4.IN 8/16: H 42 ENGAGING THE HERMIT KINGDOM: U.S. POLICY TOWARD NORTH KOREA HEARING BEFORE THE SUBCOMMITTEE ON ASIA AND THE PACIFIC OF THE COMMITTEE ON INTERNATIONAL RELATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FIFTH CONGRESS FIRST SESSION FEBRUARY 26, 1997 Printed for the use of the Committee on International Relations Pennsylvania State University Libraries FEB - 3 1998 . Documents Collection U.S. Depository Copy U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1997 44–152 CC For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 ISBN 0-16-055902-2 COMMITTEE ON INTERNATIONAL RELATIONS BENJAMIN A. GILMAN, New York, Chairman WILLIAM GOODLING, Pennsylvania LEE HAMILTON, Indiana JAMES A. LEACH, Iowa SAM GEJDENSON, Connecticut HENRY J. HYDE, Illinois TOM LANTOS, California DOUG BEREUTER, Nebraska HOWARD BERMAN, California CHRISTOPHER SMITH, New Jersey GARY ACKERMAN, New York DAN BURTON, Indiana ENI F.H. FALEOMAVAEGA, American ELTON GALLEGLY, California Samoa ILEANA ROS-LEHTINEN, Florida MATTHEW G. MARTINEZ, California CASS BALLENGER, North Carolina DONALD M. PAYNE, New Jersey DANA ROHRABACHER, California ROBERT ANDREWS, New Jersey DONALD A. MANZULLO, Illinois ROBERT MENENDEZ, New Jersey EDWARD R. ROYCE, California SHERROD BROWN, Ohio PETER T. KING, New York CYNTHIA A. MCKINNEY, Georgia JAY KIM, California ALCEE L. HASTINGS, Florida STEVEN J. CHABOT, Ohio PAT DANNER, Missouri MARSHALL "MARK" SANFORD, South EARL HILLIARD, Alabama Carolina WALTER CAPPS, California MATT SALMON, Arizona BRAD SHERMAN, California AMO HOUGHTON, New York ROBERT WEXLER, Florida TOM CAMPBELL, California STEVE ROTHMAN, New Jersey JON FOX, Pennsylvania BOB CLEMENT, Tennessee LINDSEY O. GRAHAM, South Carolina BILL LUTHER, Minnesota JOHN MCHUGH, New York JIM DAVIS, Florida ROY BLUNT, Missouri JERRY MORAN, Kansas KEVIN BRADY, Texas RICHARD J. GARON, Chief of Staff MICHAEL H. VAN DUSEN, Democratic Chief of Staff SUBCOMMITTEE ON ASIA AND THE PACIFIC DOUG BEREUTER, Nebraska, Chairman JAMES A. LEACH, Iowa HOWARD L. BERMAN, California DANA ROHRABACHER, California ENI F.H. FALEOMAVAEGA, American PETER T. KING, New York Samoa JAY KIM, California ROBERT E. ANDREWS, New Jersey MATT SALMON, Arizona SHERROD BROWN, Ohio JON FOX, Pennsylvania MATTHEW G. MARTINEZ, California JOHN M. MCHUGH, New York ALCEE L. HASTINGS, Florida DONALD A. MANZULLO, Illinois WALTER H. CAPPS, California EDWARD R. ROYCE, California ROBERT WEXLER, Florida MIKE ENNIS, Subcommittee Staff Director RICHARD KESSLER, Democratic Professional Staff Member DAN MARTZ, Counsel HEIDI L. HENNIG, Staff Associate (II) CONTENTS WITNESSES Page 5 9 20 23 26 Mr. Charles Kartman, Assistant Secretary of State for East Asian and Pacific Affairs (Acting), U.S. Department of State ........ ...... Dr. Kurt Campbell, Deputy Assistant Secretary of Defense for East Asian and Pacific Affairs, U.S. Department of State The Honorable James R. Lilley, Director, Institute for Global Chinese Affairs, University of Maryland ....... Dr. Roy Richard Grinker, Associate Professor of Anthropology and Inter- national Relations, George Washington University Mr. Robert A. Manning, Senior Fellow, Progressive Policy Institute APPENDIX Prepared statements: Mr. Charles Kartman Dr. Kurt Campbell Hon. James R. Lilley Dr. Roy Richard Grinker Mr. Robert A. Manning .... Additional material submitted to the record: Statement submitted to the record by Mr. Kim ...... Statement submitted to the record by Mr. Gilman, Chairman, Committee on International Relations 37 46 51 57 67 80 81 (III) ENGAGING THE HERMIT KINGDOM: U.S. POLICY TOWARD NORTH KOREA WEDNESDAY, FEBRUARY 26, 1997 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ASIAAND THE PACIFIC, COMMITTEE ON INTERNATIONAL RELATIONS, Washington, DC. The Subcommittee met, pursuant to notice, at 1:35 p.m. in room 2172, Rayburn House Office Building, Hon. Doug Bereuter (chair- man of the Subcommittee) presiding. Mr. BEREUTER. The Subcommittee will come to order. I think we will be joined by the Ranking Member shortly. I think we are in good fortune because, as I understand it, all votes are complete for the day so we may be able to proceed through this hearing without interruption. I hope that is the case. The Subcommittee on Asia and the Pacific meets today to exam- ine U.S.-North Korea relations. Some of you may recall that this was the subject of the Subcommittee's very first hearing in the 104th Congress. That_timing reflects the priority Representative Howard Berman, the Ranking Democrat, and I placed on the im- portance or concern we had regarding the situation on the Korean Peninsula in 1995. Now, in the 105th Congress, the situation in North Korea with respect to U.S. relations with the DPRK remains just as troubling. In the past few days, we have seen headlines regarding massive food shortages in North Korea, and the United States formed a major food assistance initiative. It also seems that the North par- ticipated in briefings by Americans and South Koreans about the nature and method of post-wartime talks. There is startling news about recent high-level defections and the serious allegation that former defectors have been targeted for assassination. Much is happening with regard to what some call, and we are calling today, maybe with a little bit of overkill, the “Hermit King- dom.” And yet we still know almost nothing about this secretive and almost completely isolated nation. Most of what we do know is alarming. North Korea remains perhaps the most volatile, bellig- erent, and dangerously unstable nation in the world. Pyongyang continues to allocate significant and disproportionate levels of scarce resources to its million-man-plus Army. Pyongyang's nuclear activities have been so alarming that it has spurred an inter- national effort to provide North Korea reactors in return for the capping of their petroleum production facilities through the Korean Energy Development Organization (KEDO). (1) 2 Even if one answers American and international concerns about the North Korean nuclear program, there is still North Korea's on- going missile, chemical, and biological weapons programs and its continued export of terrorism. Almost as disturbing as the external threat is the security threat posed by North Korea's unstable do- mestic situation: Threat of either starvation, implosion, or external belligerence. The floods of 1995, some of which I saw when I came to visit you, Mr. Kartman, do not appear to have abated. Indeed, the floods may have accelerated. It certainly does not appear that the North Ko- rean Government can any longer meet most of the basic needs of the population. Supreme leader Kim's irrational behavior continues to raise questions about who really is in control and for how long. Compared with these woes, U.S. policy toward the North has evolved with considerably less fanfare. Yet dramatic changes in U.S. policy have indeed occurred. Just last week, and I regret to say as far as I know prior to consultation with the Congress, the State Department announced its decision to provide $10 million in food assistance to the North. I would note that in an era when the United States is closing AID missions—AID missions in nations that are our friends and al- lies—assistance to North Korea is increasing by leaps and bounds. Indeed, between funding KEDO, grants of food aid, and funding the return of the remains of American MIAs from the Korean War, North Korea is one of our largest aid recipients in Asia. It is en- tirely legitimate, I think, for Congress to ask, what is going on here? What are we trying to achieve with this assistance? What are our policy objectives and how are our current policies and tactics going to allow us to achieve those goals? Certainly this Member has, as a matter of fact, spent his entire congressional career seeking to ensure that food assistance goes to the truly destitute, but it is fair to ask whether North Korea could exist without external assistance; isn't it? I would note this is a tottering regime with a million-man army still aimed directly at U.S. troops across the DMZ. Is assistance going to the North Korean military or the starving citizens? Do we or other organizations get accurate accounts of where the food is going? And what are the limits of our largesse? The current $40-million world food program commitment to North Korea, of which the recently announced $10 million U.S. con- tribution is a part, will only make a small dent in North Korea's overall need. Since the root problems of a totally inefficient State and agricultural system are not being addressed, are we to assume that we will be asked to provide food assistance again and again and again? I would tell our Administration witnesses that these are not in- tended as hostile questions. Rather they are legitimate issues that have to be explained to us and the American people whom we rep- resent. As the Clinton Administration pursues its North Korean policy, we want to play a complementary role. I think we do, and I know I do. The American people have a right to know, however, what they are getting for our money. Don't the American people and doesn't 3 the international community not have a right to expect fundamen- tal changes from the pariah State in return for our largesse? We are fortunate to have the right people from the Administra- tion to respond to these and other questions that my colleagues and I might have. I am delighted to introduce Charles Kartman, Acting Assistant Secretary of State for East Asian and Pacific Affairs. Sec- retary Kartman is very capably serving in that capacity until this Congress confirms a successor. Mr. Kartman has big shoes to fill. I observed your work while you were serving as the Deputy Chief of Mission for our ambassador in Seoul. I have no doubt that you are up to that challenge, and welcome today. Dr. Kurt Campbell is the Deputy Assistant Secretary of Defense for East Asian and Pacific Affairs where he has been the Penta- gon's point man on issues related to continued U.S. presence on Okinawa. Many of these personnel would be called upon to defend South Korea should the worse-case scenario come to pass. Dr. Campbell testified before the Subcommittee twice in the 104th Congress, and his testimony has always been forthright and he has helped make important contributions to our understanding of the activities under his area of responsibility. I am going to introduce briefly the people who serve on the sec- ond panel as well. We have an extraordinarily capable panel of pri- vate witnesses. I am pleased we will be able to welcome the Honor- able James R. Lilley. Ambassador Lilley has enjoyed a long and distinguished career in public service, including service as our am- bassador to the People's Republic of China and Republic of Korea. He has taught at Johns Hopkins and Harvard University, and the American Enterprise Institute. Also, he is presently the director of the Institute on Chinese Affairs at the University of Maryland. Robert Manning is the senior fellow of the Progressive Policy In- stitute at the Gaston Sigure Center at the George Washington Uni- versity. A prolific author, Mr. Manning has written some of the most provocative pieces on the strengths and weaknesses of U.S. policy in Northeast Asia. And Dr. Richard Grinker teaches at George Washington Univer- sity where he has developed a unique expertise related to North Korea. He has conducted detailed interviews with virtually all de- fectors who have fled from the DPRK. I look forward to hearing what lessons they are able to draw from these defectors, particu- larly your ideas, Dr. Grinker, as to the possibility or difficulty of reunifying North and South Korea. Dr. Grinker also serves as a senior fellow at the Atlanta Council. Gentlemen, your written remarks on this panel and the second will be inserted in their entirety in the record. Therefore, I would ask you to limit your oral statements to no more than 10 minutes. That will allow a maximum amount of time for questions for this panel and the succeeding one. I have no doubt our colleagues have a number of questions. I would like at this time, however, to recognize the distinguished Ranking Democrat Member of the Asia Pacific Subcommittee, my colleague from California, Mr. Berman. Mr. BERMAN. Thank you very much, Mr. Chairman, and once again, for the second week in a row you are holding an extremely 4 timely hearing on a critical front-page issue, the situation on the Korean Peninsula. Since the Agreed Framework was signed back in October 1994, our relationship has been noted for, that is, United States and North Korea, for its fits and starts. Clearly, engaging North Korea has been every bit as difficult as first anticipated. Each step for- ward has brought two steps backward. The recent defection of North Korea's Deputy Premier and the reaction by the North to the debacle of its spy sub running aground in the South by first hos- tility, then apology, are all indications of tears in the tenuous fabric of North Korean unity. Some fear and some welcome these relationships as a sign that the North Korean regime may be imploding. The lid on what was once known as a hermetically sealed country is slowly being pried open as a result of the Administration's policy helped by the consid- erable progress made in implementing the Agreed Framework. On Tuesday KEDO announced that it would be sending a sev- enth site survey team to the North for a 5-month geological inves- tigation relating to the eventual construction of light-water reac- tors. KEDO has added a number of new members to its board last year, including the European Union (EU). It delivered 500,000 met- ric tons of fuel oil last year to the North without significant diver- sions and made five phone calls with the North essentially agreeing to the framework's implementation. The decision last week by both South Korea and the United States to provide emergency food relief to women and children is another example of how the internal situation in the North has forced it to accommodate the rest of the world. The foreign food monitors, IAEA inspectors and KEDO officials are now maintaining a permanent presence in Pyongyang. None of this has been easy. Critics of our policy have a point when they argue that we give more assistance to the North, a nation with which we remain offi- cially at war, than to most of our Asian friends. Critics also point out that we must also be wary of allowing the North to drive a wedge between South Korea and us, losing sight that our real objective is the eventual democratic reunification of the Peninsula. As Chairman Bereuter just mentioned in his open- ing comments, this regime could not continue to exist without our assistance. These are real issues. I look forward to the hearing: Mr. BEREUTER. Thank you very much, Mr. Berman. That will be the order I would be happy to hear from other Members and I call first on the Vice Chairman, Peter King, the gentleman from New York. Mr. KING. I commend you for holding the hearing and look for- ward to the testimony of the witnesses. Mr. BEREUTER. On the Democratic side, Mr. Hastings. Mr. HASTINGS. Mr. Chairman, I, too, commend you for holding the hearing and would defer to the question period any statement that I might make. Mr. BEREUTER. Very well, thank you. Mr. Kim. Mr. KIM. Mr. Chairman, thank you. Again, I commend you for holding this hearing. I would like to make a brief statement. I would like to ask unanimous consent that my full statement be in- cluded as an official opening statement. 5 Mr. BEREUTER. Without objection, that will be in order. Mr. Kim. Again, I commend you and welcome all our outstanding witnesses today. I would like to hear from you on certain concerns that I have. Again, more detailed questions will be forthcoming. There are a lot of things happening right now, and I read today that our embassy in Beijing recently denied a visa to one of the highest ranking central committee Members in North Korea, and he got very upset. He said he is going to boycott all the U.S.-DPPK activities. I don't understand why we did that. That is kind of an embarrassment. Second of all, regarding all this humanitarian support we give to North Korea, I understand most of it has actually been funneled to military assistance. That is another one I am concerned about. There are a lot of them; I am just highlighting those things that we can address during your testimony. Also, I understand the Defense Minister just died a couple of days ago, and this Mr. Hwang is trying to defect to South Korea. What does all this mean to North Korea? Are they collapsing? I un- derstand Kim Jong-il is trying to strengthen its inner circle. Why? Does that mean they are ready to attack the South? There are many, many issues that I am very much interested in and I hope you can address those issues. Thank you, Mr. Chairman. [The prepared statement of Mr. Kim appears in the appendix.] Mr. BEREUTER. Mr. Capps, the gentleman from California, for any opening statement or comment. Mr. CAPPS. I do not have an opening statement, but I know how critical this subject is, and I am looking forward with great antici- pation to the testimony of our expert witnesses. Thank you. Mr. BEREUTER. Thank you very much. Mr. Kartman and Secretary, we are ready to hear from you. Please proceed as you wish. STATEMENT OF CHARLES KARTMAN, ACTING ASSISTANT SEC- RETARY OF STATE FOR EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE Mr. KARTMAN. Thank you, Mr. Chairman. It is a pleasure and an honor to represent the Department of State before your Committee. Permit me to introduce Mark Minton, director of the Office of Ko- rean Affairs. He was the lead negotiator in our discussions in De- cember in New York with North Korea that resulted in resolution of the submarine incident. I appreciate this opportunity to discuss our policy toward North Korea. Our overall goals have been, and remain, to build a durable peace on the Korean Peninsula as a key contribution to regional se- curity and stability and to facilitate progress by the Korean people themselves toward a peaceful national reunification. Even in this past week, we have seen signs that our efforts are bearing some fruit. Secretary Albright just met with Korean and Japanese leaders in Seoul and Tokyo. As you know, we consult reg- ularly with both of those governments to ensure that our North Korea policy remains tightly coordinated. I am pleased to note the success of Secretary Albright's visit to Seoul, especially in promot- ing that objective. 6 ) At the top of the agenda in the Secretary's meetings with Presi- dent Kim Young Sam and Foreign Minister Yoo Jong-Ha was a dis- cussion of Pyongyang's agreement to sit down with the United States and RÖK on March 5 to hear our joint briefing on President Clinton's and President Kim's proposal for Four-Party peace talks. This latest development builds on several years of U.S.-ROK co- operation in diplomatic efforts, beginning with negotiation of the October 1994 Agreed Framework and continuing with the Four- Party peace proposal of last April. It will extend to the groundbreaking for the light-water reactor (LWR) project in North Korea scheduled for this spring. This will replace the current North Korean nuclear reactors with a safer type. Our security alliance with South Korea remains at the heart of our policy on the Peninsula. It has weathered nearly five decades of challenges and changes. As you know, the October 1994 Agreed Framework negotiated by Ambassador Bob Gallucci froze the North Korean nuclear program and brought that phase to a close. The next phase of our efforts to engage the North centered on a proposal made jointly by the two Presidents, President Clinton and President Kim, for Four-Party peace talks. Next week's joint briefing will, we hope, lead to discussions in- volving the North and South as well as the United States and China for a reduction of tensions on the Peninsula and the estab- lishment of a permanent peace mechanism to replace the 1953 ar- mistice. Let me recap the current status: The freeze on North Korea's nu- clear facilities has been in place since 1994 and is being continu- ously monitored by the International Atomic Energy Agency (IAEA), as well as by our own national technical means. Regarding North Korea's spent fuel, which contains material that could be used to build nuclear weapons, a team of experts led by the Department of Energy is in North Korea even as we speak. The team works 12 hours a day, 6 days a week to put this material into safe storage under IAEA safeguards. The task is now more than half done and should be completed this year. The spent fuel will remain subject to monitoring by the IAEA until it is shipped out of the DPRK permanently. The Agreed Framework also provided that the United States would lead the or- ganization of an international consortium, KEDO. KEDO currently has 11 member States and has received con- tributions from over 21 countries. I would like to highlight EU's re- cent decision to join KEDO as the fourth member of its executive board, along with the United States, the ROK, and Japan. EU's commitment to contribute $20 million annually to KEDO over 5 years has helped put KEDO's finances on a more solid basis. Unfor- tunately, KEDO is still running a deficit in its heavy fuel oil fund- ing account, largely because of the initial shortage of funding in 1995 and 1996. KEDO has already negotiated five protocols with North Korea re- garding the LWR supply agreement. They define the terms and conditions for the reactor construction. KEDO has also sent six teams of technical experts to North Korea to gather necessary geo- logical, environmental, and structural information about the pro- 7 posed LWR site. The teams consisted of U.S. and Japanese, but mostly South Korean experts. A seventh team will travel to North Korea on March 1. Final preparations for construction should be made in the next few months, with groundbreaking to begin as early as this spring. Although the Republic of Korea and Japan will shoulder most of the cost of the multibillion-dollar project, continued U.S. funding for KEDO activities, primarily heavy fuel oil deliveries, remains an indispensable element in the viability of the project. Two days after the joint briefing next week on the Four-Party talks, I will meet with the same North Korean delegation to discuss the range of bilateral issues between our two countries. Among the issues I will raise are our efforts to recover the remains of Korean War-era MIAs, our proposals to end North Korean development and export of missiles and missile technology, and implementation of our agreement to exchange liaison offices in Washington and Pyongyang. I will touch on each of these. Dr. Campbell will describe our ef- forts to recover the remains of our servicemen, but I would empha- size that we consider this a top priority. U.S. negotiators met with North Korean officials in April 1996 to discuss our concerns about development, deployment, and prolifera- tion of North Korean missiles. When I meet with North Korean of- ficials next week, I will propose a date for the next round of talks on this important subject. Finally, conditions appear to be improving for the establishment of liaison offices. A full-time diplomatic presence in Pyongyang would give us a first-hand perspective on the situation there and improved access to North Korean officials. It has long been evident that North Korea seeks more normal economic relations with the United States. In January 1995, as Pyongyang began to cooperate in implementing the Agreed Frame- work, we took steps to permit U.S. companies to provide direct tele- communications services between the United States and the DPRK; to allow the import of magnesite from the DPRK; to reduce the re- strictions on financial transactions not involving the DPRK Gov- ernment or its entities, and to authorize the licensing of U.S. busi- ness transactions that further KEDO's construction of the LWRs in North Korea. On December 30 of last year, we approved a license for a U.S. firm to pursue a commercial deal to sell North Korea up to 500,000 tons of grain. (Negotiations to conclude this deal on a commercial basis have not yet been successful.) We will consider further sanctions-easing measures as North Korea makes progress on issues of concern to us. On a purely humanitarian basis, the United States has partici- pated in international efforts to alleviate the suffering of North Ko- rean civilians affected by recent flooding and food shortages. In- cluding our most recent donation, we have provided $18,425,000 in cash and in-kind support for emergency relief assistance-basically, medical supplies and food—over the past 2 years. These were in the American tradition of providing assistance to people in need without regard to politics. Our most recent donation, included in the figure I cited, was a $ 10-million in-kind contribution to the U.N. World Food Program's 8 February 12 emergency appeal. This will be administered through U.N. agencies with staff in North Korea. The World Food Program (WFP), will monitor the distribution to ensure that the assistance reaches its intended civilian beneficiaries, many of whom are chil- dren. The WFP appeal is designed to get food in the pipeline now for delivery to those most vulnerable to the threat of famine, especially children under the age of 5. The Republic of Korea has also an- nounced that it will contribute $6 million. Japan has made major contributions in the past few years and is considering doing so again, and Australia announced on February 21 that it would do- nate $2 million. I would like to mention the incursion into South Korean waters of a North Korean military submarine and the crew's infiltration into South Korean territory. A massive manhunt by ROK security forces eventually tracked down the infiltrators, but the submarine incident left many dead and threatened to derail the Agreed Framework and dim prospects for the reduction of tensions on the Peninsula. The unprecedented statement of regret made by the DPRK last December promised that this kind of incident would not recur. It laid the groundwork for a resumption of our efforts to improve the situation on the Peninsula. If North Korea clearly calculates its own interests and opts for greater cooperation, including with South Korea, we can make significant progress. North Korea's economic difficulties have created opportunities for diplomacy, but they also pose dangers. Although we do not believe that the collapse of the DPRK is imminent, its desperate economic situation cries out for immediate action by the North, both internal reform and greater, positive contact with its neighbors, especially South Korea. There are indications that Kim Jong-il will assume his father's titles of President and of Secretary General of the Korean Workers' Party sometime in the second half of this year. While this will for- malize his assumption of power, we do not expect North Korean policy or decision-making to change significantly. In summary, although there is clearly a long way to go, I am cautiously optimistic about our effort to promote lasting peace on the Korean Peninsula. This effort has been closely coordinated with the ROK and Japan. It has at its foundation the U.S.