Korean Peninsula

North Korea, as presently constituted, cannot endure indefinitely without substantial international aid. Pyongyang appears to have three choices:

Pyongyang's behavior during the mid-1990s suggests that it has adopted a muddle-through approach, in the belief that the country's difficulties are caused primarily by temporary forces over which it has no control (e.g., the weather) rather than by systemic deficiencies. Should the muddle-through approach fail, however, the North's two remaining options doom the existing regime to extinction. And therein lies the danger.

Given the military resources at its disposal, the otherwise grim circumstances in which it finds itself, and the poor prospects to halt and reverse its downward trajectory, North Korea in its current weakness and decline potentially poses a greater threat to South Korea and to U.S. interests in the region than at any time since the summer of 1950. Attempting to moderate North Korea's evolution will tax U.S. and South Korean statecraft in ways that the one-dimensional military confrontation never has.

But if the late 1990s represents a period of significant risk, it also affords unique opportunities to shape the future of the Korean peninsula to the benefit of U.S. interests. Whether the North's process of transformation will see heightened tensions on the Korean peninsula and possibly renewed conflict, or a lessening of tensions and a peaceful resolution of the Korean conflict is the central concern for Washington and Seoul.

North Korea Forces

Background and Trends

As of 1996, the Korean peninsula is in the midst of an historic transition. The enmity and military confrontation that have marked intra-Korean relations since the Korean War are unabated, as the recent submarine incursion demonstrates, but the rivalry's international context has been transformed. For decades the hostility between the two Koreas was an element of the Cold War, with the Republic of Korea (South Korea) solidly aligned with the United States, and the Democratic People's Republic of Korea (North Korea) shifting adroitly between the Soviet Union and China. Relations between the South and the North during this period were confined almost exclusively to a military standoff.

With the demise of the Soviet Union and the transformation of China into a "market-Leninist" state, geostrategic and economic considerations have eclipsed the ideological component of the Korean confrontation. As a result, North Korea finds that it is left largely to fend for itself. South Korea, on the other hand, has become an increasingly important independent actor on the world stage, as well as a major U.S. ally and trading partner. Economic dynamism, the success of then president Roh Tae Woo's "Nordpolitik," and recent democratic reforms completed South Korea's transformation from a ward of the United States in the 1950s to a respected member of the international community in the 1990s.

Economic Crisis in the North, Boom in the South

During the Cold War, North Korea's abundant natural resources, mobilized population, and assistance from friendly regimes in Moscow and Beijing enabled
Pyongyang to mask the deficiencies of its economic policies. In the late 1990s, however, it apparently can no longer sustain itself, notwithstanding the overblown claims of Kim Il Sung's juche philosophy of self-reliance. North Korea is growing weaker economically, both in absolute terms and in relation to South Korea. Without significant outside assistance and internal reform, Pyongyang stands little chance of arresting the steady economic deterioration.

South Korea's economic performance, on the other hand, is the envy of much of the world. Per capita gross domestic product (GDP) exceeded $10,000 in 1995. Exports climbed at a record-setting pace from $100 million in 1965 to $100 billion in 1995. South Korea's economy is the world's eleventh largest and continues to expand at an impressive rate. Moreover, economic prosperity and the middle class it has spawned have contributed to political stability and the growth of democracy.

Incomplete Succession in the North, Democratic Transition in the South

The succession from "Great Leader" Kim Il Sung to his son, "Dear Leader" Kim Jong Il, remained inconclusive more than two years after the elder Kim's death in 1994. At that time, Kim Jong Il seemed to understand that his hold on power was based almost exclusively on the legitimacy derived from his status as the dutiful son of the founder and only leader North Korea had known until 1994.

The extent to which the younger Kim grasps the necessity for economic reform, much less has the power to institute reform, is unknown, but he has very little room to maneuver as he attempts to consolidate his power. Unlike other successor-generation leaders (Nikita Khrushchev of the USSR and Deng Xiao Ping of China), the younger Kim cannot blame the ills of the system he inherited on his immediate predecessor; on the contrary, to deviate from his father's practices and theories would undermine whatever claim to power he holds, even though the system his father created has given North Korea six successive years of negative economic growth and the prospect of widespread famine and disease.

