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    The Kaesong Negotiations: Why the two Koreas succeeded in getting to yes (and its implications)

    August 15th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    This blog post is based on an earlier version of a Wall Street Journal (WSJ) post and video interview that can be viewed here.
    After seven rounds of meetings and 133 days, the ongoing Kaesong Industrial Complex negotiations between the two Koreas culminated into a five-point agreement. The agreement’s key provisions included language to not disrupt operations within the complex unilaterally, provide for the guarantee of safety of Kaesong assets and workers, restore customs and telecommunications operations, maintain and promote the complex to attract international investments, and the creation of a joint Kaesong Industrial Complex committee
    What led to the bargaining breakthrough? The first six rounds of talks were mainly fruitless efforts of what negotiation analysts refer to as “positional bargaining,” in which each party states and restates its positions on a particular issue. Such positional jockeying can often lead to impasse, and even at times, a strategy of purposeful strategic non-cooperation in a form of “prisoner’s dilemma” (a simulation game in which two parties have a choice to cooperate or betray one another). This seemed to be the case with North Korea, which took the view that elongating and escalating the Kaesong negotiation process would yield a net benefit—the same modus operandi it employs with its ongoing nuclear nonproliferation negotiations.
    If North Korea viewed the Kaesong bargaining process as a prisoner’s dilemma, then what does it take to break its bad behavior? In prisoner’s dilemma, players betray rather than cooperate mostly out of fear and distrust, viewing the outcome as a zero-sum game in which player A’s gain must come at the expense of player B. But if fear can be mitigated and trust furthered, a greater likelihood towards cooperation exists.
    With such agreement leading to other talks related to inter-Korean relations, the one open question now is just how long the Kaesong agreement will last? If precedent is any indicator, it won’t take too long before discord strikes again.
    Contact us here at Asia-Pacific Global Research Group to see how we can help.

    Below is Jasper Kim’s video interview with the WSJ today:


    Financial hedging strategies in an unlikely Korean conflict: Q&A with Jasper Kim

    April 30th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Below is an English-version interview excerpt with Yonhap News and Jasper Kim (Asia-Pacific Global Research Group; Director, Center for Conflict Management, Ewha University in Seoul) released on April 22, 2013 (followed by the original Korean version).
    While most believe North Korea would not intentionally enter into a war with South Korea, Jasper Kim warns us about the possibility of ‘black swan event’ occurring in the Korean peninsula.
    He suggests that a black swan event should be factored in a risk management strategy. He also stressed the importance of hedging strategies, which include call, put, and credit default swap options on Korea-linked financial products.
    Below is the Q&A interview session with Jasper Kim:
    Q. Does 김정은 (DPRK leader, Kim Jong-un) not have the upper hand within his own military?
    He has to appeal to the military since his regime is predicated on a “military first” policy. There could be internal strife and/or change within the DPRK, but we cannot figure that out exactly. He has to prove his leadership by being “hyper hawkish” and “super patriotic.”
    Q. How can a black swan event happen?
    A black swan event be triggered at any level. It will have serious damage militarily and economically. Analysts, especially in the Ivory Tower, assume that all actors behave according to “rational” behavior at all times in all scenarios. But if you walk along or near the DMZ, from my standpoint, it is clear that there are risks that even one instance of irrational behavior could lead to a possible black swan event in the Korean peninsula.
    Q. Is there a “learning effect” relating to North Korean risk?
    The prevailing school of thought among Korean analysts assume that North Korea’s future provocations are “known, known” variables. But I disagree. Given the extremely unprecedented nature of the DPRK leadership (eg, background, age, lack of military experience, third-generation of the Kim clan, etc), it is dangerous to assume that future events by North Korea will mirror those in the past. This is akin to driving a car forward using one’s rearview mirror.
    Q. What are your suggestions for markets to prepare for a possible black swan event?
    In the unlikely but possible chance of a black swan event in the Korean peninsula, financial markets in and around Korea will fall in the short run, perhaps in free fall fashion, depending on the severity of such black swan event. But assuming that such event will be resolved, there is likely to be buying opportunities when such markets go south. At the same time, to hedge against further downside risk during a possible black swan event, contingency exit plans must be executed. Upon the occurrence of a black swan event when markets enter into negative territory, the US, China, and Japan each and collectively have a vested self interest in supporting South Korea’s capital markets. Such support can come in various forms, including lines of credit (LOCs), swap agreements, and/or unified and consistent public statements from relevant institutions that the US, China, and Japan will provide adequate liquidity as needed and appropriate to South Korea. Such clear yet succinct statement will be something that financial players and traders will understand, thus instilling market confidence back to the South Korean markets.
    Q. You take the position that information, such as the internet, can transform North Korea from within?
    Yes, soft power such as information about the outside world and how the outside world views North Korea’s economic and political conditions could be pivotal to create a desire for change from within North Korea, which I have written about in a recent WSJ Korea Real Time piece.

