North Korea/South Korea risk: Alert – Inter-Korean tensions reach danger level

Following a series of North Korean provocations, including threatened nuclear attacks and the shutdown of the inter-Korean Kaesong Industrial Complex on April 7th, tensions on the Korean peninsula are at their highest for two decades. The North has raised its aggressive rhetoric to such a level that backing down will be difficult, especially as the regime’s bellicosity may reflect heightened internal political stresses. This suggests that North Korea will conduct another missile or nuclear-weapon test in the near future, or will carry out some other highly provocative act. But despite this, the risk of outright conflict remains limited.

Tensions on the Korean peninsula are at their highest since May 1994, when the US president, Bill Clinton, considered bombing North Korea’s nuclear facility at Yongbyon. In the end he refrained, having been advised by his joint chiefs of staff of the appalling human and material costs that even a limited second Korean war would entail. The same fears of escalation, with North Korea now a nuclear-armed adversary, explain the restrained response of the US and South Korea to the North’s mainly verbal provocations in the past few weeks. North Korea’s current rhetoric is alarming, including as it does warnings of nuclear strikes. Such threats are mostly bluster, given that North Korea lacks the reach to hit the US mainland with its missiles. However, South Korea and Japan are vulnerable to various kinds of provocation; in particular, the South’s capital, Seoul, lies within artillery range of the inter-Korean border.

No clear motive

When North Korea has ratcheted up tensions in the past, it has usually wanted something from its interlocutors. This time, however, there is a puzzling absence of any such demands. The North claims to be angry on two counts: censure and sanctions under two new UN Security Council resolutions; and Foal Eagle, an ongoing US-South Korean military exercise. Yet the latter is a regular annual event, while censure by the UN was an inevitable response to North Korea’s rocket and nuclear tests in recent months.

The lack of a clear motive for the North Korean government’s current behaviour suggests that domestic politics is playing a role. The North’s young and inexperienced leader, Kim Jong-un, might still feel the need to prove himself by flexing his muscles. However, there are signs that he may be overreaching himself. On April 5th North Korea warned foreign embassies that it could not guarantee their safety in the event of war, and offered them help to evacuate by April 10th. So far none has complied, thereby in effect calling their host nation’s bluff.

Meanwhile, the two powers that often fight North Korea’s corner are losing patience. Russia has been sharply critical of the North, while on April 7th China’s new leader, Xi Jinping, said that no state should “throw the region, or even the entire world, into chaos for selfish gains”. Although China will not ditch its wayward ally, Kim Jong-un must be careful not to push his main source of essential aid and trade too far.

Provoking South Korea is also an odd tactic when the South has a new president, Park Geun-hye, who has stated her commitment to softening the hard line of her predecessor by building trust with the North. While warning that any physical attack on South Korea by the North will invite retaliation, Park Geun-hye has appointed a moderate unification minister, Ryoo Kihl-jae, who has allowed private humanitarian aid to the North to continue despite the crisis.

The North closes the KIC

The one concrete measure that the North has taken so far may backfire on it. The Kaesong Industrial Complex (KIC) is the last functioning inter-Korean joint venture, located just north of the demilitarised zone (DMZ, the de facto border between the two Koreas). Riled by jibes that the continuation of business at the KIC undercut its declaration on March 30th that it was now in a state of war with the South, on April 3rd North Korea barred Southern workers and vehicles from crossing the DMZ to get to the complex. On April 8th the North said that it would withdraw its workers and temporarily suspend operations in the KIC while considering whether to allow its continued existence or close it. Presumably the 500-odd South Koreans still in the complex—with the possible exception of maintenance staff—will have to leave too. How North Korea will handle its own 53,000 workers in the KIC, who will not be pleased at the loss of their jobs and wages, remains to be seen.

The outlook remains risky

What else might North Korea do? In the run-up to April 15th, the birthday of the country’s founding leader, the late Kim Il-sung (the grandfather of Kim Jong-un), apparent preparations have been spotted for both a fresh missile trial and a nuclear-weapon test—although the latter activity may be a ruse. Meanwhile, Switzerland has offered to mediate, and the allies are changing tack for fear of stoking tensions further. On April 7th the US postponed its planned test of a Minuteman III intercontinental ballistic missile, while South Korea’s defence minister, Kim Kwan-jin, put off plans to visit the US capital, Washington.

A further enigma is that, at the same time as he threatens North Korea’s neighbours, Kim Jong-un is hinting at the possibility of domestic economic change. On April 1st North Korea’s rubber-stamp parliament, the Supreme People’s Assembly, approved a budget that as usual contained no figures, but also appointed the North’s only known reformer to the post of premier. Elevated to the politburo the day before, Pak Pong-ju was previously premier in 2003-07, when he oversaw tentative pro-market reforms that were later rolled back. Domestic media are stressing economic themes, including the need for foreign investment and more special economic zones. Neither nuclear threats nor the suspension of the KIC is likely to advance efforts to attain such goals.

In sum, Kim Jong-un appears to be lashing out without a clear plan. The challenge for North Korea’s interlocutors is to remain vigilant, but also to seize any chance to initiate dialogue. The events of 1994 are a useful precedent. The present situation is fraught with risk, but if handled carefully it could eventually lead to new negotiations.

Economist Intelligence Unit
Source: Economist Intelligence Unit