes that South Korea’s low international profile has a negative im———

18 The slogan was replaced with ‘Korea, be inspired’ in February 2010 because of unintended associations with carbonated drinks (see AFP 2009). 19 South Korea was ranked in 33rd place in 2008 and 31st in 2009 on the Anholt GfK Roper NBI (GfK Roper 2008; 2009). In 2010, GfK Roper only published the first ten ranks free of charge (GfK Roper 2010). 20 The country-of-origin (COO) effect describes the notion that the COO influences consumers’ perception of products and that otherwise identical products are rejected or consumed due to positive or negative associations with their COO (Schooler 1965).

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pact on the way South Korean products are rated abroad, which has been termed the ‘Korea Discount’.21 According to Euh (2010) the ‘Korea Discount’ signifies that South Korean products are given a lower valuation than comparable American or Japanese products because of the perceived lower status of the South Korean nation brand. This is said to be a particular problem for smaller businesses as they cannot rely on their corporate brand value, unlike the chaebǂl. Additionally, because of the unsatisfactory international status of South Korea, successful chaebǂl usually do not seek to invoke associations with their country of origin in their international marketing (source: personal interview with the PCNB’s Director for Planning and Coordination, Youn Jung-in, 21 June 2010). The focus on NB also has domestic political motives. When President Lee Myung-bak announced the establishment of the PCNB in summer 2008 as a measure to counter the negative international perception of South Korea, he was suffering from severe image problems himself as a result of the removal of the ban on US beef imports that led to civilian protests in spring and summer 2008. The fact that, in his Liberation Day speech on 15 August 2008, President Lee attributed South Korea’s unsatisfactory international reputation to ‘the idea that militant unions and violent protests were the “very first images that come to foreigners’ minds” when they think of Korea’ (to quote from Cheng 2008: 78), could be interpreted as an appeal to the citizens to subordinate their social and political demands to the ‘greater good’ of the nation’s international standing. It was in this context that Euh Yoon-dae criticised the slogan ‘Dynamic Korea’ for inducing ‘images of violent protests’ (AFP 2009). Furthermore, under the pretext of promoting South Korea’s image, the Lee Myung-bak administration can legitimise policies, such as the instalment of South Korean troops in international conflict areas, which are believed to raise South Korea’s international standing and which would otherwise lead to little public acceptance. What does the PCNB perceive as the reasons for South Korea’s unsatisfactory global reputation? In official statements and publications (PCNB 2009a; Euh 2010), South Korea’s low participation in global issues and weak sense of openness and tolerance towards foreigners are highlighted as causes for its negative international perception. In ——— 21

According to Forbes magazine, the ‘Korea Discount’ is ‘the amount by which investors undervalue Korean stocks’ (Salmon 2007).

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particular, the country’s minor percentage of Overseas Development Aid (ODA)22 and small contribution to global issues such as preventing climate change and establishing world peace are described as obstacles to achieving a positive international image. Furthermore, South Korean citizens are perceived to be ‘immature as global citizens’ (Euh 2010) in that they discriminate against immigrants and foreign labourers and lack ‘global etiquette’, which the PCNB understands as an internationally accepted code of conduct including politeness and consideration, as well as the omission of ‘unruly behaviour’ (sex tourism, substance abuse, acts of vandalism) both in- and outside of South Korea. Another factor deemed responsible for South Korea’s low international profile is that it is not considered either as an attractive tourist destination or as a place of residence. This weakness is attributed to the country’s lack of tourist attractions and deficiencies in education, medicine, housing and communication (Euh 2010).23 As a final hindrance to the establishment of a positive nation brand, the PCNB identifies the missing ‘systematic publicity’ regarding cultural assets before the establishment of the PCNB (Euh 2010). Although the PCNB’s former chairman, Euh Yoon-dae, deemed ‘Demilitarized Zone-tourism’ as counterproductive to the South Korean NB project in several interviews (e.g. Na 2009), reference to North Korea as a factor influencing South Korea’s international standing is strikingly absent from the above-mentioned aspects. According to Keith Dinnie, ‘the negative association with North Korean brinkmanship and lingering images of the Korean War’ (Dinnie 2009: 1) are to be identified as the main engine behind South Korea’s desire to reposition its brand. It is important to note, however, the difference between the PCNB’s public statements and its actual agenda. While the PCNB’s public communication targeted at international as well as domestic South Korean audiences generally avoids mentioning North Korea as an obstacle to South Korea’s nation brand, it does seek to reduce the effects of the North overshadowing South Korea’s image by using actions such as the expansion and ‘amendment’ of online ——— 22 With a percentage of 0.09 percent of the GNI in 2009, South Korea was 27th in regard to ODA among 30 OECD countries. 23 This aspect is highlighted by Anholt (2008b), who holds a rather dim view of South Korea’s international profile: ‘The world just doesn’t think very much about [South] Korea, or think very highly of it. It is not a country that ordinary people perceive to be very relevant to their daily lives, or believe to be very attractive or admirable.’ He further contends that the association with North Korea only explains part of South Korea’s negative international perception

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data on South Korea (Wikipedia, YouTube, Flickr) in order to influence the weighting in favour of the South.24

4.2 Structure, goals and activities of the Presidential Council on Nation Branding Under the motto ‘Korea, a loving embrace’ (Kor. paeryǂhago sarangpannǎn taehanmin’guk—literally a ‘considerate and beloved Republic of Korea’), the PCNB was installed as a ‘control tower’ to co-ordinate and oversee all governmental activities related to Nation Branding, as well as a mediator to facilitate implementation and to foster cooperation and dialogue with the private sector and the general public (PCNB 2009b: 10). After a period of chairmanship by Euh Yoon-dae, former president of Korea University and now chairman of the KB Financial Group, from January 2009 to June 2010, the PCNB is currently headed by Lee Bae-yong, former president of Ewha Women’s University. The Council is staffed with governmental officials and specialists from the public and private sectors, and at the time of its establishment had 47 members. They include 16 senior governmental officials (nine of them ministers25) and 31 members from various private-sector backgrounds (most prominently representatives of major South Korean corporations and scholars). These representatives are structured into five departments according to their expertise: cooperation; corporate and information technology; culture and tourism; the global community; and overall co-ordination (PCNB 2009a). While the Council is primarily an advisory body, the Secretariat of the PCNB deals with the implementation of the PCNB’s objectives and is staffed with representatives from the ministries (twelve),26 the private ——— 24

One example of this manipulation of online data was the ‘Flickr Image-making Campaign’ of September and October 2009. In the course of this campaign, the PCNB’s public call to upload South Korea related content to the image and video hosting platform Flickr led to an increase of South Korean photos to 61 percent of all photos tagged with ‘Korea’, which had only made up 28 percent before the campaign (Euh 2010). 25 The ministers of Strategy and Finance; Foreign Affairs and Trade; Culture, Sports and Tourism; Education, Science and Technology; Land, Transport and Affairs; Justice; the Prime Minister’s Office; Knowledge Economy; and Public Administration and Security (PCNB 2009a). 26 The ministries of Strategy and Finance; Foreign Affairs and Trade; Culture, Sports and Tourism; Education, Science and Technology; Land, Transport and Affairs; Justice; the Prime Minister’s Office; Knowledge Economy; Public Administra-

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(eight) and public sector (five), as well as research specialists, IT management and regional experts (seven) (PCNB 2009b: 11). The PCNB’s objectives of enhancing South Korea’s national status and prestige in the international community ‘by implementing systematic and comprehensive strategies’ and by ‘raising awareness of the Korean brand among people all over the world’, have been tackled by trigger projects concentrating on five areas: contributing to solving global issues; fostering a multicultural society in Korea; promoting tourism and culture; supporting technology; as well as enhancing global citizenship among Koreans (PCNB 2009b: 6). The corresponding trigger projects are: • the integration of all South Korean volunteer services in the organisation ‘World Friends Korea’ • the fostering of awareness of multiculturalism amongst South Korean citizens • the strengthening of international student exchanges through the programme ‘World Students Korea’ • the promotion of ‘Advanced Technology & Design Korea’ • the sharing of Korea’s economic developmental know-how • the facilitation of online access to South Korean contents for nonKorean speakers • the enhancement of Korean language instruction services • the launch of domestic ‘global etiquette’ awareness campaigns • the creation of an online network for overseas Koreans • the development of a nation brand index (Euh 2010).27 Besides these projects, the PCNB emphasises the following as opportunities to reposition South Korea’s nation brand (Euh 2010): participation in and hosting of international events, such as the Olympic Games, the FIFA World Cup, EXPO and the G20 summit, which was held in Seoul in November 2010; membership in institutions such as the Organisation for Economic Co-operation and Development (OECD) (since 1996) and the OECD Development Assistance Committee (since 2010); and the increase in South Korea’s ODA. The es—————— tion and Security; Labour; Gender Equality; and the Korea Communications Commission. 27 This summary corresponds to the status quo in May 2010. A previous list of trigger projects, which the PCNB published in February 2009, also included points such as the promotion of taekwondo and the adoption of a ‘Korean wave’ programme (Dinnie 2009). These projects are still referenced in later documents, but do not seem to be prioritised in the same way.

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timated annual budget for all activities related to NB is 100 billion won, while the PCNB has an annual budget of 8 billion won (PCNB 2009a). While these objectives and activities partly correspond to the classical NB agenda, which seeks to communicate and enhance positive assets of the country (exports, tourism, language, culture, etc.) in order to increase its comparative advantage, they also address the necessity of changing negative aspects through actual policies (i.e. the increase in ODA and the creation of a South Korean peace corps), and perhaps most strikingly, they appeal to the South Korean people’s attitudes and behaviour as factors influencing the country’s international standing. An example is the PCNB’s ‘global etiquette’ campaign, which aims to improve South Korean ‘manners’, particularly when dealing with foreigners, both inside and outside the country. As part of the campaign, which started in 2010, the PCNB produced promotional films in co-operation with major South Korean corporations, such as LG, Hyundai, Korean Air and the Woori Financial Group. In the films, South Korean citizens are, amongst other things, advised not to leave hangǎl scribbles on monuments when abroad, to respect the ‘ladies first’ rule, to say ‘thank you’ and ‘please’ and to refrain from pushing in crowded places.28 In some of the ‘global etiquette’ ads, South Koreans are contrasted with citizens from ‘advanced’ (read Western) countries, who display good manners. Another noteworthy feature of the goals and activities of the PCNB concerns the development of an own nation-brand index. The PCNB created the so-called PCNB-SERI Nation Brand Dual Octagon (NBDO) with the Samsung Economic Research Institute (SERI) in order to measure the results of its NB using a more ‘objective’ instrument than the Anholt GfK Roper NBI, as Euh stated in an interview (Ser 2009). According to Kim Dae-hee, who co-created the index, Anholt even complimented the NBDO model, saying it was more complete than his NBI hexagon (source: personal interview with Kim Dae-hee, 22 June 2010). While the methods of collecting data employed by commercial NB indexes, such as the Anholt GfK Roper NBI and the FutureBrand Country Brand Index are not uncontested, the fact that the PCNB established its own index and that South Ko———

28 Some of the ‘global etiquette’ ads can be viewed on the PCNB’s YouTubechannel (Koreabrand 2011) alongside other promotional videos, and films submitted to contests by individual users.

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rea’s brand was ranked 19th in regard to its image in 2009 (as opposed to the 31st rank it held on the NBI in the same year) and 18th in 2010 (SERI 2010), emphasises the fact that the PCNB serves not least to legitimise the president’s administration by highlighting the ‘success’ of its policies.

5 PARALLELS BETWEEN SOUTH KOREAN NATION BRANDING AND THE DEVELOPMENTAL STATE Even before turning to a concrete analysis of South Korea’s Nation Branding project in regard to South Korea’s Developmental State legacy, general parallels between the policy-based approach to NB as described in section 3.2 and Johnson’s (1982) conception of the planrational DS can already be detected. As with Anholt’s prescription for NB, Johnson’s DS prioritises institutionalised, goal-oriented strategic activities with a long-term orientation that depend on consensus ‘upon a set of overarching goals for society’ (Johnson 1982: 22). Similarly to the target-oriented economic policies of the DS, NB aims at serving the primarily economic national interests by distinguishing the country’s comparative advantage, as well as achieving progress from the current status quo. In reference to the three dimensions of the DS suggested by Stubbs (2009)—institutional, relational and ideational— further similarities between the DS and the South Korean NB can be detected. Turning to the institutional aspect, policy-based NB promotes the creation of a governmental or quasi-governmental agency to plan, implement and oversee all of a country’s NB activities on a long-term basis. This institutionalisation of NB corresponds to the role of the DS’s pilot planning organisations such as the EPB in South Korea or Japan’s MITI. The South Korean PCNB takes the role of an overarching pilot agency in that it co-ordinates and plans all governmental activities connected with NB. As a governmental agency directly connected to the country’s most powerful individual, the president, the PCNB also has the capacity to influence actual policies which are implemented by the respective ministries, public corporations such as the Korea Tourism Organisation, the Korea Trade-Investment Promotion Agency, the Korea International Cooperation Agency, and the Korea Foundation, as well as by divisions of the Secretariat of the PCNB. As the PCNB’s Director for Planning and Coordination, Youn Jung-in,

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emphasised in a personal interview (21 June 2010), in the South Korean political system, a presidential decree, which governs the PCNB, is a powerful instrument. Youn contends that the PCNB’s status marks an important difference from earlier South Korean approaches to NB, which were subordinate to the less influential prime minister. Another noteworthy aspect in regard to the institutional dimension of South Korea’s NB is the role ascribed to the bureaucracy within the PCNB. Although during personal interviews, members and associates of the PCNB frequently stressed the importance of co-operation with the private sector and the public for South Korea’s NB endeavour, the necessity for bureaucratic co-ordination and planning was usually described as a precondition. This aspect is also highlighted in Youn’s 2010 account of his experiences at the PCNB, K’oria pǎrendǎ p’awǂ (‘Korea Brand Power’), a book intended to introduce the PCNB’s work to the South Korean people. In regard to the relational dimension, the composition of the stakeholders involved in the PCNB resembles the actor constellation typical of the DS. In the Secretariat of the PCNB, which provides the Council’s office support, civil servants from the ministries and the public corporations work with representatives from the private sector, in particular marketing experts from chaebǂl such as Samsung, Hyundai and LG, to set up plans and implement measures that, it is believed, will positively influence South Korea’s image. Private corporations also financially support governmental NB activities such as the 2010 campaign on ‘global etiquette’. According to Youn, this close co-operation with businesses was facilitated through former Chairman Euh’s personal networks in the private sector. This again echoes the important role ascribed to interpersonal relations between the political, bureaucratic and economic elites in the DS model. While the South Korean corporations’ contribution to the ‘greater good of the nation’ through supporting NB generates positive publicity effects for at least their domestic South Korean presence, it can be assumed that the private sector’s commitment to NB is also motivated by the wish to maintain favourable relations with the governmental elite. An important difference to the classic DS actor constellation, however, is the inclusion of civil society in the NB project, which was particularly emphasised by PCNB associates in personal interviews conducted in 2010. The PCNB encourages the South Korean public, as well as foreign residents, in particular exchange students, to contribute to the NB project, i.e. by taking part in online contests awarding

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videos, blogs, recipes, photos and so on, thus promoting the South Korean nation brand and raising awareness of South Korea. International professionals working in South Korea are also engaged in NB through the International Advisory Forum of the PCNB.29 The inclusion of the general public in the South Korean NB project can be attributed to the fact that governmental policies require a certain degree of public support in modern-day South Korea because of the increasing leverage of civil society. Moreover, without any civil contribution, NB could be seen as mere governmental propaganda. As for the ideational dimension of the DS, Johnson’s mention of ‘projects to call attention to the developmental effort and to instil pride in its successes’ (Johnson 1982: 316), which are employed by the DS in order to counter social and political discontent in regard to the state’s autonomous role, echoes the strengthening of national identity and self-respect as one of the key objectives of NB. The PCNB associates interviewed for this study also stressed that it was regarded as a means of popularising the government’s NB project. In this context, NB in South Korea can be seen as an instrument for legitimising the Lee administration by appealing to patriotism and ‘the greater good of the nation’. This contrasts with the view of authors like Peter van Ham (2001) and Anholt (2006), who conceive of NB as a favourable concept for civil empowerment. Van Ham regards NB as a less dangerous alternative to nationalism in constructing collective identity.30 Moreover, he contends that the rise of the ‘brand-state’ represents ‘a shift in political paradigms, a move from the modern world of geopolitics and power to the postmodern world of images and influence’ (Van Ham 2001: 4). Similarly, Anholt (2006: 2) understands place branding (which comprises NB) as a peaceful and humanistic model for international relations. He attributes this to its being founded on the principles of ‘competition, consumer choice and consumer power’, which, he believes, promotes ‘freedom’ and ‘power of the individual’. This neo-liberally informed assessment of NB is, however, criticised ———

29 The International Advisory Forum of the PCNB has been meeting regularly since April 2009 to discuss issues dealing with South Korea’s international standing and includes stakeholders such as CEOs of branches of international corporations in South Korea, scholars and cultural institutions. 30 According to Van Ham, NB’s use of a country’s history, geography and ethnic motifs to promote its image ‘is a benign campaign that lacks the deep-rooted and often antagonistic sense of national identity and uniqueness that can accompany nationalism’ (Van Ham 2001: 3).

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by scholars like Zala Volcic (2009), who argues that NB invents a form of ‘commercial nationalism’ by reinterpreting nationhood and national identity in relation to neo-liberalism (Volcic 2009). South Korea’s continuous developmental orientation becomes apparent in another ideational aspect of the country’s NB. Although South Korea has long achieved the status of an industrialised nation, as is reflected by its acceptance into the OECD in 1996, the idea of having to catch up is still present in the country’s effort to improving its international standing. It becomes apparent in the PCNB’s general goal of raising South Korea’s nation brand status to the level of the more ‘advanced’ OECD countries before the end of Lee Myung-bak’s term of office in 2013 (PCNB 2009a), and in the way in which the South Korean people are encouraged to change their behaviour by the PCNB’s ‘global etiquette’ campaign. The implicit message of the campaign is that in order for South Korea to become accepted as an equal member amongst the ‘league of advanced countries’, its citizens have to adapt their behaviour to the ‘Western standard’. Despite the humorous take on stereotypical South Korean ‘bad’ manners displayed in the PCNB’s promotional films, the attitude propagated by the ‘global etiquette’ campaign is clearly developmental in that it assumes a sociocultural ‘backwardness’ of the South Korean people and localises the capacity to progress from this backwardness in the hands of the state. The PCNB’s efforts to direct the South Korean citizens towards a certain behaviour could even be interpreted as a form of administrative guidance. In a nutshell, the main parallels which can lead to an understanding of NB in South Korea as a continuation of the DS are firstly, the leading role of the state in achieving national, primarily economic goals by installing governmental institutions that issue corresponding plans; secondly, an actor constellation comprising politicians, governmental officials and private businesses which co-operate closely; thirdly, an emphasis on the importance of comparative advantage and the ‘greater good of the nation’ and on the consensus between the actors involved in the achievement of these goals; and finally, the implementation of policies that serve to induce economic development and strengthen national pride.

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6 CONCLUSION In this article, the Lee Myung-bak administration’s Nation Branding project has been understood as an example of South Korea’s continued ‘Developmental State’ orientation. It has been demonstrated that South Korean NB endeavours, led by the Presidential Council on Nation Branding as a pilot agency, display parallels in regard to all three dimensions of the DS— institutional, relational and ideational— and that adjustments concerning the methods for achieving developmental goals, such as the improvement of South Korea’s international reputation, do not necessarily undermine the institutional, relational and ideational framework of the DS. Through its foundation in the classical DS setting (a planning pilot agency, an actor constellation highlighting the networks between the governmental and the corporate elites and a goal-oriented developmental attitude) and its consideration of new variables, such as an internationalised environment and an active civil society, NB in South Korea can be seen as an example of how the DS has been adapted to survive under the conditions of a mature political economy, increasing economic globalisation and a global post-Cold War setting. By emphasising the promotion of a positive South Korean image as ‘the greater good of the nation’ in economic, social and political terms, the Lee Myung-bak administration has made NB one of its cornerstone projects, not least to legitimise its own status. One of the main weaknesses ascribed to traditional DS institutions in light of the burgeoning economic globalisation of the 1980s was their incapacity to move into the international arena. As a governmental body committed to raising South Korea’s comparative advantage by efforts targeted domestically as well as internationally, the PCNB, at least in principle, seems less susceptible to this flaw.

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ference, 2-5 April 2009, Chicago IL. Online: http://www.allacademic.com/ meta/p_mla_apa_research_citation/3/6/1/0/5/pages361057/p361057-1.php, pp. 1-16 (accessed 2 November 2010) PCNB (2009a), The International Advisory Forum of the Presidential Council on Nation Branding, April 2, 2009, report on the introduction of the International Advisory Forum of the PCNB, Seoul PCNB (2009b), The Presidential Council on Nation Branding, 13 August, 2009, conference booklet from the 2nd International Conference on Nation Branding at the 5th Cheju Peace Forum, Seoul Pekkanen, Robert (2004), ‘After the Developmental State: Civil Society in Japan’, in: Journal of East Asian Studies, 4 (2004), pp. 363-88 Petras, James (2002), ‘The Myth of the Third Scientific-Technological Revolution in the Era of Neo-Mercantilist Empires’, in: Latin American Perspectives, 29 (6), pp. 44-58 Pirie, Iain (2005), ‘The New Korean State’, in: New Political Economy, 10 (2005), pp. 25-42 Pirie, Iain (2008), The Korean Developmental State: From Dirigisme to Neoliberalism, London: Routledge Rainisto, Seppo (2003), ‘Success Factors of Place Marketing: A Study of Place Marketing Practices in Northern Europe and the United States’, doctoral dissertation, Helsinki University of Technology. Online: http://lib.tkk.fi/Diss/2003/isbn95 12266849/isbn9512266849.pdf (accessed 10 July 2010) Salmon, Andrew (2007), ‘Cutting the Korea Discount’, in: Forbes, 21 May 2007. Online: http://www.forbes.com/global/2007/0521/034.html (accessed 9 October 2010) Schooler, Robert D. (1965), ‘Product Bias in Central American Common Market’, in: Journal of Marketing Research, 2 (4), pp. 394-97 Ser, Moh-ja (2009), ‘Building “Korea the Brand” Will Take Years’, interview, in: JoongAng Daily (29 July 2009). Online: http://joongangdaily.joins.com/article/ view.asp?aid=2908004 (accessed 3 June 2010) SERI (Samsung Economic Research Institute) (2010), ‘Samsǂng kyǂngje yǂn’guso “2010 nyǂn kukka pǎrendǎ chisu chosa kyǂlgwa”’ [‘Samsung Economic Research Institute “2010 Nation Brand Index survey results”’], in: Newswire Korea Press Release Network (23 November 2010). Online: http://www.newswire.co. kr/newsRead.php?no=511589 (accessed 30 November 2010) Sinha, Aseema (2003), ‘Rethinking the Developmental State Model: Divided Leviathan and Subnational Comparisons in India’, in: Comparative Politics, 35 (4), pp. 459-76 Stubbs, Richard (2009), ‘What Ever Happened to the East Asian Developmental State? The Unfolding Debate’, in: The Pacific Review, 22 (1), pp. 1-22 Sya, L.S. (2005), Branding Malaysia, Singapore: Select Books Pte Ltd Thurbon, Elizabeth (2001), ‘Two Paths to Financial Liberalization: South Korea and Taiwan’, in: The Pacific Review, 14 (2), pp. 241-67 Thurbon, Elizabeth and Linda Weiss (2006), ‘Investing in Openness: The Evolution of FDI Strategy in South Korea and Taiwan’, in: New Political Economy, 11 (1), pp. 1-22 Uttam, Jitendra (2006), ‘Korea’s New Techno-Scientific State: Mapping a Strategic Change in the “Developmental State”’, in: China Report, 42 (3), pp. 257-68 Van Ham, Peter (2001), ‘The Rise of the Brand State: The Postmodern Politics of Image and Reputation’, in: Foreign Affairs, 8 (5), pp. 2-6

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Vartiainen, Juhana (1999), ‘The Economics of Successful State Intervention in Industrial Transformation’, in: Meredith Woo-Cumings (ed.), The Developmental State, Ithaca NY: Cornell University Press, pp. 200-235 Volcic, Zala (2009), ‘Television in the Balkans: The Rise of Commercial Nationalism’, in: Graeme Turner and Jinna Tay (eds), Television Studies after “TV”: Understanding Television in the Post-broadcast Era, London: Routledge, pp. 11524 Weiss, Linda (2000), ‘Developmental States in Transition: Adapting, Dismantling, Innovating, Not “Normalising”’, in: The Pacific Review, 13 (1), pp. 21-55 Weyland, Kurt (1998), ‘From Leviathan to Gulliver? The Decline of the Developmental State in Brazil’, in: Governance, 11 (1), pp. 51-75 Wong, Joseph (2004), ‘The Adaptive Developmental State in East Asia’, in: Journal of East Asian Studies, 4 (3), pp. 345-62 Woo, Meredith Jung-En (2007), ‘After the Miracle: Neoliberalism and Institutional Reform in East Asia’, in: Meredith Jung-En Woo (ed.), Neoliberalism and Institutional Reform in East Asia, Basingstoke, UK; New York: Palgrave Macmillan, pp. 1-35 Woo-Cumings, Meredith (1999), ‘Introduction: Chalmers Johnson and the Politics of Nationalism and Development’, in: Meredith Woo-Cumings (ed.), The Developmental State, Ithaca NY: Cornell University Press, pp. 1-32 Youn, Jung-In (2010), K’oria pǎrendǎ p’awǂ: Kukka e p’umgyǂkkwa imijirǎl ibhyǂra [Korea Brand Power: raising the national prestige and image], Seoul: Maeilkyǂngje sinmunsa

ADDITIONAL REFERENCED SOURCES Personal interview with Lee Chang-hyun (Senior Counsellor, Bureau of Enterprise and IT, PCNB; KOTRA associate), conducted on 19 June 2010 in Seoul Personal interview with Kim Dae-hee (Senior Counsellor, Bureau of Planning and Coordination, PCNB; Brand and Marketing associate at Samsung Electronics), conducted on 22 June 2010 in Seoul Personal interview with Youn Jung-in (Director, Bureau of Planning and Coordination, PCNB; MOSF associate), conducted on 21 June 2010 in Seoul

FROM ‘COLD FRIENDSHIP’ TO STRATEGIC PARTNERSHIP: THE TRANSFORMATION OF SOUTH KOREA’S POLITICAL RELATIONS WITH INDIA Niclas D. Weimar

ABSTRACT In 2012, South Korea and India will celebrate 50 years of consular relations that have brought, for both countries, a massive transformation in their bilateral relationship. Although sharing the same tragedy of national partition and an uneasy relationship with China, South Korea and India were for decades at odds with each other. Only in recent years have the two Asian democracies recognised the threats and interests they have in common, which are primarily geared to China’s rise. This paper addresses the political relations between South Korea and India, describing in detail the development of IndoKorean ties since World War II. It shows the paramount significance of the China factor for the Indo-Korean strategic rapprochement by analysing major common concerns and will discuss both the regional and international implications of the bilateral links between South Korea and India by exploring the prospects of an axis between the two. Key words: South Korea, India, China factor, bilateral relations, strategic partnership, security co-operation

1 INTRODUCTION When the president of the Republic of Korea (ROK—South Korea) Lee Myung-bak was invited by the Indian government to attend the 61st Republic Day on 26 January 2010 as chief guest—a highly symbolical gesture which India only awards to close and important partners—and, along with Prime Minister Manmohan Singh, promulgated a strategic partnership, most observers of Asian-Pacific affairs were taken by surprise, their view coloured by the former long-term cold relations between the two countries. This development, however, followed on within the framework of a changing landscape of political

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affairs in the Asia-Pacific area since the demise of the Union of Soviet Socialist Republics (USSR—Soviet Union). The ‘silent’ rapprochement between the ROK and India, which during the Cold War were deeply estranged from each other, was a slow process. Despite having faced similar challenges in their neighbourhood and in face of their common political interests and problems—most of which have since the end of World War II been geared to the People’s Republic of China (PRC—China)—it took South Korea and India more than three decades to recognise the advantages of strategic co-operation. Although an increasingly hot topic in Asian-Pacific affairs, the issue of political relations between South Korea and India is still scarcely discussed in academic circles, and the meagre literature available on the subject treats the evolution and main impetus of these relations with only small attention to detail. In an attempt to fill this gap, this article explores the transformation of the political relationship between South Korea and India since World War II, the impetus of their strong political ties and the implications that result. This inevitably leads to the question: what are the prospects of a strategic axis between the ROK and India? In determining the answer to this question, this article will deal, in the historical and generally descriptive first part, with the development of the ROK-India relationship during the Cold War and show why South Korea and India, despite shared uneasiness about a belligerent China, did not end up as strategic partners. The second part assesses the impetus of the political rapprochement between South Korea and India by analysing the major features of the enforced ROKIndia ties; the author will argue here that since their respective independence, the China factor has been the major political linkage and underlying trigger. The third part will analyse the implications of developing ROK-Indian ties in view of a potential strategic axis. The article will conclude by summarising the key arguments presented in the paper and provide a short outlook on the future of Indo-Korean political relations.

2 SOUTH KOREA AND INDIA DURING THE COLD WAR: FROM MISTRUST TO ‘COLD FRIENDSHIP’ Political relations between South Korea and India have not always been as cordial and close as today. Both the ROK and India tend offi-

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cially to ignore the fact that their relations were extremely strained for decades. There was much mistrust between the two countries, in particular between their respective early leaders, Syngman Rhee (Yi Sǎng-man) and Jawaharlal Nehru. Hence, the exaggerated public lauding of India’s support during the Korean War by ROK officials today omits the bilateral controversies during the Cold War.

2.1 India and the Korean problem Prior to the establishment of the ROK on 15 August 1948—exactly one year after India’s independence—India, under British suzerainty a member of the League of Nations and a founding member of the United Nations (UN), was part of the United Nations Temporary Commission on Korea (UNTCOK), which was to provide for fair and free elections in Korea (UNGA 1947: 16-17). India’s proclaimed foreign policy of neutrality, large population and political weight in Asia led to its being considered an important member of UNTCOK, and the country’s UN ambassador Krishna Menon was elected chairman of the commission. As the USSR denied the commission access to the North, UNTCOK failed to establish a framework for nationwide elections, with the ultimate result of the formation of two Korean states. Most members of the commission buried their hopes for a diplomatic solution for a unified Korea and shifted their support to one of the two Koreas, while the Indian government voiced its concerns and kept calling for a unified Korea (Gills 1996: 45). Wary of taking a position in the mounting East-West conflict and to underline the role it claimed as a neutral mediator, India denied diplomatic recognition to both the Democratic People’s Republic of Korea (DPRK—North Korea) and the ROK and was sceptical about ongoing debates on UN recognition of the two Koreas. For India, neither of the two governments was a legitimate representative of the Korean people and neither, therefore, was worth diplomatic recognition. This attitude and India’s neutrality met with discontent in South Korea, which primarily distinguished between pro-Communists and anti-Communists and did not know how to deal with India’s policy of non-alignment. Yet, as India’s consent for UN recognition of the ROK was regarded as crucial, South Korean envoys met the Indian Prime Minister Jawaharlal Nehru in December 1948 in Paris. Initially, Nehru was re-

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luctant to change his attitude, enraging the envoys. They engaged in heavy arguments with Nehru and criticised him as ‘indecisive’ and ‘opportunistic’. Only after a heated debate did he give in, and India voted for UN recognition of the ROK (Han 1974a: 43).

2.2 The role of India in the Korean War When the Korean People’s Army (KPA) attacked South Korea on 25 June 1950, India, an elected non-permanent Commonwealth member of the United Nations Security Council (UNSC) in 1950 and 1951, initially did not take a clear position. While its UN ambassador voted on his own for Resolution 82, which called for a halt to the conflict and withdrawal of DPRK forces from ROK territory (UNSC 1950a: 4-5; Ghose 1993: 262), Nehru did not want to meddle in the conflict. He refused to support the repelling of the North Korean attack and branding of the DPRK as sole aggressor in the following two resolutions.1 Instead, India offered its support as a mediator (Mackenzie 1950: 7). This provoked heavy criticism from the United States (US) and the ROK for its passive attitude. After harsh debates in the Lok Sabha (The People’s House of the Indian Parliament) on Nehru’s neutral stance and mounting international pressure, the Indian government ultimately decided to support the United Nations Command (UNC) forces by retrospectively approving Resolution 84 from which it had abstained before. Yet India did not want to be involved militarily, worried about its credibility in the third world and fearing it would be branded as a crusader against communism (Ghose 1993: 262). As a compromise, the Indians agreed to support the ROK with the 320man-strong 60th Parachute Field Ambulance, which would land in Korea in late 1950 (Rottman 2002: 142, 192). While this step was interpreted in the West as a change in India’s neutral foreign policy, the Indians considered their limited support for the ROK as a merely symbolic humanitarian contribution and reason enough to be involved substantially in any negotiations on the settlement of the conflict. Following its consent for support for the UNC, India, in an effort at mediation, called for a permanent seat for the PRC in the UNSC and the replacement of the Republic of China ——— 1

See Resolutions 83 and 84 from 27 June and 7 July 1950 respectively (UNSC 1950b; UNSC 1950c: 5-6).

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(ROC—Taiwan) to facilitate negotiations between the warring sides.2 South Korea and the US rejected India’s call (The Age, 19 July 1950: 7) and any further mediation attempts by the Indian government met only with refusal in the South Korean and US capitals, which did not want to ‘reward communist aggressions’ (Pittsburgh Post-Gazette, 17 August 1950: 6). India’s efforts to get China into the UNSC and its good relations with the PRC in the early years of the Cold War raised substantial suspicions in South Korea about India’s pro-Communist leanings. When the UN forces were gaining the upper hand in late September 1950 and Syngman Rhee called for the crossing of the 38th parallel, Nehru strongly opposed Rhee’s call and publicly expressed his disregard for and criticism of the South Korean president (Evening Herald (South Carolina), 30 September 1950: 4). India was well aware of the consequences of pushing beyond the 38th parallel since its ambassador in Beijing, who acted as a communication channel between China and the UN, was warned by officials of the People’s Liberation Army (PLA) that the PRC would not tolerate American troops approaching its border (Sartori 2005: 24). India—pressured between its commitment to the UN, its good ties with China and its peaceful objectives in Korea—understood the seriousness of these warnings and repeatedly called on the UNC to cease fire at the 38th parallel. The country was not only wary of the outbreak of a bigger conflict in Asia, but also of mounting pressure from both the UNC and China, each urging India’s definite commitment. India thus abstained from voting for UNGA Resolution 376 (V), which authorised the UN forces to cross the 38th parallel (Kim 2009: 2; UNGA 1950: 9-10). In the course of the rapid advance of South Korean and UN forces towards the Chinese border, China dispatched troops of the Chinese People’s Volunteers (CPV) and pushed back UN forces, while India repeatedly tried to mediate and appealed to no avail to China and North Korea not to cross the 38th parallel (Yang and Wang 1993: 199-200). The two warring parties literally ignored India’s proposals for a ceasefire and a buffer zone between the two forces (Huss 1950: 1)—an idea that would later be adopted in the creation of the Demilitarised Zone (DMZ) at P’anmunjǂm. Not only South Korea, but also China and the USSR were increasingly dissatisfied with India’s reluc——— 2

Like the USSR, India was very persistent in its demand that the ROC be replaced in favour of the PRC.

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tance to take a clear-cut position and each side accused the Indians of working for the interests of the other protagonists. President Truman even blamed Nehru for responsibility for the US losing the war (Ghose 1993: 264).

2.3 The prisoner of war debacle The repatriation of prisoners of war (POWs) 3 was to become the event pinpointing the deep rift between South Korea and India. One year after the outbreak of war, no side was able to gain significant advantage. Only then did representatives from the UNC, KPA and CPV enter into negotiations on a truce, but they could not agree on the POW issue (Boose 2000: 26). It was then, in November 1952, that the Indian UN delegation suggested a truce which envisaged the establishment of a neutral Repatriation Commission that should ensure freedom of choice in repatriation. While the majority of the UNGA approved the proposal, the USSR, China and also South Korea, which aimed at the repatriation of all Korean prisoners to its soil, rejected India’s truce plans (Milwaukee Sentinel, 5 December 1952: 1; Kim 2009: 2-3). China and North Korea, however, soon realised that there was nothing to be gained from a prolonged war and consented to peace negotiations on the basis of India’s proposal. Both sides agreed on the establishment of the Neutral Nations Repatriation Commission (NNRC), consisting of Czechoslovakia, Poland, Sweden, Switzerland and India, which was to handle the POWs and foresaw the dispatch of Custodial Forces of India (CFI). Yet the South Korean president, Syngman Rhee, was still not willing to end the war before the final defeat of the North and strongly opposed the dispatch of Indian soldiers to Korea. Cynical about India’s good ties with China, he accused India of being pro-Communist and supportive of the indoctrination of Korean prisoners with Communist ideology. Rhee announced that he would not allow a single Indian soldier to touch South Korean soil and even threatened to use force against the Indians. Nehru, heavily disturbed by Rhee’s warmongering, denounced the ROK president as a ‘reactionary anachro——— 3

Apart from varying figures on the number of POWs, further problems were the difficult attribution of Korean POWs to either North or South Korea and the wish of many Chinese POWs not to be repatriated to China.

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nism’ and called on the UNC to pressure South Korea into accepting India’s truce plan. Distrustful about the South Koreans and their intentions, India demanded safety guarantees for the Indian custodial forces from the UNC, particularly the US (Kim 2009: 4; Kux 1992: 101) and threatened to reconsider its role in the NNRC if South Korea did not remain on track with the peace process (St Petersburg Times, 11 June 1953: 1). Only heavy pressure from the UN brought Rhee to consent to an ending of the war, giving the green light to India’s proposed truce plan. He was, however, deeply disgruntled about the meddling of the Indians, which obstructed his plans to unify Korea by force. When a ceasefire was finally reached on 27 July 1953, the UNC, CPV and KPA transferred their respective prisoners who refused repatriation—more than 22,000 people—to the DMZ, where they were put under guard of the CFI. India dispatched several thousand soldiers4 and General G.S. Thimayya, an Indian, was elected chairman of the NNRC (Rau 1990: 284-85). Yet South Korea’s distrust and tense relations with India would ensure a hard time for the CFI. The ROK president carried out his earlier announcement not to permit the Indians to set foot on South Korean soil, forcing the US army to fly the CFI via helicopter to the DMZ after their arrival at Inch’ǂn (Kim 2009: 5; Kux 1992: 102; KIMH 2001: 728). Throughout their mission, US troops had to protect the CFI with tanks and flamethrowers from South Korean assaults (Portsmouth (Ohio) Times, 10 October 1953: 1). An incident that further impaired the already tense ROK-India relations were the insurgences in the southern POW camp guarded by the CFI,5 on 1 and 2 October 1953, during which Indian guards fired into rioting mobs of North Korean and Chinese prisoners. They killed one North Korean and two Chinese captives who were considered antiCommunist, and nine North Korean prisoners went missing. South Korea was furious about these incidents and saw thus event as further proof of India’s pro-Communist stance (Beaver Valley Times, 2 October 1953: 1). Orchestrated by the Rhee government, anti-Indian slogans and insulting cartoons filled the South Korean media. The ——— 4 Figures range from 5,000 to 6,000 forces (see Kim 2009: 6; Kux 1992: 102; Rau 1990: 285). 5 The CFI guarded two POW camps. The north camp, located between the Demarcation Line and the Northern Boundary, housed captured UNC forces, while KPA and CPV POWs were confined in the south camp, located between the Demarcation Line and the Southern Boundary (Hamblen n.d.).

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ROK’s foreign ministry threatened to use force against the CFI in order to kick them out of the country. The Indians were perplexed and upset about this exaggerated reaction. An angry Nehru called for the condemnation of Rhee and publicly voiced New Delhi’s utmost distrust of the South Korean government (Indian Express, 10 October 1953: 1, 8). As the mission drew to a close, the CFI forces gradually returned to India and with them several dozen POWs whose country of repatriation was yet undecided. When the last 400 Indian forces prepared for their return in February 1954, ROK army officials threatened to block the 60-mile train trip to Inch’ǂn and hold the Indian soldiers back in order to extort from the Indian government the extradition of the Korean POWs who had already been taken to India for further negotiations. US troops with fixed bayonets on their guns and tanks had to escort the returning CFI troops to protect them from South Korean assaults (The Spokesman-Review, 19 February 1954: 15). South Korea regarded the remaining Korean POWs as Indian hostages and incited a mob of several hundred people who demonstrated in Seoul against India, carrying anti-Indian banners and chanting slogans against India (Lawrence Daily Journal, 19 February 1954: 8; Rome News-Tribune, 23 February 1954: 1). The diplomatic confrontation between the two countries continued when none of the 88 POWs transferred to India opted for repatriation to South Korea (Arora and Appadorai 1975: 67). For the ROK this was a clear result of Indian pro-Communist brainwashing, while the Indian government contradicted these accusations and reciprocated by criticising the democratic deficits of Rhee’s regime (Gills 1996: 89; Times-News (North Carolina), 3 January 1957: 4).

2.4 Post-war diplomatic rift between the ROK and India South Korea’s poor relations with the Indian government identified a split in the UN camp that surfaced in conjunction with the Geneva Conference in April 1954, at which the future of the Korean peninsula was to be discussed. South Korea did not want India to attend and threatened to boycott the conference. The US, fearing South Korea’s absence at the conference, supported the ROK government in its campaign against India. While the majority of the UN Political Committee was in favour of India’s participation, India failed to achieve the nec-

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essary two-thirds of all votes as the US successfully lobbied several Latin American countries to vote against. Following its rejection, the Indian government was not only further dissatisfied with South Korea but also embarrassed by the US’s undiplomatic and blunt support of Rhee’s ‘puppet government’ (Kux 1992: 103-104; Sarasota HeraldTribune, 26 April 1954: 2). India continued in the post-war years with its efforts to solve the Korean problem, not only because of its involvement in the Korean War and its preoccupation with political stability in the Asia-Pacific region, but also to underline its role as a dominant and credible nonaligned Asian power. India favoured any final solution of the problem that was acceptable to both Korean sides (Arora and Appadorai 1975: 68). Syngman Rhee, concerned about the stability of his regime, endeavoured to prevent any Indian involvement in the UN or other conferences regarding the Korean question and blocked India’s proposal for internationally supervised elections in the whole of Korea, of which not only many third world countries but also the Communist bloc were supportive (Gills 1996: 89-90). Rhee rarely missed an opportunity to highlight his suspicions about communism and to criticise India and other countries that did not align with either of the two conflicting ideological camps, accusing them of delivering their people to the threat of communism through ‘defenseless neutrality’ (Brown 1955: 1). After rigged elections and massive student protests, Rhee’s authoritarian leadership ended in April 1960. The Indian government very much welcomed his ousting and, along with Indonesia and Burma, publicly supported the students’ demonstrations (Gills 1996: 73).

2.5 ‘Cold friendship’ in the post-Rhee years Following the ousting of Rhee, tensions between South Korea and India started to defuse only slowly. India’s boundary disputes and growing tensions with China were potentially favourable to a strategic rapprochement between the ROK and India against the PRC. Yet, affected by their controversies in the Rhee years and pursuing somewhat diverging ideologies in their foreign policy, the common threat and perception of a belligerent China were not enough to trigger such a rapprochement between the two countries as—still estranged and sus-

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picious about each other—they continued to be in disagreement about many regional and international issues. In the post-Rhee years, South Korea took some first steps to extend the scope of its foreign policy and to make diplomatic overtures to the many non-aligned countries in Latin America, Africa and Asia, in order to consolidate and extend its international diplomatic position. South Korea was aware that improved relations with India, a founding member of the Non-Aligned Movement (NAM), were mandatory for the success of its diplomatic overtures. The ROK eventually benefited from the changing triangular relationship between India, the USSR and the PRC in the early 1960s. Deteriorating relations and ideological rifts between the Soviet Union and China and their leaders Khrushchev and Mao, the concurrently improving relations between India and the Soviet Union and India’s mounting border disputes with China proved to be an opportunity for rapprochement. Several sources indicate that the USSR served South Korea as an honest broker for improved relations with India, for which the ROK in return adopted the Soviet position on the Palestinian question (Panda 2011a: 20; Hwang 1980: 124). Eventually, prodded by the Soviet Union, South Korea and India resumed trade and consular relations on 1 March 1962 (New York Times, 2 March 1962). Simultaneously, within the framework of its non-alignment policy, India established consular relations with the DPRK (MEA 2010). In October 1962, the boiling border dispute between India and China escalated in a short war. Reportedly, Nehru sought the support of South Korea and Japan—staunch anti-Chinese allies of the US—to support India in the war against the PRC (The Spokesman-Review, I November 1962: 1). The ROK government gladly seized the opportunity to side with India, not only to break further the antagonism between the two countries, but also to bring about improved relations with member countries of NAM. The ROK government condemned China (Gills 1996: 162), while the DPRK supported the Chinese position (Wang 2009: 229). The short border war, won by China, had tremendous long-term impacts on India’s and China’s ongoing perceptions of mutual mistrust. It clearly showed that India was trapped in its neutral foreign policy, as it refrained from severing ties with China since it wanted to avoid being considered as leaning toward the Western bloc. However, South Korea’s siding with India did not help to intensify its political ties with India and NAM. The ROK-India relationship would not go beyond cold friendship for decades to come,

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and many members of NAM continued to perceive the ROK as a capitalistic client-state of the US. The Indians were confirmed in their perception by South Korea’s massive military support for South Vietnam and the US—South Korea sent more than 300,000 combat troops (Scott 1971: 12; Armstrong 2001: 531-32). The Indian government was critical of the US intervention in Vietnam and similarly opposed South Korea’s contribution of troops. In the early 1970s, political relations between South Korea and India experienced a diplomatic stimulus as the course of the Cold War in Asia and strategic alliances again led to a process of change. Propelled by the 1971 Treaty of Friendship between the USSR and India and the third Indo-Pakistani war, the US under President Nixon sought a rapprochement with China to contain the USSR’s rising influence in South Asia. The Nixon doctrine, which inter alia envisaged the reduction of US troops in South Korea, disturbed President Park Chunghee’s regime and prompted worries in South Korea about national security (Nam 2009: 64-65). Like India, South Korea had reason enough to be concerned about the rapprochement between its long-term ally, the US, and China, its wartime enemy and supporter of its nemesis the DPRK. In an effort to secure the legitimacy of its regime, the Park government made new efforts to improve relations with the USSR and non-aligned countries, particularly India. An important first step was South Korea’s renunciation of its ‘Hallstein doctrine’ in February 1972 (Han 1974b: 49). When South Korea withdrew its remaining troops from Vietnam in early 1973, India welcomed this decision and was more receptive towards improving diplomatic relations with the South. Eventually, on 10 December 1973, the two countries upgraded their consular relations to ambassadorial level. India undertook a similar step with North Korea on the same day (Kannan 2008: 307). Contrary to hopes and expectations within the ROK government, the upgrading of bilateral relations did not lead to any material advantages in terms of South Korea’s diplomatic outreach to the member countries of NAM. The ROK applied fruitlessly for full membership in NAM, hoping that its improved relations with India would be helpful. While the DPRK, with the backing of many supporters within NAM, managed to join the organisation, South Korea, still regarded as an ally of the capitalists, was rejected. Facing a changing security environment in the Asia-Pacific region and limited international diplomatic recognition, the ROK government started to focus on the improvement of its self-defence capabilities

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and secretly engaged in working on nuclear weapons (NTI 2010). When, on 18 May 1974, India for the first time tested a nuclear device in the state of Rajasthan bordering on Pakistan, South Korea’s nuclear plans experienced a huge setback. Wary of endangering their political relations with India, South Korea did not dare condemn India, but it was heavily disturbed by this initiative (Walker 1974: 9), since international suppliers of nuclear fuels and reactors started to tighten controls and protective regulations, thus hampering the advancement of South Korea’s nuclear programme. The US, too, began to scrutinise the nuclear research activities of its allies and pressured the ROK to abandon its military nuclear programme. India’s testing of a nuclear device upset many ROK government officials as it ultimately affected not only South Korea’s pressing energy problems but also its national security. In the remaining years of the Cold War, South Korea and India, entangled in their regional affairs and in disagreement on multiple international issues, maintained, apart from several agreements on trade promotion, scientific and technological co-operation (Kannan 2008: 309-10), a rather uneventful relationship.

3 POLITICAL IMPETUS OF SOUTH KOREAN-INDIAN RAPPROCHEMENT AFTER THE COLD WAR Since the demise of India’s important political and economic partner, the USSR, and the resultant gradual opening of its economy to the world markets in 1991, the country has started to expand the scope of its political and economic relations. In the framework of its ‘Look East Policy’ initiated in 1992, the Indian government moved away from its Cold War policy of limited engagement with capitalistic countries and at first tried to strengthen co-operation with the countries of the Association of Southeast Asian Nations (ASEAN). South Korean chaebǂls were, however, the first to recognise the potential of India’s populous market and quickly became the largest foreign investors in India. Benefiting from the first-on-the-scene advantage, the pioneering business activities of South Korean enterprises since the early 1990s have made South Korean products and quality well

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known and popular all over India and prodded a large number of companies from other countries to enter the Indian market.6 Nurtured by the increasing Indo-Korean economic exchange, the two countries’ political relationship increasingly improved. Milestones in this rapprochement were the visits of former President Roh Moo-hyun to India in 2004 and of Indian President Abdul P.J. Kalam to South Korea in 2006, the first visit of a South Korean president and of an Indian president respectively. These were followed by negotiations about deepening bilateral ties. Lee Myung-bak, now president of the ROK, visited India during his election campaign in 2007, in recognition of the importance of ROK-India relations (Mishra 2010). Increasing bilateral exchanges created much-needed confidence that triggered the transformation of relations from strategic disconnection to co-operation and helped the two states to identify common interests and security concerns, which are primarily geared to rising China. This section will assess the three major issues that within a few years prompted a strategic partnership between the two Asian democracies. Firstly, both, in view of their nuclear-equipped neighbours, DPRK and Pakistan—backed by China—are concerned about regional stability and security, particularly in terms of the proliferation of weapons of mass destruction. Secondly, South Korea and India, having both fought wars against China, reject Chinese hegemony in the Asia-Pacific arena. They are equally worried about the rise in power of the PRC and the concurrent decline in power of the US, since China’s policy of gaige kaifang (reform and opening) is increasingly accompanied by military modernisation and assertiveness in its political and economic objectives. The third major factor in the recent ROK-India rapprochement is energy security and nuclear cooperation.

3.1 Countering the China-Pakistan-North Korea triangle South Korea and India both border unstable neighbouring countries that originated in national partition. In their respective regional contexts, the ROK and India as relatively stable democracies on the one ———

6 The economic aspect of the ROK-Indian relationship is explored in Durgesh K. Rai’s article, ‘South Korea’s Economic Relations with India: Trends, Patterns and Prospects’, in: Korea 2010: Politics, Economy and Society, pp. 188-215.

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side, and on the other side Pakistan and the DPRK as nuclearequipped regimes, where most of the annual national budget is consumed by the military, are ideological and political antipodes that are employed by China as strategic hedges. Primarily worrisome are the military relations between the DPRK and Pakistan, which date back to the early 1970s. During Pakistan’s struggle over the secession of East Pakistan (Bangladesh) in 1971, President Zulfikar Ali Bhutto approached North Korea to supply the Pakistanis with urgently needed military equipment and spare parts and recognised the DPRK soon after. North Korea’s first shipment of arms to Pakistan arrived three months before India’s military intervention in the secession war in December 1971 (Kim and Singh 2002: 181). Since then, the relationship between the DPRK and Pakistan has grown constantly, particularly in the fields of trading, research and development of conventional and nuclear arms. A report by the International Institute of Strategic Studies (IISS) indicates that in 1989 the Pakistani government under Prime Minister Benazir Bhutto signed an agreement with China that comprised the purchase of M-11 ballistic missiles and entered into negotiations with the DPRK on its Nodong-1 missiles. In late May 1993, Pakistani engineers attended the testing of Nodong missiles that were fired into the Sea of Japan. In December of the same year, Bhutto flew to Pyongyang to strengthen bilateral military ties (IISS 2002: 1). Further reports indicate that since 1992, North Korea has obtained uranium enrichment technology and know-how through the black market network of Pakistani nuclear scientist Abdul Qadeer Khan. Unlike other clients of Khan’s network, detailed figures on the extent of North Korea’s acquisitions are not available (Doyle 2008: 566-67). The ROK and India are welded together not only by the common threat of their divergent neighbours and their military co-operation, but also by China’s significant involvement in tacitly backing the North Korean-Pakistani relationship, having planted the seeds for nuclear proliferation in Northeast and South Asia. China has been a long-term supporter of North Korea’s nuclear programme and has provided the regime with technology and expertise which was secretly abused for military purposes (NTI 2007). China also condoned the shipment of nuclear technology and material as well as missiles between North Korea and Pakistan through its airspace in the late 1990s and early 2000s (IISS 2002: 1). Proliferation to Pakistan was even more extensive. Driven by economic considerations and, in all likeli-

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hood, politically stirred after India’s successful testing of a nuclear device in 1974, China supplied Pakistan with nuclear technologies and facilities that were used for the Pakistani military programme.7 Pakistan’s nuclear trade with the DPRK is based on the know-how and technology acquired through Sino-Pakistani nuclear co-operation. In the end, this triangular network brought about two new nucleararmed countries in 1998 and 2006, which not only are a threat to stability in their respective regions through their bilateral animosities, but also tie up substantial political and economic resources in South Korea and India. China’s backing of North Korea and Pakistan while concurrently fostering relations with South Korea and India is perceived by both countries as meddling in domestic and regional affairs and a dual strategy of engagement and containment. The terrorist attacks in Mumbai in November 2008 raised suspicions in India about China’s involvement and the true Chinese objectives in Sino-Indian relations, since there are indications that the whole of the equipment, including sophisticated communications, was manufactured by China’s state-owned Norinco and routed through Pakistan’s secret service Inter-Services Intelligence into the hands of the terrorists. Furthermore, China blocked several UN sanction proposals against Lashkar-e Taiba, the organisation presumed to be responsible for the attacks, and other allied organisations (Chang 2009). On the Korean peninsula, the North Korean shelling attack on the South Korean island of Yǂnp’yǂng after the G20 summit in November 2010 was for the ROK yet another example of the unreliability of the Chinese government when it comes to the DPRK: during a press conference at the PRC’s Ministry of Foreign Affairs, spokesman Hong Lei, instead of criticising and putting pressure on the DPRK, avoided condemning North Korea and called for peace and restraint on both sides (MFA 2010). China thus nurtures strategically important proxies to maintain tense power relations both on the Indian subcontinent and the Korean peninsula. These are partners that challenge India’s ambitions to emerge as a dominant economic and political power in South Asia and diminish prospects of a unified Korea that would most likely be allied with China’s rival, the US.

——— 7

For a detailed supply list see NTI 2003.

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3.2 Defence and security co-operation China’s modernisation of its military coupled with the PRC’s growing assertiveness in Asian-Pacific affairs have raised doubts in South Korea and India about China as a responsible future superpower and triggered closer defence and security co-operation. On the Indian side, these doubts are sustained by ongoing territorial disputes in Arunachal Pradesh and the Chinese-controlled Aksai Chin in East Kashmir and a sensed Chinese encirclement around the Indian subcontinent which have not only been a warning bell in terms of national security and defence but have also led to a massive build-up of India’s forces and weaponry. Indian military circles and Indian government officials, especially Defence Minister A.K. Antony, perceive China’s increasing assertiveness and presence in the Indian Ocean region (IOR) as a threat to India’s national security (Pandit 2010). A prominent project in this regard is China’s construction of port infrastructure and facilities in Pakistan’s southern city of Gwadar, which is intended to serve as a co-ordination and transit hub for China’s energy imports from the Persian Gulf (Athwal 2008: 67-68). India is nervous about the potential stationing of forces of the Chinese PLA Navy at Gwadar and an increasing Chinese maritime presence, bearing with it the ability to disturb India’s regional power and tensions in the IOR. This perception was confirmed by the anchoring of two PLA Navy ships at ports in Myanmar in August 2010 and enforced by a Chinese presence in Bangladesh, Sri Lanka and Myanmar, where Chinese companies are building the infrastructure for ports, a railway and a pipeline (Bajaj 2010). South Korea, which, because of the tense situation around the Korean peninsula and its trade relationship with the PRC, has been refraining from officially calling China a security threat, certainly does not feel easy about its giant neighbour in view of mounting Chinese territorial violations in the Yellow Sea, the PRC’s backing of the DPRK and China’s military spending. This unease was mirrored in a cooling of ROK-PRC relations when the Lee Myung-bak administration assumed office in February 2008 and, to the anger of the Chinese government, placed stronger confidence and weight in the US-South Korean alliance (Park 2010). Talks between the defence ministers of the ROK and Japan in January 2011 about deepening bilateral military co-operation, which according to several observers were directed against China (Reed 2011), also need to be seen in this context of

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growing South Korean anxiety about the PRC. Firstly, the Acquisition and Cross-Servicing Agreement—if finally signed—will allow the armed forces of the ROK and Japan to exchange fuel, food and transportation during international operations. The second envisioned agreement, the General Security of Military Information Agreement, foresees the sharing of intelligence between the ROK and Japan (Panda 2011b). On a broader plane, surveys indicate that the South Korean public is increasingly sceptical towards China: opinion polls jointly conducted by the Chinese Academy of Social Sciences and South Korean institutions show that the majority of surveyed people view China’s rise negatively (Liang 2010: 1-3). Prior to their strategic partnership, defence- and security-related exchanges between India and the ROK were only marginal. In 2005, both countries agreed, in the framework of a Memorandum of Understanding (MOU), on co-operation in the defence industry and logistics and in 2006 reached a bilateral agreement on annual joint naval exercises and co-operation between the coastguards of India and South Korea (Pant 2010). The first joint coastguard exercises in the Bay of Bengal followed in July 2006 and have since then been an important component in bilateral maritime co-operation. Bilateral defence cooperation experienced a major boost in September 2010 when A.K. Antony visited Seoul, the first visit of an Indian defence minister to South Korea. The visit was crowned by two MOUs envisaging cooperation in exchange of information, visits of military personnel, joint military training and exercises as well as joint research and development of defence technologies (Sharma 2010). India regards these MOUs, particularly in view of the ROK’s advanced military and shipbuilding industry and technology, as strategically beneficial. For South Korea, India is a potential large market for defence-related products and technologies as well as being an important partner in terms of security co-operation in the IOR. Ultimately, the strengthened defence co-operation between the two countries not only aims at improving the safety of their crucial maritime trade routes, but also, in view of joint research and development of defence technologies, addresses the issue of stability and security in the Asia-Pacific area.