    <인터뷰>제스퍼 김 이대교수, “北 블랙스완 리스크 경계해야”
    금융시장일반, 펀드 [2013/04/22 10:30 01]
    (서울=연합인포맥스) 태문영 기자 = “블랙 스완(Black Swan)은 (한국에) 군사적으
    로나 경제적으로 엄청난 피해를 줄 것이다. 금융시장에도 전염 효과를 낼 것이다. 아
    무도 도발에 대한 정의를 내릴 수 없다. 만약 총알 한 발 때문에 세계 1차대전이 발발
    했다면, 두 번째 한국전쟁이 일어날 가능성도 존재한다.”
    제스퍼 김 이화여자대학교 국제대학원 교수는 22일 연합인포맥스와의 인터뷰에서
    남북 간의 관계를 블랙 스완에 빗대어 설명했다.
    최근 개성공단 폐쇄와 북한의 도발 위협으로 남북관계는 위기를 맞았다.
    긴장 상태가 악화하면서 한반도의 지정학적 리스크가 재부각됐지만, 이전과 같이
    남북의 무력 충돌까지 치닫지는 않을 것이라는 전망이 아직은 많다,
    그러나 전혀 예상치 못했던 돌발변수가 발생하는 ‘블랙 스완’ 이벤트로 남북이 충
    돌할지도 모른다는 경고도 제기되고 있다.
    제스퍼 김 교수는 이와 관련해 북한 리스크로 촉발될 수 있는 블랙 스완 이벤트를
    경계해야만 하며 이 가능성을 리스크 관리 전략에서 고려할 사항에 넣어야 한다고 설
    김 교수는 (북한 관련) 상황을 모두 파악했다고 과신해서는 안 된다고 지적했다.
    그는 금융시장에서 예상치 못한 상황에 대비해 포트폴리오의 일정 부분을 헤지하는
    것이 중요하다고 강조했다. 또 심리에 좌우되는 금융시장에서 블랙 스완이 발생했을
    때 위기를 최소화하려면 한국과 주변국이 시장에 대한 신뢰를 보여줘야 한다고 진단
    다음은 제스퍼 김 교수와의 일문일답.
    – 북한이 개성공단을 포기한 이유와 그 주도 세력은.
    ▲ 남북관계는 군사와 외교, 경제 등 여러 차원(dimension)이 있는 체스판과 같다. 개성공단 문제는 새로운 차원이 추가된 것이다. 공단 폐쇄는 남북한 모두가 잃는 게 많은 루즈-루즈(lose-lose) 상황이다.
    공단 폐쇄 이유는 여러 가지다. 먼저 김정은 국방위 제1위원장의 지정학적 전략 계산에 근거한다. 개성공단에서 벌어들이는 외화와 일자리를 포기하는 대신 장기적으로 더 큰 뭔가를 얻어내기 위함이다. 미래의 편익이 개성공단 폐쇄에 따른 단기 손실을 상쇄하고도 남을 것이라는데 베팅한 것이다. 둘째로 김정은이 직접 선택한 것이 아니라 체제 내 파벌, 즉 군부의 명령에서 비롯됐을 가능성이 있다. 경제적 차원의 문제인 개성공단 폐쇄를 원한 군부의 저의는 긴장을 악화시켜 군이 영향력을 행사하도록 한다는 것이다.
    – 김정은이 군부에 우위를 점하고 있지 않다고 보나.
    ▲ 김정은은 무엇보다도 국내 청중, 즉 군부의 호감을 사야 한다. 북한의 위협 수위가 높아졌다는 점은 체제 내 갈등과 직접적인 관련이 있을 수 있다. 김정은이 정권을 잡은 지 1년이 약간 지났는데 지도부에 많은 변화가 있었다. 새로운 지도자가 들어섰기 때문에 자연스러운 현상으로 볼 수 있지만, 달리 보면 꽤 많은 일이 진행될지도 모른다는 점이 우려다. 우리는 이를 알아낼 수 없다는 점만을 인지할 뿐이다. 각 가능성이 좋지는 않다.
    김정은이 더 개방된 사회와 근대화를 원한다고 보나, 그전에 군부에 호소해야 한다. 따라서 그는 최소한 초기에 강경한 정도가 아니라 초강경한 태도를 보여야 한다. 자신이 초 애국적임을 군부에 증명해야 하기 때문이다. 또 너무 어린 나이를 벌충할 수 있어야 한다. 한국 문화나 정서상 나이가 갖는 의미는 크다.
    김정은은 근대화를 위해 쏟는 노력 그 이상을 군부에 기울여야 한다. 그렇지 않으면 그는 나약해 보이고 친미주의적으로 비칠 것이며, 그 순간 말로를 맞을 것이다. 따라서 그는 극도로 반미주의적 성향을 보여 그런 평가를 떨쳐내야 한다.
