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     Nov 26, 2008
Pyongyang puts politics above dollars
By Andrei Lankov

SEOUL - It appears the dreams of Washington conservatives are likely to be carried through by the force they dislike most - North Korea.

The Korean Central News Agency (KCNA) on Monday announced that from December 1 it would restrict movement across the border with South Korea, suspend an historic railway and "selectively expel" South Koreans based at two joint projects in the North, the Kaesong Industrial Estate and the Mount Kumgang tourist resort. This followed South Korea's "policy of confrontation", KCNA said.

The Kaesong Industrial Park, long a flagship of North-South economic interaction, is a thorn in the side of the more extreme


factions of the American right. The decision to place restrictions on it, however, did not come in a way the conservatives hoped for: from a righteous Seoul administration which finally saw the light and decided to cut down the lifeline of the "evil" North Korean dictatorship. The controversial park project is to be closed by North Korea, that is, by the people who benefit most from its activities to the tune of tens of millions of dollars a year.

In letters to business groups, quoted by the South's Unification Ministry, Pyongyang said half the "unnecessary" South Korean staff at the estate must leave. The move will severely disrupt operations at Kaesong, where more than 32,000 North Koreans earning about US$60 a month each work for 83 South Korean-owned factories, along with about 1,500 South Korean managers and technicians.

Trouble has been brewing since mid-October, when North Korea said the South Korean government should stop the activities of South Korean non-governmental organizations (NGOs) which were sending air balloons with leaflets and hard currency to North Korea.

They made it clear that they would retaliate by closing down Kaesong. Pyongyang says the activities of the NGOs are in a breach of a 2002 agreement which explicitly prohibits both Korean governments from waging propaganda battles against one another. When this agreement was signed, the militaries of both sides switched off their loudspeakers at the demilitarized zone between the countries. For decades the sides had bombarded each other with subversive messages (admittedly, without any noticeable effects). The sending of leaflets by balloons, a standard practice before 2002, was stopped as well.

However, NGOs took over where the government stopped. Three major civic groups based in the South conduct leaflet operations. Their messages differ, but they all use the same tactics: using favorable winds, a balloon with a leaflet-packed container is released, with calculations made to ensure it reaches a major population center. Then, when the balloon is supposed to be over its target area, the leaflets are automatically released. The technology was not provided by the South Korean military, so the NGOs had to develop it themselves.

The groups that send leaflets to the North include the North Korean Christian Association (chairman Yi Myong-bok), Fighter for Free North Korea (chairman Pak Sang-hak) and the Union of the Abductees' Families (chairman Choe Song-yong). The groups often cooperate, but their approach and messages are different.

Yi Myong-bok, a defector and a Christian activist, puts special emphasis on the spread of Christianity. Pak Sang-hak, also a defector, believes that democracy should come first, so his group's leaflets reflect this belief.

Finally, Choe Song-yong and his supporters represent families of nearly 500 South Korean citizens, largely fishermen, who have been abducted by the North Koreans since 1953. Among other things, they send leaflets with the lists of the abductees - on the assumption that some of them will learn that they are not forgotten and then find some way to contact their relatives in the South.

No doubt, the leaflets annoy the North Korean rulers a lot, but until recently they tacitly tolerated them. Now things have changed and Pyongyang has acted on its word that it would take action if the balloons did not stop.

The NGOs are independent from the Seoul government and in some cases their relations with the authorities are tense. They are very hostile to the North Korean regime and not particularly fond of the Kaesong project, so they refused to bow to any pressure and continued in a most visible way.

The loss or restriction of Kaesong would be a big blow. It began operations in late 2004 and was designed to make use of cheap North Korean labor. Even though Pyongyang pockets most of the money paid to the North Korean workers, they are still relatively well off in a country in which the average official monthly salary is US$2 a month.

There are no figures indicating the extent to which the South Korean side profits from the undertaking in purely economic terms. The companies in Kaesong are heavily subsidized by Seoul through direct and indirect channels, and the system of these subsidies is not particularly transparent, perhaps deliberately so since the government does not want to tell taxpayers how much money is being spent on aiding the North. One can only assume it is an unprofitable operation for the South Koreans.