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3.3 Energy security and nuclear co-operation Both the South Korean and Indian governments have recognised the issue of energy security and nuclear co-operation as another important feature of their enforced relations. Due to insufficient domestic resources, both countries are highly dependent on energy imports. While India is at least capable of satisfying most of its domestic gas consumption, South Korea is extremely poor in energy resources. Its strategic petroleum reserves (SPR) are far below the minimum criteria required by the International Energy Agency (IEA),8 making the country very sensitive to supply disruptions. The ROK’s oil and gas imports originate primarily, as do India’s, in the Persian Gulf. As a consequence, South Korea relies heavily on the safety of its maritime supply channels. The majority of India’s and South Korea’s energy imports traverse the narrow Strait of Hormuz, where tensions between the US and Iran pose a realistic threat to the security of tankers. Furthermore, South Korea’s energy imports pass through the Indian Ocean and the Strait of Malacca, both lifelines in maritime trade and energy supply between the Middle East and East Asia and both areas that are frequently hit by incidents of piracy. India has a paramount naval presence in the IOR and for South Korea is a strategically very important guarantor of the safety of its energy imports. Although a minor threat as compared to rampant piracy, China’s increasing presence in the IOR—a source of mounting naval rivalry between the Indians and Chinese—poses a potential challenge to the security of South Korea’s and India’s oil and gas supplies. This prompted the Indian Ministry of Defence (MOD) to link the country’s economic prosperity with energy security, defining, with unuttered reference to China, the Indian Navy’s primary task as being to ‘provide insulation from external interference’ (MOD (Navy) 2007: 10). If Sino-Indian tensions in the IOR were unleashed, military clashes between the two states could be followed by Chinese-triggered Pakistani involvement that would bring with it the potential for heavy escalation and disturbance of anti-piracy patrols. This realistic outcome would certainly have detrimental effects on South Korea’s energy supply security. ——— 8

Member countries of the IEA are committed to stocking SPR equal to a minimum of 90 days of net imports.

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Similarly important is ROK-Indian co-operation in the nuclear sector. Since India tested a nuclear device in 1974, which ultimately led to the establishment of the Nuclear Suppliers Group (NSG),9 the country has been kept from importing nuclear technology and fuel. In 2005, President George W. Bush announced a controversial and much debated deal with India that was to grant the Indians access to technologies and fuels to modernise their nuclear industry without urging India to join the Non-Proliferation Treaty. The US campaigned heavily for this within the NSG, not least because it has been trying to side more closely with India against rising China and to win India’s support against Iran. Eventually, India was granted a waiver from the NSG in September 2008 and has since then officially been allowed to import civilian nuclear technologies and fuels (Thomson and Yeo 2009: 2-3). South Korea supported the Indians’ difficult bid in the NSG and since India’s nuclear waiver has worked closely with New Delhi to forge a deal on civil nuclear co-operation. During a meeting between President Lee Myung-bak and Prime Minister Singh during the 17th ASEAN Summit in Hanoi in October 2010, both countries finalised the details of the bilateral nuclear agreement. The agreement primarily foresees nuclear co-operation in research and development and the construction of ROK-made nuclear power plants in India (Mishra 2010; Palchaudhuri 2010). The Indian government plans to expand its nuclear sector and to invest US$175 billion by 2030 in order to improve its deficient electricity production capacities. According to India’s ambassador to Seoul, the ROK is a suitable partner in this undertaking (Moon 2011), while India poses a very important market for South Korea’s ambitions to boost its nuclear industry.

4 IMPLICATIONS OF THE INDO-KOREAN STRATEGIC PARTNERSHIP: AN AXIS IN THE MAKING? Prodded by the China factor, political ties between South Korea and India have rapidly developed into a strategic partnership that is boosted through stronger co-operation and exchanges in sensitive issues such as defence, co-operative development of advanced military ——— 9

The NSG is a consortium of nuclear energy producing countries that monitors the international nuclear trade.

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technology and energy. The political rapprochement between the two has not, however, gone unnoticed in China, which regards the rapid improving ties between the two countries as part of a greater ongoing encirclement and containment strategy: analysts and military personnel in China are observing the formation of an anti-Chinese ‘string of pearls’, orchestrated by the US, which allegedly wants to preserve the current status quo in Asia and the Pacific (Huang 2010). China’s state organ Xinhua accuses this chain of allies, said to be formed of South Korea, India, Japan, Vietnam, Australia and New Zealand, of conspiring against the PRC and substantiates this assumption by reference to white papers and defence guidelines from these countries. The PRC would accordingly, in case of war, find itself in a strategically unfavourable and encircled situation, with probably only the DPRK jumping in to help (Fenghuangwang 2010). China is apprehensive about improving South Korean-Indian relations, and these fears might in the long run result in tensions in the greater region. In view of South Korea’s and India’s shared democratic values, good relations with the US and common worries about China, and with both countries facing antagonistic, Chinese-backed neighbours, the establishment of a strategic partnership in January 2010 consequently raises the question of the prospects for a ROKIndia axis. In the ROK’s security strategy, India is an important pillar for peace and stability in the Asia-Pacific region and, given the decline in power of the US, a considerable factor in preventing an unchecked rise in power of an increasingly assertive and powerful China (Han 2009: 88; Singh 2011). In view of this, the then South Korean foreign minister, Lee Jung-bin, outlined during an official visit to Delhi in 2000 the importance of the strategic linkages between the ROK and India for peace and stability in the Asia-Pacific area (Panda 2011a: 23). Partnership with a nuclear-equipped ally on China’s southwestern flank is certainly an attractive option in approaching the PRC more firmly concerning the Korean question and in curbing China’s increasing preponderance in regional affairs. Moreover, India plays a pivotal role as a naval power in the Indian Ocean and Arabian Sea and is a crucial guarantor for the safety of the ROK’s maritime trade and supplies of oil and liquefied natural gas, which make up nearly 40 percent of South Korea’s total energy consumption (EIA 2010: 2-6 ). In India’s security strategy, South Korea is primarily a balancing factor against China in East Asia (Sharma 2010). The Indian govern-

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ment is in need of reliable partners around the PRC and has therefore in recent years strengthened relations with Japan, Malaysia and Vietnam to counter China’s growing influence in South Asia and interference in Indian affairs (Singh 2007; Lakshminarayan 2010: 1-4). Moreover, the ROK is a potentially important supplier of defencerelated technologies. Access to advanced civil and military technology from South Korea, but also the potential to have an Indian naval presence in East Asia, demonstrated by the dispatch of three Indian naval ships in 2004 to Pusan and joint exercises with the ROK Navy (Indian Express, 14 October 2004), serve India as strategically crucial measures to exercise counter-pressure against China’s growing preponderance and PLA Navy activities in the Indian Ocean. It seems that the fast-paced development of Indo-Korean strategic ties, coupled with these commonalities in the two countries’ security strategy, is nourishing expectations regarding the future formation of a strong axis between the ROK and India. Nevertheless, it is less likely that India would become an unconditional military ally of South Korea and the US. India has traditionally been reluctant to join military alliances and will in view of Indo-Pakistani tensions and the potential backlash from a strong commitment to an anti-Chinese alliance continue to stick to its foreign policy of strategic autonomy (The Hindu, 10 April 2008). The Indian government prefers to maintain regional stability by exercising subtle threat and pressure against China instead of being drawn into trans-regional conflicts that could endanger the country’s economic development and regional status (Lakshminarayan 2010: 34). This policy resembles the neutral policy of the Indian government during the Cold War and is even today mirrored by its lack of full commitment to South Korea, reflected in India’s handling of North Korea: on the one hand, India, in compliance with UN sanction rulings, blocks suspicious ships and airfreight originating from the DPRK; on the other hand, India benefits economically, even if minimally, from the status quo on the Korean peninsula by selling parts of its overproduction of refined petroleum to the isolated, oil-needy DPRK and negotiating for resource imports through stakes in North Korea’s ore mines (Bahree 2010; The Economic Times, 5 April 2010). Since the Indian government is aware that joining the choir of those condemning the DPRK would be interpreted by North Korea and China as interference in regional affairs and would brand India as a US ally, New Delhi also neither criticised North Korea following the

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Yǂnp’yǂng incident in November 2010 (Dikshit 2010), nor explicitly condemned the DPRK government for its nuclear test in 2009 (MEA 2009).

5 CONCLUSION This article has outlined the political relations between South Korea and India and the massive transformation that these have undergone since World War II. Despite having shared similar concerns about a belligerent China, the two countries, diverging in their policies on capitalism and non-alignment and, since the controversies of the Korean War, suspicious about each other, did not at first find common ground for strategic co-operation. The end of the Cold War, within the framework of India’s loss of its important partner, the USSR, and the increasing decline of the power of the ROK’s ally, the US, along with the rise of China, brought opportunities for trust-building between the two Asian countries that were successfully seized. As has been shown, the China factor in the South Korean-Indian relationship, visible in three major common concerns and issues—the China-Pakistan-DPRK triangle, defence co-operation against a potentially untrustworthy China, and energy—has been the major bilateral linkage that has strengthened these relations and converted them into a strategic partnership. Both countries are provided with a stronger foothold in South Asia and Northeast Asia respectively, helping to balance the PRC and prevent the Chinese from crossing red lines in regional affairs. Though not leading to a direct military axis, the ROK-India strategic partnership is likely to grow in intensity in the near future in both politics and the economy. This will not only provide the two countries with improved domestic and regional security, but also play a crucial role in the ongoing reshaping of the power setting in Asia and the Pacific.

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Pant, Harsh V. (2010), ‘Rise of China Prods India-South Korea Ties’, in: Japan Times, 7 September 2010. Online: http://search.japantimes.co.jp/cgi-bin/eo2010 0907a1.html (accessed 16 April 2011) Park, Min-hee (2010), ‘Tensions High as S. Korea-China Relations Mark 18 Years’, in: Hankyoreh, 24 August 2010. Online: http://english.hani.co.kr/arti/english_ edition/e_international/436482.html (accessed 23 April 2011) Pittsburgh Post-Gazette, 17 August 1950, ‘India Tries Again To End The Korean War’, 24 (14), p. 6 Portsmouth (Ohio) Times, 10 October 1953, ‘U.S. Displays Strength for ROK Warning’, 102 (174), p. 1 Rau, M. Chalapathi (1990), Builders of Modern India: Jawaharlal Nehru, New Delhi: Publications Division of the Ministry of Information and Broadcasting, Government of India Reed, Charlie (2011), ‘China Real Reason for South Korea, Japan Military Pact?’, in: Stars and Stripes, 11 January 2011. Online: http://www.stripes.com/news/ special-reports/crisis-in-korea/china-real-reason-for-south-korea-japan-militarypact-1.131377 (accessed 11 April 2011) Rome (Georgia) News-Tribune, 23 Feburary 1954, ‘Last Homegoing Indian Guards Sail From Korea’, 111 (206), p. 1 Rottman, Gordon L. (2002), Korean War Order of Battle: United States, United Nations, and Communist Ground, Naval, and Air Forces, 1950-1953, Westport CT: Praeger Publishers Sarasota (Florida) Herald-Tribune, 26 April 1954, ‘India Interested In Geneva Talks’, 28 (205), p. 2 Sartori, Anne E. (2005), Deterrence by Diplomacy, Princeton NJ: Princeton University Press Scott, Paul (1971), ‘India Election Could Be Crucial To Long Range Position Of U.S. In Asia’, in: Bangor (Maine)Daily News, 26 February 1971, 82 (218), p. 10 Sharma, Rajeev (2010), ‘China-Wary India, South Korea Get Cozier’, South Asia Analysis Group, Paper 4023, September 2010. Online: http://www.southasia analysis.org/papers41/paper4023.html (accessed 24 May 2011) Singh, Ajay (2011), ‘India’s Role in the New World Order’, in: Indian Defence Review, 26 (1), 25 March 2011. Online: http://www.indiandefencereview.com/ geopolitics/Indias-Role-in-the-New-World-Order.html (accessed 25 May 2011) Singh, Yogendra (2007), ‘India-Vietnam-Relations: The Road Ahead’, in: Institute of Peace and Conflict Studies Special Report, 40, April 2007. Online: http://www. ipcs.org/pdf_file/issue/1048552290IPCS-Special-Report-40.pdf (accessed 26 May 2011) Spokesman-Review (Washington), 19 February 1954, ‘Tanks, Troops Guard Indians’, 71 (281), p. 15 Spokesman-Review, 1 November 1962, ‘Nehru Takes Job. Krishna Menon Loses Position’, 80 (171), p. 1 St Petersburg (Florida) Times, 11 June 1953, ‘Truce Threatened By India’s Stand On South Koreans’, 69 (322), p. 130 The Age (Melbourne), 19 July 1950, ‘Peace in Korea. U.S. Sends a Note to Pandit Nehru’, 29 (711), p. 7 The Hindu, 12 April 2008, ‘India Will Never be Part of Any Military Alliance: Antony’. Online: http://www.hindu.com/thehindu/holnus/001200804122067.htm (accessed 25 May 2011) Thomson, Elspeth and Dickson Yeo (2009), ‘India and the Nuclear Suppliers Group’, in: ESI (Energy Studies Institute) Bulletin on Energy Trends and Development,

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2 (3). Online: http://www.esi.nus.edu.sg/portal/portals/0/others/091231_India _and_the_Nuclear_Suppliers_Group.pdf (accessed 12 January 2011) Times-News (North Carolina), 3 January 1957, ‘Divided Korea Issue Before UN’, 82 (3), p. 4 UNGA (United Nations General Assembly) (1947), 2nd Session, 112 (II). The Problem of the Independence of Korea (14 November 1947). Online: http://daccessdds-ny.un.org/doc/RESOLUTION/ GEN/NR0/ 038/19/IMG/NR003819.pdf (accessed 4 January 2011) UNGA (1950), 5th Session, 376 (V). The Problem of the Independence of Korea (14 November 1947). Online: http://daccess-dds-ny.un.org/doc/RESOLUTION/ GEN/NR0/059/74/IMG/NR005974.pdf (accessed 13 January 2011) UNSC (United Nations Security Council) (1950a), 82 (1950). Resolution of 25 June 1950 [S/1501] (25 June 1950). Online: http://daccess-dds-ny.un.org/doc/ RESOLUTION/GEN/NR0/064/95/IMG/NR006495.pdf (accessed 4 January 2011) UNSC (1950b), 83 (1950). Resolution of 27 June 1950[S/1511] (27 June 1950). Online: http://daccess-dds-ny.un.org/doc/RESOLUTION/GEN/NR0/064/96/IMG/ NR006496.pdf (accessed 31 May 2011) UNSC (1950c), 84 (1950). Resolution of 7 July 1950[S/1588] (7 July 1950). Online: http://daccess-dds-ny.un.org/doc/RESOLUTION/GEN/NR0/064/97/IMG/NR00 6497.pdf (accessed 4 January 2011) Walker, John R. (1974), ‘Shock Waves Hit S. Korea, Japan’, in: Montreal Gazette, 27 June 1974, 197, p. 9 Wang, Hongwei (2009), Dangdai zhongyin guanxi shuping [Review of contemporary Sino-Indian relations], Beijing: Zhongguo zangxue chubanshe Yang, Fengan and Tiancheng Wang (1993), Jiayu chaoxian zhanzheng de ren [People who mastered the Korean War], Beijing: Zhonggong zhongyang dangxiao chubanshe

SHOPPING ABROAD THE KOREAN WAY: A STUDY IN RESOURCE ACQUISITION Stefania Paladini

ABSTRACT South Korean outward FDIs have registered a strong increase since 2002, with significant growth in investments in developing countries as well as in Asia and North America, targeting energy and raw materials. South Korean companies face strong competition from Chinese, Japanese and even Indian corporations in the search for resources. This study aims to examine the modalities of Korean penetration in the raw material overseas markets and to analyse the key features of the South Korean approach compared to Chinese, Indian and Japanese competitors. Koreans are known to employ a generally successful strategy in their acquisitions abroad, while putting in place one of the most comprehensive policies to secure strategic materials. It is possible to identify some key factors of this success, some linked internally to the economic and political choices of the South Korean government, some external. The analysis of a recent deal in a series of Korean successes, a lithiumexploitation agreement with the Bolivians, is proposed as a case study. Finally, the article will present the dangers and opportunities ahead for South Korea, and, in general, coming geopolitical challenges in the resource acquisition business. Key words: South Korea, strategic materials, FDI, stockpiling, lithium, geopolitics

1 FDI IN STRATEGIC MATERIALS After more than two decades in which the share of foreign direct investments (FDIs) in strategic materials, especially minerals, had declined steadily as a consequence of low prices (and low returns) of commodities, the trend in the first years of the present century started to reverse. There are many reasons for this new course. Speculations

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in commodities,1 hunger among the emerging powers for minerals and energy,2 supply constraint caused by disinvestment arising out of a prolonged decline in prices since the mid-1970s, the rising price of crude oil linked to the US dollar devaluation,3 and the start of another ‘supercycle’4 have been all mentioned as key components of this phenomenon. Whatever the reason, the effects on the strategic materials sector have been dramatic and completely changed its outlook, especially in terms of FDIs, of mergers and acquisitions (M&A) and of the global players involved. Once dominated by Western corporations and by a few other multinationals, the extractive and energy industries now feature increasing numbers of companies from emerging countries, some willing to exploit their own countries’ natural resources and others trying to secure badly-needed strategic materials, in what has been rightly defined the new ‘scramble for resources’ (Klare 2001; 2008). While investments in energy and minerals still represent only a share

——— 1

Since the so-called financial Big Bang in the London Stock Exchange in 1986, commodities have become quite popular as investment, especially in the form of derivatives (futures, options and so on). The very nature of these financial tools allows for a big leverage in terms of risk and profit, and this has led in some case to speculative movements not linked to real market demand and supply forces. This is not the only reason for the high price of commodities, but it was a notable contribution. For example, contracts on NYMEX (New York Mercantile Exchange) oil futures have increased four-fold in the past decade, and non-commercial contracts now make up approximately one-sixth of the commodities market, according to some estimations. Derivatives also have a certain part in the volatility that is now characteristic of commodities prices, even if they are not the only cause of it. 2 China’s rise has at least doubled the pressure on minerals, and the country is now the first consumer of aluminium, copper, lead, nickel, tin, zinc, iron ore, coal, wheat, rice, palm oil, cotton, soybeans and rubber (noted in 2007), oil (noted in 2010), steel and timber. ‘Since 2002, China has accounted for half the world’s growth in consumption of steel, copper, and aluminium, almost all the world’s growth of nickel and tin, and more than world’s growth [sic] of lead and zinc’ (Griswold 2007: 5). While some economists have observed that this was only one of the reasons, it has to be noted that when China is a net exporter, commodities have not experienced a steep rise in prices. This is the case with aluminium, for example, and with rare earth elements before the establishment of export quotas by China in 2004 and the following years. 3 It has to be remembered that the mining industry is very energy intensive and any increase in energy prices has an effect on the prices of minerals. 4 Some hold the view, based on statistical evidence from band-pass filter analysis and supported by investment industry analysts and industry experts, that metal prices entered the early phase of a supercycle at the beginning of the present century. This will be the third one, the first one having started with US industrialisation, and the second with Japan’s industrial growth.

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of the global FDIs,5 is worth mentioning that for some of the recipient countries they account for an absolute majority. This provokes a dependence on profits from exports of commodities (the so-called resource curse6), a polarisation of these countries’ exports and investment that can hinder their industrial development, and a geopolitical vulnerability that increases the overall risk of the sector. Looking in more detail at the mineral sector, it has to be said that energy, diamonds and metals represent by far the largest share of investments, even if with notable differences among these groups that include their strategic importance for their countries’ industries. More than half the value of the entire energy industry is concentrated in oil and natural gas. Furthermore, the metal industry is polarised among a few metals, namely iron ore, gold and copper, which account for about half of its value, followed by nickel, zinc and bauxite.7 Following the hike in prices, investment has been flowing in the sector and will eventually lead to a stabilisation of the market brought about by a surplus; though this has not yet been the case. It is important to note that mining investments present very distinctive features from other FDIs. Large corporations normally dominate a market that is extremely capital- and technology-intensive, with investments in building mines or oil sites that normally amount to billions of dollars. They therefore need to be either financially solid or state owned, since returns can be delayed for a long time through the lag between the exploration phase and the processing and final output stage.8 The technology required can sometimes be daunting, as in the ——— 5

According to UNCTAD (2007), the share of this sector in global inward FDIs between 1990 and 2007 has been around 10 percent, with a lowest point of approximately 7 percent in 2000. However, for emerging economies it has been considerably higher, e.g. in 2003 outward FDI from China accounted for 48 percent of the total. However, as will be discussed later on in the article, raw materials and energy investments have been generally growing in recent years. In the case of South Korea they passed from a share of 6 percent in 2006 up to 31 percent in 2010. 6 This is a long-running debate; some economists consider it a reality (Sachs and Warner 1999), while others question the theory (Mikesell 1997, Davis and Tilton 2002). 7 Rarer minerals, while accounting for only a very small share, on the other hand can be extremely important for specific sectors, and occasional shortage can generate a hike in prices and a wave of FDIs and acquisitions, as has been the case since 2009 with rare earth elements. 8 Some notable exceptions persist, such as the small steelmakers from the Maoist period still active in China, and some small producers of rare minerals. However, they represent a very small part of the market, and in the case of China the government has started a campaign to rationalise steel output.

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case of offshore oil prospecting, and the environmental hazards quite significant. The size of companies varies, but generally corporations in the energy sector tend to be bigger than their metal industry’s counterpart, with varying degrees of internationalisation. While in the mining sector privately owned transnational corporations are the dominant players in the market, in oil and gas, state-owned enterprises (SOEs) now account for more than half of global output. Finally, the strategic importance of minerals means that central governments have a high degree of involvement in the process, especially in emerging economies and developing countries. It is in this changing and challenging new scramble for resources that South Korean corporations have to compete.

2 SOUTH KOREAN OFDIS AND INVESTMENTS IN STRATEGIC MATERIALS

The world’s fifteenth-largest economy, with an impressive 6.2 percent of growth in 2010 even in the aftermath of the global financial crisis, the Republic of Korea (South Korea) has seen its outward (or outbound) FDIs (OFDI) registering a strong increase commencing in 2002, even if the start of the internationalisation process can be dated back to the 1990s with the segyehwa9 policy (Lewis and Sesay 2002) (see Table 1). A look at the statistics will show that in the 21st century the level of Korean OFDIs has remained quite low,10 and that it was only in 2004-05 that the government decided to step up its support for them, with the creation of the Korean Investment Corporation in 2005. However, today as before, the level of investments remains quite concentrated, with Asia and North America representing the bulk of them (see Chart 1). China and the United States alone account for more than ——— 9

This can be roughly translated as ‘globalisation’, and refers to the official ‘Going-out strategy’ that the South Korean government launched in 1990 to open up the country and at the same time push its corporations to invest abroad. 10 A commonly used measure is the FDI/GDP ratio, which in 2005 was still at 1.8 percent, comparatively lower than Japan (5.7 percent), for example. Even considering only the outward FDI stock as a percentage of GDP, in 2005 for Korea it was only 4.6 percent, compared to 8.5 for Japan and 29.2 percent for Taiwan. This low level was due to the traumatic effects of the Asian crisis, which seriously affected Korean growth and chaebǂl performances, and stopped the process. OFDIs went back to the pre-Asian crisis levels of the 1990s only in 2002.

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half of all Korean assets abroad, even if other Asian countries such as Indonesia and Vietnam have recently attracted a fast-growing share of Korean investments (Yoon 2007). Table 1

South Korea, selected indicators 1990-2009 (million of US$, when not otherwise indicated) 1990

GDP (US$ current) GDP PPP % of world GDP

1995

2000

2005

2006

2007

2008

2009

270,405 531,139 533,385 844,866 951,773 1,049,239 931,405 832,512

FDI outflows FDI outward stock FDI outward stock as a % of GDP Number of crossborder M&As Exports

1.4

1.8

1.8

1.9

1.9

1.9

1.9

1.9

1,052

3,552

4,999

4,298

8,127

15,620

18,943 10,572

2,301

10,231 26,833 38,680 49,190

74,780

97,910 115,620

0.9

2.0

5.0

4.6

5.2

7.1

10.5

13.9

8

15

4

17

30

39

50

57

65,016 125,058 172,268 284,419 325,465 371,489 422,007 363,534

Current account balance (% of GDP)

-0.7

-1.6

2.3

1.8

0.6

0.6

-0.6

5.1

Sources: UNCTAD 2007; IMF 2010; ADB 2010.

Chart 1

South Korean FDIs by geographic destination, 1968-2010 Korean FDIs by Geographic Destination (1968-2010) Europe 25% Asia 42%

Middle-East 2% Oceania 3%

c

Africa 1% Latin America 8%

North-America 19%

Source: Korea Export-Import Bank 2010.

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While the geographic destinations of Korean OFDIs have remained generally stable over time, they have changed significantly enough in nature and actors. In the beginning, and prevalently before the 1980s (Kwak 2007), Korean OFDIs were concentrated in the primary sector, specialising in the acquisition of raw materials and energy. Later on they diversified to include manufacturing and services, which now represent the lion’s share (see Chart 2). Nonetheless, raw materials and energy still account for almost a third of Korean OFDIs and have again showed significant growth starting from 2003. Chart 2

South Korean FDI by sectors, 2010 Korea's FDI by Sectors (2010)

Other services 8%

Financial services 14%

Agriculture & Fisheries 1%

Mining and Energy 31%

Telecommunication 2%

Retail & Wholesale 8%

Construction & Real Estate 8%

Manufacturing 28%

Source: Korea Export-Import Bank 2010.

In terms of company size, chaebǂl (family-founded conglomerates) have long dominated in FDIs and M&As; nevertheless the share of small and medium enterprises active abroad is about one-third of the total and growing, mainly concentrated in manufacturing and services. As mentioned above, especially in non-Western economies the main players in strategic materials are actually represented by state-owned enterprises, or public corporations enjoying strong state support. In the case of South Korea, the leading enterprises are KNOC (Korean National Oil Corporation), POSCO (Pohang Iron and Steel Company, a conglomerate in the steel-making and ferrous mineral sector), KORES

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(a company with 100-percent government ownership in charge of strategic materials), Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation. Moreover, especially in the energy sector, a significant share of existing investments has enjoyed the participation of Korean conglomerates.

3 COMPETING WITH OTHER BIG PLAYERS IN ASIA The sustained growth of OFDIs has largely mirrored the pace of some of Korea’s Asian neighbours, whose interest in outgoing investment has been growing as well.11 These countries currently represent South Korea’s competitors in resource acquisition in overseas markets. A look at Chart 3 shows how, starting from quite different levels of presence abroad, their outward trends have been converging over time.

Chart 3

FDI outflows 1988-2009, by countries

FDI Outflows 1988-2009, by countries (million of US$) 1,000,000 100,000

Korea

10,000

Japan China

1,000

India 100 10 1 198893

1995

1999

2005

2006

2007

2008

2009

Sources: UNCTAD 2009; IMF 2010; ADB 2010.

——— 11

The countries chosen for comparison in this article are Japan, China and India. The rationale for this choice is that not only are they the Asian countries comparable for size and economic importance with South Korea, but they are also its direct competitors for resource acquisition abroad. Therefore the analysis will be conducted considering this perspective only.

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Another common point among the four Asian countries represented is that the growth in their OFDIs has been sustained in developing countries and has targeted energy and raw materials. In both sectors South Korean companies face direct, strong competition from Chinese, Japanese and even Indian corporations. While the motivations are common (growing domestic demand and insufficient or virtually non-existent home supply), the modalities and strategies of these competitors has varied significantly. South Korea has been mainly looking at Japanese policies, given the similar industrial structure both countries share, while China and India, two relative newcomers,12 have adopted so far similar penetration strategies. A more specific examination of the energy sector reveals that the Asian national oil companies (NOCs) have been imposing themselves in the last ten years as the most competitive actors in the world oil and gas industry, followed by mining corporations. In the last five years13 the Asian NOCs have invested about US$49 billion in oil and gas deals around the world. Chinese NOCs are acknowledged to have been by far the most aggressive in their acquisition campaign abroad, with the three leading companies, China National Petroleum Corporation, China Petroleum and Chemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC) present virtually everywhere on the planet. South Korean companies has been quite active as well, with Korea’s KNOC14 positioning itself just behind the Chinese, outpacing the Indian Oil and Natural Gas Corporation and sometimes achieving more effective results than their Japanese competitors. This is quite understandable, as South Korea is the tenth largest oil consumer in the world but the fifth in terms of net imports after the US, China, Japan and Germany and before India. Completely lacking home production, ——— 12

Korean SOEs normally look to Japan as a benchmark, in terms both of expansion strategy abroad and of corporate governance, as the decentralised Japanese model seems by far the most effective (Jeong 2010). 13 When not otherwise specified, the latest investment data for both FDIs and M&As are related to the period 2005 to 2009. Some 2010 preliminary data are already available, but normally emanate from the press and are subject to confirmation. Press references are quoted directly in the text when appropriate. 14 In this article only oil upstream corporations are taken into account, as they are the only ones actively involved in resource acquisition through the operation of E&P overseas. In some cases, however, as it is for China, there is no distinction among the two sectors, with the same companies taking up both activities. No mention will thus be made here about important Korean downstream companies involved in refineries and oil distribution, such as SK, GS-owned Caltech and their Asian counterparts.

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South Korea is obliged to buy its whole amount overseas, with 155 overseas exploration and production (E&P) projects in 36 countries (EIA 2010, presenting 2008 data). In the case of other energy commodities, this percentage is even higher, and Korea is currently the second importer of coal and liquefied natural gas. A look at South Korea’s list of major suppliers (see Chart 4), if compared to those of other countries, will show some other telling details. Chart 4

Crude oil imports, percentage by major sources, 2009 Crude Oil Imports - % by Major Sources (2009)

30 25 20 China

15

Korea

0

India

ne

Ve

iA Sa ud

Ira n zu el a An go la Ni ge ria Om an Su da n Ru ss ia Ot he rs

5

Ira q Qa ta r Ku w ai t UA E

Japan

ra bi a

10

Source: EIA 2010.

First of all, South Korea takes more than half of its imports from only three countries, all in the Middle East and all presenting so far a politically stable environment; a sign that South Korea is not willing to take any risk on this key commodity. There are only two other important suppliers, Iraq and Iran, which for the moment account for around 15 percent of Korea’s global imports. Such concentration in only a few trusted sources is shared by Japan. China and India present a more varied composition, showing imports from African and Latin American countries. This fact reflects a fierce competition for new oil and gas suppliers that is currently engaging these two large Asian states over the world (Kumaraswamy 2007; Guenther 2008; Bustelo 2007;

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Hari 2005) and which, until recently, had seen Korea remaining behind, at least in emerging markets. This has started to change however, and South Korean companies are now beginning to sign contracts for participation in oil companies even in developing countries. In the last years, KNOC has been particularly active in Latin America and in Asia, both identified as two key areas for Korean sourcing. The corporation has shares in production fields in the Gulf of Mexico and in 2009 acquired an important level of participation in the oil company SAVIA-Peru. In Asia, it has interests in oilfield in Vietnam (its oil discovery in its Vietnamese concession has been labelled as one of Korea’s most successful; Kim 2009) and recently bought out the Kazakh company Sumbe, entering into what has been termed ‘the new Great Game’ in Central Asia. Such a position of dependency in the raw material industry has its parallel in the energy sector, where South Korea depends on imports to satisfy 97 percent of its domestic needs. The national mining and quarrying sector is tiny (about 0.3 percent of GDP; USGS 2004) while the country’s capacity in term of processing and refining is huge, as it is for oil. The sector is largely dominated by state-owned enterprises under the direct supervision of the Ministry of Commerce, Industry and Energy, which also fixes the ten-year plans for imports, stockpiling and refining of designated strategic materials. The more fragmented mineral supply side stands in significant contrast to the energy sector; here Korean companies are obliged to act even more aggressively in their search for convenient deals. As in the case of iron ore, a quite abundant mineral, the real issue is not the availability, but the cost of supply, as events of 2009 in China and Rio Tinto negotiations for the yearly fixed price have well demonstrated.15 As previously mentioned, after having been in decline for many years when compared to other OFDIs, investments in primary sectors have started growing again in these last years, due to the pressure on prices provoked by demand from emerging markets. With commodity prices rising exponentially, and facing temporary export bans or restrictions from some key producers (as from China in the case of the ——— 15

The traditional system of price-setting among the three big iron-ore miners (BHP-Billiton, Rio Tinto and VDRC) and their principal Asian customers (South Korea, China and Japan) has recently showed strains and dispute, leading to a series of incidents, among them the (in)famous ‘Stern Hu affair’ (New York Times, 5 June 2009).

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molybdenum ban in 2007 and of quotas for rare-earth elements16 in 2010), South Korean corporations have started looking overseas for additional and more secure sourcing. In 2007, Korea committed US$639 million in exploration projects overseas in nickel, uranium and coal, three times more than in 2006, and this share has gone on increasing. A specific policy to double its self-sufficiency for such high-tech strategic materials as platinum metal group minerals (PGM),17 rare-earth elements and lithium, has been recently put in place, with stocks that should grow up to 10 percent in 2011 from a level of 5.5 percent in 2010. Given the huge amount of raw materials needed by the country’s industries, this directive has to be viewed as complementing a higher level of OFDIs abroad, and not as substituting for it. At the other end, growing integration with the rest of the world has even facilitated access to the domestic market for foreign corporations when this has suited the national interest. A well-know case has been the uranium prospecting and exploitation in South Korea’s own territory. In 2009, the Australian company Stonehenge Metals Ltd. acquired the rights to four projects in which the Korean Chong Ma Mines Inc. held a 56 percent interest and which represent the largest uranium resources in Korea (Stonehenge Metals Ltd. 2010). This is not surprising, given the expertise of the Australian corporations in the mining sector in general and in uranium-mining in particular (Australia is the second-largest producer accounting for about 23 percent of

——— 16

Rare-earth elements have recently attracted much attention, following price rises and quota restriction from China, which produces about 95–98 percent of world supply. The term commonly indicates 17 metals: 15 lanthanoids (neodymium, samarium, terbium, dysprosium, erbium, lanthanum, cerium, praseodymium, gadolinium, europium, promethium, holmium, thulium, ytterbium and lutetium) and yttrium and scandium. The term ‘rare earth’ is a misnomer, as the 17 metals are actually as commonly found as zinc and copper, and even the two least abundant are about 200 times more common than gold (USGS 2009). Some of the hype about them is due to the fact that they are essential components in high-tech products, super-conductors and weapon technologies, and virtually all green technology, as in the manufacturing of the hybrid car and rechargeable batteries, depends on them. More importantly, no viable alternatives are known in the near future (Paladini 2010). 17 PGM includes six precious platinum-related metals, or platinoids, namely ruthenium, rhodium, palladium, osmium, iridium, and platinum. They are found in the same kind of minerals and share the same characteristics. While in short supply, their use in all fields of industry has been increasing, and they are now present in products from sectors as different as avionics, medical equipments, electronics, catalysts and even fashion.

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world production of uranium) and the high level of confidence its legal framework regularly inspires.18

4 THE SOUTH KOREAN APPROACH AND THE ROOTS OF ITS SUCCESS ABROAD

It is widely accepted (ECLAC 2006; Rodrik 1994; Lim 2000) that the roots of South Korean economic success reside in the effort made by the country to invest and transform itself into a knowledge economy, and to avoid being squeezed between bigger competitors like Japan and China. However, in the specific case of resource acquisition, there are other concurring factors. It is acknowledged that Korean corporations have been performing in a quite successful way, customarily overcoming difficulties and hassles common in OFDIs, as their results and some notable success stories show. This is essentially due to two different kinds of factors, internal and external, both playing a substantial part in the process. ‘Internal’ refers to factors controlled by the Korean government, such as ad hoc institutions, trade policies and other kinds of support. ‘External’ is related to the general economic situation, policies toward FDIs put in place by recipient countries, and competitors’ actions.

4.1 Internal support Internal factors have clearly played a fundamental role in FDI in resource acquisition. While it has been rightly observed (Kwak 2007) that the growth of Korean OFDI has not always been characterised and supported by a co-ordinated government policy, this has certainly been the case in the specific area of resource acquisition, given its centrality in the country’s national security. The government’s policy has focussed on some important areas, namely stockpiling guidelines, facilitating investment in the sector, and trade and commercial policies, all of which will be analysed here.

———

18 This has been noted among Chinese corporations, which have repeatedly tried to enter the Australian market with tentative bids of variable success. For a discussion of Chinese M&As (actual and unsuccessful), see UNCTAD 2007, 2008, 2010.

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4.1.1 Stockpiling A fundamental key point, driving the overall South Korean strategy to secure raw materials indispensable to its industries, is the sourcing and stockpiling policy for energy and minerals, one of the most innovative, sophisticated and comprehensive approaches in place nowadays, even in comparison to Japan. Stockpiling is an ancient practice, used by both governments and private entities to keep safe provisions of essential supplies, and clearly bears military and security implications. The US, since 1939, has been keeping ‘critical strategic materials for national defense purposes’ (NMAB 2008: 55) as prescribed by the Strategic and Critical Stock Piling Act. Its warehouses are scattered in different locations on American territory managed by the Defense National Stockpile Center.19 Over time the amount and typology of the materials guarded has varied substantially, and in 1992, with the demise of the Soviet Union and subsequent geopolitical changes, the US government started periodically selling its stocks. Recently, with the rise of hungry, emerging economies such as China and India, and high mineral prices, Congress started a serious revision of the policy in order to make it more responsive to the new challenges. Even the EU in 2008 set up a ‘vulnerability list’ with 14 sensitive materials to be watched out for (EU Commission 2008), as a signal that the practice of stockpiling itself is likely to flourish in the near future. In the case of South Korea, it is KORES, a 100-percent government-owned company, that is responsible for the management of the country’s stockpiling strategy, with the declared target of becoming one of the world’s 20 biggest mining companies (allegedly by 2020). KORES was incorporated in 1967 but has since then evolved at the same pace as the economic and industrial development of the country, while keeping the focus on the procurement and stockpiling of energy and strategic materials. Frequently restructured to meet growing demand and increasing overseas endeavours, in the last reorganisation at the beginning of 2011 KORES was divided into three headquarters, nine departments and 39 teams with ten overseas offices (two more than in 2009). In one of the last reshuffles, the KORES exploration division was split into four teams, with one of them (the so-called ——— 19

U.S. Code 50, Subchapter III—Acquisition and Development of Strategic Raw Materials, available online at http://www.law.cornell.edu/uscode/.

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search team for rare metals) specifically devoted to rare-earth elements and lithium sourcing. The South Korean government’s basic plan for overseas development of energy resources, promulgated in February 2001, gave KORES the responsibility of monitoring the supply of six specifically designed strategic mineral resources, namely bituminous coal, uranium, iron, zinc, copper, and rare-earth elements, for each of which stockpile quotas have been fixed (see Table 2). To succeed in securing these resources, the allocation of capital has been periodically increased and in 2009 was augmented from 600 billion to 2,000 billion won (US$1.78 billion). Table 2

Goal for imports of overseas-developed ore by mineral (in tonnes)

Classification

Bituminous coal

Uranium

Iron ore

80,000

4,800

40,000

30%

10%

10%

20%

20%

5%

24,000

480

4,000

305,000

212,000

350

Copper

Zinc

Rare-earth elements

Goal in 2010 Total demand Imports % Imported quantity

1,525,000 1,060,000

7,000

Source: KORES 2010.

These provisions have been recently increased (the government’s acquisition target for 2010 has been set at 199,800 tonnes for base metals, as much as in 2009), while a new strategy has been implemented for particular categories of metals. Conscious of the growing importance of the new strategic materials (30 rare minerals are identified, among them PGM metals, rare-earth elements and lithium), Korea has started raising specific stockpiles in dedicated facilities from 8.1 days of 2010 consumption to the equivalent of 13.5 days of 2011 estimated consumption, and the level is expected to keep growing. This is not yet at Japan’s security levels. Japan has in its stockpile facility in Irabaki prefecture the rough equivalent of 42 days of standard consumption for seven types of strategic metals: nickel, chromium, tungsten, cobalt, molybdenum, manganese and vanadium. Furthermore, the Japan Oil, Gas and Metals National Corporation (JOGMEC), the government body in charge of the strategic stockpiling of metals and energy, has set a ‘close observation’ list for other sensitive materials

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such as indium, rare-earth elements, platinum, gallium, niobium, tantalum and strontium, for which separate provisions are in place.20 Still, in term of global efficiency, the South Korean approach seems more cost effective and is rapidly becoming a benchmark in terms of government policy. Furthermore, in the specific case of oil stockpiling, Korea has from the outset distinguished itself by a more innovative and flexible strategy compared to the US and Japan (whose approach is known among experts as the traditional one; Nieh 2006). South Korea has imposed itself as one of the ten fastest-growing oil storage markets, due to its proximity to Japan and China and its position as a major trading hub in East Asia. Its sound and flexible approach, consisting in a time swap in oil stockpiles and in renting storage spaces to foreign corporations when convenient, allows Korea huge savings in the maintenance cost of strategic oil supplies, notoriously very expensive. An example is the implementation of the Joint Oil Stockpiling programme, through which companies such as the Norwegian independent oil company Statoil stores more than 11 million barrels in KNOC’s rock cavern facilities. Even Kuwait holds deposits. A clear strategic priority of stockpiling has thus been enacted by the South Korean government in a series of directives aimed at helping oil corporations and mining companies to secure acquisitions in new emerging markets, sometimes with remarkable success. 4.1.2 Financial stimulus Since 2004 the government has also put in place a global strategy dedicated to securing a stable supply of crude, with the National Energy Council put in charge of it. This has been implemented with a ‘package-deal model’ (Kim 2009: 3), which substitutes direct financial aid to resource-rich countries with a ‘package deal’ including technology transfer, infrastructure development and industrial diversification—all very important for recipient states.21 The government has ———

20 Both Japan and Korea, furthermore, have enacted a policy of private stockpiling, where the big corporations themselves keep a private stock of strategic materials. These private stocks vary and may account for up to 30 percent of the whole stockpile, even if detailed information can be difficult to collect, due to the sensitivity of the topic (JOGMEC 2011). 21 The Ministry of Commerce, Industry and Energy clarified and detailed this new strategy in the third basic plan for overseas development of energy resources, initiated in 2007, which will last till 2016. The first deal packaged with other provisions was

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thus encouraged South Korean private E&P overseas through a series of incentives, from tax cuts and low-interest credits granted mainly by the Korea Export-Import Bank, to providing similar benefits for corporations involved in other raw materials procurement. In an effort to encourage foreign companies in the raw material sector to team up with South Korean companies in their activities, the Korea ExportImport Bank set up natural resources development credits. Foreign companies are encouraged and sustained, provided they allow substantial Korean equity participation in the deals. In the mineral sector, KORES directly provides mine developers with low-interest, long-term loans, giving priority to those companies ‘that focus on strategic minerals whose domestic supply heavily depends on import from overseas and whose contribution to the national economy is of great importance’ (KORES 2011). A comprehensive list of 42 minerals is covered by the provision and the activities supported range from exploration to development and technical support.22 A different kind of help to FDIs has been provided by other government agencies, even if these policies are not specific to the energy and mining sector. Trade-oriented national bodies such as the Korean Trade-Investment Promotion Agency (KOTRA), the official government agency for investment and trade, have stepped up their assistance in the last ten years to help their corporations around the world. KOTRA has 105 branches in 75 countries,23 and has constantly promoted initiatives such as Buy Korea, Invest Korea and Global Korea. 4.1.3 Official policies The Korean government at central level has actively assisted its corporations abroad, normally through diplomacy in all its forms, such as providing commercial, technical and legal aid in overseas negotiations and signing agreements at country level in order to assure a supportive —————— the one with Nigeria in 2005, where oil exploration by KNOC has been combined with infrastructure and port development by KEPCO and Daewoo Marine Shipbuilding Engineering. 22 The legal framework here is constituted by the Overseas Resources Development Business Act 1979 and successive modifications, as available online at http:// elaw.klri.re.kr/. 23 According the data provided by its official website, http://english.kotra.or. kr/wps/portal/dken. One of the main functions of KOTRA branches abroad is to search out perspective partners for Korean OFDIs and acquisitions abroad. Invest Korea’s website may be viewed at http://www.investkorea.org. The agency’s work is devoted specifically to encouraging foreign investment in Korea.

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environment. Particularly effective and not only in the case of resource acquisition, though still very relevant in this case, has been the South Korean government’s trade agreement policy, one of the most common tools of government support. The use of precise commercial strategies, such as bilateral agreements for economic co-operation, free trade area negotiations and tax-cutting agreements, have been employed by the Korean government since the 1990s. This approach has increasingly showed its benefits since the slowdown and subsequent paralysis of the Doha multilateral negotiations in the last ten years and has led to dozens of these free trade agreements (FTAs) signed around the globe, among them those with the US (still not ratified) and the European Union (EU). The advantages and the economic effects of FTAs are well known in the literature (see Donnenfeld 2003). In Korea this specific instrument has gained even more support with Lee Myung-bak, who in 2008 decided to continue the policy inaugurated by the previous Roh Moo-hyun government and to build a ‘global FTA network as its core foreign-trade policy’ (Cheong and Cho 2009: 3). While not maintaining any specific, fixed FTA framework in its negotiations, South Korea has been clearly inspired by the North American Free Trade Agreement and has pursued comprehensive treaties. The database maintained by the Asia Regional Integration Center (ARIC-ADB 2011) includes about 27 agreements, already in effect or still at the negotiating stage, between South Korea and the EU, the US, Canada, Australia, India and virtually all the East Asian economies as well as others.

4.2 External factors in Korean acquisition strategies: exploiting opportunities In addition to the policies put in place by the South Korean government, other, external factors have played a substantial role in facilitating the country’s acquisition campaigns abroad. While these factors are certainly not within Korean control, the country has been ready to exploit them to the maximum. The first, and one of the most relevant, was the suspiciousness that Japan before and China now generally raise among perspective targets, especially, but not exclusively, in advanced economies when it comes to such sensitive issues as cutting-edge technologies and strate-

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gic materials. Both journalism and the literature are full of examples of deals that eventually did not pass government approval on the grounds of national security issues, as in China’s controversial attempts to make acquisitions in rare-earth elements, first with Unocal/ Chevron in the US and then with Lynas Corporation in Australia, both vetoed on different grounds.24 Here it is easy to notice that South Korea has not experienced the same difficulties encountered by its Asian competitors. This may be the reason that Korean companies concentrate their M&A activities in markets less targeted by Chinese corporations, whose competition they instead tend to avoid as much as possible.25 This is indeed an area where Korea has had some major successes. An example is the 2009 acquisition, by KNOC, of Calgary-based Harvest Energy in Canada, the biggest Korean investment abroad to date with US$3.9 billion placed in the development of the oil sand deposits (Financial Times, 22 October 2009). Another case was the first-ever hostile handover by the South Koreans with the acquisition of the UK company Dana Petroleum Plc for US$2.9 billion in August 2010. In both cases, the Chinese did not go for the deal, and the Koreans were eager to get in. A second, more general factor is related to monopolistic worries periodically emerging in the mineral sector. There is a diffuse sentiment, whether correct or not is not relevant for the present analysis, that China constitutes at present a force boosting oligopoly in the resources market, with, as a result, concentration of ownership and in some cases restriction of access to scarce and/or

———

24 The first was the Chinese attempt to acquire the Mountain Pass mine in California, which had been at the centre of world production of rare-earth elements before China started its mass production. That attempt was included in the unsuccessful bid by CNOOC for the Unocal oil company in 2005, which at that time owned the mine; the deal was then prohibited by the US government. Afterwards, the Chinese company tried to persuade Chevron, which instead won the takeover, to sell the deposit, again without success. The second instance was later on, in October 2009, when the Australian government rejected the U$210 million bid by China Nonferrous Metal Mining Group Co. Ltd. to get a controlling stake in Lynas, again on the grounds of national security. The Chinese (this time through the Jiangsu Eastern China NonFerrous Metals Investment Holding Co.) were only allowed a minority share in another rare-earth element Australian developer, Arafura Resources Ltd. 25 ‘It’s like a battle of David and Goliath, given China’s funding capability. We advise clients who are searching for the right target to avoid public deals as they usually run a higher risk of competition from Chinese firms.’ Harrison Jung of Samjong KPMG Advisory Inc., as quoted by Bloomberg, 25 October 2010.

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strategic resources.26 Such a situation is particularly sensitive in the case of nonferrous minerals, in which price volatility, uneven resource distribution and small market size make any further concentration of ownership an upsetting event for heavily dependent countries. While Japanese corporations have also been accused of these practices, the reality in those particular cases was different (Kojima 2002). There is by now sufficient evidence that Japan’s policy in the 1970s and 1980s actually had the overall effect of working towards market expansion by supporting non-dominant players (Wells 1993). While China’s role in facilitating or constraining market access to resources is still a matter of controversy (Sauvant et al. 2008; Moran 2010), the net consequence is of China being normally prevented from acquiring strategic issues in areas dominated by other Western players, such as Canada, Australia and the US. This seems to have had benefits for South Korea, as, apart for a short period in the 1990s, it has been not perceived as a threat in the way Japan was and China now is, by both developing countries and advanced economies.

5 THE BOLIVIAN CHALLENGE The long story of South Korea in South America, and the recent Bolivian acquisition, illustrate accurately the strength of the Korean approach overseas. South America had never been a priority for South Korean corporations, and in 2010 Korean OFDIs in the continent only amounted at a tiny 8 percent of the total, compared to 42 percent in Asia and 25 percent in Europe.27 South Korea’s presence, however, is not a novelty, and the first corporation to enter Latin American markets, Brazil in ——— 26

This concern was recently reinforced by the episode of a naval collision between Japan and China in October 2010. When Japan seized the Chinese ship and put its captain under trial, China retorted by halting exports of rare-earth elements, absolutely vital for Japanese industries. While the issue was later resolved, the episode has done nothing to reassure the world about China, and further Chinese acquisitions in strategic materials are likely to be affected. Governments such as Australia (in 2009) and the US (in 2004), which vetoed the previously mentioned Chinese acquisitions in rareearth elements in their territories, will, moreover, feel vindicated. 27 All data about OFDIs have been taken from the Korea Export-Import Bank, the only authoritative source for this kind of statistics. It is interesting to note that South America’s quota has remained almost constant since the 1970s (it was about 7 percent at that time) and has been growing at the same rate as the total increase in Korean OFDIs (Kwak 2007).

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this particular instance, was the steel-maker POSCO, with an investment in iron ore in a joint venture with Vale do Rio Doce, in operation since 1967. More recently, however, Korea’s interest in Latin America has increased considerably, even if in pure figures its share has remained constant. South Korea has been looking closely to China in its relations with South America, with the signature of a FTA with Chile in 2004 just after China signed, and its acceptance by the Inter-American Bank of Development in 2005. The continent has been recently identified as a strategic partner for Korea, both as target market for its products and as a vital source of strategic materials (Kwon et al. 2007). Bilateral agreements based on energy co-operation have been signed with Peru, Chile, Argentina, Brazil and Mexico, and effective negotiations were also started with MERCOSUR as early as 2005 (Kim 2008). While the major chaebǂls are present on the continent and also expanding in manufacturing and services, the focus on resource acquisition remains very strong, with investment in copper and natural gas (Peru), wood (Chile) and oil (Brazil). In September 2010, for instance, SK Networks Co. bought participation for US$700 million in the Brazilian MMX Mineracao & Metalicos SA. This represents by far the biggest investment in iron ore by a Korean company and will eventually supply about 17 percent of South Korea’s overall annual needs in iron ore. In further confirmation of expanding Korean interest in the continent, two of the new KORES overseas offices have been set up in Peru and in Chile, in order to follow more closely the South America blooming mining sector. The South Korean government, moreover, has recently reopened its embassy, closed in 1998 during the Asian financial crisis.28 In the past few years, South Korea has succeeded in signing contracts with the Bolivian government, regarded as an attractive but difficult mining partner. The country is very rich in natural resources, but poor, landlocked and underdeveloped, and with a leftist government which has done nothing to reassure foreign investors since its inception. President Morales has always declared that it is the nation which has to be in charge of its mineral wealth and in 2006 he nationalised the entire natural gas industry. Other countries, especially some US ——— 28

The two countries initially established diplomatic relations in 1965, long after Japan but well before China, which accorded diplomatic recognition only in 1985.

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transnational companies, have generally experienced problems in dealing with the Bolivians, and often had to renounce striking deals. South Korea, nevertheless, has scored two important successes in Bolivia. The first one, in 2007, was the joint venture agreement signed by a Korean consortium, led by KORES and including conglomerates such as LS-Nikko Copper, with the Bolivian state mining enterprise Comibol for the development of the mines in Corocoro province.29 This site is Bolivia’s largest copper mine, with an estimated 15 million tonnes in reserves. It had remained closed since 1985, when the price of the mineral fell dramatically. Signed after more than a year of lengthy and complex negotiations, the South Korean partner was given 45 percent of the ownership rights and committed itself to a two-phase project that will eventually produce about 3,000 tonnes per year. Both countries seem to be pleased by the prospective results. South Korea, whose annual copper consumption amounts to 1.4 million tonnes, will obtain the totality of the mineral extracted, while Bolivia, with the re-opening of Corocoro, will become the third-largest world producer of copper after Chile and Peru. The second deal, concluded in 2010, is for a joint exploration of Bolivian lithium resources. Lithium is a fundamental raw material for high-technology products, mobiles phones and especially batteries for electric cars. These growing segments have already put pressure on the supply side. While still comparatively cheap at present (about US$1 per kg), the price of lithium is expected to shoot upwards in the near future as demand is likely to outstrip current levels of supply in 2015, according to some estimates (BBC News, 9 November 2009). South Korea, a major lithium consumer, has been long searching for new suppliers to feed its growing needs. As one of the leading world lithium battery manufacturers together with Japan and China, the country has seen its manufacturing share of batteries grow constantly since 2002, to the point where it now accounts for up to 18 percent of world production, with rising prospects.30 In its quest for ——— 29

In 2010, however, Comibol announced it had discovered a much richer copper deposit near Potosi, called Abaroa. While there are no official negotiations yet in place, it is expected that the same Korean joint venture will try to secure exploitation rights, for an estimated cost of US$250 million (Minera de Bolivia, 23 September 2010). 30 Japan accounts for more than half of world battery production, but accordingly to experts its share has peaked and it is likely to lose quotas in favour of China (cur-

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alternative sources, the Korea Institute of Geoscience and Mineral Resources (KIGAM) even reported in 2010 that it had found a way to extract the mineral from seawater through the use of sophisticated membranes.31 However, given the high costs of the plants and the (so far) reduced output quantities expected (the estimated world demand in 2015 will be around 500 kilotonnes, according to Mitsubishi’s general manager in Bolivia32), different strategies have to be pursued to ensure a regular supply. South America is already the centre of global lithium production, with Chile and Argentina the first and third-largest world suppliers, thanks to their Andean deposits. Still, their reserves are comparatively small when compared to Bolivia’s, which currently has no extraction facility in place. The country accounts for more than half of world reserves. They are concentrated in its huge highland deposits (as at Salar de Uyuni, a popular tourist destination), but still lack the sophisticated technology to exploit them. Recently, the government has invested US$5.7 million to build a pilot plant to test the exploitation process, but it is expected to be able to produce, at least initially, only around 1.2 kilotonnes a year. Some American and Japanese companies have long courted the Bolivian government in the hope of building industrial plants for commercial lithium exploitation and processing, but the local communities and the government have regularly rebuffed all such tentative deals. The last examples were the negotiations with the Japanese car manufacturers Mitsubishi, Sumitomo and Toyota, which achieved nothing (Time, 22 January 2009). The main reason for refusal was the lack of control by the Bolivian side in the whole process, while what was desired was instead a joint venture for mining and technology-sharing. —————— rently at 23 percent) and South Korea. The three Asian countries together produce around 98 percent of the world total. 31 While not the first country to try this alternative method (Japan has long been paving the way), South Korea is nevertheless one of the most determined in pursuing it. The lithium from seawater experiment has given successful results, and KIGAM has teamed up with POSCO in a investment of 30 billion won (about US$26.4 million) to build an offshore facility that will start industrial production of lithium in 2012. Estimated production will amount to about 30 tonnes of the mineral annually by 2014, and it would be even possible to shift to (costly) mass production by 2015, should the need arise. 32 ‘The demand for lithium won’t double but increase by five times. We will need more lithium sources—and 50 percent of the world’s reserves of lithium exist in Bolivia, in the Salar de Uyuni. Without new production, the price of lithium will rise prohibitively.’ Eichi Maeyama, Mitsubishi’s general manager in La Paz, as quoted in BBC News, 9 November 2009.

