This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• Nuclear reactor at Wolsong-1 was closed earlier than expected after the government claimed that the reactor was not economically efficient.
• The National Assembly commissioned an audit to verify the shut-down process after lawmakers argued that an early closure was initiated despite lack of sufficient evidence.
• Although the Board of Audit and Inspection (BAI) was required to submit a final report within five months, the BAI delayed the submission several times as auditors faced difficulties in producing a unanimous conclusion on the report’s findings.

Implications: The discussion around the domestic nuclear power program raises questions on whether the government prioritizes its policy platform above economic realities. Because President Moon Jae-in came into office in 2017 with a promise to gradually phase out nuclear power plants, various voices now question whether Wolsong-1 was shuttered based on false pretenses to fulfill that election pledge. Suspicions were intensified by the head auditor’s claim that officials at the Ministry of Trade, Industry and Energy erased key documents. Some ruling party members also confirmed that drafts of the audit report affirmed the economic viability of nuclear energy.

Context:The South Korean government is also under severe constraints due to the growing financial burden of energy generation. Last year, public utility provider Korea Electric Power (KEPCO) faced a backlash after hinting that it might raise household electricity rates. The administration may face heavier criticism if the growing operational deficit at KEPCO is attributed to the government’s decision to phase out nuclear power plants. Taiwan currently faces a similar struggle with South Korea, weighing the merits of economic efficiency versus heightened safety concerns following the 2011 accident at the Fukushima Daiichi nuclear power plant.

Korea View was edited by Yong Kwon with the help of Sophie Joo, Sonia Kim, and Chris Lee.

Picture from the flickr account of the IAEA

By Mark Tokola

Toward the end of his September 23 (virtual) speech to the United Nations General Assembly, South Korean President Moon Jae-in said, “I believe (peace) begins with declaring an end to the war, an act that can affirm mutual commitments to peace.  I hope that the UN and the international community can provide support so that we can advance into an era of reconciliation and prosperity through the end-of-war declaration.”

To the general public, this would seem like common sense, didn’t the Korean War end in 1953?  Why not say so? Some commentators in Washington and Seoul, however, sat up when they read President Moon’s statement because some took it as a unilateral call to end the Korean War Armistice, which remains in effect and provides the basis for the still-useful United Nations Command (UNC), UNC-rear basing operations in Japan, and arguably the presence of U.S. forces on the Korean Peninsula.  The latter are based on a separate U.S.-ROK Mutual Defense Treaty, not the Armistice, but an end to the Armistice could lead to political pressure for a withdrawal of U.S. troops.

Furthermore, an end-or-war declaration would seem like a reward to Kim Jong-un when he has done nothing recently to deserve one.  North Korea has cut off communications with South Korea, failed to participate in cooperation called for in the 2018 Panmunjom Declaration, kept up its missile development, and, to add insult to injury, in June 2020 blew up the Joint Liaison Office that had been built in Kaesong as a symbol of rapprochement.

But, negative reaction to President Moon’s statement seems more a reflection of skittishness about the state of U.S.-ROK relations than to what he actually said.  It was nothing new.  The Panmunjom Declaration of September 2018 already made the point, and more directly.  “The two sides agreed to declare the end of war this year that marks the 65^th anniversary of the Armistice Agreement and actively promote the holding of meetings…with a view to replacing the Armistice Agreement with a peace agreement…”  The Panmunjom Declaration says that the United States and perhaps China, would need to be involved in such talks.  President Moon in his UNGA speech sounded like he was reminding North Korea of a prior commitment rather than calling for anything new.

President Moon’s call for peace also came in the context of a long line of peace declarations dating back to the 1992 Joint Declaration between South and North Korea in which they declared that they no longer had hostile intent towards one another.  The United States, too, in the Agreed Framework of 1994 provided assurances of peace to North Korea.  Declaring peace on the Korean Peninsula seems like an important thing to do, that’s why it’s been done repeatedly over the years.

That is not to say that there is not an important underlying issue in an end of war declaration.  Historically, armistices are followed by peace agreements intended to deal with the underlying causes of the conflict.  The Korean War Armistice Agreement calls for a high-level international conference to deal with “the Korea question.”  That was tried unsuccessfully in Geneva in 1954, and when North Korea is ready to do so, international diplomacy should be tried again.  The “Korea question” is not whether Kim Jong-un should have nuclear weapons, it is that neither Korea is reconciled to a permanent division of the Peninsula.  The future of the Peninsula is an issue for the Korean people, but settlement will require international support, exactly as Moon Jae-in said in his UNGA speech.  The Armistice is not an obstacle to peace talks, it is the basis for peace talks.

Mark Tokola is the Vice President of the Korea Economic Institute of America. The views expressed here are his own.

Image from versello’s photostream on flickr Creative Commons.

