North Korea's strange, bloody mistake
In eliminating his uncle Jang Song-taek, North Korea’s young leader Kim Jong Un acted like a character out of a Shakespearian drama with Stalinist characteristics. Whether Jang’s show trial and summary execution will help to consolidate or undermine Kim’s power remains to be seen. But the statement on Jang’s indictment confirms—apparently unwittingly—the enormous economic, political, and social problems facing his regime. This stunning contradiction by North Korea itself of decades of official bravado about the unity of the leadership and people and its narrative of steady progress on all fronts may or may not have serious consequences in North Korea, but it certainly will abroad.
In attempting to transfer blame for all the country’s economic troubles to Jang, the statement reports that his alleged confession referred to “the present regime … not tak[ing] any measures despite the fact that the economy and the country and people’s living are driven into catastrophe” and that “the [standard of] living of the people and service personnel may further deteriorate [italics added] in the future.” The statement also implicitly acknowledges that the botched currency re-denomination in 2009 was responsible for “sparking off serious economic chaos and disturbing the people’s mind-set.” Jang is accused of undermining Kim’s pet project of dressing up the capital of Pyongyang through massive apartment and other construction projects for the elite there at the expense of ordinary people in the rest of the country. Without citing China by name, the statement blasts Jang for making cozy deals with that country for the sale of North Korean minerals and for Chinese investment in North Korea’s special economic zones.
The regime’s leaders may have felt that releasing this statement and punctuating it with Jang’s execution were necessary for their purposes at home, but they clearly must not have understood the consequences it will have abroad. For example, whether or not it signals that the regime itself plans to backtrack on economic deals with China, PRC leaders will be further angered by the regime’s disrespect of Chinese interests. They will be more cautious about economic engagement with Pyongyang, and they will be more amenable to increasing sanctions against North Korea when it engages in its next provocation. North Korea leaders apparently are uneasy about their extreme reliance on China for economic support and hope to diversify their economic engagement. But for the rest of the world, too, Jang’s execution and this statement will only underline for a long time to come the extremely high political risk of economic dealings with Pyongyang.
U.S. and South Korean officials will look closely at the assertion that Jang intended to “grab the supreme power of the party and state by employing all the most cunning and sinister means and methods, pursuant to the ‘strategic patience’ policy and ‘waiting strategy’ of the U.S. and the south Korean puppet group of traitors [italics added].” Already determined to maintain sanctions pressure on Pyongyang to force it to abandon its pursuit of nuclear weapons, U.S. and South Korean officials will take this as an acknowledgement by the North Koreans themselves of the efficacy of their policy and double down on it.
In the wake of Jang’s execution, Pyongyang, predictably, is trying to send signals to the outside world that all is well. A North Korean ambassador reiterated that North Korea is open for all kinds of talks with foreign countries to reduce tensions, and the regime has invited South Korea to talks about their joint industrial park in North Korea. Kim Jong Un may now seek to increase economic exchanges with Seoul to reduce his dependence on Beijing. South Korea is not opposed to economic engagement with North Korea, but President Park Geun-hye will insist on international standards and transparency, something that Kim Jong Un will find very hard to swallow.
Earlier this year, Kim declared his fundamental policy to be byeongjin, that is, “parallel progress” in developing nuclear weapons and growing the economy. Jang’s execution and especially Kim’s explanation for it will make it that much harder for Kim to accomplish either goal. The North Koreans do not seem to understand that Jang’s execution alone would likely not have had a large lasting impact abroad but that issuing this kind of a statement will. It has underlined the brutal and anachronistic nature of the North Korean regime to governments and peoples throughout the world, which will now view the regime with even more skepticism for a long time to come. Moreover, Washington and Seoul must now prepare for an increased possibility that Kim will stage another sneak attack on South Korea to rally support at home.
It’s hard to find reasons for optimism at this point, but if there is any glint of a silver lining, it is that the regime itself has unintentionally revealed its desperate need to find remedies for its domestic political and economic troubles. Working together, the United States, South Korea, and China should take this as an opportunity to induce the young and inexperienced North Korea leader to give up nuclear weapons and join the international community by increasing both the pressure on his regime and the credibility of their offer of incentives for finally taking the right course.
