Seiler Winter 2010

State of North Korea
Sydney A. Seiler

Thank you. You know, at the end of the day, there's two risks on a Friday - I'm standing between everybody and their dinner and going home, and also having a degree of built-in redundancy to a presentation. So many of the issues that Bruce spoke to and some of the panelists addressed touch on what I'll be presenting, but I hope that you understand, as I preface this by stating first of all that I'm not a policy maker, so I'm not here to reflect the policy of the United States, nor am I necessarily here speaking for the intelligence community per se, although certainly most of my comments at least will track pretty much with some of the ways we tend to see this country. So hopefully we can gain a little bit more insight into what people often call the "intelligence black hole."

Now I'll be very kind of informal in my presentation, working some from brief notes. First of all the "black hole" analogy on North Korea is quite unfortunate when you think about it, because it implies two things. First of all, it implies that our policy toward the Democratic Peoples Republic of Korea is somehow based on a lack of information or less information than necessary to make a wise policy. And I would argue as we go through some of these key issues that our policy makers have to deal with, that we do have a good amount of insight into North Korea's capabilities and intentions. And secondly, it really underestimates the efforts of the 16 agencies that work against this North Korea target within the intelligence community, and our office within the Director of National Intelligence has been established to kind of coordinate and integrate their efforts. Rather than "black hole," I personally tend to see North Korea as a puzzle. North Korea is a puzzle for which we have enough pieces to see a picture - a picture that's comprehensible, a picture that speaks adequately to those two elements of threat that Kathryn spoke of - the capability and intent; and the truth be told, we don't have all the pieces to the puzzle. And what happens is, we don't like the picture that we often see of North Korea, and so we sit and we curse the absence of the pieces that are missing, when in essence, we have most of the big picture pieces that are necessary.

In a historic perspective, what people often need to understand in order to understand the North being an issue from a strategic perspective, it is the fact that we are dealing with a nuclear capability. We are dealing with the pursuit of WMD capability in their nuclear and missile programs that track back, as you mentioned, well back to the 1980s. You could actually say the 1960s when North Korea first entered the nuclear field. And clearly by the mid-1980s onward, North Korea had made a decision at the peak of the Cold War, to some degree able to survive based on the largesse of Moscow and Beijing, playing off the . . . . and Sino-Soviet conflict. But in any case, in the middle of the Cold War, largely protected by security treaties and alliances with both of those countries, North Korea pursues a capability that is intended to give it a degree of independence, a degree of self-determination, an ability to call the shots, an ability largely to mitigate any external pressure on the state to change and reform. And into this capability, of course, we have the end of the Cold War at the beginning of the 1990s which raises even more exponentially the value, the criticality of this capability the survival of the regime. In spite of the agreed framework which it entered into in 1994 with the United States which successfully brought to an end the production of at least plutonium as well as the critical fissile material, elements of its nuclear weapons program - throughout that whole period we continue to see a refinement of its capabilities. Highly explosive tests taking place in order to perfect the design of a weapon, continued pursuit of its missile capabilities. Bruce spoke of the short range ballistic missiles, and the other as we know, the Taepodong, which is often the headline grabber - the long range ballistic missiles. All these capabilities continue to be developed during what is arguably the golden years of DPRK/US relations, often referred to as the Agreed Framework Years.

What people often don't remember is - as we look at the events as they unfolded with the 2000s - is the fact that during these golden years, during the final years of the Clinton Administration when you had the advent of Sunshine Policy under Kim Dae-Jung, you the visit of the No. 2 man in North Korea . . . . to Washington, you had Secretary Albright visiting Pyongyang, a visit that I was fortunate enough to be on. During these very years, North Korea had already embarked on an alternative path to fissile material with its highly enriched uranium program, and North Korea had already started cooperation with Syria to support the production of its . . . . . . . . So even with the key years of cooperation when you could say the U.S. did not have its hostile policy, when we didn't have an administration that was not hesitant to use terms like "axis of evil" and other derogatory terms - even during those years, North Korea demonstrated its strategic intent to pursue this nuclear capability.

In the 2000s you have the public break-outs. The October 2002 confrontation in North Korea and its highly uranium program. By then Assistant Secretary Jim Kelly from the State Department - really it was a point of demarcation where North Korea initially confirmed the existence of an . . . . program, and in a possible decision, hastily made overnight - Secretary Kelly, the head of the . . . . program, and then shortly overturned that decision and decides instead to pursue the plutonium break-out. And then in 2003 we see the first reprocessing campaign where North Korea adds another couple weapons worth of plutonium to its arsenal. In 2005 another reprocessing campaign. You have this break-out where, intermingled with dialogue, intermingled with the negotiating process that starts out with three-party talks and moves in ultimately to six-party talks, even during this period, this negotiating - time is taken is improve technical capabilities, and then these break-outs of nuclear test missile launches to demonstrate these capabilities.

Let me read briefly from the DNI's Annual . . . . assessment which Bruce mentioned earlier so I won't quote the conventional capabilities obviously, for good reasons. "The North's October 2006 nuclear test was consistent with our long-standing assessment that it had produced a nuclear device, although we judge the test itself to be a partial failure based on its less than one kilo-ton equivalent yield. The North's probably nuclear test in May 2009 supports its claim that it has been seeking to develop weapons with a yield of roughly a few kilotons TNT equivalent which was apparently more successful than 2006. We judge North Korea has tested two devices and while we do not know North Korea has produced nuclear weapons, we assess that it has the capability to do so. It remains our policy that we will not accept North Korea as a nuclear weapon state. After denying a highly enriched uranium program since 2003, North Korea announced in April 2009 that it was developing uranium enrichment capability to produce fuel for a . . . . light water reactor. Such reactors use low enriched uranium, and as we see in the . . . . text, you have a capability ostensibly for commercial capability and that also proves the capabilities for weapons application when taken to the highly enriched uranium level.