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Moreover, in the case of Sumitomo, there was, and still is, an ongoing dispute about the huge (and controversial) San Cristobal silver and zinc mine, known for increasing the pollution level of the region and therefore quite loathed among the local communities, who recently threatened to cut the power to the plant (Bloomberg, 12 August 2010). This was where the South Korean deal got surprising approval. The Memorandum of Understanding was signed in September 2010 during a state visit by President Morales to Seoul, amid the agreement of the two presidents to jointly explore and start lithium production (Mining Weekly, 10 September 2010). The two state agencies in charge of the development of the huge project are the same as in the Corocoro copper agreements, KORES for South Korea and Comibol for Bolivia, and their ongoing partnership will make it easier to work together in this new enterprise. Moreover, KORES will bring to the Bolivian partner, new to lithium exploitation, its existing know-how acquired in the joint venture with Lithium One for the development of the Sal de Vida lithium brine project in Argentina.33 Bolivia will also be included in Korea’s 2011 Knowledge Sharing Programme (KSP), which aims at helping trade and investment partners to strengthen their building capabilities for effective development strategies, poverty reduction and economic growth.34 Production estimates are huge. However, given that a more complex technology is needed to develop the Bolivian lithium commercially, compared to the existing Chilean and Argentinean output, there will be a certain delay before Bolivia can attain a prominent supply role.

——— 33

In this other huge deal, in which KORES agreed in June 2010 to fund 100 percent of the exploration, prefeasibility and feasibility study costs, Korea will obtain a 30percent share of equity and will have the exclusive right to 30 percent of the lithium produced. An additional 20 percent of the output will be left for its priority purchase. Finally, KORES has secured the right to be sole sales agent for selling Sal de Vida lithium to its direct competitors for lithium batteries—China and Japan. 34 Originally devised for Asian countries, the KSP has been extended to other areas (as to Africa through Korea-Africa Economic Cooperation, KOAFEC) and been made available for other partners in need. For an example of its content, see http://www. koafec.org (accessed 26 May 2011).

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6 CONCLUSIONS: WHAT TO EXPECT NEXT At first glance, the next years look promising for South Korea; Korean corporations give the impression of being ready to face the challenges ahead in the competition to secure strategic materials and energy sources and the tensions that are likely to arise. One of the most problematic issues, which will have a certain influence on future acquisition policies, touches the exploitation of property rights of new territories. In this specific field, South Korea has been positioning itself among the most active countries in securing new strategic resources. In 1994, it became the seventh nation in the world to register a deep-sea mining area with the UN, this one extending 150,000 sq km over the deep-sea floor of the Pacific ClarionClipperton sea area. This kind of initiative, while in some cases extremely unpopular (especially in the case of acquiring agricultural land overseas35) is deemed to become only more common in the future, and the Korean experience can give important indications for latecomers. It is also reasonable to imagine that Korea will keep searching for niche markets where China, by far the most aggressive competitor, for a number of different reasons is not very active or not so assertive; this has already proved to be a successful strategy. As hard as it can be, competition for resource acquisition has not necessarily to be hostile. Initiatives for co-operation are already in place, as in the policy agreement concluded in 2010 between South Korea and Japan for joint action to secure rare minerals, with lithium and rare-earth elements on their priority list. Such co-operation makes sense given the two countries’ similarity in industrial structure and the competitive threat both face from competitors such as China in their core production sectors. Still, a word of caution is necessary. Guided by country resource assessments and countries’ lists of strategic materials for stockpiling and/or acquisition campaigns abroad, it is possible to forecast future shock points and coming conflicts. As tensions grow stronger and competition from emerging economies gets fiercer, South Korea may find itself in a highly vulnerable position, where it would need all its ——— 35

As in the controversial deal with Madagascar for food production (Time, 23 November 2008).

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negotiating skills and its balanced mix of policies to keep on securing successful deals as the present ones.

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Journal), Pennsylvania University. Online: http://repository.upenn.edu (accessed 20 February 2011) NMAB (2008), Managing Materials for a Twenty-first Century Military, National Materials Advisory Board. Online: http://www.nap.edu/openbook.php?record_id =12028&page=7 accessed 12 February 2011) Paladini, Stefania (2010), ‘Dealing With the Global Crisis: Effects on China’s External Trade and Commercial Policies’, CPI Discussion Paper, no. 63, University of Nottingham, UK. Online at http://www.nottingham.ac.uk/cpi/documents/ discussion-papers Rodrik, Dani (1994), ‘Getting Interventions Right: How South Korea and Taiwan Grew Rich’, NBER Discussion Paper, no. 4964, Cambridge MA. Online: http://www.nber.org/(accessed 10 March 2010) Sachs, Jeffrey and Andrew Warner (1999), ‘The Big Push, Natural Resource Booms and Growth’, in: Journal of Development Economics, 59 (1), pp. 43-76 Sauvant, Karl P., Kristin Mendoza and Irmak Ince (2008) (eds), The Rise of Transnational Corporations from Emerging Markets, Cheltenham, UK: Edward Elgar Stonehenge Metals Ltd. (2010), Annual Report. Online: http://www.stonehenge metals.com.au (accessed 12 February 2011) Time, 23 November 2008, ‘The Breadbasket of South Korea: Madagascar’. Online: http://www.time.com/time/world/article/0,8599,1861145,00.html (accessed 3 February 2011) Time, 22 January 2009, ‘For Lithium Car Batteries, Bolivia Is in the Driver’s Seat’. Online: http://www.time.com/time/world/article/0,8599,1872561,00.html (accessed 12 February 2011) UNCTAD (2007), World Investment Report 2007. Online: http://www.unctad.org (accessed 10 January 2011) UNCTAD (2008), World Investment Report 2008. Online: http://www.unctad.org (accessed 10 February 201) UNCTAD (2009), World Investment Report 2009. Online: http://www.unctad.org UNCTAD (2010), World Investment Report 2010. Online: http://www.unctad.org (accessed 15 January 2011) USGS (2004, 2009), The Mineral Industry of the Republic of Korea, 2004 and 2009 editions. Online: http://minerals.usgs.gov/minerals/pubs/country (accessed 12 March 2010) Wells, Louis T. (1993), ‘Minerals: Eroding Oligopolies’, in: David B. Yoffie (ed.), Transnational Corporation and the Exploitation of Natural Resources, Boston: HBS Press, pp. 244-69 Yoon, Deok Ryong (2007), ‘Korea’s Outward FDI in Asia: Characteristics and Prospects’, paper presented at the ICRIER Workshop on Intra-Asian FDI Flows: Magnitude, Trends, Prospects and Policy Implications, 25-26 April 2007. Online: http://www.kiep.go.kr/eng/ (accessed 12 January 2011)

MANAGING LABOUR MIGRATION TO SOUTH KOREA: POLICIES AND PROBLEMS REGARDING MIGRANT WORKERS Sarah Hasan

ABSTRACT Labour migrations revolve around push and pull factors between laboursending and labour-receiving countries. In the case of South Korea, reasons behind the increase in labour migration include rapid industrialisation and demographic features. Despite intense efforts, a shortage of labour has persisted. Since the 1990s, various policies have been introduced to bring in and manage migrant workers. This paper argues that despite increased legislative reforms in the fields of labour and immigration, issues such as the increase in illegal migrant workers and the vulnerability of these workers to human rights abuses have been left untackled. The paper highlights how these policies have in fact, further divided ‘illegal workers’ from ‘legal workers’ and how the measures taken by the South Korean government to manage the problem have made workers susceptible to human rights violations. The paper reviews labour immigration policies and points out loopholes in them. Key words: labour migration, legal/illegal migrant workers, skilled/unskilled migrant workers, human rights, employment permit system, South Korea

1 INTRODUCTION The role of the state is central in discussions of migration. With the emergence of sizeable migratory flows throughout the world, policies governing the numbers, characteristics and terms under which foreign labourers enter nation-states have become controversial and politically divisive. For migrant inflows, the key factors of analysis include the facts behind a country’s choices with regard to migration policies (Zolberg 1999). Particularly since the 1980s, labour migration policies in East Asia have evolved around the admission of migrant workers for time-restricted employment and residency (Yaw 2002: 5) and have

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been based on the assumption that reliance on migrant workers would be a temporary phenomenon. Already familiar with the history of labour migration in Europe and America, East Asian states developed policies intended to make it extremely difficult for migrant workers to settle over the long term or permanently. The initial objectives behind the admission of foreign workers were motivated by the needs of the labour market and an increase in the international competitiveness of the targeted industries (Athukorala 2006). The gradual dependence of the Republic of Korea (South Korea— henceforth Korea) on migrant workers has transformed itself into a permanent feature and a daunting challenge in terms of policymaking, policy goals and policy outcomes. According to a UN report, Korea will need to import 100,000 workers every year and a total of 1.5 million migrant workers between 2030 and 2050 to maintain a similar economic structure and to support senior populations (Seol and Han 2004: 46). It means that the number of migrant workers will continue to grow and hence will have a huge impact on Korean society not only economically, but also socially, politically and culturally. Many scholars have pointed out that any country’s legitimacy depends on its respect for its own laws and rights (Sassen 1996: 64). When we look at Korea’s case with respect to migration, its everevolving policy therefore warrants careful examination and analysis. For the purpose of this study, only two among the several interviews undertaken by the author, have been included: one with the current president of the Migrants’ Trade Union, conducted in Seoul, and the other with a focus group, conducted in Ansan city in Kyǂnggi province. The paper has four sections: the first deals with the background to labour migration in Korea; the second section provides a brief overview of migrant-related policies from 1991 to 2003 with emphasis on the Employment Permit System; the third section analyses the effects of these policies and pays particular attention to the dilemmas and contradictions that underlie them and which have led to the creation of a category of ‘illegal’ workers1 and human rights abuses. The final section will put forward suggestions and concluding remarks. ———

1 To minimise confusion, the term ‘illegal’ worker will be used throughout this paper instead of ‘unauthorised’, ‘undocumented’ or ‘irregular’ worker, the terms preferred by the United Nations and the International Labour Organisation, etc., because this term is the officially accepted term in South Korea. The author, however, wishes to make clear her strong disagreement with the use of the term ‘illegal’ with respect to migrant workers.

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2 BACKGROUND TO LABOUR MIGRATION IN KOREA Korea, as a labour-exporting country, sent its first batch of labourers to what was then West Germany to work in mining and nursing. In the following years, 61 percent of Korean migrant workers went to the Middle East to work on construction projects. However, Korea’s rapid economic growth since the late 1980s seems to have deprived unskilled Korean workers of the incentive to go abroad for employment (Park 1994). With improved wages and working conditions for local workers, gaps appeared in certain sectors of industry where Korean citizens stopped taking up jobs. Factors such as chronic labour shortagesˁsometimes attributed to an unwillingness to work in the 3-D job sector (dirty, difficult and dangerous jobs)ˁcreated room for a steady increase in the foreign workforce in Korea. The foreign labour force started to emerge shortly after the Seoul Olympics of 1988 and was formally introduced to the labour market through the government’s Industrial Technical Trainee Program (ITTP) established in 1991 (Yoo and Uh 2001: 22). Under the ITTP, migrant workers were recruited overseas by a network of recruiting agencies assisted by the Korea Federation of Small and Medium Business (KFSB) and entered the country to work as foreign trainees. Though not recognised as workers, these ‘trainees’ performed 3-D jobs under the ITTP for only a fraction of what local workers were paid. The Korean Immigration and Emigration Law did not allow unskilled foreign workers to enter Korea for the purpose of employment (except in the case of trainees) until 1997 (Yoo and Uh 2001: 22). Many trainees left their designated workplaces because of the harsh and restrictive nature of the ITTP and chose to become illegal workers, whoˁthrough high demandˁwere able to find work easily and were welcomed by employers. Despite problems with the ITTP, workers keep flowing in, often breaching their contracts, reaching a rate as high as 87 percent of the total foreign workforce (Athukorala 2006: 21; Seol 2000: 8; Park 2002: 75). Table 1 below shows the visa status of unskilled workers from 1987 (when the ITTP was introduced) to 2003 (when the EPS was introduced in parallel to the ITTP). Civil society groups such as Non-Governmental Organisations (NGOs), church-related groups and labour activists later banded together to form an organisation, the Joint Committee for Migrants in Korea (JCMK), to lobby on behalf of migrant workers. These groups,

178 Table 1

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Estimate of foreigners with irregular status between 1987 and 2003 (unit: persons)

Year

Total

Year

Total

Year

Total

1987 1988 1989 1990 1991 1992. 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

6,409 7,410 14,610 21,235 45,449 43,664 68,500 81,824 128,906 210,494 245,399 157,689 217,384 285,506 329,555 362,597 388,816

Irregular workers UndocuSubtotal Work visa holders Industrial trainees mented workers Foreign UnspeUndocuTechnical Ship’s investSubtotal cialised Trainee Industry mented specialist crew ment workers workers trainee Regular visa status

2,192 2,403 2,474 2,833 3,572 12,765 13,992 33,593 47,040 81,440 97,351 58,152 82,046 96,511 74,349 73,358 250,760

2,192 2,403 2,474 2,833 2,973 3,395 3,767 5,265 8,228 13,420 15,900 11,143 12,592 17,000 2,063 19,549 8,065 21,506 12,191 20,089 159,706 20,244

-

3,932 3,759 18,816 23,574 38,296 48,795 31,073 49,437 58,944 33,230 25,626 38,895

599 5,438 6,466 9,512 15,238 29,724 32,656 15,936 20,017 18,504 13,505 14,035 11,826

4,217 5,007 12,136 18,402 41,877 30,899 54,508 48,231 81,866 129,054 148,048 99,537 135,338 188,995 255,206 289,239 138,056

Sources: Data for 1987-2000, Seol (2000); data for 2001-2003, Yoo (2004).

along with other migrant groups such as the Equality Trade UnionMigrants’ Branch (ETU-MB), pressured the government to introduce a proper work-permit system, which the latter finally did in July 2003, terming it the Employment Permit System (EPS). The EPS and ITTP worked in parallel with each other until early 2007, when the EPS became the sole programme to import workers into Korea. However, through these programmes, two types of unskilled migrant workers emerged: the first type was the de facto worker under the ITTP and EPS, and the second was the illegal migrant worker (Yoo and Uh 2001: 26). Restructuring of policies in various spheres is continuously taking place. Despite noticeable differences, Korea shares some com-

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mon characteristics of migration patterns with other countries in the region, which include the temporary nature of migration with an emphasis on intra-regional inflows; a high percentage of undocumented migrant workers; and an ever-increasing share of women participating in labour migration.2 Policies on migrant workers are based on the impact of these workers on the labour market. Sassen contends that migrations are not autonomous processesˁthey do not just happen: they are produced. And migrations do not involve just any possible combination of countries: they are patterned (Sassen 1998: 56, 110). Korea seems to have similar patterns to those discussed by Sassen. Korean immigration policy appears oriented towards encouraging highly skilled, professional workers but is restrictive and closed towards the unskilled worker. Data obtained from the Korean immigration office show that foreign workers in Korea include the highly-skilled, the low or unskilled, and illegal workers. These migrants can be further divided into those who fall under the EPS, the Visitor Employment System (VES), marriage migrants, short-term employees and illegal foreign workers (Lee 2010: 2). Low-skilled migrant workers are those who enter Korea under the EPS (E-9 visas) and the VES (H-2 visas). Korea is currently running the VES exclusively for the ethnic Korean community which settled in China and Central Asia (FBPI 2008-2012: 11).3 According to the latest estimates of the immigration office, H-2 visa-holders comprise the largest group of foreigners, amounting to 51.4 percent of the total number of foreigners in Korea. The second largest group is that of E-9 visa-holders, who account for 39.5 percent of all foreigners, followed by E-2 visa-holders (foreign language instructors), who take up 4.2 percent of the share. They in turn are followed by E-7 visa holders (those engaged in designated specialised activities), who constitute 1.9 percent. All the other groups make up 3 percent of the total number of foreigners in Korea (Korea Immigration Service Data: 2010) (see Graph 1).

——— 2 3

See Yaw (2002) for a more detailed discussion. The First Basic Plan for Immigration Policy 2008-2012, hereafter FBPI.

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Graph 1 Employment classification by visa status (unit: persons, %) Percentage of Various Visa Holders in South Korea 60 50 40 30

Series 1

20 10 0 H-2

E-9

E-2

E-7

Others

Source: Ministry of Justice (2010).4

2.1 Profile of migrant workers in Korea To understand the policies it is necessary to look briefly at the profile of the migrant workers in Korea. Migrant workers comprise 2 percent of the entire workforce of Korea. The definition of a migrant (foreign) ‘worker’, according to Article 2 of the Act on Foreign Workers’ Employment, etc.,5 is a person who does not have Korean nationality and who works or intends to work in a business or workplace located in Korea for the purpose of earning wages. Definition under Article 2 (1) of the Labor Standards Act (LSA)6 stipulates that the term ‘workers’ refers to anyone who works for a business or at a business site for the purpose of obtaining a wage, regardless of the job category. Here it is important to note that the LSA is applicable to migrant workers. Inherent differences in migrants include nationality, gender and age, whereas differences imposed by the government, which are often more important, include type (expatriate or unskilled and semiskilled), status (legal, illegal), and occupational sector.

———

4 http://www.moj.go.kr/HP/TIMM/imm_06/imm_2010_12.jsp (accessed 23 May 2011). 5 Act on Foreign Workers’ Employment, etc., Act No. 9798, 9 October 2009. 6 Labor Standard Act, Act No. 10366, 10 June 2010.

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Generally migrant workers can be divided into three broad categories. The first group consists of professionals and skilled workers holding a legal working visa. They include professors, engineers, IT professionals or teachers. The second type comprises migrant labourers, who are recruited under the various recruitment schemes to meet labour shortages in small and medium enterprises (SMEs). They are further divided into the Korean diaspora and workers from other countries. The third group is made up of illegal workers who have no valid working permits (Seol 2000: 17; Yoo and Uh 2001: 26). Status revolves around the issue of legality: workers are either legal or illegal. The former group consists of those who were recruited in their home country and entered Korea under the various migrant worker employment schemes. The latter group is made up of those who for whatever reason were recruited legally to work in Korea but defaulted on their contract afterwards. They include deserters from the employment schemes, students, tourists, visitors on family visas who have worked during or after the duration of their visas without proper authorisation, and overstayers. Korea has signed a memorandum of understanding (MOU) with 15 partner countries from where labour is imported.7 These workers are employed in the areas of manufacturing, agriculture, fisheries, service industries, livestock husbandry and construction. However, migrant workers from over one hundred countries have been working in the various sectors (Park 1994; Seol 2000). The five countries sending the greatest numbers of EPS workers in 2011 to Korea are shown at Table 2. Various studies have pointed out that the number of migrant women who have joined the labour market has been rapidly increasing in Korea since 2005. They work in services and manufacturing and also suffer greater discrimination. On average, almost 30 percent of the entire foreign workforce is women (Amnesty International 2007: 3). They come mainly from China, Vietnam, the Philippines, Indonesia and Sri Lanka.

——— 7

See Appendix for the list of MOU countries.

182 Table 2

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Top five countries in 2011 with the highest number of EPS workers (E-9 visa) (unit: persons)

Nationality

Sum total Vietnam Philippines Indonesia Thailand Sri Lanka

Total sojourners

231,471 61,058 26,646 24,962 24,102 17,923

Legal sojourners

188,968 52,480 21,700 21,255 20,927 16,852

Illegal sojourners

42,503 8,578 4,946 3,707 3,175 1,071

Source: Ministry of Justice.8

3 MIGRANT-RELATED LAWS IN KOREA (1993-2011) The policy approach on migrant workers follows a strategy of selectively introducing low-skilled workers, giving consideration to their impact on the labour market (Lee 2010). Since 2003, the Korean government has changed its policies and now offers almost the same rights to foreign workers as to their local counterparts, but it is significant that the rights are different for those of different status. Some of the main legal instruments related to foreigners include the Immigration Control Act, Act No. 7006, 24 March 20059 (ICA); Act on the Treatment of Foreigners in Korea, Act No. 21214, 31 December 2008;10 Act on Foreign Workers’ Employment, etc., Act No. 9798, 9 October 200911 (AFWE); Labor Standard Act, Act No. 10366, 10 June 201012 (LSA); Minimum Wage Act, Act No. 8964, 21 March 2008;13 and the [Occupational Safety and Health] Industrial Accident Compensation Insurance Act, Act No. 9988, 27 January 2010.14 Korean laws principally apply to Korean citizens unless otherwise stated (Hwang 2010). Among the different laws mentioned above, the ——— 8

See References for details of this source and the sources for Tables 4 and 5. First promulgated in 1964 and wholly amended in December 1992, since then amended nine times up to March, 2005. 10 First promulgated on 17 May 2007 and amended once, on 31 December 2008. 11 First promulgated on 16 August 2003 and amended seven times up to October 2009. 12 First promulgated on 13 March 1997 and amended 22 times up to 10 June 2010. 13 First promulgated on 31 December 1986 and amended 11 times up to 21 March 2008. 14 First promulgated on.22 December 1994 and amended 20 times up to 27 January 2010. 9

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ICA, the LSA and the AFWE are of utmost importance as they broadly cover entry, stay, exit, hiring, firing, labour rights and responsibilities relating to migrant workers in general. Apart from these domestic laws, a large array of international instruments also exist to provide parameters for the regulation of international migration and standards for human and labour rights, butˁbecause they have little or no effect on domestic laws per seˁin this paper, they are only occasionally taken into consideration when addressing the issues related to migrant workers in Korea. The continuous increase in inflows of migrant workers resulted in constant changes to immigration and labour policies. These changes are regarded by Seol (2000: 19) as an expediential development of policy and rather far from a rational one. Inconsistencies and conflict between the laws, their implementation and their short-term nature have further added to the problem. In the next four sub-sections these policies are examined as they evolved under the four different administrations in the past two decades of Kim Young-sam, Kim Dae-jung, Roh Moo-hyun and Lee Myung-bak respectively.

3.1 Kim Young-sam (1993-1998) Under Kim Young-sam, the two issues of importing labour and dealing with undocumented workers had to be dealt with simultaneously. The Industrial Training Program for Joint Ventures (JVTP) was the first scheme of its kind and was introduced in 1991. It was originally intended to upgrade the skills of foreign workers employed by overseas subsidiaries of Korean corporations who were brought in through the KFSB. These trainees under the JVTP worked for an initial six months, a period later extended for up to six additional months, but due to their ‘trainee’ status they were not protected by the labour laws of the country (Yoo 2005: 6). In 1993, the ITTP was introduced as a modified version of the JVTP and called for easing labour shortages for SMEs with 300 or less employees. This programme was patterned on a Japanese trainee programme that had resulted in failure. Despite deficiencies and problems already identified in the ITTP, the government went ahead with implementing it. Under this programme, trainees were allowed to stay in Korea for only a year, but the period was extended to two years and more sectors were introduced (Yoo and Uh: 2001). In 1995, a rally

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was organised by a group of fifteen Nepalese migrant workers in front of Myǂngdong Cathedral in central Seoul, which drew nationwide attention. This event, which gave a new direction to later developments in migrant-related issues, was the beginning of the involvement of civil society groups seeking to give voice to the migrant workers’ deplorable conditions. In response to this rally, Cardinal Stephen Kim publicly apologised to the Nepalese workers and the then prime minister ordered a full-scale inquiry into the working conditions of foreign trainees (Seol and Han 2004; Galang 2001; Park 2004; Lim 2005). A directive on the management and protection of industrial trainees was enacted: an increase in trainees’ pay was reviewed, industrial accident compensation was included and special courts were set up in addition to some other rights that were guaranteed under the LSA. This incentive also covered illegal migrant workers, who became eligible for Industrial Accident Compensation Insurance (Seol and Han 2004; Lim 1999: 14). Major problems within the ITTP included trainees’ wages that were lower than those of illegal foreign workers; the use of trainees as a substitute for Korean workers; absence of protection under labour laws; longer working hours; a flawed recruitment process; a stronger motivation for them to flee and become illegal workers;15 and growing diplomatic problems with the sending countries arising out of the de facto and de jure status of foreign trainees.

3.2 Kim Dae-jung (1998-2003) The response of Kim Dae-jung’s government to the importing of foreign labour was mixed. In the long run, his administration made more decisive changes, such as overhauling the ITTP and introducing the Work after Training Program (WATP), which was implemented in 1998.16 The main difference brought about by the WATP was the change in the duration of stay of foreign workers (Kim 2004). At first, the timeframe was two years as a trainee followed by a year of em———

15 Being an illegal worker would make it easier for them find jobs where they were more highly paid. 16 In May 1999, Kim Dae-jung in a message to his cabinet said: ‘Discrimination against foreign workers in Korea and violations of their rights are a serious and shameful problem from a point that we are aiming to become a nation that respects human rights’ (Korea Times, 25 May 2000).

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ployment, but on amendment the timeframe was adjusted to one year as a trainee, followed by two years of employment. The programme could, in fact, be said to possess the characteristics of an Employment Permit System (EPS). Through the WATP, foreign workers became entitled to the LSA, the Medical Insurance Law, and the Industrial Accident Insurance Law, as well as receiving severance pay and various other allowances (Yoo 2005: 7; Lee and Park 2005: 152). Under the WATP, an industrial trainee who worked at a firm for two years without interruption qualified to reside and work in Korea for another year in his or her capacity as an employee and not as a trainee; but even under the programme, trainees-cum-workers had to work long hours and night shifts, had their wages withheld and had to bear abusive behaviour from their employers, because their permit incorporated restrictions to changing their workplace and hence their fate was left to the discretion of their employers. WATP still fell short of critically reducing human rights abuses.

3.3 Roh Moo-hyun (2003-2008) The EPS came into effect on 17 August 2004. This made Korea the third country in Asia, after Singapore and Taiwan, to adopt an EPS. It entitled foreign workers to bonus allowances, retirement pay and the three basic labour rights of unionising, collective bargaining and collective action; in addition, it restricted workers from being joined by their families (KCTU 2004; Park 2004). Under the EPS a migrant worker was allowed to work for a Korean SME in the designated sectors where employers were unable to find a Korean worker (Yoo 2005: 9). Another purpose of the EPS was to grant legal status to 227,000 illegal workers through a policy of restricted regularisation, which resulted in a significant decrease in the percentage of such workers (Yoo 2005: 2-3). With this bill, the number of foreign workers, including legal employees and industrial trainees, increased from 340,000 in December 2002 to 541,000 in December 2004. The underlying trends from 2004 to 2007 are illustrated at Table 3. The EPS has undergone several revisions since its promulgation. One of the main revisions was the introduction of a new law allowing foreign workers to work for five straight years without being obliged to make a one-month stay outside of the country in order to extend

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their job contracts (Bae 2008). The most recent revision to EPS, made in October 2009 and promulgated in April 2010, provided for more changes for all the stakeholders. For instance, anyone can employ a foreign worker (within the designated sectors) provided they show evidence that despite efforts made they have been unable to find a Korean worker. The period of an employment contract with visa status under E-9 is, in principle, three years, but may be extended to another two years (on the employer’s recommendation) without the worker having to go overseas. Furthermore, the right to rehire migrant workers rests solely with the employer and therefore, when a worker’s three-years’ employment contract expires, the employer is most likely to take control over the migrant worker’s fate. This element of immobility is one of the most criticised features within the EPS (AI 2010; NHRCK 2009). The number of workers to be received, their fields of employment, and the sending countries are determined by the Foreign Workers Policy Commission. Applicants must pass a Korean language test (EPS-TOPIK)17 and a medical test, and be under 39 years of age. They are randomly selected. Finally they become part of the final list of applicants to work in Korea. Standard labour contracts are signed between the parties and they get a short pre-departure training session (Lee 2007). Table 3

Trends in numbers of migrant workers employed in the period 2004-2007 (unit: persons)

Total employment General Employment Permit System Special Employment Permit System Industrial Trainee System

2004

2005

2006

2007

79,000

116,000

105,000

109,600

25,000

38,000

35,250

49,600

16,000

38,000

38,050

60,000

38,000

40,000

31,000

-

Source: Ministry of Justice, cited by Lee (2007).

———

17 The details on EPS-TOPIK (mandatory Korean-language test for migrant workers) can be found on the official website of the Employment Permit System, at http://www.eps.go.kr. The website is run in 14 languages besides English and Korean. It is a guide to the employment procedure for working in Korea under the E-9 visa category and explains workers’ rights, duties, procedure, insurance, sojourn and return.

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3.4 Lee Myung-bak (2008-present) When Lee Myung-bak came to power, he propounded the ‘creation of an open society for all’. Under his administration, changes were made in the EPS during 2009 and were promulgated in 2010. Under the Ministry of Justice (MoJ), the First Basic Plan for Immigration Policy18 (FBPI) 2008-2012 laid the foundation for implementing a longterm and consistent immigration policy with a focus on openness and assimilation (FBPI: 11). The FBPI in some respect is a blueprint for a transition to a multicultural society and through this, the MoJ has adopted various measures to improve the working conditions of migrant workers. It explicitly states that national-level protection against discrimination will be ensured and human rights will be respected (FBPI: 12). The Korean government is considering granting resident visa status for those with the specific skills and capabilities that Korean industry needs most. It also offers specific provisions on the improvement of detention facilities. However, there are a few factors that need urgent attention, including a one-step employment application procedure at the employment support centre; improved methods of reemployment; a loosening in some of the conditions stipulated in employment contracts; and employer surveillance. The FBPI clearly articulates a strategy for controlling illegal workers through crackdowns twice a year for a period of four months for the next five years. Within the EPS, stronger punishments for employers have been proposed (FBPI: 75-76).

4 EFFECTS OF POLICIES ON MIGRANT WORKERS The brief overview of the policies mentioned above during the different recent administrations shows that various shortcomings have motivated foreign workers sooner or later to leave the programme and work illegally as ordinary workers in other firms. This issue of illegal migrant workers must be resolved in an active and just manner for EPS to take root successfully. In a recent report, the E-9 visa was regarded as having the biggest responsibility for producing illegal workers (Hankyoreh, 16 February 2011). Massey (1999) concludes that ——— 18

Under Article 5 of the Act on Treatment of Foreigners in Korea, the MoJ shall re-formulate the FBPI every five years.

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although receiving countries have official policies to counter illegal migration and migrants, there is nonetheless some tacit acceptance of a ‘reasonable’ level. In some way, this holds true in the case of Korea. Some Korean studies have suggested that Korea’s choice in terms of migration policies has included the perceived impact of such policies on economic efficiency and the perception that policies might endanger the purported homogeneity within the system (Lee and Park 2005). Such researchers argue that the extremely hierarchical nature of relationships may help in understanding the orientation of migration policies (Seol and Han 2004: 49). Even among migrant worker groups, certain groups are treated differently to others, particularly if their perceived or actual status varies seriously, e.g. between documented and authorised situations. The FBPI explicitly states that the Korean diaspora will receive preferred treatment over other foreigners when all other conditions are the same (Seol and Han 2004: 11). Problems and issues are difficult to ascertain, according to some scholars, because migrant workers in Korea are employed at the bottom rungs of the labour market. Although these workers are protected under the AFWE and the LSA, their reliance on a particular employer effectively prevents them from seeking redress in the courts. Hence their labour rights are restricted since their legal presence in the country depends on their employer. Exploitation at the hands of an employer means that legal employment can be counterproductive for workers. In contrast, illegal migrants are not tied to their employer and they can leave and change their workplace at will. This is evidenced by the high rate of job mobility among illegal migrants (interview with Michel Catuira, MTU president, 8 January 2011). Lee (2007) asserts that the category of illegal worker shows a lack of firm measures within the system, in addition to high social costs for the management and supervision of illegal migrant workers. In his interview of 8 January 2011 with the author, Michel Catuira mentioned that even if workers are allowed to change workplace under the EPS (three times for genuine reasons), finding a job within the initial two months is very difficult and failure results in cancellation of their visas and their becoming illegal. The impossibility of improving their working conditions by legal means drives many legal migrant workers to leave their employers and therefore become illegal. Some of the other reasons have included a short term of stay which was not even enough to pay off the debts incurred by them to pay agents to get

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to Korea (until the introduction of EPS in 2004), restrictions on a change of workplace, wage differentials, harsh working conditions, long working hours and pro-employer policies. The following discussion will highlight how a category of illegal worker has been created out of legal workers through successive policies and, as Xiang suggests, how governments will have a harder time administering and managing labour migration without going through a third party, an area the Korean government has yet to explore (Xiang 2008).

4.1 Illegal migrant workers The construction of ‘illegal’ and the meaning of illegality are different in each country, depending on its legal, political, historical and national context. The migrant-related policies that have been introduced in Korea have created illegal workers, and their presence, despite increasing internal control, shows that these policies are not working. Coutin characterises such policies as ineffective and powerless; she asserts that these policies serve the interests of powerful businesses (in this case, during the ITTP, the KFSB or the political groups) and are involved in the legal production of illegal migrants (Coutin 2000, 2005). She goes on to ask, what is illegality? To her, it means exclusion, subjugation and repression (Coutin 2000: 30). Taking it further, De Genova (2002: 438-39) says that illegality creates a sense of deportability and hence a condition of being racialised socially that would exacerbate vulnerability. Migrant-related policies are not analysed for their attempt to reduce illegal migration but rather for their function to place illegal migrants in a more exploitable position (Sassen 1998). If we look at the ICA, we see that a foreign national may enter and reside in Korea by officially satisfying residence qualifications and meeting the terms of the residing period (ICA: Article 7, 17, 18 and 46). If found in breach of the said laws, he or she shall be subject to forcible deportation and criminal punishments. Such an outcome satisfies the conditions that Coutin and De Genova have mentioned— which include subjugation, repression and deportability within the Korean context. Migrant worker conditions are deplorable on almost all fronts—they are exploited, marginalised and severely discriminated against (AI 2006). Their situation is therefore a constant re-

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minder of the failure of the ITTP and the vagaries of the EPS. According to research by Samsung Economic and Research Institute, the E-9 visa (EPS workers) is producing more illegal workers than in any other case (Korea Times, 16 February 2011). This perceived failure of migration policies is explained by referring to the high cost of enforcement, the economic role of illegal labour, public unwillingness to punish the illegal behaviour of migrants, or the strength of the macrostructural forces of migration (Cornelius and Tsuda 2004: 9). In order to see how Korea deals with managing illegal workers, the regularisation programmes, crackdowns and deportation campaigns will be examined. 4.1.1 Regularisation schemes The term ‘regularisation schemes’ refers to any legal process (by law or in practice, explicitly or implicitly) that turns illegal migrants into legal migrants. Attempts to regularise overstayers and deserters under the prevalent immigration policy on foreign labour was first adopted by Kim Young-sam’s administration, during the introduction of the ITTP. Almost 80 percent of migrant workers were illegal at the time and most of them were either regularised or deported depending on the number of years they had spent in Korea as overstayers (Seol and Han 2004). The second regularisation drive was conducted during the Asian financial crisis in 1997 during Kim Dae-jung’s administration, when unauthorised migrants were given an option of voluntary repatriation; amnesties as well as waivers of fines were given for voluntary repatriation, with an additional one-year grace period. Almost half of the legal migrant workers moved out of Korea and amongst them a large number of illegal workers also took advantage to leave the country. Just prior to this programme, the MoJ outlined a policy directed at ITTP deserters whereby they would voluntarily report to the authorities, which would in turn lead to their transition from illegal to legal status in various sectors particularly manufacturing and construction, (Lim 2005: 12). The third regularisation was conducted when the EPS was implemented in 2004. Just before the EPS was launched in 2004, the government announced plans to deport all illegal workers, but as a result of vehement protests by pro-immigrant activists, they conceded to a proposal to grant an amnesty and a one-year visa to undocumented

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workers (Chung 2010). The MoJ stipulated that all the workers, except those who had stayed for over four years, would obtain concessions of reinstatement or official legalisation. This brought down the total number of illegal workers to less than 30 percent from the original figure of over 80 percent. Civil society groups grew increasingly critical of the conditions of regularisation and protested, without any significant changes. These roundups resulted in twelve suicides among workers who preferred to die in Korea rather than be deported back home, as they were all burdened with heavy debts (interview with Michel Catuira, 8 January 2011; KCTU 2004). 4.1.2 Crackdowns and deportations According to Ruhs and Chang (2004), labour migration policies focus on the bundle of rights that are granted to these migrant workers once they enter a country and also address the scope and number of rights for each foreign category. Unfortunately, the rights of unauthorised migrant workers are usually minimal. The authors argue that this shows that the failure to consider these rights is equal to the failure to address a core component of migrant policy (Ruhs and Chang 2004: 72). Around the world, crackdowns are considered to be an important instrument in controlling and managing illegal migrant workers. Crackdowns per se violate basic human rights. They have been taking place frequently since the 1990s in Korea. Crackdowns include acts of forceful regulation, repression, or restraint of unauthorised workers from staying in the country. ‘Deportation campaigns’ include all those measures aimed at eliminating illegality by means of physically expelling illegal migrants from the country. De Genova (2009) views this as a strict violation of the right to free movement. Crackdowns in the Korean labour migration context are a decadeold phenomenon and can be seen as the defining feature of controlling the increase in the numbers of illegal workers. These workers go into hiding, and it has been noted that, even though people are rounded up in large numbers, the situation has never improved and numbers as such continue to increase. The figures corresponding to the illegal sojourners in Table 4 below would, therefore, also correspond to the number of workers subject to crackdowns by the government and the same number would automatically become susceptible to human rights abuses.

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Table 4

Employment status of unskilled foreign workers at April 2011 (unit: persons)

Classification

Total sojourners

Legal sojourners

Illegal sojourners

Unskilled workers (total)

539,935

491,196

48,739

E-9 (EPS workers)

231,471

188,968

42,503

E-10 (Ship’s crew)

7,764

5,539

2,225

300,700

296,689

4,011

H-2 (Korean diaspora) Source: Ministry of Justice.

In 1993, the Korean government executed crackdowns on illegal workers, but this was met with resistance from employers in SMEs (Galang 2001: 20). In 1994-95, crackdowns did not target even one single manufacturing facility; instead, workers in the service sector such as restaurants were raided. In 1997, the government announced a crackdown drive with heavy penalties for both illegal workers (a fine of US$2000 for each year’s stay) as well as for their employers (repatriation costs and heavy fines were implemented). Before the start of the FIFA World Cup in 2002, the government used an additional restriction declared by the Regulatory Reform Committee, which voted for a revision of the Immigration Control Act, to punish illegal acts such as inviting a foreigner by providing a false invitation letter or reference and a premeditated act punishable by imprisonment for up to three years or penalised up to US$10,000 (Asian Workers News 2001). When the EPS was implemented in 2004, the administration conducted at least five major crackdowns in the construction, manufacturing, and video game parlor industries, during which hundreds of undocumented workers were arrested. These large-scale enforcement efforts directed towards undocumented workers were coupled with doubled penalties against employers and illegal workers who were unable to be regularised or had lost a chance of voluntary repatriation and were to be forcefully deported. Resulting in detention, these measures have over the course of time threatened human rights (Liem 2007a) Since Lee Myung-bak took office, the severity of crackdowns has increased. This has also been the main strategy of the government under the FBPI, which explicitly emphasises the importance of crackdowns in controlling the presence of unauthorised workers, with addi-

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tional powers given to immigration officers to carry out investigations (FBPI: 75). Such procedures, more often than not, result in the gross violation of human rights (AI 2006, 2008, 2009). According to figures from the Korea immigration office, 20,000 to 40,000 migrants are deported every year, serious injuries have been reported and in some cases, even deaths. Amnesty International (AI) and the National Human Rights Commission of Korea (NHRCK)19 have reported on the issue and have vigorously called for treatment of these people as human beings and not as disposable property (AI 2010). The most recent crackdowns were conducted in 2010 just before the fifth G20 summit was held in Korea in November. The situation was alarming. The MoJ offered amnesties, during which foreigners staying in the country illegally could leave and then return with a visa without getting punished. The campaign started in May and was extended up until October 2010. The government took a two-pronged approach, using both the grace period and a crackdown to reduce numbers (Korea Times, 31 August 2010). It is important to note that between crackdowns and deportations, the number of people who have lost their lives has reached over 300 since the 1990s. The latest casualty was a Vietnamese worker who lost his life on 4 November 2010 by jumping from the second floor of a building in Kǎmch’angdong to escape a raid (interview with the MTU president, 8 January 2011). There have been numerous cases in which crackdown officers have made surprise attacks on factories without legal warrants, and the breaking-down of doors and windows in dormitories and residences was reported by the Asian Human Rights Commission (AHRC 2009). Lee Myung-bak’s administration has set a monthly quota for regional immigration offices to round up illegal workers, in the process breaching both the EPS and the FBPI, where it was clearly stated that due process and protection of human rights must be upheld in the conduct of immigration procedures. The government has set a target to bring down the number of illegal aliens to 10 percent by 2012 (FBPI: 94, 95). ———

19 The National Human Rights Commission of Korea was established on 25 November 2001 as an independent national institution with a mission to ‘contribute to the establishment of democratic social foundations and fulfilment of dignity and value of mankind by upholding and promoting sacred basic human rights of all individuals’. Online: http://humanrights.go.kr/english/Immigration.jsp?board_id=IMMIGRATION (accessed 23 May 2011).

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Table 5

Apprehended immigration law violators (unit: persons)

Year

Total

Forced deportation order

2003 2004 2005 2006 2007 2008 2009 2010 2011 (1st Q)

42,906 67,734 105,212 69,674 72,712 105,941 100,337 94,232 30,067

5,861 19,307 38,019 18,574 18,462 30,576 29,043 13,474 5,488

Order to deport

2,446 1,511 2,523 901 948 1,240 1,180 1,472 540

Recommendation to deport

1,386 2,259 3,152 2,509 2,458 3,689 2,401 2,781 833

Source: Ministry of Justice.

Certainly these crackdowns have not reaped the intended results. They have brought Korea to a crossroads where the government is facing strong protest from NGOs, international organisations and civil society groups as well as unions, who have joined hands with the migrant workers in their struggle for a just system. The NHRCK in its reports has also pointed out human rights violations that have occurred during enforcement procedures involving illegal workers and issued recommendations for their rectification (NHRCK 2009). 4.1.3 Detention In contradiction to Article 12 of the Korean Constitution, which stipulates that restriction on bodily freedom can only be ordered by a judge, immigration law allows detention orders to be issued by immigration officers, a process which legalises unwarranted entry into

factories and residences in the course of immigration raids, and authorises officers to stop and search anyone suspected of being ‘in violation of immigration law’. It also allows for the presentation of detention orders after the arrest has been made rather than before. This contradiction was noted in the Special Rapporteur’s report presented in 2007 by Kajiman Khapung,20 a former MTU presi———

20 Kajiman Khapung is commonly referred to in reports and newspapers, etc. as Kajiman, his given name. He was from Nepal and was arrested and deported for his role in MTU in 2007.

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dent, along with other human rights violations that occur in the detention of irregular migrants (Khapung 2007). Korea’s detention centres are sometimes referred to as the migrant’s last hell (Seol: 2000). Detention facilities for foreigners to be deported can be categorised into two types, either the foreigner’s shelter for long-term incarceration or the shelter-room within the immigration office for one-week stays before deportees are sent out. Most of the shelter-rooms do not satisfy the minimum conditions required by the UN Standard Minimum Rules for the Treatment of Prisoners. Furthermore, the rooms are frequently overcrowded (NHRCK 2007,21 Hankyoreh, 9 February 2011). A study conducted by Van Volkenburg (2003) revealed, for instance, that the nationwide capacity of the detention centres was 1,300 people. Foreigners who are long-term detainees in shelters, for reasons such as unpaid wages or participation in a trial in process or a pending application for refugee status, are subjected to severe mental stress. Additionally, they are often in poor physical health through lack of exercise and poor housing conditions at the shelters. The only way to redress the problem is to strictly follow up the duration of stay at the detention centres and the temporary release of inmates in special cases to prevent overcrowding. A report by the Joint Committee with Migrants in Korea stated that the standard area for the accommodation of detained foreigners was about four sq m per person, which is even smaller than the 6.6 sq m of other correctional facilities (JCMK 2009: 22). The NHRCK has given warnings to the immigration office after receiving complaints from inmates. Other problems include a lack of assistance in reaching embassies, lack of notification to a lawyer or acquaintance about detention, body searches, lack of adequate clothing, poor air circulation and heating, lack of exercise time, use of handcuffs, overcrowding, and the fact that detainees spend the majority of their time locked in their cells, allowed to move around only under special circumstances such as when seeing visitors or receiving treatment in the detention centre’s medical facilities. The Global Detention Project in its 2009 country report about Korea stated that:

———

21 This report from 2007 is no longer available on the NHRCK website but can be cross-referenced from an Amnesty International Report published in September 2009 and available online: http://www2.ohchr.org/english/bodies/cescr/docs/ngos/AI_ Republic_of_Korea43.pdf.

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Korea’s immigration and detention policies have been subject to numerous criticisms. In 2009, the National Human Rights Commission of Korea (NHRCK) concluded that Article 9 of the Universal Declaration of Human Rights, Article 9 Paragraph 2 of the International Covenant on Civil and Political Rights, and Article 10 of the U.N. Principles for the Protection of All Persons under Any Form of Detention or Imprisonment are frequently violated during the arrest and detention process of irregular migrants in South Korea (NHRCK 2009, quoted by Global Detention Project 2009).

5 HUMAN RIGHTS OF MIGRANT WORKERS Ruhs (2010: 4) argues that the rights of migrant workers areG and should be analysed asGone of the three core components of labour immigration policy rather than considering them in isolation. These components include: how to regulate the number of migrants to be admitted; how to select migrants; and what rights to grant migrants after admission. Korea has fulfilled the first two components but is still struggling with the type of rights and the extent to which they should be given to migrant workers. If we look at the policy level, Korea seems to be keen in addressing the core issue of the protection of the human rights of migrant workers, and in fact one aim of the EPS was to eliminate labour rights violations (Yoon 2009). Article 5 of the LSA explicitly prohibits discrimination based on nationality in relation to employment conditions. Concrete steps were taken by Roh Moo-hyun’s government with the establishment of the National Human Rights Commission of Korea22 in 2001, which was created to address employers’ mistreatment of foreign workers, such as beatings, forced detention, withheld wages, and seizure of passports. Since its establishment, the Commission has played an important role in discussing inter-agency methods to protect foreign workers. Another significant point is how the governments, trade unions and civil society groups are taking measures to insure that migrant rights are protected. Trade unions and civil society groups that have campaigned for migrants rights are in the forefront of organising workers, including ‘illegal’ workers. When it comes to illegal workers, their situation is much worse with very few rights, even though their numbers are substantial (Abella 2003; Yoon 2010: 75). In the following section I will ——— 22

See footnote 20.

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briefly highlight the role of civil society and its collaboration with the Migrants’ Trade Union in fighting for the fundamental rights for migrant workers.

5.1 Role of civil society and trade unions Migrant workers in Korea made significant inroads in gaining rights largely because of the strong tradition of labour and civil society activism in Korea’s democratisation movement. The JCMK, which is an NGO of 150 organisations, advances the discourse on migrants’ rights and their international human rights (Lim 2003). The JCMK was formed in 1995 and ever since has worked tirelessly for the different causes and issues of migrant workers, such as lobbying for change in the ITTP in the 1990s and later for change in the EPS. As Lim has put it, the Citizen’s Coalition for Economic Justice, which has been directly involved with migrant workers since the early 1990s, mobilised many resources that migrants could not possibly achieve on their own, hence the struggle of the migrant workers was successful in gaining a degree of ‘legitimacy’ within the Korean citizenry (Lim 2005: 18). Other groups include Lawyers for a Democratic Society, Gong Gam (a non-profit public interest lawyers’ group), the Seoul Migrant Center, the Association of Foreign Worker’s Human Rights, and the Korean Confederation of Trade Unions (KCTU). Almost all of them have been engaged in the efforts of migrant workers to voice concern over crackdowns, repression, discrimination, harassment, verbal abuse, and the fundamental right for workers to unionise and to uphold the three basic rights of labour, the right to organise, to bargain collectively and to strike. The importance of these three basic rights arises through their linkage to the ‘right to existence’ and the ‘right to freedom of expression’. Choi (2004) asserts that: these three labor rights are the basic rights as ‘the right to existence’23 that has emerged as a new-era policy … Furthermore, the three labour rights are not rights that may be created through intervention by the state, but rights created without any intervention or interference by the

———

23 A reading of the ‘right to existence’ includes most economic and social rights such as the ‘right to social security’ and the ‘right to a high standard of physical and mental health’ (Choi 2004: 5).

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state; therefore, the three labour rights shall be deemed to possess the same characteristics as ‘the right to liberty’.24

The relationship of civil society to migrants can be explained by the collaboration between the struggle of migrant workers, who banded together through the Equality Trade Union-Migrants Branch, formally founded in 2001, to protest against the dehumanising conditions they faced under the ITTP and EPS regimes, and the role played by the social alliances to make inroads within the NGO network at a regional and global level. The KCTU also changed their position on migrant workers and recognised them as an affiliate and since then they have become involved in solidarity campaigns for the rights of migrant workers. The ETU, which has changed its name to ‘Migrants’ Trade Union (MTU)-Seoul-Kyǂnggi-Inch’ǂn’, submitted their application for union registration to the Seoul Labor Office (SLO) in May 2005. The following month, the SLO announced its rejection of the union’s registration. The Labor Office claimed that MTU’s members were not allowed to form a union since most of them were undocumented. MTU filed a suit against the decision with the Seoul Administrative Court, which dismissed the suit on the same grounds as the SLO. MTU appealed to the Seoul High Court and, after one year, the High Court decided that undocumented migrants had the right to form a union. The Ministry of Employment and Labour appealed against the decision of the Seoul High Court in the Seoul Supreme Court and the decision is still pending (interview with the MTU president, 8 January 2011; KCTU 2004; Liem 2007b) The LSA gives migrant workers the same rights as local workers, which include the right to unionise. The MTU, started by undocumented workers, now claims to be the only representative body of all migrants, with a membership of about 300 people, irrespective of their status. The arrests of MTU leadership since its inception have sparked wide attention from the domestic and international labour and human rights communities, and prompted an NHRCK investigation. Statements by the KCTU, Amnesty International, the AHRC and other organisations all acknowledged the targeted crackdown as an attempt to stop MTU’s union activities. The KCTU and MTU have filed a complaint with the ILO Committee on Freedom of Association in relation to this case. The MTU’s current president, Michel Catuira, a Filipino ——— 24

The ‘right to liberty’ includes most civil rights such as the ‘right to life’ and the ‘right to freedom of expression’ (Choi 2004: 5).

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national and a legal migrant worker, has continuously faced problems with the immigration office after assuming the MTU leadership (Hankyoreh, 3 March 2011). Though the number of migrant workers is close to 85 percent of the entire foreign population in Korea, MTU’s membership is low. The reasons include repression, possible cancellation of work permits and harassment from immigration officials due to the organisation’s status (interview with Michel Catuira, MTU president, 28 December 2010). Catuira further added that the MTU is a small organisation, perhaps because the vast majority of workers come from backgrounds considerably more impoverished in terms of worker rights; their consciousness has not been raised. Many of them have no idea of how a union can bring a change in their lives and they have a negative view of joining the MTU (interviews with Pakistani and Bangladeshi workers, 2 January 2011, and with the MTU president, 28 December 2010).

6 CONCLUSION The above review of immigration and labour polices shows that despite some changes, they have not achieved their goals. In light of the developments outlined above it is clear that despite government claims of initiating progress in terms of policies regarding the rights of foreigners residing in Korea, managing the growing number of illegal workers through periodic regularisation, detention, crackdowns and repatriation tactics has not been able to bear fruitful results. Despite a series of policy changes, the number of illegal migrant workers has gone up, and their vulnerability to discrimination and violations of individual rights has increased. There are a limited number of legal or institutional channels to give them the help that they urgently need. Among these, and perhaps the most active, are the civil society groups. These groups, however, are still struggling to find their place in the socio-political sphere in Korea. Incorporating these illegal workers through regularisation schemes can turn out to be the most humane way to bring them within the sphere of legality and easy management. More attention to mobility in changing workplaces and to an employer’s consent for extension of a work permit must be reconsidered. Even though the policies have been reformed over the years, targeted goals have yet to be achieved. Such goals require more realistic measures. Migrants deserve a com-

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mon standard of dignity, security and respect regardless of the reason for their dislocation and regardless of their status and their categories.

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Park, Young-bum (2004), ‘Country Report: the Republic of Korea’, Workshop on International Migration and Market in Asia, Japan Institute for Labor and Training, Tokyo, 5-6 February 2004 Ruhs, M. and Chang, H.-J. (2004), ‘The Ethics of Labor Immigration Policy’, in: International Organization, 58 (1), pp. 69-102 Ruhs, Martin (2010), ‘Migrant Rights, Immigration Policy and Human Development’, in: Journal of Human Development and Capabilities, (January). Online: http://www.compas.ox.ac.uk/fileadmin/files/pdfs/Martin_Ruhs/Migrant_rights_i mmigration_policy_and_human_development_.pdf (accessed 5 January 2011) Sassen, Saskia (1996), Losing Control: Sovereignty in an Age of Globalization, New York: Columbia University Press Sassen, Saskia (1998), Globalization and its Discontents: Essays on the New Mobility of People and Money, New York: New Press Seol, Dong-hoon (2000), ‘Past and Present of Foreign Workers in Korea 1987-2000’, in: Asia Solidarity Quarterly, 2, pp. 6-31 Seol, Dong-hoonand Han Geon-soo (2004), ‘Foreign Migrant Workers and Social Discrimination in Korea’, in: Harvard Asia Quarterly, 8 (1), pp. 45-50 Van Volkenburg, Matt (2003), ‘Drag the Illegal Foreigners Out Into the Sun’. Online: http://www.zcommunications.org/drag-the-illegal-foreign-workers-out-into-thesun-by-matt-van-volkenburg (accessed 25 May 2011) Xiang, Biao (2008), ‘Transplanting Labor in East Asia’, in: Yamashita Shinji, Makito Minami, David Haines and Jeremy Edes (eds), Transnational Migration in East Asia: Japan in a Comparative Focus, Senri Ethnological Reports 77, Osaka: National Museum of Ethnology, pp. 175-86 Yaw, Debrah A. (2002), Migrant Workers in Asia Pacific, London: Frank Cass Publishers Yoo, Kil-sang (2004), ‘Migrant Workers’ Labor Market in Korea’. Online: http:// www.kli.re.kr/kli_ehome/work/vew200004?pageNo=8&condition=&keyword= &rowNum=&year=&firstClass=&seq=233 (accessed 6 September 2010) Yoo, Kil-sang (2005), ‘Foreign Workers in the Republic of Korea’, Korea Labor Institute. Online: http://www.jil.go.jp/foreign/countryreport/2005_1107/korea_e.pdf (accessed 24 February 2011) Yoo, Kil-sang and Uh, Soo-bong (2001), ‘Immigration and Labor Market Issues in Korea’, paper presented at Workshop on International Migration and Labor Markets in Asia, Korea Labor Institute, Tokyo, February Yoon, In-jin (2009), ‘A Comparative Analysis of Immigration Policy of South Korea and Taiwan: With a Focus on Foreign Migration Workers’, in: ARI Working Papers, Series no. 3. Online: http://eng.asiaticresearch.org/bbs/view.php?bbs= ari_publishing_01&uid=13 (accessed 13 June 2011) Yoon, In-jin (2010), ‘Multicultural Minorities and Searching for Coexistence in Multicultural Korean Society’, paper presented at workshop on Incorporating Immigrants and Redefining Social Membership in a Multicultural Society, Asiatic Research Institute of Korea University, Seoul, 10 December 2010 Zolberg, Aristide R. (1999), ‘Matters of State: Theorizing Immigration Policy’, in: C. Hirschman, P. Kasinitz and J. DeWind (eds), The Handbook of International Migration: The American Experience, New York: Russell Sage Foundation, pp. 7193

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INTERVIEWS Interviews with Michel Catuira, President of the Migrant Worker’s Trade UnionSeoul, Kyǂnggi, and Inch’ǂn, Seoul, 28 December 2010 and 8 January 2011. Interview with a group of workers from Bangladesh, Pakistan and Nepal in a Focus Group interview in Ansan, Kyǂnggi province, 2 January 2011.

