PIIE Blog | North Korea: Witness to Transformation
The Peterson Institute for International Economics is a private, nonprofit, nonpartisan
research institution devoted to the study of international economic policy. More › ›
Subscribe to North Korea: Witness to Transformation Search
North Korea: Witness to Transformation

A North Korean Military Tea Leaf

by | July 11th, 2013 | 06:55 am

Japan’s TV Asahi is reporting that Kim Jong-un has ordered North Korean troop strength reduced by 300,000 soldiers. It goes without saying that this report could be entirely erroneous. But it is reminiscent of the summer of 2002 when it appeared that North Korea may have been trying to execute a significant strategic reorientation.

Since its founding, North Korea had adhered to a doctrine of uniting the peninsula on its terms — forcibly if need be. To that end, it maintains the world’s most militarized society, with the bulk of its million-strong army deployed in an offensive posture along the demilitarized zone separating it from South Korea. By 2002, more than a decade of economic decline in the North and the South’s growing prosperity and alliance with the United States had rendered that dream an anachronism.  The North Koreans were left with two basic options: play for time, hoping that the strategic environment changes favorably; or throw in the towel, recognizing that they were on the wrong side of history, and redefine the strategic goals of the regime. In the second case, one such goal could be self-enrichment. The North Korean elite’s one card is its control over the levers of power, from which it is able to appropriate the lion’s share of economic gains generated by economic reform.

From this perspective, a certain investment in weapons of mass destruction and delivery systems capable of striking targets beyond the Korean peninsula is probably warranted to maintain double-sided deterrence. However, once deterrence is secured, the mass deployment of conventional forces would be a counterproductive impediment to its rapprochement with the South, a prospective provider of capital, technology, and commercial and diplomatic entree around the world. If a nuclear-armed North Korea were to foreswear aggression toward South Korea, then its huge conventional forces would be redundant, and its million-man army, an albatross around the economy’s neck, could be demobilized.  North Korea signaled in 2002 that it was contemplating cutting their armed forces by as many as 500,000 soldiers, which perhaps more than coincidentally would have reduced them to roughly the same size as South Korea’s armed forces.

This signal fell on receptive ears, at least in South Korea, where a growing majority of the population accustomed to living for decades in the shadow of the North’s forward-deployed artillery, did not regard the DPRK as a serious threat. A public opinion poll found that more South Koreans identified the United States as the principal threat to peace than North Korea.  The younger the respondent and the higher the level of educational attainment, the wider this gap was. Fifty-eight percent of respondents in their twenties, and 52 percent of students and white-collar workers polled singled out the United States as the primary threat to peace. Another survey found that more than three-quarters of South Korean students polled actually supported North Korea’s development of nuclear weapons. Even now more than twice as many Americans as South Koreans believe that North Korea is capable of hitting their country with a nuclear weapon.

But such demobilization can work only if the troops have somewhere to go.

North Korea had and still has huge infrastructure needs that can be met using labor-intensive techniques. Its sectors of comparative advantage – apart from missiles – tend to be labor-intensive, too. With economic reform, demobilization could yield a sizeable peace dividend.

Such a switchover would have transitional costs, however.  But the North Koreans had one significant claim on the international financial system—the expectation that Japan would make a significant financial transfer to North Korea when diplomatic relations were normalized.  So one could envision a multipart plan: conventional troop demobilization, maintenance of WMDs and their delivery systems, normalization with Japan, and economic reform.

It is pure speculation whether in 2002 the North Koreans actually had this goal in mind.  Nevertheless, North Korea’s actions and statements in 2002 were consistent with this interpretation.  However, the revelation at the September 2002 Kim-Koizumi summit of North Korean abductions of Japanese citizens scotched normalization of relations with Japan. The  October 2002 revelation of a second nuclear weapons program based on highly enriched uranium (HEU) was the final nail in the coffin, making this gambit diplomatically unsustainable and leaving the regime with the legacy of the July 2002 economic reforms, but without the politically derived complementary parts of the package.

The Asahi TV story could be completely erroneous.  But if it is remotely accurate, then it raises this question of broader ramifications. Our man in Seoul, Dan Pinkston, points to a Rodong Sinmun editorial from last month in which the People’s Army are described leading “a great surge and innovations on all fronts for socialist construction in the new a-match-for-a hundred offensive speed in the 21st century” which was followed by a story extolling incredible feats accomplished by those “soldier-builders.” If one is going to demobilize the army, one better have something for those demobilized troops to do.