The Two Koreas: A Contemporary History (74 page)

By early July, only days after Kim Jong Il’s new economic measures went into effect, the DPRK’s secret talks with Japan had reached the point that Kim could well have felt that the plan for a summit meeting was falling into place. By the time he left for Russia on August 20, the North Korean leader probably knew the deal with Japan was a sure thing. What he likely did not realize was the delicate situation that now existed in Tokyo, where the few in the government who knew about the secret talks with North Korea faced the painful task of briefing their very senior colleagues who were still in the dark. Kim was on the train returning from his meeting with Putin when he received a message from Prime Minister Koizumi, effectively sealing the deal. Kim replied immediately, and Kang Sok Ju relayed the message to Director General Tanaka, who was in Pyongyang to finish off details for a “Pyongyang Declaration” that was to be the capstone of a Koizumi-Kim meeting planned for mid-September.

For the Japanese, besides the delicate task of briefing others in the Koizumi government who had been unaware of the secret talks with Pyongyang, there also remained the business of letting the Americans in on the momentous news that Koizumi would soon visit the North Korean capital to meet directly with Kim Jong Il. US deputy secretary of state Richard Armitage was in Tokyo in late August, intending to give Koizumi an early—if not very detailed—warning about a new US intelligence community estimate on the North’s uranium enrichment program. Instead, the Americans were invited to a meeting where they were told that in about seventy-two hours, Tokyo would publicly announce plans for Koizumi’s upcoming trip to Pyongyang. Several American officials had been kept informed in general over the course of Tanaka’s meetings and had encouraged the Japanese to move ahead with their talks with the North Koreans, so the news was not a total surprise. In the Tokyo meeting, the Japanese went over with the Americans the draft of the Pyongyang Declaration, word by word, according to one of the participants. Armitage went back to the US Embassy to contact Secretary of State Powell, who replied a short time later that President Bush was comfortable with Koizumi’s plans, though once the word spread, others in Washington were not so relaxed about the prospect of a Japan-DPRK summit. In early September, just before Koizumi’s trip, Bush and the Japanese leader met in New York at the annual UN General Assembly meeting. Bush embellished on the warning about the North’s uranium enrichment program, and Koizumi indicated he would be careful.

For their part, the Japanese were not completely taken aback by the news of the North’s enrichment program. They had received an early warning about it from American officials during an Asia-Pacific Economic Cooperation (APEC) summit held in Brunei that July. Moreover, they had suspected something ever since the Clinton administration a few years before had asked them to stop exports to North Korea of material that could be used for uranium enrichment. In fact, what did surprise Tokyo was that the Bush administration had not raised the issue for two years, and then suddenly, seemingly out of nowhere, it had zoomed to the top of Washington’s list of problems with Pyongyang.

SLOUCHING TOWARD THE CLIFF

Washington’s focus on the North Korean nuclear threat sharpened suddenly in the early summer of 2002. While the State Department was working on a new version of the “bold approach” toward Pyongyang, the administration’s hard-liners were encouraging the intelligence community to develop a convincing case that the North had for the past half decade been pursuing a uranium enrichment program. In midspring there had been intelligence briefings on the program, but these did not receive much notice, except by those hawks like Undersecretary of State John Bolton who saw the new findings as ammunition to use in the ongoing bureaucratic struggle against starting talks with the North. If there had been more attention to the possibility of serious US-DPRK negotiations, the enrichment issue might have received closer scrutiny by policy makers. Diplomacy was still considered nothing more than necessary theater with little likelihood of success, however, and so for most officials enrichment remained wrapped in the gauzy impression that it was a minor laboratory-type experimental program.