Gi-Wook Shin is director of Stanford University’s Shorenstein Asia-Pacific Research Center. David Straub is associate director of Stanford’s Korean Studies Program and a former State Department Korean affairs director.
A later version of this article was published by the Christian Science Monitor, a joint initiative of two academic research networks, the East Asia Bureau of Economic Research and the South Asian Bureau of Economic Research.
Shin was interviewed in NK News on Jang’s removal from power, the article is available in Korean only. Straub analyzed the execution with three other experts in an article in East Asia Forum, a news agency at the forefront of North Korean news coverage. Straub was also quoted in the CBC News and the MK News.
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The extraordinary removal and subsequent execution of Jang Song-thaek, the uncle and assumed mentor of North Korean President Kim Jong Un, are developments that have surprised analysts worldwide. The unprecedented announcement of Jang’s execution was unusual news from a country that is normally shrouded in secrecy. For the first time in nearly decades, North Korean leadership has overtly admitted to an attempt to overthrow its leadership.
Broadcast on Dec. 12 via the state-run Korean Central News Agency, North Korean leadership denounced Jang as a “traitor” who sought to undermine the regime. Among the long list of alleged crimes, Jang was accused of engineering the disastrous 2009 attempt to overhaul the national currency system and of profiteering from his sponsorship of economic policies similar to China’s. Jang, 67 years of age, was convicted of treason in a special military court and executed on Thursday.
The complete details of Jang’s execution remain unknown, and the U.S. State Department has not been able to independently verify the news. However, the style and scope of the announcement itself suggest that the Kim regime is engaged in a widespread purge, attempting to consolidate the power of the young leader. Differing viewpoints exist as to what these recent events signal, whether it is a portent of increasing instability and tension in the region. Specialists at the Walter H. Shorenstein Asia Pacific Research Center (Shorenstein APARC) have offered their analysis to a variety of media outlets.
Shorenstein APARC Director Gi-Wook Shin, Associate Director for Research Daniel C. Sneider, Korean Studies Program Associate Director David Straub, and 2013-14 Pantech Fellow in Korean Studies Sunny Seong-Hyon Lee, who have extensive experience with Korea and are often cited as commentators on regional political leadership, have been cited in national and international news reports.
Former Shorenstein APARC Korean Studies Fellow (2010-11) Sang-Hun Choe has written the lead story for the New York Times. Sneider was quoted in the newspaper report in USA Today World. Straub and Lee weigh in on the matter with two other experts in an article in NK News, a news agency at the forefront of North Korean news coverage. In a recent Financial Times Chinese edition, Lee examined why North Korea still looked "normal" after the death of Jang and analyed whether such a facade can be sustainable. On Dec. 12, Shin was interviewed in MK News on Jang’s removal from power, the article is available in Korean only.
Shorenstein APARC will continue to monitor the situation and will provide updated analysis as additional details unfold.
On Dec. 9, President of the Republic of Korea Park Geun-hye and senior South Korean foreign affairs leadership hosted experts from the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) at the Blue House for dialogue on peace and security issues in the Korean Peninsula and Northeast Asia.
President Park sought the expertise of Shorenstein APARC Director Gi-Wook Shin and numerous other Center experts, including Korean Studies Program Associate Director David Straub and 2013-14 Visiting Koret Fellow in Korean Studies Ambassador Kathleen Stephens, who are often cited for their research on contemporary U.S.-Korea relations. The meeting was reported in South Korea’s Joong Ang Daily, also recognizing Park’s visit to Stanford in 2009. The press briefing is available at the Blue House website.
Following this meeting, on Dec. 10, Shorenstein APARC co-hosted The Eleventh Korea-U.S. West Coast Strategic Forum with the Korean National Diplomatic Academy in Seoul. The Forum focused on North Korea policy, the U.S.-ROK alliance, and the current dynamics in Northeast Asia.
Started in 2006, the Forum brings together distinguished South Korean and American scholars, experts, and former and civilian officials to workshop on issues of national interest to both countries. The Forum is now convened semi-annually and the location shifts between the two locations – Seoul and Stanford. To encourage candid conversation, the Forum follows the Chatham House Rule which respects the confidentiality of individual contributions during dialogue.
A report summarizing the objectives and outcomes of the Eleventh Annual Korea-United States West Coast Strategic Forum is forthcoming.