"In September 2009 North Korea claimed its enrichment research had entered into the completion phase. the exact intent to these announcements is unclear, but the intelligence community continues to assess with high confidence North Korea has pursued the uranium . . . in the past which we assess with . . . . weapons. We judge Kim Jung Il seeks recognition of North Korea as a nuclear weapons power by the United States and the international community. Kim Jung's intent in pursuing dialogue at this time is to take advantage of what it perceives as an enhanced negotiating position having demonstrated this nuclear missile capability."

2009 was truly a pivotal year. As analysts who follow the North Korea nuclear issue largely since it began to unfold, a lot of the critical questions that we had, for example - was this simply a capability that was being developed as a negotiating ....? Was this a capability that ultimately North Korea knew that it would have to give up to pursue the economic recovery and development that everybody surely in Pyongyang must know they need? Or was this a capability that North Korea intended to develop and keep?

As the new Administration entered office, it demonstrated a willingness to reach out a hand to those countries that would unclench their fists, North Korea responded quite quickly to President Obama and his outreached hand, with a series of steps that not only defined a strategic intent, but also were designed to set the tone for the Obama administration. Three days before the inauguration of President Obama, the DPRK foreign minister spoke and issued a statement which made these issues quite clear. And it's best to use Pyongyang's own words to kind of understand. The statement says: "The U.S. miscalculate if they consider the normalization of DPRK/US relations as a reward for DPRK's nuclear abandonment. The DPRK has made nuclear weapons to defend itself from a North Korean nuclear threat, not in the anticipation of such things as a normalization of relations with the U.S. or economic assistance. It is the reality of the Korean Peninsula that we can live - (although at a very low sustenance rate - editorial comment) - we can live without normalizing relations with the U.S., but we cannot live without our nuclear deterrent. We've lived for decades without normalizing relations with the U.S., and we do that still with dignity. If there's anything we desire, it's not the normalized relations between the DPRK and the U.S., but to boost our nuclear deterrence in every way to more firmly defend the security of our nation."

And that's what we witnessed in 2009. Not escalatory steps per se, not provocations per se, although we could argue they were provocative. In fact, in their own capability to launch - whether in a satellite launch mode or an ICBM mode, it demonstrates the same capabilities that applies to an ICBM system. North Korea checked all the boxes, like a sovereign state - we have a sovereign right, in spite of United Nations Security Council resolution 1718 which states "all missile activities are prohibited." North Korea says, 'Oh, we're a sovereign state. You launch satellites. We launch satellites." And one month later they conducted a second nuclear test. "As a declared nuclear state, you test your nuclear weapons. We test our nuclear weapons."

So 2009 largely ended a . . . analytic debate I think even by many of those people who otherwise were optimistic. I won't call them apologists, but otherwise would be optimistic about the potentiality for some type of de-nuclearization under the September 2005 statement from North Korea. Clearly, Kim Jung Il through these steps and through the subsequent steps following the United Nations Security Council resolution 1874, and the sanctions that we placed on North Korea, has clearly stated that it rejects the legitimacy of the United National Security Council resolutions. It rejects the legitimacy of the nuclear non-proliferation treaty as a monopoly of the superpowers for justifying their capabilities while denying countries such as North Korea the right to theirs. It is re-articulated its September 2005's statement referring to the de-nuclearization of the Korean Peninsula, and has reiterated commitment to the nuclearization of the world. On the one hand, encouraging statements - like world peace. Who can be against world peace? On the other hand, it clearly demonstrates North Korea's position that "we will denuclearize when you, United States - wink-wink- when you China, when all the world powers denuclearize; when the United States finally does something about Israel. When India and Pakistan get rid of their nuclear weapons."

This is North Korea's clearly articulated position. But is that position sustainable? That's the question, and that's what makes 2010 a definitive year for the world. If 2009 was a key year for Pyongyang to make its statements, 2010 is a key year for the world to demonstrate its non-tolerance of a nuclear North Korea.

Kathryn touched briefly on the domestic context, and that's where we really need to focus. We assess that Kim Jung Il, having had a stroke in August 2008, a diminished . . . . . . . after an initial rush to move forth with the succession process - by . . . . his third son, Kim Jung .... as a successor, and some activities that appear to demonstrate an expedited process. if Kim had any question about his mortality. Since then his recovery has . . . . the decision for Kim Jung .... to take power but it's clearly slowed down the process. Now as you have a succession process, nevertheless it's being carried out in . . . . . when he took over from Kim Il Sung, you have a lot of room for discontent, uncertainties, unclarities, and perhaps even something we haven't seen traditionally in North Korean policy to date. It's a very dire (?) situation that the succession process is unfolding under. You have every year - North Korea fails to meet its domestic population food requirements - they're roughly 20%. Give or take 5 to 6 million a year necessary; 4 million produced. You figure 20% short of feeding its people. In a system that depends upon the state being able to monopolize the production and distribution through its public distribution system, to maintain loyalty, to maintain control - the state unable to feed its people is not a highly sustainable model.

