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Why is the Korean Reunification not to Work anytime soon

Anis H. Bajrektarevic

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How to draw the line between the recent and still unsettled EU/EURO crisis and Asia’s success story? Well, it might be easier than it seems: Neither Europe nor Asia has any alternative. The difference is that Europe well knows there is no alternative – and therefore is multilateral. Asia thinks it has an alternative – and therefore is strikingly bilateral, while stubbornly residing enveloped in economic egoisms. No wonder that Europe is/will be able to manage its decline, while Asia is (still) unable to capitalize its successes.

Asia clearly does not accept any more the lead of the post-industrial and post-Christian Europe, but is not ready for the post-West world.

Following the famous saying allegedly spelled by Kissinger: “Europe? Give me a name and a phone number!” (when – back in early 1970s – urged by President Nixon to inform Europeans on the particular US policy action), the author is trying to examine how close is Asia to have its own telephone number.

Another fallacy is that the German reunification can be just copied. 15 days at any German institute of political science and one becomes expert of reunification. Yes, Germany is a success story since the neighbors were extremely forgiving. And that was enhanced by the overall pan-continental commitment to multilateralism – by both institutions and instruments.  Europe of German re-unification was the most multilateralised region of the world. Asia today is extremely bilateral – not far from the constellations at the time of Hiroshima or Korean War of 1950s. No multilateralism – no denuclearisation; no denuclearisation – no reunification; no reunification – no overall cross-continental tranquilization of relations; no tranquility – no Asia’s sustainable success.

Why multilateralism matters? Author tries to answer it …  

By contrasting and comparing genesis of multilateral security structures in Europe with those currently existing in Asia, and by listing some of the most pressing security challenges in Asia, this policy paper offers several policy incentives why the largest world’s continent must consider creation of the comprehensive pan-Asian institution. Prevailing security structures in Asia are bilateral and mostly asymmetric while Europe enjoys multilateral, balanced and symmetric setups (American and African continents too). Author goes as far as to claim that irrespective to the impressive economic growth, no Asian century will emerge without creation of such an institution.

For over a decade, many of the relevant academic journals are full of articles prophesizing the 21st as the Asian century. The argument is usually based on the impressive economic growth, increased production and trade volumes as well as the booming foreign currency reserves and exports of many populous Asian nations, with nearly 1/3 of total world population inhabiting just two countries of the largest world’s continent. However, history serves as a powerful reminder by warning us that economically or/and demographically mighty gravity centers tend to expand into their peripheries, especially when the periphery is weaker by either category. It means that any absolute or relative shift in economic and demographic strength of one subject of international relations will inevitably put additional stress on the existing power equilibriums and constellations that support this balance in the particular theater of implicit or explicit structure.

Lessons of the Past

Thus, what is the state of art of Asia’s security structures? What is the existing capacity of preventive diplomacy and what instruments are at disposal when it comes to early warning/ prevention, fact-finding, exchange mechanisms, reconciliation, capacity and confidence– building measures in the Asian theater?

While all other major theaters do have the pan-continental settings in place already for many decades, such as the Organization of American States – OAS (American continent), African Union – AU (Africa), Council of Europe and Organization for Security and Cooperation in Europe – OSCE (Europe), the state-of-arts of the largest world’s continent is rather different. What becomes apparent, nearly at the first glance, is the absence of any pan-Asian security/ multilateral structure. Prevailing security structures are bilateral and mostly asymmetric. They range from the clearly defined and enduring non-aggression security treaties, through less formal arrangements, up to the Ad hoc cooperation accords on specific issues. The presence of the multilateral regional settings is limited to a very few spots in the largest continent, and even then, they are rarely mandated with security issues in their declared scope of work. Another striking feature is that most of the existing bilateral structures have an Asian state on one side, and either peripheral or external protégé country on the other side which makes them nearly per definition asymmetric. The examples are numerous: the US–Japan, the US– S. Korea, the US–Singapore, Russia–India, Australia–East Timor, Russia–North Korea, Japan –Malaysia, China–Pakistan, the US–Pakistan, China–Cambodia, the US–Saudi Arabia, Russia –Iran, China–Burma, India–Maldives, Iran–Syria, N. Korea–Pakistan, etc.

Indeed, Asia today resonates a mixed echo of the European past. It combines features of the pre-Napoleonic, post-Napoleonic and the League-of-Nations Europe. What are the useful lessons from the European past? Well, there are a few, for sure. Bismarck accommodated the exponential economic, demographic and military growth as well as the territorial expansion of Prussia by skillfully architecturing and calibrating the complex networks of bilateral security arrangements of 19th century Europe. Like Asia today, it was not an institutionalized security structure of Europe, but a talented leadership exercising restraint and wisdom in combination with the quick assertiveness and fast military absorptions, concluded by the lasting endurance. However, as soon as the new Kaiser removed the Iron Chancellor (Bismarck), the provincial and backward–minded, insecure and militant Prussian establishment contested (by their own interpretations of the German’s machtpolitik and weltpolitik policies) Europe and the world in two devastating world wars. That, as well as Hitler’s establishment afterwards, simply did not know what to do with a powerful Germany.

The aspirations and constellations of some of Asia’s powers today remind us also of the pre-Napoleonic Europe, in which a unified, universalistic block of the Holy Roman Empire was contested by the impatient challengers of the status quo. Such serious centripetal and centrifugal oscillations of Europe were not without grave deviations: as much as Cardinal Richelieu’s and Jacobin’s France successfully emancipated itself, the Napoleon III and pre-WWII France encircled, isolated itself, implicitly laying the foundation for the German attack.

Finally, the existing Asian regional settings also resemble the picture of the post-Napoleonic Europe: first and foremost, of Europe between the Vienna Congress of 1815 and the revolutionary year of 1848. At any rate, let us take a quick look at the most relevant regional settings in Asia.