-ROK security alliance and our commitment to deter North Korean aggression. It seeks to reduce tensions but insists on the principle of reciprocity enshrined in the Agreed Framework. It recognizes the long-stand- ing American tradition of offering assistance to needy people re- gardless of the political views of their leaders. And it offers the ĎPRK a way out of its current predicament through responsible en- gagement with the United States, the ROK, and the international community. Our effort to promote peace is not an easy task, but I believe this objective and the unattractiveness of all other approaches make it the responsible and proper course. Thank you. Mr. BEREUTER. Thank you very much, Secretary Kartman. [The prepared statement of Mr. Kartman appears in the appen- dix.) 9 a Mr. BEREUTER. Now we will hear from Dr. Curt Campbell, Dep- uty Assistant Secretary of Defense for East Asia and Pacific Af- fairs. STATEMENT OF KURT CAMPBELL, DEPUTY ASSISTANT SEC- RETARY OF DEFENSE FOR EAST ASIAN AND PACIFIC AF. FAIRS, U.S. DEPARTMENT OF DEFENSE Mr. CAMPBELL. In the interest of time, I will take your sugges- tion and submit my full testimony to the record and just spend a few minutes to highlight a few points, if I may. First of all, we at the Department of Defense fully support the State Department's diplomatic outreach. We believe that that out- reach must be based on a very firm foundation of cooperation and consultation with our Republic of Korea allies. We have a long-standing military alliance with the Republic of Korea. It is perhaps one of the most integrated, closely working military and security alliances that we have with any country. American soldiers, sailors, and Marines serve under ROK military commanders and vice versa. We train extensively. We have a series of robust exercises that take us through every aspect of military training, and we consult very regularly. I would like to just highlight three specific activities that we are involved in that touch on some of the points that each of the Con- gressmen has raised. On a daily basis, I want to assure the Committee that we could not be in closer consultation on the status of the threat that faces us in North Korea. There is no place in the world that we watch more carefully. We have a whole series of indicators in terms of military preparedness, unusual military activities in the North which we follow very, very carefully, and literally on an hourly basis North and South Korean officials are in close consultation. We have also been engaged, as you all know, obviously, the last several years in terms of upgrading both American and RÓK forces to meet the threat that is posed against us over the DMZ. We have attempted to integrate the capabilities that we saw so forcefully demonstrated during the Gulf War into our forces deployed in South Korea. Second, I want to brief you very generally about steps that we have taken with our ROK allies and also with other countries in the region to prepare for the unexpected. Clearly, our hopes are that the diplomatic initiatives undertaken by the Department of State will be successful but, of course, our job in the Department of Defense is to prepare for unforeseen events so we are in close consultation very regularly with our ROK allies about potential and unforeseen developments in North Korea. And the last point that I want to highlight is that we are also engaged in an intensive effort with the ROK to talk about our rela- tionship over the horizon. What I mean here, of course, is that our intention is to stand by the Republic of Korea not just now and in the past as we have done but into the future, because it is our be- lief that a strong and enduring relationship between the Republic of Korea and the United States is in the interests of the United States, in the interests of Korea, and in the interests of the region as a whole. 10 And with that, Mr. Chairman, I will stop and look forward to taking questions from the Members. Thank you. Mr. BEREUTER. Thank you very much, Dr. Campbell. [The prepared statement of Mr. Campbell appears in the appen- dix.] Mr. BEREUTER. I will begin the questioning. I would like to start with respect to the three-party briefing. About the recent North Ko- rean claim that the United States, “promised a simultaneous deal,” with respect to food aid and the joint briefing session. Was there a promise and what was this promise about if there was, indeed, a promise, the link between food and the joint briefing issue? Secretary Kartman, I think it is the right question for you. Mr. KARTMAN. Thank you, Mr. Chairman. There were a number of topics in the discussions in December. You are referring to a commercial transaction for which the North Koreans asked us to approve a license. We did approve that license, but we made it very plain to them that we had no further role and that any deal would have to be negotiated between the company concerned and themselves. We made that plain to them over and over again. There was no deal to provide food for their attendance at the briefing. Mr. BEREUTER. All right. I think that no one on Capitol Hill has explored yet, at least publicly, the EU's participation in KEDO. I haven't seen any coverage of it. I have a couple of questions in that respect, Secretary Kartman. Will the EU have the same status as the other three board mem- bers? That is the first question. Second, how much will the EU con- tribute, for what period of time, and for what purposes? Particu- larly, will the EU participate in funding the light-water reactor or just the KEDO administrative and interim energy costs? Have the Europeans received construction and other contracts as a price for their participation in KEDO? And finally, how would European participation in construction of the reactor affect the project and the roles of the South Koreans and Japan? I think that is more than enough to fill the time avail- able here. Can you try to address those questions, and I will refresh your memory if you need to. Mr. KARTMAN. We, of course, welcomed the decision by the EU to join KEDO. The EU has committed not only to make an interim contribution of about $13. million in 1996 but also to make a $20- million contribution in each of the next 5 years, for a total con- tribution of $113 million. (The EU has provided smaller contribu- tions in the past.) The EU requested a place on the KEDO Execu- tive Board, and we agreed. The question of the EU's status on the board was the subject of some discussion. It entailed a change in the KEDO charter to ac- count for an expansion of the board. We expect that decisions will continue to be made by consensus, but that the special equities of the three founding members will be taken into account. We can dis- cuss that further, if you wish. We and our partners, Korea and Japan, are satisfied that this will not affect our leading roles in KEDO. 11 Mr. BEREUTER. Even though you take these special consider- ations into account when reaching consensus; is that right? Mr. KARTMAN. Yes. The EU's share of the work will be trans- parent, of course. Everything will be up for bidding. Members of KEDO' will be looked at with special care, but the bidding process will be transparent. EU members will not receive any advantage over Korean or American companies. Mr. BEREUTER. Thank you very much. Mr. BERMAN. Thank you very much, Mr. Chairman. For a while now critics have been very concerned that the Administration would totally focus on the nuclear arrangements and ignore a whole series of other issues which you have touched upon in your discussion of bilateral and multilateral efforts that are going on now and have been quite evident in the news. I think it seems to me that the argument that the Administra- tion's focus is too narrow is no longer a valid argument,we will hear from outside witnesses after this panel finishes about the way you are going about it, and we will be very interested in hearing their thoughts. But it seems like you have talked about a whole broad range of issues from exporting missile technology to remains of U.S. soldiers that go way beyond just the freezing of the North Korean nuclear program. Ambassador Lilley in his prepared testimony makes some asser- tions which I think I should ask you and give you a chance to deal with because otherwise you will be gone and I think it would be important to hear your information on this. He says that the North Koreans have not provided adequate information to allow the rest of the world to assess the true extent of their needs, yet the United States has been generous. So my questions to you are: Are you confident that the North Ko- reans have provided sufficient information to justify our providing $10-million worth of food aid? Second, can you confirm-I think he makes a point in his testimony that North Korea has substantial crop insurance, I guess with Čloyds of London, that that is a re- source they could be going for assistance and have they been? Do they have this insurance? Have they been receiving crop insurance payments to cover the losses in their own crop? What about a third assertion that is made is that the North Koreans have meaningful investments in Western enterprises and private capital markets. Do we have information about that? Anything you can share with us on those assertions we would appreciate hearing it. Mr. KARTMAN. I used to work with Jim Lilley, so I am always careful of being seen as disagreeing with anything he has said. În fact, I usually don't. The premise is correct; the quality and inclusiveness of informa- tion about North Korea is limited. However, regarding the food situation, we have seen a change in North Korea. It is more open to intrusive investigation by inter- national organizations; even American experts have gone into North Korea to see the situation firsthand. While this is sort of a hard analysis, the situation is certainly no longer completely opaque. 12 Related to the question of insurance, North Korea has several sources for addressing its food needs, as it has acknowledged. The principle source is probably traditional grain suppliers, including Russia, Eastern Europe, and especially China. I expect that such a relationship, at least with respect to China, will continue. North Korea also has the opportunity to acquire substantial food assistance from the Republic of Korea and, possibly, Japan. To do so, it must acknowledge its needs in a government-to-government setting and ensure that the aid providers are treated properly. There are also commercial markets. If the North Koreans had, for instance, insurance money, they could purchase food commer- cially. I cannot go into detail regarding insurance, because it in- volves proprietary information. It involves, however, considerably less money than has been reported in the newspapers. The insur- ance companies themselves are very careful not to provide more than the North Koreans can justify. Finally, there is the international aid effort. It provides only a small fraction of the total North Korean need. The United States plays a leading role in that effort, but we provide only a fraction of total international aid contributions. Mr. BERMAN. North Korean enterprises- Mr. KARTMAN. I am not aware of such investments. When we have found North Korean transactions going through American fi- nancial institutions, we have frozen them. Millions of dollars are involved; these assets remain frozen. Mr. CAMPBELL. May I make a followon point to support Mr. Kartman's point? Congressman Berman, the important thing to keep in mind about the economic importance of North Korea and its importance with the international community is that since 1990, since essentially the collapse of the Soviet bloc, we have seen probably the greatest decline in economic performance in North Korea of almost any country in the world. If you look at the same time that we have been involved in our diplomatic interaction, the kind of assistance that we are talking about has had more diplo- matic significance, symbolic occasionally, than fundamental eco- nomic significance. If you look into the future in terms of what would be necessary, in terms of working with North Korea, there are several factors we would have to focus on before we contemplated the international community, our friends in South Korea, the United States, and oth- ers before we contemplated fundamental engagement in North Korea. No. 1, we have to see a fully consistent open dialog between the North and South in which North Korea participated fully and free- ly. No. 2, we would need to see significant structural and political reform in North Korea in which the diversions and the distortions were ended of the kind we see in any social system. The last is fundamental that we would also need to see some steps toward confidence-building measures, because it is difficult to imagine a fundamental extensive economic engagement when the North Koreans have the ability to inflict unacceptable damage not only on U.S. forces who are deployed but to our ROK friends and allies in the South. 13 Mr. BEREUTER. The time of the gentleman has expired. We may have time for another round. I am calling on Members as they ap- peared. The gentleman from California, Mr. Kim, is recognized. Mr. KIM. Thank you, Mr. Chairman. I do have a quick half dozen questions. I expect brief answers, almost yes and no type. The first question I have is that I hear that on March 5th you are going to have Four-Party peace talks, joint meetings. What do you expect at that meeting? What is your agenda? Mr. KARTMAN. On March 5, the United States and the ROK will brief North Korea about our proposal for Four-Party talks. Our agenda is simply to convince North Korea that it should attend the Four-Party talks. Mr. KM. That is it? Mr. KARTMAN. Yes. Mr. KIM. My second question is—you mention on page 6 that you are going to ease the sanction measures as far as recognizing North Korea as an independent nation. Are you going to stop halfway? What direction are we heading in right now? Mr. KARTMAN. A very complex set of sanctions has been applied to North Korea. The Trading with the Enemy Act, terrorism sanc- tions, missile proliferation sanctions: all apply. We have lifted a small set as part of the Agreed Framework negotiation. Other sanc- tions could only be lifted as the North Koreans address issues of concern to us. For instance, terrorism sanctions would be lifted if North Korea met our concerns in that area. The situation is the same with missiles. The Trading with the Enemy Act is more difficult to address. North Korea remains in a state of legal hostilities with the United States, which must be resolved in peace talks. Sanctions will not be lifted piecemeal just to reward North Korea for maintenance of past agreements. Mr. Kim. Mr. Kartman, did you also mention that the collapse of the DPRK is imminent—you don't believe it is imminent. If I can ask a different tone of questions-does that mean that North Ko- rea's military engagement to the South may not be imminent, also? Mr. KARTMAN. I said we do not see signs that a collapse is immi- nent. Mr. Kim. There is no relationship between that and military en- gagement? Mr. KARTMAN. North Korea's economic difficulties and food short- age have been exacerbated by the loss of its strategic rear area, its historic alliances. The North's overall weakness has become very profound and, in a sense, even destabilizing. The North Koreans’ awareness of their own weakness seems to have driven them to seek a new arrangement. They appear to put great emphasis on improving relations with the United States as the key element. We have, of course, declined to do this in a strictly bilateral way: we insist that it must be done in concert with our ally on the Penin- sula, the ROK. This is why we made relatively little progress in the political area. Now, however, the North Koreans may be acknowl- edging that they have to enter into a process in which the ROK is at least an equal partner with the United States. Mr. Kim. Mr. Chairman, I am going to reserve my questions for the second round. 44-152 - - 97 - 2 14 I Mr. BEREUTER. I thank the gentleman for his courtesy. The gen- tleman from California, Mr. Capps. Mr. CAPPS. I have learned a great deal today, and I have a sus- picion that this is a topic to which the Committee is going to turn over and over again. I think this is an ongoing kind of discussion. I have some confusion—I think it finally comes down to what the U.S. diplomatic and political posture toward North Korea really ought to be, if there is any possibility of revising that posture at the present time. The reason I bring that up is that I think we can approach Korea in two ways: We can talk about it as being a threat. We can also see it in terms of its weaknesses—in terms of famine, the lack of support for political order, all of the things you referenced in your testimony. And yet at the same time, the Korean situation came about because of a civil war that happened during a cold war and the cold war is now increasingly gradually disappearing; there are realignments between nations. I guess this would be my question: Do you foresee any possibility in the future whereby there may be a reunification of the two Ko- reas? That may be too speculative to ask, but should the United States be taking a greater initiative during this time of political re- alignment to modify our posture toward both South and North Korea? Mr. KARTMAN. Thank you, Mr. Capps. We are always skeptical about North Korea. We have acknowledged freely that we do not know enough about the country. We do not know how they make decisions or what their motives are. We have tried to engage them, but our engagement remains extremely limited. Therefore, every- thing that we have done, including the Agreed Framework, is based upon the principle of reciprocal and simultaneous movement. We go only so far, then stop to evaluate if the other side is still in compliance. We assume that the North Koreans are doing the same thing, be- cause they probably do not trust us any more than we trust them. We also use these opportunities to recalibrate and consult with our allies, especially the ROK. I mentioned in my opening statement that we actively support the goal of peaceful reunification on the Korean Peninsula. You asked how this might be achieved. The only answer I can give is that this is up to the Korean people themselves. Both sides on the Korean Peninsula have advanced proposals from time to time. They have points in common and can be roughly characterized as propos- als for confederation leading to full unification. It has always been clear that there was no way to get there from here without a very intense dialog between the two sides. There was such a dialog in late 1991 and early 1992. It broke down over the nuclear problem. It is implicit in the Four-Party peace talks ap- proach. We would like to see elements of that dialog restored and perhaps even break off and gain new life. As to the question of modifying our stance toward either or both of the Koreas, I believe that our relationship with the ROK should not be modified. Any hint that we were doing so would probably do very great damage to the trust between us. 15 But as regards to modifying our relationship with North Korea, we have been doing this very gradually since the first “modest ini- tiative” under the Reagan Administration in 1988. This involved talking to the DPRK, a country with which we had had no discus- sions at all prior to that initiative. Mr. CAMPBELL. Congressman Capps, if I could fill in or add on to what Chuck Kartman has stated. At the heart, at the center of our conundrum in terms of con- fronting the challenge posed by North Korea, North Korea does possess the weaknesses that Chuck Kartman has very clearly dis- cussed, and those are growing. But at the same time North Korea possessed the capability with, for instance, their artillery, the larg- est collection of artillery of its kind anywhere in the world; on a short notice they could roll out and fire that artillery into South Korea and inflict great damage, tens of thousands, perhaps hun- dreds of thousands of casualties. At the heart of our engagement is a recognition of that contradiction. History teaches us that the most dangerous period in inter- national relations is during periods where regimes feel a sense of pessimism and a sense that they have no options. And it is at those times where regimes contemplate lashing out. I think one of the most important things, in addition to having a strong policy of vigi- lance for deployed forces and a powerful partnership with our ROK allies, we must also inform our North Korean interlocutors that there is another way out. Mr. BEREUTER. Thank you, gentlemen. The time of the gen- tleman has expired. The gentleman from New York, Mr. King, is recognized. Mr. KING. Thank you. I would address this question to either or both. On the issue of the recent high-level defector from North Korea, can you update us on the current status of that defection? Also, whether or not you consider this to be in any way destabilizing to the situation, and also whether or not this will cause any contemplated change relat- ed to the U.S. troops. Mr. KARTMAN. I will begin but leave the last part of your ques- tion to Dr. Campbell. Mr. Hwang Jang Yop was a senior party the- oretician who played a very important role in the creation of the philosophy of Juche on self-reliance in North Korea. It is almost a State religion. Hwang's defection is too recent to draw firm conclusions. He is still in the South Korean consulate in Beijing. South Korean offi- cials had begun discussing his case with Chinese officials, but those discussions were interrupted by the death of Deng Xiaoping. I ex- pect that they will resume shortly. I have no reason to believe that they will not end satisfactorily, but they may take a while longer. Mr. CAMPBELL. Congressman King, on the subject of the military developments since the defection, let me give you a sense of what we see both in terms of the North and South. As I indicated, we could not be watching the situation more closely. Those of us both at the Departments of State and Defense receive almost hourly up- dates about any potential change. We have seen no sign of any changes in the North Korean mili- tary status or training that would lead us to any sense of alarm 16 at this juncture. In fact, when you look at the so-called signal list of all the various things, readiness, military movements, unusual communication, they are all at green, except for one, and that is yellow in terms of unusual changes or moves in the leadership; wit- ness Mr. Hwang in the South Korean Embassy in China and some recent deaths in the senior North Korean military elite. At the same time in South Korea, our forces are vigilant but not in an unusually high state of alert. ROK police and some military units in the capital in Seoul have been placed in a higher alert par- ticularly for potential North Korean teams that may be thinking about certain kinds of retaliations in the capital. But other than that, we can report that the situation is as normal as it can be on the Korean Peninsula. Mr. KING. Thank you very much. Thank you, Mr. Chairman. Mr. BEREUTER. I am going to take questions from other Members if they have them, and I will conclude with one or two myself. Mr. Kim. I do have a couple of questions. Dr. Campbell, you mention about this defector, which I under- stand is a pretty high-ranking official, I am sure we can learn quite a bit from this situation. On the MIA situation, can you tell me, are you going to set a high priority on the MIAs when you have a chance to hear from him? I don't think we have addressed that issue. Mr. CAMPBELL. That is a two-part question, Congressman Kim. Let me just give you an answer to the first part. We are obviously, as our ROK allies are, extremely interested in all of the information that Mr. Hwang, can provide us about the inner workings of the most secretive and difficult to understand re- gime in the world, and we are obviously working closely with our ROK interlocutors about this. I should also say that in terms of kinds of information that we would want to talk to them about, our interests and curiosities, there are no bounds. We are interested in all subjects including the question you raised on MIAs. I would just tell you since you raised it in your opening introduc- tion that the Department of Defense has three critical criteria as we contemplate the question of POW/MIA efforts. As you know, the dialog with North Korea began fundamentally in 1990 when Rep- resentative Sonny Montgomery brought back five remains from North Korea in May 1990. We have had significant discussions and exchanges and remains work with North Korea since that time. We have three efforts that we are primarily engaged with. No. 1 is onsite work in North Korea in places where we think there might be remains that can be located and identified. No. 2, our ar- chival work, much along the lines of the archival work we had done in Vietnam for years trying to get a sense of where fallen comrades might be located and, third, of course, we are pursuing aggressively the reports that you refer to, Mr. Kim, concerning live POW/MIX sightings. That is a high priority for us. Mr. KIM. I do have a couple of questions of Mr. Kartman. I want to go back to the visa denial question which you didn't address. I understand it is a very high-ranking supreme people's council member and I understand we denied a visa to come to America. What is the reason behind it? 17 Mr. KARTMAN. I believe you are referring to a proposed visit by Mr. Hwang earlier? Mr. Kim. That is correct. Mr. KARTMAN. We did not deny a visa; in fact, we never received a visa request. However, this was during the difficulty over the submarine incident, and we certainly did not encourage North Korea to believe that under such circumstances senior officials would be welcome to come to Washington. Mr. KM. I understand as part of his framework agreement, North Korea will be allowed to establish a liaison office either here or New York City. Is that done? Mr. KARTMAN. Liaison