Less than one-quarter of its industry functions - and we could speak on and on about the fuel shortages, the basic supply shortages, even the difficulty of exploiting the one thing that North Korea is known to have, which is mineral resources, because of the completely broken down infrastructure. There's no way of going in there and extracting the resources.

Random inflation resulting from the currency revaluation (?) demonstrates the degree of desperateness on North Korean's part to try to do something to rein in all the nation's capitalist activity, the entrepreneurial activity that had begun in North Korea, but also demonstrates the states inability to really bring it under control. In fact, we read - and the story is still out on this - the full impact of this currency revaluation - what is becoming clear is two things: the state really can't bring the economy back under its control. There's just no way. The economy has become too monotized (?). The success, the coping mechanisms that really allow North Korea to survive since the ..... years of the mid-1990s onward were - the local farmers using their household plots (?) and selling those on the markets; when you do a national currency revaluation, you cut off this entrepreneurial activity at the knees, and although in the near term, North Korea may be successful in containing this, the longer term implication particularly again of the elite and their confidence, not so much in Kim Jong Il - I think Kim Jong Il has established a degree of legitimacy based on pursuit of a nuclear program. If you look at the propaganda - the propaganda throughout the whole 1990s and early the 2000s, were based on "We know we will have to sacrifice. We know that we will not have all the necessities we need. We'll know that we'll not be making .... superpower. But it's not . . . . superpower that will prevent us from the Romania scenario - that will prevent us from the fate of the Socialist Bloc Countries. It will be a military capability most manifested in evidence in that nuclear capability." That degree of legitimacy a least with Kim Jong Il has - coupled with a very strong security and intelligence apparatus that continues to have very effective . . . . control mechanisms. In any case, people have been willing to suffer through the arduous march and will live in these circumstances under Kim Jong Il. The question is whether that legitimacy, that type of sustainability of the regime. there very economically dire conditions, is transferable to Kim .... or any other successor.

But most importantly, and this is where the hope - if there is any - and I do have to believe that there is - for North Korea to come to the same calculation, the same strategic calculation about its nuclear weapons capability that Muammar Khadafi did in Libya, that South Africa did in the . . . . . capability - In order for North Korea to come to the same strategic calculus, there has to be a revaluation of priorities. They have to see that ultimately this is a matter of a trade-off; that they can't have their cake and eat it too. That they cannot remain a power that is not denuclearizing, and being accepted into the international community, to gain full acceptance, support from the Republic of Korea, and the degree of normalization of relations with the United States necessary to gain that international credibility, to restore its financial image, etc.

Let me close briefly then, by looking at the North Korea issue within three context to kind of see what the homework is. What do we do about North Korea? What are the options that we may face - the United States and the six-party talks partners?

Within three broad contexts - first of all the Peninsula context; second of all, a more regional context, and thirdly - the international context with emphasis on preparations (?).

The earlier, very animated debate on conventional capability very much mirrors that that takes place whether you're behind the green door and have access to all the secrets, or whether you don't. I mean, this is a very robust debate. But I think if we agree that it's not just nuclear weapons but the entire asymmetrical capability - the ability to inflict damage upon .... in non- conventional ways, long range artillery, deployed forward in a way that it . . . . as a terror weapon by its ability to threaten Seoul and leash shells on the large populations that are in .... The special operations forces, the chemical/bio, the nuclear weapons all provide the capability to unleash incredible damage on our allies in the Republic of Korea. And the zero-sum contribution (?) for legitimacy remains, despite the fact that both Koreas have entered the United Nations, and I notice that they'll enter the Olympics tonight under different flags for the first time in about two or three Olympics. It still really is a zero-sum gain, and Bruce is well to point out that North Korea has not abandoned its goal of having the capability to effect the unification process in a way favorable to it. I use that language deliberately, because I think it may be kind of anachronism to say North Korea still has as its goal, a real goal of unifying the Peninsula through force. That implies capabilities to come all the way down South, occupy the Peninsula and . . . . . difficulties with that. But they've certainly . . . . the military capabilities in that asymmetrical, conventional, unconventional that allows it to determine the outcome of the endgame, however that endgame might play out.

There's uncertainty associated with the succession process that makes it highly unstable, and in that case - Dave mentioned the . . . . scenario and how we prepare for that. In this regard, I think the key to the Peninsular context . . . . whether it's a conventional threat associated with the traditional op plan 50-27 scenario (??) of the South, or now plan 50-29 scenario - it collapses ..... The key to this is close to operation and alliance management between the United States and the Republic of Korea. And in this regard, I would have to say from an analytical perspective, we are on some of the most solid ground we have been on in a good number of years. We look at the cooperation and the coordination that takes place between Seoul and Washington, both within the six-party talks context, and within the bilateral context.

The key to deterring North Korea adventurism (?) of course is a strong ..... in an engaged and committed White House, and I would say again - if I can pull back from my own position and looks at this subjectively, I think if anybody looks at this subjectively, we're at a very good period in ROK/US relations.

The regional context is a newly emerging threat. You know, for years we looked at the Peninsula, obviously a warring peninsula would have been regionally destabilizing, but clearly North Korea's development of a nuclear capability together with the short range ballistic missiles, intermediate range ballistic missiles, and of course the . . . . and other types of potential ICBMs makes a nuclear North Korea very destabilizing from a regional perspective. And that's where the earlier presentation by Heritage was so key as well because it spoke to the capabilities that ballistic missile defense bring, both to the United States and our own defenses, as well as our partnership with Japan and other countries in deploying these capabilities to counter the . . . of missile threat, but ultimately the key here too is diplomacy and how the United States is able to cooperate with the other six-party partners, particularly the People's Republic of China in its lead role in the six-party talks process, the country with a historic relationship with the DPRPA, the country with a demonstrated commitment to seeing a non-nuclear Korean Peninsula, and a country that's critical for us to work with in the future.