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• In response to the rapidly rising cost of housing in Seoul, the National Assembly passed a new bill that allows tenants to extend their contracts and placed a cap on the amount that rental deposits could be increased.
• However, observers expressed worry that this may lead landlords to favor monthly rental contracts over the traditional “jeonse” payment in which renters pay a lump-sum for their long-term lease and receive the deposit back when they vacate the space.
• According to polling in June, 57.1% of people in their 30s said that the current government’s housing policy is “untrustworthy.” This has been the main headwind dragging down the Moon Jae-in administration’s public approval rating.

Implications: The Korean government’s reliance on regulatory interventions to stabilize the housing market suggests that authorities are unwilling to see scarcity as the fundamental root of the problem. This conforms with President Moon Jae-in’s suggestion in his 2020 New Year’s press conference that the media’s negative portrayal of the government’s housing policy is partly to blame for the market instability. The administration’s skepticism may be further strengthened by the fact that while buying a house may be prohibitive for the average Korean, the cost of housing as a share of disposable income remains far lower in Korea compared to other countries in the OECD.

Context: This is not to discount efforts by the Korean government to both increase supply and decrease demand for housing in Seoul. Public policy has pushed developers to build new housing units in satellite cities. However, heavy traffic and insufficient public transportation connecting these new exurbs to Seoul’s city center have discouraged people from moving to these new areas. Simultaneously, the government has pushed to relocate major public institutions to Sejong City and elsewhere in the country; thereby, reducing the pressure on the capital to supply housing for its employees. However, these measures are unlikely to significantly shift the country’s center of gravity away from Seoul.

Korea View was edited by Yong Kwon with the help of James Constant and Sonia Kim.

Picture from user Chris Harber on Flickr

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• North Korea’s state-sanctioned Korean Christian Federation (KCF) has not commented on its South Korean counterpart’s draft of a joint prayer for peaceful reunification of the Korean Peninsula, raising the possibility that this ceremony might be canceled for the first time in more than 30 years.
• Many observers were caught by surprise as the KCF had traditionally maintained close ties with both South Korean and international religious organizations even during periods of heightened tensions.
• The communication freeze by the KCF follows the announcement by South Korea’s Ministry of Unification on May 26 that it will revise the Inter-Korean Exchange and Cooperation Act to ease grassroots exchanges with North Korea.

Implications: Any approach to North Korea, whether top-down or bottom-up, ultimately rests on Pyongyang’s receptiveness. Therefore, Kim Jong-un’s unwillingness to engage may forestall President Moon Jae-in’s efforts to maintain momentum around inter-Korean engagement through exchanges between grassroots and civic organizations. The lack of response from the North Korean christian organization is indicative of this challenge. Seoul had hoped that these non-governmental exchanges would sustain interest in state-led projects like inter-Korean tourism and reconnecting railways that are currently immobilized because of the diplomatic impasse.

Context: South Korea’s Korean Conference of Religions and Peace has been a consistent advocate of engagement with Pyongyang even as relations between the Koreas began to deteriorate in 2019. As a pan-religious consultative body, KCRP has long championed interfaith cooperation as a means for engaging the two Koreas. In 2017, members of the group discussed matters related to inter-Korean exchange with President Moon Jae-in during his first month in office.

Korea View was edited by Yong Kwon with the help of James Constant and Sonia Kim.

Picture from Universal Peace Federation

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• Although the government announced a new real estate policy on June 17, the unabated increase in housing cost attracted criticism from left-wing figures and groups.
• Adding to the growing dissatisfaction, research by news agencies revealed that many high officials were multi-homeowners. This prompted President Moon Jae-in to strongly urge senior government figures to sell any additional homes they own.
• According to polls released on June 24, 57.1% of people in their 30s said that the current government’s housing policy is “untrustworthy.” The 49.9 percent of the same cohort also responded negatively to the overall direction of the government’s economic policy, overtaking negative sentiments of respondents in their 50s.

Implications: More than challenges associated with managing South Korea’s ties with the United States or North Korea, disciplining Seoul’s housing market remains the issue that consistently catalyzes the most public scrutiny against the Moon Jae-in administration. The soaring real estate market has been a stumbling block for the administration since it took office in 2017. Critics point to its over-regulation of the market as the source of more intense speculative behavior and cost of living inflation for people without homes. As the Moon administration heads into the second half of its five-year term, the failure to address housing price volatility may erode the public mandate it gained in the April 15 legislative election.

Context: The Moon government’s strict real estate regulation draws on the policies of the previous progressive administration under President Roh Moo-hyun. The Roh administration introduced comprehensive real estate holding tax and implemented strong real estate regulations. However, it failed to control speculative behavior in the market. As a consequence, real estate prices continued to rise and created an opening for the conservative opposition to characterize progressive as “economically incompetent.”

Korea View was edited by Yong Kwon with the help of James Constant, Sonia Kim, and Ingyeong Park.

Picture from user Chris Harber on Flickr

By Hyungim Jang

The coronavirus pandemic poses a new challenge for the Moon administration’s ongoing efforts to boost domestic employment, especially for the youth. Some predict that young Koreans will become part of a “lost generation” as a consequence. However, national initiatives under the banner of a “Korean New Deal” are attempting to forestall this looming economic crisis.