offices will be established in capitals when technical issues are resolved. These involve our ability to provide support to our liaison office and the North Korean selection of a suitable site and finding the wherewithal to pay for it. We have not reached a conclusion, but there are no large issues involved. a Mr. Kim. Thank you, Mr. Chairman. Mr. BEREUTER. You are welcome. The gentleman from American Samoa or the gentleman from California, do you have any ques- tions? The gentleman from American Samoa. Mr. FALEOMAVAEGA. Could I defer? I can't pass? Mr. BEREUTER. I have questions if you would prefer to take a minute. The gentleman from California. I do have two areas of questions, then we will come back. The last questions are from the gentleman from American Samoa. Dr. Campbell, I have questions for you. Answer as many as you can in open session. If there are some that you can't, you don't need to identify which ones they are. We will try to have a closed- door session. These relate to military capabilities. I am going to ask you all the questions, so if it is less clear about which you don't want to answer, it is OK. Does North Korea continue to export material essentially for the construction of ballistic missiles and, if so, to whom are the sup- plies intended? Does North Korea continue to export materials es- sentially for the construction of chemical and biological weapons and, if so, to whom? Which country? How heavily involved are the North Koreans in the issues of precursor materials? And finally, it would appear that the United States was surprised over North Ko- rea's use of submarines for reconnaissance and infiltration in the South. That may or may not be correct but that is one assertion. Are we prepared so that we can detect such activities in the future? Have we changed anything, without you commenting on the changes we may have made? Mr. CAMPBELL. Thank you, Mr. Chairman. As you foresaw, there are a couple of issues here that I would feel a bit uncomfortable discussing in an open setting, but let me do my best to answer a few that you have raised. On the question of ballistic missiles development in North Korea, an external behavior, this is a subject of very real concern for us in the U.S. Government. It is one of the reasons why we have begun or attempted to begin a dialog with our North Korean inter- locutors on this subject. It is a serious subject, and I will say that we don't see any signs yet of any North Korean intention to move 18 ahead in a way that we are comfortable with but it is an issue that we want to work on more fully in the future. I can talk to you more fully about this in another setting. On the question of submarine and other activities, we have fairly clear knowledge of certain kinds of assets that the North Koreans have developed over the years. As you know, Mr. Chairman, they have placed a very high premium on surprise and special oper- ations and a variety of other quick strike capabilities. We follow those carefully The submarine was not a surprise in the sense that the capabil- ity exists. Indeed, many countries have that capability. I think the concern, of course, here is that that kind of activity which we think was primarily associated with reconnaissance obviously has the po- tential to cause much higher concerns. It is a violation of armistice and is extremely destabilizing in terms of the kinds of confidences that will be necessary for a dialog between the North and the South. On the other issues that you raised in terms of chemical/biologi- cal precursors, I would like to beg them off now and we would be happy to come back in another setting to address them more fully, also with the assistance with our friends from the intelligence com- munity. Mr. BEREUTER. Very well. Finally, Secretary Kartman, I have conveyed to the State Depart- ment the concerns of the Republic of Korea about the shipment of low-level nuclear waste from Taiwan to the Republic of Korea. And as I understand it, the preliminary arrangements had been made by Taiwan to ship such low-level waste to North Korea. I guess I would ask this question: Has the United States ex- pressed concerns to Taiwan about that shipment? Does this signify the beginning of a larger trade or political relationship between North Korea and Taiwan? Does it open the door for other countries to send low-level waste and perhaps waste of higher radioactivity to the North Koreans? Mr. KARTMAN. Thank you, Mr. Chairman. This is a thorny issue for which there are few precedents. We have discussed the issue with the authorities on Taiwan. We have raised with them environmental concerns and concerns about the safety of shipping and storage. We have discussed with them the standards that should be met with respect to IAEA inspection and monitoring, and we have raised with them the concerns of other countries in the region which should be satisfied before pro- ceeding Whether the arrangement is an element of what might be an ex- panding relationship between Taiwan and North Korea is impos- sible for me to say, frankly. Each country has its own reasons for wanting to proceed with an arrangement of this sort, which may be a sufficient explanation for why they would explore it. The Taiwanese need storage for nuclear waste. We could urge them to look elsewhere, but the need remains. For its part, North Korea needs the hard currency that Taiwan has offered for the deal. Mr. BEREUTER. Would you urge them to construct their own if they are very good at construction? 19 Mr. KARTMAN. Taiwan, you mean? Mr. BEREUTER. Yes. Mr. KARTMAN. We believe that would be an appropriate solution. Mr. BEREUTER. Thank you. The gentleman from American Samoa, Mr. Faleomavaega. Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. Mr. Secretary, I guess you have seen several articles in the media concerning the serious situation of hunger in North Korea, and I would like to ask, as to the accuracy of this information con- veyed by the North Korean Government. Is there really a very seri- ous problem with this? Do we have NGO's or international associa- tions or groups currently in North Korea that can verify the seri- ousness of this problem or is it becoming a political football? Mr. KARTMAN. Thank you, Mr. Faleomavaega. This seems to be a real food shortage, one that has been coming for several years. In fact, there was a substantial shortage during the last 2 years due to severe flooding. The consensus is that there is probably a 2-million ton shortfall this year between North Korea's needs and its own production. As I explained earlier, however, North Korea has a variety of po- tential sources for meeting its needs, only one of which is the inter- national aid community. We support the provision of food aid to meet these needs, particularly for those who are most vulnerable in a famine, but we also expect North Korea to look to some of the other possibilities, including the commercial purchases. Mr. FALEOMAVAEGA. Do we have an accurate estimate? Are we looking at starvation with basically children; do we have any num- bers to that effect; how many people are going to starve to death if we don't help North Korea, and at what point in time is it critical that they have these shipments of food items? Do we have a good overview of that? Mr. KARTMAN. There are no absolutely firm numbers. We do, however, have fairly strong anecdotal evidence that many people have already starved in North Korea, and may be starving now. In the aggregate, it may reach into the thousands. Certainly, if there were a famine this spring when food reserves will have run out, those most vulnerable will be very young children and very old peo- ple in communities where emergency supplies would have the hardest time reaching, In addition to the fact that floods decreased North Korea's over- all ability to produce food, and the deterioration of its economy has reduced its ability to purchase food on the international market, the overall difficulties appear to have weakened the food distribu- tion system within the country. Even when there is food, it does not always reach people. This puts premium on the role that the international aid community might be able to play. WFP, for in- stance, has the ability to distribute and monitor food in certain areas. Mr. FALEOMAVAEGA. Our Chairman caught my attention with the previous statement about North Korea and Taiwan's efforts to look at the problems affecting nuclear waste and transfer. I suppose that is what we are trying to work out. I just returned from the Pacific and there is a gentleman out there by the name of Mr. Alex Copsen who is putting together a 20 joint multibillion-dollar business venture with Russian and Amer- ican support and they think they can find a nuclear waste dump somewhere in the Pacific? I just wanted to know if the Administra- tion or the State Department are aware of these efforts to establish a multibillion-dollar nuclear waste dump somewhere in the Pacific. Maybe Secretary Campbell can help me out. Are you aware that Mr. Copsen's initiative is going my way, going to Palmyra Atoll and Wake Island? I wouldn't be surprised if he was talking to the Taiwanese and North Koreans. Maybe he could answer this: Why is the Pacific always being made the dump site for anything that is nuclear? I note my time is over, but I would be very curious. Maybe Mr. Copsen can take his idea to the North Koreans. Maybe they can set up a nuclear dump site over there. Mr. CAMPBELL. I have never heard of this particular idea. We hear a lot of ideas in Asia. I have not heard this one. I would say that the general trends, however, in terms of inter- ests in nonnuclear issues and both in terms of the South Pacific nuclear free zone which you know well, other initiatives, the end of nuclear testing, it has become an issue of serious diplomatic dia- log throughout the Asian Pacific. So, Congressman, I would only say on that particular point, I think the trends are going in the other direction. In fact, there is greater attention to it, greater con- cern not to repeat some of the mistakes of the past. So I am more comforted by the political developments in all countries in the Asia Pacific. Mr. FALEOMAVAEGA. Thank you. And I look forward to working with you. I have never met Mr. Copsen and I look forward to see- ing his face here in Washington. Thank you. Mr. BEREUTER. I think these are rumors floating just to keep your adrenaline level up. Gentlemen, thank you very much for your testimony today. We appreciate your help and look forward to being kept informed on issues. Thank you. I would like now to call the second panel who have been waiting patiently. I had previously given a more complete biographical in- troduction for the three distinguished panelists so I will forego doing that a second time, but if they will come forward and take their places at the table, we would like to hear from you. The first of our distinguished panel will be the Honorable James R. Lilley. I have introduced him more completely before, but suffice it to say while he is the director for the Institute for Global Chi- nese Affairs at the University of Maryland, he has been the ambas- sador to the People's Republic of China, and it is nice to have you back. The written testimony of all three of you, gentlemen, will be made a part of our record in its entirety and you may proceed as you wish. Thank you. STATEMENT OF JAMES R. LILLEY, DIRECTOR, INSTITUTE FOR GLOBAL CHINESE AFFAIRS, UNIVERSITY OF MARYLAND Mr. LILLEY. Thank you, Mr. Chairman. As you know, I was called out about a half an hour ago by a phone call from somebody who had just gotten back from North 21 Korea, who was raised in Korea and speaks fluent Korean and was up there with 12 other people, several of whom spoke fluent Ko- rean and had been up there a number of times before. And he said to me, I want to get one message across to you, and he left there on February 1st before the changes in command that we just saw, and he said the North Koreans are very unstable. They are mutu- ally suspicious, uncertain about their roles in the system. He said he heard this from certain Vice Ministers and others who confided in him; he speaks Korean. He reiterated that this was a very seri- ous problem. The second point he made was he tried to get out to see so-called malnutrition, starving North Koreans and they wouldn't let him do it. So he said, we went to a senior diplomat and talked to him. He had been there a long time, he speaks Korean and he said, I think they are playing the game of exaggerating the food problems to get aid. So I give you this anecdotal evidence. We have had anecdotes be- fore about this and what the NGO has said and what other people say. The jury is out on how bad the situation in North Korea really is. I think you have to be very skeptical about what they are trying to do and what we are being told. The situation was poor, elec- tricity went out, obviously energy shortages. Nobody is trying to say it isn't in bad shape; it is in very bad shape. But I think you have to watch this starvation food thing very carefully. That is my first comment. My second comment, I would like to just say that of all the stops that Madam Secretary Albright stopped, I think her Korean one, in my view, was most successful. She did two essential things. She put her finger on North Korea as the problem. There was none of the "equivalence” which has beset us before. An unfortunate state- ment was made at the time of the submarine incident, that both sides had to restrain themselves. The timing wasn't good and the choice of words wasn't good. But I think Secretary Albright laid it right on the line. There is a problem in the South Korean relationship, the bedrock on which we must develop the policy in the Peninsula. I was told by my Ko- rean friends that they looked forward to her trip with great antici- pation because of her credentials, and they saw the prospect of a new beginning. I am quite optimistic about that. The questions I don't think were dealt with adequately in the last session were where is North Korean money going? You don't know whether it is being smuggled out to Western Europe. You don't know how much insurance money they have got. You don't know the amount of remittances they are getting from Japan. You haven't got a good handle on how much money is going to the mili- tary budget, how much they spent on stadiums, hotels, roads that go nowhere, the foolish social engineering that they have carried out. Their own money is being spent in large sums. We have got to pin this down. Where are these guys spending their money? Be- cause this affects our security. If you can't get them nailed down or our people nailed down on this one, you are flying blind and you are playing a very dangerous game. 22 We do have indications, as I am told by my friends in the govern- I ment, that they did increase the pace of military activity last year from a very low point. But I think it is rather ironic that some of our American friends keep talking about North Korea lashing out using artillery pieces being moved quickly up to the DMZ and which are able to kill tens of thousands in Seoul. Do you really want to feed the people who can do this quick operation? Is that really in our interest to do that? I ask you. Other areas I think are in my report I will just sum up by saying I do make six policy recommendations. The key, of course, the alli- ance with South Korea, which, again, Ms. Albright has stressed, and I think it is very important, and the two other witnesses do, too. The second is the credible deterrence to any kind of North Ko- rean military action. And I have said this again and again, so at the risk of being repetitive, the only message these people under- stand is a clear, firm, authoritative statement that they will be de- stroyed if they ever attack. I think President Clinton made a state- ment like that back in 1993. I think Secretary Perry reaffirmed it in 1994. But I think you have got to make it clear, not loud, not public, that there is a no-force option, take force off the table. Lashing out is not an option for North Korea. It is better to be sick than dead and I don't think (if you look at the Korean history), their moves are irrational. They are usually calculated, whether it is tunnels under the DMZ or assassinations in Burma or blowing up KA-858 or the axe murders, they are calculated moves. I think they work on calculation and you have to base most of what you do on that assumption. But you must also take care of the variable of irrationality in terms of a very solid message that there is a no- force option. I do not think you can get away from the idea of reforming their economy and their agriculture. You have got to do this. This has to be part of the formula. The one thing I have heard is that de- spite the problems they have and the power shortages, there is no move to genuine reform. There is no talk of looking for reform solu- tions outside Juche (self-reliance) yet. It should come. It has to come. If you don't start them on some kind of road on agricultural reform with the Chinese example, then you are just throwing money down a black hole. Finally, I would just leave you with these questions: Again, I stress the first question, how does North Korea spend its money? Second, what weapons of mass destruction have they hidden away? You did not get an adequate answer on proliferation. I think you also have to get right to the core problem of what they have hid- den. We have kicked this down the road. You never can let up pres- sure to get answers to this. Third, who is the leadership and what do they want and how do they achieve it—the high-level defector in Beijing is available; I be- lieve he should be able to answer some of these questions. You have got to formulate these responsible and effective policies after looking at what this man says. We may have a breakthrough in in- formation which should help us answer some of the key questions. I will mention two issues that come to my mind out of the pre- vious testimony. First of all, there seems to have been a deteriora- 23 tion in the intelligence exchange. I know Kurt Campbell says ex- changes take place every day, every hour. But I get a different story. I think you should look into that. A second one is tripartite talks. The North Koreans have looked for tripartite talks for about 20 years and they finally got them. Will they stretch these talks out because this humiliates the South? Watch this one very carefully. It must lead to four-part and then two-part talks between North and South. Finally, I think we should ask ourselves who is backgrounding the American press that South Korea is part of the problem? Some- body in our Administration repeatedly goes to senior correspond- ents in The Washington Post; New York Times and unloads on South Korea. Who is doing that? Thank you. Mr. BEREUTER. Thank you for your strong and succinct sum- mary. [The prepared statement of Mr. Lilley appears in the appendix.] Mr. BEREUTER. Mr. Berman. Mr. BERMAN. Mr. Chairman, I just wanted to apologize to our panelists. Just in the last couple of minutes you raised a lot of in- teresting questions which I would like followup on. One of the next witnesses is the one that I personally requested appear and I would be very interested in hearing what he has to say. I have an appointment with the State Department on Asian is- sues which can't wait, so I have to go, and I apologize for missing this. I will try to get back before it is over but this is not a walk out. I think the belief is that what is going to be said, the rest of this panel is not very important. I do think it is. Mr. BEREUTER. Thank you, Mr. Berman. Your colleagues under- , stand that problem all too well. Mr. BEREUTER. Next we will hear from Dr. Roy Grinker, associ- ate professor of anthropology and international relations, George Washington University. Dr. Grinker, you may proceed as you wish. STATEMENT OF ROY RICHARD GRINKER, ASSOCIATE PROFES- SOR OF ANTHROPOLOGY AND INTERNATIONAL RELATIONS, GEORGE WASHINGTON UNIVERSITY Mr. GRINKER. Mr. Chairman, Members of the Committee, thank you for the invitation to speak to you today. I would first like to simply make a correction. I appreciated your generous opening re- marks. I have interviewed many defectors but not all of them. Most of my interviews take several hours, and there are several hundred defectors. I would also like to point out that although this hearing is spe- cifically about U.S. relations with North Korea, I am going to speak about both North and South Korea because I believe that any pol- icy toward North Korea is also a de facto policy toward South Korea as well. South Korea risks repeating two mistakes made by Germany prior to their unification: Failing to discuss practical and specific dimensions of unification until after it occurs and ignoring the ex- tent to which half a century of division can produce profound social and cultural division differences between two sides of a nation. 24 Germans have been fortunate that unification there was not ac- companied by violence, but on the Korean Peninsula where North and South are still technically at war and where it seems that preparations are being made more in the direction of war than in peace, more long-term planning is necessary. Moreover, planning is important because South Korea's financial resources are limited in comparison to those of the former West Germany, and North Korea's economy is demonstrably weaker than that of the former East Germany. The fact is that unification will occur. It will occur someday be- cause Koreans want it to. It is a sacred goal. It is especially impor- tant to the millions of people whose families continue to remain di- vided. But unification could also have profound local, regional, and global repercussions. I want to stress that unification is not the end game. It is a be- ginning. In both the United States and South Korea, the majority of policy studies do not articulate a means to achieve a coherent policy toward the Korean Peninsula or a policy consensus between the Únited States and South Korea. This is a special problem today as relations between the United States and South Korea appear in- creasingly strained. Although unification could be considered largely an internal Ko- rean matter, U.S. policies have a major, if sometimes unwitting, ef- fect on prospects for unification. Events on the Peninsula affect U.S. interests in East Asia. I recognize that many South Koreans express the worthy hope that the United States will have little role in the economic and defense policy of a unified Korea. Indeed, uni- fication is often equated in South Korea with independence from the United States and other foreign powers. However, the enor- mous costs and complexities of unification make it inevitable that external assistance will be needed even if it is confined only to international financial assistance. A coordinated policy is needed to help the two countries integrate their interests. It seems reasonable to consider the appointment of an American envoy or coordinator whose job is devoted solely to Korea. And that is what Robert Gallucci once played in this role. Such positions are ordinarily created in times of crisis. Let us have this structure in place before a crisis, political or diplomatic, occurs. The importance of limiting North Korea's nuclear buildup is not difficult to explain to the American people. However, explaining to the American people the continued presence of U.S. forces in South Korea, especially if they are actively threatened, and the likely cost-sharing necessary in any unification scenario, no matter how soft the landing, requires a more substantial investment in U.S. policy toward Korea. Now before talking about the defectors, I would like to give three examples of ways in which a little bit more attention to the coordi- nation of U.S. and South Korean policy can minimize the miscommunications between the two sides. First, South Korean scholars and policymakers seldom differen- tiate between peace and unification because from the South Korean perspective the two are inextricably linked. When the United States speaks about peace without also speaking about unification, a 25 some South Koreans interpret this to mean that the United States wants to preserve the status quo. Second, the United States and particularly the media have on a number of occasions attempted to assuage the South Koreans by saying, look, in effect you have won. You have achieved more than North Korea in every facet of life. Again, this statement is inter- preted by some to mean that the United States is content with the status quo for Korea. South Korea responds in effect by saying, if this is the case, then where is our reward? By which they mean unification, the reuniting of families, and autonomy. Third, there remains considerable disagreement for miscom- munication about the portion of the Geneva agreement framework in which North Korea agrees to a dialog with South Korea. There is less than adequate clarity in the United States on the question of whether KEDO constitutes that dialog. From the South Korea perspective, it is safe to say that it does not. Let me now speak about the defectors, about two dozen of whom I know fairly well and I have interviewed since 1993. We should pay particular attention to them because their experiences suggest to us that unification will not be a simple act of integration or as- similation. Despite the presence of about 700 defectors, we know very little about their adjustment to South Korean society. The conventional wisdom in South Korea is that North Koreans remain frozen by communism and that, when the North Korean State dissolves, North Koreans will thaw out and emerge as pure Koreans to be as- similated or absorbed into South Korea. Defectors I know tell me that North Koreans in North Korea are uncomfortably aware of this expectation and tend to equate unification with the southern conquest of the North. Most of the North Korean defectors with whom I am familiar are not doing well in South Korea. In addition to feeling isolated, some feel they are treated less well than foreign guest workers. Many are distressed by what they perceive to be a general South Korean perspective that nothing is worth preserving in North Korea. When they do not achieve economic success, they become anxious that they have nothing to show their relatives for the pain they caused them by defecting. They are accused in South Korea of having no loyalty to family. Having lived only in a Communist regime that made so many deci- sions for them, the defectors are beleaguered by the everyday choices that they confront. Many find