WATCHING NORTH KOREA FROM VLADIVOSTOK

C O N F I D E N T I A L MOSCOW 003210 SIPDIS E.O. 12958: DECL: 10/31/2018 TAGS: PREL RS KS KN SUBJECT: WATCHING NORTH KOREA FROM VLADIVOSTOK REF: A. A. MOSCOW 3025 ¶B. B. MOSCOW 2856 Classified By: Acting Political Minister Counselor David Kostelancik fo r reasons 1.4 (b) and (d) ¶1. (C) Summary. North Korea experts in Vladivostok see small signs of economic reforms in North Korea but believe Pyongyang needs more confidence in its regime survival before being willing to take further steps to alleviate the poverty situation in the country. The experts hold varying views on the state of power politics in the DPRK. The military and Kim Jong Il's cousin-in-law are two of the possible post-Kim succession scenarios, with some believing that there would be significant regime changes in the next five to ten years regardless of Kim's HEALTH situation. The South Korean Consulate General in Vladivostok tells us that relations between North and South Korea are tense and deteriorating, but personal relationships between their diplomats are cordial. End Summary. ¶2. (SBU) During a October 15-18 trip to Vladivostok, Embassy Moscow Poloff and ConGen Vladivostok Pol/Econ Off spoke to a number of local experts regarding North Korea. These included journalist Oleg Zhunusov of the business daily Zolotoy Rog, Korean-Russian community activist Valentin Pak, Head of the Russian MFA Vladivostok Representative Office Igor Agafonov, Director of the Institute of History, Archeology, and Ethnography Viktor Larin, and South Korean Consulate General Counselor Kho Kan Il. There are approximately 3000 North Koreans working in the Russian Far East (RFE) under labor agreements between the Russian and DPRK governments, and 35,000 Korean-Russians live in the region. Eye Witness Accounts of Poverty and Limited Reforms -------------- -------------- ¶3. (SBU) Our contacts offered a range of first hand impressions, based on a short trip to North Korea on ONE end of the spectrum, to regular visits for over a decade and five years of diplomatic service in Pyongyang on the other. For Oleg Zhunusov, who was recently in the port city of Ranjin to cover the start of the Ranjin-Xasan railway reconstruction project that Russia was undertaking, what little he saw left him with an impression of a poverty-stricken, fearful people who were curious about foreigners but dared not come close. The North Korean authorities controlled the journalists' every move, and allowed them to shop only at a store catering exclusively for foreigners, where newspapers in Russian carrying anti-U.S. propaganda were available for sale. While the use of dollars was officially forbidden, Zhunusov nevertheless was able to make some purchases with U.S. currency. ¶4. (C) Valentin Pak, a fifth generation Korean-Russian and prominent Korean Diaspora activist who has been visiting North Korea for a decade, told us that ONE tangible sign of the limited reforms the DPRK leadership initiated in 2002 had been the gradual increase in the number of cars on Pyongyang's streets. Igor Agafonov, on the other hand, highlighted the small-scale agricultural businesses and outdoor markets that had sprung up outside official government control during his five-year stint in the Russian Embassy in Pyongyang. Both stated that the North Korean government, after slowing down the reforms in the last two years, would likely take further small steps forward if it felt more secure about its external environment and regime survival. (N.B. Chinese Embassy Political Counselor Gui Congyou had told us the same thing in Moscow). In that regard, U.S. action to take North Korea off the list of State Sponsors of Terrorism was a step in the right direction. The jury was still out, however, on whether North Korea would eventually follow China's economic reform path. Pak believed it was inevitable given North Korea's increasing isolation from international trading and financial systems, while Agafanov categorically stated that "there will be no Chinese path" as the North Korean leadership was fundamentally unsure about its ability to maintain legitimacy while adopting a more capitalist economic system. Anticipating a Post-Kim North Korea -------------- ¶5. (C) Amidst renewed rumors of Kim Jong Il's illness, our contacts offered differing views on the state of power politics in Pyongyang. Viktor Larin asserted that Kim Jong Il had not been truly in control of the government for a while now because of his health. In his view, and that of Agafanov's, the military was playing a key role in internal politics. Agafanov saw an ideological split between the younger officer corps and the old guard, stating that should there be a succession scenario with the military taking control, the former group would be more likely to be pragmatic and therefore more preferable. Pak, on the other hand, stated that should Kim Jong Il die, his cousin-in-law Lee Yong Mu, who reportedly is a member of Kim's inner circle, was likely to be the successor rather than ONE of Kim's sons. ¶6. (C) Regardless of Kim's state of health, Pak predicted significant changes in North Korea in the next five years, while Larin estimated that there would be regime change in the next ten. In Larin's view, the South Korean government was likely banking on the ten year time line, or President Lee Myung-bak, during his September 28-30 visit to Russia, would not have been willing to contemplate a deal with Gazprom that involved building a gas pipeline through North Korea (Ref A). South Korean diplomats in both Moscow and Vladivostok confirmed to us that the proposed deal, estimated to yield concrete gas delivery from Russia beginning in 2015, was contingent on progress in the denuclearization issue and political change in Pyongyang. They indicated that the pipeline had no prospects for success in the short run, but could become viable closer to 2015 and serve as ONE of the means to unite the Korean Peninsula. North-South Korean Relations Tense -------------- ¶7. (C) Kho Kan Il of the South Korean Consulate characterized the current relations between the two Koreas as "tense and deteriorating." Noting that President Lee won the election earlier this year partially because of his pledge to implement a tougher policy on North Korea, he commented that it was hardly surprising that the two sides were not feeling particularly warm and fuzzy toward each other. ¶8. (C) Kho told us that on a personal level, relations between the North and South Korean diplomats in third countries were cordial and good despite tensions in the official relationship. This was especially the case in places such as New York and Geneva. In the RFE, thanks to the approximately 35,000 Korean-Russians in the region, North and South Korean diplomats were frequently invited to the same community events, where they had opportunities to interact with each other. However, under the Lee Administration, attitude toward mingling with North Korean diplomats was no longer as relaxed as before, according to Kho. China is Key for Influencing North Korea -------------- ¶9. (C) Echoing a sentiment we've heard repeatedly in Moscow, the local experts viewed China as having the most influence on the DPRK, in so far as anyone could influence the North Koreans these days (Ref B). Agafanov pointed out that 80 percent of foreign businesses in North Korea, however few in number, were Chinese, and China was the supplier for practically all of North Korea's import needs. Pak expressed the impression that Moscow was too far away, both geographically and policy wise, from Pyongyang and therefore was not focused on any strategic thinking on post-Kim scenarios. While Russia was interested in North Korea for economic and nuclear non-proliferation reasons, the GOR had neither the capabilities nor the desire to play a more key role on the Korean Peninsula or to compete against U.S. interests there. BEYRLE