Moon Administration’s Past Youth Employment Policies

When Moon Jae-in came into office in May 2017, the youth unemployment rate was at 9.3%. To address this issue, President Moon announced the following plans to bolster youth employment:

1. Increase the employment quota for young people (age 15-34) from 3 to 5% in public institutions, and gradually apply the quota to private companies, depending on their size.
2. Introduce jobseekers’ allowance of KRW300,000 ($249) for three months for the youth to invest in certification, job interviews, and application charges.
3. Support small and medium-sized enterprises (SMEs) when they hire young people through a “2+1” initiative: When a SME hires two young people, the government will provide the salary of a third young worker.

Although the administration did not fulfill its promise to adopt the quota, the youth unemployment rate fell by 1.4% points amid positive shift in the overall employment rate in 2018. The following year, the administration expanded its efforts to support youth employment with a 12.2% increase in the budget for these measures. As a result, the jobseekers’ allowance was increased to KRW500,000 ($415) for six months. The government also promised to expand the unemployment safety net by the end of 2020 to cover all vulnerable communities, which included lower-income workers, young people, and women who discontinued their careers. The administration also sought to legislate new rules requiring the prime minister to renew this commitment to youths every five years.

The Impact of COVID-19 on the Job Market

According to a survey of the top 500 companies in February 2020, more than a quarter of the companies (27.8%) said they planned to reduce new hires in the first half of the year compared to the same period in 2019. As COVID-19 spread rapidly, employment conditions for younger job seekers worsened. The open recruitment season for major corporations in Korea is generally between March and April. Due to the risk of infections, companies showed a preference for hiring experienced workers over new employees who required training. Most of the firms delayed open recruitment by more than a month, further reducing the number of young jobseekers who successfully found employment. In March, Statistics Korea reported that people in their 20s experienced the largest drop in the number of employed people compared to other age cohorts. In addition to this surge in unemployment, the number of people in their 20s who did not participate in the labor force (i.e. not looking for a job) jumped by 109,000 (35.8%) compared to the previous year. This is the largest change since Statistics Korea began compiling data in 2003

As the size of the workforce shrank due to the coronavirus, the recruiting process also shifted drastically. Many firms adopted contactless recruitment. For example, Samsung, the largest conglomerate in Korea, introduced a written test called Global Samsung Aptitude Test (GSAT) and conducted online interviews in May. Other large companies are also considering recruitment and interviews via social media and video. While online interviews received overall positive reviews from both interviewees and interviewers for its convenience and effectiveness, there were considerable frustrations with the online written test.

Applicants who took the GSAT noted that the problems were difficult to solve when administered on a computer. Adding to these challenges, applicants also received more difficult exam questions, adding further hurdles to employment. Even though the youth are tech-savvy, these efforts to transition recruit online still pose a significant barrier.

Government’s Immediate Plans for Youth Employment Post COVID-19

On March 20, the Ministry of Employment and Labor (MOEL) announced a supplementary budget to deal with the economic impact of the coronavirus outbreak. It proposed KRW 435.1 billion ($361 million) in funds to support small and medium-sized firms hiring young people this year.

In addition, at the end of April, the government announced an aid package to tackle a possible economic crisis from the COVID-19 outbreak. Among the funds, an additional KRW 10 trillion ($8.2 billion) was set aside for emergency employment stabilization measures. About KRW 870 billion ($721 million), approximately 8.7% of the total, was specifically allocated to support youth jobseekers. The administration also began specifically discussing ways to create new jobs for young people in the 5th Emergency Economic Council Meeting that was held on April 22. This came in response to concerns that if young jobseekers fail to enter the job market at the right time, they might become a “lost generation,” drifting through part-time jobs like many people who lived through the Asian Financial Crisis in 1997-98.

For example, during the Asian Financial Crisis and the 2008 global financial crisis, people in their 20s experienced the lowest employment rate compared to other age groups. To avoid a similar decline in employment, the government announced that it will work to create additional 550,000 jobs for young adults and low-income earners, which include “remote-jobs (contactless), tech jobs, and positions in SMEs,” in addition to allocating KRW 10 trillion ($8.2 billion) for employment support. Further specificity in what these jobs will entail have not been announced. The breakdown of the positions are as follows:

Source: Ministry of Economy and Finance

A key challenge is the rigidity of the employment market. Korea’s labor market is difficult to restructure because of strong laws protecting permanent employees. This makes companies prioritize reducing new employment when facing an economic recession.

In this environment, temporary employment for public-works projects are not expected to solve the problem in the long term. One Blue House officials described the 550,000 jobs as a short-term project that will end by the end of this year. The problem is that these jobs for the youth need to be managed carefully and differently from job-creation programs for senior citizens. It should be focused on building a sustainable career and vocational training to ensure that young people will adapt to the job market in the future.