it difficult to marry. They suffer extraordinary guilt about the plight of their families, and I can talk about this further in the question-and-answer period but I see my time is moving on. What also became clear in my work is that defectors are simulta- neously loyal to South Korea, yet remain tied to the North. As one defector put it quite tellingly, "I guarantee you there is no defector in South Korea who did not weep when Kim Il Sung died.” Korea's attempt at homogeneity cannot be reconciled with real social, economic, and political differences. It will produce costs, whatever the peace dividend. The range of possibilities is stagger- ing: Social unrest, discrimination, massive unemployment, revenge attacks, political strife, conflicts over land claims. We should not 26 is up. assume that North Korean defectors will ever be replicas of South Koreans, any more than one might assume that rich and poor South Koreans, male and female South Koreans, and South Kore- ans from the southeast and southwest, are identical to one another. I will be glad to answer more questions on this, but I see my time Thank you very much. Mr. BEREUTER. Thank you very much. [The prepared statement of Ňr. Grinker appears in the appen- dix.] Mr. BEREUTER. Now I would like to hear from Robert A. Man- ning, senior fellow at the Progressive Policy Institute. Mr. Man- ning, you may proceed as you wish. STATEMENT OF ROBERT A. MANNING, SENIOR FELLOW, PROGRESSIVE POLICY INSTITUTE Mr. MANNING. I want to thank you for the opportunity to appear here, and I want to commend you for holding this hearing on the Korean predicament. As you indicated, my full statement will be included in the record. I just want to make a few brief remarks and hope we can have an interesting discussion. Let me start by saying it is difficult to disagree with what I came across in the form of a statement by former Assistant Secretary of State, Winston Lord, that the Korean problem is, “perhaps the most urgent security challenge facing the Administration anywhere in the world.” A scenario of either desperate explosion or implosion in North Korea involving military conflict would have an enormous impact on the U.S. position in East Asia, a Korea shock which could well alter the geopolitical equation of the Asia-Pacific. Recent events that have been alluded to—the North Korean sub- marine incursion and the defection of Hwang Jang Yop, and the looming specter of famine—all underscore the volatility of the situ- ation in Korea. You may recall after last year's flood and famine some senior officials were suggesting that collapse was imminent. Kim Jong-il is still around. Some of them are not. While one cannot rule out such a possibility, I want to stress that there is no basis for making such a judgment and certainly it would be irresponsible to base American policy on such an assump- tion. The immediate question of food aid which has been raised is really the tip of the iceberg of a profound policy challenge far be- yond meeting the North Koreans who will likely face starvation in coming months. As my colleague, Jim Przystup, and I wrote re- cently in The Washington Post, the issue is not just the present emergency but a long-term structural dilemma that has to do with a failing State that threatens vital American interests. With an already poor agricultural sector, structural damage and floods, North Korea will face food deficits of more than a million tons a year for the rest of this century. However the United States and its allies respond to the current emergency, this problem must be viewed in the larger policy context. The goal of U.S. policy in Korea should be to reduce the North Korean military threat and facilitate North-South reconciliation. And I am not talking about 27 vacuous terms like dialog and engagement, but results. I think there is a paucity in that regard. The Agreed Framework on the nuclear issue was an important step forward in threat reduction. It has so far succeeded in shut- ting down the nuclear weapons program. In my full testimony I provide an assessment of the nuclear situation. Let me just say here that the bottom line is that it should stand to fall on its own merits and thus far North Korea has been largely cooperative and Congress would be wise to continue providing ade- quate funding for the nuclear project. I would stress here that our share is minute compared to that of our Japanese and Korean al- lies, and if we reneged on our part of the deal, the billions of dol- lars they are committed to coming up with may be at risk. But the North Korean military threat, no matter what happens on the nu- clear front, still remains. The proposed Four-Party talks offer the hope of addressing the larger issue. But I want to caution you that a peace treaty with North Korea is not necessarily in the U.S. or the South Korean interest unless it is part of a larger process of radical cuts in conventional military forces. This leads me to the larger question of U.S. strategy. One reason we have witnessed the absurd specter of the pathetic Stalinist di- nosaur dictating the diplomatic agenda to the world's single super- power is that Pyongyang has a clear, consistent strategy. It seeks a strategic relationship with the United States as a buffer against absorption by the South, to legitimize itself in the international community and to obtain economic aid and investment. Viewed in this light, many of what we often consider bizarre or erratic acts are really tactical moves aimed at forcing an American response while probing to see how much it can get. It also helps explain why Pyongyang has resisted dealing with Seoul. The Four-Party talks initiative proposed last April marked the first time in 4 years that the United States set the agenda and the North was put in a reactive mode. This or some other negotiating framework can offer the prospect of embedding a nuclear deal in a larger policy. The United States and South Korea owe Pyongyang the answers to some key questions. Precisely what kind of behavior do we want from North Korea and what will the United States, ROK, and Japan do if Nam Yang performs according to our wishes? The DPRK's behavior suggests that some of these tactical moves have been aimed at forcing the answers to such questions. At present, there is little evidence that either Seoul or Washington have considered answers to these key questions. The problem, in my view, is trading security for economics. In my testimony, I have outlined in some detail a road map of reciprocal steps which I believe offer the best chance of avoiding a tragedy in Korea. I would also urge Congress to press the President to appoint a special envoy modeled on the role that Dennis Ross has played in the Middle East peace process to be the point man in Korea and of the relevant players in Northeast Asia. In my view, this would be the best assurance of guaranteed sus- tained top-level attention to the Korean problem at a time when the Administration has an ambitious European agenda and a dearth of high-level Asian expertise. Thank you for your attention, and I welcome your questions. 28 I Mr. BEREUTER. Thank you very much for your testimony, and to all three of you for your testimony. [The prepared statement of Mr. Manning appears in the appen- dix.] Mr. BEREUTER. The ideas that you explain in the latter part of your paper deserve to be further explored by this panel. I call first on Mr. Kim for questions that he might have. Mr. Kim. Thank you, Mr. Chairman. Ambassador Lilley, so glad to see you again. You mention that you talked to someone who just came back from North Korea and he told you that North Korea is really unstable. That isn't the way I understood the previous panels; it seems to me they have a dif- ferent opinion. That is the problem I am having, conflicting infor- mation; it seems to be a conflicting policy. Yet the Administration keeps saying that any collapse of North Korea is not imminent. I wanted to know how they got their conclusion, but they had no an- swer. I am not sure where we stand. I am not sure I really under- stand North Korea. One side says we are continually monitoring. The other says we don't know anything about North Korea. This is my frustration. And these Four-Party peace talks we talked about that were ini- tiated by this Committee, were a congressionally-driven initiative. It was not by the Administration. My question to you is, you men- tion to watch out for this food shortage. It could be overly exagger- ated. We are officially denying any kind of assistance but turn around and give the rice to the North Koreans through the United Nations—of which we provide more than 90 percent. We have no way to monitor whether the rice is actually given to needy people. We have strong evidence that that rice has been converted, shift- ed to military use to strengthen the military so they can attack South Korea, so to speak. Whatever little we give, what kind of as- surance, Mr. Lilley, do we have to make sure that is actually going to starving children? Mr. LILLEY. That is a very good point, Mr. Kim. I was in the in- telligence business for many years and we have to wrestle with in- adequate information. You never get as much as you want. In this particular case, it seems to me some people have been hiding behind the lack of information. And we have had a whole string of defectors from North Korea, and now we have gotten a very high-level one sitting there in Beijing. We have also had this North Korean who handled the money in Berlin for high-level North Koreans. He told us about the deposits which our friends in the State Department had no details on. Didn't they find out where the money went? What banks was it in? I would think this would be point one. Why do they duck this? It seems to me, then, you would have some handle on where their money outflow is going. I would say, again, I think Hwang Jang Yop probably can explain it best. This is the man I think who should be the key to a lot of information when he starts to sing. And I imagine perhaps one reason they may be holding him in China is that they are holding his departure over his head. He may not get to Seoul if he doesn't cooperate. Maybe that is an induce- ment for him to cooperate. I don't know, but that is an old intel- ligence trick. 29 He is the man who should begin to answer questions on a macro- economic level. What the North Koreans are really doing with their money and what they are doing in terms of diverting money and rice to the Army. What is really happening inside. That is why I say you should be formulating policies quickly on new information, not necessarily on past judgments. Of course, it is very hard for any of us to say no to humanitarian aid when children are stary- ing. On the other hand, you know, and I have been there and I have seen the opulent life-style of the North Korean elite, and you get these stories of Remi Martin brandy flowing into North Korea and the various other indications of what they do with the money that they get, maybe $700 million from Japan if this were taken away from the high-level hierarchy and put into feeding the children it could probably take care of the problem for some time. These are the problems we don't wrestle with. And it seems to me what Hwang Jang Yop said is that, yes, things are unstable, people are disillusioned. There is a sense that the regime is shaking, it has lost its credibility because it can't feed its people. On the other hand, he said there is no more brutal sys- tem in this world. And to go against that system means you are dead. I don't think there has been any indication that anybody has been able to crack that system. So I am saying, yes, you could say at the same time that there is disillusionment, a lack of confidence in the regime, defections. At the same time the regime has an iron grip on the throat of the people. And, therefore, Hwang Jang Yop had said there will not be a collapse in the short term. Mr. BEREUTER. Thank you. The other gentleman from California, Mr. Capps. Mr. CAPPS. I made a comment after the first panel that I think this is a topic to which we will be returning, going over this matter again and again. I am going to ask a question that I think may sound like an odd question to be asking, but I want to preface it by explaining some of the background here. I think we have a situ- ation like where we are talking about sort of a hermit country where there is self-imposed isolation, and we are asking the ques- tion what can the possible outcome be looking down the road a ways. What can we expect to happen there or what can we hope will happen there? The only way that that can be answered is to understand the mind, the mentality, the collective consciousness of the people. And the only way to defend that kind of isolationism is to have support for it among the people themselves, unless it is being completely imposed by a small group of leaders. Anyway, this is my question, Dr. Grinker; it comes to you. You made the comment that unification and I have to say that I am looking to unification as a possibility for the future-unification is a sacred goal. Could you expand on that a little bit? Is it a sacred goal of both North and South? Sacred goal of only the South? Be- cause I am having a difficult time reconciling that with the idea that a people can live in that kind of isolation and not be prompted toward unification. 44-152 97 - 3 - 30 Mr. GRINKER. Thank you for the question. I think it is a very im- portant one. One of the things I would stress about having done a consider- able amount of work in Korea is that it is very difficult to talk to people in Korea about the possibility that Korea will not unify or that unification is not a good idea. The moment something achieves that level of being sacred, it becomes removed from debate and con- test. So within South Korea the topic of unification is one that is so important that it is, in effect, almost unspeakable. One cannot debate unification in South Korea to the degree to which one would expect in a society that holds such a sacred goal. I have never heard anybody say to me that they did not want unification and that that should be revealed. It is a very dangerous thing to say that. Having said that, let me comment that one of the most profound and salient conceptual distinctions in both South Korea and North Korea, in my opinion, is the distinction between the people and the State. This is one people and two States. Unification is the unifica- tion of the people so that they will be under a single State. This is one way in which we can understand what seem to us to be in- consistencies. For instance, how will South Korea talk about North Koreans as being their brothers and sisters? Is it that the people are innocent but the State is guilty? When Kim Hyun Hi was arrested and then pardoned for bombing the Korean Airlines, it was the State which was evil while she was innocent? And I think it will be interesting to see how the high-level defec- tor, Hwang Jang Yop, is dealt with. There are stories beginning to emerge in the Korean media that he needs to be given some sort of immunity, but it will be also interesting to see how many people call for criminal charges to be brought against him for the continu- ation of division in the North Korean regime. Mr. CAPPS. Could I do a followup? I find the distinction between people and State to be very helpful. The question becomes in the U.S. diplomatic dealings with both Koreas, can that distinction be invoked at that level? And if so, can the United States deal with people as against State? What I am actually looking for here is a mechanism to be able to think through some way in which the situation might be clari- fied and some way in which the United States might help that situ- ation get beyond the kind of stymied obstacle-laden character that it has at the present time. I think something along those lines would be helpful. Mr. GRINKER. I don't think at this point I can provide you with a mechanism, but I can provide you with a little bit more informa- tion that might be a step in that direction. Let me say that I am not a policymaker, although I am inter- ested in analyzing policy. One of the fundamental problems of any sort of diplomacy, it would seem to me as an outsider to diplomacy, is the identification of who the interlocutors should be. This is a fundamental problem in South Korea. Is it the people or is it the State that is responsible for forming policy, for achieving unification, and for speaking with the North? 31 The tremendous conflicts that have occurred when individuals have struggled to cross the border illegally into North Korea from the South highlight this problem. Particularly the students have preyed on this people-State distinction, and they have been pretty heavily criticized by the Korean media. I think that one of the ways out of this dilemma is to recognize that sometimes U.S. policy does not appreciate that distinction so, for instance, if a South Korean makes a nasty comment about the North Korean regime, that is one thing. If the United States does, that may be quite another because the South Korean might feel his brothers and sisters are being characterized as evil. Or, for exam- ple, we might look at the common American assertion that South Korean policies about food aid to North Korea are inconsistent- that, on the one hand, the South Koreans refuse to give much aid, and, on the other hand, they say that these are their brothers and sisters. This is explained by the people-State division as well, for one must not reward the State but one must also feel compassion for the people. I think if one understands that distinction, a whole lot of the inconsistencies fall into place. Mr. BEREUTER. Thank you very much. Mr. Gilman has a state- ment. I would ask unanimous consent that it be made part of the record. Without objection, so ordered. [The prepared statement of Mr. Gilman appears in the appen- dix.) Mr. BEREUTER. The gentleman from American Samoa, Mr. Faleomavaega. Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I would like to say to Ambassador Lilley that my only regret is that our friends from the Administration are not here to respond to some of the very basic and fundamental questions that you raise. . Certainly it may be the fault of this Member and maybe the Com- mittee for not being as thorough or comprehensive in asking the very questions that you raised earlier. I see a similar situation where our policymakers have failed to obtain these kinds of answers to the fundamental questions under- lying our policies. This was the very thing that led us to the Viet- nam crisis. Out of ignorance or because our Intelligence Commu- nity did not give LBJ the proper counsel or advice, it led us into a very serious problem. I see your concerns about North Korea and I hope, Mr. Chairman, that perhaps we as the Committee can frame the very questions that Ambassador Lilley raised and present it to our friends downtown for some answers. I think from a layman's perspective what prompted North Korea to look into the nuclear option was that it felt threatened by the fact that South Korea and the United States had a very strong se- curity alignment. They probably had a good guess that we had nu- clear weapons in South Korea, if I may speculate as to what prompted the North Koreans to get into the nuclear race. My question is where do we go from here if, in fact, we have a very serious problem of starvation that Dr. Grinker might call a people problem and not a State problem. I suppose this is tied to Ambassador Lilley's question, do we know where the money is being spent? That will answer whether there really is a starvation problem or whether it is because of the poor allocation of resources 32 if, in fact, millions of dollars are being donated from countries to give North Korea assistance. I hope Dr. Manning can give us some guidance. Could you give us a better perspective in terms of this subject of starvation? Are we in it for real or are we spinning our wheels, or does the Administration not have enough information to make a policy decision on it? Mr. Manning. Mr. MANNING. The best information I have is there is a serious problem with people facing starvation, but I would also note that as Ambassador Lilley points out, they spend money on all kinds of things. My understanding is they have stepped up the tempo of military operations; they have chosen guns over butter on their own accord. Again, it is hard for me to see why it is our fault and we have to fill the gap. It is a troubling situation. And it is also why I have tried to argue that we have this incremental bureaucratically sepa- rate track policy, and it needs to be integrated into a comprehen- sive approach. I think the North Koreans, frankly, would look for- ward to kind of a road map that said to them if you do X, Y and Z, we will do X, Y and Z because right now they don't know what the answer to the question is. If you recall, during the tortuous negotiations that led to the nu- clear agreement, they did these things that looked bizarre to us. They threatened to pull out of the NPT. They pulled the core of the reactor out. In retrospect, what I would argue is that they were es- sentially saying, if we trade in our nukes, what do we get for it? Up until the time they pulled the core of the reactor, the answer from the State Department was, you get a higher-level meeting. That is an absurd answer if you are a country that is on the brink. On this larger question, my concern for American interests is how do we reduce the threat to our troops and our allies? That should be our focus. If we can do that, then I am prepared and the South Koreans should be prepared to be rather generous. I have advocated, for example, opening up a Korean reconstruc- tion window in the World Bank, lending to those institutions help- ing to facilitate economic reform. All of those things are fine. But our concern—what we are getting now is they keep coming to us and getting something for nothing. And my question is, we are going to have this problem ad infinitum? Where do we draw the line? I don't believe we can go on like this. So I think you have got to put it in that context. The other thing I want to stress is we have experience in Com- munist countries. We saw the great leap forward in China. We saw it in the starvation in the Ukraine in the 1930's. Starvation does not necessarily mean political instability. But you have to ask the question who gets the food that they have? It is not going to be the enemies of the regime, I can assure you. Mr. FALEOMAVAEGA. This was also a part of the problem, and correct me if I am wrong, but there was a sense of resentment on the part of our South Korean leaders for not being consulted. Is that a proper way to proceed? Mr. MANNING. No. The problem is once the Administration de- fined it as a nuclear problem rather than a Korea problem, the greater the situation when North Korea held all of the cards, they 33 manipulated it and consciously isolated South Korea. So if you are South Korean and you are watching Bob Gallucci and his North Korean counterpart determine his future, and this is what you are seeing on TV every evening. So of course you get resentment built up. That is why up until January 20th, 1993, we had a policy that was consciously designed to facilitate parallel movement. We would not move with North Korea until there was movement between the North and the South. If you recall in January 1992, Arnold Kanter was the Under Sec- retary, and that is still the highest level contact we have had with North Korea. We met with them after they committed themselves to the IAEA, after they signed a whole series of sweeping accords for reconciliation between North and South Korea. That is, in my view, still an adequate framework if the political will were there to implement them. And so that kind of framework for negotiation has been missing, and I think that is what has fueled this tension in the U.S. and South Korean relationship. Mr. FALEOMAVAEGA. Thank you, Mr. Manning. Thank you, Mr. . Chairman. Mr. BEREUTER. You are welcome. We do have a good suggestion to follow up on any questions that Ambassador Lilley has suggested were not addressed to our wit- nesses and we will work on it. I have about three questions that I would like to address to Ambassador Lilley and Mr. Manning, Perhaps, Dr. Grinker, you will have some views on these, too, and if you do, please volunteer. First, your assessment about who is really in charge, in control in North Korea. Is Kim Chong-il, the de facto Head of State? How influential is the North Korean military? That little combination of questions first, then I will move on to my second area, if I have time, and third. Mr. LILLEY. I think we have gotten an awful lot of information on what is happening in North Korea through the years through our monstrous collection apparatus of technical collection-human collection, defectors, recruitment of agents in place. We have a lot of data. Freight cars full of it. The question is how to crystallize this and answer the question that you asked, the gut question, I haven't read all the information but this is my sense of it, Kim Chong-il is not only in charge, he is the cult of personality. They have got to have him because he is the old man's son. It goes right back to Tan Gun, the founder of Korea 5,000 years ago. Same thing with Tan Gun's son. They have got to have Kim Jong-il for legitimacy. They find that he is a flawed person, and this has emerged from the long delays in putting him on center stage. This comes from re- port after report we have on his performance, erratic, emotional, brilliant, eccentric. It is a dilemma for the leadership. They need him, but he is not what they want; he is not his father. Their whole purpose is to stay in power. That is the number one priority. Therefore, the military, the party, the bureaucracy have to work to- gether to keep this man, Kim Jong-il propped up. They have deep cleavages. We know this from the Russian expert, Mansuron, who served many years in Pyongyang. 