    – 블랙 스완 이벤트가 북한 군부 상층이 아니라 하층에서 발생할 수 있다는 지적이 있다.
    ▲ 블랙 스완은 군사적으로나 경제적으로나 엄청난 피해를 줄 것이며, 금융시장은 급락하면서 또 다른 전염 효과를 낼 것이다. 블랙 스완은 상하 모든 계층에서 일어날 수 있다.
    아무도 도발에 대한 정의를 내릴 수 없다. 미국과 남한 모두 도발에 대한 정의를 내리고 사례를 세우고자 했지만, 이는 이성적인 발상이다. 비무장지대(DMZ)에서 이성적인 행동만이 나오지는 않는다. DMZ에서 지치고 겁에 질린 사람들이 예기치 않은 총격을 유발할 수 있다. 만약 총알 한 발 때문에 세계 1차대전이 발발했다면, 두 번째 한국전쟁이 일어날 가능성도 존재한다.
    – 블랙 스완이 발생한다는 신호나 징조는 없나.
    ▲ 신호가 있겠지만, ‘과거에도 있었던 일이며 평소와 다름없다’고 해석된다.
    하지만, 일각에서는 과거의 패턴이 반복된다기보다는 새로운 패턴이 시작된다고 인식하며 전과 다른 계획을 세운다.
    대부분은 북한의 도발이 과거와 비슷하다고 판단할 것이다. 도발 후 수위가 높아지다 요구가 드러나고 상황이 진정되는 식이다.
    일부는 상황이 조금 달라졌다고 본다. 북한을 대표하는 지도자는 완전히 새로운 인물이다. 그는 알려지지 않은 ‘재화(commodity)’다. 어린데다 경험도 적고 외국에서 교육을 받았다. 그가 고위 군부 대신 권력을 쥔 유일한 이유는 성(姓) 때문이다. 김정은이 지도자가 되면서 북한 개방에 도움이 될 것이라는 시각이 있지만, 오히려 그 반대가 될 수 있다고 생각한다. 김정은의 자질이 고위 군부에 약점으로 인식되는 경우다. 김일성 세대에서 멀어지면서 이번 지도자를 어떻게 이해할지 모르겠다는 평가가 나올 리스크가 커진다.
    – 북한 리스크에서 학습효과가 있다고 보나.
    ▲ 김정은의 정권 장악 이후 학습효과가 약간 없어졌다고 본다. 그가 어떤 시각을 가지고 있으며 무엇을 원하고 이를 어떻게 성취할지 아무도 정확히 모른다. 그 자신도 이제 막 권력을 잡았기 때문에 잘 모를 수 있다. 그는 군부에 통솔력을 증명해야 하며, 이것이 그가 초강경 발언을 쏟아내는 이유다.
    다음 도발이 언제 어떻게 발생할지 모르기 때문에 앞으로도 북한의 행보에 그때그때 일일이 대응해야만 하며, 같은 도발이 있다 해도 상황이 달라질 수 있다. 대응 절차를 세우기가 매우 어려울 것이다. 도발의 정의는 과거 사례를 기반으로 했기 때문이다.
    – 블랙 스완에 대한 대응에 대해 설명해달라.
    ▲ 누구도 블랙 스완이 발생하길 원하지 않는다. 단지 리스크 관리를 위한 계산에 블랙 스완이 고려돼야 한다고 생각한다.
    미국 주택시장 거품이 붕괴하기 전 위기 가능성을 경고한 사람들은 비이성적이라는 평가를 받았지만, 2008년 이들은 갑자기 천재가 됐다. 통념과 반대되는 생각이 언제나 가장 대중적인 생각은 아니다.
    한반도의 평화는 유지돼야 한다. 다만, 일어날 가능성이 매우 작은 상황이 발생했을 때를 대비한 비상계획이 있어야 한다.
    비상계획은 블랙 스완 발생 전후를 모두 아우른다. 이벤트 발생 시 그 여파를 완화하고 사후에는 또 블랙 스완이 나타나기 전에 방어를 위해 쓸 수 있는 수단을 제시하는 것이다.
    예를 들어 금융시장에서 북한 관련 블랙 스완이 발생할 것으로 생각한다면, 국채에 대한 풋옵션이나 신용부도스와프(CDS) 등의 수단을 써서 포트폴리오 전체가 아니라 일부분만 헤지해놓으면 된다.
    – 금융시장이 쓸 수 있는 다른 전략이 있다면.