Many studies such as Card et al. (2010, 2015) or Kluve (2010) suggested that direct employment programs in the public sector are not effective in the long term especially for the youth, and that they could even have negative effects. Researchers also criticized the fact that these public works programs are concentrated in digital, engineering, construction, and manufacturing sections, which are not sustainable or take into account the specialty of the youth labor force. In an interview with Dong-A Daily, Professor Park Ji-Soon recommended that more diverse jobs for the youth be created in the private sector through investments, instead of focusing in the public sector to simply endure the employment shock.

Korean New Deal policy: The Long Term Potential

Regulatory reform and integrating the youth workforce with the 4th Industrial Revolution may lead to high-quality jobs in the private sector and reduce youth unemployment.

On April 22, Moon administration announced a new economic plan during the 5th emergency economic meeting. President Moon explained that this “Korean New Deal” will not only create new jobs but also prepare the country for the 4th industrial revolution and a post-COVID-19 economy.

The administration started to outline more details of the Korean New Deal during the first and second Meeting of Central Economic Response Headquarters, which was held on April 29 and May 9. The project is mainly comprised of “the Green New Deal” to cope with climate change, and “the Digital New Deal” to redesign existing systems that are based on face-to-face relationships and replace them with digital platforms. In addition, the Korean New Deal incorporates biotechnology research, cultural content generation, and adopting digital management platforms to improve performance in areas such as public transportation. According to President Moon, Korean New Deal is not intended to merely overcome the crisis by creating temporary jobs, but to build a sustainable foundation for a new digital economy.

“Promoting Digital New Deals will make decent job opportunities, especially for young people,” said Kim Yong-beom, the 1st Vice Minister of Economy and Finance. “Since the service industry was hit the hardest by the COVID-19, the number of young job seekers has decreased significantly. I think it will also contribute greatly to complementing those jobs,” he added. Since the administration is working on a large-scale project to promote a digital economy, there are expectations for the increase in demand of the young talents in the technology field. Indeed, there was a rise in stock prices and increased recruitment in the IT industries in spite of the pandemic.

Moreover, immediate job dividends from these initiatives can help young jobseekers. According to research conducted by the Korea Development Institute (KDI), the time it takes for a college graduate to find their first job is negatively correlated with their long-term earning power. In Korea, the wage loss stemming from the delay in landing one’s first job is particularly high. If a college-graduate is held up from finding their first job by one year, their income for the first 10 years of employment will be reduced by 4 to 8% annually compared to peers of the same age who immediately found employment. Therefore, KDI argues that finding jobs at the right time is deeply important.

There are concerns whether these programs will be sustainable in the long-run. The Korean New Deal is set to continue until 2025. Since President Moon leaves his office in 2022, the project can only be maintained as part of a national agenda if the next administration commits KRW 45 trillion ($38 billion) out of the total New Deal budget of KRW 76 trillion ($63 billion).  If COVID-19 is not to have long-term employment consequences for Korea’s youth, the efforts only begin with the Moon administration.

Hyungim Jang is a student at Sungkyunkwan University, pursuing a degree in Economics and Politics.  She was an intern at the Korea Economic Institute of America in the Spring of 2020. The views expressed here are the author’s alone.

Picture from flickr user Mark Hanna

By Robert R. King

During a video conference between South Korean President Moon Jae-in and European Council President Charles Michel on June 20, the South Korean leader said “I believe there’s a need for North Korea and the United States to try dialogue one more time before the U.S. presidential election. The issues of nuclear programmes and sanctions will ultimately have to be resolved through North Korea-U.S. talks.”  A South Korean presidential aide said that President Moon’s office had conveyed these views to the White House.

It seems a bit unusual that President Moon’s interest in midwifing another Trump-Kim summit was made public after a conversation with the head of the European Union.  President Moon has played a key role in the U.S.-North Korean summitry that has taken place thus far, but making the proposal for a new summit public after a video conversation with the leaders of the European Union seemed inconsistent.

President Moon played a very visible role as the intermediary who brought a summit proposal to Trump in March 2018.  That effort led to the Singapore summit three months later.  It is not clear what role President Moon played in the second summit in Hanoi in February 2019.  That meeting ended prematurely when the final dinner, the signing of a joint statement, and other planned concluding events were abruptly cancelled after failed initial meetings.

The third of the three Trump-Kim meetings took place one year ago in June 2019.  This was the briefest and least formal of the meetings.  On an official visit by President Trump to South Korea, the two leaders traveled to Panmunjom in the Demilitarized Zone (DMZ) where the three leaders met informally.  Trump and Kim had a brief private meeting.  Despite the friendly handshake and Trump’s much photographed footstep onto North Korean soil, the U.S.-North Korea relationship has languished.

Is Trump Interested in Another Summit? 

The U.S. President seems a bit preoccupied with the resurgent COVID-19 pandemic in the United States.  Also, a new media frenzy has questioned “what did the President know and when did he know it” regarding reports that Russian intelligence were offering Taliban insurgents generous cash bounties for killing American soldiers in Afghanistan.