Multilateral constellations

By far, the largest Asian participation is with the Asia-Pacific Economic Cooperation – APEC, an organization engulfing both sides of the Pacific Rim. Nevertheless, this is a forum for member economies not of sovereign nations, a sort of a prep-com or waiting room for the World Trade Organization – WTO. To use the words of one senior Singapore diplomat who recently told me in Geneva the following: “what is your option here? …to sign the Free Trade Agreement (FTA), side up with the US, login to FaceBook, and keep shopping on the internet happily ever after…”

Two other crosscutting settings, the Organization of Islamic Cooperation – OIC and Non-Aligned Movement – NAM, the first with and the second without a permanent secretariat, represent the well-established political multilateral bodies. However, they are inadequate forums as neither of the two is strictly mandated with security issues. Although both trans-continental entities do have large memberships being the 2nd and 3rd largest multilateral systems, right after the UN, neither covers the entire Asian political landscape – having important Asian countries outside the system or opposing it.

Further on, one should mention the Korean Peninsula Energy Development Organization – KEDO (Nuclear) and the Iran-related Contact (Quartet/P-5+1) Group. In both cases, the issues dealt with are indeed security related, but they are more an asymmetric approach to deter and contain a single country by the larger front of peripheral states that are opposing a particular security policy, in this case, of North Korea and of Iran. Same was with the short-lived SEATO Pact – a defense treaty organization for SEA which was essentially dissolved as soon as the imminent threat from communism was slowed down and successfully contained within the French Indochina.

Confidence building – an attempt

If some of the settings are reminiscent of the pre-Napoleonic Europe, the Shanghai Cooperation Organization – SCO and Cooperation Council for the Arab states of the Gulf – GCC remind us of the post-Napoleonic Europe and its Alliance of the Eastern Conservative courts (of Metternich). Both arrangements were created on a pretext of a common external ideological and geopolitical threat, on a shared status quo security consideration. Asymmetric GCC was an externally induced setting by which an American key Middle East ally Saudi Arabia gathered the grouping of the Arabian Peninsula monarchies. It has served a dual purpose; originally, to contain the leftist Nasseristic pan-Arabism which was introducing a republican type of egalitarian government in the Middle Eastern theater. It was also – after the 1979 revolution – an instrument to counter-balance the Iranian influence in the Gulf and wider Middle East. The response to the spring 2011-13 turmoil in the Middle East, including the deployment of the Saudi troops in Bahrain, and including the analysis of the role of influential Qatar-based and GCC-backed Al Jazeera TV network is the best proof of the very nature of the GCC mandate.

The SCO is internally induced and more symmetric setting. Essentially, it came into existence through a strategic Sino-Russian rapprochement , based, for the first time in modern history, on parity, to deter external aspirants (the US, Japan, Korea, India, Turkey and Saudi Arabia) and to keep the resources, territory, present socio-economic cultural and political regime in the Central Asia, Tibet heights and the Xinjiang Uighur province in line.

The next to consider is the Indian sub-continent’s grouping, the South Asian Association for Regional Cooperation – SAARC. This organization has a well-established mandate, well staffed and versed Secretariat. However, the Organization is strikingly reminiscent of the League of Nations. The League is remembered as an altruistic setup which repeatedly failed to adequately respond to the security quests of its members as well as to the challenges and pressures of parties that were kept out of the system (e.g. Russia until well into the 1930s and the US remaining completely outside the system, and in the case of the SAARC surrounding; China, Saudi Arabia and the US). The SAARC is practically a hostage of mega confrontation of its two largest members, both confirmed nuclear powers; India and Pakistan. These two challenge each other geopolitically and ideologically. Existence of one is a negation of the existence of the other; the religiously determined nationhood of Pakistan is a negation of multiethnic India and vice verse. Additionally, the SAARC although internally induced is an asymmetric organization. It is not only the size of India, but also its position: centrality of that country makes SAARC practically impossible to operate in any field without the direct consent of India, be it commerce, communication, politics or security.

For a serious advancement of multilateralism, mutual trust, a will to compromise and achieve a common denominator through active co-existence is the key. It is hard to build a common course of action around the disproportionately big and centrally positioned member which would escape the interpretation as containment by the big or assertiveness of its center by the smaller, peripheral members.

Multivector Foreign Policy

Finally, there is an ASEAN – a grouping of 10 Southeast Asian nations , exercising the balanced multi-vector policy, based on the non-interference principle, internally and externally. This, Jakarta/Indonesia headquartered  organization has a dynamic past and an ambitious current charter. It is an internally induced and relatively symmetric arrangement with the strongest members placed around its geographic center, like in case of the EU equilibrium with Germany-France/Britain-Italy/Poland-Spain geographically balancing each other. Situated on the geographic axis of the southern flank of the Asian landmass, the so-called growth triangle of Thailand-Malaysia-Indonesia represents the core of the ASEAN not only in economic and communication terms but also by its political leverage. The EU-like ASEAN Community Road Map (for 2015) will absorb most of the Organization’s energy . However, the ASEAN has managed to open its forums for the 3+3 group/s, and could be seen in the long run as a cumulus setting towards the wider pan-Asian forum in future.

Before closing this brief overview, let us mention two recently inaugurated informal forums, both based on the external calls for a burden sharing. One, with a jingoistic-coined name by the Wall Street bankers  – BRI(I)C/S, so far includes two important Asian economic, demographic and political powerhouses (India and China), and one peripheral (Russia). Indonesia, Turkey, Saudi Arabia, Pakistan, Kazakhstan, Iran are a few additional Asian countries whose national pride and pragmatic interests are advocating a BRIC membership. The G–20, the other informal forum, is also assembled on the Ad hoc (pro bono) basis following the need of the G–7 to achieve a larger approval and support for its monetary (currency exchange accord) and financial (austerity) actions introduced in the aftermath of still unsettled financial crisis. Nevertheless, the BRIC and G-20 have not provided the Asian participating states either with the more leverage in the Bretton Woods institutions besides a burden sharing, or have they helped to tackle the indigenous Asian security problems. Appealing for the national pride, however, both informal gatherings may divert the necessary resources and attention to Asian states from their pressing domestic, pan-continental issues.