And secondly, and clearly as important is our relationship with Japan, and I think here again, in spite of obviously some difficulties with transition of governments on both sides, and any time you have a transition, you have a period of getting to know each other. But on this issue, on the North Korea nuclear issue, there's been a solid partnership throughout the whole period of the six-party talks. Japan has its own critical interest in relation to the . . . . key issue and are taking this as a fair and faithful partner in the six-party talks, and has clearly shown as much concern as a target, perhaps even more so than other countries in the region because of the ballistic missile capabilities, but a real target of the North's capabilities as my Japanese colleagues like to remind me: the NoDong missile with the nuclear warhead is really the most serious and real threat that we face now from a nuclear North Korea. And that's not to diminish at all the Taepodong threat because it certainly it sells (?) in Tokyo. And again, the way that we have coordinated our policy towards North Korea has insured that, as Bruce mentioned, in North Korea wanting to break the ROK/US alliance as a goal of getting US forces off the Peninsula. They would certainly would like US forces out of Japan. Pyongyang's constant goal has been to drive a wedge between Washington and Seoul on the one hand, Washington and Tokyo on the other, and certainly any trilateral cooperation between those countries. In this regard, again, not to throw optimism . . . . clearly we have a strong trilateral, cooperative relationship on this issue.

And finally we'll move on to the international context because people are correct in pointing to the proliferation concern as real. North Korea has demonstrated a willingness and a capability to proliferate nuclear technology in its support to Syria, in its construction of the reactor at El Khabar (?), its history of exporting blitz missiles to Iran, Syria and other countries; its long record of illicit activities - counterfeiting of US currency, international narco trafficking. It's clear that North Korea plays by a different set of international norms of behavior than other countries do, and while we want to provide for North Korea an opportunity to normalize its behavior, an opportunity to pursue a path that doesn't require the proliferation of these types of weapons, these types of arms, these types of illicit activities, and while we continue to pursue that within the six-party talks context, as we key up for North Korea all the benefits it would have by pursuing the role, it has yet to demonstrate its willingness to take denuclearization.

In addition to all those benefits, we have a very strong set of monitoring and sanctions right now that have proven successful as we see in the turnaround of the . . . . . boat which has headed to South Asia - the detention of the airplane in Thailand that was headed to the Middle East. We have seen examples where the United States Security Council resolution 1874 put into place with the close cooperation of the six-party talks partners to include Russia and China, where putting these sanctions into place have had an effect of deterring the likelihood of not only conventional arms proliferation, not only making it more difficult to proliferate ballistic missiles, but helping ensure our capabilities and make it that much more difficult for the sum of all fear scenario, that is, that a North Korea that would do a desperate act which would certainly be an act of desperation. I think even North Korea . . . . . of proliferation beyond what it has done today.

This is why in this regard, within the international context, the sanctions that have been put in place on these companies that are associated with . . . . weapons of mass destruction programs, these companies that are so-called second economy, your C. . . . . , you omni......, your ........, the companies that all sound very foreign to a lot of people here - these are the companies that are out there selling or attempting to sell the arms, and likely would be the ones that would sell even beyond that, and the better that we cooperate internationally, the greater likelihood we have of reducing that type of proliferation which obviously would be unacceptable.

In summary, we see North Korea of late re-iterate its commitment too multi-lateral dialogue for denuclearization - carefully chosen words, a bit of hesitance to return to the six- party talks which - it's probably seen the consensus that grew in 2009 among the other parties of an intolerance of a nuclear North Korea, and an unwillingness to give in to their traditional force in negotiating behavior. So a commitment to a multilateral dialogue for denuclearization - denuclearization in a broad sense however. Denuclearization as the removal of the nuclear umbrella from the Republic of Korea. Removal of real and imagined threats in reality. It's a difficult road ahead, but it's good that North Korea continues to re-articulate its commitment to denuclearization. We need to build upon that in order to help lead North Korea down the road it needs to head.

Unfortunately there's not a pure strategic decision by Pyongyang. However, at this point that's why the intelligence community as reflected in Director Blair's comments does not equate (?) to the high probability that Kim Jong-Il will give up his nuclear weapons which he personally sees as crucial to his security. And that's why we move on to the third point which is why we need strategic patience. Strategic patience is the key to reach out to . . . . Strategic patience, engagement, a reiteration of our commitment, of the six-party talks partners' commitment to 1)move North Korea toward denuclearization, but also to show it all the benefits that it could have by that denuclearization. And Kathryn, I think you're right. We've got an elite - there's an elite . . . Many of them have lived overseas, returned to Pyongyang, they're younger; information penetration in North Korea is greater than it's ever been in history, they know what the outside is like. They all know the potential benefits of denuclearization. Kim Jong-Il, I believe, has made a decision that the nuclear weapons are more beneficial than all those potential benefits, and it's hard to argue with somebody like that. You've got the same situation to a degree between Japan and North Korea, with all these . . . . potential assistance . . . . . Japan. There's some progress on . . . . issues, and yet they refuse to do even that. How much harder will it be for them to give up their nuclear weapons, particularly Kim Jong-Il, for mere economic promises. But the next generation may be different, and that's what we look to. That's what we follow closely and that in itself is why we have to continue to articulate to North Korea both our intolerance of its nuclear capabilities as well as the benefits that it would gain should it choose to road to denuclearization.