APPENDIX South Korea has concluded MOUs on the Entry Permit System with the following 15 countries: 1. Vietnam 2. Philippines 3. Indonesia 4. Thailand 5. Sri Lanka 6. Mongolia 7. Uzbekistan 8. Bangladesh 9. Cambodia 10. Nepal 11. Pakistan 12. Myanmar 13. East Timor 14. Kyrgyzstan 15. China

VIL(L)E ENCOUNTERS: THE US ARMED FORCES IN KOREA AND ENTERTAINMENT DISTRICTS IN AND NEAR SEOUL Elisabeth Schober

ABSTRACT Over the last few decades, criminal acts of US soldiers stationed in South Korea have been amplified by an outraged Korean public into a symbol of the at times uneven relationship between the United States and South Korea. In this article, these ‘violent imaginations’, which have GIs at their centre, are contextualised and further complicated through the exploration of two entertainment districts in and near Seoul that are nowadays popular with US Armed Forces personnel. Connected by the movement of a convicted sex offender, Geronimo Ramirez, who made his way from the peripheral town of Tongduch’ǂn to the inner city student district of Hongdae one day in January 2007, these two entertainment spaces will be put in relation to each other: the ‘Ville’ next to Camp Casey—that is, a red light district that specifically caters to US soldiers—and Hongdae, a multifarious, politically and sexually liberal entertainment space adjacent to Hongik University in downtown Seoul. Key words: militarisation, sexuality, nationalism, anti-base movement, urban studies, Seoul

1 INTRODUCTION For so long as troops have moved about in other people’s countries, the presence of camp followers, and fractious relations between soldiers and civilians, have persisted, causing anxiety and resentment amongst local populations. The long-term stationing of United States (US) forces in South Korea, which entails a continuous flow of predominantly young men sent to the country for typically short postings, presents a special case that is the outcome of inter-governmental agreements signed during the Cold War. The Korean situation (and that of neighbouring Japan) is perhaps unique, in that the agreement

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between the US and the Republic of Korea (ROK—South Korea, henceforth Korea) has long historical reasons and is seemingly open ended. The current stationing of 28,500 US soldiers is a mark of the continuing unresolved tensions on the Korean peninsula, and may reflect new American strategic thinking toward China, which has undoubtedly become a major factor in maintaining a military presence in Northeast Asia. While local hostility over the US Armed Forces’ presence in Korea is certainly not a recent phenomenon, over the last few decades it has become more systematically utilised by nationalist left-wing forces in the South. Public contestations over GI crimes (migun pǂmjoe) have led to a widespread change in attitudes among the Korean population toward the US soldiers stationed in their country. I seek to capture this shift by a focus on to what I call ‘violent imaginations’,1 a counterhegemonic discourse that portrays US soldiers as potentially aggressive (sex-)offenders on the loose in the adult entertainment districts in and near Seoul. Furthermore, with entertainment neighbourhoods being amongst the very few spaces where US soldiers and Korean civilians actually have a chance to meet, I seek to complement social imagination by providing some insights into the actual everyday encounters in these particular neighbourhoods that are marked by ambivalence and suspicion. In such a way, I shall portray the putatively more mundane aspects of the US-South Korea relationship, which has changed dramatically since the onset of democratisation. This present military alliance, it seems, is challenged by many aspects beyond ——— 1

In utilising this term, I do not seek to make a claim to fictitiousness and somehow call into question the widely distributed crime statistics published by Korean NGOs that point at rampant GI crime. Instead, I want to stress both a moment’s mediation that goes into conjuring up these depictions of soldiers (i.e. most Koreans will not have much contact with US soldiers themselves and instead rely on information provided by others), and the fact that it is significantly linked to a nationalist frame for US-Korea relations. I am inspired here by writers in Nationalism Studies who stress the dimension of imagination that goes into establishing and maintaining nations (Anderson 1991; Hobsbawm and Ranger 1983), but also by anthropological answers to such writings, such as those of Marshal Sahlins (1999) and Arjun Appadurai (1996), with the latter claiming that: ‘The world we live in today is characterized by a new role for the imagination in social life. To grasp this new role, we need to bring together the old idea of images, especially mechanically produced images (in the Frankfurt School sense); the idea of the imagined community (in Anderson’s sense); and the French idea of the imaginary (imaginaire) as a constructed landscape of collective aspirations, which is no more and no less real than the collective representations of Emile Durkheim, now mediated through the complex prism of modern media’ (Appadurai 1996: 49).

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those of (inter-)national security, which are worth exploring: the historical, political, economic, social, racial and sexual dimensions of the situation lend themselves well to the application of new concepts, approaches and interpretations, including those originating in anthropology.

2 SETTING THE SCENE: ‘IF YOU ARE IN A CERTAIN NEIGHBORHOOD ...’ On a Saturday in mid-January 2007, 23-year-old Private Geronimo Ramirez, together with another soldier friend of his, made the twohour ride from his US military base located in the remote town of Tongduch’ǂn all the way to central Seoul. First having lunch at the Dragon Hill Lodge, an Armed Forces recreation centre located inside the US Army Garrison at Yongsan in Seoul, they found that all rooms at the military hotel were booked, and decided on a sleeping arrangement outside of US territory: ‘After going out in downtown Seoul, Ramirez’s friend said he knew a motel in Hongdae, a college neighborhood known for its many bars and clubs. … The pair checked in at 10 p.m. And then went out drinking’ (Slavin and Hwang, Stars and Stripes, 19 January 2007). They drank in Hongdae until Ramirez’s buddy had had enough and went to sleep. Ramirez, however, returned to the cold streets of the neighbourhood, and kept downing beers from convenience stores by himself. Stumbling through a nearby residential area in the early morning hours, he came across a 67-yearold Korean woman who was on her way back home from a cleaning job that Sunday morning. Ramirez would beat and rape the woman repeatedly, on the street, in an alley and finally inside a building, until he was arrested by Korean police forces who had heard the woman scream for help. Ramirez, in his public letter of apology to the victim, claimed to have no recollections whatsoever of the assault; he urged the woman he assaulted not to ‘think bad of americans [sic] for everyone makes mistakes and this was mine’. He added that ‘I was suppose[d] to go home soon & get married but now i [sic] can’t i will stay here & pay for my mistakes’ (Slavin and Hwang 2007).

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The first time I hear about this rape incident is during a conversation with Jay,2 a 22-year-old US Army member whom I get to know in downtown Seoul in late 2007.3 Descending into a crowded basement bar together with two Korean acquaintances (Jay’s girlfriend, and a college friend of hers), I immediately become aware of the many stares that Jay, tall, muscular and short-haired, attracts in this location. It’s a typically noisy, tightly packed bar located in the popular Chongno district of central Seoul, and he and I seem to be the only foreign guests this evening. While his friends chat away in Korean next to us, politely but decidedly ignoring Jay’s occasional interceptions of ‘What the fuck is it that you are saying?’, Jay is keeping himself busy by returning some of the stares he receives from the neighbouring tables until the young people there nervously shift their eyes away. He only relaxes a bit when the food—grilled chicken— arrives; a little earlier we had ruled out any meal possibly containing kimch’i, with Jay asking me in mild disgust, ‘You really eat that shit?’ After some initial remarks by Jay that he would most certainly not be a good conversational partner for me—‘I’m not a good guy to talk to, in case you haven’t noticed yet. I don’t know how to deal with students. I only know how to deal with soldiers, got that?’—Jay eventually starts telling me about his off-post life in Tongduch’ǂn, a town adjacent to the US military Camp Casey about 30 km north of the capital. Asked what it is that his friends do when they have a little free time to spend, he answers straightaway, ‘Go to whores’, and then adds with an apologetic smile: ‘Sorry, but that’s just how it is. Nothing else to do up there anyways.’ In Tongduch’ǂn, bar staff, taxi drivers and sex workers employed in the ‘Ville’ area4 of the town are the only non-military people whom they ever get to meet, and beating up cab drivers, he boasts, has become almost a competition for some of his ——— 2

All names of individuals interviewed (and if deemed necessary, other locational or occupational details that could jeopardize anonymity) have been changed according to the usual anthropological standards of privacy protection. For further information on ethics in ethnographic field work, see, for instance, http://www.aaanet.org/ committees/ethics/ethcode.htm. 3 I conducted ethnographic field research in South Korea from September 2007 to June 2009 as part of my PhD studies in Sociology and Social Anthropology. I was funded by a Marie Curie Early Stage Training Fellowship (Marie Curie SocAnth) and by a Doctoral Research Support Grant from Central European University. 4 ‘Ville’ is the colloquial term used by US soldiers to signify the entertainment spaces adjacent to US bases. In the English literature on the subject, the name ‘camp town’ has become widespread, while the Korean term usually deployed is ‘kijich’on’. All three names will be used interchangeably throughout this article.

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comrades, who easily tend to get into rows over money or the supposedly rude behaviour of Korean drivers. The language of communication in Tongduch’ǂn is a mix of broken English and Korean, and Jay himself has quickly learned how to say ‘fuck off’ and ‘I’ll kill you’ in Korean; ‘that’s usually enough to drive guys away that wanna fuck with me’, he adds. The US military, Jay tells me, invests a lot of energy and monetary funds every year in ‘good publicity projects’ such as sending soldiers out to teach English at local schools for a day, sponsoring orphanages or other community development projects. ‘The idea behind this’, he adds, ‘is, of course, that there is already plenty of bad press about us out there.’ He then brings up Ramirez, whom he knew from sight, and gives me an account of the event that reflects the extreme social and geographical distance that separates him and his soldier friends, who usually hang out in camp towns near remote US military bases, from the inner-city Korean student space of Hongdae: There was this guy who was charged with raping a 60-year old woman. I know the guy, he still claims he didn’t do it. Well, I’m sure he came on to the woman, but … They were in one of those neighborhoods, you know. Where the only women you meet are prostitutes. But then, you know, the Korean media, they said that normal people are living in these areas, too. But of course, the soldiers, they don’t see it that way. If you are in a certain neighborhood, you gotta be a hooker. That’s just how they see it.

The crucial error underlying Jay’s justification of Ramirez’s actions— the old woman may have been a sex-worker after all—not only betrays a logic rampant within institutions where hegemonic masculinity has become a leading principle (see Lee Chang-hun 2010), namely that violating a sex worker somehow constitutes a lesser crime than an attack on a ‘decent’ woman. In the particular context of South Korea, it also signifies a misreading of a complex social urban space that Jay with his limited knowledge of the country, its language and its history is unable fully to grasp. Coming from a small town in Arkansas, his stay in Korea is his first time abroad. He has been in the country for less than a year, he tells me, and with his tour here coming to an end rather soon, his mind is clearly much more occupied with his upcoming deployment to the Middle East than with the intricacies of Seoul’s entertainment districts. This results in his conflation of the quasi-red light districts near US military bases, such as Tongduch’ǂn, with which he is well acquainted, with a lively inner-city entertainment

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district mainly frequented by students and artists. His idea that any Korean woman he comes across in ‘a certain neighborhood’ necessarily needs to be sexually available therefore speaks of a certain kind of displacement of decades of GI experiences and behavioural patterns in Korea—which traditionally involved easy accessibility to female Korean bodies in the confined spaces of camp towns near US military bases5—into the unknown territory of an experimental Korean student neighbourhood.

3 THE EMERGENCE OF CAMP TOWNS DURING SOUTH KOREA’S MILITARISED MODERNITY

The Korean peninsula is one of the most heavily militarised regions on this planet, where the armed face-off between the northern and southern parts of the formerly united country has now entered its sixty-first year. An armistice signed in 1953 that ended the Korean War but is challenged at regular intervals when skirmishes erupt at land or sea between the contestants, holds the parties in place along the dividing line, ironically named the Demilitarised Zone (DMZ). Aptly described as ‘the scariest place on earth’ by Bill Clinton (Havely 2003), the level of militarisation around this border is such as to have turned the edges of this buffer zone into a heavily fortified ‘dead’ space. The North Korean People’s Army has over 1.17 million soldiers constantly deployed (though not all on military duties), with an additional 7.45 million people in the reserve; large numbers of troops are stationed in close proximity to the border (Bermudez 2001: 1). The ROK’s armed forces, situated on the other side of the DMZ, currently have a standing army of around 655,000 people and another three million in the reserve. While it has been estimated that more than 30 percent (about US$8 billion) of the gross national income of the Democratic People’s Republic of Korea (North Korea) went into its defence sector in 2007, South Korea, with its US$26.3 billion defence budget, spent a sum three times larger (see Moon and Lee 2010). In the midst of such enormously large troop contingents deployed, the number of US soldiers in the country, nowadays ranging ———

5 ‘The social construction of every Korean female as a potential object of pleasure … is the most important aspect of the whole relationship [between locals and GIs] and the primary memory of Korea for generations of young American men who have served there’ (Cumings 1992: 170).

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in the lower 10,000s, seems to be almost inconsequential. However, their presence in the South is of huge symbolic significance, pointing to the breadth and depth of US political, economic and military engagement in Korea over the last 66 years. The emergence of camp town spaces—the controversial realms near US military installations—is intricately linked to South Korea’s embrace of ‘militarised modernity’, a notion that Moon Seungsook first utilised ‘to capture the peculiar combination of Foucauldian discipline and militarized violence that permeated Korean society in the process of building a modern nation in the context of the Cold War’ (Moon 2005: 7). This contradictory and violent path of militarisation intertwined with rapid industrialisation—that would lead the country towards becoming one of the wealthiest nations in the world—first emerged in the 1960s, reached its heights in the 1970s, and slowly abated from the 1980s onwards (Moon 2005: 42). After the division of the country by the US and the Soviet Union in 1945, direct US military rule and the devastation of a civil war that cost millions of lives, the year 1961 brought a military coup that would raise to the top a ruler, Park Chung-hee, who used the threat emanating from the North to implement ever more autocratic measurements to safeguard his political survival (see Lie 1998: 76). The South Korean military, in conjunction with the increasingly powerful Korean Central Intelligence Agency, both of which were lifted into power by billions of US dollars invested in the Korean security apparatus (see Brazinsky 2007: 71), now played the most crucial role in maintaining the antiCommunist state and fostering the security alliance with the US. Park, perhaps equally driven by the idea of national independence as his counterpart Kim Il Sung, while at the same time being caught in a web of economic and military dependency towards both the US and Japan after the Normalisation Treaty of 1965, placed all of his cards on a double strategy of security and economic development that had the goal of complete national sovereignty in mind. Both of these aims, however, required one thing in particular: disciplining and controlling the potentially unruly populace. ‘The rulers of the garrison state’, Harold Lasswell wrote in 1941, ‘will depend upon war scares as a means of maintaining popular willingness to forgo immediate consumption.’ He then further pointed to the tendency of the ruling military classes in such states to see themselves critically endangered by any rise of non-military consumerist desires (Lasswell 1941: 465). This old remark on a hypothetical state

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structure resonates very well with the case of the ROK post-1960, before the country’s dramatic economic take-off, and in particular with Park Chung-hee’s own reasoning displayed in his writings. At times, he saw the country plagued by a ‘monstrous, chronic disease’, triggered by the introduction of ‘American things, Western things, (and) Japanese things’, which in his view were to blame for the corrosion of national spirit and had given rise to widespread ‘laziness, corruption, vanity and luxury’. In order to shield the nation from such decadence, he viewed it as the most essential task to ‘build the economy and strengthen national defence’ (Park Chung-hee 1970: 29, quoted in Walhain 2007: 87). ‘National solidarity and total unity’, he asserted, ‘are the most important things for us in confrontation with the communist North. The most harmful things for us are corruption, impropriety, and the lack of discipline’ (emphasis added; quoted in Moon 2005: 17). In line with such beliefs, among the first decrees of Park Chunghee were the ‘Laws on the Prevention of Prostitution’ announced in 1961, which sought directly to ‘put dampers on Seoul’s raucous life after dark, centered on the exuberant Myǂng-dong district, neon signs ablaze and using almost as much precious electricity as Tokyo’s Ginza’ (Cumings 1997: 356). With the introduction of nightly energy restrictions following the oil crisis of 1973, which left Seoul in near darkness for lengthy periods until the mid-1980s (see Lankov 2007: 337), the development of larger areas for local amusement was made additionally difficult for a while. At the same time, Park and his followers advocated entertainment for US troops (and later on, for Japanese tourists going on kisaeng sex tours in Korea as well), considering this a necessity for the security of the nation and its incipient economy that craved foreign currency. Therefore, ‘contradicting its promulgation of “Laws on the Prevention of Prostitution” in 1961, the Park Chung-hee government set up a series of laws, regulations, and legal mechanisms throughout the 1960s and ‘70s that promoted the sex tourism industry and were indirectly designed to facilitate the mobilization of working class women into the sex industry’ (Lee Jin-kyung 2010: 89). As an outcome of such a strategy, sparsely populated rural areas near US bases were quickly refashioned into entertainment districts (‘camp towns’) which, aided by their quasi-extraterritorial quality, promoted a booming sex industry and other shadow market opportunities in these areas (Moon 1997; Lie 1995; Yuh 2002). While the crea-

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tion and maintenance of these camp towns was sanctioned by the Korean state in an effort to bring much-needed dollars into the Korean economy, at the same time it also allowed the containment of foreign bodies and ideas to clearly delineated areas that Park viewed as equally essential. Within such a logic, Katharine Moon explains, eventually ‘the prostitutes [working in kijich’on] have served two important social functions: containing undesirable foreign influences on the greater Korean society and preventing the prostitution and rape of “respectable” girls and women by US soldiers’ (Moon 1997: 39). Contradictorily, these places were simultaneously considered to be dangerous and polluting by ‘decent’ Koreans, who would go to great lengths to avoid them, and attributed with a mesmerising Western allure by potentially marginalised Korean women and men, who went to these areas looking for employment, distraction, or an opportunity to leave Korea behind. In particular It’aewǂn, a neighbourhood adjacent to the US Army Garrison Yongsan, came to attract various groups and individuals seeking some of the liberties they thought existed near the US base. The first generation of Korean rock musicians around Sin Chunghyǂn, for instance, learned their trade by playing the stages of all the GI clubs of the neighbourhood after the end of the Korean War (see Kim and Shin 2010; Russell 2008: 142). Eventually quite a few Korean college students and other young people started to make excursions to It’aewǂn as well, attracted by the relative freedom the proximity of the US base promised to them during the difficult years of the Yusin era (Kim Eun-shil 2004: 45). Then migrant communities from the Middle East began to settle near Seoul Central Mosque (erected in It’aewǂn in 1976; see Lankov 2007: 265); while recently, the number of African migrants, mostly from Nigeria and Ghana, in the area has risen significantly (Han Geon-soo 2003: 163, 166). Sexual minorities, too, have found It’aewǂn air to be more liberal than that of other parts of Seoul, with the gay and transgender scene assembling here since the early 1990s (see Jeon 2005). Today, while It’aewǂn still maintains a steady stream of visitors, with its central location in Seoul possibly playing a crucial role in this attraction, the same promise of illicitness has turned the ‘Ville’ areas in or near Ǎijǂngbu, P’yǂngt’aek and Tongduch’ǂn into no-go areas afflicted with much economic deprivation and social isolation. Nowadays, with most Korean sex workers more or less having left kijich’on for good in face of the decreasing value of the dollar, the arrival of foreign female entertainers from peripheral economies has even fur-

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ther solidified the disengagement of both the Korean state and its citizenry from these in-between spaces near US military bases (see Yea 2005 and Cheng 2010). Besides socio-economic factors accelerating the demise of camp towns, political contestation over the US military presence in the country starting from the 1980s specifically targeted camp town spaces as well, re-casting them as the very areas in which US domination touched ground in its most violent manifestations.

4 FROM ALLY TO AGGRESSOR: VIOLENT IMAGINATIONS AND URBAN ENTERTAINMENT DISTRICTS

‘Traditionally, the majority of the Korean people had favorable impressions about the United States mainly because of their historical experience. ... The United States was more than a friend to Korea; it was the friend, and there was no more enthusiastic ally to Koreans’, wrote Kim Jinwung (2001: 173). US soldiers—for several decades after 1945 practically the only larger group of foreigners whom Koreans came across in their daily lives—were embraced as friends because of their support in keeping the Communist threat in the North at bay. Leftist forces in the country, too, were attracted by the US for the promises of liberal democracy it stood for, with the soldiers often being viewed as signifiers and agents of the political, social and at times sexual freedoms associated with the West. But from the 1980s onward, matters changed significantly as earlier friendlier notions held about GIs were gradually undermined. A growing sense of anger over the virtual immunity provided to US military personnel through the Status of Forces Agreement (SOFA) between South Korea and the US played a significant role in this process (Feinerman 2005). Bolstered by a de facto lack of legal and social responsibility that was partly the outcome of this agreement, US soldiers routinely engaged in criminal acts that were rarely ever punished in Korean court. Statistics collected and published by Korean NGOs indicate that up to 100,000 crimes may have been committed by GIs from 1945 to 2001, many of which took place in the camp towns adjacent to US military bases (Civil Network 2001). Perhaps even more damaging to the military alliance was the structural component of the daily realpolitik of Cold War Korea, whereby local elites and their American allies repeatedly placed security concerns over those of democracy (Brazinsky 2007: 13). The ‘Copernican turn’

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which transformed Korea from one of the most pro-American countries in the world into one where anti-Americanism is a daily reality to be grappled with, argues Namhee Lee (2007), can be found in the controversial US response to the Kwangju Uprising of 1980, when the Korean military slaughtered hundreds of protesters in the town of Kwangju: ‘Partly as a result of the Chun regime’s persistent efforts to assert its close ties with the United States, the South Korean public, especially students and intellectuals, largely believed that the United States supported the military regime and its brutal crackdown in Gwangju’ (Lee 2007: 121). In the years that followed Kwangju, anti-Americanism and anti-US militarism became firmly entrenched ideological elements in the student- and worker-led minjung movement for democratisation as it sought to wrestle definitional and political power over the Korean nation out of the hands of the generals who by then had been running the country for several decades (Lee 2007: 109). After the events of 1987 when President Chun Doo-hwan was forced into resignation after week-long protests, negative perceptions about the US military eventually spread to other sectors of society as well. In the midst of the country’s slow transition from military dictatorship to liberal democracy, a few galvanising events, such as the brutal murder of a Korean sex worker, Yun Kǎm’i, that took place in Tongduch’ǂn in 1992, were to lead to widespread contestation of GI crimes. Subsequently, both in the 1990s and 2000s,6 at times hundreds of thousands of people took to the streets of Seoul and other cities, and South Korea was slowly turned into a country where ‘strong criticism of the United States has become more and more popular within nearly all social strata’ (Kern 2005: 258). In such a way, imaginations that centred on the seemingly violent nature of both the military alliance and its agents on the ground emerged as a counter-hegemonic discourse in South Korea, with the putatively dangerous kijich’on spaces playing a significant role from the outset in defining a claim for a new relationship between the ROK and the US. Tongduch’ǂn, in particular, through the inter——— 6

The murder of Yun Kǎm’i—which in this context proved to be the most significant event in the 1990s—will be discussed in the next section. Crucial controversies in the 2000s included that over the death of two middle-school students, Shim Mi-sǂn and Shin Hyo-sun, two teenagers who were killed by a US military vehicle near Tongduch’ǂn in the summer of 2002, as well as the lengthy row over the destruction of the village of Taechuri to make space for the expansion of the US military Camp Humphrey (Yeo 2006).

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mediary of the media, NGO and leftist activist representations, achieved great infamy and was turned into a household name synonymous with the darker sides of US troop deployment in South Korea. This town’s history and its subsequent emergence on the cognitive map of many Koreans as a quintessentially violent space will be explored next.

5 TONGDUCH’ǁN’S VILLE: IMAGINATIVE AND TERRITORIAL SPACE ON THE MARGINS

5.1 Early expansion When night falls in camptown, the boys start to emerge from the gate. Some guys come all by themselves, their eyes hungry for some action. Others walk in groups of two, three, four, they wander down the main street, laughing, pointing, gazing. Some hold the hands of their American, Korean, Russian or Filippina wives, with the occasional kid in tow, that’s how they enter the ‘Ville’ that clings to the walls of their military base. Blacks, Whites, Latinos, the occasional Asian American—the one thing that makes them immediately discernible as GIs is their shaven hair. Many of them tattooed in more than just one place, most of them in good shape, tall, muscled, healthy, they radiate confidence and aggressive energy. They sit down at Suzie’s café for a beer and some food, chitchat with each other or talk with the former Korean sex worker that runs the place and is always willing to talk about her halfblack teenage son and his no-good GI father that abandoned the two of them in this town, and about her never-ending desire to move to the States, to leave all of this behind. Other boys head further down, straight to one of the clubs, to meet the young Filippina woman of their choice that is waiting at the bar, all made up in a skimpy little dress. Slowly, the town awakens from its badly needed sleep, because day time is only used to nurse the hangover, to repair the damage, to fix what can be fixed; night time, again and again and again, to get wasted, ruined, laid (Field diary entry on Tongduch’ǂn, June 2009).

‘In a way, Dongducheon is like a mosaic piece, each segment of which corresponds to the phases of the Korean modernization’, writes Kim Byoung-sub (2007: 20). A closer look at the history of this town does indeed seem to prove him right. What is today’s Tongduch’ǂn is located in the very heart of the Korean peninsula, but after the division of the country into two halves this region was relegated to the status of a border zone near the dead space of the DMZ. The area had first been used by the Japanese colonialists to fuel their large-scale military en-

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terprise: prior to World War II, a small town had emerged near the roads and railways built in this region to facilitate the exploitation of the woodland and minerals that helped to fuel Japan’s Pacific war efforts. This existing infrastructure was possibly the most important reason why the US Armed Forces chose this particular location for erecting a net of military bases after the end of the Korean War in 1953 (Kim 2007: 21). In other areas of Korea, too, the American troops simply took over the foundations left behind by the Imperial Japanese Forces (for instance, what is today’s US Army Garrison Yongsan was once the headquarters of the Japanese Army). In addition to the large Camp Casey, four other bases (Camps Hovey, Castle, Mobile and Nimble) and a gun-training area were also built in the vicinity, with the land appropriated by the US military in this region amounting to a total of 40,53 sq km (Kim 2007: 21). This assemblage of land, property and people under the auspices of the US Armed Forces meant a huge concentration of wealth in a predominantly rural area that had previously only supported small-time farmers and traders. This pocket of prosperity, moreover, was transplanted into the region at a moment when the country around it lay in ruins after three years of civil war. Consequently, soon enough povertystruck Koreans would come from different parts of the country to make a living in the shadow of the bases built here. A large segment of those who came were young women who followed the troops around and offered sexual and emotional services to the young foreigners. Initially, in the years directly following the war, they were often driven by the naked wish to escape from starvation—many of them were in fact girls or very young women who had lost their parents during the war, as Katharine Moon points out in Sex Among Allies: ‘The vast majority of the prostitutes of the 1950s to the 1970s had barely completed elementary school; junior high graduates were considered highly educated among such women. Most, especially among the earlier generations of prostitutes (1950s-70s), came from poor families in Korea’s countryside, with one parent or both parents missing or unable to provide for numerous family members’ (Moon 1997: 3). With US developmental aid pouring into the country, however, life circumstances for Korea’s population slowly improved, and after the military coup in 1961, new economic plans sought to incorporate the female workforce as well into the process of rapid industrialisation (Lee Jin-Kyung 2010: 86). In the 1960s and 1970s, many of the

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women who entered Tongduch’ǂn were running away from badly paid informal-sector jobs, or from the super-exploitation taking place in the country’s many sweatshops (Lie 1998: 104). Consequently, by the mid-1960s, Tongduch’ǂn had become home to about 7,000 prostitutes making a living off the soldiers in nearby Camp Casey (Moon 1997: 28)—an incredibly high number considering that the population of the town was 7,200 in the 1950s and reached 60,000 only towards the late 1960s (Kim Byoung-sub 2007: 22). The dream of so much money to be made in the company of the rich Americans—and also the potential to perhaps one day get married to one of them and leave Korea behind for the US—fuelled many a migration from the factory to the GI club.

5.2 Marginalisation and decline After the heyday of kijich’on life during the 1960s and 1970s, when more than 20,000 Korean sex workers tended to the needs of about 60,000 troops in the country, the 1980s were already bringing the first signs of decline to the Tongduch’ǂn area and other kijich’on spaces as well: troop reductions (especially under Nixon in the 1970s) and larger political, economic and social changes in the country and the region deeply affected these areas (Moon 1997: 30). The dramatic economic ascent of South Korea that started to gain speed in the 1980s would further marginalise prostitution for US soldiers as a means of making a living, adding even more pressure to women who already suffered from the stigma attached to getting sexually involved with foreign soldiers (and particularly African-American ones). Consequently, many kijich’on sex workers now chose to move out of camp town areas to cater instead to a local clientele which could be found in the now rapidly growing entertainment districts for domestic customers (Han Jung-hwa 2001: 98). Such was the economic and social situation in the Tongduch’ǂn of the early 1990s, when this camp town became the centre of a heated debate after the gruesome death of a young Korean sex worker in the locality. On 31 November 1992, 26-year-old Yun Kǎm’i, a former factory worker who had come to Tongduch’ǂn’s camp town looking for opportunities amongst the sex workers and US soldiers in this area, was murdered by Kenneth Markle, an American soldier then 20 years old. Pictures of her mutilated corpse, revealing fully the ghastly details of the murder spread across the country within a matter of days

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through the Internet, were later flashed at protests in front of US military bases, and even brought into classrooms by educators who wanted to inform their students about the event. A Korean man born in 1982, for instance, recalled to me how one of his teachers came to his elementary school class to relay all the details of the murder to his shocked young students, warning them at the end of his tale to stay clear of camp town areas where US soldiers were to be found. Following the dissemination of news on the murder, tens of thousands of people followed the rallying call of religious, nationalist and feminist organisations to take to the streets. They demanded that Markle, Yun’s murderer, should be punished heavily and that the Status of Forces Agreement between Korea and the US, perceived as grossly unjust, should be revised again. Following Kǎm’i’s death, ‘[s]tudent groups staged violent protests while businesses, such as Korean restaurants and taxis, boycotted members of the US military. Some activists founded the “Joint Commission for Countermeasures” in order to investigate the murder case publicly. They organized press conferences, visited US military bases and demanded a public apology from US authorities’ (Kern 2005: 261). With significant parts of the anti-base movement that was first to emerge after this murder being recruited out of the nationalist left of the minjung faction, Yun’s killing indeed proved to be the one event that would bind previously disparate anti-US military forces together. The perceived domination of the southern half of the Korean peninsula by the US was now pointed up via nationalist appropriations of the dead woman, who was turned into a iconic, but mute figure for the movement. The death of Yun Kǎm’i, in such a way, triggered a process that the anthropologist Marshal Sahlins has labelled ‘structural amplification’—the conversion of a micro-history (a fight between a sex worker and her client that ended in an act of violence) into a macro-narrative that pertains to the fate of greater collectives (the potential death of the Korean nation at the hands of America). ‘Collective subjects such as nations,’ writes Sahlins (2005: 6), ‘“imagined” as they may be, take on the flesh-and-blood qualities of real-life subjects … and are accordingly acted out in interpersonal dramas, with all their attendant feelings and emotions.’ A double amplification took place during the protests following Yun’s death: specific places (i.e. the kijich’on areas adjacent to US military bases) were now turned into imagined spaces that were understood to be both national spaces of

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shame, and transnational spaces of empire, where US domination over South Korea could be felt in its most violent expression. Ostracised by Korean society as a prostitute while alive, Yun Kǎm’i was now posthumously embraced tightly as a daughter of the Korean nation: ‘Yun’s mutilated body was material evidence of imperialist violence against the bodies of Korean women. These bodies were allegorized as the “victimized” and “suffering” Korean nation. … The body of Yun Kǎm’i became a metaphorical boundary for the nation’ (Kim Hyun Sook 1998: 189). She was described as ‘the daughter of poor family’, ‘our (the Korean) daughter’, ‘a female factory worker’, ‘poor prostitute’, and ‘our nation’s daughter who dreamed for America’, her life was remembered as emblematic of that of many other Korean prostitutes: ‘“[U]nder the Stars and Stripes, the colonized bodies of our women are thrown about”’; “how did you get here, Kǎm’i?”’ (Kim 1998: 190). In the imagination of pastor Chǂn Usǂp, Yun Kǎm’i even becomes a symbol for the slow demise of a nation: ‘The death of Yun Kǎm’i is not the death of an individual. It is the death of national sovereignty; the death of national (human) capital.’ Revitalisation of the dying Korean body, in his and others’ view, could only come through driving out the American troops (Kim 1998: 191). In the midst of this dramatic symbolic reconstitution of kijich’on spaces after the Yun murder, the economic desolation of camp town areas such as Tongduch’ǂn gained further speed against the backdrop of South Korea’s economic ascent. The Korean GI club owners, faced with the dilemma of constantly dwindling numbers of local women willing to engage in sex work in the kijich’on areas, now resorted to buying labour power in economically weaker countries such as Russia or the Philippines. With the introduction of foreign workers into the entertainment business, the kijich’on of Tongduch’ǂn has managed to survive up to this point, even though constant talk of a final relocation of all US military installations in the area to P’yǂngt’aek further to the south has certainly been raising tensions in the Ville area again in recent years. A further process of marginalisation, moreover, has taken hold since the 2000s, this time affecting the spatial significance of the Ville in the layout of Tongduch’ǂn city. The building of a large dormitory town several kilometres away from the old centre of Tongduch’ǂn, that is, the camp town area near the base, has brought in many Korean commuters who typically have nothing to do with the US military.

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This development has led to the emergence of a new town centre that is further removed from the base (Kim Byoung-sub 2007: 23). And with the recent connection of this new centre to the Seoul subway system, the Ville has been even further decentralised within the boundaries of Tongduch’ǂn, as the city’s new inhabitants rigorously circumvent the US military areas in their daily activities. A curious and rather unanticipated outcome of Tongduch’ǂn’s recent urban encroachment is that it has made US soldiers themselves more mobile, as the Ville, too, was connected to the subway in 2007. This link allows the GIs to move relatively easily across the (sub)urban landscapes of the Greater Seoul Metropolitan Area. Beyond the usual troop reductions and relocations that have had a great impact on camp towns in the past, nowadays another more silent threat to the economic survival of the Ville can be found in easy access to public transportation and to glitzier entertainment districts a mere hour or two away, where sex can often be attained without monetary compensation. Faced with the progressive devaluation of kijich’on spaces, the soldiers, as will be explored in the next section, increasingly opt for escaping the Ville: in their freetime, they often seek out inner city entertainment districts instead, with their claims to a right to downtown entertainment displacing and dispersing much of the old conflict across the urban space of the capital. In such a way, Hongdae, an up-and-coming student district in the city centre that has repeatedly been portrayed in the Korean press as an area ‘contaminated’ by the presence of foreign soldiers (see Kim Chi-man 2005), has found itself at the centre of new contestation over GIs and their potentially violent behaviour in Seoul’s entertainment spaces.

6 HONGDAE AND THE EVERYDAY (DE-)MILITARISATION OF URBAN SPACE

Whoever visits Seoul nowadays will immediately get a sense that the Seoul of dark nights of the 1960s and 1970s is long gone and has given way to a city that never seems to sleep, where crowds of partiers move from one adventure to the next in the neon-lit streets of its many entertainment districts. Clusters of night clubs, karaoke joints, massage parlours and a seemingly endless number of bars can be spotted at every second corner. Starting from the late 1970s and 1980s, adult entertainment and erotic consumption, which the political elites of the

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country during the period of militarised modernity had sought to contain within the boundaries of kijich’on neighbourhoods, have now spread to many more areas of the city. After Park Chung-hee’s assassination in 1979, an increasing number of adult entertainment districts were inserted into the urban landscape of Seoul, which now catered to the growing legions of office workers who found employment in Korea’s companies and pumped their hard-earned money into the booming entertainment industry that expanded at speed. Laura Kendall (1999) writes of ‘[a] distinctive style of work-related play that encouraged many white-collar men to come home only to sleep’ and which played a crucial role in the rise of entertainment businesses in South Korea. She connects this trend with the rise of a chaebǂl-style business culture: ‘Accounts of chaebol life describe the critical importance of group carousing, sometimes combined with varying degrees of sex play, as a means of building solidarity among co-workers, and at the higher levels, for furthering business deals and gaining the good will of government officials’ (Kendall 1999: 7). Paradoxically, throughout a good part of the 1980s, even though the grip on people’s consumerist behaviour was increasingly loosening, at the same time Park’s successor, Chun Doo-hwan, was still going to great lengths to extend the subjection of all civilian life to military matters. However, the increased wealth accumulated by Korean companies, which directly translated into more political power, together with the crucial alliance forged in June 1987 between the newly emerged middle classes of company employees and the students and workers who had traditionally led the democratic movement, finally brought the era of soldiers to an end (Cumings 1997: 393). While the period that has ensued since the consolidation of democracy in the 1990s has most certainly been that of the company workers, other sections of society—mainly students and artists—have also been actively creating their own oppositional spaces in the city. The most important physical zone to emerge in the era of democratisation for these groups, who traditionally see themselves in opposition to the powers-that-be, is undoubtedly that of the student entertainment district of Hongdae. The neighbourhood around Hongik University (Hong’ik Taehakkyo), founded in 1946 and also known by its abbreviation Hongdae, has become a hub for artists and musicians, starting in the early 1990s, when a handful of live clubs opened their doors to join the few bars and coffee shops catering to the students who would

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frequent these establishments after their classes were done (Lee Muyong 2004: 70). With ever more clubs, now predominantly playing hip hop, techno and other forms of dance music that emerged in the late 1990s and early 2000s, the neighbourhood became decidedly sexier in the eyes of many: in contrast to the traditional night clubs in the entertainment districts catering to office workers, which usually meant an expensive establishment in which to enjoy the company of young women who had to be paid more or less generously for their time and attention, these new types of clubs asked for relatively little cover charge, had no female entertainers working, and generally left it to the visitors themselves to create a racy atmosphere. The sudden influx of a wealthier clientele attracted by the ever-expanding clubs also resulted in the speedy gentrification of the neighbourhood, with many of those who had previously been able to afford to live there now being driven out (Cho 2007: 23; see also Park 2004, 2007). Some quickly attributed this change to a new specimen who emerged on the Hongdae stage: foreign residents living in the larger Seoul Metropolitan Area had also started to come to the neighbourhood at weekends, much to the displeasure of the area’s original visitors. Hyo-jin, for instance, a 30year-old peace activist who used to spend her early twenties in Hongdae, stated in an interview with me: ‘[Recently] all those … sorry … all those foreigners started to come in. It totally ruined the independent culture, instead it all just became about clubbing and corporate shops and restaurants.’

6.1 Hongdae’s reaction to GI visitors Amongst the—predominantly Western—foreigners who discovered Hongdae, one group in particular was soon picked out as fundamentally being responsible for the demise of alternative Hongdae. US soldiers, who were attracted by the free-spirited atmosphere, the large concentration of entertainment facilities, and in all likelihood also the availability of a large number of young Korean women who were curious about getting to know foreigners in the clubs and bars of the area, were now being singled out. The high number of GIs caused concern to local club owners, who were afraid of losing their Korean clientele: the soldiers were rumoured to have started chartering buses to get from remoter base areas to Hongdae, and ‘GIs were becoming

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such a common sight in Hongdae that Koreans started calling it “Hong-itaewon”’ (Chun 2002). In late October 2002, some club owners decided to take action, and US soldiers coming to the neighbourhood were met with signs notifying them that they would be barred from entry to their establishments: The first thing you now see at the threshold of the 10 [Hongdae] clubs is a yellow, 60-by-45 centimeter sign in English. In bold, black capitals it says: ‘We sincerely apologize, but due to many previous bad experiences, GIs are no longer permitted to enter Hongdae clubs.’ The letters in ‘GIs’ are bright red. Right next to the sign is usually a red sign that warns, again in English: ‘Things not to do at Hong-dae clubs.’ The list provides hints at what the ‘previous bad experiences’ may have been drugs, fights and sexual harassment (Chun 2002).

Several months after the accidental deaths of Shim Mi-sǂn and Shin Hyo-sun in the summer of 2002,7 which had led to widespread protests across the country, the atmosphere that US soldiers stepped into whenever they entered Hongdae was indeed very tense, and on occasions bordered on the hysterical. An unconfirmed rumour was making the rounds at the clubs and bars at that time that ‘an American GI had stabbed a young Korean woman while she was dancing at a club, NB, that was popular with GIs. According to the rumor, the woman died immediately, and the GI was handed over to the US Army and nobody knows if he was punished.’ Club owners, together with concerned student activists from Hongik University, eventually discussed the matter and decided on a ban: ‘The students say they have seen enough of the “arrogance of GIs”, and that the soldiers “have an attitude that Koreans should be grateful that the US Army is there to protect the country”’ (Chun 2002). The US Armed Forces, alerted by all the commotion in Hongdae over the presence of their soldiers, reacted within a month and, citing ‘force-protection concerns’, put the entire neighbourhood off-limits starting from 2 December 2002. This action meant that all troops and US military-affiliated civilians, such as family members, civilian employees and contractors, had to stay out of the area from 9 p.m. to 5 a.m. This ban was lifted only on 1 May 2006, after ‘Korean National Police, US military police and force-protection officials [had] conducted a combined threat assessment, officials said’ (Flack 2007). However, seven months later an incident would force the authorities ——— 7

See footnote 6.

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to revise their position, when Army Private Geronimo Ramirez raped an elderly Korean woman at the end of a night of partying at Hongdae. Although the ban on Hongdae continues in place up to this day, the US Armed Forces now face the dilemma of unenforceability: because of the large size of the neighbourhood and the geographical distance from US bases, there is practically no way of policing the soldiers effectively as they mingle freely amongst the other civilian foreigners visiting the district. US soldiers who frequent the area despite the ban in the meantime have usually come up with a series of tactics: generally, they tend to stay away from certain venues, they often use baseball caps to cover up their short-cropped hair and on occasions pose as English teachers if asked about their profession. The fact that US soldiers are not immediately invited to join the ongoing parties makes this space even more attractive to quite a few of them. Karl, a 26-yearold US Army member stationed at the Yongsan Garrison, explains his passion for this neighbourhood to me: ‘It’s very, very far away from It’aewǂn, and all these other areas for the military. It’s more like a college town atmosphere. Cause there actually is that university right next to the place. … It feels like home.’ Karl, like other US soldiers I have met in Hongdae, no longer goes to the clubs in the area, as he could get himself in trouble with the bouncers if identified as a soldier. Instead, he hangs out in smaller bars or goes to the Hongdae playground, a little park in the heart of the neighbourhood that functions as the central gathering point for Korean punks, emos, skinheads, hippies, rastas and whoever else does not have the economic means to enter a bar or club. This small space offers itself as a ground for encounters of the most unusual kind: while sometimes late at night matters escalate into violence between various individuals and along racial lines, with some of the Korean youngsters going on a deliberate ‘Yankee hunt’, most of the time people actually find ways to co-operate in this space. Hyǂngjin, a 21-year-old Korean punk kid is seen trying to sell a home-made anti-Bush T-shirt to a young GI, whose Korean girlfriend eyes the scene with interest. Another US soldier is getting drunk with a group of Korean skinheads in a corner nearby, exchanging anecdotes about their occasionally devastating experiences in the militaries they have served in. The common denominator that allows people to sit and party together despite occasionally vastly different politics can perhaps be attributed to their mutual recognition that they are all socially, politically and to some degree economically marginalised in the country they find themselves

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in, and perhaps also to their wish to escape potentially totalising societies for the length of a night, be it that of late capitalist Korea or that of the United States Armed Forces. With the soldiers’ emergence in these liberal inner-city spaces that many of the local actors have attempted to keep free from the US military, they raise much discussion amongst those who encounter them on the nature of the US-Korea security alliance, on Korea’s place in the world, and on the state of Korea’s democracy in the late 2000s, at a time when the country still seems to be affected by militarist legacies that are the outcome of unresolved armed conflict in the region. At the same time, many Korean citizens, including those locals left behind in the economically and socially struggling kijich’on spaces, would rather prefer to keep GIs contained in the camp towns they emerged from. The challenge remains to the US Armed Forces in Korea and their leadership, who are increasingly becoming aware of the conflict over US military personnel in Korean inner-city spaces. This awareness can be seen in Donald Rumsfeld’s recently published 2002 memorandum on Korea: ‘We do need to rearrange our footprint there. We are irritating the South Korean people. What we need to do is have a smaller footprint, fewer people, and have them arranged not so much in populated areas’ (Ramstad 2011).

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A TRAJECTORY PERSPECTIVE TOWARDS RETURN MIGRATION AND DEVELOPMENT: THE CASE OF YOUNG KOREAN NEW ZEALANDER RETURNEES Jane YeonJae Lee

ABSTRACT Social scientists have been particularly interested in looking at the extent to which transnational return migrants can contribute to their home nation’s economic and societal development. Through their experiences gained overseas, returnees are seen as agents of change; they can most effectively create international bridges through their numerous transnational linkages and bring valuable skills to benefit their home nation. But along with the positive lights of being ‘skilled’ returnees, there are also negative aspects, which lead to their being seen as ‘privileged’ transnationals, who can easily move across nations and who are often not loyal to their home country. Through a qualitative study of young Korean New Zealander returnees, such notions about transnational returnees are re-examined. I argue that a greater engagement in a trajectory perspective is needed in order to understand the complexities of the implementation of return migrants and how the returnees actually experience their returns. The recurring themes of exclusion and in-betweenness emphasise the irony behind seeing returnees as agents of change and privileged transnationals. Key words: South Korea, New Zealand, return migration and development, agents of change, everyday experiences

1 INTRODUCTION Return migration1 is ‘the great unwritten chapter in the history of migration’ (King 2000: 7). Certainly within the history of Korean immigration in New Zealand, return movements are recent phenomena that have not yet been examined in depth. As indicated by data for 2007, ———

1 Return migration is the process ‘whereby people return to their country or place of origin after a significant period in another country or region’ (King 2000: 8).

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there are over four thousand ethnic Koreans with New Zealand residency or passports who now live in Korea as returnees (S.H. Lee 2008). This is a significant number of Korean New Zealander returnees, and the figure is estimated to be around 15 percent of the whole Korean population of New Zealand (Statistics New Zealand 2006). In parallel to the census data, a study from the Department of Labour has indicated that 21 percent of recent permanent immigrants to New Zealand have been absent long term, especially those from skilled groups (Merwood 2008). Apart from these imprecise comments about the increasing number of emigrating immigrants from both the sending and receiving countries, the exact number of those who return to their former country is difficult to find because of inadequate statistical data and because of the fact that they may hold more than one passport (Merwood 2008; Guzzetta 2004; Ho 2002). In this paper, I seek to discuss the social and cultural implementation of the increasing number of returning Korean New Zealander employees in South Korean society, and within such a context, to examine and understand the returnees’ everyday working experiences and their transitions of identity. In particular, I want to examine to what extent the Korean New Zealanders can be considered as agents of change in their homeland. The paper begins with a theoretical framework discussing return migrants as agents of change. I argue that a greater engagement in a trajectory perspective is needed in order to understand the complexities of the implementation of migrants’ return. Secondly, I will discuss the politics of the economic and social contexts of the South Korean job market and society, where the search for ‘global talents’ has become firmly entrenched. In setting the scene, I will depict the stories of the returnees’ individual working experiences in their homeland. The narratives are divided between the experiences of identity contestation, personal measurements of social impact, and exclusion and alienation.

2 LINKING RETURN MIGRATION, DEVELOPMENT AND TRAJECTORIES Despite some scepticism, return migrants have constantly attracted developmental attention and have been perceived as innovators and agents of change in their homeland; consequently, the policy implications of such migrants have been discussed in various works at both

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academic and policy level (Ghosh 2000; King 2000; Black and Gent 2004, 2006). Within the various intra-European return migration cases in the 1970s, those returnees who came back after many years with skills and financial aid gained overseas were perceived as innovators: The image portrayed was one of peasants-turned-innovators who, upon their return, would offer their countrymen the worldview and skills necessary for modernisation. As a result of foreign training, migrants returning to their natal villages could⎯as dedicated entrepreneurial change agents⎯wisely invest mind, body, and capital and contribute mightily to the arduous and long haul toward modernisation (Rhoades 1978: 137).

Indeed, such a positive view of return and innovation was apparent especially in return migration movements from urban to rural and wealthier to poorer nation, where the positive impact of returnees was viewed as beneficial for modernisation of the homeland. However, such a vision has also been criticised for its idealistic nature, and scholars have illustrated that in reality, change and development may not necessarily take place to great effect (Rhoades 1978; Cerase 1974; Bovenkerk 1981; Gmelch 1980). Bovenkerk, in his study ‘Why Returnees Generally do Not Turn Out to be “Agents of Change”: The Case of Suriname’ (1981) explained that Surinamese returnees from the Netherlands could not adjust themselves to their homeland society because they had already acquired overseas cultural values. Bovenkerk (1974) has attempted to illustrate what kind of factors affect the extent of positive changes that returnees can bring to their home nation. Those factors include (Bovenkerk 1981): • • • •

Actual numbers of returnees: the numbers need to be not so great as to create unequal distribution of wealth, but not so small as to have little or no effect Duration of absence: returnees should have lived overseas for the right amount of time (between ten to 12 years) to be adaptive in both cultures Social class of returnees: the higher the educational and financial status of returnees, the greater the impact they are likely to bring Preparedness (Cassarino 2004): how well prepared the returnees are prior to their return will affect their impact

More importantly, Bovenkerk (1981) and Gmelch (1980) both argue that truly successful and well-educated immigrants are more likely to settle in their overseas settings, while less successful migrants are

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more likely to return, hence their impact should not be overvalued. A similar perception is apparent in the case of Southern Italian returnees from the United States (Cerase 1974). Earlier studies commonly assumed that return migration was viewed as a failure of former migration. However, such a view has been challenged by more recent studies, where scholars have illustrated that transnationals and highly skilled immigrants are also choosing to return to their home nations to suit their own life strategy (Ley and Kobayashi 2005; Conway and Potter 2009). Conway and Potter (2007; 2009) have developed the idea of agents of change further and have argued that youthful returnees can be developmental agents in their homeland. Although the actual impact of returnees on local societies depends on how advanced the returnees are in their careers, or how culturally adaptive they can be, the ‘transnational presence’ of returnees is expected to be more meaningful and influential in today’s society (Conway and Potter 2009). For instance, Caribbean transnational return migrants are seen as human agents, where one returnee may bring changes to local farm management (Conway and Potter 2007). St Bernard (2005) has shown that overseas returnees to Puerto Rico have not only been highly educated while overseas, but have also had good local connections and knowledge which enhanced their critical role in local development. Unlike previous return migrants, who returned after retirement or because they had failed to be successful in their host societies, and consequently were not well prepared for their return (Cassarino 2004), today’s returnees are becoming much more transnational in nature, are more active and are highly skilled. A common theme to emerge from studies linking return migration and development is that there is a significant need for empirical research on those linkages (Conway and Potter 2007; King 2000; Bovenkerk 1981). Indeed, studies that see returnees as agents of change have often taken structural and economic perspectives and have not touched upon individual narratives. Conway and Potter (2007) argue that one needs to understand the returnees’ experiences on a smaller level and then scale upwards to examine the structural impact. Although the number of returnees may be small, their impact should not be underestimated (Conway and Potter 2007). Importantly, we must not forget to ask: ‘What about the perspectives of returnees themselves?’ as Jeffery and Murison point out (2011: 132). To what extent do returnees feel like agents of change in their home society?

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Do they feel as if they are valuable members of that society? Such questions have not been asked widely in return migration literature. ‘If you come back with money, they are jealous. If you come back with nothing, they ridicule you’ (Gmelch 2004: 10). In many cases, studies have demonstrated two opposing portrayals of returnees: that while they can be effective developers in economic terms, they can also generate negative social effects such as unequal distribution of wealth and tensions among the locals (King 2000). The notions of exclusion and marginalisation experienced by returnees upon their return to their homeland are apparent in a number of recent studies (Glick Schiller and Fouron 2001; Chin 2003; Tsuda 2003, 2009; Oxfeld and Long 2004; Christou 2006; Koh 2008; Wang 2008). ‘In earlier cases ... immigrants were expected to eventually return home, and longdistance nationalism2 contained a call to come and rebuild the land. To accept permanent settlement elsewhere was generally defined as national betrayal’ (Glick Shiller and Fouron 2001: 4). Similarly, Tsuda (2003) explains that in Japanese culture, even if living standards in the home country are difficult, one should endure; leaving one’s country to gain a better life overseas is considered as a betrayal and a mark of disrespect to one’s own nation. The difference in socio-economic status between the returnees and the rest of society has been regarded as a major factor generating exclusion from the receiving homeland society (Koh 2008; Long and Oxfeld 2004; Brettell 2003), while political discrimination and social power also place returnees into marginal positions within society (Tsuda 2003; Wang 2008). Nadia Kim (2009) illustrates a trajectory for second-generation Korean Americans living in Los Angeles who feel that while they are racial outsiders in America, they are cultural foreigners in Korea. Often, the economic facets of return migration have been examined from structural perspectives (Ghosh 2000), while the themes of identity development and ‘home’ have been studied by ethnographers (Long and Oxfeld 2004; Brettell 2003). The key is to link the literature of ‘return and development’ to the ethnographic studies of returnees in order to understand the complexities of structural factors at ——— 2

Long-distance nationalism is a claim to membership in a political community that stretches beyond the territorial borders of a homeland. It generates an emotional attachment that is strong enough to compel people to political and personal actions that range from displaying a home country flag to deciding to return and die in their homeland (see Glick Shiller and Fouron 2001).

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local levels. By taking a ‘trajectory perspective’, I aim to trace the individual paths which returnees took from the initial immigration phase to their early phase of acquiring their jobs, and to their working experiences. Such a perspective has also been used in differing contexts and termed as ‘migration trajectories’ (Ho 2009), ‘path-dependency perspective’ (Balaz and Williams 2007), and ‘life-history approach’ (Wallace 1994), where the authors emphasise the need to understand the individual’s pathways in relation to the larger context.

3 CONTEXT 3.1 1.5-generation Korean immigrants in New Zealand Koreans are a recent immigrant group in comparison with other ethnicities in New Zealand. In the 2006 census, the Korean population had increased to 30,792 from 19,026 in 2001. Koreans began to emigrate to New Zealand as part of the ‘new wave’ in the 1990s, when large numbers of middle-class Koreans left for Canada, Australia and New Zealand (Chang 2006). This population is highly concentrated in the largest metropolitan area, Auckland (2008 population: 1.4 million), where about two-thirds of the Korean population of New Zealand reside (Friesen 2008). Ninety-four percent of all Koreans in New Zealand are either of the first or the ‘1.5’ generation3 and 87 percent have resided in New Zealand for less than ten years (Chang 2006: 6). High proportions of Korean immigrants are well educated and many were previously employed in skilled occupations in their home country (Lidgard and Yoon 1998). However, unable to find formal employment commensurate with their skills, many became selfemployed, establishing small businesses such as dairies (also known as variety stores), restaurants, souvenir shops, cafes, travel agencies and hair salons (Lidgard 1996). A number of studies examine settlement and health issues of first-generation Korean immigrants (Lee et al. 2010; Spoonley et al. 2003; Yoon and Boyer 1995; Tan 2008), but the literature on the children of those immigrants⎯1.5-generation Korean immigrants⎯is very limited. Although an actual number is diffi———

3 Unlike first- or second-generation immigrants, ‘1.5-generation’ immigrants refer to children who migrated as part of a family unit, usually aged between six and 18 years, but who lived and experienced schooling and their formative socialisation in their country of origin (Bartley and Spoonley 2008).

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cult to arrive at, a large proportion of those children are returning to their homeland, mostly after their tertiary education. This paper considers the experiences of the 1.5-generation Korean New Zealander returnees only.