34 A number of people have served up there for years who spoke Korean, knew Korean history and culture and knew Korean fac- tionalism. This is all a matter of record how the North operates. There are arguments among themselves day and night but they also know how to play us. They will get one of your esteemed Con- gressmen up there and they will put on a stage show for him about factionalism and whisper in his aide's ear saying there is a simple scenario of the good guys versus the bad guys. It is a shadow play with the paper dolls that the Americans understand and then come up with an instant analysis. Mr. BEREUTER. Ambassador Lilley, on crucial military deploy- ment issues, would it be the military that makes the decision or Kim Chong-il? Mr. LILLEY. My sense is that the military makes the decision and gets his stamp of approval. He would have no choice but to agree. Mr. BEREUTER. Who else? Anyone among you would like to con- tribute answers to this question? Mr. MANNING. I would basically concur with Ambassador Lilley. It is clearly the case that the military has a larger political role than it did when Kim Il-song was alive. We don't know the inner workings, and I am not going to pretend to tell you I do. We have seen a lot of anecdotal evidence in that regard. Mr. BEREUTER. My next question is, can we use food aid to lever- age change in their economic policies? If the United States is at- tempting to use such leverage, do we have a strategy to do so? Do you discern any strategy? Mr. LILLEY. I think both Bob and I have talked to this point and I find it essential that we appreciate that the North Koreans don't understand it when you give them something for nothing. They think you are an imbecile. Here they are spewing out invectives on us every day, threatening to turn Seoul into a sea of fire, stiffing you on a whole series of things, and then demanding more aid. Mr. BEREUTER. You don't think we are exercising leverage? Mr. LILLEY. I think we may be now. I am beginning to see the sun come up. I think I am beginning to see people make the con- nection. As Bob suggested, I have heard also from Defense Depart- ment colleagues the other day in a private luncheon, that they are beginning to figure out some hard ways we can get mutual balance force reduction under verification and the confidence-building measures in return for food aid. I think this has to go hand in hand with food aid. I know it is sort of the mantra. Food aid is unconditional when it is for human- itarian purposes. We should not make linkage. But North Korea is not Somalia or Rwanda. This is a very powerful military force with its gun at your head. It seems to me you have to develop a different strategy. You have to assess that gun at your head. When the North Koreans threaten to lash out, we tend to throw more food at them. This lacks a certain logic. And I believe it was Kevin Sullivan of the Washington Post who pointed out the other day in an article that you are not going to take care of the military threat with food aid. It will be there 10 years from now because it is useful to the North. It seems to me you have to tie it in, whether it is implicit or explicit, to force re- 35 duction and non-use of force. This is for the diplomats and nego- tiators to work out. Mr. BEREUTER. Mr. Manning. Mr. MANNING. I would put it in a slightly different way in terms of not so much food aid but what does North Korea want? We have some sense of that at this point; do they want foreign aid, foreign investment, more trade? They would like to join the World Bank? The Asian Development Bank? They need enormous amounts of in- vestment in infrastructure and so on, and the question is, we cre- ate an incentive structure that creates a political environment that says to them, you want this stuff, you can get it. There is a price. You can't maintain the military threat and all the rest. And you are going to have to define the choice and let them make the choice. That is all you can ask a policy to do. I am troubled because we haven't, as I mentioned earlier, we haven't done that. The North Koreans come to us and say, OK, we are ready to deal; what do you want us to do? The answer is, well, we will get back to you on that because we don't know and neither do the South Koreans have an offer. I think for all the alleged consultation and all the time in meet- ings and so on, I am troubled by the fact that we don't seem to have a clear idea of what we want them to do. And I think if we did that and laid out this kind of a road map, and as my former boss, Jim Baker, might do, give them an 800-number and if you want to do this, fine; if you don't, have a nice day. Because at the end of the day you can't save them from themselves. They have to make these choices. Mr. BEREUTER. Do any of my colleagues have a final question to add? Mr. LILLEY. Could I add one thing, Mr. Chairman? Bob touched on this. I think it is important to look at the lessons of history. China had a food problem in 1958 of monumental proportions, caused by lunatic social engineering, and some natural disasters; 30 or 40 million people died. But foreign observers claimed there was no famine. All I can say is watch out for the foreign militant who comes back and tells you after a month in that country what it is like. They were dead wrong in China. The Chinese didn't get any aid, and by 1978 Deng Xiaoping came along and reformed agriculture and it just took off. That is one. Let's look at (and I am indebted to my colleague, Nic Eberstadt here) another one in 1921, a starving Ukraine in Russia. Hoover, who was an excellent administrator, went in there to run a food program. Maybe he wasn't the greatest President, but he was a very good administrator. He took our food program, and he said he didn't want any nonsense from the Communist party. He ran the program and he saved probably 5 million lives. And they were look- ing for a Soviet moderate to come out of this and who do they get? Joe Stalin. You come in there, you do the right thing, you save the people's lives. You can't anticipate results. The arithmetic is there, how many lives saved and how many did Stalin eventually kill? I think when you get involved in these very complex situations like North Korea where the stakes are very high and you have got foreigners running around telling you the way things are in North 36 Korea, you have really got to get at the basics of what is actually happening. Mr. Kim and Mr. Berman have raised those questions. I really think we have a chance to get at some of the answers now, a as we have got this defector, Hwang Jang Yop. Let's get him over here as fast as we can and really try to understand this situation. Mr. BEREUTER. Thank you. Mr. Kim, did you have a final question? Mr. KIM. Yes. Mr. Lilley, I really enjoyed you very much. I do have one last comment and question about this fear of being in- volved in a war. A lot of South Koreans are afraid that the North Koreans are pushed against the wall and they have a choice: Ei- ther sit there and starve to death or attack the South. Either op- tion is a deadly option and a lot of South Koreans fear that might happen, maybe they will engage in war. Do you have any opinion on that? Mr. LILLEY. I guess I go back to this statement, Mr. Kim, that you have got to work very hard to take the force option off the table, and you may think that that is dreaming, but I think that is America's role in the Far East. We take the war option off the table in the Taiwan Strait, in the South China Sea, Korean Penin- sula because power is our trump card. Mr. Kim. Shouldn't the policy have been to try to please both par- ties? America has been overly friendly to the North and sometimes the South and back and forth and it's not clear which policy we have-a solid policy? Mr. LILLEY. I would say we have two good events that have oc- curred recently. We got Hwang Jang Yop, the high-level defector, and Secretary Madeleine Albright came with a fresh look. I would keep an open mind and let those two things work out. I have some confidence that things will get better. Mr. BEREUTER. Gentlemen, thank you very much for your testi- mony and for sharing your thoughts with us in response to our questions. It was very helpful to us. I appreciate the time you de- voted to it. Thank you very much. The Subcommittee is adjourned. [Whereupon, at 3:50 p.m., the Subcommittee was adjourned.) 37 House International Relations Committee Subcommittee on Asian and Pacific Affairs February 26, 1997 U.S. Policy Towards North Korea Testimony of Charles Kartman Acting Assistant Secretary Bureau of East Asian and Pacific Affairs Department of State 38 Mr. Chairman, It is my pleasure to represent the Department of State before this Committee today. I appreciate this opportunity to discuss our policy toward the Democratic People's Republic of Korea (DPRK). Our overall goals in this policy are to build a durable peace on the Korean Peninsula as a key contribution to regional stability, and to facilitate progress by the Korean people themselves toward national reunification. Even in the past week, we have seen signs that our efforts are bearing fruit. As you may know, I returned Monday evening from Seoul and Tokyo, where I accompanied Secretary Albright in her meetings with Korean and Japanese leaders. Central to our strategy for managing North Korea is our commitment to consult regularly and closely with our South Korean allies, to ensure that our North Korea policy remains tightly coordinated. I am very pleased to note the success of the Secretary's visit to Seoul in promoting that objective. At the top of the agenda in the Secretary's meetings with President Kim Young-Sam and Foreign Minister Yoo Jong-Ha was a discussion of a significant development in our policy toward North Korea Pyongyang's agreement to sit down with the U.S. and ROK on March 5 to hear our joint briefing on President Clinton and President Kim's proposal for Four Party peace I will discuss this proposal at greater length in a moment, but I wanted to cite this tangible evidence of recent success of our policies in engaging the DPRK and encouraging inter-Korean dialogue. This latest development builds on several years of US-ROK cooperative diplomatic efforts, beginning with negotiation of the October 1994 Agreed Framework, continuing with the Four Party peace proposal of last April and extending forward to the groundbreaking for the light-water reactor (LWR) project in North Korea scheduled for this spring. In a broader sense, of course, these initiatives are rooted in the US-ROK alliance, which has ensured stability on the Korean Peninsula since the Korean War. In this longer term perspective, our security alliance with South Korea remains at the heart of our policy on the Peninsula. Our joint ability to deter North Korean aggression is stronger than ever. As members of this Committee know well, the U.S.-ROK alliance has weathered nearly five decades of challenges and changes. The Republic of Korea, which emerged from the Korean War in ruins, has built itself into a vibrant democracy with a robust economy. The U.S. is rightly proud of the role we have played in this process by ensuring the security of our ally. We are also convinced that our efforts with South Korea to promote a lasting peace will contribute to 39 - 2 - the eventual reunification of the Peninsula. From Deterrence to Engagement For decades after the Korean War, our North Korea policy consisted of a critical but still one-dimensional task -- to deter renewed North Korean aggression. The end of the Cold War changed the situation on the Korean Peninsula, and we and our allies in South Korea have adapted to the new realities. Working together, we have supplemented our deterrent capability with diplomatic initiatives designed to draw the North out of its increasing isolation and encourage it to become a responsible member of the international community. It is useful to note that the process of moving from stark confrontation to dialogue with the DPRK has a bipartisan history of some nine years. In 1988, under the Reagan Administration, the U.S. undertook what was termed a "Modest Initiative" to open the window for greater contact with Pyongyang. The next phase came in January 1992, when, during a period of improved dialogue between South and North Korea, the Bush Administration hosted the first-ever meeting between senior U.S. and DPRK officials in an early effort to address our concerns with the North's nuclear program. That phase of diplomacy, hit high gear when my good friend Ambassador Bob Gallucci reengaged the DPRK on the nuclear issue in 1993. Negotiated in close consultation with our South Korean and Japanese allies, the October 1994 Agreed Framework not only provided a means to address our concerns about the North Korean nuclear program, but also laid out a structure to pursue our other diplomatic objectives with the DPRK. The next phase of our efforts to engage the North is centered on the proposal made jointly by President Clinton and ROK President Kim in April 1996 for Four Party peace talks. In a major step forward in this process, next week, on March 5, I will sit down with a South Korean Deputy Foreign Minister to brief a delegation from the DPRK on this proposal. This joint briefing will, we hope, lead to discussions involving the North and South, as well as the United States and China, concerning a reduction of tensions on the Peninsula and the establishment of permanent peace to replace the 1953 Armistice. The_Agreed Framework: Nuclear Aspects Allow me first to discuss the current status of the nuclear aspects of the Agreed Framework. Most significantly, this agreement, if fully implemented, will both bring the DPRK into full compliance with its nonproliferation obligations under the Non-Proliferation Treaty (NPT) and require the North to go beyond those obligations by dismantling its existing nuclear facilities. In return the North will be provided with interim energy, in the form of heavy fuel oil, as well as two proliferation-resistant, light-water nuclear reactors. 40 - 3 - - The first step in moving towards eventual dismantlement of the North's existing nuclear program is a freeze on its key existing facilities. That freeze has been in place since November 1994 and is being continuously monitored by the International Atomic Energy Agency (IAEA) as well as by our own national technical means. In addition, the IAEA is currently engaged in negotiations with the North to prepare the ground for eventually instituting safeguards on its nuclear program. Under the Agreed Framework, the North will forego the right to reprocess spent fuel and will, instead, safely store and eventually transfer existing fuel to another country. I would note that existing fuel contains material which could be used to build nuclear weapons. Thanks to the hard work of a team of experts led by the Department of Energy, which is in North Korea working 12 hours a day, six days a week, the task of putting this material into storage under IAEA safeguards is more than half done. Actual canning of the spent fuel began on April 27, 1996, and is planned to be completed this year. Upon completion of canning activities, the spent fuel will remain at the spent fuel storage basin at Nyongbyon where it will continue to be subject to monitoring by the IAEA until it is shipped out of the DPRK. The Agreed Framework also provides that in return for the freeze and dismantlement of the DPRK's present nuclear program, the U.S. will organize under its leadership, an international consortium to finance and supply two light-water reactors (LWR), as well as the heavy fuel oil shipments, to the DPRK. Under American, South Korean and Japanese leadership, the Korean Peninsula Energy Development Organization (KEDO) has grown into an important arm of our countries' coordinated diplomacy. KEDO currently has eleven members, spread over five continents and has received international contributions from over twenty-one countries. I would like to highlight the European Union's (EU) recent decision to join KEDO as the fourth member of its Executive Board. This has increased KEDO's standing as a truly global organization. The EU's commitment to contribute $20 million annually to KEDO over five years has also helped put KEDO finances on a more solid basis. The combination of new EU funding, our regular contribution to KEDO and those of other countries, is critical, particularly in insuring KEDO's heavy fuel oil deliveries to the DPRK. has made steady progress in financing those deliveries and has met the obligations of the Agreed Framework. Nevertheless, KEDO is still running a deficit in its oil funding account, largely because of the initial shortage of funding, in 1995 and 1996. We will continue our efforts, in close cooperation with other KEDO members, to effectively deal with this problem. I would note that these deliveries are essential to the integrity of the nuclear freeze since they help compensate the DPRK for the loss of energy production from nuclear reactors which were 41 - 4 under construction before the Agreed Framework. I would also note that KEDO is taking steps to ensure the proper use of this fuel by the North and that we are following this situation closely. KEDO has accomplished much in preparing for actual construction of the LWR project. It has negotiated five protocols to the LWR Supply Agreement which define the terms and conditions for reactor construction. It has sent six teams of technical experts to the DPRK to gather necessary geological, environmental, and structural information about the proposed LWR site in the DPRK. These teams have consisted of U.S., Japanese, and South Korean experts. A seventh team will travel to North Korea on March 1. Final preparations for construction should be made in the next few months with groundbreaking on the project to begin this spring. I would add that, as the LWR project progresses, North Korea's contact with the world and with the ROK will rapidly increase. Most specialists working on the project will be ROK citizens and South Korea's national power company - KEPCO is the prime contractor. Already, it has facilitated North-South contact through almost constant KEDO-DPRK negotiations at KEDO headquarters in New York and through the regular visits of South Koreans, under KEDO sponsorship, to the North to prepare for the reactor project. Although the ROK and Japan will shoulder the bulk of the responsibility for the multi-billion dollar construction costs for the LWR project, continued U.S. funding for KEDO activities, primarily heavy fuel oil deliveries, remains an indispensable element in the viability of the project. The Agreed Framework: Enhancing North-South Contact In addition to providing a means of freezing, and eventually eliminating, North Korea's indigenous nuclear program, the Agreed Framework called on the u.s. and DPRK to improve bilateral relations in tandem with resolution of issues of importance to the U.S. The pace of change will depend, of course, on the degree to which the DPRK is prepared to move further along the positive path on which it embarked with the signing of the Agreed Framework. A key element, which at our insistence was written into the Agreed Framework, is the expectation of progress in North-South relations. In our subsequent diplomatic contacts with the DPRK, we have stressed consistently and frequently the necessity of such contact. This is both the most important and the most difficult goal in the entire enterprise, but even here some progress has been achieved. Here I would again call your attention to the sustained and business-like contact between North and South Koreans within the framework of KEDO. This contact will increase markedly as the LWR project begins on the ground later 42 - 5 - this year. As I mentioned earlier, the North's agreement to attend the joint briefing on the Four Party peace talks is another significant step in achieving this goal. US-DPRK Bilateral Business Two days after the joint briefing on the Four Party talks, accompanied by officials from the Defense Department and the National Security Council, I will meet with the same DPRK delegation to discuss the range of bilateral issues between our two countries. Among the issues I will raise in that meeting are our efforts to recover the remains of Korean War-era MIAS, our proposals to end North Korean development and export of missiles and missile technology, and implementation of our commitment to exchange liaison offices in Washington and Pyongyang I will leave to Dr. Campbell to describe our efforts to recover the remains of u.s. servicemen who died in North Korea during the Korean War, but I would emphasize that we consider this an extremely high priority issue. I would only add that the expansion of contacts into the military area is a positive development that can only help the process of opening North Korea. In April 1996, U.S. negotiators met with DPRK officials to discuss our concerns about North Korea's development, deployment, and proliferation of missiles and missile technology. As the Agreed Framework is allowing us to resolve our concerns about proliferation of nuclear materials, we hope that these talks will ultimately resolve our concerns about these dangerous and destabilizing weapons. Putting an end to these threats is a top U.S. priority. When I meet with North Korean officials in New York next week, I will propose dates for the next round of talks on this important issue. When we signed the Agreed Framework, we agreed to exchange liaison offices -- the lowest level of diplomatic representation between countries -- as soon as technical issues could be resolved. Although some of these matters remain unresolved, including arrangements for supplying and supporting our office in Pyongyang and the North's ability to find suitable offices in Washington, conditions appear to be improving for the realization of this commitment. The establishment of these small-scale offices would be of practical benefit to both sides. We are very grateful to Sweden for its willingness to act as our protecting power in the DPRK, but as American citizens increasingly visit the DPRK -- as journalists, academics, humanitarian relief workers or specialists in the canning, remains, or fuel monitoring projects -- we feel the need to be able to provide them directly with consular protection and support. A full-time diplomatic presence in Pyongyang will give us a first-hand perspective on the situation and provide 43 - 6 - us with improved access to North Korean officials. And it will facilitate the kind of diplomacy we have had to undertake through cumbersome methods until now, such as our efforts in December to resolve the submarine incident. In recognition of the progress made on issues of concern to us, we have taken a number of modest steps to ease economic sanctions against the DPRK. In January 1995, as Pyongyang began to cooperate in implementing the Agreed Framework, we took steps to permit U.S. companies to provide direct telecommunications services between the U.S. and the DPRK, to allow the import of magnesite from the DPRK, to reduce the restrictions on financial transactions not involving the DPRK government or its entities, and to authorize the licensing of U.S. business transactions that further KEDO's construction of light-water reactors in the DPRK. On December 30, 1996, we approved the license of a U.S. firm to pursue a commercial deal to sell North Korea up to 500,000 tons of grain, consistent with our policy of sympathetic consideration of all applications for provision of foodstuffs on commerical terms. However, negotiations to conclude this deal on a commercial basis have not yet been successful. We will consider further sanctions-easing measures as North Korea makes progress on issues of concern to us. Humanitarian Aid On a strictly humanitarian level, the U.S. has participated in international efforts to alleviate the suffering of North Korean civilians affected by recent flooding and food shortages there. Including our most recent donation, over the past two years, we have provided $18,425,000 in cash and in-kind support for emergency relief assistance -- basically, medical supplies and food -- for the North. for the North. These contributions have been made in the spirit of the American tradition of providing assistance to people in need, without regard to politics. Our most recent donation was a $10 million in-kind contribution to the UN World Food Program's February 13 emergency appeal. The delivery of our contribution -- a corn-soy blend used as a basic food for infants and nursing mothers, as well as rice and corn will be administered through U.N. agencies with staff in North Korea. The WFP, which will monitor the distribution of our contribution, has demonstrated its ability to ensure that assistance reaches the intended civilian beneficiaries, many of whom are children. The latest UN World Food Program appeal, even if fully subscribed, will only meet 5% of the North's estimated 2 million ton shortfall of grain this year. However, the appeal is designed to get food in the pipeline now for delivery to those most vulnerable to the threat of famine. The prospect of widespread hunger or even famine this spring creates the possibility of unrest, dislocation of North Korean civilians in search of food, and other difficulties. 44 - 7 - The U.S has not acted alone in providing humanitarian assistance to the DPRK. The Republic of Korea has announced that it will make a $6 million dollar contribution. Japan has $ made major contributions in the past few years, and is considering doing so again. Australia announced on February 21 a donation of over $2 million to the latest appeal. Many other countries have also contributed to this international relief effort. Next Steps Experience has taught us that it is difficult to predict the pace of progress in our dealings with North Korea, and events can move quickly on the Korean Peninsula. Steady progress on the implementation of the Agreed Framework and halting steps toward DPRK acceptance of the Four Party talks suffered a setback last autumn with the incursion into South Korean waters of a DPRK submarine and the infiltration into ROK territory of North Korean military personnel. A massive manhunt by ROK security forces eventually tracked down the infiltrators, but the "submarine incident" left many dead, threatened to derail the Agreed Framework, and dimmed prospects for the reduction of tensions on the Peninsula. As I mentioned, persistent diplomacy by the U.s., in close coordination with the ROK, resulted in the unprecedented statement of regret made by the DPRK last December and laid the groundwork for a resumption of our efforts to improve the situation on the Peninsula. If North Korea clearly calculates its own interests and opts for greater cooperation, including with the ROK, we can make significant progress. Inevitably, challenges will continue to crop up. Some of these obstacles are foreseeable -- others will arise without warning. North Korea's economic difficulties have created opportunities for diplomacy, but they also pose dangers. Although we do not believe that the collapse of the DPRK is imminent, its desperate economic situation cries out for immediate action by the North - both for internal reform and greater positive contact with its neighbors. There are indications that Kim Jong-il will assume his father's titles of President and Secretary General of the Korean Workers' Party sometime in the second half of this year. While this will formalize his assumption of power, we do not expect North Korean policy or decision making to change significantly. At the same time, we believe that these dire prospects are pressing the North Korean leadership to review its traditional isolation, a development we, the ROK and others want to encourage. We do not seek to perpetuate the system there, as some suggest. But as the North chooses between the kinds of changes that serve our interests and a fate that awaits it if 45 - 8 - it refuses to change, we also are not anxious to face these costs and risks if we can avoid them. We are assessing the impact and implications of the recent defection of Hwang Jang-yop, the senior North Korean ideologist, whose case, we trust will be resolved peacefully by China and South Korea in accordance with international practice. In summary, although there is clearly a long way to go, I am cautiously optimistic about our effort to promote lasting peace on the Korean Peninsula. This effort has been closely coordinated with the ROK, Japan, and our other friends and allies in the region and around the world. It has at its foundation the U.S.