And looming over everything else for President Trump is the upcoming U.S. presidential election in November.  At this point, the outlook for Trump does not appear to be so promising.  The latest polling numbers suggest that Trump is lagging behind Joseph Biden by a significant margin, and in the last couple of months Biden has outraised Trump in campaign cash.

In a normal election year, Trump would be frantically crisscrossing the country from one mass rally to another.  His first effort to get into campaign rally mode in Tulsa, Oklahoma, on June 20, however, was a disappointment.  Preliminary publicity raised expectations with talk of millions seeking tickets, but the audience filled only a third of the seats at the arena.  Trump campaign staff were found infected with COVID-19 virus just before the rally began, and public health specialists publicly criticized the President for holding such a rally in the face of the intensifying pandemic.

Under these circumstances, President Trump may well be looking for a shiny bauble to dangle before the press to focus attention on him and draw attention away from the current domestic news stories that are less flattering.  Another summit with Kim Jong-un could give him a new opportunity to change the news focus and let him play the role of global statesman.

On the other hand, with two previous summits and the meeting in the DMZ with Kim Jong-un from June 2018 to June 2019, the novelty and press-worthiness of another North Korea summit is certainly gone.  Furthermore, there is a distinct risk that the erratic Kim Jong-un might not give Trump the diplomatic triumph he seeks, and another Hanoi-style diplomatic flop before massed media cameras and microphones could contribute to an electoral disaster at home.  The risk-reward scale seems to be tilting heavily toward caution.

One straw in the wind, however, is that Deputy Secretary of State Stephen Biegun is visiting Seoul and Tokyo for meetings on July 6.  Before being elevated to his current position, Biegun was Senior Representative for North Korea Policy, and he negotiated with North Korean officials in connection with previous summits.  Also traveling with Biegun is Allison Hooker, senior National Security Council staffer on North Korea, who is one of the most experienced U.S. government officials on this issue.

Where is Kim Jong-un?

A key unanswered question is whether Supreme Leader Kim is interested in hand holding in front of the cameras with President Trump.  Over the last year North Korea has shown little interest in actually reaching an agreement with the United States.  The North Koreans walked away from senior-level diplomatic meetings in Stockholm in the fall of 2019 and called the session “sickening.”

In January of 2020 one of Pyongyang’s most senior and most experienced diplomats said “Although Chairman Kim Jong-un has good personal feelings about President Trump, they are, in the true sense of the word, ‘personal’.”  He then added that North Korea has “been deceived by the United States, being caught in the dialogue with it for over one year and a half, and that was lost time for us.”  Just last month, North Korean marked the second anniversary of the Singapore Summit with the United States.  On that commemorative occasion, the North Korean Foreign Minister asked, “Do we need to keep holding hands with the United States?”

Another question is whether Kim Jong-un is in a position to be seen up close by western news media, which would be an essential part of any summit for Trump.  Questions about Kim’s health surfaced in April when he failed to appear at the birthday commemoration of his grandfather Kim Il-sung.  This is the most important national holiday in North Korea, and Kim Jong-un’s presence has been the high point of the commemoration in the past.  Kim did not reappear until the festive opening of a new fertilizer factory after being absent from public view for over three weeks—the longest such gap in his public appearances since he assumed the leadership.

The appointment of Kim Jong-un’s sister Kim Yo-jong as an alternate member of the Party Politburo has raised questions about his health.  His sister has increasingly played a leading role in verbal attacks on the United States and South Korea.  She was the author of a harsh attack on South Korea for permitting defector organizations to launch balloons with leaflets from the South to float into the North.  She blasted South Korea’s President Moon Jae-in and ordered the picture-worthy explosion that destroyed the liaison office where the two Koreas had contact offices on the North Korean side of the DMZ.

Kim Jong-un’s unexplained absences, the expanded role his sister is playing, and the harsh attacks on the United States and South Korea suggest some uncertainty regarding what might be going on behind the curtain with the North Korean leadership.  This may not be the time for a close-up inspection of the Supreme Leader.

The other question is whether the North Korean leader wants to make a deal with Donald Trump at this time.  North Korean diplomats and foreign policy analysts are reading the tea leaves regarding the upcoming United States election.  They are likely questioning whether a high-level meeting with an American president whose reelection in four months is not a foregone conclusion.  As Donald Trump has demonstrated since becoming U.S. President, changes in leadership can result in significant changes in policies.  A Biden administration will have little interest in following through on Trump commitments to North Korea.  Why risk making an agreement with a president who might not be around much longer?  If Trump is reelected, another summit certainly could be in the cards.  But there is little benefit for the North in rushing to meet before the election.

“As Sands through the Hourglass”

South Korean President Moon Jae-in has his own logic for pushing a summit.  He is acutely aware that he has passed the mid-point of his presidency, and the South Korean constitution limits its chief executive to a single term.  He has a strong working majority in the National Assembly, and his focus is his legacy.  As a senior advisor to former president Roh Moo-hyun, he saw Roh hold a summit with Kim Jong-il, but it came at the end of his presidential term and he was not able to follow up with programs to cement the Sunshine policy.  Moon rushed for a North-South summit early in his term, and he is now anxious to consolidate the progress made with the North.  First and foremost that means getting the United States and North Korea together.