Yet, besides the UN system machinery of the Geneva-based Disarmament committee, the UN Security Council, the Organization for the Prohibition of Chemical Weapons – OPCW and International Atomic Energy Agency – IAEA (or CTBTO), even the ASEAN Asians (as the most multilateralized Asians) have no suitable standing forum to tackle and solve their security issues. An organization similar to the Council of Europe or the OSCE is still far from emerging on Asian soil.

Our history warns. Nevertheless, it also provides a hope:  The pre-CSCE (pre-Helsinki) Europe was indeed a dangerous place to live in. The sharp geopolitical and ideological default line was passing through the very heart of Europe, cutting it into halves. The southern Europe was practically sealed off by notorious dictatorships; in Greece (Colonel Junta), Spain (Franco) and Portugal (Salazar), with Turkey witnessing several of its governments toppled by the secular and omnipotent military establishment, with inverted Albania and a (non-Europe minded) non-allied, Tito’s Yugoslavia. Two powerful instruments of the US military presence (NATO) and of the Soviets (Warsaw pact) in Europe were keeping huge standing armies, enormous stockpiles of conventional as well as the ABC weaponry and delivery systems, practically next to each other. By far and large, European borders were not mutually recognized. Essentially, the west rejected to even recognize many of the Eastern European, Soviet dominated/installed governments.

Territorial disputes unresolved

Currently in Asia, there is hardly a single state which has no territorial dispute within its neighborhood. From the Middle East, Caspian and Central Asia, Indian sub-continent, mainland Indochina or Archipelago SEA, Tibet, South China Sea and the Far East, many countries are suffering numerous green and blue border disputes. The South China Sea solely counts for over a dozen territorial disputes – in which mostly China presses peripheries to break free from the long-lasting encirclement. These moves are often interpreted by the neighbors as dangerous assertiveness. On the top of that Sea resides a huge economy and insular territory in a legal limbo – Taiwan, which waits for a time when the pan-Asian and intl. agreement on how many Chinas Asia should have, gains a wide and lasting consensus.

Unsolved territorial issues, sporadic irredentism, conventional armament, nuclear ambitions, conflicts over exploitation of and access to the marine biota, other natural resources including fresh water access and supply are posing enormous stress on external security, safety and stability in Asia. Additional stress comes from the newly emerging environmental concerns, that are representing nearly absolute security threats, not only to the tiny Pacific nation of Tuvalu , but also to the Maldives, Bangladesh, Cambodia, parts of Thailand, of Indonesia, of Kazakhstan and of the Philippines, etc . All this combined with uneven economic and demographic dynamics  of the continent are portraying Asia as a real powder keg.

It is absolutely inappropriate to compare the size of Asia and Europe – the latter being rather an extension of a huge Asian continental landmass, a sort of western Asian peninsula – but the interstate maneuvering space is comparable. Yet, the space between the major powers of post-Napoleonic Europe was as equally narrow for any maneuver as is the space today for any security maneuver of Japan, China, India, Pakistan, Iran and the like.

Let us also take a brief look at the peculiarities of the nuclear constellations in Asia. Following the historic analogies; it echoes the age of the American nuclear monopoly and the years of Russia’s desperation to achieve the parity.

Besides holding huge stockpiles of conventional weaponry and numerous standing armies, Asia is a home of four (plus peripheral Russia and Israel) of the nine known nuclear powers (declared and undeclared). Only China and Russia are parties to the Non-proliferation Treaty – NPT. North Korea walked away in 2003, whereas India and Pakistan both confirmed nuclear powers declined to sign the Treaty. Asia is also the only continent on which nuclear weaponry has been deployed.

Cold War exiled in Asia

As is well known, the peak of the Cold War was marked by the mega geopolitical and ideological confrontation of the two nuclear superpowers whose stockpiles by far outnumbered the stockpiles of all the other nuclear powers combined. However enigmatic, mysterious and incalculable to each other , the Americans and Soviets were on opposite sides of the globe, had no territorial disputes, and no record of direct armed conflicts.

Insofar, the Asian nuclear constellation is additionally specific as each of the holders has a history of hostilities – armed frictions and confrontations over unsolved territorial disputes along the shared borders, all combined with the intensive and lasting ideological rivalries. The Soviet Union had bitter transborder armed frictions with China over the demarcation of its long land border. China has fought a war with India and has acquired a significant territorial gain. India has fought four mutually extortive wars with Pakistan over Kashmir and other disputed bordering regions. Finally, the Korean peninsula has witnessed the direct military confrontations of Japan, USSR, Chinese as well as the US on its very soil, and remains a split nation under a sharp ideological divide.

On the western edge of the Eurasian continent, neither France, Britain, Russia nor the US had a (recent) history of direct armed conflicts. They do not even share land borders.

Finally, only India and now post-Soviet Russia have a strict and full civilian control over its military and the nuclear deployment authorization. In the case of North Korea and China, it is in the hands of an unpredictable and non-transparent communist leadership – meaning, it resides outside democratic, governmental decision-making. In Pakistan, it is completely in the hands of a politically omnipresent military establishment. Pakistan has lived under a direct military rule for over half of its existence as an independent state.

What eventually kept the US and the USSR from deploying nuclear weapons was the dangerous and costly struggle called: “mutual destruction assurance”. Already by the late 1950s, both sides achieved parity in the number and type of nuclear warheads as well as in the number and precision of their delivery systems. Both sides produced enough warheads, delivery systems’ secret depots and launching sites to amply survive the first impact and to maintain a strong second-strike capability . Once comprehending that neither the preventive nor preemptive nuclear strike would bring a decisive victory but would actually trigger the final global nuclear holocaust and ensure total mutual destruction, the Americans and the Soviets have achieved a fear–equilibrium through the hazardous deterrence. Thus, it was not an intended armament rush (for parity), but the non-intended Mutual Assurance Destruction – MAD – with its tranquilizing effect of nuclear weaponry, if possessed in sufficient quantities and impenetrable configurations – that brought a bizarre sort of pacifying stability between two confronting superpowers. Hence, MAD prevented nuclear war, but did not disarm the superpowers.