At the November 2013 Third Plenum, China’s leaders committed to an ambitious program of economic reform. Now their challenge is to convert those commitments into a realistic and sustained program of change. Barry Naughton, just back from fall term at Tsinghua University in Beijing, examines the achievements and obstacles, and discusses how these fit in with the other initiatives of Xi Jinping’s complex emerging agenda.
Barry Naughton is a professor at the University of California, San Diego. He is one of the world’s top experts on the Chinese economy, and a long-term analyst of Chinese economic policy. Naughton received his Ph.D. in Economics from Yale University in 1986. Naughton was named the So Kuanlok Professor at the Graduate School of International Relations and Pacific Studies (IR/PS) of the University of California at San Diego in 1998. He has consulted extensively for the World Bank, as well as for corporate clients. Naughton is a member of the Council on Foreign Relations and is a non-resident fellow of the Brookings Institution in Washington, D.C.
This event is co-sponsored with CEAS and is part of the China under Xi Jinping series.
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Gi-Wook Shin, director of Shorenstein Asia-Pacific Research Center, says, "history education is very susceptible to national sentiments and apt to have politically explosive potential because it is closely related to the national identity of a country." "Balanced history education is needed to resolve the 'Northeast Asia paradox,' a quandary highlighted by intense territorial disputes and conflicting historical perceptions despite close economic, cultural and social exchanges between the regional countries."
The complete article is available at Korea Focus, December 2013.
The digital information technology (IT) revolution currently underway is profoundly reshap- ing economic activity, influencing politics, and transforming societies around the world. It is also forcing a reconceptualization of the global and local: many of the technologies, platforms, and fundamental disruptions are global in nature, but national or local contexts critically influence the uses and effects of IT.
The Asia-Pacific region provides a fascinating array of countries for examination of the political, economic, and sociocultural effects of digital media on the modern world. Economies range from developing to advanced. Governments include varied democracies as well as one-party regimes. The press enjoys relative freedom in some countries, undergoes limited constraints in others, and is tightly controlled in a few. Populations range from dense to sparse, and from diverse to relatively homogenous.
Held September 12–13, 2013, in Kyoto, Japan, the fifth Stanford Kyoto Trans-Asian Dialogue focused on the catalyzing effects of digital media for change in the Asia-Pacific. Four major themes were addressed:
SYNCRETISM front cover
Japan’s first decade of the twenty-first century was both disappointing and bewildering, producing wildly contrasting evaluations. Many have come to call this period the “second lost decade,” characterized by policy paralysis and overall lackluster economic growth.
For those studying Japan more closely, however, the same decades reveal nothing short of a broad transformation in numerous core tenets of Japan’s postwar political economy. How can we best capture this transformation?
Each chapter in this volume examines a different aspect of Japan’s political economy within a longer historical trajectory, from multiple angles, to depict a flexible but resilient system. We characterize Japan’s process of change as syncretism—practices foreign, domestic, old and new were selectively adopted, mixed and matched, along the way creating a new and unique hybrid system.
Examination copies: Desk, examination, or review copies can be requested through Stanford University Press.
The Politics of Economic Restructuring and System Reform in Japan
This paper presents a simulation model based on the growth rate, the inflation rate, and the consumption tax rate in the future. Future tax revenues and fiscal expenditures are projected using regression models estimated from past data. The fiscal situation is called unsustainable if the outstanding amount of Japanese government bonds (JGBs) becomes higher than the level of private sector financial assets. We focus on the general account of the central government, which is the source of JGB issues. We find that the higher the economic growth, the more likely it is that the fiscal situation is sustainable. When a larger portion of interest income is reinvested in JGBs, the chance is higher that the fiscal situation is sustainable. Most importantly, raising the consumption tax to 20% guarantees fiscal sustainability in most cases. Our analysis shows that without a consumption tax hike beyond the 10% rate, a fiscal crisis will be almost a certainty, even with a real economic growth rate of 2% despite a shrinking labor force. A reasonably quick hike of the consumption tax, namely a hike by 1% a year, up to 20%, combined with high or moderate economic growth rates, seems to keep the economy out of a fiscal crisis, where a moderate growth rate is defined to be generated by a productivity increase per working-age population of 1.9%, which was the average during the Koizumi years.