In June Blue House national security adviser Yim Sung Joon visited Washington to take soundings on the administration’s thinking. He returned to Seoul with discouraging news that the hard-liners were in the saddle, but apparently with no inkling about the intelligence assessment under way on the issue of North Korea’s highly enriched uranium (HEU) program. Ambassador Jack Pritchard, who had been one of those receiving the briefing on the DPRK’s enrichment efforts, proposed to the North Koreans that a visit by a high-level US envoy be scheduled for July 10—a date that probably suited Pyongyang well enough. Earlier might have been better from Kim Jong Il’s standpoint, as it would have been provided a useful drumroll to his plans to unveil new economic measures on July 1. But July 10 was still tolerably close.

Even with what it saw as accumulating and nearly overwhelming evidence that decisions in Washington were moving in the wrong direction,
Pyongyang seemed determined to resume talks with the United States. For its part, Washington did not understand, nor would it have cared even if it had noticed, that Kim Jong Il was in the final stages of a major diplomatic effort to create the peaceful security environment he thought was required for his economic initiative to succeed. That meant securing ties with his great-power neighbors Russia and China, improving relations with the European Community, breaking the logjam with Japan, moving ahead on the inter-Korean front, and, above all else, getting relations with the United States back on track. If there were new possibilities for US diplomacy created by Kim’s economic plans, Washington did not grasp them.

On June 29, barely forty-eight hours before Kim’s new economic policies were to be rolled out, the waters of the West Sea were again the scene of a clash between the two Korean navies. Two North Korean navy ships crossed the Northern Limit Line and opened fire on several smaller South Korean patrol boats, killing and wounding several sailors and sinking an ROK speedboat. In an unprecedentedly quick move, Pyongyang sent a message via the inter-Korean hot line to Seoul, expressing regret over the incident and informing the South that “lower ranks” were responsible for the “unintended clash.” Given that Kim Jong Il’s economic measures were set to go into effect only two days later, it is hard to believe that the naval incident had Kim’s blessing ahead of time. Nevertheless, the clash was a symptom of a festering problem in the West Sea, one that would grow worse and more deadly over time. Eventually, there would be an escalating series of naval incidents accompanied by a military buildup by both sides in the area near the disputed sea border. The situation in the waters off the west coast would become as dangerous as anything that existed along the well-marked and formally accepted military demarcation line on land.

The naval clash gave Washington a perfect excuse to postpone the planned July 10 meeting in Pyongyang. The real reason for the postponement was the new intelligence assessment that suggested the need for a reinterpretation of the North’s enrichment program. The analysis was not based on any direct knowledge of how far the program had actually developed; rather, it was a synthesis of information about material and machinery the North had procured—or sought to procure—over the past several years. The procurement effort suggested to analysts a major effort to move beyond small-scale experimentation and launch a production-scale program, though as the CIA was at pains to make clear, it was impossible to say if all the pieces had already been assembled and were actually operating.

The new assessment, which sent shockwaves through Washington, left the hard-liners feeling vindicated and exuberant. Bolton called the intelligence community analysis “the hammer I had been looking for to shatter the Agreed Framework.” He says in his memoirs that he told
representatives of the intelligence community that he intended to use their analysis “to go straight for the Agreed Framework’s jugular.” Even those in favor of negotiations instantly concluded that the North Koreans had been caught “cheating” on the Agreed Framework.

To the Americans, the idea that the North had been “cheating” was almost as important, maybe even more so, than the possibility that the DPRK uranium enrichment program had shifted into high gear. The North’s conduct, real and supposed, was taken collectively as something akin to a moral affront. To the Americans, “cheating” meant that the North Koreans had to be punished. It meant that a US delegation, when it finally got to Pyongyang, would not negotiate, would not host a dinner, and would not engage in any of the normal practices of diplomacy that might begin the process of dealing with the problem. The US delegation would, in effect, give the North Koreans an ultimatum—although no one would have used that word—and then leave.

This tactic suited the hard-liners. Neither the vice president nor Secretary of Defense Rumsfeld believed that negotiations with the North Koreans would ever accomplish anything significant anyway. They were willing to let a senior official go to Pyongyang, but only on a leash so short that it would make a North Korean diplomat look like a free spirit.
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The leash on the American negotiator stayed attached well into the multilateral talks that eventually began in 2003.

