Caution: Bumpy times for the Koreas

Posted in Koreas | 10-Jan-08 | Author: Aidan Foster-Carter| Source: Asia Times

South Korean President-elect Lee Myung-Bak

The year 2008 promises to be a year of change and uncertainty on the Korean Peninsula.

When Lee Myung-bak of the conservative Grand National Party (GNP) was elected as South Korea's next president by a landslide on December 19, it marked a decade of center-left rule in Seoul. A former mayor of Seoul, aged 66, Lee begins his five-year term on February 25.

Or at least he is due to. An unprecedented special counsel is probing financial allegations from Lee's past. He will probably survive this, since to indict him now could cause turmoil. But his foes will keep digging for old sleaze, which may weaken his mandate for change.

Hence the GNP might not after all win separate parliamentary elections, due on April 9. Lee Hoi-chang, an ex-premier who polled 15% as an independent in December, is founding a new right-wing party. This may rob the GNP of the majority Lee Myung-bak needs for his program.

Lee's ambitious pledges include 7% gross domestic product growth (now cut to a more realistic 6%), and a vast new canal network. Critics fear the latter will be a white elephant and ecological disaster.

Lee's appeal was his promise to fix the economy: in fact not in bad shape by Organization for Economic Cooperation and Development norms - it is the world's 12th largest - with growth close to 5% and record exports. But graduate unemployment and (till recently) soaring real estate prices have created a sense of unease.

A decade ago, it was Lee's party which brought Seoul close to sovereign default in the 1997-98 Asian financial crisis. Veteran dissident Kim Dae-jung, elected president at his fourth try, resisted populism to open and restructure the economy - which bounced back. He also won the Nobel peace prize in 2000 for the first-ever inter-Korean summit meeting.

DJ's successor Roh Moo-hyun continued the Sunshine policy of outreach to North Korea. But at home he was weak and combative, seeming keener to promote equality than growth.

Hence the appeal of Lee MB. Nicknamed "bulldozer" from his career as a chief executive at Hyundai, one of the biggest conglomerates (chaebol), Lee won plaudits as a can-do mayor of Seoul. Yet amid global economic uncertainty, his many promises if not delivered could rebound.

His plans to deregulate the chaebol are controversial. Korea's engines they may be; but the largest, Samsung, is being probed for alleged large-scale bribery and other malfeasance. To ease the few curbs on them may boost growth, but will not improve corporate governance.

Abroad, Lee will mend fences with the US. President George W Bush and Roh were not soulmates, though Roh sent (non-combat) troops to Iraq to win breathing space for the Sunshine policy.

Yet in 2007 Bush dropped his "axis of evil" rhetoric to belatedly start engaging Pyongyang, bringing new life to six-party nuclear talks (both Koreas, the US, China, Japan and Russia).

Surprisingly Roh also backed a free-trade agreement with the US, signed last year. Lee supports this too, but protectionist lawmakers in both countries may refuse to ratify it.

How Lee will handle North Korea is unclear yet. He threatens to review a flurry of inter-Korean agreements inked in Roh's final months. But many of these are sensible business deals, not the one-sided largesse of the past. These should be acceptable to the pragmatic Lee - no cold warrior, unlike his old-guard namesake Lee HC.

However, Lee says he will make Sunshine conditional on nuclear compliance. That could be a problem. After a year of unprecedented progress, including closure of its plutonium-producing Yongbyon site, North Korea has reverted to type and is now dragging its feet.

By end-2007 Yongbyon was meant to be disabled (put beyond use), and Pyongyang was to declare all its nuclear facilities. But disabling has slowed, and nothing has been declared.

The latter means hard choices for the North's leader, Kim Jong-il. The US needs not only a full inventory of his nuclear arsenal, but also credible accounts of two related concerns: a suspected separate program based on highly enriched uranium, and alleged nuclear proliferation to Syria. Pyongyang as usual denies it all, but has a lot of explaining to do.

The fear is that Kim, or his tough generals, are not yet ready to follow Libya in truly giving up their weapons of mass destruction. A militant, secretive paranoid state with no other assets (like oil) to parlay, North Korea does not do disclosure - much less surrender.

So Kim may play for time, in hopes - surely vain - of a better deal from Bush's successor. But elsewhere time is not on his side, as he refuses to adapt to an age of globalization.

North Korea's economy, wizened and desperate like its people, urgently needs reform. Yet the regime is trying to rein in markets. This year could see malnutrition tip into famine, like a decade ago when a million people perished. Seoul's and other aid is thus sorely needed.

Kim turns 66 on February 16. He had heart surgery last year, but has named no heir. Yet successions are the Achilles' heel of dictatorships. His own - thanks to his father, North Korea's founding self-styled "great leader" Kim Il-sung - took over 20 years of careful preparation.

If quasi-monarchy continues, a tangled lovelife leaves at least three young and untried sons - by two mothers, neither his wife and both now dead - vying for the "Dear Leader's" crown.

Should anything befall Kim Jong-il, all bets for North Korea are off. The Korean People's Army may well step in, but the risk of chaos - with loose nukes - would be acute. Long-suppressed struggles for power and about policy (hawks vs reformers) could explode.

All his neighbors pray that Kim Jong-il will finally and fully embrace peace and reform in 2008, so his fierce mangy little dinosaur of a state can evolve into a more normal mammal.

Yet on past form the Dear Leader may continue to dither and feint. If so, no one will attack a nuclear North Korea - but Seoul and even Beijing will tire of propping up such a nuisance.

North Korea has defied the pundits by not collapsing, outliving communisms elsewhere. It may cling grimly on for a while yet, but not indefinitely. Its interlocutors are right to seek a soft landing - but prudence demands they also brace themselves in case of a bumpier ride.

Aidan Foster-Carter is honorary senior research fellow in sociology and modern Korea at Leeds University, United Kingdom. Now a freelance writer, consultant and speaker on Korea for policy, business and academic audiences, he has followed events on the peninsula for four decades.

This article was commissioned for Global Perspectives, International Affairs Forum (, published by the Center for International Relations, Arlington VA. Used by kind permission of CIR.