December 16, 2014:   North Korean efforts to the halt the smuggling of goods into and people out of North Korea have been increasingly vigorous but senior officials note that there has been a decline in the number of arrests. Security officials on the border respond that this reflects success, but North Korea agents operating on the other side of the border report that the smuggling continues and that Chinese and North Korean smugglers complain of having to pay higher bribes because of the use of elite secret policemen on the border this year. Senior leaders have been told that even the elite secret police are succumbing to the bribes and that getting caught (which can lead to execution) is no longer a deterrent because so many of the secret policemen are now corrupted that they can devise methods (they are the elite after all) that make it extremely difficult to prove any of them are taking the bribes. The large amounts of cash obtained are then deposited in Chinese banks to avoid detection if a corrupt secret policeman’s family suddenly buying things they cannot afford. This means that many of these corrupt secret policemen eventually plan to flee the country so they can spend all that bribe cash. The government can take some comfort in the fact that the corrupted police can still be depended on to detect and attack anyone trying to threaten the power of the North Korean government. After all, those bribes are only being paid because of the power of the government to retaliate.

The victory of bribery comes despite numerous new policies meant to deter smuggling and corruption. This included declaring certain border areas, known to be heavily used by smugglers, as “high crime areas” and saturating them with more police patrols and inspections of people going about their business. This increased the number of people smugglers had to bribe to get their work done and that increased the cost of smuggling for North Koreans. North Korea agents in China had little trouble finding out about this. For a while the more vigorous anti-smuggling efforts meant more risk for smugglers but that soon evolved into higher bribes and less risk. The same pattern has been observed in recent campaigns against buying South Korean clothing, cosmetics, other consumer goods and electronic media (via memory sticks or DVDs). The police get more bribes and the government is stuck with more expenses (special imported detection gear and hiring more police) and not a lot to show for it except a growing number of police getting caught taking bribes and being executed or condemned to a lifetime of slave labor.  The spread of corruption within the North Korean security forces, and bureaucracy in general, is another problem the government realizes is critical but has so far proved impossible to eliminate. The government was forced, by economic necessity, to legalize black market and clandestine manufacturing activities and that led to more opportunities for corruption. More of the senior leadership are accepting the fact (that the Chinese have been talking about for years) that the market economy is much more efficient than a centrally controlled one. So far the old school communists are still in control and trying to make central planning and greater control work. It has never worked anywhere but that is because, as the true-believers put it, it was never done correctly.

North Korea is angry at China for not coming to their aid over recent war crimes accusations. North Korea is even angrier, and very shaken that a retired Chinese general said publically that China would not come to the aid of the current North Korean government if the government collapses or starts a war. China often makes official announcements via public “comments” by retired senior government or military officials. This makes it easier to, if need be, back off from the new policy. China has not backed off this one. China is telling North Korea to do what China wants or else. China wants work on North Korean nuclear weapons stopped. China apparently promised to be useful in the UN if North Korea resumed the six nation talks over North Korean nuclear weapons. At the same time Chinese diplomats and spies inside North Korea report that Kim Jong Un was not willing to halt his nuclear program under any circumstances. Kim Jong Un sees the nukes as his ultimate defense against all his diplomatic, economic and internal (as the result of poverty, corruption and greater knowledge of the outside world) problems. China has long been the ultimate solution if North Korea becomes so threatening that war seems likely. Only China has enough allies inside North Korea and military forces that can quickly (without having to battle through a fortified DMZ) go in and replace the Kim dynasty with a more accommodating dictator. China does not see force as a desirable option. The fiscal, diplomatic and human cost is too high. Then there is the risk that Chinese forces will not perform well against North Korean troops who resist. This would expose the weaknesses in Chinese military leadership that many senior Chinese officials are aware of but would prefer to keep the rest of the world unsure of. But the one Chinese threat to North Korea that is very real is the declaration that China will not help the current North Korean government in a crises. Since 1950 China has pledged, and delivered, on assurances of help. That promise is now gone and the North Korean leaders are moving on.

