Friday, October 20, 2006

Kim took 'calculated' risk with nuke bargaining chip

By Andrew Salmon
The Washington Times
October 20, 2006

SEOUL -- Kim Jong-il, North Korea's secretive leader, is one of the world's most unreadable figures. Analysts agree that Mr. Kim's nuclear test Oct. 9 was the latest in a long march he has undertaken to secure his survival and that of the regime, but they differ over how many Rubicons he may have to cross in the future.

His leadership puzzles outside observers. Some Korea watchers suggest viewing him not through the prism of other communist regimes but rather ancient Korean monarchies, or even the chaebol -- the family-run conglomerates that dominate the South Korean economy.

Observers see North Korea's missile and nuclear programs as bargaining chips in discussions with the United States. Pyongyang has said it wants financial sanctions lifted and bilateral discussions with Washington. The United States has refused these requests, citing U.S. law on the financial issue and the primacy of six-party talks on the negotiations issue. The nuclear test is seen as the latest attempt to move Washington.

"I think the nuclear-test decision was very calculated; risk was factored in," said Michael Breen, Seoul-based author of "Kim Jong-il: North Korea's Dear Leader." "North Korea is not the Taliban. Kim leads a state that wants to come in from the cold, but remain intact."

Military-first policy

Commander in chief of North Korea's armed forces since 1991, Mr. Kim is preoccupied with national security. The only time he has spoken in public was in 1992, when he exalted the armed forces at a military parade. In Pyongyang, most slogans refer not to his father Kim Il-sung's "juche" — philosophy of self-reliance — but to the younger Mr. Kim's "songeun" — his military-first policy.

When North Korea's economy began to disintegrate in the early 1990s — the same time as the fall of European communism — Pyongyang maintained 2 million troops in a nation of 23 million inhabitants. The military received preferential rations during the famines of the late 1990s that killed as many as 2 million North Koreans. Missile exports became a major foreign-currency earner.

Given the fate of Romanian dictator Nicolae Ceaucescu, who was executed in 1989, Mr. Kim is equally preoccupied with personal security. He is rarely seen in public; when he is, it is often with military units. Where he lives is unknown. Footage exists of him with a huge revolver. A former bodyguard who defected to South Korea called him a good shot, and recalls Mr. Kim exhorting his escorts to train harder.

By Western standards, Mr. Kim cuts a bizarre figure. His purported taste for the good life, his unusual appearance and the secrecy surrounding him make him a figure of caricature, as in the animated satire "Team America." Though some call him a madman, long-term Korea watchers, who have seen him play a weak hand with skill and daring, disagree.

"The analyses of him and how he expresses his authority, by the CIA and others, see him from a distance and from a different cultural perspective," said Mr. Breen. "They are pretty shallow."
Control and corruption

North Korean society can be understood in terms of control and corruption, said Kim Tae-woo of the Korea Institute of Defense Analysis in Seoul.

Koreans traditionally have favored strong leaders. Mr. Kim's popular image was visible, albeit to a lesser degree, in authoritarian South Korean President Park Chung-hee, the ex-general who forged the economic miracle.

"Socialist regimes were not built around devolvement of power from one generation to another. Neither Stalin nor Mao passed power to their children," said Hank Morris, a specialist on Korean business at consultancy IRC Ltd. "North Korea looks like a fascist monarchy."

"Some liberal South Koreans believe North Korea is the 'legitimate' Korea, created from the old kingdoms," added Mr. Kim of the Korea Institute of Defense Analysis. The North commonly represents itself as a "purer" Korea than the globalized South.

Unlike his father, who led the austere life of a guerrilla leader in the 1930s and had tremendous personal charisma, Kim Jong-il, like princes of yore, lived a closeted existence. He was born in the Soviet Far East, and during the Korean War was packed off to China for education and safety. The young Mr. Kim indulged his interests in art and culture — particularly movies — as well as state affairs.

Fight for succession

Like some princes, he is accused of being a philanderer, with a "happy corps" of young women as his harem. Other sources say he is a family man.

As in royal dynasties, competition sometimes turns deadly. His sons are rumored to have fought over who will succeed him.

Another comparison to Mr. Kim's governance is the leadership of a chaebol, the giant family-run conglomerates that some compare to royalty. The metaphor may shock some South Koreans.

"I don't see any comparison," said Jang Ha-seung, Korea's highest-profile shareholder rights activist.

Foreign observers disagree.

"In terms of leadership, the chaebol comparison is valid," said Brian Myers, a North Korea specialist at Dongseo University.

Like North Korea, the chaebol are ruled by family dynasties, who maintain power through shadowy shareholdings in affiliates. Like Mr. Kim, chaebol chairmen are aloof: Samsung Chairman Lee Keun-hee, sometimes called "the most powerful man in Korea," is a shadowy figure, rarely seen in public but revered by employees.

Also like Mr. Kim, the chaebol have customarily shown little respect for the law. Chung Mong-koo, the chairman of Hyundai Motors, was recently indicted on corruption charges, and Mr. Lee of Samsung has faced investigations. Reflecting Mr. Kim's lack of concern for his countrymen, the chaebol have been notorious for ignoring shareholder rights.