KIM JONG IL’S PROGRESS

Unaware of the storm in Washington over enrichment, Kim Jong Il went ahead with the rollout of his new economic policies. These were never publicly announced in a single official document, nor were they ever identified as “reforms,” but rather were presented as improvements to “socialist economic management.” Later that summer, the North Korean press was filled with an unusual number of articles praising the party’s economic policies, but there was nothing explicit in the media about what changes were taking place. It did not take long, however, for foreign reporters to get wind of developments. As early as July 11, the Japanese news agency Kyodo published a lengthy and fairly detailed report on the new measures. Sometime later, a busload of KEDO employees traveling on the country’s east coast saw marked improvements in a hotel where they often stopped on the way to or from the reactor construction site. The changes ranged from simple things, like an aquarium in the hotel’s entrance hall no longer filled with lifeless, scummy water, to considerably more important matters,
like a bathroom cleaned and renovated so that it that no longer required risking one’s health to use it.

Kim’s new measures were not meant to be applied in a single big bang. Rather, they appear to have been planned in phases, involving gradually widening circles of adjustments. A group of North Koreans traveling to a meeting in Europe, for example, showed a set of slides portraying the various planned phases. At this point, they said, they were looking for practical advice on how to operate markets. They indicated they were under pressure to make the early phases of the new policies show results in order to win over the skeptics in the leadership. The skeptics apparently were making their views known publicly. Signs in North Korean media of an extended debate over how far, and how fast, to move suggested that although Kim Jong Il had made the decision to implement new economic policies, much remained unsettled, open to interpretation, and with enough room left for those opposed to full-scaled reforms to push back.

The intellectual underpinnings for the new policies went back several years, at least to early 2000, not long before Kim Jong Il’s first visit to China in seventeen years. After another visit to China in January 2001, during which Kim toured Shanghai with a large group of military and economic officials, planning apparently continued. In the autumn, Kim gave instructions on key issues that would form the basis of the measures to follow: economic management, profits, results, and expertise.

In the initial phase of the North’s new economic policy, the measures included increasing salaries as well as reducing subsidies for such things as bus and train fares and the cost of housing. The purpose, in part, was to get at the population’s psychology of dependence, to wean people away from feeling the state would provide everything and bring them to a stage where they had to make choices on how to spend their money. Subsequent phases included establishment of large central state-sanctioned markets, permission for selected industries to engage in autonomous economic activity, and changes to the structure of cooperative farms.

Parallel with and apparently intended to work in support of these new measures, Kim approved the establishment of a Special Administrative Region (SAR) in Sinuiju, the gateway city across the Yalu River from the Chinese city of Dandong. The two cities were connected by a relatively narrow bridge consisting of a single rail line and a single vehicular lane, each permitting traffic in only one direction at a time. Built by the Japanese in the 1930s, this bridge and another older one a few yards away had been destroyed by US bombs during the Korean War. The “new” bridge was repaired while the older one was left in its ruined state, eventually to become a popular tourist attraction.

The law governing the Sinuiju SAR was announced on September 12, less than a week before Japanese prime minister Koizumi was to arrive in
Pyongyang. It provided for an unprecedented amount of autonomy for the area, similar to the liberties granted to Chinese special economic zones in the 1980s. In addition to a variety of industries, the zone would also, it was rumored, host gambling casinos.

The Chinese, who might have been expected to support this development in the North’s economy, did just the opposite. Virtually as soon as the North Koreans announced the SAR, media reports appeared citing Beijing’s opposition to it. The Chinese crushed the SAR as quickly as they could, charging that the area’s newly appointed “governor”—a shadowy Dutch Chinese figure named Yang Bin whom Kim had somehow been persuaded to pick—was a big-time crook who owed millions in taxes and that a fleshpot and magnet for money laundering on their border was more than they could tolerate. Yang was arrested in short order and sentenced to eighteen years in jail.