As noted, the nuclear stockpiles in Asia are considerably modest . The number of warheads, launching sites and delivery systems is not sufficient and sophisticated enough to offer the second strike capability. That fact seriously compromises stability and security: preventive or preemptive N–strike against a nuclear or non-nuclear state could be contemplated as decisive, especially in South Asia and on the Korean peninsula, not to mention the Middle East .

A general wisdom of geopolitics assumes the potentiality of threat by examining the degree of intensions and capability of belligerents. However, in Asia this theory does not necessarily hold the complete truth: Close geographic proximities of Asian nuclear powers means shorter flight time of warheads, which ultimately gives a very brief decision-making period to engaged adversaries. Besides a deliberate, a serious danger of an accidental nuclear war is therefore evident.

Multilateral mechanisms

One of the greatest thinkers and humanists of the 20th century, Erich Fromm wrote: “…man can only go forward by developing (his) reason, by finding a new harmony…”

There is certainly a long road from vision and wisdom to a clear political commitment and accorded action. However, once it is achieved, the operational tools are readily at disposal. The case of Helsinki Europe is very instructive. To be frank, it was the over-extension of the superpowers who contested one another all over the globe, which eventually brought them to the negotiation table. Importantly, it was also a constant, resolute call of the European public that alerted governments on both sides of the default line. Once the political considerations were settled, the technicalities gained momentum: there was – at first – mutual pan-European recognition of borders which tranquilized tensions literally overnight. Politico-military cooperation was situated in the so-called first Helsinki basket, which included the joint military inspections, exchange mechanisms, constant information flow, early warning instruments, confidence–building measures mechanism, and the standing panel of state representatives (the so-called Permanent Council). Further on, an important clearing house was situated in the so-called second basket – the forum that links the economic and environmental issues, items so pressing in Asia at the moment.

Admittedly, the III OSCE Basket was a source of many controversies in the past years, mostly over the interpretation of mandates. However, the new wave of nationalism, often replacing the fading communism, the emotional charges and residual fears of the past, the huge ongoing formation of the middle class in Asia whose passions and affiliations will inevitably challenge established elites domestically and question their policies internationally, and a related search for a new social consensus – all that could be successfully tackled by some sort of an Asian III basket. Clearly, further socio-economic growth in Asia is impossible without the creation and mobilization of a strong middle class – a segment of society which when appearing anew on the socio-political horizon is traditionally very exposed and vulnerable to political misdeeds and disruptive shifts. At any rate, there are several OSCE observing nations from Asia ; from Thailand to Korea and Japan, with Indonesia, a nation that currently considers joining the forum. They are clearly benefiting from the participation .

Consequently, the largest continent should consider the creation of its own comprehensive pan-Asian multilateral mechanism. In doing so, it can surely rest on the vision and spirit of Helsinki. On the very institutional setup, Asia can closely revisit the well-envisioned SAARC and ambitiously empowered ASEAN  fora. By examining these two regional bodies, Asia can find and skillfully calibrate the appropriate balance between widening and deepening of the security mandate of such future multilateral  organization – given the number of states as well as the gravity of the pressing socio-political, environmental and politico-military challenges.

In the age of unprecedented success and the unparalleled prosperity of Asia, an indigenous multilateral pan-Asian arrangement presents itself as an opportunity. Contextualizing Hegel’s famous saying that “freedom is…an insight into necessity” let me close by stating that a need for the domesticated pan-Asian organization warns by its urgency too.

Clearly, there is no emancipation of the continent; there is no Asian century, without the pan-Asian multilateral setting.

Modern Diplomacy Advisory Board, Chairman Geopolitics of Energy Editorial Member Professor and Chairperson for Intl. Law & Global Pol. Studies contact: anis@bajrektarevic.eu

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East Asia

The forthcoming meeting between Kim Jong-Un and Donald J. Trump

Giancarlo Elia Valori

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 The meeting between the leader of the Democratic People’s Republic of Korea, Kim Jong-Un, and the President of the United States, Donald J. Trump, will be held in Hanoi, Vietnam, on February 27-28, 2019.

 The primary aim, as stated by both Heads of State, is the solution of the North Korean and US nuclear issue in South Korea.

 The news of the meeting had initially been delivered by President Trump, in his speech on the State of the Union, but also in a long series of now inevitable Twitter messages.

 Indeed, after the Singapore Summit between Kim Jong-Un and Trump, in the first half of June 2018, the negotiations between the two countries had clearly stalled.

 The results reached in Singapore, however, were very significant: the US Armed Forces’ cessation of the joint exercises with South Korea’s military structures; the certainty – as stated by President Trump – that Kim Jong-Un would dismantle his nuclear system “very quickly”, but also the continuation of US economic sanctions against North Korea, unless “quick and new” choices were made by Kim Jong-Un.

 It should also be noted that the decision to suspend the joint military exercises with South Korea was a real bolt from the blue for the country, above all while President Trump enabled North Korea to use the nuclear and conventional IAEA “safety measures” – an unavoidable and necessary factor of a future and quick disarmament.

 Since the Singapore Summit the denuclearization of the whole Korean peninsula has been the aim of both Heads of State, but with a too generic approach on the procedures and time schedule of the checks on disarmament.

 For the time being, however, while from the beginning of its autonomous negotiations with South Korea, North Korea has always avoided carrying out nuclear or missile exercises and tests, certainly no one has declared or shown interest in really endeavouring for denuclearization in both Koreas.

 However, why has Hanoi been chosen as venue of the meeting?

 The choice has been made precisely by President Trump because the capital of Vietnam, which is still a painful symbol for the United States, has managed to become a great pole of international economic development, after its reunification with the Communist North Vietnam.

  In a Twitter message President Trump wrote: “Under Kim Jong-Un’s leadership, North Korea will become the great economic powerhouse of Southeast Asia, considering that I have gotten to know Kim and fully understand how capable he is as a politically rational leader”.