I'll wrap up there and open it up to your questions.

MODERATOR: Claudia!

CLAUDIA ROSETT: Thank you. Why on earth should we think that the Pyongyang . . . . Syria was the only joint venture North Korea . . . . . to outsource its . . . . .

SEILER: You're right. There's absolutely no reason to think that North Korea, having crossed that line, would not do it again.

ROSETT: Where else are you seeing . . . . . . ?

SEILER: We watch - we . . . . that could be done on a global scale, and obviously, I think everybody in this room knows a lot of the stuff that's in the media, possible potential cooperation with Burma and other countries. The difficulty with North Korea, of course, is it's a fascinating topic, given all the amount of misinformation and speculative reporting that's out there. It's really difficult to sort through the full array of information and misinformation that's available, and I'm not meaning to out rightly discount all of the information. But what we're seeing I think is unprecedented value of third country . . . . . information. . . . . . was mentioned earlier, other countries reporting. I just have to show you that because of this precedent, we watch it very closely.

ROSETT: Could I just have a quick follow-up on that. Could you name -- understanding that you're not going to make spectacular news this afternoon by telling us you've actually spotted one somewhere else, but could you name five places that bear closer looking. We know about Burma, but North Korea is extremely . . . . in many parts of the world. We've just heard there are . . . . products that the Bush Administration never came clean about the Iranian connection. I personally have wondered because there's all sorts of evidence that there was druggery (?) going on between Syria and - sorry - North Korea and Iraq via Syria and . . . . So could you take us through their fields - Latin America, Africa, elsewhere in Southeast Asia? Some places where you look - you keep an eye, even if you aren't seeing anything yet.

SEILER: Well, not in an effort to dodge the question, but to artfully dodge it - you know, I mean, there's two dimensions to an issue such as this. First of all, it's to look at the third countries' intentions. Look at the countries who'd be willing to pursue this capability. One distinguishing mark about North Korea's WD exports, particularly its missiles, is that - it's countries that can't acquire these capabilities anywhere else that turn to North Korea. North Korea is not the provider of preference if you are a legitimate country looking to build a decent ballistic system or have a - it's not to diminish some of their qualities or exports, but when you're dealing with North Korea, you're risking the isolation - you're making a strategic commitment that you are willing to be labeled a pariah that comes with dealing with North Korea. So we look at those countries that would be like that, and we do also follow closely where North Korean individuals are traveling at business. Ii would also say though - and another reason why I definitely don't want to speak too much on this question is - our ultimate success in detecting this is really based upon the ability to track this without a large amount of attention coming to it. I think clearly with the Syria case, and I know I'll probably take a large number of arrows for this one, but I think in the Syria case, it was an intelligence success story of how we identified it, and how we worked through that issue, and I'll just leave it at that. But it is an issue that we are extremely focused on, within the larger context of any rogue state wanting to pursue either the plutonium route with an El Khabar/...... ..... reactor, or a covert uranium enrichment program.

MODERATOR: Gordon!

GORDON CHANG: We heard this fascinating discussion about the capabilities and the frailties of the North Korean military, but of course when we talk about this, shouldn't we also talk about North Korea's friends? So for instance, North Korea and China are each other's only military ally, and China is North Korea's primary diplomatic backer, and certainly provides a lot of material assistance. I know that it sounds inconceivable that the People's Liberation Army would help the North Koreans but of course in the last couple weeks we have seen these statements by Chinese generals in the Asian media about taking on the United States and willing to fight and even preparing for it. So my question is: Could somebody on the panel talk about how the People's Liberation Army might interact and help the Korean Peoples Army? After all, this is something that has happened before in the 1950s, so it seems to me that this would be an important part of the discussion in terms of thinking about conflict on the Korean Peninsula.

SEILER: I think from the intelligence community perspective, when you look at China - first of all, what's clear is China is not a monolith, and if you scour the open source writings and all the various voices that are out there, I think you'd get a diversity of opinions. But what is clear is that Beijing and Washington have an important relationship and that one would find it difficult to - if you look at - the PRC has led the six-party talks process. You see a commitment to try to maintain stability in the region, both by assuming the difficult task of denuclearization and also dealing with a North Korea that at times likes to throw temper tantrums and make everybody's life difficult. In that regard, it would be difficult for me to conceive of any type of cooperation between the two countries that was designed either to destabilize or shift the balance of power on the Peninsula.

MODEATOR: Michael!

MICHAEL MARSHALL: Thank you for that plethora of information from the whole panel. First, I'm not a military specialist. . . . . . (rest of question inaudible for clear transcription.) The UN Security Council Resolution . . . . what effect has it had in your estimation . . . . because it seems to have had a pretty dramatic effect on their arms trade . . . . and lastly, . . . . . and there is a lot of discussion about which regime to negotiate with - you know, which would be more effective to negotiate with . . . . . . . . I would like to get your thoughts on that.

_____: Command, control, computers, communications and colleagues . . . . If we really want to complicate things like military commanders like to, usually on the advice of guys like Dave, you throw in . . . . You have C4 ISR - command, control, computers, intelligence -

MODERATOR: David!

DAVID MAXWELL: Reconnaissance and surveillance.