3.2 Korea’s search for global talents South Korea experienced rapid industrialisation from the 1970s, which led on in the late 1980s to the concept of globalisation (Duk 2002; J. Kim 2010). Kim Young-sam, when he was president in 1993, accelerated this development by initiating a movement towards the internationalisation of Korea, affirming ‘segyehwa’ (globalisation) as the key to developing the nation (Duk 2002; Shin 2000). With South Korea’s adherence to the World Trade Organisation (WTO), Korean markets became even more globalised, sending goods to and receiving them from all over the world. South Korea, however, learnt to globalise its markets in a hard way, with the IMF crisis of 1997, when the country faced huge economic debts to its overseas business partners (Duk 2002; Shin 2000). As a result, South Korea’s search for global talents has become significant in its drive for globalisation (Lee and Oh 2009). The search for ‘high’, ‘global’ skills is not a new phenomenon and is certainly not a Korea-specific trend either (Brown et al. 2001; Foster 2008). Foster (2008) explains that along with the increase of multinational markets and globalised firms, there is also a rising demand for new skills. Lee and Oh (2009) show that to compete to become a global leader in Korea, an individual not only needs to possess skills in multiple languages, but also needs to be culturally adaptive and open-minded. Since the IMF crisis in 1997, the South Korean government has begun to develop a new set of policies toward overseas Koreans as part of the state’s nation-building processes (Park and Chang 2005). The Overseas Korean Act of 1999 was implicitly and explicitly driven by economic interests. It was developed to build stronger relationships between the state and those overseas Korean communities with financial capital and skills (Park and Chang 2005). The act allows Korean expatriates to register as Overseas Korean local residents, a provision that gives the returnees quasi-local rights in areas such as banking, owning a house, medical insurance and pensions. This open co-ethnic Korean policy attracted a large number of overseas Koreans to return

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to South Korea for work and living. In 2005, there were around 18,000 Korean Americans living and working in South Korea (Skrentny et al. 2007), and this number has tripled over the past three years (Lee 2008). Overall, the numbers of Overseas Koreans residing back in Korea were over 90,000 in 2007 (Lee 2008; Choi 2008). Yet, how these returnees are settling back into Korean society, and whether they are actually having any positive impact, has not been studied in depth (Kang 1995; A. Kim 2009). Discussions that see humans as agents of change and development have been criticised because ‘it is not actual human beings who are an input into the production process, but one of their characteristics—their capacity to work’ (Block 1990, quoted in Brown et al. 2001: 14). In other words, this impact should be closely studied at individual levels through carefully designed qualitative studies.

4 METHODOLOGY In order to understand the links between a returnee’s personal complex story and larger societal issues, ethnographic research was necessary. The qualitative study presented in this article was based on indepth interviews and the observations of forty young Korean New Zealander returnees who have voluntarily returned to Korea over the past ten years and who participated in this research. As Bennett and Shurmer-Smith (2002: 151) state, the key to interviewing is more or less to ‘expose differences, contradictions and, in short, the complexity of unique experiences’. Along with such a methodological aim, I also took a life history approach (Wallace 1994), in order to collect information from the very initial stage of their migrating experience to New Zealand from Korea, to gain a holistic understanding. Semi-structured in-depth interviews of one to three hours in duration were conducted in settings comfortable to participants, such as cafes, restaurants, their houses or workplaces. All of the interviews were undertaken in Korean. I have taken detailed field notes on matters including the participants’ settings and their facial expressions during the interviews. These notes aided data analysis by providing a broader context for the responses. Follow-up interviews were also carried out about a month later with ten chosen participants, which offered an opportunity to ask further questions. I have also been fortunate enough to spend some time with some of the returnees in their

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everyday activities, and this allowed deeper understanding of their lives. This layered approach produced a rich account of the participants’ lives and concerns. According to ethical requirements, the interviews were audio-taped with the participants’ agreement. I had explained to the participants that all of the information gathered would be kept private and that, through the use of pseudonyms, their personal identification would not be revealed. The resultant narratives were critically read and thematically coded.

4.1 Information about the study participants Forty interview participants were identified through a snow-balling sampling method. Fifteen male and 25 female participants were chosen in the end, a balance that is representative of the actual proportion of the sexes among returnees. The age range of the participants was between 23 and 33. The majority of the participants were still single or were in a relationship; only seven participants were married. Over 75 percent of the participants had returned alone, leaving their close family members in New Zealand. Their occupations were diverse, ranging over engineers, computer scientists, designers, accountants, civil servants, lawyers, academics, home-makers and other particular professions (see Table 1). Table 1

Types of employment

Local firms Mechanical/computer engineer (3) Finance and marketing (5) International lawyer (1) Management/administrative work (4) Computer/graphic designer (4) International firms Mechanical/computer engineer (2) Finance and marketing (4) International lawyer (1) Management/administrative work (3) Computer/graphic designer (1) Researcher (1) Source: Author’s own data.

Education English teacher at institution (4) English teacher at local school (2)

Specialised jobs Civil servant (2) NGO (1) Professor (1) Graduate student (4) Clinical psychologist intern (1) Homemakers (3)

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While the majority of the participants were successful in their careers, some were unemployed. The total number of jobs is 47 (instead of 40), because some of the participants had more than one occupation. I have also included their past occupations, where participants had recently changed their jobs. This was because the narratives in the results section were inclusive of their recent past and present working experiences. I have grouped the types of employment in four broad categories. It is also important to note that their motivations for returning included various individual and structural factors such as employment, family, and searching for a better quality of life. Figure 1 illustrates in general fashion the study participants’ motivations for return. Work and employment had the highest rate (19 percent of responses). New Zealand was seen as a difficult location to find a job and, on the other hand, Korea was seen as having a bigger market with more opportunities. Family was another prominent cause for return and included reasons such as parents and siblings having also returned, having close and extended family members in Korea who offered jobs, and being influenced by parents’ suggestion. Personal reasons (11 percent) included factors such as religious belief, a car accident, a problem with friends in New Zealand, and health issues. Not being happy with their life in New Zealand (9 percent) and wanting to have a new experience in Korea (12 percent) were also factors. Those who returned mainly because, for various reasons, they were unhappy with living in New Zealand also tended to be longing for a new experience in Korea. A ‘homing instinct’ (8 percent) correlated with the theme of wanting ‘to be included’ (6 percent). Those who had a strong desire to be with their own ethnic group had a stronger attachment towards their home country and felt that Korea was their home. A small proportion (5 percent) of the participants also said that marriage was their main reason to return. Although only a few of the participants indicated this as their ‘main reason’, later in the interviews more participants conveyed their desire to find their future spouse in Korea. ‘Ethnic ties’ (3 percent) was another reason.

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Figure 1 Main reasons for return migration

Source: Author’s own data, 2010.

5 TRAJECTORIES OF THE RETURNEES’ WORKING EXPERIENCES The various working trajectories of the Korean New Zealander returnees have been divided into three major themes. The first one was their transition in identity from being ethnic minorities to being cultural minorities. When they entered the workforce in Korea, they soon realised that their Korean identities were contested. The second one was the returnees’ own perception and measurement of their value in the Korean job market. The last recurring theme was the experiences of exclusion and alienation in their work. Two case studies are presented in this part.

5.1 Identification with the ‘privileged’ identity of Kyop’o (overseas Koreans) The two broad discourses of return migrants as agents of change and privileged transnationals affected the everyday lives of Korean New Zealander returnees in both positive and negative terms. The re-

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turnees’ narratives illustrate that no matter how they felt about themselves, they were often stereotyped or seen as different from the local Koreans on the basis of their overseas status. The majority of the returnees indicated that they were often stereotyped as different once they became known as Kyop’o to others. Mary Seo (28, F) indicated that whatever she did at work, she got judged because her co-workers knew that she was from New Zealand: People tend to think that when you are from overseas, you don’t have polite manners to your co-workers. So, whenever I show certain (polite) manners, they tell me that I’m not like any other overseas Koreans and judge me very positively. On the other side, when I say things out front to others, they say that I do this because I’m from overseas (Seo, 23 April 2009).

As Mary said, whether as positive or negative aspects, returnees’ actions were seen as different because they were Kyop’o. Similarly to Mary, David Kim (26, M) felt strongly that he did not want his coworkers to know that he was from New Zealand: I don’t want any spotlight on me because I’m from overseas. You know, it’s like ... I don’t like that look of ‘he doesn’t know anything’ ... For instance, if they (co-workers) find out that I’m from overseas, I think it creates more disrespect for me than respect. I don’t like it when people just assume and say ‘you probably don’t know this ...’ and often, I hear this when they are talking about army experience or university experience ... it’s not that I get hurt or really offended, it’s really no big deal, but it does annoy me a little (David Kim, 29 April 2009).

Although David said that ‘it’s no big deal’, his Kyop’o identity was a distraction in his everyday life. Alicia Choi (26, F) felt that the fact that Kyop’o were seen differently in Korean society was because Korean people were still reluctant to accept different cultures and other ethnicities. Alicia felt that had she worked in New Zealand, she would have felt less different in comparison to her experiences of alienation in Korea: If I tried harder and found a job in New Zealand and mingled with the co-workers, like going to work parties and BBQs, I would have been accepted more and wouldn’t be seen as much different from the rest of the kiwis. But here (in Korea), I am always seen differently ... just from not knowing certain Korean words, they think that it’s because I’m a New Zealander. Nobody accepts me fully as a Korean person here (Choi, 13 May 2009).

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Such a narrative illustrates that being cultural outsiders can be experienced as a bigger stress than being ethnic outsiders, as sharing a similar culture is seen as more important when it comes to acceptance. Along with the fact that returnees were seen as cultural outsiders, there were certain perceptions that returnees from the West were privileged: They tend to think that I was privileged living overseas. However, they don’t realise that we had to go through a lot of difficulties by growing up in New Zealand as 1.5 kids. You know the things that we had to go through, helping out with our parents’ businesses and having to adjust to a new culture wasn’t easy in the beginning (Raymond Kim, 16 March 2009).

Similarly to Raymond, a number of other returnees have also indicated the experience of being seen as rich and privileged. Helen Park (26, F), for instance, thought that Korean New Zealanders did go through a better education system when compared to Koreans: We grew up in a good environment ... For instance, we didn’t have to study as hard as Korean kids do, and Korean people may think that we achieve things too easily ...? People see me like that very often…they think that I probably grew up without any difficulties, they tend to think that we didn’t have any hardships in our lives (Park, 21 April 2009).

Although Helen felt that Korean New Zealanders were privileged to a certain extent, she did not agree with the view that Korean New Zealanders ‘don’t know any hardships’. Such a ‘privileged’ discourse about Kyop’o from the West is constructed because of the English skills that the returnees possess. These are seen as something highly valuable in Korean society. With their English skills, returnees have a higher possibility of getting into professional jobs (Lee and Oh 2009). A number of the returnees showed irritation towards those who viewed their skill in English as something that came naturally just from being Kyop’o, as the locals did not respect the hardship behind gaining that skill. As Korean New Zealander returnees are mostly of the 1.5 generation, they still remember the difficult days of their school years when they could not speak any English at all. Unlike second-generation immigrants, they had to work extra hours each day in order to gain their English skills.

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5.2 Can Korean New Zealander return migrants be considered as agents of change? When such a question was raised during interviews, the majority of the participants showed great enthusiasm towards the topic, demonstrating the important role they have in Korean society as agents of change. Kyle Oh (30, M), who was working as a graphic designer in Korea, said that it is important to have overseas Korean employees like himself in his company: I think returnees bring many benefits to our company ... not to mention the kinds of international networks that we are creating ... but I think in general, returnees bring back something valuable to the society. Things are changing rapidly these days and we (Korea) are becoming a global society. I feel that returnees have a great role in this process. For instance, at our work, I found that returnee workers are way more creative compared to local Korean employees (Oh, 26 April 2009).

Kyle had a number of returnee workers at his work, including those whohad returned from Australia and America. He explained that the company employer liked to have overseas Koreans because they tended to think ‘outside of the square’ and their work tended to be more innovative.Similarly, Eric Ham (29, M), who was working as a technical sales representative, believed that he was in a better position to globalise the company when compared to the local Korean workers: I really think that people like us (returnees) should be placed in many different companies in order for Korean firms to be globalised smoothly. For instance, you can learn to be a ‘global leader’ in theory, but when it comes to real circumstances, I’ve seen so many Korean people not being able to speak English properly to foreign collaborators. On the other side, whenever I go on an overseas business trip, I am able to interact well with others because I can speak English and I can also easily relate to them. Through having much better communication, I am able to do a task much more effectively. I am not trying to say that I am any smarter or better qualified compared to the local Korean workers, but I am saying that I could work more naturally in a global setting (Ham, 20 May 2009).

Eric explained that because he was working well, he was put in charge of many international projects, which helped him to be promoted at work. Although he realised that his position at work could be seen as a threat to other co-workers, Eric believed that with his overseas experience he was a valuable member of his company. Such accounts from both Kyle and Eric would seem to back up the finding from Lee and

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Oh (2009) that returnees as a group of skilled workers are valued not only for their English skills, but for their ability to work innovatively, for displaying cultural awareness and being open-minded. A large number of the Korean New Zealander returnees chose to become English teachers in their homeland. The English-teaching sector has increased dramatically in Korea over the last ten years and it is now common for primary and secondary schools and for various English-language institutions to employ native speakers as English teachers. As 1.5-generation English teachers, the returnees’ role was unique and not like that of the foreign teachers. David Kim, who was working as an English teacher at a local primary school, explained that he was different from the rest of his co-workers—American or Canadian English teachers—because he had a strong Korean ethnic tie: I feel that those English teachers from America or Canada just come to Korea to earn money and experience Korean culture, not because they particularly enjoy teaching or they like kids. But because I’m Korean, I care about the students more and teach with more concers for each student (David Kim, 29 April 2009).

Such a view was shared by a number of other returnees who were working as English teachers. A number of such teachers also stated that because they could speak Korean as well, they were able to communicate with the students’ parents for giving feedback and explaining their child’s progress at school. Michelle Jo (25, F) demonstrated that the returnee teachers could do multiple tasks at work because they could also speak Korean: Because I am bilingual, my boss gives me extra administrative jobs such as consulting with parents and writing reports. Then I am actually employed as a ‘native speaking’ teacher, so I get paid the same amount as the other English teachers receive (Jo, 9 May 2009).

Michelle was employed as a native-speaking teacher under the work contract, yet her task involved more than that done by foreign English teachers. Although Michelle did not enjoy having too many tasks at work, she mentioned that her position in charge of managerial roles led to her becoming the head English teacher. Michael Lee (28, M) returned to Korea and started working for the New Zealand embassy in the education sector. He explains that because he is a 1.5-generation person, he understands both Korean and New Zealand culture and that this is a merit in his job:

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I know that there are plenty of other people out there who have better working experiences than me. However, with my cultural and social understanding of both countries, I have been making many changes in the education policy between Korea and New Zealand (Lee, 6 April 2009).

It seemed that while the number of Korean New Zealander returnees may be smaller in comparison to Korean Americans or Korean Canadians, they equally brought valuable skills back to Korean society in various forms and at various levels. Perhaps the 1.5-generation returnees were most valuable, following Bovenkerk’s argument (1981), because they had lived overseas for ‘just the right amount of time’ to be culturally adaptive in both Korean and New Zealand cultures. Unlike the second- or third-generation returnees, they showed greater enthusiasm and loyalty towards the development of their homeland.

5.3 Conflict, exclusion and jealousy The experience of exclusion and alienation was a dominant theme that ran through most of the participants’ working experiences. While in section 5.1, I illustrated their exposure to identity contestation, which was a more discreet aspect of the exclusionary experience, here I share some of the extreme incidents of alienation through two case studies, those of Helen and Richard. Helen returned to South Korea when she graduated from university at the age of 21. She graduated at a very young age because she was able to commence her tertiary studies by skipping her senior year at high school.4 When she returned to Korea in 2005, she was able to find her first job easily because there was a high demand for professionals with English-language skills that year. She was appointed as the quality auditor of a leading international pharmacy company. Her first year at work was very smooth. Everyone welcomed her to the company. A number of the senior executive workers asked her for help with projects that required English. She was considered to be a highly valuable member of her team. However, when she was promoted to a higher position, she started to feel excluded:

——— 4

In New Zealand, it is not uncommon for students with high grades at their junior year to skip their final year at school and commence their university education early.

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As you know ... I was employed at a very young age. Then I got promoted very quickly after I started working for the firm. I think my other co-workers think that I got promoted only because of my English skills ... But that is really not true. Because I had English skills, I was involved in many important international projects, so I worked extremely hard and worked extra hours compared to others. So I think I deserved to be promoted, but that’s not what others think ... so I felt that when I got promoted, others were talking behind my back. I certainly knew that others were thinking badly of me when one co-worker explicitly told me at a work dinner that she hated me because I’m getting promoted faster than others for doing nothing ...! I didn’t really care what others thought. But I was really hurt by this one co-worker whom I have become friends with. When I realised that she was acting strangely to me (after the promotion), I was really annoyed and hurt. I used to commute with her everyday and we were really close you know ... but after all, she was not a true friend (Park, 21 April 2009).

Helen was hurt not only by her co-workers’ exclusion, but at losing, after her promotion, a friend she had had. This friend was an older woman who helped her a lot when she was first settling in at her workplace. She used to explain Korean culture and norms to Helen and made her feel at home. Helen further explained how it was difficult for her to make friends in Korea because for some reason, she was always made to feel different from those around her. She tended to protect herself from becoming close friends with Koreans because she was afraid of getting hurt again. Although she really enjoyed her work, as she said further, the ‘people problem’ that she had made it harder to settle permanently in Korea. Not many years later, Helen moved to Singapore because she did not like Korea anymore. Richard Yoon (28, M) grew up in a small town in New Zealand. After graduating from university, he was employed as a software developer at a computer engineering company in Seoul. As with Helen, Richard was promoted quite quickly, compared to his co-workers, because he was in charge of many international projects. Although he could have been a valuable member of his team, he eventually quit his job and went back to New Zealand: So this incident happened a few weeks after I got promoted ... It was at a work’s drink party ... The general manager was telling me that I was no longer promoted and that I would be put back into my old position because I had been doing poor work over the last month. I was like what the h***? Then I eventually found out that the general manager changed my last month’s work report and moved all of what I have achieved to under his name!! I just couldn’t believe that things like this could actually happen in a real world you know ... I knew that most

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people at work knew that this thing had happened as it became quite a huge issue. Then the funny thing is ... nobody blamed the manager and just acted real quiet about it. I just couldn’t take it anymore. Just thinking about it now makes me angry (Yoon, 17 June 2009).

Richard discussed further why he could not fit into his work in Korea. Unlike his male co-workers, Richard had not served in the South Korean army for two years. Hence, he was much younger than his coworkers and could not share the same army culture. Richard felt that when he had to manage workers who were older than him, he could sense that they were less respectful towards him. Despite all the discreet forms of alienation and exclusion, Richard continued his work, as he enjoyed working for the firm. However, when the above incident happened, he felt humiliated and undervalued. It was time for him to ‘escape’ from all the hatred. Both Helen and Richard were valuable workers in their companies. They were first hired because they both possessed the high, global skills that were needed for their firms. However, because their coworkers were jealous of their fast promotions, Helen and Richard both experienced exclusion and alienation. Despite the fact that they could have made valuable contributions to their companies, they could no longer work and had to leave Korea. What made it more unsatisfactory for both Helen and Richard was that they had both wanted to return to Korea because they missed ‘home’ and wanted to be closer to their own people. Richard especially, who had grown up in a small town near Auckland where there were not many Korean people around, wanted to be close to his own ethnic group again. However, being cultural outsiders, they could not be accepted into Korean society.

6 CONCLUSION This paper has attempted to take a trajectory perspective on the structural implementation of the return of Korean New Zealander workers to South Korea. Firstly, I have examined the changing economic context of Korean society, where the search for global talents has become significant. (Indeed, there has been a national attempt to attract overseas Koreans through the development of lenient policies; see Park and Chang 2005.) On a surface level, the Korean New Zealander returnees were seen as a useful group of potential global talents who

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possessed overseas experience and skills. Although the number of Korean New Zealander returnee workers may seem insignificant, their impact on the globalisation of South Korean companies should not be undervalued. Through an in-depth qualitative study of Korean New Zealander returnees, I have examined individual working trajectories in order to understand closely the relationship between return and development. I have illustrated how the returnees experience their workplaces and whether they feel that they are contributing to national development. The majority of the returnees have indicated that they were often stereotyped as different once their co-workers knew they were Kyop’o. They were often seen as more individualistic, ignorant of Korean culture, rich and privileged. Importantly, despite their strong ethnic ties to Korea, they were always seen as cultural outsiders. I have demonstrated furthermore through the returnees’ stories that the barriers between returnees and locals are still prevalent in Korean society. The sense of being ‘othered’—whether it be in a discreet or explicit manner—was the initial working experience that was shared by all of the study participants. Despite experiences of identity contestation at work, a number of returnees conveyed their usefulness in the Korean job market. I have illustrated how the returnees fulfilled their role as ‘agents of change’ in various individual work settings. Within the design industry, one returnee has indicated that returnee designers had a significant role in their company for bringing in ideas and innovations that are different from those of local Korean designers. Eric Ham, who was working for a financial company, stated that with his English skills and cultural understanding, he was much more effective and adaptive at working on global projects, therby helping his company to become globalised smoothly. Within the English-language education sector, a number of returnee English teachers showed that they were working in multiple tasks because of their ability to speak both English and Korean. Being 1.5-generation immigrants, the returnee workers generally saw themselves to be valuable members in their jobs for having openmindedness towards different cultures. More importantly, they displayed great enthusiasm and loyalty toward the the development of the homeland. The stories of Helen and Richard were presented as strong case studies, depicting experiences of exclusion and jealousy at work because of returnees’ ‘privileged’ positions. Such a ‘privileged’ position,

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however, was something that the returnees had to strive for, but in the case of Helen and Richard it was not a happy experience. Both of these two ‘fled’ South Korea because they could no longer go through the feelings of alienation and exclusion. Williams and Balaz have suggested in their study (2005) that in order to measure the impact of returnees on their local home society, we should examine not only how many skills the returnees possess, but also how much social recognition they receive from their home nation. As shown in the case of Helen and Richard, while they could both have been valuable members of their firms in the process of globalisation, they were not socially accepted. Hence, Korea lost its human capital resource. While it may seem to be an abstract ambition to understand the connections between return and development, a trajectory perspective of qualitative accounts can give vivid narratives of how innovative linkages may or may not be achieved through return migration. In the case of Korean New Zealander returnees, they seem to be making small, but significant changes at the local level. However, the narratives of identity contestation, alienation and exclusion suggest that there needs to be a better awareness and acceptance of overseas Koreans in Korean society in order for the returnees to make sustainable development where all the parties involved are satisfied.

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REFERENCES Balaz, Vladimir and Allan M. Williams (2007), ‘Path-Dependency and Path-Creating Perspectives on Migration Trajectories: The Economic Experiences of Vietnamese Migrants in Slovakia’, in: International Migration, 45 (2), pp. 37-67 Bartley, Allen J. and Paul Spoonley (2008), ‘Intergenerational Transnationalism: The In-Betweenness of 1.5 Generation Asian Migrants in New Zealand’, in: International Migration, 46 (4), pp. 63-84 Bennett, Katy and Pamela Shurmer-Smith (2002), ‘Writing Conversation’, in: Melanie Limb and Claire Dwyer (eds), Qualitative Methodologies for Geographers: Issues and Debates, London: Arnold, pp. 251-63 Black, Richard and Saskia Gent (2004), ‘Defining, Measuring and Influencing Sustainable Return: The Case of the Balkans’, Working Paper Series WP-T7, Sussex Development Research Centre on Migration, Globalisation and Poverty, Sussex University Black, Richard and Saskia Gent (2006), ‘Sustainable Return in Post-Conflict Context’, in: International Migration, 44 (3), pp. 15-38 Block, F. (1990), Post Industrial Possibilities: A Critique of Economic Discourse, Berkeley CA: University of California Press Bovenkerk, F. (1974), The Sociology of Return Migration: A Bibliographic Essay, The Hague: Martinus Nijhoff Bovenkerk, F. (1981), ‘Why Returnees Generally Do Not Turn Out to Be “Agents of Change”: The Case of Suriname’, in: Nieuwe West Indische Gids, 55, pp. 154-73 Brettell, C. (2003), Anthropology and Migration: Essays on Transnationalism, Ethnicity, and Identity, Lanham MD: Rowman & Littlefield Publishers Brown, Phillip, Andy Green and Hugh Lauder (eds) (2001), High Skills: Globalization, Competitiveness, and Skill Formation, Oxford: Oxford University Press Cassarino, Jean-Pierre (2004), ‘Theorising Return Migration: The Conceptual Approach to Return Migrants Revisited’, in: International Journal on Multicultural Societies, 6, pp. 253-79 Cerase, F. (1974), ‘Expectations and Reality: A Case Study of Return Migration From the United States to Southern Italy’, in: International Migration Review, 8, pp. 245-62 Chang, S. (2006), The Global Silicon Valley Home: Lives and Landscapes within Taiwanese American Trans-Pacific Culture, Palo Alto CA: Stanford University Press Chin, James Kong (2003), ‘Multiple Identities Among the Returned Overseas Chinese in Hong Kong’, in: Michael Charney, Brenda Yeoh and Tong Chee Kiong (eds), Chinese Migrants Abroad: Cultural, Educational and Social Dimensions of the Chinese Diaspora, Singapore: Singapore University Press and World Scientific Publishing Co., pp. 63-82 Choi, S. (2008), ‘Conflict over the Admission of Korean Diasporic Communities in China and Russia: “Why?”’ (chungguk rǂsia tongp’o ch’eryuchagyǂk nollan wae?), in: Overseas Koreans’ Newspaper. Online: http://www.dongponews.net/ (accessed 29 August 2008) Christou, Anastasia (2006), Narratives of Place, Culture and Identity: SecondGeneration Greek-Americans Return ‘Home’, Amsterdam: Amsterdam University Press Conway, Dennis and Robert Potter (2007), ‘Caribbean Transnational Return Migrants as Agents of Change’, in: Blackwell Geography Compass, 1, pp. 25-45

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Conway, Dennis and Robert Potter (ed.) (2009), Return Migration of the ‘Next Generations’: Twenty-First Century Transnational Mobility, Aldershot, Surrey,UK: Ashgate Duk, Y.J. (2002), ‘Globalization and Recent Changes to Daily Life in the Republic of Korea’, in: J. Lewis and A. Sesay (eds), Korea and Globalisation: Politics, Economics and Culture, London: Routledge, pp. 10-35 Foster, Michael (2008), ‘The Global Talent Crisis’, in: Bloomberg Businessweek, 19 September 2008 Friesen, Ward (2008), Diverse Auckland: The Face of New Zealand in the 21st Century?, Auckland: University of Auckland Ghosh, Bimal (2000), ‘Return Migration: Reshaping Policy Approaches’, in: Bimal Ghosh (ed.), Return Migration: Journey of Hope or Despair?, Geneva: International Organisation for Migration and UN, pp. 181-226 Glick Schiller, Nina and G. Fouron (2001), Georges Woke Up Laughing: Long Distance Nationalism and the Search for Home, Durham NC: Duke University Press Gmelch, George (1980), ‘Return Migration’, in: Annual Review of Anthropology, 9, pp. 135-59 Gmelch, George (2004), ‘West Indian Migrants and Their Rediscovery of Barbados’, in: Lynellyn Long and Ellen Oxfeld (eds), Coming Home? Refugees, Migrants, and Those Who Stayed Behind, Philadelphia: University of Pennsylvania, pp. 206-224 Guzzetta, Charles (2004), ‘Return Migration: An Overview’, in: Journal of Immigrant & Refugee Services, 2 (1 and 2), pp. 109-117 Ho, Elaine Lynn-Ee (2009), ‘Migration Trajectories of “Highly Skilled” Middling Transnationals: Singaporean Transmigrants in London’, in: Population, Space and Place, 17 (1), pp. 116-29 Ho, Elsie (2002), ‘Multi-Local Residence, Transnational Networks: Chinese “Astronaut” Families in New Zealand’, in: Asian and Pacific Migration Journal, 11 (1), pp. 145-64 Jeffery, Laura and Jude Murison (2011), ‘The Temporal, Social, Spatial, and Legal Dimensions of Return and Onward Migration’, in: Population, Space and Place, 17 (2), pp. 131-39 Kang, Su Dol (1995), ‘Data on International Migration in Korea’, in: Asian and Pacific Migration Journal 4 (4), pp. 579-84 Kim, Annice E. (2009), ‘Global Migration and South Korea: Foreign Workers, Foreign Brides and the Making of a Multicultural Society’, in: Ethnic and Racial Studies, 32 (1), pp. 70-92 Kim, J. (2010), ‘Globalisation of Global Firms’ (sinhǎngguk kǎllobǂl kiǂptǎrǎi kǎllobǂlhwa yǂngu), paper presented at the 2008 Korean International Conference of Economics Studies, Sookmyung Women’s University, Seoul, 9 November 2008, Seoul: Korean Academy of International Business Management, pp. 21-44 Kim, Nadia (2009), ‘Finding Our Way Home: Korean Americans, “Homeland” Trips, and Cultural Foreignness’, in: Takeyuki Tsuda (ed.), Diasporic Homecomings: Ethnic Return Migration in Comparative Perspective, Palo Alto CA: Stanford University Press, pp. 305-324 King, Russell (2000), ‘Generalizations from the History of Return Migration’, in: Bimal Ghosh (ed.), Return Migration: Journey of Hope or Despair?, Geneva: International Organisation for Migration and UN, pp. 7-56 Koh, P. (2008), ‘Vietnam’s Familiar Strangers: Returning Overseas Vietnamese and the Ssymbolic (Re)construction of Homeland’, paper presented at Conference of Return Migration in Asia: Experiences, Ideologies and Politics, National University of Singapore, 31 July-1 August

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Lee, C. and H. Oh (2009), ‘International discussion on the development of world talent’ (kǎllobǂl hwangyǂngpyǂnhwa’e taebihan ch’ǂngsonyǂn injaekaebal chǂllyage kwanhan kukchehaksulhoeǎi), conference held at Seoul National University, 2008, Seoul: National Youth Policy Institute. Online: http://lib.nypi.re.kr/ pdfs/2009/28.pdf Lee, Jane YeonJae, Robin A. Kearns and Wardlow Friesen (2010), ‘Seeking Affective Health Care: Korean Immigrants’ Use of Homeland Medical Services’, in: Health and Place, 16 (1), pp. 108-115 Lee, S.H. (2008), ‘“Overseas Korean Residency”: No Settlement Policy’ (‘kungnae kǂso singojǎng’ chǂgch’aek mothae), in: Overseas Koreans’ Newspaper. Online: http://www.dongponews.net/ (accessed 6 March 2008) Ley, David and Audrey Kobayashi (2005), ‘Back to Hong Kong: Return Migration or Transnational Sojourn?’, in: Global Networks, 5 (2), pp. 111-127 Lidgard, Jacqueline (1996), ‘East Asian Migration to Aotearoa/New Zealand: Perspectives of Some New Arrivals’, Hamilton NZ: Population Studies Centre of the University of Waikato Lidgard, Jacqueline and H.K. Yoon (1998), ‘The Employment Experiences of Recent Korean Immigrants in New Zealand’, in: Philip Morrison (ed.), Labour, Employment and Work in New Zealand, Wellington, The Victoria University of Wellington, pp. 263-75 Merwood, P. (2008), Migration Trends 2006/07, Wellington NZ: Department of Labour Oxfeld, Ellen and Lynellyn Long (2004), ‘Introduction: Toward an Ethnography of Return’, in: Lynellyn Long and Ellen Oxfeld (eds), Coming Home? Refugees, Migrants, and Those Who Stayed Behind, Philadephia: University of Pennsylvania, pp. 1-15 Park, Jung-Sun and Paul Y. Chang (2005), ‘Contention in the Construction of a Global Korean Community: The Case of the Overseas Korean Act’, in: Journal of Korean Studies, 10 (1), pp. 1-27 Rhoades, R. (1978), ‘Intra-European Return Migration and Rural Development: Lessons from the Spanish Case’, in: Human Organization, 37 (2), pp. 136-47 Shin, D.-M. (2000), ‘Social Welfare Policy during the Kim Young-sam Government: Globalization and Social Welfare’, Ph.D. dissertation, Ewha Women’s University, Seoul Skrentny, John, Stephanie Chan, Jon Fox and Denis Kim (2007), ‘Defining Nations in Asia and Europe: A Comparative Analysis of Ethnic Return Migration Policy’, in: International Migration Review, 41, pp. 793-825 Spoonley, Paul, Richard Bedford and Cluny Macpherson (2003), ‘Divided Loyalties and Fractured Sovereignty: Transnationalism and the Nation-state in Aotearoa/ New Zealand’, in: Journal of Ethnic and Migration Studies, 29 (1), pp. 27-46 St Bernard, Godfrey (2005), ‘Return Migration to Trinidad and Tobago: Motives, Consequences and the Prospects of Re-migration’, in: Robert B. Potter, Dennis Conway and Joan Phillips (eds), The Experience of Return Migration: Caribbean Perspectives, Aldershot, Surrey UK; Burlington VT: Ashgate, pp. 157-82 Statistics New Zealand (2006), 2006 Census. Online: http://www.stats.govt.nz/ Census/2006CensusHomePage.aspx (accessed 14 April 2011) Tan, L. (2008), ‘Health System “Failing Asians”’, in: New Zealand Herald, 26 June 2008 Tsuda, Takeyuki (2003), Strangers in the Ethnic Homeland: Japanese Brazilian Return Migration in Transnational Perspective, New York: Columbia University Press

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Tsuda, Takeyuki (ed.) (2009), Diasporic Homecomings: Ethnic Return Migration in Comparative Perspective, Palo Alto CA: Stanford University Press Wallace, J. Brandon (1994), ‘Life Stories’, in: Jaber F. Gubrium and Andrea Sankar (eds), Qualitative Methods in Aging Research, Thousand Oaks CA: Sage, pp. 137-54 Wang, Cangbai, (2008), ‘Re-defining Return in Asian Migration: The Case of China’, paper presented at Conference of Return Migration in Asia: Experiences, Ideologies and Politics, National University of Singapore, 31 July-1 August Williams, Allan M. and Vladimir Balaz (2005), ‘What Human Capital, Which Migrants? Returned Skilled Migration to Slovakia from the UK’, in: International Migration Review, 39 (2), pp. 439-68 Yoon, H. and T. Boyer (1995), An ethno-geography of Taiwanese, Japanese and Filipino immigrants in Auckland, Auckland: Department of Geography, University of Auckland

INTERVIEWS Choi, Alicia, female, aged 26, interviewed on 13 May 2009 Ham, Eric, male, aged 29, interviewed on 20 May 2009 Jo, Michelle, female, aged 25, interviewed on 9 May 2009 Kim, David, male, aged 26, interviewed on 29 April 2009 Kim, Raymond, male, aged 32, interviewed on 16 March 2009 Lee, Michael, male, aged 28, interviewed on 6 April 2009 Oh, Kyle, male, aged 30, interviewed on 26 April 2009 Park, Helen, female, interviewed on 21 April 2009 Seo, Mary, female, 28, interviewed on 23 April 2009 Yoon, Richard, male, 28, interviewed on 17 June 2009

CONNECTING EAST ASIANS IN EUROPE: THE POWER OF KOREAN POPULAR CULTURE Sang-Yeon Sung1

ABSTRACT This paper studies popular culture in the daily lives of East Asians living in Vienna. It shows that these immigrants maintain connections with their homelands in part by consuming Korean pop culture, which they consider to be generally Asian and therefore useful in articulating a transnational East Asian identity. Many hesitate to admit that Korean pop culture plays an important role in their identity formation, but because of it they have found new common interests. Those who had previously confirmed their existence only through the West are finding new opportunities to construct an alternate consciousness by sharing popular culture, largely because it breeds a creative form of hybridisation, which works toward sustaining local identities in global contexts. How audiences identify with what they see and hear is important in their derivation of pleasure from media consumption. Key words: popular culture, transnationalism, migration, East Asian identity, Korean wave, transnational community

1 INTRODUCTION Factors such as the high speed of the Internet, multiple cable channels and media globalisation have led to the possibility of dynamic cultural exchanges within East Asia. Recent discussion of East Asian media is centred on the idea of ‘East Asian popular culture’ in the global scene, and the cultural imperialism of the West is no longer a topic of concern (Chua 2006). Consuming East Asian popular culture has gradually become part of the daily routine in contemporary East Asian society, and this transnational consumption is not only connecting East ——— 1

This work was supported by an Academy of Korean Studies Grant, funded by the South Korean government (MEST, Basic Research Promotion Fund) (AKS-2009-FA 438008).

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Asians more closely together, but also creating a special kind of transnational consumer group among East Asian emigrants. If earlier studies of immigrants focused on assimilation into the receiving culture or analysed how immigrants struggle to remain in contact with the home culture, the new trend focuses on how immigrants develop their dual or even multiple identities in the transnational community. Because of globalisation, terms such as multiple identities, transnational community, and multilayered citizenship have come to the fore. Unlike previous immigrants, today’s migrants orient their lives towards two or more societies and develop transnational communities and consciousnesses (Castles 2002: 1146). They tend to focus on the new, receiving culture while remaining part of their community in the country of origin (Madsen and Van Naerssen 2003: 68). For these migrants as transnational members of society, the consumption of popular culture plays an integral role in community-building and identity-construction. Popular culture plays a weighty role in the daily lives of East Asians, possibly more so than in other regions, such as Europe as a whole (as suggested by Katzenstein 2005: 88). Television dramas can be a topic of daily conversation, and pop stars can act as cultural ambassadors of the nation. Consequently, to gain more cultural power in the region, each nation is trying to contribute to the East Asian pop cultural flow and to attract more regional fans. With the Internet and cable channels well developed, the role that popular culture is playing as a soft power of the nation is immense. According to Vicky Cheng, a section chief at the international affairs division of the Tourism Bureau in the Ministry of Transportation and Communications of the Republic of China (Taiwan), where she was interviewed: Unlike Asians, Europeans or Americans are not interested in Asian pop stars or pop culture in general. Therefore, we use different strategy when targeting global travellers. But for Asian travellers, I think using celebrity to create an image they like to promote is the best way to promote Taiwan (interview with author, 25 March 2011).

As evidenced by my earlier works and interviews, I emphasise the important role of popular culture in East Asian nations and argue that popular culture is a key to understanding how East Asians are articulating their identity in the 21st century.

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1.1 The popular cultural scene in East Asia The contemporary East Asian popular cultural landscape is full of Asian products. If you visit Taiwan, for example, popular culture from neighbouring nations forms a great part of the contemporary cultural landscape there. Japanese pop songs are often heard in the street, South Korean soap operas can be seen on local television programmes at almost any time of day, and photos of Hong Kong pop stars are often seen in public. East Asian teenagers no longer yearn for American pop music and Hollywood movies as they used to: now, they are fascinated by the popular culture of the Asian region. In the 20th century, East Asia was dominated by Western culture—more strictly speaking, American popular culture. East Asians preferred to consume Western popular culture and considered Western culture superior to theirs. Because of aggressive promotion and marketing by Japan and South Korea and the eagerness of each nation to compete in the regional cultural scene, East Asian pop culture has very much taken the place of Western culture. Asians today prefer to consume popular culture that evokes their own cultural and historical background while appearing visually more attractive to them. Starting in the 1980s, popular cultural products have increasingly criss-crossed national borders of the East Asian countries and come to constitute part of the culture of consumption that defines everyday life. This perceptible cultural interchange allows for the discursive construction of ‘East Asian popular culture’ as an object of analysis (Chua 2004: 202). The circulation of popular culture within East Asia started with the development of media technology, particularly in the 1990s, ‘the decade of Asia’ in various senses. Especially, the astonishing economic growth of the region has made Asian nations more confident in the face of Western cultural and economic power. Iwabuchi (2002: 152) has emphasised the development of communication technologies in initiatives by massive transnational media corporations, such as News Corp, Sony and Disney, which have facilitated the immediate circulation of media images and texts worldwide. The US popular-culture industry still dominates the airwaves and large and small screens and is unlikely to be displaced soon, but East Asian popular culture has claimed a significant piece of the regional economy. The possibility and realisation of a transnational East Asian identity, eased by the production and consumption of popular culture, remain experimental questions in each of the East Asian locations.

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2 AIMS AND METHODOLOGY This paper is based on ethnographic research on consumption patterns among East Asians living in the Austrian capital, Vienna. The main research questions of this research are: ‘Does Korean pop culture play a central role in the articulation of transnational East Asian identity?’ and ‘Do East Asians feel at home while consuming Korean pop culture?’ (The pop culture in question is specifically that of South Korea.) The reason that this research focuses on Korean popular culture is because it is the most recent pop culture in East Asia since the mid1990s. In this paper, I demonstrate that East Asian immigrants in Vienna maintain their sense of East Asian community by consuming Korean pop culture, which they consider to be ‘Asian’, and that therefore Korean pop culture plays a significant part in the articulation of transnational East Asian identity. The analysis of consuming behaviour and the reasons expressed through interviews will show how these immigrants articulate their transnational identity as remaining as East Asians while integrating into Europe. Research for this paper consists of ethnographical work done between 1 March 2009 and 28 February 2010 in Vienna. Around 20 personal interviews and 20 website interviews (at www.sysung.at) were the main tools used in this study. The subjects of interviews were firstand second-generation Chinese, Japanese, Taiwanese and South Koreans, whose ages were between 20 and 60, and who were currently living in the Austrian capital. The interviews, basically focusing on the subjects’ daily consumption of popular culture and the reasons for their consumer behaviour, were conducted in English, German, Korean and Chinese, and the answers were recorded and transcribed so as to produce concrete results. Although website research was used in this research, this paper focuses on the results of personal interviews, which are more effective in uncovering East Asians’ sense of cultural identity and cultural connections with their homelands and how they wanted to articulate themselves. .

3 EAST ASIANS IN AUSTRIA Much study of East Asian immigrants has been done by American scholars (Espiritu 1992; Olsen 1997; Padilla 1985; Pyke 2000), building on experience acquired through their long history of studying im-

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migration in a multi-ethnic and multicultural society. Ethnic minorities in the US have been approached through many disciplines and seen from a variety of scholarly perspectives; however, the study of East Asian Americans tends to look at East Asians as a ‘model minority’ (Oyserman and Sakamoto 1997), or to explore their struggle to assimilate with American society by stressing family values and education (Kagitcibasi 1996). Most earlier works have assumed that minorities are constantly struggling to assimilate within the dominant culture in which they are living; however, recent work has begun to explore how Asian Americans define themselves (Ling and Chung 1996; Oda 1996), and has not focused on how they try to assimilate or how they are perceived by the dominant society. More within ethnographic research has been done to understand their identity construction as Asian Americans (Padilla 1985). In contrast, East Asians in Europe are still an unexplored research topic. This fact can be explained by the restricted history of East Asian immigration into Europe and the small numbers of migrants involved. Within Europe, a preoccupying concern has always been the relationship between the predominant cultures of Western Europe and those of the ‘major minorities’ in Eastern Europe, to which is now added the debate over the impact of Muslim culture. From a European perspective, East Asians do not form a group of comparable interest. Since East Asians do not create any group conflict as minorities or with the dominant group, and they tend to keep to themselves within their communities, extensive research on them in Europe has not been undertaken. A few works on the topic exist. These include ethnographical works, such as Flemming Christiansen’s book Chinatown Europe (2003) and Pál Nyíri’s article (1999) on new Chinese migrants, which explore Chinese overseas identity in Europe. In Austria within the last few decades, the number of East Asians has been increasing. Research done by the Japanese Ministry of Internal Affairs and Communication shows that the number of Japanese living in Austria increased from 1,173 to 2,047 between 1985 and 2007. South Koreans began emigrating to Austria 50 years ago as nurses to support Austrian hospitals, and the number of Koreans living in Austria is now approximately 2,500.2 The number of Taiwanese ——— 2 The Overseas Korean Society of Austria is preparing compilation of a book about ‘fifty years of history of Korean immigration in Austria’ and is planning to build a ‘Korea Cultural House’ to promote Korean culture and ease interaction with Austrians and people of various ethnicities in Vienna.

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living in Vienna is approaching 3,000. The exact number of Chinese is hard to measure because of undocumented immigration, but it certainly increasing. No scholarly work has been done to understand the East Asian community in Austria, despite its becoming more active. Through my research, I hope to extend somewhat our knowledge of an emerging taste in Europe among East Asian immigrants for cultural products that reinforce links with their home countries, taking the various East Asian groups living in Vienna as the test bed. Scholars from various fields have written about the powerful impact of popular and consumer cultures on youth identities and cultures (Appadurai 1990; Giroux 1994; Pyke 2000). They have argued furthermore that, for young people from immigrant families, popular and consumer cultures are significant sources of information about being who they are (Olsen 1997; Pyke 2000). Observation of East Asians in Austria confirms that the consumption of popular culture is a significant marker of their self-identity. They have different tastes and preferences by genre and nation, but all participants in my study agreed that they preferred to watch or listen to East Asian pop culture and that consuming East Asian pop culture keeps them in closer touch with their hometowns.

4 EAST ASIAN POP CULTURE: THE BACKGROUND The emergence of the regional circulation of popular culture in East Asia was led by Japan, which can be said to have been the leader that set the industry standard, the major producer and exporter. Since the early 1990s, Japanese mass culture has spread through East Asia. The new Asianism appearing in contemporary Japan is the product of ‘constructing cultural similarity with the rest of Asia through popular culture and urban consumption’ (Iwabuchi 2001). Japan’s cultural industries are creating new similarities between Japan and other parts of Asia. Since the mid-1990s, Japan’s mass cultural products and lifestyle have become cutting edge throughout East Asia, offering a complement to or substitute for Hollywood (Katzenstein 2005). Japanese family television dramas and horror movies, and the familiar cuteness of Pokemon characters, are popular cultural products, which sell in Asia because they resonate with existing cultural repertoires. By the early 2000s, Japan faced increased competition from the aggressive export of similar products from South Korea, where the gov-

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ernment had targeted the export of Korean popular culture as a new economic initiative, in response to the 1997 Asian regional financial crisis. President Kim Dae-jung, who boasted that he was the ‘president of culture’, established the Basic Law for the Cultural Industry Promotion in 1999 by allocating a budget of US$148.5 million to this project (Choe 1999). In developing their cultural industry, South Koreans have emulated and appropriated American cultural industries, with ‘Learning from Hollywood’ as a slogan. Along the way, they have added their own twists to foreign styles and forms, by interpolating their indigenous traits and unique flourishes in innovative ways (Shim 2006: 35). In 1999, a Korean blockbuster film, Shiri, was shown in Japan, Hong Kong, Taiwan and Singapore, receiving critical acclaim and drawing large audiences; it earned US$14 million at the Japanese box office (Kim Young-shin 2000). Since then, Korean films have become regular features in cinemas across Asia. When the Korean film Joint Security Area opened in Japan on 26 May 2001, it became the first Asian import in the Japanese film market to be shown on as many as 280 screens (M. Kim 2001). Furthermore, Hollywood studios are eager to buy remake rights to Korean films. For example, DreamWorks SKG paid US$2 million for the remake rights to the Korean horror film A Tale of Two Sisters; that was twice what the studio had paid for the Japanese horror movie The Ring a few years before (Ho 2003). Korean television drama started to fill the channels of Taiwan, Japan and Hong Kong (Chua 2006). Winter Sonata (kyǂul yǂn’ga) attracted many Japanese women in 2003 and was so popular that NHK decided to replay it in 2004. The main actor, Bae Yong-joon, is still the most welcomed foreign actor in Japan. In 2004, too, the Korean ancient drama Jewel in the Palace (taechanggǎm) became very popular among East Asians, especially in Taiwan, and from that success, all the Chinese-speaking countries started to import it.

5 KOREAN WAVE AND KOREAN NATION BRANDING Observing consumer patterns of East Asians in Vienna for several years outside of my research, I have come to realise that Asians tend to consume a great deal of South Korean pop culture. In casual conversations, many Taiwanese and Japanese in particular have spoken about how they purchase Korean television dramas and how much

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they like to watch them. These observations and conversations with many East Asians show that popular cultural trends in the homeland affect their consumption behaviour. For example, while visiting their home country, when they have found out what pop music is popular, they tend to purchase CDs of it on the way back to Vienna. Many have thus already watched television dramas popular in their homelands. Through such exposure, Korean pop culture seems to be the most popular product among East Asians in Vienna; since 2000, it has most definitely been one of the trendiest pop cultures among East Asians (Sung 2008, 2010). Through this paper, I explore how East Asian pop culture started to circulate amid the phenomenon of the Korean Wave (hallyu), which gave Korean pop culture the central role in the East Asian pop-cultural scene. The Korean Wave, a trend incorporating South Korean soap operas, films and pop music, has spread all over East Asia, interconnecting East Asians as well as making them more competitive with each other. Experts who have studied hallyu have observed that a common East Asian cultural sentiment, which stands in direct opposition to Western culture, has been the essential reason for its success (Kim Hyun-mi 2005; Shim 2006; Sung 2008). Though hallyu has been a sudden phenomenon, its effect on the perception of South Korea in neighbouring countries is impressive. Products that have recently been attributed to the Korean Wave are said to possess the distinction of evoking a sense of familiarity among people in Asia (Cho 2005: 177). The popularity of South Korean television dramas in Asia owes much to Confucian-based values, such as the traditional family, respect for the elderly, and a preference for sons (Kim 2005: 187). The popularity of Korean pop culture has much to do with the emergence of global consumers, who choose their culture on the basis of individual preference and orientation, rather than nationality. Taiwan, China, and Hong Kong are more active receivers of Korean and Japanese products at this moment. Taiwan stands at the centre of the East Asian pop circle because of its openness to importing foreign products. This openness and motivation to accept foreign culture, to develop fan clubs and to participate in global society have made Taiwan one of the biggest importers of Japanese and Korean products. By 2000, it had become the largest importer of South Korean television dramas. In less than a decade, South Korea has become a media powerhouse in East and South Asia. It has gone through an astonishing pe-

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riod of economic development and democratisation, but it is still seen in many countries as an exotic unknown or an unimportant nation. According to Simon Anholt’s Nation Brand Index, released in 2008, it ranked 33rd among 50 countries. This index is ‘a report card for countries, measuring the world’s perception of each nation as if it were a public brand’; among the highest ten ‘most positively perceived countries, the ranking reveals a strong correlation between a nation’s overall brand and its economic status’ (Nation Branding Info 2008). Dissatisfied with the result, the South Korean government in January 2009 launched an ambitious nation-branding programme, claiming that South Korea’s global image lagged behind what South Koreans thought the nation deserved.3 Euh Yoo-dae, president of Korea’s Nation Branding, reported to President Lee Myung-Bak with a ten-point action plan to upgrade the national image.4 Because the South Korean government is constantly making an effort to use Korean pop culture as one of its main strategies to increase South Korea’s status in East Asia, the power of Korean pop culture will probably have a stable future in the region.

6 ASSESSMENT OF KOREAN POP CULTURE IN AUSTRIA East Asians consume popular culture in many different ways: they buy it from their home country and online shopping malls, and they borrow it from friends, but the most important way in which they have constant contact with it is through the Internet. The Internet is a vital condition of their patterns of consumption because it provides the easiest and most convenient way to purchase products and update news. Without it, East Asians in Austria would be unable to consume all the cultural products they want with the same speed as in their homelands. Respondents mentioned that they use it to stay in touch with their families in Asia and to keep up with cultural trends. ———

3 See Alena Schmuck’s article in this volume on ‘Nation Branding in South Korea: A Modern Continuation of the Developmental State?’ for a fuller discussion. 4 The plan included these steps: to promote taekwondo; to dispatch 3,000 volunteers abroad every year; to adopt the Korean Wave programme; to introduce the Global Korea scholarship; to adopt the Campus Asia programme; to increase external aid; to develop state-of-the-art technologies; to nurture culture and tourism industries; to treat foreigners and multicultural families better; and to help Koreans become ‘global citizens’.

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The most important question I raised in this research is whether East Asians are consuming East Asian products and what patterns of consuming East Asian products are connecting them in Vienna. I wanted to understand whether they considered South Korean popular culture to be ‘East Asian’ because it contains an Asian cultural core and Asian sentiments, or if they were just following the trend in their home towns. Therefore, through my research, I directly and indirectly asked if consuming Korean pop culture was based on Asian sentiments contained in Korean popular culture. Many interviewees agreed that Korean popular culture contains strong Asian sentiments, which all East Asians can assimilate, and their main reason for purchasing Korean pop culture is because of these Asian values; however, although many Japanese mentioned that they love Korean pop culture because it brings a nostalgic feeling of ‘Asia’, they emphasised that they were Japanese and not East Asians. It seemed that Japanese long for their Asianness through popular culture, but they struggle to identify themselves as ‘East Asians’. It ironic that all the Japanese interviewees were so fond of South Korean products and praised the fact that Korean products contain ‘Asianness’, but hesitated to claim that all East Asians have similar cultural backgrounds. Akemi Oki, a 40-year-old Japanese woman in Austria, told me: I like Korean soap opera because all the story and contents are more sentimental then Japanese ones. In Japan, it is hard to find these stories like Korean soap opera anymore. In my mother’s generation, we used to have these Asian-feeling dramas, but [they are] no longer popular in Japan. The Asian sentimental stories are no longer produced. That is the main reason that our mothers’ generation feels very close to Korean television dramas, because it reminds them of their childhood while watching Korean soap opera. No other foreign products can attract Japanese as much as Korean dramas (interview with author, 22 March 2009).

She pointed out that Korean popular culture contains an Asian core, and that is the main reason for Japanese to consume it, but she refused to identify herself as East Asian, and she pointedly called herself Japanese. To my question whether she felt there was some bonding between East Asians through hallyu, she again said, ‘I am Japanese and not Asian’ (interview with author, 22 March 2009).

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Akiko,5 who is 45 years old, married to an Austrian and a resident of Vienna for 15 years, showed great affection for Korean pop culture. According to her, ‘I love Korean men. Bae Yong Joon is the most attractive man I ever saw. We cannot find this kind of actor in Japan. So tall and has this intelligent look. Japanese women love Korean actors’ (interview with author, 22 March 2009). She told me that she purchases Korean films or dramas regularly through the Internet. According to her, ‘I sometimes watch Korean drama all night. It is so romantic. I sometimes think how can Korean men be so romantic when they are Asian. I sometimes miss Asia when I am watching Korean dramas’ (interview with author, 22 March 2009). Hann-Wei Chen, a second-generation Taiwanese living in Austria, commented that ‘Korean TV series still convey traditional Confucian values that might be one reason for success in East Asian countries, foremost in China and Taiwan, where modern TV series mostly lack of [sic] these values’ (website interview with author, 11 February 2010). Mr Chen is married to a Japanese woman and therefore has more awareness of Japanese pop trends, but he still told me that he likes to watch Korean films or listen to Korean pop. He added: I personally like Japanese pop culture more. I just think it is more attractive for me because Japanese pop has been long history in Taiwan. But when I go back to Taiwan, I see so many people who like Korean pop culture and therefore, I also can have easy accesses to Korean pop culture. I think it is not bad, and I enjoy it as well (interview with author, 11 February 2010).

Many Taiwanese and Chinese of the older generations favour South Korean television dramas. Ms Zhang, a 60-year-old Taiwanese, said: I love Korean dramas. I watched almost everything that was popular in Taiwan. Every time I go back home, my friends will burn the Korean drama to me. Jewel in the Palace is my favourite one. I am just amazed how they can make the drama so realistically. They are just so touching. I cry all the time when I watch (interview with author, 3 December 2009).

Ms Chang, a 45-year-old Taiwanese, said: I watch Korean drama many times. I also like Korean films. They are really well made, and it portrays more Asian life than Japanese ones. Japanese ones are just trendy and well made, but sometimes it is not realistic in Taiwanese life. Korean dramas are more ‘Asian’ to me. Maybe

——— 5

Akiko is not her real name. She refused to put her actual name in the text.

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that is why I watch Korean drama so often: because I miss home (interview with author, 5 September 2009).

The East Asian fondness for Korean popular culture is not based only on Asian sentiment: an important factor is that Korean pop culture indicates cultural hybridity. Culture is nowadays neither produced nor consumed in a single country. The Korean Wave fits perfectly into the demands of a globalised world, and this calls for sensitivity in dealing with cultural issues. A product designed for global markets does not necessarily contribute to the formation of genuine cultural links between East Asians, other than common consumption habits, said one interviewee. The less identifiable a particular cultural item is with a single locality, the more cultural acquisition is possible for everybody. Therefore, one thing is clear: ‘hybridity sells!’ What all the answers have in common was the opinion that South Korean popular culture combines high quality (which can rival that of Western cultural products) with an Asian voice and face (which make it easier to identify with the content of the product). According to an interviewee identified as C, who refused to give his name: I first started to like Korean pop music because of their look and performance. After getting to know more, it is really Western blend of Asian pop music. I think that is the most attractive part of Korean pop music. You kinda get every mixture of culture (interview with author, 1 March 2010).

Jenny (a nickname) also said Korean pop music is really trendy. According to her: Korean pop is really up to date. I love their fast beat and their well made videos. I like Mandarin pop as well but only because I can understand the lyrics. I still love to listen to K-pop although I don’t understand the lyrics. It is never boring (interview with author, 9 February 2010).

Another interviewee, Tomas (again, a nickname), said: Although I am only half Japanese, I love Japanese and Korean pop culture. I feel very comfortable viewing or listening. Korean or Japanese pop are no longer really boring. My Austrian friends also like them a lot. I think because they are not something like transnational. Visually more western but still has this Asian thing (interview with author, 29 January 2010).

Another pertinent factor raised during research is that South Korean movies and dramas deal with themes that appeal to all sorts of specta-

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tors, regardless of geographical and cultural location. They typically deal with love and family issues, but unlike Western movies and dramas, they emphasise filial piety. Chinese and Japanese people rediscover an Asian identity by watching Korean television dramas: they identify Korean historical dramas with Confucianism and humanism. These dramas illustrate a balance between tradition and modernisation, and ‘emphasize care and respect mediated by tight social ties in family, nation, and so forth’ (Yoon 2008). According to interviewee Yi Chung: In our church, we have a lot of people who watch Korean drama regularly. I know few friends who watch it very often. I am not in [sic] fan of dramas, but I can understand why they like Korean drama so much. It deals with a lot of ethics we forget in the modern days. Like respecting our parents or value of traditional culture. Like in the story of Jewel in the Palace, Koreans really well delivered their traditional culture. Everybody loves Korean food after watching that drama (interview with the author, 3 December 2009).