    ▲ 가격이 하락하면 한국 금융시장이 평가절하되므로 중장기적으로 저가매수 기회가 생길 것이다. 그러나 블랙 스완이 발생했을 때 유일한 방법은 시장에서 탈출이다. 그러나 미국이나 일본, 중국 등 주변국이 크레디트라인이나 외환 스와프를 체결하는 등 한국의 유동성을 지지한다는 짧은 발언을 하는 게 유일한 방법이다. 특히 G2 국가가 중요하다. 금융시장은 심리와 신뢰를 기반으로 한다. 중국과 미국은 신용을 지지할 수 있다. 신뢰가 있다면 시장은 리스크를 저가매수기회로 여길 것이나, 그 반대라면 시장은 바닥을 형성하지 못하고 떨어질 것이다. 다른 국가들이 유동성을 공급한다는 발언으로 한국시장에서 시장 변동을 막지 못한다면 그 여파는 전 세계로 퍼져 모두에게 영향을 줄 것이다. 이런 상황은 아무도 원하지 않는다. 따라서 한국에 도움과 지지를 보내는 일이 모두의 이익에도 맞는다.
    모든 것이 시장에 영향을 미칠 수 있기 때문에 그 어떤 것이라도 블랙 스완이 될 수 있다. 하지만, 금융 시장에서 좋은 점은 리스크를 관리할 헤지가 가능하다는 것이다. 따라서 금융시장에 대한 믿음이 있다. 다만, 모든 가능성을 파악했다고 자만하는 순간 추락해버릴 것이다.
    – 미국이 대화 의지를 보였고 북한은 먼저 사과를 요구했다.
    ▲ 신경전이 계속되나, 이견이 조금씩 좁혀지고 있다. 적어도 아예 대화를 거부하진 않았으니 긍정적이라고 본다. 양측 모두 유연성을 발휘할 여지가 있다. 시간이 지나면서 북한과 미국은 직간접적으로 대화할 것으로 생각한다.
    중국과 미국 북한의 ‘G3’ 회담이 효과적이라 본다. 기존 6자회담 참가자는 너무 많다. 북한이 양자회담을, 다른 국가와 6자회담을 원한다면 3자회담이 타협점이라 생각한다. 대화를 통해 서로 이해관계를 확인하는 것이다. 가장 중요한 것은 신뢰다. 6자회담은 이제 너무 형식적이어서 원조를 받을 수는 있어도 신뢰를 쌓을 여지가 매우 작다. G3에서라면 원조와 신뢰 모두를 얻을 수 있다. 신뢰와 신용이 없다면 금융시장에도 도움이 되지 않을 것이며 지정학적으로도 부정적이다.
    대북 정책에서 성과를 기반으로 한 관계 형성이 괜찮은 대안이라 생각한다. 북한이 특정 기준을 충족하거나 목적을 달성하고 나서 이를 증명하면 더 많은 지원을 약속하면서 한 단계씩 나아가는 것이다. 기본급에 성과급을 더해주는 것과 비슷하다.
    – 북한에 정보의 자유로운 이용이 필요하다고 언급한 바 있다. 실현 가능하다 보는지.
    ▲ 가능하다고 본다. 이미 한국 매체에 대한 암시장이 형성돼 있고 북한 내부에는 인터넷과 휴대전화가 있다. 주민들이 외국 정치권에서 하는 말은 선전이라 생각해 믿지 않지만, 보고 듣는 한국 비디오와 음악은 믿을 수 있다. 이를 원하는 주민들 때문에 티핑 포인트(tipping point)가 발생하면 모든 게 급격하게 바뀔 수 있다.
    소프트 파워(soft power)가 (북한을) 움직일 것이다. 문화와 정보, 이에 대한 갈구가 외교보다 더 큰 힘을 발휘할 수 있다.
    – 경제적 원조보다 영향력이 클지.
    ▲ 개성공단 문제만 봐도 알 수 있다. 개성공단으로 어떤 효과를 거뒀다고 확신하기 어렵다. 북한과 남한 근로자들이 함께 일한다면 이론상으로는 서로 더 가까워지고 극적인 효과가 있어야 하나 그렇다는 이야기를 듣지 못했다. 경제 개혁은 긍정적이나, 남북관계에서 기대만큼 게임체인저(game changer)는 아니다.
    – 북한 리스크 이외에 ‘코리아 디스카운트(Korea Discount)’ 요소가 있다면?
    ▲ 대부분 기업 경영구조와 관련한 것이긴 하나, 많은 진전이 있었다. 또 일본과 중국이라는 두 강대국 사이에 있기 때문에 영토 분쟁 리스크 요인이 있다. 이 역시 블랙 스완이 될 수 있다. 하지만 ‘코리아 디스카운트’는 대부분 북한과 관련한 것이다.