 It is not just flattering. Probably President Trump has been fascinated by this young North Korean leader, heir to an extraordinary ancestry, who  studied in Switzerland, followed his cursus honorum in the true control rooms of North Korea’s power, and was modest while he was learning and is now assertive, without rhetoric, when he rules.

 Pending his visit to Vietnam, the North Korean leader will visit the factories of the Bac Ninh Province, northeast of Hanoi, with a view to probing the concrete possibility of building a smartphone factory jointly with the South Korean company Samsung.

Most likely, there will also be a visit by the North Korean leader to Ha Long Bay, a popular tourist area near Haiphong.

 If we do not think about quality tourism, we cannot properly imagine the future development of North Korea, which will also fit very well in the new global food chains.

 It should also be noted that this visit by Kim Jong-Un is the first one he pays to Vietnam.

 It is also worth recalling that North Korea sent some of its air forces to fight alongside the VietMihn of the Vietnamese Communist “resistance”, as well as Russia and China. Currently, however, Vietnam’s primary economic partner is, coincidentally, South Korea and this has certainly not contributed to preserve good relations between North Korea and Vietnam.

 The meeting between the Head of US negotiators, Stephen Biegun, with his North Korean counterpart, Kim Hyok-Chol, has already taken place in Hanoi and Pyongyang – a meeting always focused on topic number 1, namely denuclearization.

  Before this assignment in relation to North Korea, Stephen Biegun was responsible for Ford Motor Co’s international relations.

 He knows Russian and Moscow’s economic and political circles very well. He is member of the Board of the U.S. Russia Foundation and of Ford Sollers, the joint venture of Ford Motor Co.in the Russian Federation.

 Kim Hyok-Chol had met Biegun also in Pyongyang, where they had already talked about “complete denuclearization”.

  The denuclearization that will probably emerge in its already final form at the end of the Hanoi talks between the two leaders.

 We can already predict it will envisage the dismantling of the Yongbyon reactor and some funds to support North Korea’s economic growth, with a very “long-term” loan for funding the nuclear decommissioning of the Democratic People’s Republic of Korea.

 In fact, the latest satellite images of the North Korean reactor Yongbyon show a still active and well-maintained site, while the main structures of the reactor seem to be still unused to date.

 Kim Jong-Un has already decided that Yongbyon will be the start of the great North Korean denuclearization process.

 Both symbol and substance.

 An image to be shown the world and a credible subject of negotiation.

 Kim Jong-Un has always said – also to his South Korean counterpart – that it would be Yongbyon to be closed down, at the beginning of negotiations, “if there were corresponding actions by the United States”.

 Which actions?

 It is easy to imagine them: the “sincere” measures envisaged by Kim Jong-Un, in his last New Year’s speech, are the removal from South Korea of the US military and nuclear structures that can allow a response to the first nuclear attack from the North.

 In 2018 alone, North Korea also destroyed both a nuclear base and a missile structure, but the United States said that these operations had not been fully accomplished and, in any case, they could be easily reversed.

 According to some US nuclear disarmament experts, Kim Jong-Un could reach a level just at the limit of complete nuclear disarmament, but such measures would be such as to clearly regionalize North Korea’s nuclear (and hence  missile) threat.

 In short,Kim Jong-Un “rescues” the United States from its missiles.

 This also means that, in a military or geopolitical regional crisis, Kim Jong-Un could also “involve” both China and Japan in the negotiations, thus multiplying both the effect of his threat and the strength of his final resigning to continue the attack.

 The other factor will be the “new and soft phase” of relations between North and South Korea, with a significant reduction in the number of guard posts and internal weapons within the Demilitarized Zone.

 For the North Korean leader the next step will be to almost completely put an end to the old alliance between South Korea and the United States which, in his opinion, is always a harbinger of dangerous military (and, in the future, also economic) presences that would push a de facto unified  Korea to get out of the triangle which will effectively replace the North Korean nuclear system, i.e. the North Korean strategic integration with China and the Russian Federation.

Even the planned dismantling of Yongbyon, however, would leave North Korea with a substantial amount of nuclear weapons, and the possibility of producing enriched uranium elsewhere.

 Nevertheless, there would anyway be a definitive stop to the production of plutonium by North Korea, which is a very important political and strategic result.

 It should be recalled, however, that even the sole dismantling of Yongbyon is a remarkable technological, financial and political operation.

 A stable connection would be needed between the United States, the Russian Federation, China and, probably, South Korea, and even the now residual European Union.

 In addition to IAEA, of course.

 It will take many years and huge funds to achieve this result. Needless to cherish the fond hope.

 Just to give an example, the Rocky Flats US headquarters used for storing plutonium, was dismantled in 14 years at a cost of 9 billion US dollars.

 In Belgium, Eurchemic was decommissioned and dismantled in 25 years at a cost of 333.75 million US dollars.

 Probably the most rational and quick choice will be to entrust the decommissioning of Yongbyon to a joint political and financial organization between the United States and North Korea.

 Nevertheless, how will North Korea afford it? Obviously it will not want to have external support – and rightly so – but, hence, how can the issue be solved?

 The huge cost of decommissioning the site must anyway be shared by a sufficient number of actors. North Korea cannot materially bear 50% of all costs.

 Hence support will be inevitably needed from South Korea, the Russian Federation and China, but also from Japan and, probably, an axis between Vietnam and Thailand, for example.

 It is impossible for the United States and North Korea alone to bear all the costs.

 We could also think about an ad hoc investment bank which, at international level, would be entrusted with the task of funding the operation, at least partly, so as to later organize business projects in North Korea, in full agreement with Kim Jong-Un’s leadership.

 Once clarified the financial framework, the technical operations of decommissioning could also be very quick: reinforced concrete “containers” to be filled with nuclear N materials would be used. Then the reactor (and the iodine selector filters) cells would be emptied, but what is left would be covered again with much reinforced concrete, without further removals that could be postponed to economically better times.