The dynastic succession in the North stands in stark contrast to the nascent democratic institutions taking root in South Korea after decades of political tumult. Since its founding in 1948, South Korea has had seven presidents. None of the first six came to a happy end. But the election of Kim Young Sam in late 1992 for a constitutionally-mandated single five-year term ended more than three decades of rule by military men and may prove a watershed in South Korea's transition from an autocracy to a democratic political system.

Diplomatic Record Mixed in the North, Adroit in the South

For North Korea, the diplomatic picture is mixed. On the one hand, the North is more isolated from the outside world than ever. Soviet and Chinese regimes, supportive of Pyongyang in the past, have been replaced by governments that have established diplomatic and economic links with South Korea and distanced themselves from North Korea. On the other hand, there have been some tentative openings to the outside world, principally to Washington and Tokyo. Moreover, North Korea's maneuvering in regard to its suspected nuclear weapons program demonstrates that Pyongyang is capable of effectively conducting skillful diplomacy--a diplomacy marked by a penchant for brinkmanship tactics and the creation of artificial "crises" designed to grab the attention of U.S. officials.

There has been some progress on the issue of U.S. servicemen missing in action from the Korean War and on the North Korean missile program as a consequence of the North's strategy of engaging the U.S. and trying to isolate itself from any dealings with the South. But the U.S.-North Korean dialogue has yet to result in a full lifting of U.S. economic sanctions against North Korea or the opening of liaison offices in Washington and Pyongyang. And while Washington is interested in a permanent peace on the Korean peninsula, it has rejected Pyongyang's demand to negotiate a separate U.S.-North Korean peace treaty to replace the Armistice Agreement, insisting that Pyongyang deal directly with Seoul on formally ending the Korean War. The U.S.-South Korean proposal for four-party talks among South Korea, North Korea, the United States, and China, issued by Presidents Clinton and Kim at their Cheju Island summit in April 1996, is intended in part to create an opportunity for the two Koreas to address a permanent peace arrangement. Progress on this issue would likely improve the political atmosphere for increased international aid to the North as well.

South Korean diplomacy has been particularly adroit since the late 1980s. With the encouragement of Washington, South Korea capitalized on its hosting of the 1988 Olympic games to expand its diplomacy to former adversaries. South Korea's establishment of diplomatic relations with the USSR in 1990 and China in 1992, coupled with the simultaneous entry of the two Koreas into the United Nations in 1991, confirmed that the South had won the competition with the North for international standing. South Korea's ability to establish ties with former adversaries while maintaining its traditionally close links with the United States demonstrated the strength of U.S.-South Korean bonds and South Korea's newfound diplomatic skill.

North Remains Militarily Powerful, South Closing the Gap

Only in the military realm does North Korea retain any significant power. The large, heavily armed, and forward-deployed military forces of North Korea continue to pose a serious threat to South Korea and to U.S. forces stationed there. Though North Korea's population is only 24 million, it fields the world's fifth-largest military, with an active force of 1.28 million backed by a reserve force of 4.7 million. While many of its units are armed with equipment from the 1950s and 1960s, other elements are more modern. Of particular concern to U.S. and South Korean commanders are North Korea's:

But the Korean People's Army (KPA) both exacerbates and suffers from the deterioration of the North Korean economy. So far, the KPA has been largely shielded from the effects of the food crisis, but the shortage of fuel, along with Pyongyang's lack of hard currency, bad credit rating, and loss of major-power sponsorship all reduce the KPA's combat readiness. As a result:

By contrast, the South's spectacular economic growth finances a steady qualitative improvement in South Korean forces, narrowing the gap with the KPA in terms of combat power. However, the remaining gap would be even smaller or non-existent had South Korea in the late 1980s not begun to cut its defense budget as a percent of GNP and not devoted significant defense funds to the purchase of equipment and capabilities designed for hypothetical, non-peninsula threats rather than the extant threat from the North. Apparently acting on the assumption that North Korea will not attack as long as the U.S. remains committed to the defending the South, South Korea has devoted considerable resources to more mobile forces that could make it a regional power. South Korea pays close attention to its military might relative to that of Japan.

Potential Flashpoints

Deterrence has been effective on the Korean peninsula since 1953, and a rough equilibrium has marked the military confrontation since then. In the late 1990s, however, the erosion of North Korea's power could put stability at risk. Although North Korea probably could not mount a successful blitzkrieg campaign to conquer the South, and would risk extinction if it tried, the North remains a potentially dangerous adversary in a variety of other conflict scenarios.