    North Korea’s “war” declaration: made for domestic consumption but potential for “black swan”

    March 30th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    North Korea has just declared “war” on South Korea.
    This is the latest in a streaming series of increasingly bellicose statements from the DPRK and its 20-something leader, Kim Jong-Un.
    While many commentators are taking a bet (position/view) that North Korea will not do anything that will provoke war on the Korean peninsula, we believe that a certain amount of attention must be focused on a possible “black swan” event in which a small foreseen or unforeseen event can trigger retaliation by the other side per the responding country’s rules of engagement. Unlike recent skirmishes and attacks along the inter-Korean border region, this time both Koreas are on extremely high levels of military alert akin to two sprung traps in which even a small event can trigger a larger-scale conflict.
    We also believe that most of North Korea’s rhetoric is for the public consumption of North Korea’s military brass and general public, in that order. Such acts are in part an effort, perhaps even a desperate one, to secure domestic support, implying that Kim Jong-Un may be losing support at home. Because of Kim Jong-Un’s age (under 30), and inter alia, that he is the nation’s 3rd-generation ruler from the Kim dynastic clan (a “3-3” risk factor), North Korea’s leader has to take a constant “hyper-hawkish” stance to dispel any notion that he may be weak and dovish towards the nation’s historic enemies. Within a Korean cultural context, even one day difference between two people can vastly change relational dynamics.
    Below is a quote from a recent CNN story and video clip related to North Korea’s increasing threats, featuring Jasper Kim of the Asia-Pacific Global Research Group:
    “First and foremost, it’s for his domestic audience,” said Jasper Kim, founder of the Asia-Pacific Global Research Group in Seoul, South Korea. “Because without the support of the military, he won’t be around for much longer. And so he has to bolster his support with the brass.”