-ROK security alliance and our commitment to deter North Korean aggression. It seeks to reduce tensions , but insists on the principle of reciprocity enshrined in the Agreed Framework. It recognizes the long-standing American tradition of offering assistance to needy people regardless of the political views of their leaders. And, it offers the DPRK a way out of its current predicament -- through responsible engagement with the U.S., the ROK, and the international community. Our effort to promote peace is not an easy task, , but I believe this objective, and the unattractiveness of all other approaches, make it the responsible and proper course. 46 STATEMENT BY DR. KURT M. CAMPBELL DEPUTY ASSISTANT SECRETARY OF DEFENSE (ASIAN AND PACIFIC AFFAIRS) HEARING ON US POLICY TOWARD THE KOREAN PENINSULA SUBCOMMITTEE ON ASIA AND THE PACIFIC HOUSE COMMITTEE ON INTERNATIONAL RELATIONS February 26, 1997 Mr. Chairman, Members of the Subcommittee, I welcome the opportunity to represent the Department of Defense in this hearing on US policy toward the Korean peninsula. I would begin my statement with recognition of a fundamental point--the forty-three year old US alliance with the Republic of Korea has been a profound success and continues to serve as the foundation for a broad, solid bilateral relationship. The peace and stability fostered by our close security ties have greatly benefited both countries and contributed to the economic prosperity and democratic development of South Korea and the entire Asia-Pacific region. South Korea has risen from the devastation of the Korean War to become a regional and global model. In economic terms, the ROK has built the eleventh largest economy in the world. Politically, the South has made impressive progress in instituting democratic practices across the spectrum of government, from the local to the national level. While the lion's share of credit rightfully goes to the ROK population in achieving these political and economic milestones, the US security shield has no doubt been indispensable in providing South Korea the breathing space to pursue its impressive development course. 1 47 The security relationship has by no means been a one-way street. The US- ROK alliance has significantly bolstered US strategic aims in promoting regional stability and economic prosperity as well as reassuring all countries that the US is committed to an active engagement policy toward Asia. In deterring aggression from an often unpredictable and highly-militarized North Korea, the US has helped create an environment in which developing Asian states could pursue a political and economic course compatible with American values and beliefs, This is particularly true in the case of South Korea. As a result, the security alliance between the US and the Republic of Korea is more than a treaty commitment--it is a close, mutually beneficial partnership built on a shared stake in democracy and free markets. Our alliance is an essential element of the strategy for achieving our longstanding security goal--a non-nuclear, peacefully reunified Korean peninsula. Even after the North Korean threat passes, the US intends to maintain a strong defense alliance with the ROK, in the interest of regional security. The need for a combined US-ROK military command and force structure to protect our common values is more compelling than ever. Today the United States and South Korea confront twin security challenges on the Korean peninsula-- deterrence of armed conflict and preparation for crises short of war. On the first challenge, North Korea's large conventional military forces continue to threaten the security of the Republic of Korea. Two-thirds of its 1.1 million military personnel are positioned within 100 kilometers of the Demilitarized Zone, with a substantial artillery force capable of striking Seoul with little advance notice. In addition, North Korea possesses missile and other weapons 2 48 programs that heighten concern over its intentions. The US and ROK continue to focus their security cooperation on deterring the use of this military capability, whether in an all-out attack on South Korea or in a more limited military provocation. Let there be no doubt that deterrence is our first priority. Should deterrence fail, we will prevail militarily on the peninsula. At the same time, deteriorating economic conditions within North Korea and the recent defection of a senior DPRK official raise questions about future developments in the North. Therefore, it is only prudent for the US and ROK to consult closely and be prepared for a range of contingencies that may occur on the Korean peninsula. Without a close defense alliance between the US and South Korea, we would not be able to respond effectively to these challenges to our security interests. It is also important in a time of transition and uncertainty that we give no signals to North Korea that the calculus of the US-ROK security relationship, which has served us so well, is changing. We must strongly counter any perception in Pyongyang that it can drive a wedge between the US and ROK on security issues. US-ROK combined forces are better-equipped and more ready now than at any time in the history of the alliance. But maintaining capable and ready forces is a constant process. The US is engaged in ongoing efforts to modernize its peninsular force of about 37,000 military personnel with the latest military equipment, including AH-64 helicopters, Bradley Fighting vehicles, Global Positioning System receivers, frequency hopping radios, and a pre-positioned heavy brigade set. These measures have been complemented by ROK efforts to outfit its m with the most modern tanks, armored personnel carriers, self-propelled howitzers, and 3 49 fighter aircraft. The ROK commitment of resources to defense has been impressive, with over 21 percent of the most recent government budget devoted to the military. The ROK maintains 670,000 personnel in uniform and has pledged more than $1 billion in cost-sharing support for US military forces on the peninsula from 1996- 1998. Our security objectives in Korea have been greatly aided by diplomatic breakthroughs during the past several years. In particular, the engagement process begun by the US-DPRK Agreed Framework, which froze the North's nuclear program and its destabilizing potential, has defused the most immediate source of tension and deflected what could have been a military confrontation with North Korea. With the agreement and our underlying security commitment, we have preserved stability on the peninsula and created an opening to pursue other issues of concern, the most important of which, North-South dialogue, is the foundation for a stable, long-term peace on the peninsula. Other bilateral issues that we have pursued include missile proliferation and the recovery of Korean War remains. The Agreed Framework has also provided greater access to North Korea and some North-South contacts. The Defense Department is making a three-pronged approach to North Korea to account for those missing from the Korean War. First, we have made progress in recovering remains from the Korean War, completing one joint operation in July 1996 that yielded the remains of a US serviceman who was positively identified and buried by his family. Second, we hope to conduct archival research in North Korean records before undertaking additional remains recovery operations later this year. Third, we continue to seek answers from North Korea and other sources on any reports of live Americans detained in North Korea. Please be assured that the Defense Department is committed to pursuing this issue vigorously with the North. 4 50 Permanent peace on the peninsula will be accomplished only through diplomatic/political means, and the Agreed Framework begins that process by laying a groundwork for uncoerced reconciliation between South and North Korea. We must recognize, however, that this agreement is an initial step in a long and difficult course. Our desire for a long-term, stable peace on the peninsula will not be realized overnight, but that reality does not diminish the value of current initiatives toward North Korea. The alternative could very well be direct conflict with the North, which would take a devastating toll in lives and resources. For this reason, it is important а for the US to back the Agreed Framework, and the international consortium that implements its provisions, with the resources that will permit it to succeed. Until North and South Korea find a peaceful solution to their differences, we remain committed to the terms of the 44-year old Armistice Agreement. The Armistice Agreement and its mechanisms must remain until an appropriate arrangement supersedes them. Only South and North Korea can resolve the division of Korea; therefore, replacement of the Armistice by an appropriate agreement can come about only through direct dialogue between South and North Korea. The US, while addressing near-term security concerns, has worked hard to promote such a dialogue. 5 51 Statement of Ambassador James R. Lilley before the House of Representatives International Relations Committee Subcommittee on Asian and Pacific Affairs February 26, 1997 I am pleased to respond to the Subcommittee's request for views on North Korea. Secretary Albright's visit last week to South Korea demonstrated that we have a chance for a new beginning in America's relationship with our most endangered ally. South Koreans expected that because of her background, her reputation for toughness, her inherent anti-communism and her record of articulating allied interests at the United Nations, she might reverse the deterioration in American-South Korean relations. Their hopes were realized to an extent when she said that progress on the peninsula depends on how much the North recognizes the severity of its predicament and that the US-South Korean relationship was the bedrock for a Korean peninsula peaceful solution. That constitutes a clear and refreshing statement from this administration. The North must come to grips with its situation. Its people are starving, and even the most privileged among their elite are beginning to question the validity of their corrupt totalitarian ideology. “Can we call people sane when they talk of having built a utopia for workers and farmers when the workers and farmers are starving?” wrote Kim Jong Il's tutor Hwang Jang-yop last week as he sought asylum in South Korea's embassy in Beijing The spate of high-level changes taking place in Pyongyang these days suggest he is not the only high-ranking official challenging the logic of the destitute regime. At the same time that Kim Jong Il professes to support a red banner ideology of self-reliance, his officials are judged on their ability to beg for food from international organizations. They make desperate pleas for aid while clinging to a propaganda posture that extols failed leadership and threatens terrorism against their presumed enemies. By all accounts, the economy of the North is indeed collapsing, and starvation is widespread. Accordingly, the United States, which has little reason to sustain the regime, has pledged to send $10 million worth of grain, and South Korea, which has even less reason to aid its belligerent enemy, has pledged another $6 million. Japan is expected to contribute generously as well to the international effort. These contributions will not solve the North's problems, however, they are intended as a "bandaid.” Much will be said about guaranteeing that the food gets to children, civilians and the elderly instead of to the military. But, regrettably, all too little will be said about using this aid to persuade the North’s leaders to reform their system. 52 2 The North needs systemic agricultural and economic reform. They must break away from the concept that self sufficiency in food equals security in food. The basic fundamentals of their juche philosophy are wrong. They cannot grow what they need. In the past two years, floods have complicated their ability to grow food, but they have not caused the famines. North Korea's policies are to blame for pursuing a path to certain defeat. The regime would be wiser to recognize that the way out requires both economic and agricultural reform. North Korea has resources, including coal, other minerals, and magnesite which is increasingly valuable to high-tech industries. Earlier in this century, it also had industry. The economy of the North can be turned to produce more than the regime's officially-sanctioned smuggling effort in drugs and weapons. In any reunification scenario, the North is expected to provided labor rather than food. Its economy should be structured to provide resources and exports with which to fund purchases of food for their population Over the past two years, the United States provided food assistance to North Korea on four occasions to combat widespread damage caused by flooding. While supplying food aid is a noble, humanitarian gesture, the issue is so emotionally charged that it is easily manipulated by the cynical regime. The North Koreans have not provided adequate information to allow the rest of the world to access the true extent of their needs, yet the United States has been generous. The total amount of US money spent on relief has already reached $8.2 million. Recent floods doubtlessly eroded topsoil, but they may have been a financial windfall to the regime. South Korean sources have reported that the North may have received up to $130 million in crop insurance from private insurers, including Lloyd's of London. The total value received by North Korea is unclear, but we do know that one reinsurance broker disclosed involvement in a compensation deal valued at $25 million. North Korea's reluctance to disclose insurance payments makes sense when viewed in light of the statements of North Korean defector Choe Su-Ung. Choe was once one of North Korea's elite, having graduated from Kim Il-Sung University and managed a North Korean joint venture in London. He says North Korea's overseas officials were instructed by Pyongyang to play up the food situation in North Korea. In addition, Choe handled large sums of money for the North Korean elites, investing in Western enterprises and markets. The United States has also funded $26.5 million in shipments of heavy fuel oil, starting in 1994. The Department of Energy was authorized another $17.7 million to secure weapons-grade material from possible misuse. There was a $2 million cash payment to North Korean officials to buy their assistance in recovering remains of American MIAs. Another $8.2 million in food aid was sent to relieve North Korea of its food shortages. In total, the United States has already given North Korea well over $50 million. This is largely in consideration for their pledge to halt a nuclear program that 53 3 North Korea itself should have wanted to shelve because of its consequences for North Korea's environment. North Korea is now a major recipient of American foreign aid. How North Korea spends its own money gives us a certain perspective on why we should be careful how we spend ours. First, consider the North’s investment in its military. According to Defense Department estimates, North Korea spends 25-30% of its GNP on its armed forces. Compare that with the United States, which spends roughly four percent of its GNP on defense. North Korea is the world's most militarized economy, absorbing one of every five men of working age, and directing resources to unproductive projects such as a series of underground tunnels underneath the demilitarized zone. Four such tunnels have been discovered and as many as 20 more may exist. These tunnels were dug at enormous cost, to carry out a war of infiltration and aggression against South Korea. In addition, North Korea has massive reserve stockpiles of ammunition and POL, estimated at one million tons each, which it continues to expand despite tremendous cost to its economic structure and hardship to its people, according to a Defense Intelligence Agency report of 1995. North Korea still persists as a global security risk. North Korea's ballistic missile program dates back to the late 1980s. North Korea's Scud Bs have a range of 300 kilometers and can reach as far as Kunsan Air Base in South Korea. The 500 km range of the Scud C can cover the peninsula, and has a 700 kg warhead. Additionally, North Korea has produced a medium-range (1000 km) No-Dong missile with a 1,000 kg warhead, and two long-range missiles are under development: the Taepo Dong I and II, with ranges of 1500 km and 2000 km respectively. In 1987, the DPRK sold Scud Bs to Iran, and in late 1990, Scud Cs as well. North Korea's production capability for the No-Dong missile is stalled, so the Department of Defense has concluded that anticipated sales of that missile to both Iran and Libya have been shelved. It shipped SCUD missile materials to Egypt this past spring, a clear violation of the MTCR and the 1990 US antiproliferation laws. These missiles have a range of 300 miles -- and can easily reach Israel. North Korea, according to ACDA, exported $90 million worth of arms in 1993, a significant sum. Were the proceeds of these sales used to buy food for North Korea's people? We do not know. A recent report done jointly by the Center for Nonproliferation Studies in Monterrey and the Center for Contemporary International problems in Moscow has said that North Korea has been on a military shopping spree in Russia, China, Pakistan and India. It charges the North is upgrading its MiG-21s with more powerful engines and navigational equipment from India. Pyongyang has, the report claims, asked India for Russian-made systems, including Russian air defense systems, “tunguska” anti-aircraft systems, submarines, landing ships and automatic infantry weapons like “Kalashnikov” machine guns. 54 4 The North’s counterproductive spending does not end with the military. Millions are spent on self-glorifying, economically disastrous government projects while North Korea's citizens are told to eat less every day. North Korea has sacrificed the livelihood of its citizens in order to finance a personality cult centered on late President Kim Il-Sung. After the death of former President Kim Il-Sung, the presidential palace was remodeled to house the embalmed body, costing the government nearly $83 million dollars. The embalming itself, according to the Etar Tass News Agency, cost $6 million. In 1989, North Korea hosted the World Festival of Youth and Students. Having lost face to South Korea, which successfully carried out the 1988 International Olympic Games, North Korea imported 1,000 Mercedes-Benz automobiles to shuttle around guests for its festival. North Korea spent hundreds of millions of dollars for a sports stadium and for a 105-story pyramid-shaped hotel, which is unfinished, abandoned, and now scheduled for demolition. Pyongyang built this structure at a time when city hotels were operating at much less than capacity. The North Korean newspaper Pyongyang Times of North Korea provides us with interesting insights into where our taxpayer dollars end up -- helping to build a 100,000 square meters plaza and a 300 meter covered walkway to commemorate the second anniversary of Kim Il-Sung's death in 1996. Hundreds of thousands of elaborately trimmed granite slabs decorate this gigantic monument. And we also have the monument to victory over the American imperialist aggressors, built in 1993 -- a gigantic socialist facade with a 150,000 square meter plaza. The United States should not lose sight of the nature of the regime we are dealing with, as we seek to prove America's characteristic generosity and respect for international obligations. The regime has made little progress toward peaceful North-South dialogue. On June 25 of every year, including this past one, Pyongyang has launched a month-long propaganda campaign aimed at generating and deepening hostilities toward the United States and South Korea. In North Korean newspaper editorials, the government maintains that the United States initiated the Korean War to “conquer Asia and the whole world.” In a similar vein, North Korea moved to renourice its obligations under the armistice that ended the North Korean War in 1953. It continues to denounce South Korea in the most virulent terms as a war maniac and puppet. It seems to me we could be more realistic about how we manage taxpayers' funds. The United States needs to be circumspect about throwing money down North Korea's black hole. Efforts guided by humanitarian impulses do not always produce humanitarian results. As my colleague Nicholas Eberstadt recently reminded us, soon after the Bolsheviks took control in the Soviet Union, famine there compelled American attention. No less a figure than Herbert Hoover led an American relief effort (1918-1923), helping presumably moderate leaders of the new political elite deal with the food shortages caused by Communist policies -- one of these presumed moderates was Joseph Stalin. At its 55 5 peak, the Russian Relief organization was said to feed 10 million people per day, there is no doubt that its saved countless lives. But it also laid the foundation for Lenin's New Economic Policy, Stalin's rise to power, and Stalin's policies of forced collectivization, which may have caused the loss of substantially more lives. The situation in North Korea, like that of the Soviet Union in the 1920s, is what is now termed a “Complex Humanitarian Emergency” by international aid workers. As scientific as the term sounds, it is a euphemism for situations in which humanitarian needs are certain and severe, but no one dares say that the solution is the replacement of the regime responsible for causing the crisis. Our policy should be focusing on ways of promoting real, long-term change on the peninsula, not throwing money at an unfriendly totalitarian regime. Money without reform just leads to recurring hand-outs. The Agreed Framework is front-loaded to favor Pyongyang, and won't guarantee nuclear transparency for another decade or longer, but there are benefits, and the United States should stand behind its commitments in this agreement. We don't, however, have to match North Korea's profligacy dollar for dollar in order to do it, and we should monitor our efforts and demand a substantial quid pro quo. I suggest that there are six points that should guide our policy: We need a stronger, more comprehensive joint policy with South Korea. Bringing the alliance together behind a common strategy must be our first priority. We have to discard the moral equivalence that marked Secretary Warren Christopher's misguided comments last fall after a commando team was delivered by a North Korean submarine to swarm across the countryside murdering South Korean citizens. Secretary Albright seems to recognize how damaging her predecessor's comments were, and seems to understand the strategic consequences of such gaffes. Nothing is to be gained by seeking favor with the North at the South's expense. We also have to establish at the outset that we base the allied approach on a credible deterrence. We must continue to send a clear, unambiguous signal that any war will lead to the North’s destruction. In spite of the foul rhetoric that characterizes the North’s diplomacy, they recognize the cost of pursuing what they claim to be willing to do forcing reunification through war. They stop short of pursuing their threats because they know they will encounter overwhelming opposition. The consequences of war must always be made clear to them. It can no longer be used as a bargaining chip to get concessions. - A Major policy goal of the United States should be the reform of North Korea's agriculture and economy. That is an objective that we share with China, Japan, and South Korea. If the regime were not so mesmerized by its own ideological 56 6 propaganda and its desire to stay in power, it would be an objective of North Korea as well. We have to realize that throwing money at them without conditions merely makes us feel good and lines the pockets of North Korea's elite. China, with its own track record of spectacular agricultural reform -- from collectivization to private initiative -- is clearly the key. North-South dialogue must be resumed, and should be built on the North-South agreements reached five years ago. Two agreements, the Reconciliation and Denuclearization agreements reached between North and South in 1991 and 1992 serve as the bases of achieving unity, peace and stability on the peninsula. Pyongyang balked at implementing these agreements, especially when inspections conducted under the agreements uncovered the fact that Pyongyang had produced weapons- grade nuclear fuel. But the agreements remain as the basis for resumed North-South talks. We should also push for confidence building measures between the North and the South. This can include conventional force reduction under verification and withdrawals of troops from the Demilitarized Zone, the establishment of hot lines, exchanges of observers, and notifications of exercises. South Korea now maintains 90% of the allied forces along the DMZ, so the North has plenty of incentive to make this a topic for bilateral North-South talks. Within the context of these points, we should proceed with funding for the Korean Peninsula Energy Development Organization (KEDO), the most positive aspect of the Agreed Framework which the Administration signed with North Korea in October 1994. We should maintain the organization, live up to our commitments, and use the organization to monitor the North’s compliance with the Agreement. We should not focus so closely on the 1994 Agreement, however, that we forget North Korea's longer standing commitment to allow full challenge inspections by the International Atomic Energy Agency which insists North Korea has not lived up to its obligations. Secretary Albright seems to have passed the first test presented by the crisis on the Korean Peninsula. She has reaffirmed the primary importance of the alliance and called upon the North to recognize what it needs to do. Calling upon North Korea to get a grip on its predicament suggests that she is also capable of getting a grip on American policy and improving and strengthening our position on the peninsula. James R. Lilley is director of the Institute for Global Chinese Affairs at the University of Maryland, and an adjunct fellow at the American Enterprise Institute; he served as Assistant Secretary of Defense for International Security Affairs, November 1991- January 1993; Ambassador to China, 1989-1991; and Ambassador to the Republic of Korea, 1986-1989. 