Risk of miscalculation

"People who supply Kim Jong-il with food and oil are keeping him in business," said Mr. Morris of IRC Ltd. "The banks kept chaebols in good working order, despite going off the rails in 1997. When banks could not continue funding, they simply collapsed. But the North's top creditor is China, and many think Beijing is not eager to precipitate a collapse."

The most pressing question for policy-makers now is how far Mr. Kim is prepared to go in his nuclear brinksmanship. On this, analysts differ.

"The United States has drawn red lines three times. In the early 1990s, it was 'Don't make nuclear weapons.' Later, it was 'Don't test nuclear weapons.' " said Mr. Kim of the Korea Institute of Defense Analysis. "The last is: 'Don't sell them.' If North Korea does, it's war and they are aware of that. I don't think they will take that risk."

Given the strategic shift of the 21st century from the logical balance of the Cold War to the ruthlessness of the war on terror, Mr. Myers at Dongseo University worries that Mr. Kim could miscalculate.

"We need to be more worried about North Korea's irrational behavior," he said. "You are able to reason with communists. They did not fire on their own people in 1989. Kim, on the other hand, was happy to build monuments to himself while his people starved. His objective is survival, but he is capable of overreaching in the mistaken belief that America will always back down."

Our Small Defense Budget

Wall Street Journal Editorial
October 20, 2006; Page A12

Congress recently passed a record defense-spending bill for 2007, and critics lost no time adding it to their list of woes caused by the Iraq war. The real story is more interesting: to wit, how relatively little the U.S. now spends on national security, notwithstanding a war on terror and especially compared with previous periods of global conflict.

It's true that overall defense outlays for fiscal year 2007 are on track to surpass -- in dollars adjusted for inflation -- defense spending at the height of the Vietnam War. It's also true that defense spending has already increased by some 40% since 2001, when President Bush came to office. War opponents cite such figures to suggest that the Iraq campaign is too great a burden, and is sucking up funds better spent on domestic programs.

Less talked about is that the $528 billion spent on national defense in fiscal 2006, which ended on September 30, equaled only 4% of U.S. gross domestic product. Historically, that level is far more in line with peacetime military spending. Many Americans might be surprised to learn that current U.S. defense spending isn't all that much above the 3% share of GDP that prevailed from 1999-2001 and was a postwar World War II low.

The top chart nearby tracks defense spending as a share of the economy since 1940, when it was 1.7% before the mass mobilization of World War II. It reached a postwar high of 14.2% in 1953 during the Korean War, 9.5% in 1968 at the height of Vietnam, and 6.2% in 1986 at the peak of the Reagan re-armament that showed the Soviets they couldn't win the Cold War.

Defense spending then took an especially rapid plunge from 4.8% in 1992, falling to 3% by the end of the 1990s. Some of this "peace dividend" was warranted after the Berlin Wall fell, but letting the security budget fall so far is also one of the ways in which the Clinton era was a holiday from global history.

This huge defense drawdown is also the real story behind President Clinton's ballyhooed deficit reduction. The GOP Congress gets some credit for slowing the rate of growth in domestic spending in the mid-1990s. But nearly all of the decline in government spending in the Clinton years came from defense. Only toward the end of the 1990s did the GOP Congress begin to agitate for modest defense increases, which Mr. Clinton accommodated in return for more spending on his own domestic priorities.

Sooner or later this trend had to stop, and it did with the jolt of September 11. President Bush needed to find more resources to fight the war on terror, and he has done so by increasing defense spending by a full percentage-point of GDP over his six years in office. More than half of the fiscal 2006 budget deficit of 1.9% of GDP can thus be attributed solely to this rebuilding of American defenses after the Clinton drawdown.

Today's relatively modest defense buildup is also apparent if you look at defense spending as a share of all federal outlays. (See lower chart.) Nearly half (46%) of all tax dollars went to national security during Vietnam, and 28.1% as recently as 1987. But spending for the war on terror, including Iraq and Afghanistan, has only lifted defense to 19.8% of all federal spending today. We have less to spend on guns because we are spending so much more than we once did on the rest of government, especially health care.

In retrospect, Mr. Bush missed a historic opportunity after 9/11 to ask government to spend less on non-essential programs so it could spend more on security. Instead, overall federal spending grew by nearly 50% in Mr. Bush's first five years, as he allowed Congress to spend more on just about everything. At least Mr. Bush avoided the trap of asking for a tax increase, which would have slowed the economic growth that we have seen throw off record amounts of revenue in the past two years, and thus fund spending on both guns and butter (or, too often, pork).

The larger point is that America remains a long way from a state of "imperial overstretch," as critics of an assertive foreign policy like to put it. U.S. defense spending remains at modest levels, probably too modest given the threats we face and the overseas deployments by our servicemen and women. In addition to hot wars in the Middle East and against terrorism everywhere, the U.S. must maintain its air and sealift capacity to deploy to other regions if needed. Weapons built during the Reagan era must be upgraded or replaced, and the Pentagon will also have to invest in new technologies to deter any future enemies. And all of these priorities must compete with the ever-larger share of the defense budget consumed by health care and salaries for the volunteer force.

Our own judgment is that the U.S. is going to have to increase defense spending to meet these challenges, and that the time to begin such a debate is now.