Moon sees Trump as a risk-taker, willing to break barriers and ignore foreign policy experts.  He met three times with Kim Jong-un, although those summits produced meager results.  Moon is also acutely aware of the United States political timetable.  He fears that a Biden presidency will not be make quick progress with North Korea.

President Moon is likely to be a lame duck or even a former President before a new Biden administration has personnel in place and has completed necessary policy reviews to undertake innovative policies toward Pyongyang.  Even if Trump wins reelection in November, Moon sees the sand spilling through the hourglass.

The North has taken a breath after its tantrum over the balloon crisis and after exploding the liaison office.  South Korea responded to these outbursts by abjectly bowing to the North’s demands to stop the sending of balloons.  Now there is a very small window to make progress in relations with the North, and the President is determined to act quickly.

Is There Time for a Summit?

North Koreas have seen the waning hours of a U.S. presidential administration and watched last ditch efforts to accomplish a particular goal before a new administration takes office.  At the end of the Clinton Administration on October 24, 2000—just days before the American election—Secretary of State Madeleine Albright visited Pyongyang and negotiated with Kim Jong-il in an effort to make a breakthrough on denuclearization.  She also held out the promise of a visit by U.S. President Bill Clinton if it were successful.  The American diplomat was warmly welcomed and feted at one of Pyongyang’s spectacular synchronized performances in the Pyongyang stadium, but no meaningful agreement was reached.  North Korea wanted to deal with the new president.

After North Korea tested its first nuclear weapon in 2006, the George W. Bush Administration worked to the very end of the administration in an effort to reach a denuclearization agreement with North Korea.  In June 2008 agreement was reached on the first steps with North Korea declaring fifteen nuclear sites in the Six Party Talks.  Running against the clock, the Bush administration rescinded trade restrictions and began the process of removing the North from the list of state sponsors of terrorism.  In October, agreement was reached on what would be included in verification protocol, and about that same time the United States announced it would provide North Korea with significant humanitarian assistance through the UN World Food Programme and some private American humanitarian organizations.  By December, however, efforts to reach arrangement on verification of the nuclear agreement had broken down, and shortly after the Obama Administration took office food assistance was suspended because monitoring of distribution could not be assured, and North Korea tested its second nuclear weapon.

The bottom line is that North Korea has previous experience with urgent last ditch efforts to reach agreement with the United States to beat an election deadline.  In the case of Presidents Bill Clinton and George W. Bush, there was no question that this was the end of their tenure in office.  There is no expectation that Trump will be that much better in dealing with their interests than Biden might be, so North Korea feels little urgency to rush into another summit.  President Moon is the one participant who feels the greatest urgency to move quickly.

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America.  He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.  

Photo from Wikimedia Commons.

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• On June 16, North Korea blew up its joint liaison office with South Korea in a display of antagonism towards the Moon administration for failing to prevent activists from sending anti-Pyongyang leaflets.
• As a response to the demolition of the building, the Korean Conference of Religions and Peace (KCRP) issued a statement cautioning for calm amid rising inter-Korean tensions.
• In the statement, KCRP also called for both Koreas to expand the role of cooperative projects, such as the Kaesong Industrial Complex and Mount Kumgang tour program.

Implications: Bolstered by the Moon administration’s efforts to enhance people-to-people ties between North and South Korea, the KCRP represents one of many domestic stakeholders that will continue to advocate for engagement with Pyongyang despite deteriorating conditions. While the latest provocations by North Korea diminish the likelihood of near-term talks between the governments, these grassroots organizations will prevent the political appetite for engagement from falling to zero. In fact, the stalled diplomatic process has pushed these grassroots organizations to more actively underscore the importance of individual-level inter-Korean projects.

Context: Founded in 1968, The Korean Conference of Religions and Peace is a leadership group that represents seven major religions in South Korea. As a pan-religious consultative body, KCRP has long championed interfaith cooperation as a means for engaging the two Koreas. In 2017, members of the group discussed matters related to inter-Korean exchange with Moon Jae-in, South Korea’s newly elected president at the time.

Korea View was edited by Yong Kwon with the help of James Constant, Sonia Kim, and Ingyeong Park.

Picture from flickr account of user Brian Hammonds

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

What Happened

• On May 26, the Ministry of Unification announced its plan to revise the Inter-Korean Exchange and Cooperation Act to simplify administrative procedures and to allow wider cross-border exchanges with North Korea.
• On May 27, the U.S. State Department said South Korea’s attempts to increase engagement with North should be pursued in parallel with North Korea’s denuclearization.
• On May 12, South Korea’s Minister of Unification said the ministry is planning to prioritize the inter-Korean tourism project, after the COVID-19 crisis is resolved, that would allow its citizens to visit North Korea.
• During the May 10 speech, President Moon reiterated his vision to bolster inter-Korean cooperation.