57 Testimony of Roy Richard Grinker, Ph.D. Associate Professor of Anthropology and International Affairs The George Washington University Senior Fellow, Atlantic Council of the United States of America Before House Committee on International Relations Subcommittee on Asia and the Pacific Prepared Statement February 26, 1997 58 Mr. Chairman, members of the Committee, thank you for the invitation to speak to you today about trends and projections that involve relations between North and South Korea. I should note at the outset that my views do not necessarily represent those of my University or the Atlantic Council. My testimony is based on research I conducted over the past several years. Part of the research was federally funded through the United States Institute of Peace. I also note that, although this hearing is about U.S.-North Korean relations, I will speak about both North and South Korea. I believe that any policy toward North Korea is also, de facto, a policy toward South Korea. As an anthropologist, my research addresses the cultural dimensions of a question of profound importance: How can South Koreans prepare for Korean unification? As one component of the research, I have interviewed many North Korean defectors living in Seoul and its outskirts in order to develop an understanding of what unified Korean society might look like. But I am also concerned with another question, perhaps more , relevant for this committee: How can the United States prepare for Korean unification? I will speak first, then, about how bilateral relations between the U.S. and South relate to unification, and second about the lessons we can learn from defectors. 1 If American military and policy analysts are correct in their assessments of the DPRK's collapsing economy, Koreans in both north and south may soon face dramatic change and stand on the brink of unification. Everyone would like to see a smooth transition to peace and unification, but in order to ensure such a transition the U.S. and the ROK need to ivordinate policy for unification and mitigate the possibilities for miscommunication. Coordination between the United States and South Korea is made difficult, however, by a limited amount of research conducted within South Korea on 59 unification, and within the United States on the role of the U.S. in unification. Moreover, within South Korea there is little public discussion of detailed unification issues, and although politicians call unification Korea's "paramount goal," they seldom provide details. South Korea risks repeating two mistakes made by Germany prior to unification: failing to discuss practical and specific dimensions of unification until after it occurs, and ignoring the extent to which half a century of division can produce significant social differences between the two sides of a nation. Germans have been fortunate that unification was not accompanied by violence; on the Korean peninsula, where south and north are still technically at war, more long-term planning is necessary. Planning is especially important because south Korea's financial resources are quite limited in comparison to those of the former West Germany, and North Korea's economy is demonstrably weaker than that of the former East Germany. The fact is that Korean unification will occur someday because Koreans want it to. It is a sacred goal for all Koreans, and it is especially important to the millions of people who remain separated from family members and hometowns. But unification could also have profound local, regional and global repercussions. Unification is not the end-game. It is a beginning. One approach I would advocate includes U.S. - ROK policy coordination that will not only help the ROK prepare for unification, but will also help the United States make inter-agency preparations for the range of contingencies in this volatile region, including the sudden collapse of the DPRK, the status quo, and gradual unification, among others. In both the U.S. and ROK, the majority of policy studies on Korean issues concern North Korea's nuclear buildup and the Geneva Agreed Framework, and do not articulate how the U.S. can achieve a coherent policy toward the Korean peninsula or a policy consensus between the U.S. and the ROK. This is a special problem today, as south Korean-U.S. relations appear increasingly strained. Although unification can be considered to be a largely internal Korean matter, United States policy has a major, if 60 sometimes unwitting, effect on prospects for unification. Events on the peninsula affect U.S. military, political, and economic interests in East Asia, and the words and actions of the United States government directly influence north-south relations. I realize that many South Koreans have the worthy hope that the U.S. will have little role in economic and security policy in post-unification Korea -- indeed, unification is often equated with autonomy and independence from the United States. However, the enormous costs and complexities of unification make it inevitable that external help will be needed, even if the help is confined to international financial assistance. A U.S.-ROK coordinated policy, not simply a consultative process, will help the two countries integrate their different interests, and might also help the U.S. government to more clearly articulate U.S. goals in northeast Asia. The importance of limiting North Korea's nuclear buildup is not difficult to explain to the American people; however, the presence of U.S. forces in South Korea, especially if they are actively threatened, and the likely cost-sharing necessary in any unification scenario (no matter how soft the landing), requires a more substantial Korea policy than is currently available. Coordination may also require that the President appoint a special envoy or coordinator so that greater attention is given within the administration to policy coordination, a role that Ambassador Robert Gallucci once played. It is clear that both the United States and South Korea have put considerable effort into the push for four-party talks, but at this point there is no single individual or office to which Koreans can direct their communications. KEDO is currently the only arena in which the U.S., South Korea and North Korea communicate with one another on a regular basis, but KEDO involves a limited number of issues, however important they may be. Positions such as special envoys and coordinators are often created in crisis situations. Let us have a structure in i place before a crisis occurs. Among the other benefits of a coordinated policy is that it would shift American and Korean foreign policy perspectives to longer-term security and economic concerns, such 61 as post-unification coordination. Specific data, such as defector materials, have to be analyzed not only for what they tell us about North Korea but for what they tell us about the integration of South and North Korean labor in a unified Korea. Information on North Korea needs to be analyzed not only for evidence of current North Korean agricultural losses and impending economic collapse, but to develop strategies for dismantling or preserving different components of the North Korean economy. Other data from North Korea, especially those pertaining to labor, industry, and infrastructure, need to be analyzed in terms of the contribution or harm of a unified economy to South Korea, the United States, and Korea's Asian neighbors. For example, the South Korean economy needs to be equipped to deal with North Korea's overproduction of heavy machinery, and underproduction of valuable minerals such as anthracite, zinc, and iron ore. Longer range policies aimed at ensuring economic prosperity in the region may also require that bilateral U.S.-ROK and U.S.-DPRK talks be refigured in terms of a multilateral defense policy, thus securing a more flexible defense, greater and more secure access to markets, and at the same time preventing the DPRK from excluding the ROK from international diplomatic and trade negotiations. Another advantage of coordination is that South Korea and the United States need to determine their shared and diverging interests, as well as minimize unnecessary distortions. Let me give three examples of how the United States' commitment to South Korea is interepreted in South Korea in a way that diverges from the United States' intentions. All three examples illustrate how many in South Korea have come to believe that the United States is content with the status quo of a divided Korea. First, South Korean scholars and policy makers seldom differentiate between peace and unification because, from the Korean perspective, the two are inseparable. It is undoubtedly in the interests of the United States to secure peace in Korea, for trade and security reasons, but a divided Korea does not necessarily, and under all circumstances, go against U.S. interests. This perspective is often misinterpreted by South Korea to mean 62 that the U.S. wants to preserve the status quo. Indeed, I believe that this distinction between peace and unification is a potential point of conflict between the United States and South Korea. Second, United States officials have on a number of occasions attempted to assuage South Korean concerns about their future by saying, "You have won. You have achieved more than North Korea in every facet of life." Again, this statement is easily misinterpreted as the support of the status quo. South Korea responds by saying, "If we have won, where is our reward?" by which they mean, the unification of the two Koreas that will finally end the war, reunite our families, and give us sovereignty and autonomy. Third, there remains considerable potential for miscommunication about that portion of the Geneva Agreed Framework in which North Korea agrees to a dialogue with South Korea. South Koreans with whom I speak are concerned that the United States believes KEDO represents a dialogue between South and North Korea. Statements I have heard off-the-record lead me to share South Korea's concern that there is less than adequate clarity in the United States government on the question of whether KEDO constitutes a dialogue. From the South Korean perspective KEDO is not dialogue. Unfortunately, "dialogue," as it appears in the Agreed Framework, is neither specified nor given conditions or timing. Moreover, the Agreed Framework does not link dialogue to any other part of the agreement. 2 Let me now address the issue of defectors. They are a model -- the only model -- for predicting future social problems in a unified Korea. Despite the presence of about 700 defectors in the south, whose travails suggest some of the social problems facing a unified Korea, almost nothing has been published in the Korean language about their adjustment to the south. Few scholars address the social and 63 cultural differences between North and South Koreans. The reason for this absence of research is that differences between North and South Korean people are usually attributed only to the North Korean state. South Koreans therefore know very little about the lives of the North Korean people. The conventional wisdom -- wrong in my view -- is that North Koreans remain frozen by communism and the North Korean state. According to this perspective, when the state dissolves, North Koreans will thaw out and emerge as true Koreans -- to some extent even more pure in their Korean identity than many of the South Koreans, who feel that they have been corrupted by Westernization. In other words, unification is largely conceived in South Korea as the assimilation or absorption of North Koreans into South Korea. South Koreans who speak and write about unification expect unifomity and homogeneity if not in the immediate future than within a limited number of years. Cultural differences are glossed only in negative terms, as there is no positive conception of diversity or plurality in South Korea. Although the South Korean government has recently abandoned the frequent use of the Korean term for "unification by absorption," this remains the dominant hope in South Korea, and the defectors I know tell me that North Koreans in North Korea are uncomfortably aware of this expection. Defectors are important to study for two reasons. First, they can provide valuable information about North Korea. My personal opinion, however, is that the most valuable information they provide concerns the potential integraton of North and South Korean society, rather than the North Korean leadership. I base this opinion, in part, on the fact that most defectors have not lived in the innermost circles of North Korean politics, and so actually know very little about the North Korean leadership. Second, defectors are the only tangible evidence we have for potential social and economic conflict within a unified Korea. Both Korcus continue to perpetuate a myth of sameness that cannot be reconciled with more than fifty years of division., and the defectors are a good model for predicting that the myth will not become a reality. 64 Another reason why the defectors have been seldom analyzed for what they tell us about the future is that current unification scenarios are lacking in an important respect: they are all founded on the premise that unification itself is the endgame, with little or no attention paid to the consequences. Indeed, few Korean scholars or policy makers study unification as a point of origin, or as a process that requires planning for the long term. Even Helmut Kohl's administration in West Germany, which framed German unification strictly in material terms, did not foresee the widespread costs, and dissatisfaction with unification. Although early in his administration President Kim Young Sam ordered several government agencies to analyze social aspects of unification, they have not cooperated with one another, and their results are unavailable for government or public discussion. The central conundrum about unification in all of these discourses today is that unification prospects are associated primarily with the future of the North Korean economy, and are not linked to social issues; it goes something like this: if North Korea is made more economically healthy, then unification is less likely; yet, if the North Korean economy collapses, then unification is more likely to occur but with devastating economic effects. Korea's myth of homogeneity cannot be reconciled with real social, economic, and political differences that will produce costs, whatever the peace dividend. The range of possibilities for social conflict and discrimination, massive unemployment, revenge attacks, political strife, and economic crisis, is staggering. If there is a massive movement of people from north to south, what will South Korea want the United States to do? If there is a massive movement of North Koreans into China, what will China do at its border? Another question that needs to be considered is how the north and south can be integrated socially and economically when there are so many ticavages, such as between the southeast and southwest, within South Korea itself. These cleavages are exacerbated ? by the absence of a concept of diversity or plurality in Korea. Because there is little 65 interest in or acknowledgement of diversity, some of the most important questions about Korea's future are impossible to ask: How are South and North Koreans different? And how will these differences express themselves in a unified Korea? 3 Most of the defectors with whom I am familiar are not doing well in South Korea. In addition to feeling isolated, they feel they are discriminated against, especially in relation to other defectors. Some believe they are treated less well than foreign guest workers. Many are distressed by what they perceive to be a general South Korean view that nothing in North Korea is worth preserving. When they do not achieve economic success they become anxious that they have nothing to show their North Korean relatives in the future for the pain they caused through their defection. They are accused in South Korea of having no sense of loyalty to family. And of course, even raising families and thinking about families is quite different in north and south. North Koreans do not keep genealogies or worship ancestors as South Koreans do; South Koreans do not have the t'akase or day care centers that North Koreans have. Having lived only in a communist regime that made so many decisions for them, the defectors are beleagured by the everyday choices they confront. They have a hard time reading Korean newspapers because they never learned to read Chinese characters. Many find it difficult if not impossible to marry, they suffer guilt about the plight of the families they left behind and have few friends; about half are unemployed. They are angry that the South Korean government will not give them a role in shaping unification policy or beginning a dialogue on the social dimensions of unification. They are often fearful that they will become the objects of revenge attacks committed by South Koreans. Ironically, in the wake of the assassination attempt against the defector Yi Han Yong, the defectors now appear more fearful of attacks by North Koreans. 66 What also becomes clear in my work is that defectors are simultaneously loyal to South Korea and yet proudly tied to the north. After all, even South Koreans who are descended from northern hometowns feel themselves connected forever to the north -- not, of course, as a different country, but as a place of origin. This was brought home to me by a defector who said, "I guarantee you there is no defector in South Korea who did not weep when Kim Il Sung died." It would be a mistake to assume that North Korean defectors will ever be replicas of South Koreans, any more than one would assume that poor and rich South Koreans, male and female South Koreans, South Koreans from the southwest and from the southeast are identical to one another. I hope that North Koreans who come to South Korea will be treated in a way that does not discard the 50 year history of nearly 30 million North Koreans in monolithic terms as evil or wrong, and does not simply denigrate North Koreans as simple, brainwashed followers of a political cult. South Koreans have begun a discourse on the North Korean people. Footage from north Korean news broadcasts is now aired, middle school textbooks now approach the topic of difference and are in fact critical of the pejorative term ichilgam (sense of cultural difference), and specifically different attitudes towards work, and just a few months ago on television, two Koreans, one a North Korean defector and the other a South Korean comedian (both, incidentally, named Kim Yong), performed a stand-up comedy routine about their cultural differences. It remains a significant problem that all North Korean magazines, newspapers, films, etc. remain classified. North Koreans can help make Korea a greater political and economic power, but the chances for success are much less, and the chances of social and economic disaster much greater, if the south does not begin to talk about the North Korean people, and offer a plural society in which they can one day live. 67 DANGER AND OPPORTUNITY ON THE KOREAN PENINSULA: CHALLENGES TO U.S. POLICY TESTIMONY OF ROBERT A. MANNING SENIOR FELLOW PROGRESSIVE POLICY INSTITUTE BEFORE THE HOUSE OF REPRESENTATIVES COMMITTEE ON INTERNATIONAL RELATIONS SUBCOMMITTEE ON ASIAN AND PACIFIC AFFAIRS February 26, 1997 68 Introduction Mr. Chairman, members of the committee, I am grateful for the opportunity to appear here today. I want to commend the committee for focusing this timely hearing on the Korean predicament. It is difficult to disagree with former Assistant Secretary of State Winston Lord's assessment that the Korea problem is,"perhaps the most urgent security challenge facing the administration anywhere in the world." Recent events—from the North Korean submarine incursion into South Korea last September, to the recent defection of Hwang Jang-yop, the highest ranking North Korean official ever to do so, and most immediately, the looming specter of widespread famine all underscore the volatility of the situation in Korea. It is difficult to overstate the risk to American lives and interests and those of our South Korean allies posed by the heavily-armed standoff in Korea. One must hope that President Clinton's new foreign policy team devotes the amount of sustained top-level attention to managing the inevitable transformation of the Korean Peninsula which it merits. It should be a top national security priority. A scenario of either desperate explosion or implosion in North Korea involving military conflict would have an enormous impact on the U.S. position in East Asia, a "Korea shock" which could well alter the geopolitical equation in the Asia-Pacific. Mr.Chairman, I believe we may be approaching a turning point in Korea, a moment of perhaps of heightening danger but also of new opportunity. I say this based not on the idea that the collapse of North Korea is necessarily near, but on the premise that desperation tends to focus the mind. And in a word, desperation may best characterize the opaque regime in Pyongyang. Pyongyang's willingness to attend the US-ROK joint briefing in New York next week and its consideration of participating in broader four party talks are a measure of what might be termed necessity as the mother of cooperation. For this reason, I would to take the opportunity here to outline what I think are common misperceptions about North Korea and its behavior. I will also touch on what I view as inconsistencies in American policy, and suggest approaches for U.S. policy which may offer the best chance of success. There are some fundamental questions that should be 69 examined: how is it that this pathetic Stalinist dinosaur has been able to control the diplomatic agenda in recent years? Why do we have an economic embargo against the DPRK which prevents them from selling goods to buy food, even as they are one of the largest recipients of U.S. aid in East Asia? Do we want to engage and open up North Korea or isolate it and squeeze it until it breaks? Is the DPRK a partner in non-proliferation or a rogue state? Current issues Let at the outset touch on one pressing issue of the day that reveals much about the desperate situation in North Korea and much that is troubling about our dealings with Pyongyang: emergency food aid. There is little doubt that thousands of North Koreans face starvation in coming months, as the recent UN appeal suggests. This is in part the result shortages from two years of horrible floods, but also reflects the larger problem of a failing totalitarian state whose economy, and particularly whose agricultural sector, is in shambles. Beyond the 1.8 million ton grain shortage North Korea faces this year, it faces shortages of at least 1.2 million tons a year for the next several years. The issue is not just an emergency now. After six consecutive years of negative growth which has contracted its economy by some 30%, there is a longer-term dilemma of how to deal with a failing state that threatens vital American interests. America has a noble tradition of humanitarian compassion. But unlike starving Angolans and Sudanese whom we fed, North Korea literally has a gun at our head even as it begs for relief. Moreover, given the persistent and growing needs of North Korea, where do we draw the line? After all, the same North Korean system which threatens American troops and our South Korean allies is also responsible for the tragic situation facing thousands of its people. Indeed, my information is that despite looming mass starvation, Pyongyang has this year stepped up its military operations, choosing guns over butter. One lesson that should have been learned from our recent experience in Somalia is that there is rarely a purely humanitarian issue. While the immediate situation may warrant emergency food shipments, the U.S., South Korea and Japan should place the food issue in a larger framework of policy towards North 70 Korea before delivering any massive food transfers. Japan has large rice surpluses which are more expensive to store than to donate, and Seoul has also hinted that it would consider providing large-scale food aid under certain circumstances. In sum, this food question underscores the need for a more comprehensive approach to the Korea problem. Until very recently, policy has been focussed on—if not defined by—the issue of North Korea's nuclear weapons program. The move toward four party (U.S., China, South Korea, North Korea) talks, though still vague of purpose, offers the prospect of embedding the Agreed Framework in a larger policy designed to reduce the North Korean military threat and foster North-South reconciliation, while regaining control of the diplomatic agenda. Assessing the Nuclear Accord Let me also briefly comment on the October 1994 Agreed Framework which has shut down North Korea's known nuclear weapons program. This first ever deal between the US and North Korea has been viewed skeptically by many in Congress. I believe this is an understandable consequence resulting from the character of the totalitarian regime in Pyongyang, less than ideal consultation by the administration, and the absence of a larger strategy to deal with the conventional military threat from the North. The nuclear issue is but one aspect of a larger Korea problem. But the risk both to the non-proliferation regime and to regional security of a DPRK with an on-going nuclear program, one that three years ago was on the verge of expanding, is substantially grave that the nuclear accord should stand or fall on its own merits. On its own terms, the nuclear accord has been largely successful. The North Korean nuclear program has been frozen. The fuel rods from the reactor core which it had removed, with enough plutonium for 3-4 bombs, have been canned. The Korean Energy Development Corporation (KEDO), ably directed by Ambassador Steve Bosworth and his team, have negotiated detailed arrangements to begin constructing two light Water Reactors (LWRs) in North Korea. Pyongyang has generally cooperated, allowing US officials wide access to its nuclear site at Yongbyon. There has even been a significant amount of dialogue between North and South Korean officials within the KEDO process. Moreover, as the principal channel for diplomacy between the US, South Korea and North Korea, and as the source of 71 500,000 tons of heavy oil annually, North Korean officials appear to display a sense of investment in the nuclear accord. Nonetheless, implementation has thus far not been problem free. Negotiating the detailed agreements and protocols for the massive $5-$6 billion LWR project have been tortuous. Moreover, the International Atomic Energy Agency (IAEA) has complained that North Korea has given less than full cooperation in preserving its past nuclear activities. This may have created new difficulties for IAEA efforts to determine the DPRK's true nuclear history at the point in implementation of the accord three or four years hence when full compliance with IAEA obligations is required for delivery of critical nuclear components. This will also be a prerequisite for a U.S.