It seems that the older generation (from around the end of their forties to their sixties) prefers Korean dramas because they contain more Asian values. Generally, the research proves that the older generation favours Korean television drama, while the younger generation (2540) prefers Korea pop music because of the hybridity and trendiness. A further angle could be that South Koreans feel the need to portray Korea in a positive light to non-Koreans. This could be a reason that hallyu does not display elements unique to Korean culture or elements of traditional culture that the producers feel may not be modern enough. As one of the interviewees claimed, a deep-seated desire among South Koreans is not to appear backward, and this attitude can be seen in the cultural products that Koreans export. Many interviewees revealed that through the consumption of Korean pop culture, their image of South Korea had changed greatly. Most of them commented that they had had neither negative nor positive feelings towards South Korea, but that after experiencing Korean pop culture, they had begun to become interested in Korean culture and Koreans. Some interviewees were unsure whether the image of South Korea was positive or ambiguous, but most said it had changed during the previous ten years. Many reasons were mentioned for this change, among which was Korean pop culture. Some interviewees were of the view that Korea is an economically developed country, and that Korean companies like Hyundai and Samsung were accepted

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as unique Korean brands worldwide. Others said that the World Cup in 2002 was a turning point in the perception of Korea: from that moment on, the representation of South Korea in East Asian media had changed in a positive way. Most interviewees stated that they thought the change was due to the influence of Korean popular culture. A few said that, ten years before, nobody had had any knowledge about South Korea, and that this situation has changed because Korean pop culture has advertised a certain image of Koreans. Some interviewees said that because of Korea’s popular culture and status in the East, Koreans are treated in a friendlier way. From my own research (Sung 2010), I have demonstrated that Taiwanese consumption of soap operas, films, and music videos exemplifying the Korean Wave has transformed and reconstructed the image of South Korea in Taiwan.

7 CONCLUSION: IS POPULAR CULTURE BONDING THE EAST ASIAN COMMUNITY IN VIENNA? Asia has never been culturally homogeneous. The adjective ‘Asian’ is complicated by an enormous number of possible cultural references, from culturally homogeneous countries in East Asia, such as Japan and Korea, to multi-ethnic/multiracial/multicultural/multilingual/multi-religious postcolonial nations in Southeast and South Asia. The imaginary unity of this grouping lies in the possibility of constructing an East Asian identity. Such a mission is a long-standing project. In the early 1990s, in the days of the rise of capital in East Asia, these countries were imagined to be a coherent cultural unit under the label of the ‘dragon economies’ (Vogel 2006). The increased circulation of East Asian popular culture is still a growing phenomenon. Hallyu, in particular, is a new trend in the cultural landscape, one that started to be noticed only at the end of the 1990s. Its speed of circulation is narrowing the geographical, social and psychological distance among Asians by providing topics for conversation, stimulating tourism and offering opportunities for diverse meetings. Instead of admiring Western popular culture, Asians are finding opportunities to construct an alternate consciousness by sharing a popular culture similar to their own. In this sense, Korean pop culture plays a key role in the rebuilding of an East Asian identity. In this article, South Korean pop culture has been shown to play a vital role in articulating East Asian identity in Austria. These residents

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of Vienna, by consuming Korean popular culture that they consider to contain an East Asian cultural core and sentiment, and by consuming the same products as other East Asians, are creating a transnational community. Many hesitate to admit that Korean pop culture plays an important role in constructing East Asian regional identity, but it seems to be true that, because of hallyu, East Asians in Austria have found new common interests. I saw strong nationalism among the people of each East Asian country, but it is clear that Korean popular culture has become a favourite cultural icon from contemporary Asia, and this popularity has led overseas East Asians to buy Korean popular culture through the Internet, even in a foreign setting. NonWesterners who have so far confirmed their existence only through the West are finding new opportunities to construct an alternate consciousness through the sharing of popular culture (Cho 2005: 177). Popular culture breeds a creative form of hybridisation, which works toward sustaining local identities in the global context. How audiences identify with what they see is most important in their construction of pleasure from media consumption. East Asian cultural identity is not only an idealistic vision, but imaginable.

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REFERENCES Appadurai, Arjun (1990), ‘Disjuncture and Difference in the Global Cultural Economy’, in: Public Culture, 2 (2), pp. 1-24 Castles, Stephan (2002), ‘Migration and Community Formation under Conditions of Globalization’, in: International Migration Review, 36, pp. 1143-68 Cho, Hae-joang (2005), ‘Reading the “Korean Wave” as a Sign of Global Shift’, in: Korea Journal, 45 (4), pp. 147-82 Choe, Y. (1999), ‘Gov’t to Spend Over 1% of 2000 Budget on Cultural Affairs’, in: Korea Herald, 28 September 1999 Christiansen, Flemming (2003), Chinatown, Europe: An Exploration of Overseas Chinese Identity in the 1990s, London and New York: Routledge Chua, Beng Huat (2004), ‘Conceptualizing an East Asian Popular Culture’, in: InterAsia Cultural Studies, 5 (2), pp. 200-221 Chua, Beng Huat (2006), ‘East Asian Pop Culture: Consumer Communities and Politics of the National’, in: Cultural Space and Public Sphere in Asia 2006, Seoul, Korea [conference publication], pp. 27-43 Espiritu, Yen Le (1992), Asian American Pan-ethnicity: Bridging Institutions and Identities, Philadelphia PA: Temple University Press Giroux, Henry A. (1994), Disturbing Pleasures: Learning Popular Culture, New York: Routledge Press Ho, A.L. (2003), ‘Airing Skeletons in the Family Closet’, in: Straits Times, 20 August 2003 Iwabuchi, Koichi (2001), ‘Becoming “Culturally Proximate”: The Ascent of Japanese Idol Dramas in Taiwan’, in: Brian Moeran (ed.), Asian Media Productions, Richmond, UK: Curzon Press, pp. 54-74 Iwabuchi, Koichi (2002), Recentering Globalization: Popular Culture and Japanese Transnationalism, Durham NC and London: Duke University Press Kagitcibasi, Cigdem (1996), Family and Human Development Across Cultures: A View from the Other Side, Mahwa NJ: Lawrence Erlbaum Katzenstein, Peter J. (2005), A World of Regions: Asia and Europe in the American Imperium, Ithaca NY and London: Cornell University Press Kim, Hyun-mi (2005), ‘Korean TV Dramas in Taiwan: With an Emphasis on the Localization Process’, in: Korea Journal, Winter 2005, pp. 184-205 Kim, M. (2001), ‘“JSA” Making It Big in Japan …’, in: Korea Herald, 2 June 2001 Kim, Young-shin (2000), Taemanǎi Yǂksa [History of Taiwan], Seoul: Jiyoungsa Press Ling, J. and Chung, R. (1996), ‘Areas of Conflict in Asian American Families’, paper presented at the Asian American Families in Transition Symposium, 104th Annual American Psychological Association Convention, Toronto, 9-13 August 1996 Madsen, Kenneth D. and Ton Van Naerssen (2003), ‘Migration, Identity, and Belonging’, in: Journal of Borderlands Studies, 18 (1), pp. 61-75 Nation Branding Info (2008), ‘Anholt’s Nation Brand Index 2008 Released’. Online: http://nation-branding.info/2008/10/01/anholts-nation-brand-index-2008-released Nyíri, Pál (1999), New Chinese Migrants in Europe: The Case of the Chinese Community in Hungary, Oxford: Oxford University Press Oda, A. (1996), ‘Relationship of Parenting Style to Achievement, Coping, and SelfConcept of Asian American College Students’, paper presented at the Asian American Families in Transition Symposium, 104th Annual Psychological Association Convention, Toronto, 9-13 August 1996

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Olsen, L. (1997), Made in America: Immigrant Students in our Public Schools, New York: New Press Oyserman, Daphua and Izumi Sakamoto (1997), ‘Being Asian American: Identity, Cultural Constructs, and Stereotype Perception’, in: Behavioral Science, 33 (4), pp. 435-53 Padilla, Felix (1985), Latino Ethnic Consciousness: The Case of Mexican American and Puerto Ricans in Chicago, Notre Dame IN: University of Notre Dame Press Pyke Karen (2000), ‘The Normal American Family as an Interpretive Structure of Family Life among Grown Children of Korean and Vietnamese Immigrants’, in: Journal of Marriage and Family, 62 (1), pp. 240-55 Shim, Doobo (2006), ‘Hybridity and the Rise of Korean Popular Culture in Asia’, in: Media, Culture & Society, 28 (1), pp. 25-44 Sung, Sang-yeon (2008), ‘Introduction: Why Are Asians Attracted to Korean Pop Culture?’, in: Korea Herald (ed.), Korean Wave, Seoul: Jimoondang Sung, Sang-yeon (2010), ‘Constructing a New Image: Hallyu in Taiwan’, in: European Journal of East Asian Studies, 9 (1), pp. 25-45 Vogel, Ezra F. (2006), The Four Little Dragons: The Spread of Industrialization in East Asia, Cambridge MA: Harvard University Press Yoon, Sunny (2008), The Cultural Identity of Asian Communities: Korean Hallyu Television Dramas and Their Receptions among Asian Media Audiences. Online: http://visualculture.hanyang.ac.kr/CulturalIdentityofAsiancommunity.pdf (accessed 5 July 2010)

INTERVIEWS Akiko (nickname), Japanese, recorded interview conducted on 22 March 2009 in Vienna. C (refused to give his name), Taiwanese, recorded interview conducted on 1 March 2010 in Vienna. Chang, Taiwanese, recorded interview conducted on 5 September 2009 in Vienna. Chen Hann-Wei, Taiwanese, website interview, 11 February 2010. Chen (member of Tamkang University English Department, Taiwan), recorded interview conducted on 22 October 2009 in Vienna. Vicky Cheng (Tourism Bureau in the Ministry of Transportation and Communications of the Republic of China), recorded interview conducted on 22 March 2011 in Taiwan. Jenny (nickname, since she refused to identify her real name), Taiwanese, website interview, 9 February 2010. Oki, Akemi, Japanese, recorded interview conducted on 22 March 2009 in Vienna. Tomas (nickname, since he refused to identify his real name), Taiwanese, website interview, 29 January 2010. Yi Chung, Taiwanese, recorded interview conducted on 3 December 2009 in Vienna. Zhang, Taiwanese, recorded interview conducted on 3 December 2009 in Vienna.

FROM THE ‘SOVIET ERA’ TO THE ‘RUSSIAN RENAISSANCE’: EVOLUTION OF THE NARRATIVE ABOUT RUSSIA AND RUSSIANS IN THE NORTH KOREAN CULTURAL DISCOURSE Tatiana Gabroussenko

ABSTRACT Throughout the history of the DPRK, the narrative about the Soviet Union, subsequently Russia, has served as an important reference point against which North Korean policymakers have constructed the self-image of the state and its people. Since 1945, the North Korean image of Russia has undergone a process of complicated transformation which has reflected the DPRK’s changing political purposes and perspectives. This article investigates the evolution of the North Korean narrative of Russia with particular attention to two distinctive ‘Russian waves’, which occurred in the period from 1945 to the early 1960s, and in the early 2000s. Basing herself on historical investigation of a wide range of North Korean literary texts, the author analyses the major features, messages and imagery in the North Korean discourse about the Soviet Union/Russia from 1945 to the 2000s and considers the political implications and propagandistic efficiency of this discourse. Key words: North Korea, propaganda, literature, culture, North KoreanSoviet/Russian relations

1 INTRODUCTION In the early 2000s, the secluded, mono-ethnic cultural discourse of the Democratic People’s Republic of Korea (DPRK—North Korea) was intruded upon by novel personages with distinctive non-Korean features—Russians. Since then, sympathetic accounts about Russians as friends of Korea, and colourful pictures of visiting Russian folklore and dance groups have filled the pages of North Korean illustrated periodicals; contemporary North Korean literary magazines publish translations of Russian and Soviet creative writings. Many North Korean works of fiction now employ the theme of Russia and Russians,

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and the fictional relationships of North Koreans with Russians in these narrations are surprisingly cordial. This abundance of Russian imagery and warm, sentimental motifs accompanying the emergence of positive Russian characters calls to mind the Soviet era in the late 1940s, or the period of the implantation of Soviet institutions into every sphere of North Korean national life. Describing the late 1940s-early 1950s, Scalapino and Lee have noted that ‘in cultural as well as in political terms, this was the Soviet era, with Russian literature, Russian movies, and the Russian language featured everywhere’ (Scalapino and Lee 1972: 375). One of the first tasks that the nascent North Korean regime laid before its literary ideologists was the creation of literary works that would glorify their Soviet liberators, the Soviet way of life and Soviet-Korean friendship. Complimenting the USSR as a political ally, however, was far from being the primary purpose of the ‘friendship writings’ that emerged in abundance soon after liberation. As the leading North Korean critic An Hamgwang recognised, literary works about the Soviet Union were written with the intention of educating North Koreans in the spirit of Marxism-Leninism and teaching them through the Soviet example how to construct quickly a new progressive socialist society that would resemble the Soviet one (An 1956: 379-80). In other words, ‘friendship writings’ were also meant to introduce Soviet-like Stalinist social patterns into the nascent DPRK. However, probably the most important political function of pro-Soviet writings was their assistance in creating a proper self-image of North Koreans by measuring this image against Soviet ‘elder brothers’. An ideological and political divergence between the Soviet Union, whose leadership voted for de-Stalinisation, and the DPRK, which chose the most restrictive version of state socialism, led to the gradual waning of the Soviet era in North Korea. From the early 1960s, tributes to the Soviets and omnipresent images of Soviet/Russian ‘friends of Korea’ disappeared from North Korean propaganda. In the period from 1970 to the 1990s, Russians rarely appeared on the pages of North Korean fiction, and even perestroika, which dramatically changed relations between the two countries, at first failed to break through this wall of silence. It took about a decade for the DPRK’s policymakers to reconsider the role of Russia in North Korean official discourse and to reconstruct the discourse of Russia and Russians in a mode that would serve North Korean propaganda purposes.

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Ostensibly, the aims behind the ‘Russian Renaissance’ differ from the rationale of the Soviet era. On the one hand, changes in the international climate have eradicated the need to flatter the contemporary Russian government or community in order to gain economic or political dividends for the DPRK. There is little doubt that post-Soviet Russia is no longer willing to play a significant role in international economic connections with the DPRK, let alone serve as a major economic donor to the impoverished country. On the other hand, the destruction of socialist institutions and the new international policy of the ex-Soviet Union has turned post-perestroika Russia into a perfect anti-model for the DPRK, which positions itself as ‘the last warrior for socialism’. Contemporary Russia continues to serve as the benchmark against which North Korean propaganda constructs its self-image of today’s DPRK. This new role allotted to Russia is important enough to place the narrative of Russia/Russians well ahead of all other foreign themes, including those of China/Chinese. While today’s China is much more vital to the DPRK as a political and economic partner, the amount of attention which China, its people and culture gains in official North Korean cultural discourse cannot be compared to that given to Russians.1 This article investigates the evolution of the narrative of the Soviet Union/Russia in North Korean cultural discourse, comparing the major messages and imagery of the contemporary ‘Russian Renaissance’ with those of the Soviet era. I will consider the changing North Korean narrative of the Soviet Union/Russia as a reference point against which North Korean policymakers have been constantly constructing the self-image of the DPRK and its people. While the scale of this essay does not allow me to make thorough comparisons of North Korean discourses of Russia and the respective Soviet/Russian discourses of North Korea, or to investigate the correlation between these discourses and the actual relations of the two countries in every detail, I will briefly outline these issues in the periods indicated. My research is based on an historical analysis of a range of literary texts about Russia/the Soviet Union which have been published in of——— 1

It is notable that when contemporary North Korean propagandists bring up the subject of China they rarely resort to images of indigenous Chinese, preferring instead to publish translated literary works of Chinese ‘socialist realist’ writers or to depict Chinese Koreans as admirers of the DPRK. See, for example, a characteristic article about the love of Japanese and Chinese Koreans for Kim Jong Il (Ch’oe 2010).

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ficial magazines in the DPRK between 1945 and the late 2000s.2 Considering the level of political control over publications in the DPRK, these texts can serve as pure cases of North Korean official propaganda.

2 THE DISCOURSE OF RUSSIA/SOVIET UNION IN THE ERA OF SOVIET INFLUENCE (1945-1960): FROM SELF-HUMILITY TO KOREAN ETHNOCENTRISM

As was acknowledged practice in Eastern Bloc countries, early North Korean propaganda presented relations between the DPRK and the Soviet Union as following the purported model of apprentice-teacher, or younger brother/elder brother in communism (with Korea the ‘apprentice’ and ‘younger brother’). This model was more or less common in the propaganda of all emerging socialist countries, yet in the DPRK it had its own specific nature. Analysing the image of the Soviet figure in early North Korean propaganda, Brian Myers claims that ‘friendship writings’ presented relations between North Koreans and Soviet citizens through the ‘the metaphor of the mother-child bond’, with Koreans as ‘children’ and Russians as a collective ‘mother.’ By presenting Russia as a ‘mother’ or an unconditionally stronger and wiser figure, North Korean propaganda pleaded for ‘motherly’ love and protection from the Soviet Union. In Myers’ opinion, such a model of representation of the North Koreans solidified the ‘mother-child symbolism of the North Korean mainstream paradigm’. This paradigm infantilised Koreans, presenting them as a ‘child race’ in desperate need of a dominant protecting force; later such infantilisation facilitated establishment of the cult of the Great Leader as an ultimate protector of North Koreans (Myers 1994: 70-71). My own research into ‘friendship writings’ confirms that early pro-Soviet works published in the DPRK in the late 1940s indeed strongly victimised and infantilised North Koreans in ways similar to the mode of pre-liberation KAPF literature (Gabroussenko 2010: 80-92).3 These accounts portrayed Koreans as weak, naive, childlike people, while endowing Russians with qualities which corre——— 2

All translations from Korean and Russian are the author’s. KAPF stands for the Esperanto term Korea Artista Proletaria Federatio, signifying the Federation of Proletarian Artists of Korea, a leftist writers’ union that existed in Korea during the colonial period. 3

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sponded to their status as elders and protectors: dignity, strength and responsibility. The ‘mother-child bond’ which emerged in the early ‘friendship writings’ filled early pro-Soviet works with characteristic selfabasement. For example, in the poem by Min Pyǂnggyun entitled ‘Yǂngye’ (‘Pride’), happy, liberated Koreans ‘hid their faces in the wide chests of their Soviet liberators’ (K’ǎnak’ǎn uǎi 1954: 6-8). The protagonist of Pak Sǎnggǂl’s poem in the anthology Glory to Stalin (1949) claims that the Soviet liberators ‘raised the flame of life’ in the soul of a Korean who had previously lived ‘as a submissive animal’ (Han 1949: 86). In Han Sǂrya’s ‘Brother and Sister’ (1949), passive and helpless Korean soldiers are saved by powerful, beautiful and wise Russian women (Myers 1994: 68-9). Such subservience in early ‘friendship writings’ was a prolongation of an old pattern of colonial, pro-Japanese Korean literature;4 for all its obvious and unflattering implications, this pattern had its own advantages. Self-humility and victimisation spared Koreans from accepting responsibility for their sufferings during the colonial era, putting all the blame for their national ordeal on external forces, the Japanese, and redirecting the need to free themselves from this ordeal on to external forces, the Russians. It is notable that Soviet citizens as the intended recipients of these tributes neither encouraged, nor appreciated them. The self-humility of Korean narrations embarrassed them to the point that they often felt the necessity to omit the most obsequious scenes in Russian translations of pro-Soviet works by North Korean authors (Gabroussenko 2010: 24; Myers 1994: 70). An analysis of Soviet writings about Korea that were published in the Soviet Union in the period 1945-60 testifies to the fact that while Soviet propaganda indeed considered the relations between Koreans and the Russians as conforming to the above-mentioned model of apprentice-teacher, or younger and elder brother in communism, in the Soviet picture of the world, the status of apprentice or younger brother was held not to entail any innate inferiority of Koreans.5 Coupled with the ideology of ‘proletarian interna———

4 For a comparison of early pro-Soviet writings with pro-Japanese propaganda see Myers 1994: 70. 5 Many Soviet accounts about Korea in particular emphasised the equality between Koreans and Russians. For example, when a visiting Soviet journalist Perventsev described a meeting of his Soviet colleagues with Korean workers and intellectuals he stressed that: ‘We met in an atmosphere of mutual understanding and respect. There

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tionalism’, the model of apprentice-teacher implied only a temporary Soviet advantage over North Koreans—the advantage of a nation that had experienced socialism first and now summoned the others to follow their way to the shared paradise of communism. There is little doubt that sympathetic Soviet accounts that were translated into Korean and published in abundance in the DPRK had their impact on the gradual shift in the North Korean understanding of the Soviet Union away from the initially servile pattern. However, the major factors behind this trend, which occurred between the mid1950s and the early 1960s, were an escalation of nationalist rhetoric in official North Korean discourse and the political distancing of the North Korean leadership from the Soviet Union as it de-Stalinised after 1955. Above all, the domestic cult of the Great Leader, which grew stronger in the DPRK from 1955, left no space for any foreign authorities in North Korean cultural discourse. Under the influence of these factors, the balance in North KoreanSoviet fictional relations at first evened to a point of equality between Russians and North Koreans and then began to lean the other way. In Soldiers on the Cultural Front, I have analysed a characteristic essay written by Han Sǂrya in 1956 under the title ‘Fadeev and I’, in which Han cautiously attempts to demean the figure of the recently deceased top-ranked Soviet literary dignitary in his relations with Koreans (Gabroussenko 2010: 24). Towards the end of the Soviet era, this tendency becomes more tangible: ‘friendship texts’ have acquired imagery which implies the idea of the superiority of Koreans. To trace this transformation in the North Korean concept of the Soviet Union within the single year of 1960, I have undertaken a comparative analysis of three literary texts which were published in that year in Chosǂn munhak.

2.1 Changing attitudes as revealed in three texts A short story by Kim Hongmu, ‘Marǎsya’, which was published in the first issue of Chosǂn munhak in 1960 (Kim 1960), describes a strong and inspiring Russian doctor Marǎsya, who works selflessly at the Red Cross hospital during the Korean War. This beautiful young —————— were no first and second among us in national or social terms. We were all equal and were friends to each other.’ See Perventsev 1950: 73.

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woman displays a sensible and balanced approach to her work, and only by accident do her Korean colleagues find out that Marǎsya lost her Russian husband five years before during the Chongjin land operation. Revealing her tragedy to a younger Korean colleague, Oksun, who has also recently lost her husband, Marǎsya teaches her never to grieve over her tragedy in public, because ‘when you cry your enemies laugh’. Marǎsya dies trying to save Korean children from a fire. Though Kim Hongmu portrays Marǎsya in the typical mode of a fictional Soviet doctor in Korea, that is, as a strong, overprotective mother of her Korean patients, he also makes it clear that Marǎsya’s feelings towards Korean people are not limited to motherly care for the weak. Above all, the Soviet heroine respects Koreans as strong, heroically fighting people ‘with beautiful souls’. In their turn, Marǎsya’s Korean colleagues and patients love her and keep a grateful memory of her after her death. The story presents relations between Russians and Koreans as a harmonious comradeship in arms, in which both Koreans and Russians make equally precious sacrifices for one noble goal: Korea’s freedom. However, in a short story by Hwang Chuyǂp, ‘Fedya’ (Hwang 1960), which was published in Chosǂn munhak a few months later, harmony and equality have disappeared. Fedya is a young but experienced Russian welder and engineer who leads a team of Koreans at a Korean construction site. Fedya adores Koreans and works ‘tirelessly’ for their good. After Chairman Kim Il Sung visits the site and summons them to work harder, the team decides to accomplish the construction well ahead of schedule. Fedya notices that his co-workers are straining their eyes severely and discovers the reason: the protective masks which his Korean colleagues wear are made of inadequate glass. Fedya asks the administration to resolve the problem; yet he is informed that it is difficult to find the appropriate masks now because the proper glass is in demand around the country. Worrying about his friends’ eyesight ‘with a heart of a mother’ (Hwang 1960: 57), Fedya strictly prohibits his Korean subordinates from working until the situation is resolved. The Koreans pretend to comply with his command but they secretly disobey Fedya and continue to work with their improper equipment. Fedya is enraged by the ‘irrational’ behaviour of his friends, who are ready to damage their eyesight permanently in order to complete their work ahead of deadline. Yet, after much deliberation he comes to admire the unquestioning loyalty of Koreans to their leader. He understands that ‘it is silly to try to stop such people’

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and that he must find a way to help them achieve their goal. Fedya calls his wife in Moscow, and the next day she comes to Pyongyang bringing proper protective masks with her. The Koreans are thankful to Fedya for this expression of true friendship between the Soviet and Korean people, which is ‘deeper than a sea’. They continue to work together with increased enthusiasm, ‘without distinguishing between day and night’. In this short story, a Russian is equally involved with Koreans in another noble Korean project, yet their relations are far from being equal. On the one hand, the story is infused with the highly sentimental imagery of a mother-child bond between Koreans and Russians, which was typical for the earlier ‘friendship writings’. The Russian character emerges as an elder, mature and more reasonable person who, as a ‘true mother’, cares about the physical welfare of his Korean ‘children’, and Korean characters are portrayed as excitable children, who admire Fedya’s muscles and run after him whenever they hear the sound of his accordion and his Kazak songs. The physical appearances of Korean and Russian characters are depicted according to the old stereotypes: Fedya’s friend Rim Sǎngho is a boyish ‘shortie’, and Fedya is an attractive giant with curly blond hair. On the other hand, unlike Korean characters in previous ‘friendship writings’, who used to obey Russians eagerly (see, for example, an analysis of the short stories ‘Anna’ (1948) by Yi Ch’unjin, and ‘Brother and Sister’ (1949) by Han Sǂrya, in Myers 1994: 67-71), Korean characters in ‘Fedya’ are endowed with an ideologically advanced mentality which is too complex for a Russian to grasp using his sheer common sense. It takes a long time for Fedya to understand the nobility of revolutionary martyrdom which is inherent in his Korean friends. Though both Korean and Russian characters are depicted as suffering because of their mother-child conflict, it is Fedya who is forced to take the first step toward peacemaking. In fact, the story reverses the previous apprentice-teacher pattern: from now on, it is Russians who must study and learn from Koreans. The proposed arrangement of Soviet-Korean relations in the story is simple: as friends of Korea, Russians must unconditionally help Koreans in all their enterprises, without voicing their opinions on the subject, which can be too dignified for Russians to understand. It is notable that while Hwang Chuyǂp presents ‘unquestionable loyalty’ to the Great Leader as the major attraction of the Korean nation in the eyes of the Soviet engineer, in reality it was the major

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source of disaffection of the Russians in the DPRK. From the 1960s Soviet popular opinion started to associate North Koreans not with the affable victims of Japanese colonisation and the heroically fighting soldiers of the Korean War, but with the devotees of the most extravagant cult of personality, which the Russians had outlived and ostracised in their own society. A short story, ‘Father’, which was written by Ri Yunyǂng three months after ‘Fedya’ (Ri 1960) further develops this line of reasoning. ‘Father’ is a story about a Russian surgeon, Borodin, who works in Korea during the Korean War in a Red Cross hospital. Borodin has lost his son, a promising field surgeon who, like the husband of Marǎsya in the above-mentioned story, died during the Chongjin land operation. In his letters to his father, Borodin’s son writes about his new discoveries in wartime surgery aimed specifically at Koreans and also about his Korean friend, an orphaned soldier Kim Jinp’yo, whom he regards as his brother. Borodin searches in vain for Kim Jinp’yo until he finds out that he is in the neighbouring hospital, waiting for an amputation of his wounded arm. The old surgeon rushes to see Kim Jinp’yo and using notes by his son performs a revolutionary operation of transplantation of bone tissue on Kim’s wounded arm. The operation and recovery are successful, and Borodin considers Kim his adopted son. While this story is permeated with the usual rhetoric of Korean-Soviet friendship and expressions of respect for the Russians (such as Jinp’yo’s calling Borodin’s son his ‘elder brother’, ‘the USSR is the cradle of world revolution’, and other such phrases), its imagery leaves no doubts as to who are considered the figures of supreme importance in the story. To start with, ‘Father’ has radically changed the customary portrayal of the physical features of Korean and Russian fictional characters. The narration portrays Kim Jinp’yo as an ‘extremely tall person with wide shoulders’, and Doctor Borodin as a short stout man, ‘like the majority of Russians’. Koreans in the story are also endowed with exceptional physical endurance. One of the patients of Borodin’s son, a Korean soldier, repeats the heroic act of Alexander Matrosov, a Soviet hero of World War II, who threw himself in front of an enemy machine gun to give his comrades a chance to storm German positions. Unlike the Russian Matrosov, who died during this suicidal act, the Korean soldier survives ‘like a phoenix’, despite being wounded by ten bullets in the chest (Ri 1960: 64). The physical superiority of Korean characters is coupled with their exemplary emotional stability.

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In contrast to the pattern of early ‘friendship writings’, in which weak and meek Koreans ‘hid their faces’ in the wide chests of Soviet liberators, ‘Father’ portrays Borodin, a mature person and a field surgeon, as constantly losing his composure and crying on the shoulders of younger Koreans who remain pillars of strength and dignity, such as his Korean colleague or Kim Jinp’yo. Characteristically, the author departs from the common pattern of infantilisation of Korean personages, presenting instead the Russian surgeon as a childishly spontaneous figure and all younger Korean characters as poised and mature. After receiving the news that Jinp’yo was staying in a hospital about twenty li away, Borodin rushes to meet him immediately, despite stormy weather and being seriously ill. While his Korean colleague tries to persuade the emotional Russian to wait till the next day when the weather will have improved, Borodin walks the long journey to Jinp’yo through the pouring rain, with a high fever. Koreans in the story are presented as people entitled to special feelings and treatment. In conflict with the ethics of the Hippocratic oath, the medical notes of Borodin’s son start with ethnocentric reminders: ‘Let us love and respect the heroic people of Korea!’; ‘Let us become fathers for the wounded Korean soldiers!’ The author repeatedly states that these medical notes are aimed specifically at curing Korean wounded soldiers, as if Koreans possess a special anatomy (and the episode with the Korean soldier who survives Matrosov’s trial serves as an indirect testimony that this may, indeed, be the case). Only an acquaintance with Korean soldiers inspires the experienced doctor Borodin to contemplate the imperfections of the contemporary state of medicine. ‘The more Borodin stayed in Korea the more deeply he understood how noble and beautiful the spiritual world of Koreans was, and the more disappointment he felt about the state of contemporary medicine. He felt that contemporary medicine was not adequate to the beauty of these people’ (Ri 1960: 74). Apparently, wounded Russian compatriots, of whom Borodin cured many during World War II, did not stir such feelings in the doctor. If the author of ‘Fedya’ at least tries to justify the uniqueness of his Korean characters by their exceptional loyalty to their leader, in ‘Father’ the extraordinary ‘beauty and nobility of the spiritual world’ of Koreans receives regular reference, requiring no explanation. A significant new trait in ‘Father’ is its apparent inattention to basic Russian culture. While previous ‘friendship texts’ used to be quite culturally sensitive, often to the point of excessive exoticisation of Rus-

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sians (in ‘Fedya’, for example, it was hardly plausible to portray an urbanised Soviet engineer as constantly carrying an accordion around on a construction site and loudly singing Kazak songs), ‘Father’ includes surprisingly few details about the Russian side of its Russian characters. Typically enough, these details are either unflattering (such as defining the majority of Russians as short and stout), or plainly incorrect (such as naming Borodin’s son Sibirov—which is a Russian surname, not a given name). Such inattention to Russian cultural specifics is logical, providing that Russians in ‘Father’ are supposed to play the role of a faceless admiring background for Koreans rather than being personages of any independent importance. ‘Father’ reaches a level of ethnocentrism that was thus far unprecedented in North Korean literature. Some texts published in 1960, such as a documentary report by Pak Yǂnggǎn, titled ‘Sincere Friend: A Story about Engineer Gorcheev’ (Pak 1960) followed the same line. However, North Korean ideologists did not go further, and ethnocentric biases in later ‘friendship writings’ did not evolve into distinct anti-Russian/anti-Soviet racist propaganda. From 1965 the stream of pro-Soviet texts petered out, to rise again sporadically in the late 1980s. The infrequent North Korean texts about Russians/Soviet citizens in the later Kim Il Sung period all belonged to a special category which I define as writings about ‘foreign admirers’ of the DPRK. In an unpublished article ‘Foreigners in North Korean fiction’, I analyse this genre in detail. In the present context, the major differences between this genre and the ‘friendship writings’ of the Soviet era may be briefly outlined as follows. Unlike ‘friendship writings’, which portrayed Russians as actively involved in various projects on Korean soil, such as liberation, war or industrialisation, and falling in love with things Korean as the result of these shared activities, this new genre solidified the role of Russians, among other sympathetic foreigners, as merely admiring observers of the various wonders of the DPRK. On the one hand, these narrations emphasised the innate international appeal and universality of North Korean cultural values. In a typical text of this type, the heroine of Yun Kyǂngju’s ‘Red Roses of Siberia’, a female Russian doctor living in the remote Siberian wilderness in 1986, eats kimch’i and rice for supper and plays North Korean marches on the piano just for pleasure (Yun 1986). On the other hand, unlike ‘friendship writings’, which recognised the services of Soviet citizens to Korea, the new narrations distanced Russians from Korean national affairs, thus further promot-

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ing Korean ethnocentrism. By the 1980s, the time of confessions of love of Koreans for their Soviet liberators had totally passed. In turn, the Soviet narrative of North Korea from the 1960s experienced a corresponding process of estrangement from their ‘younger brothers’. In the Soviet Union, relations with the DPRK were, in Vladimir Tolstikov’s words, unofficially defined as ‘cold friendship’ (Tolstikov 2002), and references to the DPRK in the Soviet press in the 1960s-1980s were limited to neutral publications about the everyday life of regular North Korean citizens, as Ivan Zakharchenko, foreign news commentator with RIA Novosti, told the author in 2010 (Zakharchenko, personal email to the author, 27 March 2010). These materials about North Korean brethren in socialism (which never included references to juche or Kimilsungism) were necessarily positive yet lacked the enthusiasm of the early post-liberation years.

3 THE DISCOURSE OF THE ‘RUSSIAN RENAISSANCE’ (2000S): KOREANS AS THE LAST WARRIORS FOR SOCIALISM Perestroika and the demolition of the Soviet Union have radically transformed the respective narratives of the DPRK and postperestroika Russia about each other, though these developments at first moved in opposite directions. As Russia entered its period of reconstruction in the late 1980s-1990s, the Russian media, particularly the journal Ogonyok (Little Fire) and Literaturnaya Gazeta started an unprecedented anti-North Korean campaign. In these publications, criticism of the political system of the DPRK was spiced by derogatory comments about ‘brainwashed’ or ‘destitute’ North Korean people6 and sleazy gossip on sexual life in the DPRK (Alexandrov 1996), topics unimaginable in Soviet times. Some ex-Soviet journalists considered loud, personally offensive attacks on yesterday’s ally a way of disassociating themselves from the henceforth unpopular creed of communism and from their own positive writings about North Korea published just several years before. The notorious anti-North Korean activity of the journalist Leonid Mlechin in the 1990s was a characteristic example of this tendency (Bushin 2004). ———

6 See, for example, a mocking article that appeared in October 1998 about the state of medicine in the DPRK, in which the author poked fun at the fact that North Koreans ‘die like flies’ from meningitis in the absence of proper Western medications (Ogonyok, 42, 19 October 1998).

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North Korean ideologists were ‘shocked’ by these materials and tried at first to launch protests against such publications (Zakharchenko, personal email, 27 March 2010). Rodong Sinmun started to publish impassioned articles which criticised ex-allies for their betrayal of socialism. However, North Korean creative writing kept an eloquent silence over the new developments. For example, Paek Pohǎm, the author of a short story ‘Separation and Reunion’ (1996), which depicts Kim Il Sung’s care for Korean compatriots living in former Soviet territories, necessarily mentions the demolition of socialism in the Soviet Union but avoids any discussions of the theme (Paek 1996). It took about a decade for Koreans to reconsider the new situation fully and to define their own place in the new picture of the world. So far as I know, the first North Korean literary works which delivered detailed interpretations of perestroika and post-Communist Russia emerged only after 2000. Notably, the North Korean narrative of post-Communist Russia contains no negative remarks about the Russian people. Instead of scolding the apostates of communism, North Korean ideologists took a radically different approach, which is similar to the perspective of the post-2000 narrative of South Korea. In a forthcoming article analysing this perspective (Gabroussenko 2011), I argue that North Korean propaganda, faced with the necessity of explaining the decline of leftist political activity among South Koreans in recent decades, started to present the brethren in the South as pitiful victims of American colonisation, forcibly disconnected from their national tradition and devoid of independent political thinking. In the heavily gendered new narrations about South Korea, the feminine weakness and immaturity of ‘poor South Koreans’, I suggest, is contrasted to the masculine strength and wisdom of North Koreans. While this approach has softened the attitude of North Koreans towards the politically inert South Koreans, it has also delegated responsibility for the fate of the Korean peninsula exclusively to North Koreans. The new conceptual approach to Russia has assumed a similar compassionate and at the same time patronising approach to the former ‘elder brothers’. Reversing the post-liberation paradigm of Korean-Soviet relationships, which was based on the twofold view of Koreans as victims of foreign colonisation, and Russians as victors over the Japanese and saviours of Korea, the narrative of ‘Russian Renaissance’ presents an opposite juxtaposition. Now Russians are portrayed as the victims of a foreign conspiracy which destroyed the

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Soviet Union, in contrast to the North Koreans, who have managed to defeat the foreign conspiracy, save the socialist system in their country, and serve as the last hope for Russians. While the new approach generously applies childhood imagery to ex-Soviet ‘victims’ of perestroika, the set of qualities which it ascribes to Russians as ‘children’ often differs from the qualities which once were ascribed to Koreans. If Koreans as victims of colonial modernisation were presented in the mode of a ‘child race’ (sobakhan, or benevolently naive, pure and innocent in their weakness) (Myers 1994: 132-4, Myers 2008; and Myers 2010: 56-9, 152-4), many victimised Russians in the contemporary model have acquired the qualities of ‘naughty’ or ‘unruly’ children, or the ‘prodigal sons of socialism’. According to this model, Russians, driven by a gullible belief in the Western myth of democracy, have rejected the wisdom of their national authorities, disobeyed their Communist elders, and thrown away the advantages of their socialist system. Quite logically, the only result they have attained is the destruction of their country. Now the ‘unruly children’ deeply regret their disobedience. This mode of presentation calls to mind the Korean children’s fairytale of ch’ǂng kaeguri, or ‘a little green frog’, whose disobedience drove his mother to her deathbed. A representative example of this new ch’ǂng kaeguri-style approach is the short story by Rim Hwawǂn titled ‘The Fifth Photo’ (Rim 2001). Its complicated plot can be summarised as follows. Katya Sintsova, a beautiful girl, belongs to a respectable and prosperous family of high-positioned party cadres, all devoted followers of socialism. Her great-grandfather died fighting the White Guards in 1919; her grandfather died fighting fascist Germany in 1941; the father is a selfless, high Communist party official, who firmly believes in socialism; and her elder brother is a highly placed official and a member of the Moscow committee of the Young Communist League. Katya, who lost her mother at an early age, is a kind and diligent child who cares for her father and elder brother. As a talented artist she enters the University of the Arts. However, at university, Katya falls under the influence of her friends, young spoilt Westernised brats who spend their lives dancing and shopping for fashionable clothes. They skip university lectures and consider the regular meetings of the League of Young Communists ‘boring’. Under this vicious influence, Katya experiences conflict with her family, trying in vain to persuade her father to pay more attention to materialist pleasures and forget about Com-

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munist spirituality. To the dismay of her father and brother, Katya goes so far as to interact with foreigners. A young American named Maconolly seduces Katya, promising to marry her but disappears after she gets pregnant. Katya is forced to have an abortion and falls into depression over her lost love. Meanwhile perestroika occurs, and this, together with Katya’s personal drama, drives Katya’s father to his deathbed. His last words are ‘long live the Communist party’. Katya mourns over her father’s death but considers him an idealistic ‘idiot’. She tries to sell old family photos of her famous Communist ancestors to casual observers on a Moscow street, and the Korean narrator Chinok, a female North Korean translator, meets her during this shameful trade. Katya goes abroad in search of her lover, only to find out that her seduction by Maconolly was a carefully contrived plot. Maconolly is shown to be the heir of a family of Russian landlords who emigrated and whose land during the revolution was nationalised by Katya’s great-grandfather. In revenge, the landlord’s great-grandson destroys the Sintsov family. Katya writes a letter from abroad to her brother in which she strongly regrets her inconsiderate behaviour, admitting that it was indeed her, not her father, who was ‘an idiot’. Yet she feels that she has no other choice but to stay abroad working in a brothel, ‘like Katya in Tolstoy’s Resurrection’. At the end of the story Katya is injured in a car crash, loses her leg and becomes known infamously as ‘the one-legged Russian prostitute’ in Munich. Needless to say, this pitiful storyline is incongruent with Russian reality and mentality. In real post-perestroika Russia, where families of ex-party cadres are situated at the top of the new social hierarchy, Katya Sintsova, rather than following the path of Tolstoy’s heroine, a seduced and betrayed peasant girl, would marry an oligarch, become a celebrity or a politician, or have her own prosperous business. However, historical accuracy is surely not Rim’s purpose. Like the majority of contemporary North Korean works of ‘foreign’ fiction, ‘The Fifth Photo’ is a didactic fable meant for North Koreans, so it is not surprising that the author strives to wrap the necessary messages in familiar packaging. The kaleidoscope of troubles that falls upon the Sintsov family corresponds with the usual conventions of Korean literature, such as the infantilisation of the female character, foreigners and their mores as the reason for all problems, the motif of mortal revenge, loss of chastity of the heroine as the result of a villain’s seduc-

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tion, Katya’s mutilation as an ultimate form of punishment,7 and her life in a brothel as an ultimate form of disgrace. Appealing to Korean cultural sentiments, ‘The Fifth Photo’ in allegorical form expounds the reasons for and consequences of perestroika and also defines good and bad models of behaviour in contemporary political circumstances.

3.1 The reasons for perestroika: the loss of loyalty to one’s elders as the bearers of correct ideology Lest readers miss the point, the narrator repeats many times that the destruction of the Sintsov family symbolises the destruction of the Soviet Union, which occurred because of the ‘loss of its ideological base’. As the author presents it, previous generations of Russians used ultimately to adhere to this base and harboured no doubts. The allegiance of Katya’s grandfather to the party was tested by mistaken purge and imprisonment in Stalin’s time, and yet he remained loyal to the cause. The deathbed words of her father in the late 1980s were ‘long live the Communist party’. These people (all males) used to cement Soviet society by their loyalty to their leaders and unconditional belief in Communist ideas; this was what made the Sintsov family respectable and stable. What destroyed this family was the inconsiderate behaviour of one girl. Four photos of the decent ancestors of the Sintsov family are contrasted to the photo of Katya in a brothel; this is ‘the fifth photo’, which symbolises the degeneration of the famous Soviet family. The transformation of Katya from a dutiful daughter and sister into a disobedient brat who calls her father ‘an idiot’ and sells the family photos and eventually her body to dirty foreigners lies at the centre of the Sintsovs’ tragedy. Though during his final meeting with Katya, Maconolly calls her a ‘destroyer of socialism’, the narrator insists that Katya is actually a ‘victim of this destruction’, which was inspired by Americans and national traitors, such as Gorbachev or Yeltsin. The ——— 7

The motif of a positive hero losing his or her leg in a car crash in the big city, as an embodiment of the concept of ‘vicious progress’ forced by the West on innocent non-Westerners, is a particular favourite in North Korean culture. Among many examples is the short story ‘Wǂnbo’ written by the KAPF writer Ri Kiyǂng in 1928 and considered a classic in the DPRK (see Ri 1958), or the 1974 popular North Korean film ‘The fates of Kǎmhǎi and Ԃnhǎi’ (Kǎmhǎiwa Άnhǎi unmyǂng) (Gabroussenko 2011).

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beautiful young heiress of a prosperous Soviet family by definition lacks the mental abilities and independent thinking which would let her recognise the danger of excessive materialistic aspirations and neglect of ideology inspired by foreigners. Katya’s major fault is not her destructive activity but her overconfidence in her own reasoning and disobedience to the elders, who alone were able to keep social order in the Soviet Union and see clearly through the intrigues of foreigners. The call to uphold their elders’ traditions and not to fall victim to foreign deceit, which will destroy ‘socialism in our style’, is a popular warning message in other organs of contemporary North Korean propaganda targeted at younger people. The party newspaper Rodong Sinmun aimed to alarm its readers by stating that [I]nfiltration of bourgeois ideas and culture has a particularly poisonous affect on young people. When young people are contaminated by bourgeois ideas, culture and way of life they all without exception start to hate political life and organised life, and turn into extreme liberals. They start to turn away from politics, lose interest in political life, and then easily violate the law and social order of the state and become hoodlums who act according to their will (Rodong Sinmun, 2 August 2005).

Obviously, young people ‘acting according to their will’ are considered an utter danger in the DPRK.

3.2 The effects of the collapse of the Soviet Union: ideological destruction as a loss of moral order A curious aspect of the story is the way the North Korean author portrays the effects of the collapse of the Soviet Union and the introduction of capitalism. These effects are the subject of incessant discussion in post-Communist Russia, where the economy has suffered severely from reforms and the majority of people distrust their current leadership. One might expect that North Korean criticism of perestroika would be close to the position of Russian leftists, yet this assumption is incorrect. The Russian critical perspective focuses mostly on the material disadvantages of neo-capitalist reforms. One example is an ironic comment on perestroika by Dmitrii Puchkov (‘Goblin’), a popular figure in the Russian intellectual scene:

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You see, before they started the so-called democratic reforms they should have announced the following: ‘Dear citizens! We are now starting a return to capitalism. This means that firstly, we will take away from you everything that you have saved during your lives. A few people will roll in riches, while the rest of you will be dirt poor. Many of you will lose your houses. The army and police will serve the rich and will suck your blood. Many of you will be killed if you’re considered unnecessary. You will be driven away from where you live now. Then you will turn into society’s trash, which has no influence on your country’s life. We will destroy science, education, medicine, sport. Welcome to capitalism.’ And no one would have been disappointed afterwards (‘Yurii Shevchuk na linii’, 2010).

In contrast, North Korean perestroika narratives never discuss the material consequences of the introduction of a capitalist system into the ex-Soviet Union, such as rapid impoverishment of the majority of the Soviet population, political instability and sudden loss of social security. In all probability, North Korean propagandists are wary of dangerous parallels with the contemporary situation in their own country, where the population has already undergone these negative processes as the result of the inefficiency of North Korean economic management. In North Korean presentations, the negative effects of perestroika lie mostly in the sphere of destruction of the ideological system of communism, which necessarily implies a loss of moral order in the former Soviet society. In many North Korean narratives about Russia, this destruction declares itself in such forms as closing an institute of Marxism-Leninism and the substitution of the red flag of Lenin with an old Russian flag which allegedly symbolises the ‘dead spirit of the tsar’ (Ryang Ch’angcho’s ‘The Second Briefing’ (Ryang 2000) is an example), demolition of statues of Lenin (Chǂng Yǂngchong’s ‘A Glow in the Sky’ (Chǂng 2001) deals with this issue), and so forth. One must admit, however, that for all the likely political shock that came with demolishing statues and changing the colour of the flags, these are dramas that the majority of people would be able to survive. ‘The Fifth Photo’ delivers the idea in a more impressive way. The story directly equates communism with common moral and humanitarian values, in particular with those that stir strong emotions in Koreans. The loss of the Communist ideological order in Russia is depicted as a loss of moral order, which is delivered through the images of the gradual moral degradation of the daughter of the Sintsov family (from a ‘kind and industrious child’ to a ‘spoilt brat’; from virgin to disabled prosti-

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tute), the death of the head of the family through moral shock, and the permanent moral sufferings of Katya’s elder brother, who lives on, unable to help his denigrated younger sister. Rim Hwawǂn portrays these tragedies as direct consequences of the decline of socialism in the Soviet Union without mention of any particular material reasons (such as sudden impoverishment, for instance) which forced Katya to choose this way. To a layperson it would be difficult to understand why the demolition of socialism must necessarily lead to the prostitution of the heroine. However, this line of reasoning in ‘The Fifth Photo’ is typical of North Korean propaganda, where the term ‘socialism’ encompasses moral values and traditions that often have nothing to do with socialist ideology. For example, the column Sahoejuǎi todǂkkwa uri saenghwal (Socialist Morality and Our Life) in the leading North Korean journal Ch’ǂllima, describes polite talking on the phone, obedience to the law, caring for children, proper ways of entertaining guests, and good relations between a mother and a daughter-in-law as the benevolent consequences of the socialist system in the DPRK.8 Moreover, by claiming that ‘in all spheres of our social life we must preserve our socialist way of life, such as in our clothing, our hairstyle, our politeness and morality and our culinary culture’, another article in Rodong Sinmun actually equates socialism with a particular customary hairstyle and cuisine in the DPRK (Rodong Sinmun, 5 July 2008). A threat to socialism implies a threat to all these commonly shared values, customs and traditions, and ‘The Fifth Photo’ shows us a scary postSoviet world in which this threat was realised.

3.3 North Koreans as the embodiments of thriving morality While the author consciously avoids a comparison of the material levels of post-perestroika Russia and the contemporary DPRK, their societies are contrasted on moral grounds via a comparison of two families. The narration of the declining Sintsov family is counterpoised with the self-gratifying story of the North Korean family of the narrator, which is presented as an embodiment of thriving juche morality. ———

8 See, for example, articles published in the column: ‘Polite Person’, 2004; ‘Let Us All Fulfil the Duties of Citizens of the Military First Epoch’, 2007; ‘When Guests Come’, 2005 (Sahoejuǎi todǂkkwa uri saenghwal (Socialist Morality and Our Life), Ch’ǂllima).

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While the head of the Sintsov family dies through the combined shock of the destruction of the Communist party and of his own family, the husband of Chinok leads a highly respectable life as a People’s Army officer. While Sergei Sintsov loses his social status as the result of perestroika and looks beaten and depressed, Chinok’s twin sons are strapping young officers in the People’s Army, who have recently been honoured by a personal meeting with Kim Jong Il. A particularly striking disparity is between Katya Sintsova and Chinok’s daughter. Katya endures a shameful existence as ‘the onelegged Russian prostitute’. In contrast, Chinok’s daughter is now finishing high school. Though being a talented violin player, this exemplary North Korean teenager, instead of going to a music conservatory, presumably on the way to the peak of material success and fame, selflessly rejects her personal ambitions. Following the inspiring examples of her father and brothers, Chinok’s daughter is also going to join the army. (Apparently, loyal service in the People’s Army is presented as the major antidote to the danger of Westernised liberalisation in the DPRK and a major guarantor of its social stability.) As the result of this virtuous way of life, North Koreans in the story demonstrate an enormous moral integrity which the Russian protagonists eagerly recognise. When Katya first encounters Chinok during the shameful trading of her family photos, she feels a thrill in the presence of this unknown North Korean woman, who exudes an aura of wholesomeness; despite her cynicism and arrogant manners, Katya is unable to stand the direct glance of Chinok, as if it were the light of her own conscience. Katya’s brother, Sergei Sintsov, openly admires Chinok and extols the exemplary virtues of Korean people and particularly their Great Leader, as the quintessence of these virtues. ‘The Fifth Photo’ contrasts the Great Leader to the corrupt Gorbachev and Yeltsin, the traitors of Russian national interests. Indeed, in contemporary North Korean fiction about Russia the idea of the moral superiority of North Koreans is embodied in particular in the image of the wise, nationally oriented and far-looking Great Leader (an image that combines the personalities of both Kim Il Sung and Kim Jong Il), which radiates a mystical power. A Russian female character in ‘A Glow in the Sky’ claims that the glow of Kim Jong Il’s smile is like that of the icons in Russian churches and she cannot take her eyes off it (Chǂng 2001: 53). Without exception, Russian protagonists obey the power of the Great Leader. In a short story by Kim Taesǂng, ‘A Condition of Peace’ (2009), the Great Leader Kim Il Sung

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during the Pueblo crisis teaches irresolute Russians how to behave with the arrogant ‘American bastards’ (Kim 2009). In the abovementioned ‘A Glow in the Sky’, the filial piety of Kim Jong Il, who mourned his deceased father Kim Il Sung for three years, impresses Russian leader Vladimir Putin to the extent that the then Russian president reconsiders his own dismissive attitude to the historical past of Russia and the Soviet Union and makes his policy more nationally oriented (Chǂng 2001). Thus, in the new paradigm of North Korean fiction it is Russians who ‘hide their faces’ in the wide chests of Korean protectors, advisers and saviours, and totally lose their dignity in the process. ‘The Fifth Photo’ finishes with a letter from Sergei to Chinok in which he informs this virtuous lady about the shameful fate of his sister and attaches a photo of Katya as a prostitute. North Koreans, acting as exemplary Confucian elder siblings, condescend to the weakness of Russians and kindly care for them despite their sins and faults. Chinok together with other North Koreans saves the life of Sergei Sintsov when he is hit by a speeding car on a street in Moscow. Though being extremely busy with the responsibilities of her life, Chinok constantly worries about the distant Sintsov family. An even more characteristic example of this new fictional arrangement is a science fiction short story by Ri Kǎmch’ǂl, ‘Change Course!’ (Ri 2004). Its plot can be summarised as follows. Kim Sǂkjin, a young North Korean diplomat, is returning home from overseas on an aircraft belonging to an American company, with 250 passengers from different countries on board. Kim becomes friends with two Russian passengers, a professor of astrophysics, Vasilii Ivanovich, and his beautiful daughter Nina. Vasilii tells Kim that, deceived by the rhetoric of ‘freedom’ and ‘democracy’, he immigrated to the United States after perestroika, but soon regretted this decision. The Americans had involved the Russian astrophysicist in what he thought was a space programme but turned out to be a programme to develop deadly space weapons. Vasilii refused to co-operate with the ‘traders of war’ and now is returning back home, bringing the ashes of his wife who died in a car crash in New York. Soon after departure it is discovered that a delayed action bomb is attached to the airplane, ready to explode at the moment of landing, when the plane will go down at the height of 3,000 metres. It is the CIA’s revenge against the Russian professor; previous attempts to eliminate him have been unsuccessful, including the car crash in which his wife died.

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Among the panic-stricken passengers the only person who is able to keep his composure is Kim Sǂkjin. Poised and self-confident, Kim becomes an informal leader of the passengers. He inspires the professor to announce publicly the truth about his refusal to co-operate with the American weapon programme, advice which the Russian professor eagerly follows. Kim saves the chastity of delicate Nina from the attacks of armed and drugged American ruffians, disarming them with his bare hands. He orders the crew to change course to the DPRK, where, with the help of a unique North Korean anti-gravitation technology, they stop the plane in the air above North Korea and deactivate the bomb. When the plane lands safely and the passengers rush to thank Kim Sǂkjin, he refuses their expensive gifts and money and gives all the credits for their survival to his socialist motherland. In this story, a North Korean character stands high above other people with his patriotism, firm will, courage, mental agility and physical power. The author constantly emphasises that a source of these unique qualities is the socialist motherland of Kim Sǂkjin. When a young Western passenger asks Kim why he is so confident in their salvation, Kim answers that he believes in his motherland as in his own mother, and a mother would never let her children down. Kim’s motherland is acting as a perfect protective force. Unlike carefree contemporary Russia, the DPRK is wisely increasing its military potential. As a result, its most advanced military technology saves the lives of peaceful people including Russians. In his interview to the foreign correspondents, Vasilii stresses the essentially defensive nature of North Korea’s military programme by commenting that the antigravitation force which North Korean scientists have discovered allows them to protect the DPRK with an invisible ‘iron shield’. The superb qualities of the North Korean in the story are contrasted with the childish helplessness of the Russians. Both Vasilii and Nina unconditionally trust Kim and cling to him; at tense moments, Kim Sǂkjin holds the hands of his Russian friends. Nina is portrayed as an especially infantilised character. Even after this grown-up girl has listened to the story of Vasilii’s communication with American militarists, she still fails to understand why some ‘bad people’ want to kill her daddy. Vasilii has to adapt his story to her level by explaining that ‘it is all because of money, dear. They are afraid that they will lose their money if I open my mouth.’ However, Nina’s lack of mental abilities is compensated by her delicacy and pureness, which constitute a pleasant contrast with the vulgarity of other Western passengers.