More details are coming out about the continuing arrests and punishments of those believed close to the late, disgraced uncle of Kim Jong Un. This includes quietly (without publicity) blaming allies of the late uncle for things going wrong in North Korea. This apparently began with the May 23 collapse (because of corruption) of a 23 story apartment building in May 2014. This happened in the capital and most of the hundreds of dead were families of high ranking government bureaucrats. So now many corrupt or otherwise unwanted officials are being accused of being followers of the evil uncle. Dozens have been executed or sent (with their families) to labor camps. This mayhem began in late 2012 when all the blood relatives of Jang Sung Taek, the uncle of supreme leader Kim Jong Un, were killed. Jang was denounced in early December 2012 and executed on December 12th. After Jang was executed the secret police rounded up Jang’s siblings along with their children and grandchildren and killed them all. Some who resisted orders to leave their homes and accompany the secret police were shot on the spot, in front of witnesses. Those who had married into the family were spared and sent to live with their families. Such mass murder is an ancient custom and was once found all over the world. It persisted longest in East Asia, where has been less frequently used in the last century or so. The purpose was to prevent family members later seeking revenge for the execution of their kinsman.

In addition to the family members, the secret police also went after key aides of Jang and sent them to labor camps. This apparently was not enough as even the family of accused associates of the uncle who are overseas are being sought out and kidnapped or killed by the secret police. Kim Jong Un has decided that these people are a potential threat and must be returned to North Korea for punishment. It is not unusual for dictators to go after real (or imagined) individuals abroad who are deemed to pose a threat. The Soviets did this during the Cold War and Iran has carried out similar operations. North Korea has long sought to assassinate defectors in South Korea and elsewhere but has never been as active in this area as under Kim Jong Un.  It was also recently revealed that Kim Jong Uns may have aunt died from a stroke while engaged in a heated discussion with her nephew shortly after her husband had been executed. That has not been confirmed and other rumors have it that the aunt committed suicide in 2013 or died of some other medical problem.

Meanwhile the younger (by about five years) sister (Kim Yo Jang) of Kim Jong Un, like his aunt (the sister of his father Kim Jong Il) is being promoted to a senior position in the government. The late aunt eventually used her position to get rich from corrupt practices. It is unclear if Kim Jong Un has discussed this matter with his newly promoted sister. Kim Jong Il had seven children and most of them became more interested in living well than in running a police state.

The major problem in North Korea has long been corruption and when this problem is actually measured North Korea finds that it has the dubious distinction of being best at something they would rather not be. Thus a recent international study found North Korea one of the three most corrupt nations in the world. Corruption in this Transparency International Corruption Perception Index is measured on a 1 (most corrupt) to 100 (not corrupt) scale. The three most corrupt nations (Afghanistan, North Korea and Somalia) have a rating of 8 and the least corrupt (New Zealand and Denmark) are 91. A look at this index each year adds an element of reality to official government pronouncements. African nations are the most corrupt, followed by Middle Eastern ones. In East Asia North Korea sets the standard for sleazy behavior.

One reason for the corruption is the need to do whatever it takes to keep the ruling Kim family in power. This requires vigorous efforts to obtain foreign currency needed to buy the luxury items required to keep the ruling elite content. Cash is also required for special equipment (cell phone detectors and other surveillance gear) required to keep current with what North Koreans are up to. Much money is spent on legal (like enticing foreign tourists to visit and spend a lot of money) and illegal (making counterfeit American currency and proscribed drugs for export) money raising operations. Since Kim Jong Un took over three years ago he has spent over $300 million on new tourist attractions like a ski resort, a water park and horseback riding facilities. North Korea already has two gambling casinos that mainly cater to Chinese. Most tourists come from China and popular Chinese vices are discreetly catered to. North Korea currently gets about 250,000 tourists a year and it has been advertising more frequently in China because that’s where many tourists come from and where most of the new ones would come from as well. Western tourists spend more money, but there are far fewer of them and they require more security because, unlike the Chinese, the Westerners don’t know how to behave properly in a police state.