Accident, Incident, Provocation

An accident, incident or miscalculation in the Demilitarized Zone (DMZ), at sea, or in the air could escalate out of control because of:

In the past, South Korea has acted with restraint in the face of severe provocations by the North. The shift in the balance of power on the peninsula, however, means that Pyongyang cannot assume restraint will be practiced in the future.

Breakdown of the Agreed Framework

If the Agreed Framework does not hold and North Korea revives its nuclear weapons program, the United States--assuming it would not acquiesce to North Korea's becoming a nuclear armed state--would face the same choices it confronted in early 1994. That is, the U.S. could either seek UN economic sanctions, which North Korea has labeled an act of war, or it could resort to preemptive strikes to destroy the North's nuclear facilities. In either case, war would be likely.

Coup d'etat in the North

Kim Jong Il is potentially vulnerable to a rival faction coalescing around an alternative leader, especially if the loyalty of the internal security forces or the military were in doubt. A coup attempt could come from within the inner circle, perhaps with the backing of China, if the economy continues to deteriorate and Kim Jong Il fails to implement reforms.

U.S. Army and South Korean soldiers fill sand bags on the edge of the Military Line of Demarcation at Pan Mun Jom.

Chaos in the North

A coup attempt or further economic deterioration could lead to the collapse of North Korea followed by chaos and possibly civil war. China might intervene either out of concern for instability along its border with North Korea or in response to a call for assistance from a favored faction within the North. Pressures for South Korea to intervene could well prove overwhelming in response to actual or impending Chinese intervention or to calls to impose order and reunite the peninsula under the auspices of Seoul. South Korean military intervention would be problematic for the U.S. because of the complex military command relations linking American and South Korean forces.

The necessity to absorb a failed North Korea could stall South Korea's economic engine and overwhelm its nascent democracy. The potential for social instability and violence would be high and might not be confined to the peninsula. Given the history of the two Koreas and the zero-sum nature of Korean politics, the administration of the North by the South Korean government could prove to be quite harsh, if only to preclude mass migration south. Some experts estimate that, following a merger of the two Koreas, as many as two million North Koreans might attempt to move south in search of relatives and a better life. Unrestricted competition for jobs between impoverished workers from the North and the South Korean labor force could lead to social unrest and could inflame South-North regional animosities.

Attack on Seoul

Located just twenty-five miles south of the DMZ, Seoul is the political, financial, educational, and cultural center of South Korea--and home to one out of every four South Koreans. The city is vulnerable to North Korean attacks ranging from harassment, through the firing of artillery and missiles for the purpose of intimidation, to a massive, combined arms assault to capture the city.

The U.S.-South Korean Combined Forces Command is determined to prevent the North from seizing Seoul. If Seoul were to fall, however, South Korean authorities would have to decide whether to continue the war (and probably carry it to the North) by combining its surviving forces with massive reinforcements from the United States, or to accept a negotiated settlement on the North's terms to preclude further damage to Seoul.

Disputed Islands

The disagreement between Japan and South Korea over some small islands periodically enflames nationalist feelings.

U.S. Interests and Approach

Net Assessment

A negotiated end to the division of the Korean peninsula is unlikely given Korean culture and political traditions. Absent a significant incentive or threat, there is almost no likelihood that North Korean leaders will pursue compromise with their rivals in the South. The greatest disincentive from the North Korean elites' standpoint is their likely fate under a peninsula-wide South Korean government. Because the rule of law has never been firmly established in the South, politics has had few constraints and victors have wielded great power. Those who lose political power are left largely defenseless against their rivals in a society where those in power tend to use state resources as weapons against their opponents.

Demilitarized Zone

Pyonyang's dialogue partner of choice is Washington, not Seoul. It has become increasingly clear that North Korea sees the United States as the key to its survival over the long term. Pyonyang views the Agreed Framework as the foundation for improved relations with Washington, to include the easing of economic sanctions, increased diplomatic interaction leading to the opening of liaison offices and ultimately the establishment of diplomatic relations and increased economic activity.

For its part, Washington has made it clear that the pace of improved U.S.-North Korea relations will be determined largely by the degree to which North Korea is willing to deal with the South.

This diplomatic activity, of course, is being conducted against a backdrop of potential collapse. Systemic failings and the loss of outside aid have so weakened North Korea that its ability to withstand additional stress is in question.

