North Korea's tipping point

PANMUNJOM, Korea — As dawn broke on June 25, 1950, almost a quarter of a million North Korean soldiers swept across the border into South Korea, five years after the peninsula had been roughly sliced in two by victorious Soviet and United States forces at the end of World War II.

Six decades after the two Koreas settled on an armistice, 2 million troops — 1.2 million of them in North Korea — remain locked in an uneasy standoff either side of a 160-mile-long military demarcation line better known as the demilitarized zone.

Today, the prospects for detente, let alone of moves towards unification, look dimmer than ever.

The North abruptly canceled a meeting scheduled for today with the U.S.-led United Nations Command to discuss the March sinking of the South Korean naval vessel, the Cheonan. According to reports, the North has asked to reschedule for Thursday.

Last Friday, the U.N. Security Council condemned the sinking of the Cheonan, apparently by a North Korean torpedo, although it stopped short of blaming the regime directly.

Talks on the North’s nuclear weapons program have stuttered to a halt; bilateral ties have sunk to their lowest level in years.

To add to the uncertainty, the North Korean economy is in trouble — again — as U.N. sanctions over its nuclear tests and the cutting of trade ties by the South risk plunging the already impoverished nation into a famine similar to the one that killed as many as 2 million people between 1995-97.

And the rest of the world is immersed in the political parlor game of forecasting what the secretive, and increasingly unpredictable, communist state will look like after its ailing Dear Leader, Kim Jong-il, makes way for his youngest son.

The next few days will tell us which North Korea emerges from the fallout from the Cheonan tragedy, in which 46 sailors died: a chastened state ready to talk; or a more belligerent version that repeats recent threats to drown its enemies in a “sea of fire.”

It is not surprising, then, that when tourists to Panmunjom — the U.N.-administered “truce village” on the Korean border — gaze through binoculars northwards across the demilitarized zone, it isn’t only the occasional blankets of mist that obscure their view.

What little is known about the machinations of the world’s most secretive state comes from South Korean government officials, the animated pronouncements of the North’s official news agency, defectors and small-time surveillance operations that double up as purveyors of anti-North Korean propaganda.

Taken together, their nuggets of information add up to a country on the brink of political and economic crisis.

The South Korean central bank recently reported that the North’s economy shrank by almost 1 percent in 2009, partly as a result of tighter U.N. sanctions.

The trend is expected to continue this year, according to the Korea Development Institute, now that trade with the South has collapsed in the wake of the Cheonan sinking, potentially costing the communist state hundreds of millions of dollars.

“North Korea’s economy could be hurled into a very precarious situation,” the institute said in a new report.

Late last year the regime was shaken by its disastrous handling of a currency revaluation designed to clamp down on free market activity. Instead, it rendered the savings of the country’s burgeoning middle class almost worthless, and fueled rampant inflation, food shortages and sporadic civil unrest.

The ban on private economic activity and foreign currency was duly lifted, but the damage — economic and to the regime’s reputation — had been done.

The loosening of market restrictions is set against a backdrop of political uncertainty that has dogged North Korea since Kim Jong-il suffered a stroke in 2008.

Speculation is mounting that his youngest son, Kim Jong-un, will be propelled to the upper echelons of the regime’s hierarchy when the Workers’ Party holds a rare conference to elect new leaders in

Recently, the Dong-A Ilbo, a South Korean newspaper, quoted sources as saying the Swiss-educated Kim Jr. had been secretly elected to the supreme people’s assembly last year in preparation for the succession.

Ha Tae-keung, president of the Seoul-based Open Radio for North Korea, says Kim Sr.’s poor health and the protracted handover of power to Jong-un is creating anxiety among North Korean military elites.

“Kim Jong-il’s death would make the future very uncertain for them,” said Ha, whose station uses a network of informers in North Korea and broadcasts news, soap operas and other programs celebrating life in the capitalist South to a small but growing number of North Koreans who listen on modified, and undeclared, shortwave radios.

“They are not confident in the youngest son’s abilities as leader and are worried that there will be no role for them when he takes power. That’s why more of them are turning away from the regime and towards groups like ours.

“The regime is manufacturing tension to consolidate Kim’s grip on power. To say the U.S. is going to attack so they must be prepared for war is simple propaganda. This policy could last for at least another three years, until the son has established himself.”

However the rumored succession proceeds, North Korea watchers agree that the country is on the brink of a tumultuous phase to which the South and its allies should respond with vigilance, if not preparations for a conflict to rival that of six decades ago.

"Part of the skirmishes that are going on are in part related to trying to establish credibility for [Kim Jong-il’s] son," Leon Panetta, director of the CIA, said last week. "And that makes it a dangerous period."