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This quality of the Russian heroine, just like the naivety of Borodin in ‘Father’ (see above) brings Nina strikingly close to the pattern of the ‘child race’, which Myers defines as a standard mode of selfpresentation by North Koreans. Vasilii’s weakness is also compensated by some good qualities. The Russian professor finds enough courage to reject the immoral suggestions of Americans; unlike other passengers he behaves graciously in the face of mortal danger and chooses the correct course of action under the guidance of Kim Sǂkjin. As we see, the North Korean interpretation of perestroika separates the Russian people from the undesirable political course of their new leadership. Instead of placing Russians among the rows of mortal enemies of the DPRK, North Korean propaganda portrays them as weak victims of this course and as repentant ‘prodigal sons of socialism’. In this scheme, Russians desperately need the guidance and protection of North Koreans, guidance which North Koreans eagerly grant. A curious expression of the new self-positioning by the DPRK as a sole carer of socialism and of Russian victims of perestroika appears in the attitude of North Korean officialdom to the Soviet cultural legacy. Today North Korean literary journals frequently publish translations of classics of Soviet fiction that have been forgotten in contemporary Russia. Veterans of the Soviet stage, such as artists from former official Soviet groups of folk music and dance and the ageing stars of Soviet popular music regularly visit the DPRK, often at the personal invitation of Kim Jong Il, who is known as an enthusiast of Russian culture. In Pyongyang they are showered with honours and presents; according to some sources, one of these ex-stars, Lyudmila Zykina, as a personal guest of Kim Jong Il, even underwent free medical treatment in the DPRK (Media UA, 18 January 2008). Though flattering Russians is not a purpose of this policy, North Korean hospitality unavoidably recruits friends among these visitors to the DPRK. While many loyal Russian guests would disagree with the North Korean opinion about contemporary Russian society (and most of them are simply unaware of such an opinion), they readily accept the DPRK’s perception of itself as a ‘proud little country’ which sticks to its independent policy in today’s globalising (Americanising) world. For example, a frequent visitor to the DPRK, the senior Soviet singer Iosif Kobzon, despite his Westernised political views, proudly considers himself a personal friend of Kim Jong Il and

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justifies North Korean policy by the need to stand against foreign aggressors. Quite in accordance with the line of official North Korean propaganda, the Russian singer Kobzon emphasises the spiritual qualities of the DPRK, which can serve as an example for contemporary Russians: ‘I was deeply impressed by this country: by its culture, its originality, its patriotism. These are the things we can only dream about today’ (Vokrug novostei, 7 August 2006).

4 CONCLUSION Over the sixty years’ history of relations between the DPRK and the Soviet Union/Russia, the image of Russians in North Korean official discourse has undergone a process of complicated transformation from ‘elder brothers’ to ‘prodigal sons of socialism’, or from a positive to a negative reinforcement of North Korean policy. This transformation has reflected not only changes in the international political situation but also a development of the official ideology in the DPRK. The subservient post-liberation framework, which reiterated the pattern of the colonial self-image of Koreans, went against the egalitarian expectations of Soviet Communists and more importantly, contradicted the burgeoning nationalistic ideology of the DPRK. Under the influence of these factors, the ‘metaphor of the mother-child bond’ which permeated the initial concept of Soviet-North Korean relationships, in the late 1950s evolved into a pattern of equality, with Russians and North Koreans presented as equally noble comrades in arms and brothers in socialism. However, this parity proved to be unstable, and in the early 1960s ‘friendship texts’ started to employ ethnocentric imagery which came close to the reverse of the post-liberation understanding. In the texts of the early 1960s, Koreans were endowed with all possible virtues and portrayed as protectors of Russians, whose virtues, apart from loyalty to Koreans were no longer extolled. In the period between the late 1960s-1980s, this tendency developed further: the rare Russian characters played a role as passive admiring spectators of North Koreans, no different from the regular images of foreign admirers of the DPRK. Perestroika has radically transformed the North Korean narrative about Russia. Avoiding open confrontation with their former brethren in socialism, North Korean literary ideologists have interpreted undesirable political processes in Russia in the same way in which they

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have dealt with the declining political activity of South Koreans. Just as DPRK propaganda discusses contemporary South Korean society exclusively in terms of moral degradation and national disgrace, so too it has driven the discussion of the cause and effects of perestroika into a purely moralistic sphere. The destruction of socialism in the Soviet Union has been presented as an act of childish disobedience by young Russians against their Communist elders; the resulting postSoviet reality is portrayed as an abyss of immorality. Similar to the way the new narrative about South Korea victimises and infantilises South Koreans, presenting them as powerless victims of American conspiracy, the narrative of perestroika portrays Russians as victims of the cunning intrigues of Westerners. In this picture of the world, the place of North Koreans is rather flattering. They are presented as people who, contrary to the ‘prodigal sons of socialism’, have successfully defeated the foreign conspiracy, saved socialism in their country, and now play the role of ‘the last hope’ for Russians. The efficient ‘Military First policy’ of the North Korean leadership and in particular respect for the army are presented as the major antidotes to the destructive Westernisation of the DPRK. Just like the relations between North and South Koreans, relations between North Koreans and Russians are portrayed through the motif of the imposing moral strength of North Koreans versus the powerlessness of Russians. The new pattern has actually reversed the initial model of North Korean-Soviet relations, which was once based on the twin principles of Koreans as childishly powerless victims of foreign colonisation, and Russians/Soviet citizens as mighty saviours of Korea. In general, the North Korean narrative about Russians reveals that the concept of a ‘child race’ is not a permanent and exclusive mode of representation of North Koreans in the official discourse of the DPRK. Apart from the initial post-liberation paradigm of North KoreanRussian relations which, indeed, presented Koreans as innocent children who clung to Mother Russia for protection, in all other writings about North Koreans and Russians, North Koreans emerged either as equally powerful brothers, or as dignified and responsible figures, the superiors and protectors of Russians. In their turn, infantilised Russian characters are not always portrayed as ch’ǂng kaeguri or disobedient children. Some works such as ‘Father’ or ‘Change Course!’ endow Russian personages with typical ‘child race’ attributes such as purity, spontaneity and benevolent naivety.

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The modified narrative about Russia solidifies the positive selfimage of North Koreans, creating an illusion of positive involvement of the people of the isolated DPRK in world affairs and sometimes even in the remodelling of the world order by the sheer strength of their moral authority. While in real life, North Koreans cherish as a significant privilege an opportunity to perform even hard, dirty and unqualified work as farmhands or loggers in Russian territory (Zabrovskaya 2008), fictional North Koreans play the flattering role of intellectually superior and wiser friends of Russians. However, a more important aim of the new discourse is to give negative reinforcement to Koreans to stick to the secluded way of life prescribed by their wise and caring elders, restrict their materialistic aspirations, and withdraw from any attempts to reform their society. While in the current circumstances we have no way of precisely verifying the general efficiency of this propaganda line in terms of its expected outcome, there is indirect evidence that this policy makes some impact on the North Korean mental picture of the world. An absolute majority of Russian visitors to the DPRK testify that at least the external attitude of North Koreans to Russians is friendly and surprisingly free from ideologically driven tensions and historical criticism. While in private talks with Russians North Koreans do not conceal their negative attitude to perestroika and the destruction of the Soviet Union, they behave cordially to Russians as people, brag about their good knowledge of the Russian language and culture and often share good memories of former times in the North Korean-Soviet friendship.

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Ri, Kǎmch’ǂl (2004), ‘Hangnorǎl pakkura’ [Change course!], in: Chosǂn munhak, 5 (679), pp. 71-80 Ri, Yunyǂng (1960), ‘Abǂji’ [Father], in: Chosǂn munhak, 8 (156), pp. 62-76 Rim, Hwawǂn (2001), ‘Tasǂt pǂnchchae sajin’ [The fifth photo], in: Chosǂn munhak, 2 (640), pp. 50-63 Rodong Sinmun (2005), ‘Purǎjyoa sasangmunhwajǂk ch’imt’uǎi uihǂmsǂnggwa haedoksǂng’ [Danger and poison from the infiltration of bourgeois ideas and culture], 2 August, p. 2 Rodong Sinmun (2008), ‘“Urisik taero saranagaja!” I kuhorǎl tǂuk ch’ǂljǂi kuhyǂnhaja’ [Let us consistently realise the slogan ‘Let us survive our way’], 5 July, p. 1 Ryang, Ch’angcho (2000), ‘Tupǂnchchae kija hoekyon’ [The second briefing], in: Chosǂn munhak, 2 (628), pp. 55-63 Sahoejuǎi todǂkkwa uri saenghwal [Socialist morality and our life] (2004), ‘Chongyǂngi kanǎn saram’ [Polite person], in: Ch’ǂllima, 11, p. 50 Sahoejuǎi todǂkkwa uri saenghwal [Socialist morality and our life] (2005), ‘Sonnimǎl majǎlttae’ [When guests come], in: Ch’ǂllima, 2, p. 63 Sahoejuǎi todǂkkwa uri saenghwal [Socialist morality and our life] (2007), ‘Sǂngun sidae kongminǎi ǎimurǎl tahaja’ [Let us all fulfil the duties of citizens of the Military First epoch], in: Ch’ǂllima, 8, p. 23 Scalapino, Robert and Lee, Chong-sik (1972), Communism in Korea, Berkeley CA and Los Angeles: University of California Press Tolstikov, Vladimir (2002), ‘Kapitan Krasnoi armii Kim byl horoshii muzhik’ [Kim, a captain in the Red Army, was a good fellow], in: Vlast’, 38 (491), 30 September 2002. Online: http://www.kommersant.ru/doc.aspx?DocsID=343387 (accessed 5 February 2011) Vokrug novostei [Around news] (2006), ‘Iosif Kobzon o Severnoi Koree: “Eto vse to, o chem my segodnya o etom tol’ko mechtaem”’ [Kobzon on North Korea: ‘We can only dream about all these things today’], 7 August. Online: http:// www.vokrugnovostei.ru/news/news18832.html (accessed 4 March 2011) Yun, Kyǂngju (1986), ‘SSibiriǎi pulgǎn changmi’ [Red roses of Siberia], in: Chosǂn munhak, 8 (466), pp. 10-18 ‘Yurii Shevchuk na linii’ [Yurii Shevchuk speaking]. Online: http://oper.ru/ news/read.php?t=1051606006&page=2 (accessed 17 March 2010) Zabrovskaya, Larisa (2008), ‘KNDR–Russia–RK: obmen trudovymi resursami’ [DPRK–Russia–ROK: labour exchange]. Online: http://demoscope.ru/weekly/ 2008/0333/analit04.php (accessed 18 June 2010)

BEYOND LIPS AND TEETH: THE ECONOMICS OF THE CHINA-NORTH KOREA RELATIONSHIP Tim Beal

ABSTRACT This article attempts to penetrate beyond the traditional rhetoric of the relationship between China and North Korea—that it is as close as lips and teeth—to assess one aspect of the relationship, the economic one. That said, the wider context of the relationship is extremely important. For North Korea, China has been a bulwark against the United States, and in earlier periods, a counterbalance to the Soviet Union. However, North Korea has always been wary of becoming too dependent on China, one reason being its desire to establish normal, and even friendly, relations with the US, and Japan, to offset Chinese influence. Accessible statistics on the economic relationship between China and North Korea are limited, but there are enough for us to build a reasonable assessment. It is clear that North Korea has acted rationally both to diversity and to enlarge its foreign trade and inward investment. It has sought to reduce its dependency on China, but the pressure of US-led sanctions, bolstered by Lee Myung-bak’s reversal of the engagement policy of his immediate predecessors, has meant that the country has had to turn increasingly to China. Key words: North Korea-China relations, foreign trade, foreign direct investment, sanctions, statistics, China-Korea trade

1 INTRODUCTION Any analysis of the relationship between China and the Democratic People’s Republic of Korea (DPRK—North Korea) must immediately address the problems of lack of data and information. When we are examining the relationship between the United States and the Republic of Korea (ROK—South Korea), we have a problem, if anything, of information overload. The statistics available here of trade and investment relations are very detailed. We know how many South Ko-

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rean students study in the US, and the patents that South Korean companies register in the US. There is a constant stream of newspaper, magazine, and journal articles. Academics can relatively easily interview officials, politicians, businesspeople, journalists, and other academics. On top of which we have recently been blessed with WikiLeaks. However unreliable, it is at least information. The pickings are far slimmer at the table where China and North Korea dine together. There is a dearth of direct information on the relationship; none from the North Korean side apart from occasional official communiqués or vacuous media articles, and that from China, whilst better, is still relatively limited. For instance, we get customs statistics on trade but limited information on Chinese investment in North Korea.1 We know what Hu Jintao and Kim Jong Il say in public speeches when they meet, but we do not know what they say in private. There are indeed rumours, but they have to be treated with great caution. Nevertheless, by being aware of the context in which the ChinaNorth Korea relationship is situated we are in a position to make an informed judgement about it and the way it is evolving. In some ways the lack of direct information is an advantage because it forces us to examine more rigorously what we do have. It also makes us more aware of the uncertainties inherent in all information. We know above all not to take anything at face value, but scrutinise its provenance, the built-in incentives for deceit or spin, the possible consequence of the information process itself, from gathering to dissemination. Much of this process takes place over cultural, political and linguistic boundaries, which all add another source of distortion. This paper will examine two aspects of the China-North Korea relationship, looking first at trade, then investment, all within the important framework of context.

2 THE TRADING WEB AS CONTEXT Trade statistics offer a rather elegant way to analyse relationships between states. Statistics, as discussed in the appendix, are inherently problematic but ultimately they do concern themselves with real things. Trade between China and North Korea, and North Korea’s trade with China and the world, gives a measure of how important the ——— 1

The main source is Drew Thompson 2011.

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two countries are to each other and how that importance is affected by the interplay of other forces. Trade becomes a manifest proxy of the relationship in general. Trade may be considered to be broadly moulded by two factors, the economic and the political. Other things being equal, we can expect trade between two countries to reflect what economists call revealed comparative advantage. (England, in David Ricardo’s famous examples, was better off specialising in the production of cloth and exporting some of that to Portugal in exchange for wine. Portugal, for its part, would not bother to produce cloth but specialise in wine, exporting some of that for English cloth. That was not because England produced cheaper cloth than Portugal—Portugal produced both wine and cloth more cheaply than England—but because of the comparative costs.) Trade does not happen in a political vacuum, and politics can facilitate or impede trade. Britain used Imperial Preference for many years in an attempt to lock its colonies into trade with the mother country and keep competitors such as America and Germany at bay. Nowadays free trade agreements (FTAs) do somewhat the same thing. A bilateral FTA enhances trade between two countries to the detriment of others. The [South] Korea-US FTA, if and when it comes into force, will have an impact on South Korea’s trade with China. Politics also intercede for good strategic reasons. If Portugal accepts the English comparative advantage in the manufacture of cloth, then England will industrialise and become rich, and Portugal will not industrialise and will stagnate, which is roughly what happened. Sensible countries do not accept existing comparative advantage but look to the future, investing in sunrise industries even though economists may complain. Sensible countries also look to diversify their trade so they are not over-dependent on any one trading partner.

2.1 China’s trade with North and South Korea Figure 1 charts the share of both Koreas in China’s foreign trade from 1950 to 2009, the last year for which data are available. More detail is given in the appendix. A couple of things stand out:

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Firstly, right from the beginning of reported direct trade between China and South Korea (this was preceded by trade via Hong Kong), it was substantially more than China’s trade with the North. By 1992, the year in which China and South Korea established diplomatic relations, China’s exports to the North were only US$540 million compared with US$2,438 million to the South. Imports were even more skewed in favour of the South. China imported US$154 million from the North and US$2,623 million from the South. Secondly, it is salutary to see how important North Korean trade was to China, especially in the 1960s but even into the 1980s. The explanation of that is simple—the United States. The US embargo prohibited American trade with China and hampered that of subordinate states such as Japan and Canada, who were anxious to tap into the China market. According to Chinese statistics there was no trade with the US between 1954 and 1972. In that latter year China did more trade with North Korea than with the US (State Statistical Bureau of PRC 1981). But by 2009, China’s trade with the US was US$299 billion, that with North Korea was US$2.7 billion, a factor of 112-fold.

The Koreas in China's foreign trade, 1950-2009 9 8 7 6 5

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Share of total foreign merchandise trade (%)

Figure 1 The Koreas in China’s foreign trade, 1950-2009

Sources: Author’s calculations based on the following sources: for 1950-80, State Statistical Bureau of PRC 1981; for 1986-87, Zhongguo dui wai jing ji mao yi nian jian 1988; for 1988, Almanac of China’s Foreign Relations and Trade 1989; for 19802009, IMF September 2010.

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The trade statistics illustrate the interplay between economics and politics. Contemporary Chinese trade with the US is roughly at a natural level. The Americans do restrict exports of military equipment and technology to which, whether for military or other strategic reasons, they do not want China to have access. China’s trade with South Korea does not suffer that hindrance but is enhanced by South Korean investment in China, which tends to draw a certain amount of Korean products, especially capital equipment, with it. From the point of view of China, North Korean trade is of no great economic importance. It has been in the past, and may well recover some value in the future, but even in the best circumstances it will be overshadowed by larger economies.

2.2 North Korea’s foreign trade Data, as discussed in the appendix, present an issue. North Korea does not publish trade statistics, and what are available are compiled from trading partner statistics, are not detailed, and are frequently very contradictory. For instance, the Korean Trade-Investment Promotion Agency (KOTRA), an official South Korean organisation, released data in 2010 and explained that ‘our overseas branches across the world collected data from 78 nations’. Kim Tae-gyu, commenting on the data in the Korea Times of 24 May 2010, estimated North Korea’s imports in 2009 at US$2.4 billion, and exports at US$1.1 billion (Kim 2010). By contrast, Direction of Trade Statistics (DOTS) issued by the International Monetary Fund (IMF) gave figures of US$5.1 billion and US$1.8 billion respectively (IMF 2010). Since the IMF data (hereafter DOTS) are more comprehensive (they go back to 1981), more detailed and probably more impartial, they have been used in this paper. The issue is further complicated by the fact that neither Korea regards inter-Korean trade as ‘foreign’. So we have to look elsewhere for inter-Korea trade and add that to the DOTS. KOTRA draws attention to what it calls North Korea’s rocketing ‘dependence on China’. Of note is that North Korea’s dependence on China has rocketed, as almost four-fifths of its 2009 offshore trade was with the world’s most populous country, one of only a few allies of Pyongyang.

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The Sino-North Korea trade ratio was just 42.8 percent in 2003 but continued to increase to 52.6 percent in 2005, 67.1 percent in 2007, 73 percent in 2008 and 78.5 percent last year (Kim 2010).

How correct is this assessment? Table 1 presents the data from the DOTS, supplemented by ROK data on inter-Korean trade. Figure 2 plots this data; the top line excludes North Korea’s trade with South Korea (i.e. DOTS), and the lower line includes it (i.e. DOTS+SK). Table 1

China’s share of North Korea’s trade, 2003-2009 (percent) 2003

2004

2005

2006

2007

2008

2009

DOTS

34.0

36.4

38.2

35.5

33.5

34.4

40.7

DOTS +SK

27.7

30.8

30.7

28.0

26.0

28.4

32.8

Sources: Author’s calculations based on IMF September 2010; MOU Exchanges and Cooperation.

Figure 2 China’s share of North Korea’s trade, 2003-2009

Share of total trade (including or excluding trade with SK)

China's share of North Korea's trade 2003-2009 43 41 39

Exc SK

37 35

Inc SK

33 31 29 27 25 2003

2004

2005

2006

2007

2008

2009

Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

The top line should correspond to the KOTRA figures, but is substantially lower. Even in 2009, while KOTRA claimed that 78.5 percent of North Korea’s trade was with China, the DOTS +SK figure was only 40.7 percent. Even if we accept the KOTRA figures, high trade con-

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centration ratio is not uncommon between small economies and large neighbours. In 2009, Canada did 62.4 percent of its trade with the US, and the US share of Mexico’s trade was 63.3 percent.2 These are lower that the KOTRA dependency ratios but higher than the data derived from DOTS. It would appear that KOTRA is under-estimating North Korea’s foreign trade. Continuing with the DOTS data, and adding in statistics for interKorean trade, we now look at the course of imports and exports. InterKorean trade must be included because it is effectively foreign trade and from the point of view of North Korea, the South and China are alternative trading partners. If South Korea restricts trade with the North then some, perhaps most, of this lost inter-Korean trade will be done with China. Detailed (monthly) data are not available at this stage to allow us to attempt to trace this connection. Moreover, although the Lee Myung-bak government’s policy has been to close down trade (and tourism) with the North, this has been hampered by the Kaesong Industrial Complex (KIC), which continues to exist, albeit in a constrained form. The small and medium enterprises operating out of Kaesǂng, and Hyundai Asan, which manages it, form a political constituency that seemingly cannot be ignored. Han Jae-wan, a researcher from Korea International Trade Association (KITA), quoted by Jung Seung-hyun in JoongAng Ilbo of 30 September 2010, drew the obvious connection between restricted inter-Korean trade and increased trade with China: ‘The government won’t go as far as restricting the Kaesong complex since this will greatly affect both countries’, said Han Jae-wan, a researcher at KITA … In contrast, North Korea’s trade with China grew by 16.8 percent during the first half. ‘If the government’s trade restrictions on North Korea continue, the size of North Korea’s trade with China will definitely increase’, said Han (Jung Seung-hyun 2010).

Han’s confidence that Kaesǂng was safe from the South Korean government because its restriction would ‘greatly affect both countries’ is clearly misplaced. The South Korean government wishes to do what it can to cut off economic exchange with the North because, given the disparity between the two economies, that will impact much more on the North than the South. Nevertheless, in respect of the KIC at least it does not have complete freedom of action. In the event, by November 2010, according to the [South] Korean Customs Service, although ——— 2

Percentages calculated from DOTS.

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other inter-Korean trade had dropped by 30 percent to US$464 million, that through Kaesǂng actually shot up by 62 percent from a year earlier to US$1.3 billion. Moreover the number of companies increased by 30 percent to 121 compared to 93 in 2009.3 Although the government cannot ride roughshod over the companies at Kaesǂng, its restrictions are biting. By January 2011 it was reported that Kaesong companies were ‘on the brink as sanctions continue’; only 122 companies were operating normally, 77 were not ‘currently operating’, and 16 had ‘halted operations’ (Hankyoreh, 19 January 2011). 2.2.1 North Korea’s imports In the long term (i.e. back to 1981) it does not appear that China’s share of North Korea’s imports has increased. Table 2 gives data for North Korea’s main import partners over the last three decades, on a decade by decade basis. Table 2

North Korea’s imports, 1981-2009, top 11 countries (excluding Soviet Union, and Russia prior to 1993) (US$ millions)

DOTS+SK China South Korea Japan Algeria India Russia Thailand Brazil Germany Congo, Republic of Singapore

1981-1989 9,340 3,534 1 2,497 1 139 51 7 455 8 309

1990-1999 15,045 5,886 635 2,199 27 351 1,090 225 468 481 435

2000-2009 41,015 11,853 5,954 1,878 5,356 3,564 1,259 1,732 1,383 708 1,540 796

1981-2009 65,401 21,273 6,590 6,574 5,383 4,053 2,349 2,007 1,859 1,644 1,548 1,540

Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

———

3 Chosun Ilbo, 23 December 2010; Eoh Jin-joo, Arirang, 22 December 2010. Both sources carry an identical story in which there is an identical misprint. The amount of trade through Kaesǂng is given as US$1.3 million. This clearly should be billion, and this was confirmed by email from Arirang.

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China’s share on an annual basis is plotted below in Figure 3, using the data from Table 2. Figure 3 China’s share of North Korea’s imports, 1981-2009 China's share of North Korea's imports, 1981-2009 60 50 40 30 20 10

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

-

No data in this set for Soviet Union/Russia prior to 1993. Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

If we look at the broad sweep of North Korea’s imports over the last three decades, from the final column in Table 2 (Figure 4) we can see that China has been the major source country but not excessively so, bearing in mind proximity and good relations on the one hand (which tend to push up the Chinese share) and the movements of geopolitics, which have tended, on balance, to suppress that of other countries. It must be stressed that this data from the IMF does not include trade with the Soviet Union, which was North Korea’s leading partner in the 1980s, as it had been in the preceding decades. Direct trade from South Korea only starts in 1989, and Japan cuts trade down from 2002 onwards. What is particularly interesting is the strong role of Algeria and India, followed by Thailand, Brazil, Congo and Singapore. Algeria and the Congo, we can assume, are suppliers of oil; the others are more difficult to pin down. However, the spread of countries does suggest that the DPRK has been anxious to diversify its sources of

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imports and avoid over-dependence on China. We should also remember that if the US had normal relations with the DPRK we might expect it to be a major trading partner. Figure 4 Share of top source countries in North Korea’s imports, 1981-2009 Share of top source countries in North Korea's imports, 1981-2009 China South Korea Japan Algeria India Russia Thailand Brazil Germany Congo, Rep. Singapore 0

5

10

15

20

25

30

35

Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

The main sources of North Korea’s imports that are relevant here are China, Japan and South Korea. We know that the Soviet Union was important up to the Soviet collapse, and not thereafter. Data for Russia does not appear in DOTS until 1993, by which time it is a minor player. Algeria is important, but presumably only as a source of oil. Oil is reportedly an important component of Chinese exports to North Korea, but DOTS does not give any breakdown (Kim 2010). Figure 5 shows that over this period North Korea’s imports from Japan decline. This is due to Japanese policy decisions rather that anything coming out of North Korea. Imports from South Korea take off with the lifting of barriers by Roh Tae-woo in the late 1980s. During the Kim Daejung and Roh Moo-hyun administrations, North Korea’s imports from the South grow strongly, along with those from China. There is no sense here of China gaining ground at the expense of South Korea.

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Figure 5 North Korea’s imports from China, Japan and South Korea, 1981-2009

2.500

North Korea's imports from China, Japan, South Korea 1981-2009

2.000

China

US$ millions

Japan

1.500

South Korea

1.000

500

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

-

Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

The situation changes with the coming to power of the Lee Myungbak administration (see Figure 6). Whereas North Korea’s imports from China increase over 2007-08, and fall back 2008-09, presumably reflecting the global recession, those from South Korea decrease in both years, mainly, it would seem, as a consequence of government policy. Between 2008 and 2009, North Korea’s imports from China fell 6.1 percent, and from South Korea, 16.1 percent.

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Figure 6 North Korea’s imports from China and South Korea, 20072009 North Korea's imports from China and South Korea, 2007-2009 2.500

US$ millions

2.000 China

1.500

South Korea 1.000

500

2007

2008

2009

Sources: Author’s calculations based on MOU Exchanges and Cooperation; IMF September 2010.

2.2.2 North Korea’s exports The direction of North Korea’s exports is not too dissimilar to that of its imports, except that here oil is not a major traded commodity. This brings us to yet another mystery. If North Korea seeks to balance bilateral trade, which is a very common trade policy objective, then we might expect to see sources of oil imports featuring in the exports list. However, whilst Venezuela and Saudi Arabia have been relatively important export markets (see Table 3 and Figure 7) the former has been a very minor source of imports and the latter only a tenth the size of Algeria, which is not a major export market. There is an intriguing discrepancy in these IMF statistics on North Korea’s trade with oilexporting countries; Algeria is an important source of imports, but not of exports, and Venezuela and Saudi Arabia are among the top export destinations, but are not shown as important sources of imports. It may be that some oil is recorded as coming from the country of refining, such as Singapore, but there are still unanswered questions here.

ECONOMICS OF THE CHINA-NORTH KOREA RELATIONSHIP

Table 3

315

North Korea’s main export markets, 1981-2009 (excluding Soviet Union, and Russia prior to 1993) (US$ millions) 1981-1989 6,641 2,227 18 1,605 735 162 155 103 93 -

DOTS+SK China SK Japan Germany India Brazil Venezuela Saudi Arabia Lebanon Bangladesh Thailand Russia

1990-1999 10,038 1,435 1,449 2,490 475 344 135 4 313 148 238 65 448

2000-2009 18,184 4,214 4,638 1,131 225 790 951 877 381 527 286 451 114

1981-2009 34,863 7,876 6,105 5,225 1,435 1,296 1,086 881 849 675 627 609 562

Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

Figure 7 North Korea’s main export markets, 1981-2009 North Korea's main export markets, 1981-2009 China South Korea Share of total exports

Japan Germany India Brazil Venezuela Saudi Arabia Lebanon Bangladesh Thailand 0

5

10

15

20

25

Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

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Again we see that while China is the major export market, it is not, in the circumstances, particularly dominant. Looking at North Korea’s three main export markets (excluding the Soviet Union) over these three decades (Figure 8), we get a similar picture to that shown by imports in Figure 5. Imports to Japan go up and then decline because of Japanese sanctions. From 1988 to 2001, Japan is North Korea’s main export market except for 1993, when there is a surge in exports to China. Exports to the South are recorded from 1989 and grow rapidly, overtaking Japan in 2002. South Korea overtakes China in 1995 and has remained North Korea’s major export market up till 2009, except for 2003-05, where China was ahead, but even in those years growth was strong. We can see the beginnings of Lee Myung-bak’s sanctions in 2009. Figure 8 North Korea’s exports to China, South Korea and Japan, 1981-2009

1.000

North Korea's exports to China, South Korea, and Japan, 1981-2009

900 800

US$ millions

700 600

China

500

South Korea Japan

400 300 200 100 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

-

Sources: Author’s calculations based on the following sources: for 1989-2004, MOU 2005; for 2000-09, MOU Exchanges and Cooperation; IMF September 2010.

2.2.3 Drawing conclusions on trade The general conclusion we can draw from this cursory analysis of North Korea’s trade is that it has attempted to diversity and balance its

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direction of trade. Where trade with particular countries has been negligible (such as the US) or constrained, as in the case of Japan, it has been the result of their policy decisions, not North Korea’s. It is too early to trace the decline in North-South trade, but the indications are that it will be greatly reduced, despite the KIC. That is entirely a decision of the South Korean government and the North has tried hard to keep the trade going (Chosun Ilbo, 18 February 2011). If, as KOTRA claims, ‘North Korea’s [trade] dependence on China has rocketed’, then this has been because of decisions taken elsewhere, in Washington, Seoul and Tokyo, and not in Beijing or Pyongyang (Kim 2010).

3 INVESTMENT Foreign direct investment (FDI) into North Korea is a hugely important subject, but will be touched on only briefly here because of lack of space and sparsity of good data. Drew Thompson, for one, has suggested that China’s policies towards the Korean peninsula are constrained by its investments in the North (Thompson 2011). However, according to Thompson, Chinese investment in North Korea between 2003 and 2009 totalled US$98.3 million, roughly 12 percent of the US$850 million of FDI it has in South Korea (National Bureau of Statistics of China, Table 17.20). By that token North Korea would in fact not weigh very heavily in Chinese calculations. As in trade, South Korea is much more important to China than the North. Table 4 2003 1.12

Chinese outbound investment in North Korea, 2003-2009 (US$ millions) 2004 14.13

2005 6.5

2006 11.06

2007 18.4

2008 41.23

2009 5.86

Source: Thompson 2011, p. 49, Table 1.

One intriguing question is why Chinese investment in North Korea is currently so small. That may reflect a lack of interest on the Chinese side, but given the potential, especially in minerals, and China’s huge global appetite for overseas investment, that does seem unlikely (see Foster-Carter 2011; Yoon 2011; Wang and Huang 2011). More plausible is the suggestion that it reflects North Korean reluctance to be-

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come too dependent on China. Significantly the largest investor in North Korea, apart from perhaps South Korea (at the Mt Kǎmgang resort and Kaesong Industrial Complex) is Egypt. Orascom Telecom, one of the companies of the Orascom Group, Egypt’s largest conglomerate, signed a contract in 2008 to set up a 3G telecommunications network in North Korea (Song 2008; Orascom Telecom 2008; Noland 2008; Rapoport 2008). The joint venture, named Koryolink, seems to have been very successful, at least in terms of subscriber growth, which is currently heading towards the one million mark (TeleGeography 2010; Chosun Ilbo, 10 December 2009; Williams 2011d). By a statistical quirk, North Korea now has the highest number of 3G subscribers of any network in the world (Williams 2011a). Orascom has a 75 percent holding in Koryolink, with the remaining 25 percent held by the state-owned Korea Posts and Telecom Corporation (Orascom Telecom). Orascom Telecom is reportedly investing US$400 million in the venture (Noland 2008; Al-Issawi 2008; Rapoport 2008). Orascom Telecom has also set up a bank in North Korea (Al-Issawi 2008). Other companies in the Orascom Group have also invested in North Korea. Orascom Construction has a US$117 million investment in Sangwon Cement and Orascom has also stepped in to complete the 105-story Ryugyǂng Hotel (Noland 2008; Herskovitz 2008; Demick 2008). Just how important the Orascom investments are to North Korea was signified by the special treatment accorded to Naguib Sawiris, Orascom Telecom’s CEO, on his visit to Pyongyang in January 2011, where he had a meeting with Kim Jong Il and Jang Song Thaek, vice-chairman of the National Defence Commission (KCNA, 24 January 2011; Williams 2011b). A photo was released showing Sawiris with his arm linked with Jang’s and holding Kim’s hand (Williams 2011c). It is unclear what effect the turmoil in Egypt will have on Orascom’s investments in North Korea. As Copts, the Sawiris family may have sufficient distance from Mubarak and the mainstream elite to remain above the fray, or they may be particularly vulnerable (Stier 2011). Orascom has been one of North Korea’s success stories in terms of FDI. For many years the country has attempted to attract FDI with very limited success. In 2009, according to the World Investment Report compiled by the United Nations Conference on Trade and Development (UNCTAD), its stock of FDI was US$1.4 billion, a small fraction of the US$110.8 billion in the South (Table 5).

ECONOMICS OF THE CHINA-NORTH KOREA RELATIONSHIP

Table 5

319

Inward FDI to the Koreas, 1990-2009 (US$ millions) FDI

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

World 207,697 154,009 165,973 223,454 256,112 342,544 388,998 486,476 707,185 1,087,500 1,401,466 825,280 628,114 565,739 732,397 985,796 1,459,133 2,099,973 1,770,873 1,114,189

Inflows DPRK (61) 134 2 8 (1) (0) 2 307 31 (15) 3 (4) (16) 158 197 50 (105) 67 44 2

ROK 759 1,133 567 546 795 1,270 2,012 2,641 5,072 9,883 9,004 4,086 3,399 4,384 8,997 7,055 4,881 2,628 8,409 5,844

World 2,081,782 2,347,366 2,429,159 2,631,511 2,844,455 3,381,329 3,873,724 4,452,998 5,547,221 6,757,556 7,442,548 7,468,968 7,519,080 9,372,829 11,055,515 11,524,869 14,275,734 17,990,069 15,491,182 17,743,408

Inward stock DPRK 572 706 708 716 716 716 718 1,025 1,056 1,041 1,044 1,040 1,024 1,182 1,379 1,429 1,325 1,391 1,435 1,437

ROK 5,186 6,318 6,885 7,432 8,227 9,497 11,510 14,151 19,223 29,106 38,110 53,210 62,660 66,070 87,770 104,880 119,140 119,630 94,680 110,770

Source: UNCTAD 2010.

It is not difficult to guess why this is so, although hard evidence is difficult to come by. Many, including Drew Thompson, whose comments are given below, blame the situation in North Korea. Corruption, infrastructural problems, government regulation and other obstacles are mentioned (Stanley Foundation 2005; Chosun Ilbo, 10 December 2009). There is truth in that, but the same applies elsewhere, China and India being relevant examples. I have interviewed foreign business people in these three countries and am not persuaded that the business environment in the DPRK is inordinately difficult. The major reason that foreign companies do not invest in the DPRK is because of the US-led sanctions regime, fortified over the last year or so by the Lee Myung-bak administration (Institute for Far Eastern Studies 2010).

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In December 2009, Kim Jong Il made a visit to the Rajin-Sǂnbong (Rasǂn) Free Trade Zone, which was seen as an attempt to reinvigorate it after 18 years of lacklustre growth (Lee Jong-heon 2009; Chosun Ilbo, 10 December 2009). Then in 2010 there was a renewed effort to attract FDI by establishing a State Development Bank and the Korea Taepung International Investment Group. KCNA (20 January 2010) reported that ‘Pak Chol Su, a Korean resident in China, [was elected] permanent deputy director-general and president of the group’. The entities were initiatives from the highest level Kim Yang Gon, chairman of the Korea Asia-Pacific Peace Committee was elected director-general of the board ... The board of directors is made up of seven persons including representatives of the National Defence Commission, the Cabinet, the Ministry of Finance (KCNA, 20 January 2010).

According to Chosun Ilbo (21 January 2010, Kim Yang Gon is director of the United Front Department of the Korean Workers’ Party and ‘[r]umor has it that Jang Song-taek, Kim Jong-il’s brother-in-law and the director of the Administrative Department of the Workers’ Party, is also on the board of directors’. The two organisations were very much concerned with FDI: The [Taepung International Investment] group, an external economic cooperation body, will play the role of an economic complex ensuring the induction of investment and finances for the State Development Bank, and it will be headquartered in Pyongyang. The State Development Bank is to provide investment on major projects to be carried out according to the state policy after being equipped with advanced banking rules and system needed for transactions with international monetary organizations and commercial banks (KCNA, 20 January 2010).

So the group was to attract FDI and the bank was to disburse it for development projects. Although Pak Chol Su, the president of Taepung, is Korean-Chinese, it is clear that the objectives extend beyond China.4 At the moment it appears that Chinese investment in North Korea is primarily market driven, though ethnic ties between Korean Chinese in Northeast China and the homeland may play a part. According to Thompson:

——— 4

‘Pak was born in 1959, graduated from Yanbian University and has an MBA’ (Thompson 2011: 43).

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Only two of China’s top 100 companies are investors in North Korea, both steel companies. The majority of Chinese investors in North Korea are small and medium-sized enterprises ... The majority of Chinese investors in North Korea are not State Owned Enterprises (SOEs) controlled by the central government, but privately owned companies and provincial, prefecture, and municipal-owned SOEs. As far as one can tell, only four out of the 138 investors identified as legitimate investors are central-government owned companies (Thompson 2011: 5).

Thompson discounts Chinese government direction, or capability to direct: Despite the fact that they have geostrategic significance, Chinese joint ventures in North Korea are not state-directed investments. It is difficult to conceive how China’s central government could exert meaningful control over the actions of investors who are mostly small and privately held. China can encourage outbound investment but cannot effectively control it. Likewise, the central government cannot realistically direct large-scale outbound investment to a particular country without imposing considerable opportunity costs (Thompson 2011: 76).

The reality is that China has various mechanisms to guide strategic overseas investment. This is generally part of the ‘going out’ strategy whereby it secures strategic resources on the one hand, and divests itself of excess American dollars on the other. Loans are one instrument, and China has now overtaken the World Bank as a source of funds (Dyer et al. 2011; Lamont and Dyer 2009; Jopson and Anderlini 2009). The agreement signed in October 2009 by the Chinese premier, Wen Jiabao, to provide a US$250 million loan for a second bridge over the Yalu (Amnok) river will inevitably boost trade between China and North Korea (Solomon and Page 2011). The government can also ‘guide’ state-owned companies in strategic directions (Scissors 2010, Scissors 2011; Pomfret 2010; Becker 2010; Klare 2010). As the joke has it, in America the corporations and banks control the government, in China the government controls the corporations and banks. Whilst we should not exaggerate the degree of government management of the economy, and its overseas investments, it does seem that the Chinese government does have tools and will use them in suitable circumstances. Thompson says that Chinese companies are reluctant to invest in North Korea because ‘[w]idespread corruption, the lack of rule of law and even personal violence make North Korea a brutal investment destination’ (Thompson 2011: 48). It does seem unlikely, though, that companies that can handle investment in Afghanistan, to mention just

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one ‘brutal investment destination’, would find the DPRK particularly daunting (see Wines 2009). A more plausible explanation for the low level of Chinese investment in North Korea is that the DPRK is reluctant to become over-dependent on Chinese investment and has sought to diversify. There has been some success in this; see, for instance, Orascom, and South Korean investments during the administrations of Kim Dae-jung and Roh Moo-hyun. Even though relations between South and North Korea rapidly deteriorated with the Lee Myung-bak administration, is seems that prior to the Cheonan (Ch’ǂnan) incident the DPRK harboured hope that there would still be further investment from the South Though Pak appears to be a Chinese citizen, he is a Korean and one ‘who maintains relations with South Korean officials and businessmen’ (Chosun Ilbo, 27 January 2010). He apparently once arranged a secret inter-Korean meeting (Chosun Ilbo, 21 January 2010). Furthermore, in that same month of January 2010 the regulations of the Rasǂn special economic zone were amended in an apparent attempt to attract South Korean capital (Jung Sung-ki 2010). In March 2010, on the eve of the Cheonan incident, there was a spate of articles in the North Korean media about new efforts to attract FDI from the South and internationally (Chosun Ilbo, 3, 15 and 20 March 2010; KCNA, 10 March 2010; Jung Sung-ki 2010; Snyder 2010). That would give us additional reason to be sceptical that North Korea sank the Cheonan. North Korea has looked in other directions, but generally speaking international companies are scared off by American policy and its sanctions regime. Egypt’s Orascom and Thailand’s Loxley Pacific have been exceptions. It was reported that in 2009 the North mounted an ‘an investment blitz in the EU’ but found that sanctions were an insuperable barrier (Chosun Ilbo, 27 January 2010). With the further souring of relations with the South after the Cheonan incident, and deepening American pressure, it became inevitable that North Korea would turn to China, and be more receptive to Chinese FDI (Institute for Far Eastern Studies 2010). There were reports of Chinese plans to make very substantial investments, especially in special economic zones along the border (Capital Vue, 19 October 2010; Chosun Ilbo, 21 October 2010; Global Times, 29 October 2010). An important factor in all this seems to be the push outwards from China. Chinese overseas investment is going up in all directions, including South Korea (Chosun Ilbo, 11 September 2010). China is taking renewed interest in Rasǂn, and there have been reports that

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Shangdi Guanqun is planning a $2 billion investment there (Jung Sung-ki 2011; Solomon and Page 2011; Chosun Ilbo, 20 January 2011). Behind this increased push is a logistics crisis in Northeast China: Dalian is a venue for the transport of grain, coal and timber from three northeastern Chinese provinces to southern areas or overseas. Goods are transported on the ground from the provinces to Dalian, from which they are taken elsewhere by ship. The source said Dalian’s capacity is saturated and the port can no longer handle logistical transportation from the northeastern provinces. China’s economic benefits from the development of Rajin will be enormous given the expected increase in exports, the source added. ‘The North has refused to develop Rajin but is being compelled to open up the port because of its economic crisis’ (Donga Ilbo, 5 May 2010).

As North Korea faces increased hostility from South Korea, the US (and Japan), the chances of securing FDI from countries other than China are decreasing. If North Korea is becoming an economic appendage of China it will be against the wishes of the DPRK government, and will not be part of any Chinese strategy. It will be a result of decisions taken elsewhere.

4 CONCLUDING REMARKS There is much hyperbole written about the North Korea-China relationship as there is about North Korea itself. Much of it has its origins in self-serving government propaganda, which is then regurgitated by journalists. A recent example of this is provided by WikiLeaks, and specifically by the conversation between US Ambassador Kathleen Stephens and the ROK’s Vice-Foreign Minister Chun Yung-woo on 17 February 2010, which was reported in a cable back to Washington by Ambassador Stephens on 22 February. The cable was made public in late November 2010, with its text appearing in the Guardian on 1 December 2010. The cable led to a lot of excited headlines. The Guardian itself claimed that it indicated that ‘China “would accept” Korean reunification’. Simon Tisdall’s article in the Guardian was headed: ‘Wikileaks cables reveal China “ready to abandon North Korea”’, with a sub-

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heading suggesting that ‘Leaked dispatches show [sic] Beijing is frustrated with military actions of “spoiled child” and increasingly favours reunified Korea’ (Tisdall 2010). The Washington Post of 30 November 2010 told us that ‘Wikileaks reveals plans for North Korean collapse’. David Sanger’s article on the subject in the New York Times was headed: ‘North Korea keeps the world guessing’, which surely implies some intent on North Korea’s part. But in the article Sanger had no doubts that much was being revealed (Sanger 2010). This was echoed in anther headline in the same paper which captured, in essence, the opinion of the mainstream (Anglo-American) press: ‘Cables obtained by WikiLeaks shine light into secret diplomatic channels’ (see Shane and Lehren 2010). There were some who expressed scepticism, but they were a minority (see, for example, Sunny Lee 2010). The reality, as wiser people discerned, was that the WikiLeaks revelation was more likely an expression of Vice-Minister Chun’s hopes and his desire to persuade the Americans, rather than a cogent description of China’s attitudes towards the DPRK (see Sigal 2011). That is why it is important to look in areas where we have some hard data, whatever their inadequacies. When we look at the evidence about trade and FDI links between China and North Korea we are brought down to earth and the wilder constructions evaporate. There is much nonsense written about chuch’e (Juche), by North Koreans and outsiders alike. It is more usefully seen, as with China’s pre-Deng Xiaoping policy of self-reliance, partly as a reaction against the bruising experience of Japanese colonialism, but also as a response to a hostile external environment. When the Americans came to terms with China in the 1970s, lifting the embargo and moving towards the normalisation of relations, trade and investment quickly took off. The same would surely happen with the DPRK if American policy changed. Indeed, if we look under the surface, and examine what data we have on the DPRK’s foreign economic relations, we see motivations and strategies that are not surprising. For instance, in 1975, Kim Il Sung, in a speech to ‘industrial activists’, was reported as saying: To carry out our foreign trade well, we must decisively improve the quality of export goods, since merchandise by nature is a thing produced not for one’s own consumption but for sale to others. Of course, we must make even the products we turn out for domestic consumption neat and useful, but we must make export goods of a better quality. Factories and enterprises turning out export goods should further improve

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the quality of products and package them neatly. In this way, we must strive to win the reputation and confidence in the international market that our merchandise is very good (Hyun 1982).

That is a statement which would not be out of place in any textbook on international marketing. It seems that North Korea has tried hard to attract foreign investment from around the world, including for instance the European Union, and not to become too dependent on China (Chosun Ilbo, 27 January 2010). It has, as we have seen, attempted to diversify its direction of trade in order not to become too reliant on its neighbour. We do not have to read too much into this; it is what any prudent government does. It has also attempted to grow its trade. Back in 1982 Hyun Syng-il noted: In the 1970s, the pattern of industrialization was outward. [The DPRK] introduced a great deal of foreign technology, especially from Western countries, and additional emphasis was placed on the development of export goods industries, such as ferrous and non-ferrous mining, building materials, light industry, and agricultural production in order to earn foreign currency. ... The trend of recent [pre-1982] industrialization appears that they rely more and more on foreign technology while they put more investments on producing exportable goods such as minerals and grains (Hyun 1982).

If North Korea has not been successful in developing and diversifying its trade and inward investment it is primarily not because of misguided policies of autarky, as is often argued, but because of external constraints. The relationship with China should be seen within that context.

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STATISTICAL APPENDIX Note on sources and methodology The main source of trade data for the tables in this article is provided by the ‘Direction of Trade Statistics’ (DOTS) published monthly by the IMF. The particular dataset used here comes from the September 2010 release. The IMF’s monthly publication is the main international source of statistics on the direction of trade, that is, exports and imports by partner countries. Nevertheless, it presents all sorts of methodological problems and issues, most of which do not concern us here, but some of which must be noted. The material for the DOTS comes originally, of course, from reporting countries. This is our first problem, because the DPRK does not publish trade statistics, and is in any case excluded from the IMF by the United States. What are shown here as North Korean imports and exports are supplied by partner countries. Their statistics on trade with North Korea may be inaccurate for political reasons; there is in many cases, we may assume, an incentive to under-declare trade with North Korea. Trade going via a third country may be recorded as with that country, rather than with the final partner. One mystery is that Algeria is shown as a major import source. This presumably is oil; the DOTs does not give a breakdown into commodities or even commodity groups. Imports from Algeria for the period 1981-2009 total US$5,383 million, while imports from Iran come to only US$336 million (Saudi Arabia records US$522 million). This is rather strange, given that Iran is a major oil exporter and the relations between it and North Korea appear to be good. In addition, we have press reports about North Korea-Iran exchanges in nuclear and missile technology which may well be exaggerated but are not improbable (Fulghum 2010; Chosun Ilbo, 23 November 2010, 16 December 2010, 11 February 2011). In other words, we would expect to see more imports from Iran than are shown. There are also technical problems with using trading partner statistics, the main one being that of recording leads and lags. A consignment recorded in exporting country statistics in one period will appear in the importing country’s statistics at some later period. The statistics of exports from A to B never quite correspond with the statistics of imports by B from A.

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Currency conversion gives rise to another set of variations. The DOTS are in US dollars, which is the international norm. Values will have been converted into and out of US dollars as the traded commodity is processed by Customs services at either end. Another point, which does not concern us much here, but which is of considerable economic importance, is that trade statistics record the movement of goods (and sometimes services) over national boundaries but say nothing about ownership and flows of profit. For instance, in Pyongyang in 2010 I visited the new e-library at Kim Il Sung University, and the newly opened Pyongyang University of Science and Technology. Looking around at the computer equipment, of which in these two places there was an abundance, there are the familiar brand names—LG, from South Korea, Dell and HP from the US. Presumably they all came in via China and almost certainly appear in the trade statistics as Chinese exports to North Korea. They were probably manufactured in China, although not necessarily so. In any case, some of the profit must have flowed back to the original brand owners. A further complication is that South Korea (along presumably with North Korea) does no regard inter-Korean trade as foreign. As discussed in the paper we must, of necessity, consider trade between the two Koreas as foreign. The DOTS dataset does give some data on South Korea trade, but it is very small and has been disregarded in this paper. Instead we turn to South Korean sources on inter-Korean trade, as provided by the ROK Ministry of Unification.5 These have been added into the DOTS data to give as complete a picture as we are likely to get of North Korea trade until the DPRK publishes trade statistics. Trade statistics must in general be treated with great caution, and statistics for trade with North Korea carry additional burdens of uncertainty. For additional statistical tables see http://www.timbeal.net.nz/geo politics/add_stats.pdf.

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5 Data for 1989 to 2004 are taken from Ministry of Unification (2005), ‘2005 White Paper on Korean Unification’; those for 2000 to 2009 from Ministry of Unification, ‘Exchanges & Cooperation’.

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Fulghum, David A. (2010), ‘Iranian Missile Enhancements Appear in North Korea’, in: Aviation Week, 14 October 2010. Online: http://www.aviationweek.com/aw/ generic/story.jsp?id=news/awx/2010/10/14/awx_10_14_2010_p0-262107.xml& headline=Iranian Missile Enhancements Appear in North Korea&channel= defense Guardian, 1 December 2010, ‘US embassy cables: China “would accept” Korean reunification’. Online: http://www.guardian.co.uk/world/us-embassy-cablesdocuments/249870 Hankyoreh, 19 January 2011, ‘Kaesong Companies on the Brink as Sanctions Continue’. Online: http://english.hani.co.kr/arti/english_edition/e_northkorea/459 520.html Herskovitz, Jon (2008), ‘North Korea’s “Hotel of Doom” Wakes from Its Coma’, Reuters, 17 July 2008. Online: http://www.reuters.com/article/rbssTechMedia TelecomNews/idUSSEO9654020080717 Hyun, Syng-il (1982), ‘Industrialization and Industrialism in a Developing Socialist Country: Convergence Theory and the Case of North Korea’, Ph.D. dissertation, Utah State University IMF (International Monetary Fund) (2010), Direction of Trade Statistics, September 2010 Institute for Far Eastern Studies, ‘Investors in DPRK Take Huge Hits; Interest in FDI Plummets’, NK Brief no. 10-10-18-1, 18 October 2010. Online: http://www. nkeconwatch.com/category/organizaitons/institute-for-far-eastern-studies (accessed 18 May 2011) Jopson, Barney and Jamil Anderlini (2009), ‘China Pledges $10 Billion in Low-cost Loans to Africa’, in: Washington Post, 9 November 2009. Online: http://www. washingtonpost.com/wp-dyn/content/article/2009/11/08/AR2009110818002. html Jung, Seung-hyun (2010), ‘Inter-Korean Trade Rose Despite New Sanctions’, in: JoongAng Ilbo, 30 September 2010. Online: http://joongangdaily.joins.com/ article/view.asp?aid=2926562 Jung, Sung-ki (2010), ‘N. Korea to Attract S. Korean Investment in Rason’, in: Korea Times, 14 March 2010. [All Korea Times references online: http://www. koreatimes.co.kr/www/news/nation] Jung, Sung-ki (2011), ‘China to Invest $2 bil. in NK Economic Zone’, in: Korea Times, 7 January 2011 KCNA, 20 January 2010, ‘1st Board Meeting of Development Bank’. [All KCNA references online: http://www.kcna.co.jp/item] KCNA, 10 March 2010, ‘1st Meeting of Korea Taepung I IG Held’ KCNA, 24 January 2011, ‘Kim Jong Il Receives Egyptian Businessman’ Kim, Tae-gyu (2010), ‘N. Korea Suffers Trade Deficit for Two Decades’, in: Korea Times, 24 May 2010. Online: http://www.koreatimes.co.kr/www/news/biz/ 2010/08/123_66437.html Klare, Michael T. (2010), ‘China’s Global Shopping Spree’, in: TomDispatch, 1 April 2010. Online: http://www.tomdispatch.com/post/175226/tomgram%3A_michael _klare%2C_shopaholic_china/#more Lamont, James and Geoff Dyer (2009), ‘China and World Bank in Talks to Establish Industrial Zones in Africa’, in: Financial Times, 4 December 2009. Online: http://www.ft.com/cms/s/0/040beac2-e041-11de-8494-00144feab49a.html Lee, Jong-heon (2009), ‘North Korea Looks to Spur Free-trade Zone’, in: UPI, 17 December 2009. Online: http://www.upi.com/Top_News/Special/2009/12/17/ North-Korea-looks-to-spur-free-trade-zone/UPI-97301261060491/

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Lee, Sunny (2010), ‘China to Dump North Korea, Really?’, in: Asia Times Online, 2 December 2010. Online: http://www.atimes.com/atimes/Korea/LL02Dg01.html MOU (Ministry of Unification) (2005), ‘2005 White Paper on Korean Unification’. Online: http://eng.unikorea.go.kr/eng/default.jsp?pgname=LIBwhitepapers&brd MOU, ‘Exchanges & Cooperation’. Online: http://eng.unikorea.go.kr/eng/default.jsp? pgname=AFFexchanges_overview (accessed 18 May 2011) National Bureau of Statistics of China, China Statistical Yearbook. Online: http://www.stats.gov.cn/tjsj/ndsj/2009/indexeh.htm (accessed 18 May 2011) Noland, Marcus (2008), ‘Telecommunications in North Korea: Has Orascom Made the Connection?’, Peterson Institute of International Economics, 8 September 2008. Online: http://www.iie.com/publications/papers/noland1208.pdf Orascom Telecom (2008), ‘Orascom Telecom Inaugurates the First 3G Mobile Network in the Democratic People’s Republic of Korea’, 15 December 2008. Online: http://www.otelecom.com/files/media_Files/06364916_OT%20Inaugurates %20First%203G%20Mobile%20Network%20In%20DPRK.pdf Orascom Telecom, ‘Koryolink’. Online: http://www.otelecom.com/Subsidiaries/ details.aspx?id=157 (accessed 18 May 2011) Pomfret, John (2010), ‘China Invests Heavily in Brazil, Elsewhere in Pursuit of Political Heft’, in: Washington Post, 26 July 2010. Online: http://www. washingtonpost.com/wp-dyn/content/article/2010/07/25/AR2010072502979. html?hpid=topnews Rapoport, Carla (2008), ‘Orascom Invades North Korea’, Economist Intelligence Unit, 30 January 2008. Online: http://globaltechforum.wordpress.com/2008/ 01/30/orascom-invades-north-korea/ Sanger, David E. (2010), ‘North Korea Keeps the World Guessing’, in: New York Times, 29 November 2010. Online: http://www.nytimes.com/2010/11/30/world/ asia/30korea.html?_r=2&hp Scissors, Derek (2010), ‘Where China Invests, And Why It Matters’, Forbes, 17 August 2010. Online: http://www.forbes.com/2010/08/17/china-spendinginvestment-overseas-markets-economy-china-tracker_print.html Scissors, Derek (2011), ‘China Global Investment Tracker: 2011’, Heritage Foundation, 10 January 2011. Online: http://www.heritage.org/Research/Reports/ 2011/01/China-Global-Investment-Tracker-2011 Shane, Scott and Andrew W. Lehren (2010), ‘Cables Obtained by WikiLeaks Shine Light Into Secret Diplomatic Channels’, in: New York Times, 28 November 2010. Online: http://www.nytimes.com/2010/11/29/world/29cables.html?_r=1 &hp Sigal, Leon V. (2011), ‘WikiLeaks Reveals South Korean Hopes, Not North Korean Realities’, in 38 North, 10 February 2011. Online: http://38north.org/2011/ 02/wikileaks-reveals-south-korean-hopes-not-north-korean-realities/ Snyder, Scott (2010), ‘North Korea’s Renewed Push for Foreign Investment at RajinSonbong’, in: East Asia Forum, 12 March 2010. Online: http://www. eastasiaforum.org/2010/03/12/north-koreas-renewed-push-for-foreign-invest ment-at-rajin-sonbong/ Solomon, Jay and Jeremy Page (2011), ‘Chinese Firm to Invest in North Korea’, in: Wall Street Journal, 19 January 2011. Online: http://online.wsj.com/article/SB 10001424052748704678004576090270026745368.html?KEYWORDS=rason Song, Jung-a (2008), ‘Orascom Scores North Korea Mobile First’, in: Financial Times, 31 January 2008. Online: http://www.ft.com/cms/s/0/677017da-cfd811dc-9309-0000779fd2ac,dwp_uuid=319b98a6-0c1a-11db-86c7-0000779e2340. html

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Stanley Foundation (2005), ‘Future Multilateral Economic Cooperation With the Democratic People’s Republic of Korea’, conference organised in co-operation with the German Council on Foreign Relations, Berlin, 15-17 June 2005. Online: http://vps.stanleyfoundation.org/initiatives/eenk State Statistical Bureau of People’s Republic of China (1981), Statistical Yearbook of China, Beijing: State Statistical Bureau of People’s Republic of China Stier, Ken (2011), ‘What an Egyptian Billionaire Thinks of the New Order’, in: Time, 18 February 2011. Online: http://www.time.com/time/specials/packages/article/ 0,28804,2045328_2045333_2052116,00.html TeleGeography, 20 April 2010, ‘Govt to Produce Own Handsets as Demand for Mobile Phones Rises’. Online: http://www.telegeography.com/cu/article.php? article_id=32849 Thompson, Drew (2011), ‘Silent Partners: Chinese Joint Ventures in North Korea’, US Korea Institute, 3 February 2011. Online: http://uskoreainstitute.org/research/ special-reports/silent-partners-chinese-joint-ventures-in-north-korea/ (accessed 30 May 2011) Tisdall, Simon (2010), ‘Wikileaks Cables Reveal China “Ready to Abandon North Korea”’, in: Guardian, 29 November 2010. Online: http://www.guardian.co.uk/ world/2010/nov/29/wikileaks-cables-china-reunified-korea UNCTAD (2010), World Investment Report 2010, New York: UNCTAD Wang, Bijun and Yiping Huang (2011), ‘Is There a China Model to Overseas Direct Investment?’, in: EABER Newsletter, April 2011. Online: http://www.eaber.org/ intranet/documents/76/2480/EABER_SABER_Newsletter_2011_04.pdf Wang, Zhaokun (2010), ‘NK Leases Islands to Beijing: Report’, in: Global Times, 29 October 2010. Online: http://world.globaltimes.cn/asia-pacific/2010-10/587571. html Washington Post, 30 November 2010, ‘Wikileaks Reveals Plans for North Korean Collapse’. Online: http://www.washingtonpost.com/wp-dyn/content/article/2010/ 11/30/AR2010113000197.html Williams, Martyn (2011a), ‘North Korea Tops 3G Ranking’, in: NorthKoreaTech, 12 January 2011. [All NorthKoreaTech references online: http://www.northkorea tech.org] Williams, Martyn (2011b), ‘Orascom Telecom CEO Meets North Korean leader’, in: NorthKoreaTech, 23 January 2011 Williams, Martyn (2011c), ‘Orascom CEO Meets Kim Jong Il’, in: NorthKoreaTech. org, 24 January 2011 Williams, Martyn (2011d), ‘3G Users to Hit 1 Million This Year, Says Report’, in: NorthKoreaTech, 4 February 2011 Wines, Michael (2009), ‘China Willing to Spend Big on Afghan Commerce’, in: New York Times, 29 December 2009. Online: http://www.nytimes.com/2009/12/ 30/world/asia/30mine.html?_r=1&hp Yoon, Edward (2011), ‘Status and Future of the North Korean Minerals Sector’, Nautilus Institute, 6 January 2011. Online: http://nautilus.org/publications/ essays/napsnet/reports/DPRK%20Minerals%20Sector%20YOON.pdf Zhongguo dui wai jing ji mao yi nian jian [China foreign economic and trade yearbook] (1988), Beijing: Zhongguo zhanwang chubanshe

THE INTERNATIONAL COMMUNITY AND THE NORTH KOREAN NUCLEAR PROGRAMME Sebastian Harnisch and David J. Roesch

ABSTRACT The international community has employed different mechanisms to contain the North Korean nuclear programme over the last two decades, each animated by a different leadership model. Model 1, emerging in the 1993-94 crisis and forming the basis for the Agreed Framework, was characterised by US leadership, US-DPRK negotiations, and the provision of economic incentives. The breakdown of the Agreed Framework process in 2002 and 2003 made possible a second model, marked by a Chinese-led regional approach and the creation of a case-specific non-proliferation regime by the UNSC. This paper proceeds by outlining the development of the North Korean nuclear programmes and the measures the international community has taken to address them. We find that a fledgling model 3 approach, focused on preventing horizontal proliferation and led by a US-Chinese duopoly, might be in the making. Key words: North Korea, Six Party Talks, United States, non-proliferation, IAEA, nuclear weapons

1 INTRODUCTION The North Korean1 nuclear programme is among the gravest threats to the international nuclear order and world peace. North Korea not only left the Nuclear Non-proliferation Treaty (NPT) in 2003—becoming the first state to do so in the treaty’s 40-year history—and tested nuclear devices in 2006 and 2009, but it has also repeatedly exported conventional weapons, missile and nuclear technology to states in South Asia and the Middle East. Furthermore, North Korea does not ——— 1 Following common usage, this article uses ‘North Korea’ and ‘Democratic People’s Republic of Korea’ (DPRK) interchangeably. The same applies to ‘Republic of Korea’ (ROK) and ‘South Korea’.