_____: Right. Essentially, what it means is - let's go back to before we had modern communications. The reason - I was in Fredericksburg, VA, which as you know is the cultural center of the universe. About 10 kilometers from my home in Spotsylvania County is Chancellorsville, where Lee defeated an army twice his size. He was able to so because he was able to control his troops better than the Union commander was. And that has not changed. He or she who is able to control their troops the best, move in the quickest to the most effective spot has that best C4I, and in today's modern technology age, C4I has become a vital aspect of winning. Wars are now much shorter in duration until you're fighting counter-insurgency. Does that make sense to you? . . . . 1874. I saw this wild press piece - Syd might have seen it too - from a think tank in Stockholm 10 days ago that said the weapons sales for North Korea had gone down by 90%. Please allow me to say - I doubt that. I think that two things - 1874 is very important. That's what you were asking about, I believe. And I think PSI is very important as well because we're never going to stop the North Koreans, but we can certainly hurt them and I think you've seen that. 1874 has done something that is very important and we've gotten nations - we haven't traditionally played a big role in things like PSI, like the United Arab Emirates and Thailand. . . . . . 35 tons of military equipment is a lot to lose. So I think it has had some effect. I have no idea how much of an effect, but it certainly at the very least forced the North Koreans to look at using new tactics, techniques and procedures when they run these types of programs, and something that is just fascinating to me is - I'm sure you've been reading in the press about what happened in Thailand - how that shipment was supposed to go from North Korea to Thailand, Sri Lanka and somewhere else, to eventually get to Iran. They were using front (?) companies in five different countries because . . . . You know, a plane from the Ukraine built by the Russians - yes, it was just very successful. The North Koreans are very smart in doing stuff, so we're going to have to - our government, and folks like Syd - and those he works with - they are going to continue to have to be very smart to combat (?) how they run these operations because they're very sophisticated.

____: . . . . Is it impacting North Korea's nuclear negotiation position?

____: I think Larry could answer that one.

LARRY NIKSCH: You talked about whether it would be more difficult or less difficult between negotiating with Kim Jong Il and negotiating with a successor regime. It seems to me the positions that the North Korean government has laid out in the last few months, including what Syd talked about, this denigration of the importance of diplomatic relations, also the revival of the peace treaty and the attempt to roll the nuclear issue into a peace treaty negotiation rather than a six-party negotiation, the demand that sanctions be lifted. We saw the development of some of these positions actually early in 2009 - in January and February there were a number of important North Korean policy statements related to their negotiating position which began to lay these things out. Now, that was the period when Kim Jong Il seemed to have been incapacitated because of his stroke. The period from September until probably April or May of 2009, and we had in effect a collective body of leaders taking over at least part if not all of the policy formulation process during that period. These policies, which continue to have been built up and developed and have been laid out to the Obama Administration now seem to be a case in which the North Korean government, now with Kim Jong Il apparently back in charge of the policy formulation process, has carried over the agenda that the - what you might call "successor collective leadership" began to put forth in early 2009. That tells me that the influence and power that these leaders, Jong Sung ..... and - one expression that has been used to describe this group was Jong Sung .... and the four generals. There may be a few more officials added to this group of five that has been described. It seems to me that even though Kim Jong Il seems to be back in charge of the policy formulation process, the power that this group accumulated during this 7 or 8 month period in which they were running the policy formulation process - their power has not receded all that much, and he has to listen to them now more than he did perhaps before the pre-stroke period. Again, I think the negotiating agenda on the nuclear issue that they are running now, which is a very difficult one, especially this peace agreement one - I think reflects the influence of this group, an influence which I think remains at a high level.

MARSHALL: I must apologize for getting here rather late but I simply couldn't get away earlier. A question - but a couple of observations first. I was meant to be a discussant, and again I apologize for being late. These are my observations.

It seems to me that the internal situation in North Korea is extremely volatile at the present, and a lot of the policies we've seen are an effort to try and keep a lid on that volatility. As Mr. Seiler mentioned, North Korea is now much more open to information from the outside than it was under Kim Il Sung. As a result, even . . . . They know South Korea is much better off than North Korea. They know that China and people who went into China during the famine in the late '90s, saw that life there was way better than in North Korea. So there's an awareness that North Korea is not what people were told it was in the past. And I think that then gets reflected in - not so much popular . . . , but in popular attitudes. I'm not talking about a political protest group, but in people's attitude to their country and to work. Some years ago I spoke to a Mongolian senior legislator. Mongolia has open relations with North Korea as well as being close to the U.S., which is very useful. And he said that - he also was a private businessman, and he had employed North Korean laborers. North Korean laborers come to Mongolia and get work there. And he said these people had no work ethic. He said they simply are - they don't understand what it is to turn up on time, to work hard. He said, after they've been about a year in Mongolia, they start to catch on. And I've heard similar things from members of the South Korean Unification ministry about North Korean workers in the Kaesong complex, that people do not have anything like the work ethic that South Korean workers do. And what it reminded me of was Eastern Europe workers and particularly Russian workers under the Soviet Union where people said "We pretend to work and they pretend to pay us." So at the level of the population, the working population, there's clearly extensive demoralization.

When it comes to the elite - I mean, I think the interesting puzzle, Mr. Seiler, is - who stands where among the elite? It's clearly not a monolithic body. It's probably mostly a younger generation who are looking to the future, and realizing that the present situation is not sustainable, and perhaps an older generation, particularly a military . . . . who want to hold onto the legacy of Kim Il Sung and protect it, and the nuclear capability is a sort of insurance for that.