 The plasma torches and all the other current techniques could almost immediately stop the action of radioactive materials, but with a maximum amount of staff that could be about 150 technicians and at least 70 elements, all selected among North Korean experts.

 In short, if all this can happen in the future, the solution for Yongbyon will be found in less than a year and at a predictable cost of 6 million US dollars.

  The 5 MWe reactor defueling is a further problem.

  This is the primary source of plutonium.

 The defueling would cost approximately 3 million US dollars, all inclusive, while the real dismantling would cost about 30 million US dollars.

 Hence the total cost for dismantling the plutonium and uranium networks, the centrifuges and the reactor will range between 300 million US dollars, in an initial and scarcely effective phase, and as many as 1.6 billion US dollars.

Under IAEA sole control, the dismantling of all North Korean facilities will last at least twenty years, at the aforementioned cost of 1.6 US dollars, but without IAEA supervision it will take at least ten years and almost one billion US dollars.

 Why confining the negotiations for peace and inclusion of the Democratic People’s Republic of Korea into the world market only to the nuclear issue?

 It is most likely that the North Korean chemical weapon warehouse is “old”, but there are certainly still VX and CW agents, G-series and V-series nerve agents that are certainly not negligible in any confrontation capable of endangering North Korean stability and political identity.

 What about discussing it in the Summit, at least in an initial phase? What about establishing a rational military balance between the United States, Russia and China in the whole Asian continent?

 Kim Jong-Un could – and certainly will- be a fully rational actor, who will know how to evaluate the best potential for the defence of his country, but without the silly memories of the Cold War.

 This also applies to North Korea’s chemical weapons, which Kim Jong-Un will deal with the necessary flexibility, but also with a compensatory criterion with respect to his nuclear system.

 Hence the prospects for the North Korean leadership could be the following:

a) keeping a minimum share of chemical, bacteriological and even nuclear weapons to effectively react to any North Korea’s political crisis. The calculation of the Minimum that a statesman must always be able to do. A possible solution could be an official statement, just before or even during the forthcoming Hanoi Summit, that there will be a mutual and official recognition between the United States and North Korea – a definitive document dealing with borders, the political personality, the regular exchange of ambassadors and cultural, commercial and financial relationships.

b) An agreement for the transfer of nuclear and bacteriological-chemical stocks to a third country, under the supervision of the international Agencies responsible for the operations. An already possible agreement could be  separating and dividing stocks between China, the Russian Federation, South Korea, Japan, the United States and even the irrelevant EU.

c) Support to the military police and security forces of the Democratic People’s Republic of Korea for monitoring staff, stocks and their political use by unreliable elements of Kim Jong-Un’s regime. A relationship between intelligence services that is unavoidable, considering the future commitments.

Hence North Korea must know very well that if there is someone interested in the stability of the regime, this is precisely the axis of Western powers that are accepting Kim Jong-Un’s openings, with laborious rationality.

  It will therefore be essential to envisage – with the figures and costs already mentioned above, as well as the respective allocations and breakdowns – a refinancing project, especially in the short term, of the Democratic People’s Republic of Korea which shall mainly concern:

1) the prevention of humanitarian disasters, also with the same UN Agencies that have been supporting North Korea on these issues for over 23 years. Once again, there is no problem in this regard. Apart from China that, in fact, currently supports – almost alone – North Korea against international sanctions, it will be necessary to stabilize aid and organize it in a different way, considering the costs of the large nuclear decommissioning.

2) How can it be done? It is simple, after all. It could be done by immediately establishing an International Bank for Korea and Asia in the South-West, which would collect aid, deal with investment in North Korea, support the population and, above all, submit to the North Korean government the new industrialization projects, mainly in the tourist, environmental and food chain sectors, but also in fine technologies. The entry of a great country, such as North Korea, into the world market will be the real great deal of the century and the true and stable guarantee for future peace. It will be good to jump at the chance, without making a fuss about it.

3) Finally we should help North Korea to become what it already is, namely a rich country. Certainly, with its “parallel” liberalizations, North Korea’s current leadership has already done much, but here very strong liquidity injections will be needed, as well as new and effective projects to be quickly submitted to Kim Jong-Un’s government.

4) The origin of this North Korean small economic boom is still bilateral trade with China. Hence we need to preserve and strengthen it. Indeed, as has already been envisaged in China, we need to imagine a rational inclusion of North Korea in the Chinese Belt and Road Initiative towards the West. The maritime networks, currently already present in an eminently maritime country, such as North Korea, would be perfect for managing the Chinese networks that already start from Gwadar.

5) It would therefore be silly to do what some US leaders suggest, i.e. to force North Korea to choose between nuclear weapons and economic support. Kim Jong-Un has studied Marx very well, when he was in Switzerland, and knows all too well that aid never comes “without strings attached”.

6)Hence the real costs of the great nuclear decommissioning must be calculated accurately, with an initial dismantling of the chemical and bacteriological arsenal, to which the evaluation of social and economic impact shall be added. Finally, this shall also be matched by an initial, rational and credible support for starting a new industrialization of the North Korean economy, which cannot obviously be only the result of South Korean investments.

Hence, besides defining a good policy line for intervening on nuclear decommissioning, we shall also do a rational and economic calculation of future costs and investments.

  This is needed to make Kim Jong-Un’s relinquishment of his nuclear system not coincide with an economic crisis and a weak integration of the country in the future world market, which will however be very different from the current one.

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China Vision: China’s Crusade to Create a World in its Own Image

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In the wake of Chinese leader Xi Xinping’s moves to make himself ruler for life, everyone is wondering about his government’s ambitions for its role in the world.  Daniel Wagner has written about what the trends indicate in China Vision: China’s Crusade to Create A World in its Own Image.