Growing electricity shortages in North Korea have caused numerous delays and cutbacks in essential functions, like processing (threshing and polishing) the rice harvest or running factories that employ a lot of people. Yet the government has turned power on so people can watch news/propaganda shows on TV. This is done on a rotating basis because there is not enough energy to light up large areas at once. The government considers it essential to get out their version of new items that are all over the foreign (Chinese and Western) media and the Internet. The government takes for granted that this critical reporting now makes its way into North Korea and that it is essential to counter this bad publicity with propaganda giving North Koreans a plausible alternative that makes the North Korean government look good. The major story currently being “corrected” is the move in the UN to prosecute North Korean leaders for crimes against humanity. This became an issue when a UN study on North Korean labor camps was released earlier this year. The revelations are not news to most Koreans (north and south) because North Korean have been escaping to South Korea in greater numbers since the 1990s and reporting the grisly details. Now the UN has taken notice and North Korea is not happy with that at all.

Another story the government must deal with is the growing food shortages. Drought and lack of fertilizer (largely because the government cannot afford to buy imported fertilizer anymore) sharply cut crop yields this year and many rural North Koreans are expecting to be very hunger for the next six months (until the first crops can be planed and harvested). Government propagandists have all sorts of stories to explain this without admitting the government was in any way at fault.  

Meanwhile aging and poorly built power plants plus a drought (reducing hydroelectric power) and similar declines in the railroad system (preventing coal from getting to coal fired power plants) have increased the number of blackouts. Late in the year farms have priority on electricity so they can complete the harvest. This means a growing number of cities (except for the capital) are conspicuously dark at night. Satellite photos of the north have been available regularly for over a decade and show the continuing decline in the availability of electricity. These power shortages are a vivid reminder of how decrepit the economy is and are a major source of discontent in the north. In addition to the power shortages, many rural North Koreans will notice reduced food supplies over the next few months. This is also due to the drought and is compounded by the power shortages and general lack of all resources.

Police have been stopping and searching students more frequently, especially in urban areas. That’s because it’s become fashionable for young North Koreans to carry U.S. one dollar bills as good-luck charms. Children often receive American or Chinese currency as gifts from parents or grandparents and such gifts are very popular with the kids. Foreign currency has long been illegal in North Korea but over the last few years American and Chinese currency has replaced the local currency for important transactions. The government has been printing so much of the local currency that the inflation has made it increasingly worthless except for purchases at state controlled stores. But there is so little to buy in those stores that the legal (and illegal) markets have become the source of many essential (and luxury) goods. Young North Koreans see the dollar as the future but the police see these good-luck charms as an additional income source as police must seize illegal foreign currency.

North Korea has been in the news a lot recently over accusations that North Korea was responsible for recent hacks of Sony Pictures computers. This was believed to be payback for Sony ignoring North Korean complaints about a Sony film (The Interview) that makes fun of North Korea and its leader. While there is some evidence in hacker code left behind that North Korea might have been involved, it’s considered more likely that the Sony hack was carried out by pro-North Korean hackers, not North Korea itself. Many leftist activists in East Asia are pro North Korea and some of them have hacking skills. Internet security experts point out that Sony has, for a long time, ignored warning that its Internet security was weak and that it was vulnerable. Despite several earlier (and very embarrassing) breaches Sony apparently did not act aggressively enough to protect itself. Going along with the idea that they were targeted by Big, Bad North Korean Master Hackers gets Sony management off the hook for ignoring clear signs that they were vulnerable to second-rate hackers. The reality is that North Korea has built up a formidable Cyber War capability, but it is mainly devoted to making money, not punishing media enemies. North Korea officially denied that it had hacked Sony but praised the effort as “righteous.” The Sony hack was also popular throughout Korea because Sony is a Japanese company and humiliating the Japanese has long been popular in Korea.