Just to wind up, my Mongolian legislator said he and the legislature frequently receives parties of officials from North Korea and he said that one of the first questions that they ask in private conversation is: what happened to your Communist party? What happened to the members of the Mongolian Community party? Did they get shot? Were they put in prison? No, they continued in the political process and actually got elected back into the government at one stage in the post-Communist era. So there's clearly a concern there among the officials at the sort of mid-level: what's our future going to be like? We foresee change. Is there a hope for us to hold onto what we've got?

In terms of a question, I'd like particularly for Mr. Seiler to answer - obviously DNI does a lot of work on military intelligence: how much do you know of that different attitudes and different group within the elite - social, political attitudes there within North Korea? SEILER: You know, Larry and I, I think, may have a little bit different view of how the events of 2009 played out, and I think in large part, part of it's driven by what I see as a pretty solid consensus at the top circles of decision making in North Korea. If you think about the people who have influence into foreign policy, I'm thinking for example Tong Suk Chu (???), Kim Jung T...., who is a counselor under the National Defense Committee and who is now .... department who handles with relations with South Korea and Japan among others - I think we have long seen this portrayal of a hardliner vs. moderate debate as a negotiating tactic. We don't see that type of diversity, although clearly - I mean, as a caveat - there's two careful ways - first of all there is bureaucratic competition. The Ministry of Foreign Affairs loves it when there is dialogue ongoing. They like . . . . it's certainly a sign to some. Technicians responsible for the missile program like it when they get to launch a missile, or when they get to make a nuclear device go boom in a hole in a cave. But all that said, it brought around a consensus, and I would actually say that the scenario that I see is that - what we saw in early 2009 was really planned for the end of the Bush Administration when it became clear that - we deadlocked - in essence that the six-party talks were - a lot of the analysts thought we were deadlocked which was on this issue of verification and the sampling and access required in order to 1) confirm the actual plutonium production, and also to gain insight into the highly enriched uranium position. And this is actually where actually the agreed framework had stumbled, when you look at the IAEE (?) and its inability to get the special inspections necessary to clear the delta between what North Korea had declared what it actually produced in the way of plutonium and what the IAEE and others thought they might have had, which were the few grams worth - few dozen grams of plutonium vs. kilograms - weapons' worth.

So the six-party talks process had run its course as far as it could go, and North Korea could sense it was not going to really get a lot of support for a liberal verification regime. And this is after the President took North Korea from the terrorism list, and then the whole issue of what type of access will we have in the province . . . . and I would opine that at that point North Korea makes a decision that it's going to embark on this path with the new administration, to demonstrate early on that it's a nuclear power, to demonstrate early on "You have to pay attention to us." - to demonstrate early on it has the strategic capabilities. And they were probably thinking too - if the new Administration is so committed to dialogue, why not walk into such dialogue . . . . The question is, what did the stroke do to that plan? And I think it may have impacted the timing. Larry, I'm not so certain that what we saw was an ascendancy of a collective leadership that took it in a difficult - hard direction. Early on, in this whole cycle, we were expecting the possibility of a second . . . . . . that we were to hit pretty basically where we were; that after this escalatory cycle, we would get into a charm (?) offensive. The charm offensive was not particularly surprising in that regard, so North Korea's behavior today - this is why . . . . . in particular has stopped looking at the tactical question - we're often driven - and it's a little slam on the press, because you guys are just running the stories, but when are the North Koreans coming to the talks? When do the six-party talks start again? As though the resumption of talks were an objective in itself, and that's actually North Korea's strategy, and that's how it's earned so many concessions just for coming back to the table. And this is where the interesting thing analytically is, with everybody calling for strategic patience now, and telling . . . . "You're going to be rewarded simply for coming back to the talks," - what is North Korea's behavior at this point? Will it be -- . . . . once again, use some type of provocative action, or will it actually see our calmness and comply with it? And this goes back to the question then, "which regime can you negotiate with?" You can negotiate with them all; they're not mutually exclusive. You negotiate with the current regime because it's the reality at hand. It's a reality that we gain a lot of benefits from the six-party talks process; we build diplomatic consensus; we do somewhat mitigate some of the more provocative behaviors of North Korea. I think that the consensus we have in the region helps us on the proliferation issue which is a relative concern, and we keep putting that message on the table. Peace treaty, normalization - all this other stuff. It's all there. Just come back to Beijing - come back to ........ and when Kim Jung Il hears that, maybe we're . . .. Maybe Kim Jung Il could care less about all these benefits - and he really just wants the capability. The rest of the elite though is watching and we're . . . . . . . . "Where does our future lie? Is this sustainable?" particularly if the other six-party talks remain firm in their position. And I would add too that Tehran is watching. Other potential proliferants are watching. The whole credibility of any post-cold war, NTT (?) centric type of counter....., non- proliferation regime hinges on how well we handle this issue. From an . . . . . perspective, other countries are watching us. So it's a multi-dimensional issue that sometimes we Korea-hams think too much only that it is a Korean context, but it's got the international proliferation. That's a long, rambling answer to a very simple question and I apologize for it, but that's basically how we saw some of the leadership dynamics play out over the past year.