Kaesong has been frequently criticized by hawks in Washington, who see it as yet another way to indirectly subsidize the North Korean regime. Indeed, the regime is no doubt making good money out of Kaesong. So why is it prepared to close or restrict it so abruptly?

First, it is difficult to take the official explanation of the balloons at face value. The leaflets they drop are disturbing and annoying, but they hardly constitute a direct threat. After all, Pyongyang was not influenced by the much larger efforts of South Korean propagandists before 2002.

From frequent talks with North Korean defectors, the author has the impression the leaflets have not had much impact on North Koreans. Even if they come across a leaflet and read it (they are supposed to surrender leaflets without reading them), they do not necessarily believe the statements. How can they know that the statements are not wild exaggerations or fabrications, not that much different from the lies they read in their own official newspapers every day?

So, if leaflets are a pretext, the real reason could be the Kaesong project itself, in that it provides opportunities for unauthorized exchanges, given the large numbers of North and South Koreans working together for the first time in 60 years since war divided the peninsula.

The North Koreans not only learn modern technical skills, they also have ample scope to look at their southern compatriots and see that they do not behave like South Koreans are supposed to, according to North Korean propaganda. Cautious political discussions can't be ruled out, which in the long run could have a great impact on the internal situation of North Korea.

This must have been a crucial consideration for Pyongyang, as the survival of the North greatly depends on maintaining the myths about the South, such as it being a starving US colony, a "living hell, land of destitution and despair".

In recent years, the spread of smuggled South Korean videos has made this propaganda line unsustainable. Now, North Koreans are told that the South, while probably affluent, has lost its true national identity, so its inhabitants are full of admiration towards the spiritual purity of their Northern brethren. The southerners, the propaganda claims, also badly want to purify themselves under the wise guidance of the Dear Leader Kim Jong-il (allegedly a cult figure in both the South and the North).

The leaders in Pyongyang do not want this myth exposed, and for North Koreans to see how badly the North fares in comparison to the prosperous and free South - something about which the leaders themselves have no doubts.

In this context, Kaesong was a gamble from the outset, and for a while Pyongyang seemingly decided that since the monetary rewards were good, the political risks could be accepted and managed.

Perhaps they also wanted to check whether they could contain the spread of dangerous information; the decision was made in 2002-2004, when North Korean politics were going through a period of very limited but still unprecedented relaxation.

However, the relaxation soon ended. Since late 2004, North Korean leaders have worked hard to turn back the clock to the situation that existed in the 1970s and 1980s. They reintroduced rationing of food, limited market activities (and now, if very recent rumors are to be believed, are contemplating a near complete closure of markets from January). All recent measures have been about greater control and tougher restrictions.

Unlike optimists overseas, they believe North Korea cannot afford to emulate the success of China in transforming the economy as this would entail a considerable relaxation of domestic police control. China survived such a relaxation, but there is a great difference between North Korea and China. The Chinese leaders do not have to deal with the existence of a "South", "another Korea", a large country in which people speak the same language but enjoy nearly unbelievable prosperity. The North Korean leaders believe their populace will become uncontrollable if the common people learn how prosperous the South really is.

Over the past few years this has made Kaesong something of an anachronism, the only project in the country working towards greater openness and liberalism. Now it seems this anachronism is not going to last, it has become too dangerous; the era of openness is well and truly over. The measure is likely to prolong the agony of North Korea, but it gives the North's leaders additional time to enjoy their moderately luxurious lifestyle.

Hawks in Washington might hope that the decision will deprive the North Korean regime of revenue, thus bringing its end closer. But they are wrong. The regime can survive in isolation - actually, it can survive only in isolation. Starving people do not rebel; they just die, especially when they have no idea that a different way of life is possible.

Kaesong offered a glimmer of light, but now this is being snuffed out, to the peril of the long-suffering people of North Korea.

Andrei Lankov is an associate professor in Kookmin University, Seoul, and adjunct research fellow at the Research School of Pacifica and Asian Studies, Australian National University. He graduated from Leningrad State University with a PhD in Far Eastern history and China, with emphasis on Korea. He has published books and articles on Korea and North Asia.

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