    Korean War 2?: Heightened tensions on the Korean Peninsula push to the edge

    March 22nd, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Is the Korean peninsula on the verge of a Korean War part 2?
    According to Asia-Pacific Global Research Group founder (and professor at Ewha Womans University in Seoul, Korea), the risks of this are certainly notable. Jasper Kim notes that both North and South Korea are engaging in a “dangerous game of tit-for-tat” at all levels–military, paramilitary, and cyber, which “has the potential to end very badly given that the two Koreas are like two sprung traps, which can be triggered at any time.”
    We believe that the two Koreas are engaged in a worrisome form of bilateral, bellicose brinksmanship. The recent cyberattacks against some of South Korea’s major broadcasters and banks are likely just the beginning of a continued series of purposely provocative attacks meant to shore up domestic support in North Korea, especially from its military for Kim Jong-Un, while simultaneously trying to ensure a type of “zone defense” in North Korea in the form of nuclear and non-nuclear missile technology.
    Below are recent CNN TV appearances on this issue featuring Jasper Kim:


    PRC v. DPRK? – Will the China-NK alliance remain stable?

    February 19th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Will the China-NK alliance remain stable?
    Global Times | 2013-2-17
    By Jasper Kim
    Given the recent bilateral and UN-based diplomatic discourse between North Korea and China on North Korea’s third nuclear test last week, could Pyongyang and Beijing’s relationship be switching from friends to foes?
    The once staunch alliance between North Korea and China has historically been based on shared mutual political interests.
    For North Korea, from an economic standpoint, an alliance with China translated into fuel aid and trade revenue, since China provides most of North Korea’s fuel supplies and is its top trading partner.
    For China on the other hand, in years past, from a socio-political standpoint, North Korea represented a sought-after strategic buffer zone from thousands of US and South Korean troops and any other military presence, above and beyond the Demilitarized Zone along the 38th parallel that has separated the two Koreas since 1953, the year of the armistice ending the Korean War (1950-53).
    From the US perspective, as per its stated Asian pivot, the US-South Korea alliance represents a much needed opportunity to maintain a military presence up to the 38th parallel, above and beyond its military presence in nearby Japan, Guam, the Philippines, Australia, and other strategic locations.
    From South Korea’s perspective, maintaining a strategic, albeit shrinking, troop-level presence onshore also represents a not so subtle US and UN military defense security guarantee in the event of a major incursion against South Korea’s sovereign borders or national security interests by North Korea.
    Relating to the recently evolving Sino-North Korean diplomatic dynamic – and specifically, how China should treat its Stalinist state neighbor – several perspectives can be taken.
    First, there is the traditionalist view which dictates that the Sino-North Korean relationship is one that should continue forward as it has in the past – in terms of economic and geopolitical support – primarily based on the history of alliance between the two countries and their respective leaders.
    Second, there is the absolutist view, which states that the Sino-North Korean relationship should be disentangled, given the fact that North Korea’s actions are increasingly unpredictable, and perhaps just as importantly, are increasingly embarrassing to Beijing’s leadership as it is seen as being unable to assert its leadership over the secretive Stalinist state.
    Third, there is the cost-benefit calculus view which oscillates between the traditionalist and absolutist views, specifically, that the Sino-North Korean relationship can either be one of an outright alliance or not, based on a multi-factor cost-benefit analysis.
    In other words, China should continue to support and outright align itself with North Korea if, but only if, the benefits of supporting North Korea outweigh its related costs, China’s benefits being the aforementioned geopolitical factors.
    In contrast, related costs in the calculus are ever-changing, which may tilt the cost-benefit calculus conclusion from a yes to no, in terms of whether Beijing should continue to support Pyongyang.
    Related costs could include, but not be limited to, North Korea’s actions potentially or actually negatively impacting China’s increasing rise as a global socio-political and economic superpower, loss of geopolitical legitimacy for supporting an increasingly rogue state from the viewpoint of the international community, embarrassment by being seen as being rebuked or ignored by North Korea, straining of the Sino-US relationship which may trigger a political or economic backlash in various forms, and the cost of providing fuel and economic aid which could instead be used to support other actual or potential future allies within and beyond Asia.
    Pyongyang has so far relied on the singular premise that Beijing’s leadership holds the traditionalist view.
    But even if the traditionalist view is one that China’s leadership harbored throughout the Cold War period, this premise fails to account for the possibility that Beijing’s leadership at some point may consider and implement the absolutist or cost-benefit calculus views as a matter of policy to North Korea’s possible detriment.
    Such a change may occur if the Sino-North Korean relationship continues to deteriorate with more provocative acts by Pyongyang.
    For these reasons, the Sino-North Korean dynamic in the 21st century – what I refer to as the “Chimerica century” – is in flux, unlike in years before, which may unexpectedly reconstitute China’s pivot sometime in the future from “China with North Korea” to “China versus North Korea.”
    The author is the founder and CEO of the Asia-Pacific Global Research Group.
    To view the article in the Global Times website, click here.