The book notes the paradox that China is in regards to investment.  The world’s 2nd largest economy continues to accept billions of dollars in development loans from banks like the World Bank and Asian Development Bank.  Meanwhile, Chinese state banks are loaning trillions of dollars to countries around the world.  Chinese entrepreneurs are feverishly setting up businesses abroad and purchasing foreign companies and real estate. If a foreigner wants to invest in China though, they must accept ownership stake limitations and obey rules that explicitly make them less competitive.  In regards to domestic investment, Wagner argues that China invests way too much on grand public projects, like apartment blocs that remain largely vacant, and not enough on small-midsized businesses.  One of these days (the next global recession?), the chickens will come home to roost and China will have to re-evaluate its blank-check policy.

Much of the book focuses on China’s role in foreign diplomacy and commerce.  The fledgling superpower is in the process of spending trillions of dollars on loans to the developing world, particularly through its Asia-oriented Belt and Road Initiative.  These no-strings attached loans give China enormous power over many of the poorest countries in the world.  Many people, like former Maldivian PM Mohamed Nasheed, have outright accused China of imperialist behavior.  The author writes that, “Kenya was to be forced to relinquish control of its largest and most lucrative port in Mombasa to Chinese control as a result of Nairobi’s inability to repay its debts to Beijing.”  China also owns ports in locales as diverse as Djibouti City and Zeebrugge, Belgium.  Chinese firms are likewise emulating some neo-colonial tendencies.  For instance, Wagner writes that, “Fewer than half of these [African-based Chinese] firms sourced inputs or had African management.”  Controversial Chinese real estate projects like Forest City, Malaysia are arguably examples of literal colonialism.

Through this strategy of buying friends and building a global network of ports, China is strengthening its impunity as a Top 3 naval power.  Increasingly, China is treating the South China Sea as its private fiefdom by ignoring credible territorial claims of the Spratly Islands and Scarborough Shoal by the Philippines, Indonesia, Japan, Brunei, Malaysia and Vietnam.  Most disturbing of all is Xi’s recent verbal aggression towards Taiwan.  By buying friends, China can mute criticisms of this military aggression in the UN and isolate foes like Taiwan (only 19 countries have diplomatic relations with it).  With a rapidly expanding fleet of sea craft, the People’s Liberation Army Navy is better equipped than ever to project hard power via all of China’s ports, from off the coast of the Philippines to Belgium…. On this dire note, I wish Wagner had written more about the budding conflict between China and the other 1B-person country in the world, India.  I predict that the dichotomy between democratic India and totalitarian China will determine the future of humanity.  Seeing as India & China (and China’s close ally Pakistan) all possess thermonuclear weapons and have recent military skirmishes with each other, one can only hope that the Tiger and Dragon don’t initiate WWIII squabbling over a sleepy locale like Kashmir or Nepal.

In the final section of the book, Wagner writes about China’s dominance in the virtual sphere.  Chinese tech companies like Baidu, Alibaba and Tencent are rapidly catching up and even beating Silicon Valley in terms of traffic, profitability and innovation (most importantly, AI).  China has also become the de facto global leader in green technology.  China’s blank-check philosophy funds these rapid advancements.  A lot of this apparent innovation, however, is fuelled by corporate espionage.  For the past few decades, Chinese firms (often with official backing) have been using spies and hacking to steal blueprints and thus reverse engineer inventions.  Ironically, these knock-offs are oftentimes sold to the US government, which creates a huge security risk.  In many cases, Western companies willingly share confidential data with China in order to be granted access to the Chinese market.

China’s running racket of stealing IP and personal user data from US companies that choose to operate in China demonstrates the importance of government regulation… In this case regarding national security and user privacy protection.  Ironically, China enforces data encryption and other cybersecurity measures through regulations like the 2017 Cybersecurity Law.  The willingness of Western companies to literally sell themselves out to China in the frenzied hope of making a quick buck in the world’s largest market is textbook junkie-mentality.  These free market free-basers expose their fundamental flaw in the face of China’s system of state capitalism.  By ceding responsibility of investment from the government to the private sector solely, countries like the US are being vastly outspent by China in everything from space travel to quantum computing research.  As economists like Michel Aglietta and upstart politicians like Alexandria Ocasio-Cortez point out, the state must be responsible for picking up the slack when the free market fails to focus on important long term projects, like a Green New Deal (China already has its own publically funded version of the GND).

China Vision is a good account of the Chinese Communist Party’s domestic heavy-handedness and foreign diplomacy-via-blank-check.  The two are interconnected, as China’s crackdown on internal dissidents informs how it treats foreign countries and human rights activists who dare to oppose it.  Through China’s Belt and Road Initiative of loaning billions of infrastructure dollars to developing nations, it can control them through a carrot-and-stick approach.  China’s spy state apparatus is also being used to sabotage foreign humanitarian organizations, religious groups, governments and companies.  The CCP may soon export its surveillance state blueprint to other interested authoritarian states, setting the stage for a cold war between China and its client dictatorships & the Western democracies.  The People’s Liberation Army is preparing for this possibility with a huge naval buildup in the contested South China Sea, aided by all of the “civilian” ports that it’s building there under the auspices of the BRI.  Daniel Wagner’s book does a good job of explaining these geopolitical trends in a concise and even-handed way.  He explains how colonialism and the Cold War helped to shape China’s cynical outlook on the world and doesn’t exaggerate China’s capabilities.  Anyone in politics, tech, economics or the NGO sphere will learn a lot from this book.

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China’s economic transformation under “New Normal”

Sultana Yesmin

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China’s double digit growth, also termed as “old normal growth” had dominated the country’s economy since 1980s. Despite the rapid economic development over the last few decades, this old normal growth has encountered some setbacks, including economic imbalance, income inequality, limited consumption choices against increasing level of demand, and environmental challenges.

Given this context, a comprehensive new development model, “new normal”, incorporating the innovation, coordination, greening, opening up, and inclusiveness, is formulated by Chinese authorities to enable wide-ranging growth and development throughout the country.

Analysts refer to “new normal” as China’s new phase of economic development. The recent trend of “growth slowdown” or “new normal” economic growth is also referred to new strategy of Chinese foreign policy by the analysts.