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fully recognise the 1953 line of demarcation, particularly in the waters surrounding the Korean peninsula, and continues to question the status quo on the peninsula through targeted military provocations, including the sinking of the South Korean naval corvette Cheonan (Ch’ǂnan) in March 2010 and the shelling of Yǂnp’yǂng island in November 2010 (Bermudez Jr. 2011; Joint Civilian-Military Investigation Group 2010). This paper argues that the international community’s handling of the North Korean nuclear programme has been increasingly steered by a duopoly formed by the United States and China and has employed three distinct models to address the North Korean challenge. Model 1, which emerged in 1994 during the first nuclear crisis, emphasised delegation to the United Nations Security Council (UNSC) and USDPRK bilateral co-operation with financial and political support from neighbouring US allies (Japan, ROK) through the Korean Energy Development Organisation (KEDO). Model 2 arose when the US under the Bush administration attempted to reconstruct the non-proliferation regime through retributive policies aimed at members of the ‘axis of evil’. The key shift occurred when the UNSC failed to agree on sanctioning North Korea’s NPT withdrawal and delegated diplomatic talks to the Three Party format under Chinese leadership. In this model, the People’s Republic of China (PRC, China) attempted to build broadbased support for a diplomatic resolution, leaving the North Korean regime intact while reining in its proliferation behaviour. Through its resolutions and the imposition of sanctions since 2006, the UNSC has created a case-specific arms control regime for North Korea, in substitution for the faltering NPT-based disarmament regime. Today, outlines of a third model are emerging in the face of North Korea’s strategy of targeted provocations. Rooted in a minimal consensus between the five permanent members of the UNSC that they would acquiesce in a limited North Korean nuclear potential but bar horizontal proliferation (i.e. nuclear exports), it involves a tacit agreement to leave the containment of further military provocations to bilateral and plurilateral actions under US leadership. This US-China duopoly has thus established a stop-gap regime of sanctions and procedures to complement the existing nuclear non-proliferation regime and alleviate its flaws in the North Korean case. In the following sections, we provide an overview of the measures the international community and its bodies have taken to address the North Korean nuclear programme from its inception to the present day. These measures are

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then critically evaluated. We find that while international efforts may have failed to prevent or even roll back North Korea’s programmes, they have had some degree of success in managing North Korea’s nuclear potential. A concluding section summarises our analysis and outlines its implications.

2 THE NORTH KOREAN NUCLEAR PROGRAMMES There are two different ways of acquiring fissile material for nuclear weapons: separating plutonium from spent fuel rods, or processing and enriching uranium.2 While North Korea’s programme and the international efforts to contain it have focused on the plutonium route, the existence of an enrichment programme was disclosed in November 2010, confirming long-standing suspicions to that effect (Albright and Brannan 2010; Hecker 2010a, 2010b). The following paragraphs outline the DPRK’s plutonium- and uranium-based programmes and its legal obligations. The country’s now probably dormant plutonium-based nuclear weapons programme was based on security considerations fostered inter alia by the US threat of using nuclear weapons in the Korean War, the Soviet stance in the Cuban missile crisis, and South Korean nuclear ambitions in the 1970s. Over the last two decades, however, North Korea has also used the offers of a ‘freeze’ and improved transparency concerning its nuclear programme as bargaining chips and a means to generate revenue in talks with South Korea and the US (Harnisch 2003; Mazarr 1995b). Lastly, the regime began to lay claim to the status of ‘recognised nuclear-weapon state’ after its first nuclear test in 2006. Hence, North Korea has clearly evidenced the three central motives for acquiring nuclear weapons: security, economic interests, and prestige (Hecker 2010c). Technologically, the plutonium programme builds on Soviet technology, mainly a smaller research reactor dating to the 1960s and a 5megawatt (MW) reactor at the Yǂngbyǂn site. These have allegedly been used to generate electricity and for medical and research purposes. Besides help from China and the Soviet Union, North Korea gained access to uranium enrichment technology through the Abdul ——— 2

Enrichment refers to increasing the share of Uranium-235, an isotope of which natural uranium contains less than 1 percent.

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Quadeer Khan proliferation ring prior to its uncovering in 2004 (Chestnut 2007). It remains unclear what exactly North Korea received from Pakistan, but the then-president, Pervez Musharraf, disclosed in his autobiography that Pakistan had delivered two dozen P2type centrifuges and hands-on training to the DPRK. Furthermore, in November 2010, North Korea gave the American scientist Siegfried S. Hecker a tour of a uranium enrichment site housed in the former fuel fabrication plant at the Yǂngbyǂn site. There is widespread agreement that North Korea could not have indigenously produced and assembled the roughly 2,000 centrifuges shown to Hecker, given, in particular, that the site was under surveillance by the International Atomic Energy Agency (IAEA) until April 2009. There seem to be two implications here: firstly, in spite of the sanctions put in place by three rounds of UN resolutions, North Korea continues to import sensitive technology, probably through Chinese middle men.3 Secondly, it is ‘highly likely’ that further facilities like this one exist elsewhere in North Korea (Hecker 2010b). During Hecker’s visit, the North also revealed that it had begun work on two light-water reactors (LWRs), also at the Yǂngbyǂn complex. Nonetheless, we would argue that it does not necessary follow from these recent developments that the DPRK is trying to produce enriched-uranium nuclear weapons; such a step would make little military sense.4 Lastly, work on two reactors of 50 MW and 200 MW respectively, originally begun in the 1980s and frozen under the 1994 Agreed Framework, has not been completed, and they are thought to be in a sufficiently decrepit state to render them useless. ——— 3

An estimated 50 percent of the DPRK’s external trade is conducted through the three railway links with China. Furthermore, the Chinese port of Dalian plays a crucial role in North Korean trade. This seems to imply at the very least Chinese acquiescence, especially since there have been several cases of interdicted exports that originated in or transited though Dalian, for example, in 2009, chemical protective equipment bound for Syria was discovered in Pusan in South Korea; and in 2010, spare parts for tanks were intercepted in South Africa (Panel of Experts 2010: 22). In addition, it has long been known that the DPRK uses an intricate web of middlemen and front companies, among other places in China. 4 Aside from the technical difficulty of weaponising enriched uranium, it would currently be considerably cheaper and more reliable for North Korea to reactivate its plutonium programme, which has a demonstrated capability. Further, it would make little sense for North Korea to disclose publicly the location of an enrichment facility serving military purposes. This leaves open the possibility of a North Korean Qom, i.e. a secret enrichment facility.

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From a legal perspective, the DPRK is bound by its accession to the IAEA in 1974 and the NPT in 1985. With considerable delay, North Korea signed a comprehensive safeguards agreement in April 19925 and provided the IAEA with a first report on its nuclear production facilities and activities the following month (IISS 2004: 7). Ensuing IAEA inspections suggested stark discrepancies in the North Korean report: contrary to the claim that the reactor had been shut down only once to exchange damaged fuel rods, environmental sampling indicated it had been shut down three times since 1989. According to the inspectors, reprocessing campaigns between 1989 and 1991 could have yielded enough plutonium for one to four nuclear weapons (IISS 2004: 7), whereas North Korea maintained it had only extracted 100 grams of plutonium (Harnisch 2003: 151). Furthermore, US satellite imagery released to the IAEA in the fall of 1992 showed that the DPRK had covered up two nuclear waste sites at Yǂngbyǂn prior to the inspections (Fischer 1997).

3 MODEL 1: THE FIRST NUCLEAR CRISIS 1993-1994 The first North Korean nuclear crisis saw the development of what we call model 1, the attempt to rein in the nuclear programme through US-DPRK bilateral co-operation and the involvement of the UNSC. The eventual resolution and ‘freeze’ of the North Korean plutoniumbased programme in exchange for economic incentives resulted mainly from US-DPRK negotiations and was to be monitored by the IAEA. After futile attempts by the IAEA director, General Hans Blix, to resolve the open questions outlined above through regular inspections, the IAEA Board of Governors on 25 February 1993 demanded that North Korea accept special inspections within three months—a first in the IAEA’s history (Mazarr 1995a: 95). ‘Special inspections’ go beyond the facilities declared by a country and are supposed to provide the Agency with on-demand access to suspicious undeclared sites. In a reversal of President Bush’s cancellation of the 1993 ‘Team Spirit’ joint and combined exercises with South Korea, the incoming president, Clinton, announced that the manoeuvres, held annually since ——— 5

An item-specific safeguards agreement (INFCIRC/252) had been signed on 20 July 1977, placing two research facilities at Yǂngbyǂn under safeguards.

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1976, would go ahead in 1993. Against this backdrop, the North Korean leadership under Kim Il Sung rebutted IAEA demands not only by denying inspectors access, but also by, for the first time, declaring its intention to withdraw from the NPT on 12 March 1993. Accordingly, the Board of Governors found North Korea to be in breach of its safeguard obligations and forwarded the case to the UNSC (IAEA General Conference 2003; Sloss 1995: 861-75). In its resolution 825 of 11 May 1993, the UNSC called upon the DPRK to reconsider its withdrawal and to admit IAEA inspectors into the country. Furthermore, with 13 votes and abstentions by China and Pakistan, the Council mandated bilateral negotiations aimed at resolving the crisis. The Council thereby underscored North Korea’s treaty obligations while also providing for the possibility of a negotiated resolution as intended by article 33, chapter VI of the UN charter. It did not criticise North Korean behaviour, but merely referred to the IAEA’s position; Russia, the United Kingdom and the US went further than the Council by questioning the validity of the reasons offered by North Korea. They did not, however, question the DPRK’s right to withdraw under article X of the NPT as such (Perez 1994: 777). Following negotiations with a US special envoy, Robert Gallucci, North Korea suspended its withdrawal on 11 June 1993—one day before it was to enter into force—without, however, retracting it altogether. In the US-DPRK joint statement signed on the same day, North Korea promised to fulfill its NPT obligations and to accept the ‘impartial’ application of full-scope safeguards. This, however, was made conditional on the continuation of negotiations. In exchange, the US provided assurances against the use of force, including the actual or threatened use of nuclear weapons. Following the joint statement, relations between the IAEA and North Korea deteriorated in the second half of 1993, with the DPRK claiming a ‘special status’ in the NPT and offering to maintain the continuity of inspections by changing batteries and film rolls. The IAEA, however, continued to push for unfettered access. The US for its part pressured the Agency to delay finding North Korea in breach of its safeguards agreement so as to make room for further negotiations before again appealing to the UNSC. Bilateral negotiations resulted in a ‘memorandum of understanding’ in December 1993, allowing for IAEA inspections of seven known sites, while leaving open the question of the alleged storage sites and taking swipe samples (Wit, Poneman and Gallucci 2004: 119-21).

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IAEA inspections in March 1994 led to an escalation of tensions and the breakdown of negotiations. North Koreans prevented inspectors from taking swipe samples at the suspected sites, making it impossible to arrive at a complete picture of past reprocessing campaigns and creating serious doubts about the IAEA’s ability to monitor and safeguard the upcoming refuelling of the reactor. The issue at stake here was accounting for the 1989 shutdown and the ensuing reprocessing campaigns. While the DPRK in its initial report to the IAEA maintained that it had separated only an insignificant amount of plutonium (about 100 g), the 1993 inspections painted a different picture. To assess fully the veracity of the North Korean report, the IAEA needed access to either the alleged fuel dumps revealed by US satellite imagery or the fuel rods due to be discharged from the 5-MW reactor in 1994. Without access to either of the two, it was virtually impossible for the IAEA to determine how much plutonium had been separated. North Korea publicly threatened to reprocess the 8,000 fuel rods the 5-MW reactor contained and began unloading them in May 1994 without IAEA inspectors being present. Furthermore, it took deliberate measures to obscure further its nuclear history by, for example, not labelling fuel rods and mixing them up. On 27 May, Hans Blix explained in a letter to the UNSC that 60 percent of all fuel rods had been removed so far and that by failing to label and sort them, the North was making it impossible to reconstruct the operating history of the reactor in the future without resorting to (potentially manipulated) operating records. This resulted in another UNSC presidential statement—a resolution pushed by Western members and Russia had been blocked by China—on 30 May (President of the Security Council 1994), strongly urging North Korea to unload the 5-MW reactor in a manner compliant with IAEA requirements. But rather than allowing the IAEA to monitor the reactor’s unloading, as demanded by the Agency, North Korea promptly rejected the demands on 2 June and accelerated the unloading of the reactor, preparing for the reprocessing and separation of plutonium. With China’s vote, the IAEA Board of Governors decided on 10 June to suspend all non-medical technical assistance to North Korea, whereupon North Korea declared its withdrawal from the Agency (13 June) and said it would consider any sanctions a ‘declaration of war’. While the UNSC debated a US proposal for a wide-ranging sanctions regime and the US National Security Council seriously considered bombing the Yǂngbyǂn site, a private initiative of the former US

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president, Jimmy Carter, eased tensions significantly. He met with North Korean leader Kim Il Sung in Pyongyang on 15 and 16 June 1994. Kim agreed to freeze the nuclear programme and place it under IAEA inspections in exchange for improved relations with the US and resumed high-level bilateral negotiations. Despite Kim Il Sung’s death on 8 July 1994, the US and North Korea signed the ‘Agreed Framework’ in Geneva on 21 October 1994.

3.1 Implementing the Agreed Framework: US leadership and the role of the UNSC and IAEA The Agreed Framework is—especially in its nuclear provisions—a complicated executive agreement (Agreed Framework between the United States of America and the Democratic People’s Republic of Korea 1994). This section outlines the main provisions of the agreement and the IAEA’s role in its implementation. The Agreed Framework lays out a three-step process. First, the DPRK freezes its ‘graphite moderated reactors and related programs’ (section I, paragraph 3). This includes halting the construction of the two larger reactors, shutting down the 5-MW reactor, the fuelfabrication and reprocessing plants, and securing the 8,000 fuel rods removed in May 1994. The IAEA monitors this and the DPRK remains a member of the NPT. Progress is rewarded by improved economic and diplomatic relations, for example, the establishment of liaison offices, US negative security assurances and the lifting of trade barriers and sanctions within three months (sections I and II). The US also arranges for the construction of two LWRs by a target date of 2003 (IISS 2004: 39). Lastly, 500,000 tons of heavy fuel oil (HFO) delivered annually compensate North Korea for the energy shortfall resulting from the freeze. In the second phase, when ‘a significant portion of the LWR project is completed, but before delivery of key nuclear components’, the DPRK allows IAEA special inspections of the contentious waste sites in order to account for North Korea’s pre-1992 nuclear record. Concurrently, all fuel rods are removed from North Korea. In the final phase, the second LWR is completed and the Yǂngbyǂn site dismantled (IISS 2004: 10-13, 39; Martin 1999: 37, 2002: 52-3; Stanley Foundation 2006: 3; Wit 1999: 60-61). To implement the delivery of fuel aid and the construction of the two LWRs, the Agreed Framework

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stipulated that the ‘U.S. will organize under its leadership an international consortium’ (section I, article 1). This was realized on 9 March 1995, when the ROK, Japan and the US founded KEDO. Essentially, the Agreed Framework allowed North Korea to trade the gradual uncovering of its nuclear past, including its actual nuclear weapons capacities, for external aid in order to stabilise the regime, a basic bargain that was also to be at the heart of the Six Party Talks (SPT) begun in 2003. On 4 November 1994, the UNSC tasked the IAEA with carrying out those inspections mandated by the Agreed Framework, which were then authorized by the IAEA Board of Governors on 11 November (President of the Security Council 1994). This de facto suspension of the IAEA’s safeguards privileges was problematic, given that for the Agency, North Korea’s safeguards obligations remained intact despite its unilateral and unaccepted withdrawal from the NPT and the IAEA.6 Against the backdrop of the Iraq debacle, however, the Agency was able to strengthen significantly its role as an enforcer in the North Korean case. Not only were new methods of detection and analysis used successfully and the right to special inspections confirmed by the Board of Governors, but the practice of collecting and making use of information provided by third states was also established (Fischer 1997: 293-4). This was to become an essential element of the 1997 Additional Protocol, which relies heavily on the use of both open-source and intelligence material provided by member states. Should a state be found to be in violation of its safeguard agreements based on the newly-available information, the case could then be referred to the UNSC. Nonetheless, it is crucial to note that the Agreed Framework reflects the fact that the key US concern was preventing further separation of plutonium through enforcing a freeze on existing North Korean facilities, rather than the accounting for past activities. Effectively, consideration of the second issue was postponed indefinitely, even though the Agency had for the first time made use of the ‘special inspections’ instrument. Significant questions remained as to how effective this tool was, given that the IAEA had to back down in the first ——— 6

This interpretation is shared by the UNSC (President of the Security Council 1994; UN Security Council 2006, passim). Interestingly, this reading hinges on the view that the DPRK is still party to the NPT, since North Korea’s safeguard agreement stipulates that it remains in force only as long as the DPRK is a member of the NPT (IAEA 1992, article 26).

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North Korean nuclear crisis and the apparent infeasibility of UN sanctions to back up IAEA findings of violations. In spite of some technical process, the KEDO project quickly ground to a halt, with both North Korea and the US time and again trying to make meeting their obligations contingent on new and farther-reaching conditions. North Korea’s offer to cease the export of delivery systems to trouble spots (South Asia, Middle East) and building activities in exchange for ‘financial incentives’ is a case in point. On the US side, Congress, now newly Republican, attempted to broaden significantly the North Korean agenda by introducing missile proliferation and human rights issues, and in turn making the Agreed Framework contingent on North Korean accommodation on these topics (Hathaway and Tama 2004; Martin 2002: 55-7). North Korean military provocations, such as the 1996 submarine infiltration incident off the east coast of South Korea and the 1998 intermediate-range Taepodong-1 missile tests, decreased the willingness among the KEDO states to follow through on the agreement. An attempt by the Clinton administration to revitalise the KEDO project by proffering a comprehensive solution, including the question of delivery systems exports, culminated in a series of high-level meetings in the fall of 2000, with North Korean Vice-Marshal Jo Myong Rok visiting the White House and Secretary of State Albright going to Pyongyang and meeting Kim Jong Il. However, despite this promising start, the initiative faltered in December 2000 and during the transition to the new US presidency, a result not least of the incoming administration’s very different views on North Korea (Martin 2002). In sum, the first nuclear crisis on the Korean peninsula was temporarily resolved through US-DPRK negotiations, which resulted in the Agreed Framework. It is hard to overstate the importance of US leadership during this period. While China did abstain in the UNSC vote on resolution 825 and voted in favour of the cessation of IAEA aid to North Korea, these votes must be seen largely as reactive. US initiatives were clearly the driving force throughout 1993 and 1994.

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4 THE SECOND NUCLEAR CRISIS (2002-2004): WANING US LEADERSHIP AND PLURILATERAL CONFLICT MANAGEMENT WITHOUT THE UNSC George W. Bush’s administration oversaw a significant change of track in dealing with the DPRK. The KEDO project and the underlying arrangement quickly entered troubled waters, with voices opposing any co-operation with ‘rogue states’ quickly gaining the upper hand within the administration. After completing its North Korea policy review in June 2001, US policy-makers now demanded the ‘complete, verifiable and irreversible dismantlement’ (CVID) of nuclear facilities. Furthermore, after the 9/11 attacks the US president announced in January 2002 that his administration would proactively counter states of the so-called axis of evil, which included North Korea. The UNSC’s failure to sanction the DPRK’s withdrawal from the NPT further exacerbated US disillusionment with multilateral approaches. In March 2002 then, the Bush administration for the first time refused to certify North Korean compliance with the Agreed Framework, a necessary precondition for Congressional authorisation of funds to meet US KEDO obligations. It claimed that from a legal perspective, North Korea was in ‘anticipatory breach’ of the Agreed Framework, which set the date for the first inspection concurrent with the delivery of the first critical components of the first LWR to the country (scheduled for mid-2005). Nonetheless, to keep the Agreed Framework from collapsing and to ensure heavy fuel oil shipments could continue, Bush waived the certification requirement (Office of the Press Secretary 2002). While Gallucci, the US chief negotiator of the agreement, and KEDO representatives vehemently criticised this interpretation, Asian allies of the US pushed for direct bilateral talks between the US and the DPRK. When these eventually took place in October 2002, the US delegation to Pyongyang confronted the North Koreans with intelligence suggesting that they were pursuing a secret uranium enrichment programme (Sanger 2002). While there has been considerable debate over the exact wording, the members of the delegation took North Korean statements as an admission of having such a

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programme and claiming the DPRK had a right to develop nuclear weapons if it felt threatened.7 This caused a severe crisis. The US declared that North Korea did not comply with the Agreed Framework, with the contracts with KEDO, and with the inter-Korean denuclearisation agreement. The other KEDO states followed suit by suspending heavy fuel oil deliveries from November. North Korea ended the 1994 freeze by removing IAEA seals and surveillance equipment, eventually evicting all IAEA inspectors in the second half of December (Brooke 2002; IAEA Director General 2003: articles 7-10). The DPRK was thus in a position to reprocess over time the 8,000 fuel rods removed from the 5MW reactor. On 10 January 2003, North Korea declared its withdrawal from the NPT ‘with immediate effect’, arguing that the threemonth lead time stipulated by the NPT had passed between 12 March and 11 June 1993, after it had first announced its intention to withdraw (KCNA 2003). Whether this immediate withdrawal is legal and effective remains doubtful. The majority of the international community and of the international organisations involved did not accept North Korea’s original withdrawal (12 March 1993), the suspension thereof (11 June 1993), and the retraction of this suspension (10 January 2003) (Asada 2004).8 In the aftermath, however, the UNSC was unable to arrive at a common position. Both Russia and China opposed potential measures. After a session on 9 April 2003, the Council’s president reported merely that the Council supported further diplomatic efforts (du Preez and Potter 2003).

5 MODEL 2: REGIONALISATION OF THE CONFLICT, PRC LEADERSHIP AND SIX PARTY TALKS (2003-2008) Several factors combined to create a window of opportunity for Chinese initiatives in late 2002 and 2003. These included the breakdown of the Agreed Framework and the increasing US unilateralism outlined above. Furthermore, the impasse in UNSC deliberations brought about by the Chinese position and the US invasion of Iraq made a ——— 7

For a first-hand account of the meeting and its aftermath, see Pritchard (2007: 34-40). 8 See also footnote 6.

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Chinese multilateral initiative possible, with a focus on multilateral talks to arrive at a regional, diplomatic solution of the conflict.9 At the same time, the UNSC emerged as a much more active player during this phase, creating a case-specific non-proliferation regime to address the DPRK case. In our reading, this combination—increasing regionalisation of the conflict under Chinese leadership and the concurrent creation of a case-specific non-proliferation regime—marked a new approach towards the DPRK’s nuclear programme, which we label model 2. Pressured by China, North Korea in April 2003 agreed to three-way talks, which expanded into the Six Party Talks, with the US, the DPRK, China, Russia, the ROK and Japan participating. These talks were aimed at preventing—at least for the time being—any increase in the North Korean nuclear weapons potential. In the long run, however, they also aimed at the complete denuclearisation of the Korean peninsula (Harnisch and Wagener 2010). The first four rounds of talks saw only very limited progress, at one point adjourning for more than a year, while North Korea accelerated its nuclear activities and declared itself a nuclear power on 10 February 2005 (Nikitin 2009: 1). North Korea’s neighbours, South Korea, Japan and China, therefore repeatedly pushed the Bush administration to drop its CVID precondition in favour of a step-by-step approach. This resulted in the joint statement of 19 September 2005, which provided for North Korea to give up all its nuclear weapons and programmes, return to the NPT at an early time, and comply with its safeguards obligations. In exchange, the US reaffirmed that it had neither nuclear weapons in South Korea nor any aggressive intentions against the North. South Korea confirmed it possessed no nuclear weapons and that, in accord with the 1992 ‘Joint declaration on the denuclearization of the Korean peninsula’, it would not strive for them. All participants accepted North Korea’s declaration that it had the right to peaceful uses of nuclear energy. Furthermore, they promised to discuss the delivery of LWRs (and thus the de facto resumption of the KEDO process) ‘at an appropriate time’ (Huntley 2007: 471).

——— 9 Against the background of heavy bureaucratic infighting in the Bush administration, US Secretary of State Colin Powell was instrumental in suggesting the format and Beijing’s role as the host of the preliminary trilateral talks in April 2003 (see Pritchard 2007: 62).

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However, the ink on the paper had not dried before different interpretations of the document became evident (Chinoy 2008: 249-51; Pritchard 2007: 102-27). The US negotiator Christopher Hill had to read out a statement drafted by Vice-President Cheney’s office, which made further negotiations contingent on conventional disarmament and progress on human rights (Rozman 2007: 610). Then, on 15 September 2005, i.e. during the fourth round of negotiations, administration hawks passed financial sanctions against the Macao-based Banco Delta Asia (BDA), which held North Korean accounts worth $25 million (Bechtol 2009: 31). None of the charges levelled against the DPRK, including money-laundering, counterfeiting and other illicit activities, were new, so the timing indicated the hawks’ reassertion of control (Pritchard 2007: 131). These financial sanctions were the main obstacle to further talks after the DPRK had sounded out the unchanged US position in the first session of the fifth round in November 2005 (Moore 2008: 13). Facing stiffened US sanctions and the refusal to provide economic aid in exchange for a freeze, North Korea escalated the conflict again throughout 2006. After testing its Taepodong-2 missile on 4 July, the US national holiday, and several other missiles the day after, the DPRK announced on 3 October that it would shortly test a nuclear device; and on 9 October 2006 it detonated a small nuclear device yielding less than one kiloton (see CNS 2006). This time around, North Korean provocations gradually galvanised international criticism, as reflected by the UNSC’s reaction, which was prompt and increasingly in unison. In reaction to the missile test, the UNSC—albeit after considerable internal controversies pitting the US and Japan against Russia and China—passed resolution 1695 on 15 July 2006. It called on North Korea to suspend all missile-related activities, including production, export and tests, and called for its return to the NPT, the IAEA safeguards system, and the Six Party Talks. The resolution further mandated the cessation of all trade related to missile technology and weapons of mass destruction with North Korea.10 North Korea’s announcement on 3 October of an imminent nuclear test further closed the ranks. On 6 October, the UNSC president declared that the test would pose ‘a clear threat to international peace ——— 10

The operational sections, however, were not based on chapter VII (Lee 2007).

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and security’, indicating the Council’s willingness and ability11 to act under chapter VII of the UN Charter (President of the Security Council 2006).12 In response to the 9 October test itself, the Council unanimously and with no abstentions passed resolution 1718. Explicitly acting under chapter VII (article 41), it created a comprehensive and legally binding sanctions regime in order to contain and roll back the North Korean nuclear weapons programmes, beyond the NPT and IAEA obligations no longer observed by the country. With resolution 1718, the Council broke new ground. Acting under chapter VII, it demanded that North Korea ‘return to the Treaty on the Non-Proliferation of Nuclear Weapons and International Atomic Energy Agency (IAEA) safeguards’, while simultaneously putting targeted economic sanctions in place. Demanding North Korea’s return is, however, legally dubious, given that the NPT’s depository nations and the Security Council never accepted North Korea’s withdrawal in the first place (Damrosch 2009: 182). Still, the Council demanded and decided that North Korea should completely, verifiably and irreversibly abandon all nuclear weapons and programmes relating to nuclear weapons, weapons of mass destruction, and missiles. Further, resolution 1718 demands that North Korea provide the IAEA transparency measures extending beyond these [NPT and INFCIRC/403 safeguards] requirements, including such access to individuals, documentation, equipments and facilities as may be required and deemed necessary by the IAEA (paragraph 6, UNSC Res. 1718).

Effectively, the Council created a case-specific non-proliferation regime for a country demonstrably in violation of its safeguards obligations and the NPT,13 from which it had unilaterally withdrawn. What the Council did not do, however, is equally important. It did not impose comprehensive sanctions targeting the North Korean economy as a whole, which allowed South Korea and China to continue their ex——— 11 As opposed to resolutions, presidential statements are not voted on and thus usually reflect consensus opinions (Aust 2010: 194; Talmon 2003: 431-35). 12 Chapter VII stipulates that the UNSC, having determined that there exists a threat to the peace, breach of the peace, or an act of aggression under article 39, can impose sanctions (article 41) or use military means (article 42) 'to maintain or restore international peace and security’ (article 39). Crucially, actions taken under chapter VII are legally binding for all UN member states (article 48). 13 By testing a nuclear device as a non-nuclear-weapons state and exporting nuclear technology.

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tensive trade and investment activities. This position also led President Ahmadinejad of Iran to claim that similar sanctions would not stall Iranian uranium enrichment ‘even for a second’ (cited in Kittrie 2007: 387). In addition, the Council did not specify deadlines or behaviour that would trigger further sanctions. Thus, after the first nuclear test and intensive deliberations, the Security Council did not pursue a retributive strategy aimed at deterring other states from similar behaviour. Rather, it set its sights at containing the negative impact of North Korean proliferation activities on other regions and the future rollback of nuclear activities through the Six Party Talks.

5.1 Six Party Talks: from enthusiasm to rejection The impetus for taking up the Six Party Talks again was a change in US North Korea policy in the fall of 2006. The unexpected loss of both houses of Congress to the Democrats in the November mid-term elections turned Bush into a lame duck over night. Encouraged by the Democrats’ victory, Bill Richardson, governor of New Mexico, attacked the administration’s ‘out-sourcing’ of DPRK policy to China and called for direct talks with North Korea (ICG 2006: 14). The shifting power relations forced a number of pivotal hawks on North Korea to leave the administration. Secretary of Defense Donald Rumsfeld went on 18 December, UN ambassador John Bolton resigned, expecting his recess appointment would not be confirmed, and Robert Joseph, Under-Secretary of State for Arms Control and International Security, left in late January 2007 (Giacomo 2007; Martin 2007: 21). Late 2006 saw an ‘abrupt about-face in North Korean policy’ (Kim 2008: 3), with the US agreeing to secret bilateral negotiations in Berlin in January 2007. At the talks, US negotiator Christopher Hill and his North Korean counterpart agreed on the outlines of a ‘denuclearisation action plan’ intended to implement the 2005 joint statement. Making several significant concessions, the Bush administration reached a legally non-binding agreement with North Korea at the end of the third session of the sixth round, which in its immediate provisions largely resembled the Agreed Framework. Within 60 days, North Korea would freeze the Yǂngbyǂn facilities and allows IAEA inspectors to verify this. In exchange, the DPRK would receive 50,000 tons of HFO from South Korea. Additionally, the US would initiate

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the process of removing North Korea from the list of state sponsors of terrorism, exempt it from the Trading with the Enemy Act, and release the BDA funds within 30 days. The US administration not only eased its financial sanctions aimed at the DPRK, it also stopped making the removal of North Korea from the list of state sponsors of terrorism contingent on the complete, irreversible and verifiable dismantlement of the Yǂngbyǂn facilities. Table 1 Round 1 2 3 4

Overview and results of the Six Party Talks Duration 27-29.08.03 25-28.02.04 23-26.06.04 26.07-07.08.05 (1st session) 13-19.09.05 (2nd session)

5

09-11.11.05 (1st session) 18-22.12.06 (2nd session) 08-13.02.07 (3rd session)

6

19-22.03.07 and 18-20.07.07 (1st session) 27-30.09.07 (2nd session) 10-12.07.08 (3rd session) 23.07.08 (informal meeting in Singapore) 08-11.12.08 (4th session)

Results Chairman’s statement Chairman’s statement Joint declaration 19.09.05: DPRK promises dismantlement of nuclear facilities in exchange for incentives, US promises future normalisation of relations US imposes financial sanctions after nuclear test; Initial actions for the implementation of the joint statement, 13.02.07 Second-phase actions for the implementation of the joint statement, 03.10.07: DPRK promises freeze, verification and eventual dismantlement of its plutonium facilities in exchange for being removed from the US list of state sponsors of terrorism

Source: Authors’ compilation.

2007 and 2008 brought some promising developments. In June 2007, the BDA funds were unfrozen and transferred indirectly to North Korea, the Yǂngbyǂn shutdown was verified by the IAEA in June and July (Choe 2007a, 2007b; Cody 2007), and an agreement on how to proceed in dismantling the Yǂngbyǂn facilities was reached in October 2007. Eventually, the US even lifted the sanctions under the Trading with the Enemy Act. Such positive moves culminated most

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graphically in North Korea blowing up the cooling tower of the 5-MW reactor in Yǂngbyǂn in May 2008, an image that went around the globe. Nevertheless, implementation ground to a halt later in 2008, with verification measures emerging as a potential deal-breaker as the Bush administration proposed an extensive and intrusive regime in July 2008, demanding access to facilities all over North Korea (Kessler 2008b; Nikitin 2010: 19). The DPRK rejected the draft, arguing that only the 15 facilities named in the nuclear declaration should be subject to inspections. On 11 August, President Bush decided not to remove North Korea from the list of state sponsors of terrorism pending progress on the verification regime. The DPRK reacted by halting disablement and on 18 September announced it would recommence reprocessing (Kessler 2008a, 2008b), asking inspectors to remove monitoring equipment and seals on 22 September (IAEA Director General 2009). Christopher Hill’s trip to Pyongyang in early October resulted in an unknown inspection agreement, which led Bush to remove North Korea from the list of state sponsors of terrorism on 11 October (Niksch 2009). Even though North Korea resumed disablement activities and allowed the re-installation of monitoring equipment, the remaining months of the Bush tenure were marred by controversy over the exact content of the verification deal, especially concerning environmental sampling, which the DPRK refused to permit. Against a background of what is thought to have been a serious illness for Kim Jong Il and the concomitant rumours over his succession, the crisis escalated once more in the spring of 2009. In quick succession, the DPRK declared all political and military agreements with the ROK and the Northern Limit Line void—in the case of the 1953 armistice, for the fifth time since 1994 (Oh and Hassig 2010: 92). On 5 April 2009, it claimed to have launched a satellite into space on a long-range missile and reacted sharply when the UNSC’s president criticised this as a violation of resolution 1718, declaring its intention to pursue uranium enrichment repeatedly in April, June and September (KCNA 2009a, 2009b, 2009c, 2009d). North Korea conducted a second, more sizeable nuclear test on 25 May 2009 (ICG 2009) and medium-range missile tests on 4 July.

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6 LIMITING THE DAMAGE: THE UNSC AND CONTROL OF THE NORTH KOREAN POTENTIAL The second nuclear test resulted in the tightening of the existing sanctions regime through UNSC resolution 1874 (Nikitin, Chanlett-Avery and Nanto 2010; Roy 2010: 5), which prohibits all exports of North Korean weapons and authorises all states to board and inspect suspicious vessels. This amounts de facto to a multilateralisation of the USled Proliferation Security Initiative (PSI) of 2003 (Newman and Williams 2005), without, however, creating new grounds for inspections. The resolution explicitly refers to existing international law and makes inspection contingent on ‘convincing reasons’ on the part of the inspecting state, and on the assent of the state under whose flag the ship is registered or in whose waters the inspection is to occur (Padilla n.d.). The will of North Korea’s neighbours to provide convincing reasons and their ability to force suspicious vessels into ports will be decisive for the resolution’s implementation. While India and Pakistan, both important transit states, have co-operated, China’s implementation of the resolution remains less certain, as is underscored by the burgeoning trade between the two countries, which has been unaffected by sanctions (Haggard and Noland 2010: 541, 557; Noland 2008). North Korea’s use of cargo aircraft further complicates interdiction, as these cannot be inspected after takeoff, and some modern aeroplanes could reach Iran, for instance, without refuelling. It is during refuelling stops that weapons deliveries have previously been intercepted, as, for example, in Bangkok on 11 December 2009 (Nikitin, Chanlett-Avery and Nanto 2010: 6-8). The problem is further exacerbated by the likelihood of North Korea transporting high-value cargo by air rather than sea (Panel of Experts 2010: 21-3). After resolutions 1718 and 1874 entered into force, a growing number of shipments of conventional weapons were intercepted in the United Arab Emirates, South Korea, South Africa and Thailand (ICG 2010; Panel of Experts 2010: 26). North Korea’s long-standing cooperative relations with various states in the Middle East (Iran, Syria, Libya, Yemen) and Asia (Pakistan, Burma) in the field of missile and nuclear technology indicate, however, that it is willing and able to circumvent existing sanctions and to sell or barter its know-how and technology to other actors (Chestnut 2007; Hecker and Liou 2007).

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The DPRK is suspected of having exported nuclear technology to, inter alia, Syria, Iran and maybe Burma during its NPT membership up until January 2003. These states then used it in undeclared facilities, that is, without the safeguards mandated by the NPT (Albright et al. 2010; Htut 2010; Lin 2008). If this is the case, North Korea has violated article III, paragraph 2 of the NPT. If one is of the opinion that North Korean membership in the NPT did not end in 2003, the since proven co-operation with Syria on its Al-Kibar reactor would be a further violation of the NPT. At the very latest, however, UNSC resolution 1718 (14 October 2006) forms a legally binding prohibition of the export of nuclear technology and material by North Korea (Joyner 2008). The Security Council has to date not directly addressed the cooperation between North Korea and Syria. The Al-Kibar case thus far rests with the IAEA. Nonetheless, the Council did react indirectly by acquiescing in the Israeli preventive strike on the facility on 6 September 2007, as did the majority of the international community. Legally speaking, the Council thus accepts that a nuclear-weapon state outside of the NPT (Israel) takes military action against a non-nuclearweapon state within the NPT (Syria) that has probably violated its safeguards agreements (Spector and Cohen 2008). Political considerations, especially signalling to Iran, may have led the Council to accept this illegal behaviour (Asharq Alawsat 2008). Nevertheless, the Security Council would probably not condone unauthorised military actions against safeguards violators. Neither Israel nor the US has charged Syria with wanting to build nuclear weapons, let alone attack Israel in the near future. That North Korea reaffirmed its promise not to export nuclear material, technology or know-how as part of the agreement of 3 October 2007 can only partially cover up the fact that the Council lets third states (Israel) enforce its legally binding resolutions when it is internally divided (Weitz 2008). The Council is also divided over the question of whether, and if so how, it should respond to the sinking of the South Korean corvette Cheonan on 26 March 2010. The South Korean government accuses the DPRK of having torpedoed and sunk the vessel, which was close to the Northern Limit Line during a manoeuvre at the time; the North Korean military summarily denies this (KCNA 2010; Joint CivilianMilitary Investigation Group 2010). South Korea maintains that the Six Party Talks should be suspended for the time being and the UNSC

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involved. Just as it did in the case of enforcing the sanctions enshrined in UNSC Resolutions 1718 and 1874, China advocates a policy of restraint and rejects further sanctions (Global Security Newswire 2010).

7 NORTH KOREA AND THE INTERNATIONAL NUCLEAR ORDER: A TIME TO BREAK DOWN, AND A TIME TO BUILD UP? In terms of both policy-making and academic studies, there is a growing trend of considering the nuclear non-proliferation regime, stretching to the UNSC as its ultimate guardian, significantly weakened. This diagnosis is underscored by the North Korean case, where the interplay of the IAEA, the UNSC, and bilateral and multilateral negotiations has not prevented the DPRK’s emergence as the ninth de facto nuclear weapon state. Nonetheless, the non-proliferation regime’s tools and mechanisms have been employed and have delayed the North Korean nuclear programme and limited its extent. The regime has thus regulated, but not prevented, North Korea’s nuclear weapons programme. In this article, we have suggested that the international community’s efforts to address the North Korean nuclear programme are best understood in terms of two different models. Model 1, employed in the first nuclear crisis and underlying the Agreed Framework, was based on US leadership and US-DPRK diplomacy. It entailed the freeze of the DPRK’s plutonium programme in exchange for economic incentives. With the breakdown of the Agreed Framework in 2002 and increasing US disenchantment with multilateralism, a window of opportunity for a Chinese multilateral initiative emerged. Accordingly, model 2 saw both the regionalisation of international efforts under Chinese leadership in the Three Party and Six Party Talks, and the creation of a case-specific non-proliferation regime by the UNSC. The Security Council has thus taken on important tasks to uphold the NPT in 1993-94 and since 2006, for example, by establishing an independent sanctions regime. With North Korea having acquired nuclear weapons, the Council’s measures now aim at containing nuclear proliferation by North Korea by tightening export controls and intensifying inspections, especially on the sea lanes linking North Korea with South Asia and the Middle East (Schulte 2010). We would argue that this acquiescence in North Korea’s vertical proliferation can be traced back to a tentative agreement between

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China and the US. For the Republican Bush administration, a military engagement at the height of the Iraq conflict was politically and militarily impossible, although the Clinton administration had given serious thought to a preventive strike in a similar situation in summer 1994. For the PRC, a nuclear North Korea with a limited potential and moderated behaviour is obviously much more acceptable than any further destabilisation of the regime and/or Korean reunification (potentially leading to US forces on the Chinese border). It remains to be seen whether we are currently witnessing a renewed North Korean focus on extricating material concessions from South Korea, and the emergence of a model 3 built around the case-specific non-proliferation regime and a US-Chinese agreement to tolerate vertical, but not horizontal proliferation by North Korea (Byman and Lind 2010: 64-6). The DPRK’s strategy of highlighting its nuclear potential to make the international community pay for a freeze or inspections has been relatively unsuccessful since the breakdown of the Six Party Talks, as can be seen from the still suspended talks and their lack of resumption after the 2009 nuclear test. That North Korea’s disclosure of a uranium enrichment plant will result in another Agreed Framework-style deal seems highly unlikely at the time of writing. The recent conventional provocations aimed at South Korea—the shelling of Yǂnp’yǂng and the sinking of the Cheonan—could indicate an attempt to make South Korea the new patron, stepping in for the US-led group that delivered heavy fuel oil under KEDO and the 2007 deal. By defining rules and what constitutes a violation, the Security Council has only partially succeeded in plugging the holes in the nonproliferation regime that the North Korean case has laid open. It has now begun to sketch in how it interprets withdrawal from the NPT in relation to its crucial task of securing peace and international security. This blurry notion, which should focus on establishing a link between the violation of IAEA safeguards and the NPT’s criteria for noncompliance, might have to become much more detailed and precise in the near future, for instance, in the Iranian and Syrian cases. As for Israel’s airstrike against the Syrian nuclear facility, the Council— albeit with the tentative agreement of the better part of the nonproliferation regime’s members—even accepted a blatant violation of international law. Should such acquiescence in preventive strikes against the (potential) violators of safeguards become part of the common practice of states, it could lead to unintended proliferation effects. If regime mem-

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bers themselves no longer trust in the non-proliferation regime’s ability to enforce its rules and bank on third states to enforce them, rational proliferators will no longer invest in the tedious process of building nuclear facilities, but rather try to buy ready-to-use weapons systems. It is only plausible to assume that this is what the North Korean regime took away from the US preventive war against Iraq. Needless to say, the world would be better off if as few states as possible heeded this North Korean lesson.

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ABOUT THE AUTHORS AND EDITORS Tim Beal recently retired from Victoria University of Wellington, New Zealand, where he specialised in Asia and taught international marketing. He has an M.A. (Hons) in Modern Chinese Studies and a Ph.D. (on Chinese foreign trade), both from Edinburgh University. He has visited both Koreas a number of times, most recently in 2010, and has been a visiting professor at Korea University and a visiting fellow at the Korean Institute for International Economic Policy in Seoul. His most recent book on Korean issues is Crisis in Korea: America, China and the Risk of War (London: Pluto, August 2011). He maintains a website called Asian Geopolitics, which has a focus on Korea (http://www. timbeal.net.nz/geopolitics/). Further details at http://www.timbeal.net.nz/ Email: [email protected] Sabine Burghart is a Ph.D. candidate and research assistant to the chair of East Asian Economy and Society at the department of East Asian Studies, University of Vienna. She holds an M.A. in political science from the University of Leiden. Between 2004 and 2007, she served as programme officer at the Korea office of the German Friedrich Naumann Foundation for Liberty in Seoul. She was in charge of the foundation’s training programmes and capacity-building projects in the DPR Korea. Email: [email protected] Rüdiger Frank is professor of East Asian Economy and Society at the University of Vienna, also an adjunct professor at Korea University and the University of North Korean Studies (Kyungnam University) in Seoul. He holds an M.A. in Korean Studies, Economics and International Relations and a Ph.D. in Economics. In 1991/1992, he spent one semester as a language student at Kim Il Sung University in Pyongyang and has been researching North Korea ever since. Visiting professorships have

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included Columbia University New York and Korea University, Seoul. He is a council member and for the period 2011-13 secretary of the Association for Korean Studies in Europe and is deputy chief editor of the European Journal of East Asian Studies. He is a member of the Editorial Board for the book series Brill’s Korean Studies Library, an associate at The Asia Pacific Journal, a member of the Editorial Board of the Korea Review of International Studies, and co-founder and member of the Editorial Board of the Vienna Graduate Journal of East Asian Studies and Vienna Studies on East Asia. His major research fields are socialist transformation in East Asia and Europe (with a focus on North Korea), state-business relations in East Asia, and regional integration in East Asia. His most recent book is (with S. Burghart, eds) Driving Forces of Socialist Transformation: North Korea and the Experience of Europe and East Asia (Vienna: Praesens 2010). An edited book Exploring North Korean Arts is due to be published in summer 2011. Professor Frank is regularly consulted by governments, media and businesses on North Korea and East Asia. Most recently, this included consultancy work and a background policy paper for The Elders in preparation for the visit by former presidents Martti Ahtisaari, Jimmy Carter and Mary Robinson and former prime Minister Gro Brundtland to the Korean peninsula and China. In 2011, he was invited to join the World Economic Forum, Global Agenda Council on Korea. For more information, see http://wirtschaft.ostasien.univie.ac.at For publications, see http://univie.academia.edu/RuedigerFrank Email: [email protected] Tatiana Gabroussenko graduated from the Far Eastern State University (ex-USSR), where she majored in Korean history. She obtained her Ph.D. in East Asian Studies at the Australian National University. She is currently a visiting fellow at the School of Culture, History and Language, College of Asia and the Pacific (CAP) at the Australian National University. She is the author of a number of articles devoted to contemporary North Korean culture, literature and propaganda. Her most recent book, Soldiers on the Cultural Front: Developments in the Early History of North Korea Literature and Literary Policy, was published by University of Hawai’i Press in 2010. Email: [email protected]

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Sebastian Harnisch is professor of International Relations and Foreign Policy at the University of Heidelberg. His research interests span German and American foreign policy, European affairs, non-proliferation of weapons of mass destruction, and Korean affairs. Email: [email protected] Sarah Hasan is a Ph.D. candidate in the Graduate School of Korean Studies at the Academy of Korean Studies, Seongnam, South Korea. Her field of interest is migration studies and in particular the immigration and labour policies of South Korea. Email: [email protected] James E. Hoare Ph.D., retired from the British Diplomatic Service in 2003. He was posted to Seoul and Beijing, and his last appointment was as British Chargé d’Affaires and Consul-General in Pyongyang. He now writes and broadcasts about East Asia. Among his recent publications are A Political and Economic Dictionary of East Asia (Routledge 2005) and North Korea in the 21st Century: An Interpretative Guide (Global Oriental 2005), both written with his wife, Susan Pares. He is a senior teaching fellow at the School of Oriental and African Studies, University of London, where he teaches a course on North Korea, and an honorary departmental fellow in the Department of International Politics, Aberystwyth University. He lives in London. Email: [email protected] Patrick Köllner is director of the Institute of Asian Studies, GIGA German Institute of Global and Area Studies, and professor of political science, with a focus on political systems in East Asia, at the University of Hamburg. He holds a Ph.D. and a venia legendi in political science. Between 1996 and 2006 he was sole editor of the German-language predecessor of the Korea Yearbook. His research focuses on Japanese and Korean politics and political regimes, parties and other organisations more generally. He has published in journals such as Japan Forum, Japanese Journal of Political Science, Journal of East Asian Studies, Politische Vierteljahresschrift, and Social Science Japan Journal. Email: [email protected]

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Jane YeonJae Lee is currently a Ph.D. researcher in Geography at the University of Auckland. Her research examines the everyday experiences of young Korean New Zealander returnees on both the individual and the structural scale. In particular, her project explores the aspects of the identity transitions of the returnees and the changing meanings of ‘home’ within a transnational context. Outside of her Ph.D., she works as editor for the Graduate Journal of Asia-Pacific Studies. Her most recent publication is ‘Seeking Affective Health Care: Korean Immigrants’ Use of Homeland Medical Services’, in: Health and Place, 16 (1), 2010. Email: [email protected] Stefania Paladini is an economist specialised in international trade, strategic commodities and geopolitics. She is at present Senior Lecturer at Coventry University. Before relocating to the UK, she spent several years in Hong Kong and China with the appointment of Italian trade commissioner and advised companies on trade and investment in Asia. Her current research interests are the Asian presence in Latin America and government policies regarding strategic materials. Email: [email protected] Susan Pares has worked in the Research and Analysis Department of the Foreign and Commonwealth Office and, since 1987, as an editor and writer on East Asian subjects. She edited Asian Affairs, 1997-2001, and between 2000 and 2007 the Papers of the British Association for Korean Studies. She served in the British Embassy in Beijing, 1975-76 and accompanied her husband, James Hoare, on postings to Seoul (198185), Beijing (1988-91) and Pyongyang (2001-02). They are co-authors of several books dealing with East Asian and specifically Korean affairs. The most recent is North Korea in the 21st Century: An Interpretative Guide (2005). Email: [email protected] David J. Roesch holds an M.Sc. from the London School of Economics and is currently working towards a Ph.D. at the department of Politics and International Studies, University of Cambridge. His research interests include

ABOUT THE AUTHORS AND EDITORS

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US foreign policy, NATO and transatlantic relations, realist theories of international relations, and non-proliferation. Email: [email protected] Alena Schmuck is a graduate student of East Asian Economy and Society at the University of Vienna and is currently researching Nation Branding in the context of the East Asian political economies. She holds an M.A. and a B.A. degree in Journalism and Communication Studies, as well as a B.A. degree in Korean Studies from the University of Vienna. She conducted parts of her studies at Sogang University, South Korea, and Karlstad University, Sweden. During spring/summer 2010 she was an intern at the South Korean Presidential Council on Nation Branding in Seoul. Email: [email protected] Elisabeth Schober is a Ph.D. candidate at the department of Sociology and Social Anthropology, Central European University (CEU). She holds an M.A. in European Ethnology (Karl-Franzens University, Graz) and another in Nationalism Studies (CEU, Budapest). Her dissertation is based on 21 months of field research conducted in and near Seoul. It seeks to explore the history, dynamics, contentions and implications of the presence of members of the US Armed Forces in the urban entertainment districts of South Korea. Additionally, she is an editor for Korea Forum, a journal on politics, culture and art in the two Koreas, and a volunteer for the Berlin-based NGO Korea Verband. Email: [email protected] Sang-Yeon Sung is a university lecturer at the department of East Asian Studies and at the department of Musicology at the University of Vienna. As an ethnomusicologist, her research and teaching focuses on East Asian pop music and culture. She received her Ph.D. in ethnomusicology at Indiana University, US. Her research focuses on the competitive cultural policy of East Asian nations and their cultural promotion. Email: [email protected]

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ABOUT THE AUTHORS AND EDITORS

Niclas D. Weimar studied Modern Chinese Studies and Business Administration with a focus on Energy Economics in Cologne, Shanghai and Taipei, and is currently completing his second degree, an M.A. in Indology and Tamil Studies, Islamic Sciences and Modern History at the University of Cologne. He works at the Institute of Indology and Tamil Studies and is project assistant at the Centre of Modern Indian Studies at the Faculty of Economics and Social Sciences. His research interests concern rural development, energy policy, and international and transcultural relations in East and South Asia. Email: [email protected]

367 MAP OF THE KOREAN PENINSULA

Design and Imaging Unit, Durham University.