    North Korea’s Nuclear Test – predictably unpredictable (4 Impacts)

    February 12th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    1) North Korea’s motivation for the nuclear test
    North Korea’s objective with today’s nuclear missile test is to put the international community on edge vis-a-vis its predictably unpredictable acts. By such acts, North Korea will garner the attention, frustration, and fear of the international community, which the DPRK hopes it can convert into diplomatic talks, either bi- or multilateral, which is a forum in which it can solicit economic and non-economic aid, a critically important factor given the dire internal conditions of North Korea today.
    2) What to look for now that North Korea has gone through with its nuclear test

    This is North Korea’s third missile test since 2006. There are two things that could be of potential risk going forward. First, whether the DPRK’s nuclear test was based on plutonium or uranium enrichment technology. While North Korea’s plutonium stockpile is relatively fixed and limited–thus placing a potential ceiling on the number of nuclear warheads it can produce with plutonium–a successful uranium enrichment nuclear test would signal that North Korea could continue with producing more weapons grade nuclear material for many years to come. Second, expect the DPRK to continue its saber rattling and brinksmanship, especially in the early days of South Korea’s new incoming president, Park Geun-hye, given the unique history between her father, Park Chung-hee (South Korea’s president from 1962-79) and the DPRK’s leadership in the 1960s and 1970s. In short, North Korea will test President Park’s mettle early.
    3) What to expect from North Korea now that it has conducted its third nuclear test?
    Expect North Korea to follow-up its nuclear test with further provocative acts, up to the very limit of what it thinks can be done without military repercussions. North Korea’s confidence in this respect is based on the international community’s interest in keeping the Northeast Asian region peaceful and stable. After all, if socio-political conditions deteriorate, international security as well as economic conditions can spiral downward quickly and rapidly, given that the Asian markets could turn into another “Asian contagion” effect based on such “black swan” event. The risk of North Korea’s stance is that things may go over the edge, purposely or accidentally, since the two Koreas are on high alert, akin to two sprung traps ready to snap at any given moment.
    4) More sanctions against a super-sanctioned state
    Several UN resolutions have been enacted against North Korea with little effect. This is not entirely surprising given that North Korea is a super-sanctioned state–that is, one of the world’s most sanctioned states. So more sanctions on top of a plethora of already existing sanctions will not likely be effective. As a Stalinist state, North Korea is seeking legitimacy and respect among its neighbors. Yet it also harbors a deep fear and suspicion of such neighbors. A carrot and stick approach of, for instance, a Reaganesque ramping up of military defense spending along with strategic carrots in the form of performance-based incentives and aid through verifiable and sustainable calibrated expected future behavior, for the benefit of both Koreas, among others, could be one step in the right direction.

    U.S.-ROK missile pact revision – 5 Implications

    October 3rd, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    1) What has been revised in the joint military pact between Korea and
    the U.S.? (in terms of the country’s missile capabilities?)