Range of North Korean Missiles

U.S. Interests

Support South Korea against the threat of aggression from the North

Since 1950, the U.S. has supported South Korea against the threat of aggression from the North. The original rationale was the geostrategic importance of the Korean Peninsula during the Cold War, including the importance of forward defense of Japan from Soviet or Chinese aggression. That no longer remains valid. The North, devoid of external backing, remains the only direct military threat to the South. At the same time, however, U.S. interests on the peninsula have grown from their original, Cold War security aspects. The South's economic growth and its increasingly democratic political institutions have transformed it from solely a bulwark against communism to a dynamic international player with whom the U.S. desires to maintain a close, multifaceted relationship.

Preserve stability in East Asia

As a status quo, non-expansionist power, the U.S. has long sought to preserve peace and stability in East Asia and the Pacific, a region of tremendous economic growth and strategic importance. The U.S. has a strong interest in ensuring that no state in the region becomes a hostile hegemon and that it retains strong allies in the area.

Regardless of when it occurs, the inevitable change coming in North Korea carries with it the potential to seriously disrupt peace and stability not only on the peninsula but in the Northeast Asia region. The U.S. has an interest in ensuring that its relations with the major powers surrounding the peninsula--China, Japan, and Russia--are not disturbed by the eventual reunification of Korea.

Maintain access to open markets

Continued U.S. economic prosperity is tied to a system of open markets, and nowhere is the potential for economic activity greater than in East Asia. In that regard, access to the South Korean market is important to the U.S. economy.

Foster the growth of democracy

The U.S. has an interest in seeing that South Korea becomes a full democracy, which is more likely to be a stable and powerful ally of the U.S. By guaranteeing the security of South Korea, the U.S. has given the South Korean people the time necessary to build robust economic institutions and to sort out their domestic politics so that the process of democratization could begin.

U.S. Approach

The United States has extended its nuclear umbrella to cover South Korea. It also stations almost 37,000 military personnel and substantial conventional combat power in the South and leads both the United Nations Command and the U.S.-South Korea Combined Forces Command (which handles deterrence and defense). Maintaining the U.S. force structure in South Korea and the region will maximize the chances for continued successful deterrence. But more than military power is needed to address the evolving situation on the Korean peninsula.

The U.S., in cooperation with South Korea, seeks to keep the process of change on the Korean peninsula manageable and peaceful, and to find an alternative to the potentially catastrophic scenarios that have dominated speculation about North Korea's future. The United States' cautious engagement of the North, predicated on the continuation of the freeze on Pyongyang's nuclear weapons program, springs from the convictions that the most desirable alternative to the continued existence of North Korea, the negotiated reunification of the peninsula, is highly unlikely anytime soon; and that the most likely alternative, the need for the South to absorb the failed North, is highly undesirable and potentially dangerous.

How well South Korea's budding democracy could withstand severe shocks is an open question, and, short of war, it is difficult to envision a greater shock than sudden reunification brought on by the collapse of the North. For the foreseeable future, the deterrent role of the U.S.­ROK Combined Forces Command remains the best guarantee that, over time, a durable peace can be built on the Korean peninsula. South Korea needs time for democracy's roots to sink deeper, for its political institutions to mature, and to prepare for the Herculean task of consolidating the nation. North Korea needs time to acclimate itself to the outside world. Both Koreas need time to resolve the legacy of more than half a century of bitter rivalry so that they can progress toward a reunification that contributes to regional stability.

Even after the North Korean threat diminishes or disappears, and with it the necessity to plan for a major regional contingency, U.S. strategic interests in the region would still be served by a continued military presence on the Korean peninsula. Future U.S. force structure on the peninsula will be determined by many factors, including the nature of U.S. relations with Korea, China, Japan, and Russia. Ideally, U.S. force structure on the peninsula following reunification would:

Careful advance coordination with Seoul would preclude the possibility that South Korean officials would mistakenly perceive force structure changes as a signal that the United States had decided to withdraw from the region, and would give officials in both capitals time to prepare public opinion for a modified U.S. military presence. Officials in Washington and Seoul understand the strategic rationale for a continued U.S. presence, and making the case to the American and Korean people should not be difficult.

North Korean military forces continue to pose a serious threat to South Korea and to U.S. forces stationed in the South. The larger reality, however, is that in virtually every area of competition, save that of the military, South Korea, with the strong backing of the U.S., has emerged as the clear victor over the North.

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