NIKSCH: I just want to make a brief comment about what we've seen in the last month or so. There are three things that seem very different in North Korea since the beginning of the year. I don't know what the future will hold, what effect these three developments will have. The first of these is - a statement that is reported that Kim Jung Il made in January in which he admitted to failing to adequately feed his people. Then you have the apology by the Prime Minister, Kim Yong Il about a week ago, for what is reported to have been a very, very large meeting of local Communist party officials in Pyongyang, an apology for the economic mess caused by the currency change, and also by the restrictive measures against the private markets in North Korea. And now you have the reports that the regime has begun to lift restrictions on the markets which it imposed in 2009, actually going back to some degree into 2008, and also it is now allowing people again to trade in foreign currency which, in December, was banned as part of these economic measures the regime put forth. All of this, or at least the last two elements in these three changes, coming out of pressure, public, grass-roots pressure on the regime. Now, I've never seen anything like this in North Korea before. I don't know what it means, but it's something I think we have to watch very carefully. And if something really develops from this, it seems to me, U.S. policymakers really need to examine the question of how do we incorporate a new trend along these lines in North Korea into our diplomatic approach to North Korea? I would watch this very closely now over the next few months in terms of whether this is just a momentary blip on the screen, or whether it's going to be something more fundamental in terms of real change in North Korea.

or . . . . capability is to leave the infrastructure as is, combine forces command is a proven combined command that has deterred the North Koreans . . . . So until the South Korean military had the capabilities necessary to assume a separate command from the United States forces, my suggestion, my thought, my assessment would be leaving the structure in place, pushing back that date of 2012 until the ROK military has those capabilities.

MAXWELL (?): . . . . first point out something. We talk about the OpCon (?) issue and say that Korean forces are . . . . wartime OpCon of the U.S. That's not really true. The combined forces command answers to the military committee which is made up of the National Command Authorities of both countries. There is a U.S. General in charge of combined forces command, and he answers to the military committee of both countries, and U.S. Forces Korea does not have OpCon of Korean forces. So I think that's important to remember.

The other thing I think is interesting - look at our alliance over the last 60 years, and our military - the development of our military capabilities has been very symbiotic. That's really what we have - and how we have developed the combined command, and the strengths of both countries have taken the place of the weaknesses there, and this symbiotic relationship has in many ways not allowed a South Korean unique military culture to develop because the standard by which South Korea and the Combined Forces Command judges military operations is the U.S. standard, and as Bruce has taught us, U.S. C4I is very extensive, and the challenge for South Korea, because the standard which they have grown up with is the U.S. standard, they have to invest a tremendous amount of resources to develop that standalone capability, separating the Combined Command. So it's a real challenge and it becomes a resource and time question. Can they commit the resources to develop that unilateral capability, and do they have the time to do it?

Again, I caveat this - my personal comments, not official comments. But I would say my personal comments - I think it is correct, and it is the future, particularly what happens in a regime collapse scenario that the Korean military be in the lead. It is important for reunification of the Peninsula and what happens in the North that it is the South Korean military in the lead for legitimacy purposes and the only way to counter the 60 years of propaganda and indoctrination of the North Korean people, because if the U.S. forces do lead, it can be counterproductive. But the challenge is time and how we're going to do this. And I think the symbiotic relationship that we have had is a difficult one to break and it's going to be a real challenge for us in the future.

MODERATOR: Leonard!

LEONARD OBERLANDER: I would just add to what David Maxwell just said - over the least 60 years, since the Korean War, American troops have been in Korea in that same mode - cooperating with the Korean military. During this time, there was a transition from President Syngman Rhee to Bak Jeonghui to 1989 into a democratic government. This was at last a 35- year transition. There was a lot of . . . ., a lot of development and cooperation. Part of it was called military civic action. It was building roads and schoolhouses, and it was what we call now Infrastructure Development and so forth. The status that has been achieved during this military relationship, accompanied in the private sector enormous progress in industry and technology, and South Korea today is one of the foremost, advanced, technological countries on the planet, and has a very successful private sector which is accompanied by that democratic process. I find it somewhat surprising that the military has not progressed to the same extent, and David Maxwell just explained I think the reason why, but the potential is there and I think the policies, goals and objectives which seem to be clear need a strategy in Korea for the private sector to help support the development and the capabilities . . . . .

MODERATOR: Kathryn!

KATHRYN WEATHERSBY: The question about China which you raised is a significant question. I would just say that the strong consensus is that China's aim with regard to North Korea is to prevent instability in its region that borders Korea because of the large Korean . . . . . . . . . there and so there's a tremendous concern about the consequences of implosion of the state on China's own internal stability, internal security. And so rather than supporting . . . North Korean . . . . . . . it would use whatever leverage it has on North Korea with by way of supplying North Korea with resources to restrain . . . . There's really no support for the idea that its alliance with North Korea on paper would lead it to support any conflict . . . .

____: I don't want to prolong this but . . . I understand the Chinese concern about the Korean population on the border, but if there were implosion in Korea, North Koreans wouldn't go north into China. They would go south into South Korea and we've already de-mined three passages through the DMZ, so that's exactly where they're going to go. I think the Chinese have much different motivations for what they're doing. They see some short term examples certainly in . . . . South Korea and Japan, and certainly getting exemptions (?) out of the United States because they . . . dialogue in six-party talks, not a solution. So there's a lot that's going on there which I think that we aren't willing to talk about, certainly not in public and perhaps not even in private regarding the way that China and North Korea interact. I think it's very important that we look at this, especially since Fu Ju Tau (???) has purportedly felt at least politically - the North Koreans have always been correct (?) because he has been a . . . . and therefore he has an affinity for the North Korean solutions. I don't want to prolong this but I think there's a lot more . . . . . we really need to look at in terms of North Korea because it's not just North Korea. It's really China as well.

MODERATOR: With that then, ladies and gentlemen - thank you very much. The meeting is adjourned.

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