During the 2014 Asia-Pacific Economic Cooperation (APEC) CEO Summit in Beijing held on November 09, 2014, Chinese President Xi Jinping first used the phrase as “new normal stage of Chinese economy.” President Xi also referred to China’s stable economic growth in order to improve and upgrade economic structure under the “new normal” conditions.

Subsequent to this, China’s 13th Five-Year Plan (2016-2020) incorporates the “new normal” in economic development with a particular vision of building a moderately prosperous society in all respects by 2020. The key significant features of China’s “new normal” are:

Slower economic growth

One of the key reforms or significant changes on China’s medium-high economic growth rather fast growth over the past few years is exceedingly evident. To be mentioned, over the past 40 years, China has maintained an average annual growth rate of around 9.5 percent that transformed an impoverished nation to an upper-middle-income nation.

In contrast, the gross domestic product (GDP) growth rate lowered from 7.5 percent in 2012-2014 to 6.8 percent in 2017. According to China’s National Bureau of Statistics (NBS), the GDP growth rate was relatively same, 6.6 percent, in 2018, with an expected target of around 6.5 percent at the same time.

For the purpose of economic restructure and high-quality development, China’s local governments have also lowered their GDP growth targets in the same year. The new trend of normal flow of growth is projected to be relatively same in the upcoming years.

Yiping Huang, Professor of economics at the National School of Development, Peking University, and an adjunct professor at the Crawford School of Public Policy, ANU, refers to such transformation of China’s growth model as the transition from “economic miracle” to “normal development,” which is the partial departure from the traditional bottom-up approach.

The World Bank also mentions that, China’s economic slowdown is not unexpected, rather desirable from both from short and medium-term perspectives aiming at fostering China’s transition to a modern economy through the new model. This transition denotes a clear move from high speed growth to slower, steadier, and more sustainable economy.

Market-oriented reform

One of the significant aspects of China’s “new normal” economic model is to facilitate market for playing “decisive role” in allocating economic resources. The “new normal” endeavors for making interest rates, currency exchange rates, and land prices more market-oriented. Incremental steps have already been taken towards the liberalization of interest rate and exchange rate set by market forces, cutting taxes, and reducing costs in order to widen market access, stimulate market vitality, and support economy.

The improvement of market environment, enhancement of private investment and investment-led growth, establishment of comprehensive pilot zones, facilitation of interest rate controls on loans, proactive fiscal policy, prudent monetary policy, and the increase of effective supply among other significant measures have also been outlined in the report on the Work of the Government delivered by Premier Li Keqiang at the Second Session of the Twelfth National People’s Congress on March 05, 2014.

Supply-side reform

President Xi first announced the phrase “supply-side structural reform (SSSR)” in late 2015, which injects new impetus into China’s economic policy framework. The SSSR mainly focuses on reducing distortions in the supply side of the economy and upgrading the industrial sector.

A study on China’s SSSR conducted by Reserve Bank of Australia finds five core policy objectives of China’s supply supply-side reform–cutting excess industrial capacity; reducing leverage in the corporate sector; de-stocking of property inventories; lowering costs for businesses and addressing “weak links” in the economy.

In this regard, China has focused on overcapacity reduction, especially in coal and steel production. As for example, more than 65 million metric tons of steelmaking capacity and over 290 million tons of coal-production capacity were eliminated in 2018.

Moreover, the government has already reduced tax to foster business friendly environment. President Xi has underscored the necessity of strengthening areas of weakness to boost the supply of the public goods and services.

Innovation driven economy, the vital part of SSSR, attempts to enhance the quality of products, reduce ineffective and lower-end supply through the advancement of artificial intelligence, big data, and the inauguration of 5G mobile communication equipment etc.

Services-driven economy

As per the push for services-driven economy, the socio-economic issues for the improved people’s wellbeing have also been addressed in the “new normal”. President Xi Jinping remarks, “Comprehensively deepening reform will not only liberate the productive force but also unleash the vitality of the society.”

The 13th FYP highlights the development of services and measures to address environmental challenges in order to reduce pollution and amplify energy efficiency. During the 2014 Beijing APEC meetings, temporary shutdown of Chinese factories was given “priority of priorities” to curb pollution and ensure air quality. As per the policy, China has started accelerating the development of clean energy industry from 2018.

The green development aside, robust consumption, reducing social imbalances, improving education and healthcare facilities, and expanding social protection get equal priority in the new phase of economic development.

Opening up through Connectivity

The new phase of Chinese economic growth is based on political economy that anticipates trans-border trade and investment facilitation as well as border connectivity through greater integration and sustainable relations among nations. China’s stretching connectivity over Asia, Africa, and Europe through the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road”, altogether known as Belt and Road Initiative (BRI), is extending influence from South China Sea to Indian Ocean. RMB internalization and China’s leading role from multilateral trade forums to climate change accords clearly signify the “new normal” policy of President Xi Jinping.

Implications on China’s socio-economic development

The “new normal” economic model has far-reaching impacts on China’s comprehensive development and path towards building a moderately prosperous society.

First, China’s has comfortably been maintaining its position as the world’s second largest economy. National Bureau of Statistics (NBS) reports, despite the slowdown of GDP growth rate, China contributed more than 30 percent to world economic growth during 2017. Hence, the investment-led growth since 2012 has resulted huge benefits for Chinese businesses and the overall economy.

Second, Chinese people are getting relief from the side effects of old model, mentioned earlier. The country has been witnessing growing equality among people, comparatively equal income distribution, robust consumption, environment-friendly industrialization, quality products, and other developments in other socio-economic sectors.

Third, Qualitative than quantitative aspects of economic growth, balanced and sustainable growth, stable employment, innovation, green development, investment intensification, faster industrial upgrading, and opening up are leading to China’s dream towards a sustainable socio-economic development. For example, the number of Chinese enterprises, around 27 million, and market entities have been increased in China over the past few years under both market and supply-side structural reforms. These new business hubs are boosting the country’s structural transformation and economy.

Finally, China’s new phase of economic growth and new historic juncture reiterate China’s development as per the vision broadly prescribed in Socialism with Chinese characteristics for a new era.

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