    The recent missile range pact between the U.S. and ROK allows for the extension of South Korea’s ballistic missile range from the current striking distance of 300km to 800 kilometers.
    What this means is that – with a strike range of 800 kilometers – South Korea’s missiles would have the capability to strike most, if not all, targets within North Korea, including its Yongbyon nuclear facility.
    North Korea’s ballistic missiles have the potential to strike most, if not all, targets within South Korea. The DPRK is also developing its Taepodong-2 ballistic missile technology, which some estimate to have a strike range of up to 10,000 kilometers. This range would make a strike target as far away as Hawaii possible.

    2) Why has Seoul strongly called for the revision?
    South Korea has wanted the ballistic missile pact revision to broaden its missile protection capabilities. Other related reasons could include:
    – Recent North Korean aggressions in and around the DPRK-ROK border, including attacks/aggressions against Yeonpyeong Island in 2010 and an earlier attack on a South Korean warship, the Cheonan, which killed 46 servicemen
    – Increasing inter-Korean political uncertainty regarding Kim Jong-Un, North Korea’s recently appointed leader. Little is known about him. And given his relative lack of military experience and youth (late 20s), the likelihood of potential internal insurrection may be seen as uncertain and thus riskier. Based in part on such uncertainty, the ROK’s defense ministry has called for a 5.1% military budget increase
    – From a domestic political perspective, a push for greater missile capabilities before South Korea’s upcoming December 19 presidential elections may be a strategic pre-emptive move to mitigate the risk that South Korea’s next president may not be from the same conservative ruling party (Saenuri). Of the three top presidential candidates, two of the three (Moon Jae-in of the DUP party, and Ahn Chul-soo an independent candidate) would most likely support a relatively more dovish/pro-DPRK policy stance.
    3) Washington has been reluctant to alter the pact for a significant
    period of time. Could the revised agreement undermine Japan and the U.S.’s initiatives of non-proliferation and arms control?

    First, from the U.S. perspective, on the one hand, it is in the process of increasing its security pivot more towards Asia, which serves as a notable security presence to Pyongyang and Beijing.
    Second, yes, the revised agreement could undermine Japan and the U.S.’s initiatives towards non-proliferation and arms control in the region (which has been especially tumultuous recently, due to increased tensions based on disputed island territories involving China, South Korea, and Japan).
    What the U.S. wants to avoid is an Asian arms race – what can be called a twenty-first century “Confucian Cold War” in which Japan decides to reconstitute its nuclear technology for military use. This would mean that Tokyo’s leadership would put forth the process towards amending its post-War constitution, which at present, provides for its military to be used for defensive purposes only, or alternatively, taking a relatively broad interpretation of “defensive purposes” to include, but not be limited to, such things as protecting its national interests abroad (rather than purely domestically).
    It is important to not understate the potential for Japan to convert its nuclear capabilities for military use in a relatively short time period, if provoked to do so.

    4) Briefly tell us about North Korea’s missile capabilities and how
    strong of a threat it is to the security of the Northeast Asian region
    as well as the Korean peninsula.

    – BALLISTIC MISSILES: 800 (estimated total)
    – POTENTIAL LONG-RANGE MISSILE CAPABILITIES: TAEPO-DONG 2 (which can conceivably reach targets as far as 10,000 kilometers from the missile’s launch pad)
    – NUCLEAR WARHEADS: 6 to 8 (as publicly announced by the DPRK). Speculation exists that the DPRK has the capability to produce more nuclear warheads, which it may be doing at present.
     – ARMY: 1,000,000-plus (estimated). Although the sheer size of the DPRK’s military is noteworthy, it is highly possible that most of its army are not as well-equipped as ROK and U.S. military forces that it will meet in the event of a conflict.
     5) What is North Korea’s likely reaction to the revision?
    One of North Korea’s greatest weapons is an invisible one – being predictably unpredictable and unpredictably irrational.
    Although no one really can know with great specificity, given that the DPRK is a black box of sorts in terms of available information, what can be said is that it is more a question of “when” than “if” North Korea will antagonize South Korea and its allies. Such behavior may come in the form of military and/or paramilitary and/or cyberattacks, particularly before, during, and possibly after South Korea’s upcoming presidential elections.
    See the Global Times op-ed piece here by Jasper Kim on this topic.