Meanwhile things are going much better in South Korea which is poised to regain the leadership in shipbuilding. In 2012 South Korea lost its decade long battle with China to retain its lead in shipbuilding. That was because of a five year depression in the world market for shipping. This caused South Korean ship exports to fall 30 percent in 2012, to $37.8 billion. China, helped by government subsidies, saw ship exports fall only 10.3 percent, leaving China with $39.2 billion in export sales. The Chinese government has also been giving its ship builders lots of new orders for warships, which made its yards more profitable and better able to beat South Korea on price. The Chinese government also provides its ship builders with more loans, allowing the builders to offer better credit terms to customers. South Korea is still ahead of China in total orders for ships. China was not able to keep its lead as South Korea not only builds cheap but also does more complex work to higher quality standards. Chinese shipyards have been laying off workers because the new orders have been falling. Meanwhile South Korea, which always had the lead over China in building high-tech ships, is getting more orders for these more expensive (and profitable) designs.

 December 15, 2014: In North Korea the army began its annual cold weather training. This year there was more activity than in the last decade and most of the additional activity consisted of special operations troops practicing for operations during an invasion of South Korea. This included low level parachute jumps. This is something that has not been seen for a while. That was explained back in 2007 when refugees from North Korea reported that the air force there had ceased, or greatly reduced, training flights of the 300 An-2 aircraft it maintained for delivering commandos into South Korea. The reason was apparently lack of fuel, and spare parts to keep the fleet of 30-40 year old aircraft in working order.

Now more AN-2s are being seen in the air. The AN-2 is a strange bird. It’s a single engine bi-plane made mostly of wood and canvas. This makes it difficult to pick up on radar, especially if it’s coming in low. The 5.5 ton aircraft was developed by Russia in the late 1940s, and it was most frequently used for crop dusting and fire-fighting, as well as a light transport. It can carry up to a dozen passengers. The An-2 can fly as slow as 60 kilometers an hour, making it excellent for crop dusting, or parachuting commandos to a precise location. It’s range of 800 kilometers is sufficient to reach most of South Korea. Over 10,000 were produced, by Russia, China and Poland, until the early 1990s. The North Koreas regularly had theirs up for training flights, as the pilots had to be pretty good to get across the DMZ (or via open water) into South Korea at night. But fewer AN-2s were seen flying in the late 1990s.

Outside of North Korea many An-2s were used as light transports in out-of-the-way places. It was a rugged aircraft, and could land and take off on a short stretch of road, or a field. The North Koreans may have planned to land some of their commandos that way, thus enabling the troops to carry more weapons and explosives with them. The North Korea Air Force has been cutting back on training flights since the late 1990s and most of their combat aircraft are considered very inferior to the more highly trained South Korea pilots as a result. While North Korea has long maintained a large (nearly a million personnel) military, these troops are poorly led and equipped and there has been little cash for new equipment or training since the 1990s. In the last two decades the South Koreans have upgraded their own military to the point where it is considered on par with U.S. troops. But decades of threats from North Korea have instilled a degree of fear in South Koreans that cannot be shaken. The farther you are from Korea the more absurd the North Korean threats appear to be. But if you live within range of North Korea rockets or artillery, it’s hard to get a good laugh out of the situation. This year the North Koreans appear to have provided the military with more cash to buy fuel (for flight training) and that is being done more to boost troop morale in the north than to scare the South Koreans.

December 8, 2014: North Korea revealed that it had a new commander of the air force. This was apparently a normal change of personnel. The air force is in terrible shape, with antiquated aircraft and not enough fuel to train pilots adequately.  

November 28, 2014: South Korea received the first of ten LST II class amphibious assault ships. These are 7,100 ton vessels that can carry 300 hundred troops as well as 10-20 vehicles. There is a landing pad that can hold two helicopters. Two smaller landing craft that can run up on a beach are also carried. The first ship will enter service in 2015 and are part of an expansion of South Korea amphibious forces. The South Korean Marine Corps is being expanded from 25,000 men to 32,000 by the end of the decade.