The FINANCIAL — In the autumn of 1996, I was invited to Pyongyang in North Korea to talk business with a mainstream bank which had very little money in its treasury.
It was a time of relative calm, both the North and South were talking “unification” which only meant an invitation from the North to the South to join its nation under the rule of Km-Jong-Il. However there was a mood of optimism. Some foreign governments were thinking of establishing embassies and consulates in Pyongyang to take advantage of the mining resources North Korea claimed it had.
Technically, I was on an official invitation but was constantly escorted by three security men who ensured that I did not take any photos of any factories that I visited, or the unfinished 800-room hotel in the centre of the city; that I met no citizen or even a foreigner in Pyongyang; that I made no eye-contact with any male or female and that I never moved metres away from the heavy smoking security personnel who were assigned to ensure that my stay in Pyongyang was smooth.
The 4-lane streets were empty; one noticed no real traffic and everything was orderly to the last detail. However, there was an eerie feeling that the country is a very strange place, perhaps the most rigidly and ruthlessly controlled society on earth. I tried to understand the psyche of the North Koreans, who since the time of Kil-Il-Sung, had been suffocated by one-man rule and total dictatorship and who have been brain-washed for years to an extent that their rulers became gods incarnate. When I left Pyongyang after a brief 14 days which looked much longer, I reflected and still do on what North Korean think and want and how its god-like leaders managed to keep a society under such obedience to the state.
North Korea has been sabre-rattling for years, mainly against the South Korean long-lost brothers and sisters and against the United States, North Korea’s arch enemy. The Korean War when Pyongyang was razed to the ground and the North Korean leader’s to ability to rebuild a nation is a constant theme of the nation’s history. People believe that their leaders are right, that they had and still have a mission to accomplish; that all sacrifice and spilling of the blood is a necessary means to bring South Korea back to the fold.
During the last few days, North Korea has been raising the tempo of hatred and has declared that it is now in a state of war with South Korea, has closed the joint Kaesong Industrial complex where some 50,000 North Koreans worked, and with each passing day, is bringing the threat of an attack on South Korea and on the United States of America to a dangerous level of escalation of hostility.
The young Kim-Jong-Un, the paramount leader-god in the succession of family leaders, with a European education, has most certainly surprised many with his recent moves to alert the world of its capacity to strike at the heart of South Korea. With a more than a million men and women in the armed force, with substantial military power and possibly with nuclear capability, North Korea is not to be taken lightly. Most, including me, expected him to begin a process of reconciliation with the South, bring about a more open society at home and open the country to more investment and growth.
It could be that the young leader wants to stamp his foot on the North Korean people, build up the hysteria of North Korea being under threat of annihilation and build his image as the man who would liberate the people from the tyranny of the South, something that I do find it difficult to understand.
Should there be a first strike either from the North or the South, and a full or limited scale war begins, it is not the question of who wins or loses, but what direct and collateral damage it will leave behind. What would China, the main banker to the North for some years, do under such a situation. Will the North Korean soldiers fight the war, or, in a time of crisis and turmoil, desert the ranks and run for cover. And what would the US do, other than supporting the South. Will it undertake a pre-emptive strike at key military facilities in the North Korea. The fact that North Korea has openly declared that it will strike American military facilities in Guam is enough justification for the world’s super power to test North Korea’s military strength. I suspect that the time for this getting closer.
Any outbreak of hostilities in the Korean Peninsula will be destructive to both North and South and to the region. And if any nuclear warheads are used, it would certainly trigger a massive attack on North Korea by both the South and the United States, with full back up support from Japan. China may chose to stay clear of the conflict but it would need to take a firm stand on its position toward North Korea. Asia has been tiding over the global economic and financial crisis without much damage. A war in the Korean Peninsula will disturb its equilibrium and send it plunging on the downward spiral.
Diplomacy with North Korea for the last several years has failed. It is unlikely to succeed. The only option that is available is to set up a defensive mechanism to contain North Korea or to re-design a strategy for peace which will include China, South Korea, Japan. One of the strategic planks is to offer the North Korean Leadership the chance of employing some million men and women in enterprises to be funded and set up in North Korea. After all, their income levels are so low that it should provide a major economic value to the nation.
When I was in Pyongyang, much of the discussion centred around setting up factories to produce goods to the world and giving mining licenses to credible companies from overseas. Most investors viewed the proposals with great suspicion. Hardly anyone wished to take a serious look at North Korea. The reason was obvious: how do you operate in such a tightly controlled society and under which national or international law can one function. It is a chicken and egg question : which comes first: the rule of law or investments which trigger the process of growth and rule of law.
North Korea has now embarked on a dangerous gamble. It could have a deadly backfire if they push their threats further up the scale.
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