Implications: Seoul is exercising its option to pursue a bottom-up approach to inter-Korean engagement while government-to-government efforts are stalled. The proposed revision of the Inter-Korean Exchange and Cooperation Act aims to designate municipalities and civilian groups as agents for cooperative projects with the North and ease regulations for more individual-level interactions. The government hopes that these revisions would promote exchanges between the two Koreas and facilitate state-led projects like inter-Korean tourism and reconnecting railways in the long run.

Context: President Moon invested significant political capital in inter-Korean détente since he took office in 2017. However, many of his efforts have been hampered by broader geopolitical challenges, domestic opposition, and an uncooperative North Korea. With the ruling Democratic Party now fully in control of the National Assembly, the Moon administration is likely to leverage the momentum to push ahead with its desired North Korean policy.

Korea View was edited by Yong Kwon with the help of Gordon Henning, Soojin Hwang, and Ingyeong Park.

Picture from flickr user TeachAgPSU

By Robert R. King

In a tough statement, Kim Yo-jong, the sister of Kim Jong-un, issued a particularly vicious attack on North Korean defectors, particularly those who send leaflets across the border from the South. She referred to the refugees in the South as “human scum, hardly worth their value as human beings” and “human scum, little short of wild animals who betrayed their own homeland, are engrossed in such unbecoming acts to imitate men. They are sure to be called mongrel dogs as they bark in where they should not.” [The quoted text is from the official English translation of the statement; the Republic of Korea is always referred to as “south Korea” without a capital “S”.]

The statement also includes a threat: “Now that the mongrel dogs are doing others harm, it is time to bring their owners to account. I would like to ask the south Korean authorities if they are ready to take care of the consequences of evil conduct done by the ruggish-like mongrel dogs who took no scrupple to slander us while faulting the ‘nuclear issue’ in the meanest way at the most untimely time.”

The repetition of vicious phrases such as “human scum” and “mongrel dogs” seems to go beyond the usual vituperation and venom that is reserved by the North for defectors who have illegally fled the paradise that is North Korea in order to live in the South.

Why has one of the most senior North Korean officials, the sister of the Supreme Leader, issued such a blistering denunciation of refugees from the North now in the South?

Are Leaflets Really Having an Impact in North Korea?

The statement begins with reference to sending “hundreds of thousands of anti-DPRK leaflets into the areas of our side from the frontline area.” Sending leaflets across the DMZ via balloons or other means of physically delivering the papers has been done for decades. In recent years this has been a publicized effort of some human rights and defector organizations in the South for publicity and fund-raising. The effort is visible and photo-worthy. It irritates officials in the North, and the media blasts from the North are used by human rights groups in the South as evidence of their effectiveness. (See, for example, the North Korean threats against the South in 2016 when tens of thousands of leaflets were sent across the border by balloon.)

Leaflets sent by balloon, however, have limited impact. They usually land not far from the DMZ border and seldom if ever reach Pyongyang, and soldiers are ordered to pick up and destroy such propaganda materials. Far more significant information is reaching North Korea via radio—government-sponsored and religious broadcasts from South Korea, U.S. radio from Voice of America and Radio Free Asia in Korean, and Korean-language broadcasts from Chinese border areas intended for the Korean population in Northeast China, but with a significant listenership in North Korea. In Cold War Europe in the 1950s, the United States conducted major sophisticated balloon drops of leaflets directed toward Czechoslovakia, Hungary, Poland, and other countries in Central Europe, but such efforts were abandoned in 1956 in large part because they were less effective than radio in reaching these areas.

Uncertainty in the North and Defector Influence in the South

Another factor that may have motivated Kim Yo-jong to release her broadside against North Korean defectors in South Korea is because there is growing uncertainty in the North. Kim Jong-un was missing from the public eye for three weeks before he made a public appearance for the grand opening of a fertilizer factory, then he was out of sight again for a notable period of time. The Supreme Leader smokes too much, is overweight, and he had health problems—not a healthy prognosis for someone in his 30s. The recent promotion of the Supreme Leader’s sister Kim Yo-jong to alternate membership in the Politburo and her recent prominence in making important public statements, such as this recent blast against defector leaflets, may be a further indication of uncertainty about the future.

Another factor that may be raising concerns in the North is what appears to be the growing influence of defectors in South Korea. In elections six weeks ago, two prominent defectors were elected to the National Assembly. Although both are members of the minority party in the Assembly, it shows the growing credibility, acceptability, and influence of defectors in the South. Defectors traditionally have taken the toughest position against the North in South Korea’s political discourse. In the past defectors have been on the margins of South Korean society, but now two prominent defectors sit in the National Assembly.

Pressing South Korea for Progress on Rapprochement

Another explanation for the “nastygram” from Kim Yo-jong is that Pyongyang is getting impatient with the slow progress by President Moon Jae-in for improving relations between the North and South. Moon just marked the third full year of his five-year term in office, and under the South Korean constitution, a president can serve only a single term. Time is running out to redefine the relationship with the North under Moon Jae-in. Furthermore, Moon’s Democratic Party just won some 60 percent of the seats in the National Assembly. If he wants to make progress with the North, he now has the votes in the Assembly to get it done. Mme. Kim’s blast may be intended to encourage President Moon to move more quickly.