-North Korean nuclear cooperation accord to allow American companies to participate in the LWR project. Compliance by both sides in regard to the non-nuclear aspects of the accord has been sorely lacking: Pyongyang has not pursued North-South dialogue, and the U.S. has neither substantially loosened or lifted the trade embargo nor opened a liaison office in Pyongyang. On balance, however imperfect, the nuclear accord appears to be achieving its basic purpose, and I would urge Congress to appropriate the roughly $25-million for heavy oil to meet U.S. obligations. Failure to meet our end of the bargain would likely have a spiral effect in Seoul and Tokyo, who bear the lion's share of the burden, some $3.5 billion and $1 billion, respectively. The accord could easily unravel, and remove what relative stake North Korea has in cooperation, which despite periodic provocations and mini-crises has, again, in relative terms, provided a modicum of crisis stability. Beyond the Nuclear Issue The problem is less with the Agreed Framework than the inability thus far of both Seoul and Washington to build on the accord and create an incentive structure to reduce the North Korean conventional military threat and place North-South reconciliation at the center of diplomacy. Indeed, even North Korea's statement of regret issued New Year's week was done via U.S. mediation with no direct contact with South Korea. It must be said that in light of the chronic problems facing North Korea as a dilapidated economy and anachronistic totalitarian state, it is possible that no policy, however well-conceived and well-executed may 72 succeed in saving North Korea from itself. Without question, a world without North Korea would be desirable. But the risk that Pyongyang would not go quietly into the night as did the East German regime, but would engage in at least "sue for peace" military action suggests that it would be less than responsible stewardship of the national interest not to actively pursue diplomatic efforts at gaining a "soft landing" and gradual reunification process, so long as such efforts are underpinned by credible deterrence. Indeed, the logic of the nuclear deal was in essence, a quid pro quo: Pyongyang would trade its ultimate insurance policy, its nuclear weapons program, for a new economic and political engagement with the U.S., South Korea and Japan. It suggested, in effect, the first phase of a bail-out for a failing state. The implicit premises of the deal were: on the North Korean side, it needed economic aid, trade and investment to revive its moribund economy as key to its survival; and on the US-ROK-Japan side, the desire to avoid both a war or a collapse and achieve a 'soft landing and gradual reunification process drove a logic of magnanimity. The implicit assumption of the nuclear deal was that it would serve to catalyze the broader possibilities of multi-faceted economic and political engagement of Pyongyang with the international community. There should be a valuable lesson about dealing with North Korea from the nuclear accord. Starting from the reality of credible U.S. deterrence ruling out force as a viable option, when a package was put on the table which took into account legitimate North Korean concerns, however convoluted the process, they did respond positively Life After the Agreed Framework Yet as the Agreed Framework has unfolded, it does not thus far, appear to be following such a script. The underlying premise -- that Pyongyang viewed an opening of its economy to foreign investment aid and trade as the least bad choice of a menu of unappealing options—now appears highly problematic. Unlike China and Vietnam -- and even less so than Cuba -- North Korea has only experimented at the margins with economic opening. It has thus far sought to limit such involvement to isolated locales, particularly Rajin-Sonbong in the far northeast corner of the country, around which it has built a barbed wire fence symbolizing its larger fears of a Trojan Horse in its midst. It has not embarked on internal market reforms comparable to either China or Vietnam. It appears that the North Korean elite knows that its 73 system is broken, but does not know how to fix it without taking unacceptable risks to its hold on power. Put another way, Pyongyang is aware that our incentives may be poison apples, and is reluctant to take a large bite. Thus the North seeks to open up only at the margins, willing to take only minimal risk to its political system and obtain all investment and aid possible, but only on its terms. This appears a kind of "muddle through" strategy. The challenge is whether any incentives can persuade Pyongyang that taking such a risk is the least bad choice it faces. Similarly, on the U.S. and South Korean side, policies designed to put North Korea on life support have not been systematically pursued. If our goal is to open up the North, why have an embargo? This is at bottom, the result of North Korean behavior and the residue of four decades of confrontation. Seoul has allowed only modest and tightly controlled business involvement with the DPRK. North Korea's strategy of forging a strategic relationship with the U.S. and a lack of clear direction in South Korean policy has made it difficult for any genuine North-South reconciliation to occur. Under pressure from a reasonably skeptical Congress suspicious of the Agreed Framework and from Seoul to go slow, Clinton administration efforts to move towards more normal economic and political relations have thus far been minimal. U.S. policy into 1997 has been limited to a narrow interpretation of the Agreed Framework, essentially little beyond organizing the Korean Energy Development Organization (KEDO) and the supply of heavy oil to North Korea. Apart from $10 million in emergency food aid and an easing of restrictions on NGOs to engage in humanitarian activities in North Korea, little movement has occurred. There has not been any substantial easing of the trade embargo against North Korea, nor has Pyongyang been removed from the list of nations supporting terrorism, and the exchange of liaison offices promised in the nuclear accord has bogged down in diplomatic detail. At the same time, North Korea's economy continues to deteriorate. Since 1991, North Korea's downward economic spiral has continued with few signs of positive economic trends. Devastating floods in 1995 and 1996 not only resulted in a 1.2 million ton grain shortage, according to the UN food Program, but caused long-term structural damage to food-growing areas. North Korea will face a similar shortfall in 1997 and probably for the rest of this 74 century. There are increased reports of major factories shut down or operating at low capacity as well as frequent power outages, a deteriorating infrastructure and a breakdown in its centralized system as regions and factories with anything to sell have been allowed to try and barter their goods for food at the Chinese border. I would add here parenthetically that China last year appeared to have made a strategic decision to renew political, economic and military ties to Pyongyang, including as much as 500,000 tons of food aid. Beijing's desire to defer if not avoid instability, potential refugee flows, and a democratic, free market unified Korea allied to the United States on its border helps explain such a choice. Preparing for the Endgame: Soft Landing or Implosion? The danger is that unlike East Germany, North Korea may not go quietly. Seoul, Washington or Tokyo have only recently begun to prepare for any sudden change in the status quo. Episodic discord over the issue of humanitarian food aid highlights the difficulty in coordinating policies. And regardless of any initiatives, at the end of the day, there is no guarantee that North Korea's future can be decided by external actors. While there is widespread international consensus that a soft landing and gradual reunification process is the preferred outcome, it appears increasingly difficult to obtain. In the optimal scenario, reunification would be a multi-stage process, beginning with modest confidence building measures and an emphasis on economic cooperation. The December 1991 North-South agreement on reconciliation and cooperation offers a more than adequate framework for such a process, with various joint commissions overseeing each realm of inter- action. Accelerated economic activity along with social and political interchange such as exchanges of divided families, mail and phone communication would occur in the initial phases. In the military realm, agreements on a hotline, notification of exercises, and a talks on a pull back of troops and artillery to an agreed distance from the DMZ might be an initial phase of CSBMs. The larger question of a major reduction of conventional forces, perhaps modeled on the experience of the Conventional forces in Europe (CFE) would be substantially more difficult. Such an arms reduction process would be more likely to begin in a way that could make progress in a second phase of this reconciliation process. 75 Similarly, in the areas of economic, social/cultural and political a first phase which one can consider beginning in 1991 and lasting for perhaps another 1-2 years would include initial tentative movement. Seoul, as it appears poised to do, could raise the $5 million limit on direct investment. Seoul and Pyongyang might agree to request a Korean Reconstruction Fund be created as a window in either the World Bank or Asian Development Bank. Initial cultural exchanges—sports, dance, arts, film—might occur. Efforts to allow Pyongyang to host some of the 2002 World Cup events might also be of symbolic value. In the second phase, there would essentially be qualitatively and quantitatively, more of the same. More economic involvement, more social/cultural exchanges, wider contact and progress on confidence building measures and arms reductions. The assumption here is that this process would produce enough tangible benefits to strengthen the Pyongyang regime such that any dangers to it from the shattering of social myths would be offset by the material progress resulting from its opening. This might then provide a new sense of legitimacy by performance, enabling the regime to, in effect, forge a new social contract based on the concrete benefits to North Koreans everyday life and a looser authoritarianism by the state. This is roughly what has occurred in China, and to a lesser degree, in Vietnam. The third stage would be one variation or another of the confederal models which have been proposed by Pyongyang, Seoul (and by opposition leader Kim Dae Jung). Broadly it would be a version of a "One country, two systems" model. Again, the premise here is that the DPRK economy is revived sufficiently to sustain North Korea as a functioning entity. Discussion of the details of the various confederation proposals is beyond the scope of this paper. But initially it would permit both Korea to maintain their respective political systems and military forces, gradually moving towards unifying them. Perhaps an inter-Korean parliament which might over time merge with the North and South's respective legislatures There would initially be the outward symbols of unification, one national flag, one Olympic team, one Asian Games team,etc. At a latter point in this stage, there might be a merger of foreign embassies and joint diplomatic representation.. How probable is such a best-case scenario? It is difficult to gauge, but judging from the reluctance of Pyongyang to pursue wider economic openings, internal market-oriented 76 reforms and even things such as family exchanges, it appears that the fear of not being able to control any opening up is a significant,and perhaps insurmountable impediment. While there are signs of incremental change, and certainly a new openness to foreign investment and trade, the regime's behavior suggests that it believes the extreme closed nature of North Korean society is viewed as key to its rule. The question would be whether it has or can reach a state in which the benefits of pursuing such a strategy would be outweighed by the risks of implosion? While this is not impossible, it is difficult to view it as highly probably unless there is a rapid and radical change in Pyongyang's economic policies, both domestic and international. The structure of the DPRK economy bears more resemblance to the industrial economies of communist eastern Europe than to China and Vietnam. Thus would likely require "shock treatment" to resuscitate its moribund economy. This would be even more difficult to achieve than the type of initial reforms which China or Vietnam have implemented and would almost certainly have dire political consequences for the ruling elite in Pyongyang. Thus, it is possible that the regime might offer "too little, too late," to turn its situation around. To achieve a soft landing requires above all, a level of comfort and trust between North and South Korea that is difficult to imagine at present. Behind Pyongyang's resistance to serious North-South reconciliation is a problem of legitimacy. If the North abandons its Confucian-Leninist ways, or more precisely "Kim Il Sungism," what is the basis of legitimacy of the North Korean state. Certainly not performance. To overcome this problem requires a psychological transformation beyond the "zero- sum" psychology of the past four decades. In short, it would require the ROK to become a "good winner" and the North to be a "good loser." The US and ROK must find a way to assuage the DPRK fear of absorption. If that is possible than a soft landing either under the scenario described above, or by a form of "peaceful implosion," a variant of what occurred in places such as German y or Romania might theoretically be possible. But such an outcome means, as Winston Churchill advised half a century ago, "In victory, magnanimity." What is to be Done? 77 As a practical matter, the US and ROK need to transform the dynamics of diplomacy with the DPRK. The absence of a clear sense of strategic direction has made it easier for the North to set the agenda. It makes no sense for a desperate failing state to be calling the shots. This is in part because it has a clear strategy: forge a strategic relationship with the US as a kind of security blanket or buffer against absorption from the South. One reason we go through the continuing cycles of crisis is because structurally this strategy can not work, the US will not trade the ROK for North Korea. Yet it continues to create deep strains in the US- ROK alliance. Moreover, the lack of a clear sense of direction in U.S. diplomacy, a sense of what the endgame is, tempts Pyongyang to take provocative actions, to shake the tree, if you will, and see what falls down. There is a compelling need for a sort of roadmap, a coordinated gameplan between the US and ROK, and then with Japan. Such an approach was successful in creating a confidence-building process which led to normalizatison of relations with Vietnam—even though Hanoi never formally accepted the idea. This means creating an incentive structure such that there are reciprocal steps taken by the DPRK and by the US-ROK-Japan. The broad trade-off is security for economics. The U.S. goal should be to reduce the North Korean military threat--artillery, Scuds, chemical weapons, and ultimately, major conventional force reductions. If the military threat is neutralized, the urgency of the problem diminishes sharply. In return, the US-ROK-Japan would at each step provide various blandishments: lifting the US trade embargo, some level of ROK and Japanese investment and/or aid. The four party talks or an alternate multilateral framework would be an appropriate forum for such a political process. One notional step might be "norms for norms." That is to say, in exchange for North Korean compliance with the MTCR, accession to CWC, and biological weapons treaty the US would lift the embargo, the DPRK could join the World Bank and Asian Development Bank, perhaps APEC. A Korean Reconstruction window at the World Bank could be opened focused on economic reform of both industry and agriculture and to which Europe and Japan could contribute. Failure to embark on such a larger strategy in which to embed the nuclear accord will likely mean it will not be sustainable. Growing pressures from the Congress, Korean National 78 Assembly and Japanese Diet continue to put KEDO at risk. North Korea will balk and likely provoke mini-crises. This leads to another, and perhaps more likely scenario, an implosion. This is a collapse resulting from internal social and political convulsions. There are at least two variations on this theme, a collapse of regime and a collapse of total state authority. Both could grow out of failed efforts by Pyongyang to achieve a soft landing. Either could evolve а over the next 2-5 years if we continue in the current incremental "muddle through" mode. Contingency Planning Notwithstanding a historical pragmatic "can do" tendency in American thinking, the reality is that not all problems have good solutions. At the end of the day, one can not save a failing state from itself. Even the best policy, adroitly implemented, can only create political circumstances which make it as easy as possible for Pyongyang to make the desired choices. Certainly four decades of confrontation can not simply be erased from Korean or American minds by policy decree. This suggests a compelling need for accelerated and more in-depth policy coordination and contingency planning. One problem on the American side is that Korea has been treated as a second-tier issue. There is no surfeit of Asia hands in senior policy-making positions in the administration. The issue has not received sustained week-to-week high-level attention necessary to manage the Korean Peninsula commensurate with the geostrategic stake for US interests in the Pacific. Witness the freelance diplomacy done at various points—however positive the results—by former President Carter, and then Congressman Bill Richardson. Is this the best way to conduct foreign policy? The new Clinton administration would be well advised to appoint a Special Ambassador, an equivalent of Dennis Ross's role in the Middle East, for the Korean Peninsula, a person of prominence with bipartisan credibility and stature in the region, who answered directly to the President and Secretary of State. This is more likely facilitate better policy management and less misunderstanding and tension between the US and ROK as well as better coordination with surrounding major powers (China, Japan, Russia). There is precedent here. In 1994, the President elevated senior negotiator Robert L. Galucci to the title of Special Coordinator, reporting directly to the President. When Galucci 79 left the government, no equivalent role was designated in the State Department. Moreover, if the four party negotiating process begins in earnest, it would be extremely demanding for the Assistant Secretary for East Asia and Pacific Affairs to manage the process as well as the rest of their portfolio. It would be wise to appoint a special negotiator for such talks, one carefully selected in consultation with Congress. The US and ROK must have a candid dialogue about what strategic choice to pursue: either squeeze the DPRK until it collapses or a strategy designed to put the DPRK on life support. Thus far, we have in essence been doing both at the same time. One partial explanation for what we perceive as erratic North Korean behavior may be a lack of clarity of purpose on our part. The U.S. and South Korea owe North Korea the answer to some core questions: precisely what behavior do we want from North Korea, and what price are we collectively prepared to pay we get it? There is little evidence that either Washington or Seoul have a considered response to those questions. a If the proposed multilateral talks do occur, there is some question as to whether a peace treaty with North Korea is in the interests of Washington and Seoul. If such a treaty is merely a paper commitment it could well be counterproductive. If by a peace treaty we mean revising the armistice agreement, and signing a treaty at the end of a process of radical conventional force reductions, then perhaps a Grand Bargain providing economic blandishments and security assurances as a quid pro quo for major reductions in the military threat is worth pursuing. At the same time, contingency planning for massive refugee flows should be quietly pursued in discussions with Japan and China, and Russia. This is the immediate contingency problem. At the same time, planning for the initial steps in picking up the pieces in the event of implosion must be very quietly, but candidly discussed: is it simply an internal Korean affair? does Seoul want or need international help, financial or otherwise in the reunification process? Failure to step up to these sorts of questions will likely result in attenuation of the US-ROK alliance at the expense of both Korean and American interests, and perhaps even the stability of Northeast Asia.. 80 Jay kin Congressman Jay Kim February 26, 1997 Asia/Pacific Subcommittee Opening Statement I am very pleased that we are here today to discuss the timely issue of U.S. policy toward North Korea. North Korea is one of the world's last true communist states -- isolated in a region of the world where explosive free market economies are the order of the day. The communist regime in Pyongyang continues to rule its people with an iron fist. Finally, however, we are starting to see signs of fissure from within the current North Korea, symbolized by the defection of the ideological father of North Korean Communism. The current famine in North Korea appears to be reaching epidemic proportions. One report has the amount of food per person at barely one half of the amount in Ethiopia during their famines of the 80s. After many years of isolation, a combination of eroding support from the former Soviet Union and China, as well as two years of floods, have forced North Korea to enagage the international community in order to feed its citizens. This engagement provides the United States a chance to finally bring the North Koreans to the bargaining table on a number of important issues, including nuclear weapons proliferation, North-South Peace and international arms sales. The current geopolitical climate provides the Administration a unique opportunity to achieve some of our long-held goals in dealing with the North. We have tried for a long time to maneuver the North to the bargaining table to hold talks with both us and the South, I hope the Administration can take advantage of this opportunity and finally succeed in achieving some of our policy goals. Most importantly we need to bring pressure on the North to sit down and talk with the South and to negotiate a permanent peace and once and for all bring an end to the 40- plus years of hostilities along the DMZ. 81 Statement Chairman Benjamin A. Gilman Subcommittee on Asia and Pacific “Engaging the Hermit Kingdom: US Policy towards North Korea” 26 February 1996 1:30 pm Mr. Chairman, thank you for calling this timely and important hearing on North Korea and allowing me to say a few words. As you are all aware, much has transpired recently on the Korean peninsula and it is important that we avail ourselves and the public of the significance of these events. This panel of esteemed experts will clearly shed much light on a very difficult subject. I thank all of you for your willingness to appear before us today. The Korean peninsula and its security is of vital importance to the national security of the United States, our South Korean allies and to East Asia. Many consider the Korean peninsula to be one of the most volatile places on earth--most of this can be 82 attributed to the totalitarian regime in North Korea. From the grounding of a North Korean submarine off the coast of South Korea in September --to the Agreed Framework-- to the Four Party Talks-- to the World Food Program's appeal for famine relief, the United States is increasingly involved with the reclusive regime in Pyongyang. And as we observe the ending of the three year mourning period of Kim Il Sung's death this year and the anticipated official ascendancy of his son Kim Jong II, it is judicious and prudent that we pause and review our relations with North Korea and plan a strategy for the future which will lead to a peaceful, democratic and reunited Korean peninsula. This hearing is certainly a step in that direction. Mr. Chairman, thank you again for holding this hearing and for the continued excellent work you and your staff do on the Asia-Pacific Subcommittee. Thank you. 90000 PENN STATE UNIVERSITY LIBRARIES ISBN 0-16-055902-2 9 "780160"559020 A000031632485 89