The threats in the tough message from Pyongyang target initiatives that President Moon supports in the search for better relations with the North. Kim Yo-Jong referenced the upcoming 20^th anniversary of the June 15, 2000 summit between leaders of the North and South, and their declaration marking the beginning of Kim Dae-jung’s “Sunshine” Policy which led to improved relations, divided family visits, and economic cooperation.

Kim Yo-jong’s warning to the South Korean president followed another blast of vicious invective: “The south Korean authorities must be aware of the articles of the Panmunjom Declaration and the agreement in the military field in which both sides agreed to ban all hostile acts including leaflet-scattering in areas along the Military Demarcation Line. . . . It is hard to understand how such sordid and wicked act of hostility is tolerated in the south at a time as now.”

Mme. Kim then spelled out the threats: “south Korean authorities will be forced to pay a dear price if they let this situation go on while making sort of excuses.” If Seoul does not take steps Pyongyang is demanding “they had better get themselves ready for possibility of the complete withdrawal of the already desolate Kaesong Industrial Park following the stop to tour of Mt. Kumgang, or shutdown of the north-south joint liaison office whose existence only adds to trouble, or the scrapping of the north-south agreement in military field which is hardly of any value.”

Considering the modest impact of the leaflet balloons and the vicious voice in which they are attacked, it seems quite clear that the North is simply trying to move Seoul into making important concessions now. Political uncertainty, the possible strain on the North Korean economy from United Nations sanctions, and the worldwide Covid-19 economic downturn are likely the most important factors behind the vehemence of the statement, which indicates its urgency.

Denouncing U.S. Secretary of State Pompeo and Defending China

Another interesting and probably related media missive was a statement released by the International Department of the Central Committee of the Workers Party of Korea. The statement said that Secretary of State Pompeo “reeled off rubbish” that the U.S. would work with its partners in the West to ensure that “liberal democracy” rules in this century. It continued to note that Pompeo “said nonsense about China over the issues of Hong Kong, Taiwan, human rights and trade disputes,” and “he slandered the leadership of the Communist Party of China over socialism.” The statement then included another malicious comment about the Secretary of State: “Pompeo, who has been deeply engrossed in espionage and plot-breeding against other countries, has become too ignorant to discern where the sun rises and where it sets.”

The last phrase is probably the key to the blast at Pompeo. North Korea clearly has cast its lot with China and wants to make sure that Beijing will have no doubt that Pyongyang sees its future with its socialist neighbor China as relations deteriorate between the U.S. and China.

Increasingly dependent on China as its economy worsens, thanks to UN sanctions and now the Covid-19 economic downturn, North Korea appears to be increasingly concerned about its future. The blast at South Korea and the tightening embrace of China appear to show a North Korea increasingly fearful about the future in a very difficult time.

South Korea’s Immediate Response Risks Emboldening the North

In less than 24 hours after Mme. Kim Yo-jong issued her demeaning and intemperate screed against the flier balloons, the South Korean government responded that it would take immediate action to prohibit the sending of fliers via balloon because they caused “tension” with the North. Mayors of some of the towns along the border reportedly called for strong government action to halt the balloon launch. The spokesperson of the Ministry of Unification said “most leaflets have been found in our territory, causing environmental pollution and increasing burden on local people to get rid of them.”

Defectors and human rights activists were equally adamant that they would not stop their launch activities. One rights group said it had no plans to stop sending fliers across the border, and in fact had ordered another one million leaflets. Advocates were quick to denounce the restrictions as a violation of the right of freedom of speech, and others denounced buckling under Pyongyang’s demands.

The real risk of for the Moon Jae-in government is that by responding so quickly and so publicly to the demeaning dressing down from Mme. Kim Yo-jong gives the administration the appearance of being overly eager to accede to Pyongyang’s demands. It looks particularly obsequious to respond so quickly and so totally to such an arrogant ultimatum from the North.

Such a response only weakens Seoul’s ability to negotiate with the North.  The quick and total capitulation by the South will only encourage Pyongyang to take a tougher position in any negotiations that may come up in the future.  There was not even a hint that the South might drive a bargain with the North to get something in return for ending the sending of fliers.

I am personally skeptical of the value of balloons. Getting information into the North is better done with radio broadcasts and thumb drives than with fliers. How Seoul is responding, however, will have a major impact on future negotiations with the North.  Unfortunately, the pattern does not bode well. The South Korean government’s immediate capitulation on balloons will only encourage the North to make unreasonable demands. The real danger is that Moon Jae-in administration will be so eager to show success in improving relations with the North in the final two years of its tenure in office that there will be an incentive to cave to demands from the North.

Robert R. King is a Non-Resident Fellow at the Korea Economic Institute of America.  He is former U.S. Special Envoy for North Korea Human Rights.  The views expressed here are his own.  

Picture sources from Wikimedia commons