UNIFICATION MINISTRY OFFICIAL SEES SOUTH-NORTH

C O N F I D E N T I A L SEOUL 000459

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/10/2017
TAGS: KS KN PGOV PREL MNUC
SUBJECT: UNIFICATION MINISTRY OFFICIAL SEES SOUTH-NORTH
RELATIONS CONDITIONED ON DPRK DENUCLEARIZATION PROGRESS

REF: SEOUL 219

Classified By: POL M/C Joseph Yun. Reasons 1.4(b/d)


1. (C) SUMMARY: The Ministry of Unification's (MOU)
Assistant Minister for Planning and Coordination Park
Chang-bong, a veteran MOU official who criticized the
Sunshine Policy, expects President Lee Myung-bak's government
to make clear to the DPRK that most economic assistance,
including fertilizer and rice, depends on denuclearization
progress. However, the policy would not be spelled out until
after the April 9 National Assembly elections, he said, when
the Grand National Party's dominance is expected to be made
clear. The ROKG would likely allow the Kaesong Industrial
Complex and Mt. Kumgang tourism projects to continue, but
without prospects for further expansion until there is
progress on denuclearization; nor will other prospective
economic projects, such as road and rail impromvements, be
considered until then. Seeing the DPRK's long-term prospects
as bleak, Park said that he was working to have ROKG planning
for unification consider not only a gradual unification
scenario, as before, but also a contingent scenario based on
collapse in the North. End Summary.

--------------
ROKG ASSISTANCE AND DENUCLEARIZATION PROGRESS
--------------


2. (C) In a March 7 meeting with POL M/C and Poloff, Park
Chang-bong said that he saw President Lee Myung-bak's
incoming government as firm on tying all but a token amount
of economic assistance to the North to progress on
denuclearization. "Without progress on the Six-Party Talks,
I don't see much aid," he said. Park said that he had
concerns about ROKG food assistance to the North because it
was used to prop up the otherwise defunct Public Distribution
System, and because DPRK officials sold the food when
distributing it, gaining funds that could be used for any
purpose. As an illustration of the new government's
attitude, Park said that the incoming team was holding up a
shipment of 50,000 metric tons of maize that President Roh
Moo-hyun's administration had agreed to provide to the DPRK
toward the end of its term. The need for progress on
denuclearization had to be made clear before the new
government could begin providing economic assistance. That
said, Park believed that the ROKG would provide a token
amount of fertilizer and rice assistance, perhaps 50,000
metric tons of each, in any case.


3. (C) Park said that the economic assistance policy would
likely remain unstated until after the April 9 National
Assembly elections, when the Grand National Party was
expected to win a sizable majority of the 299 seats. The
post-April 9 policy would also be more forthcoming about
human rights issues. He said that the ROKG and DPRK were not
in contact on this or other issues.


4. (C) Asked about the main economic engagement projects that
began during the Roh administration, the Kaesong Industrial
Complex (KIC) and the Mt. Kumgang tourism project, each
estimated to yield about USD 1 million per month to DPRK
authorities, Park said that they would be left to continue,
but without ROKG subsidies and without prospects for
expansion until there was progress on denuclearization. For
example, the ROKG-sponsored trips for schoolchildren to Mt.
Kumgang, which the Roh administration resumed in 2007 after
suspending them in the wake of the July 2006 missile tests,
were no longer an option. Park added that if the South-North
situation deteriorated, the ROKG would retain the option of
shutting down KIC and/or Mt. Kumgang. (Note: Perhaps as an
effort to entice more South Koreans to visit Mt. Kumgang,
North Korean authorities announced last week that tourists
would be allowed to drive private cars directly to the
resort. End Note.)


5. (C) Park clearly supported a harder-line ROKG policy on
economic assistance to the North, but he also expressed
several concerns (echoing reftel): that China could replace
ROKG aid (noting Kim Jong-il's recent publicized visit to the
Chinese Embassy in Pyongyang); that the South Korean public
could criticize the ROKG if the North Korean people were seen
as suffering food shortages; and that the DPRK could respond
with a provocation, such as a missile or nuclear test, that
would also unsettle the South Korean people. Even so, "we

have the stomach for it," he said.

--------------
CONTINGENT SCENARIO
--------------


6. (C) The Lee government's policy would send a clear message
to the DPRK that denuclearization progress was needed for
economic assistance to resume, Park said. But the ROKG and
USG had to consider the possibility that the DPRK would still
not denuclearize. That would require a change of plans,
including increased pressure on the DPRK regime, which could
lead to the regime's collapse. Park said he was working to
have a contingency scenario included in ROKG plans for
unification; he was leading an MOU effort to update those
plans.


7. (C) Noting that many South Koreans recoiled at the
possibility of a DPRK government collapse, seeing millions of
refugees streaming south and untold costs, Park said the real
prospects were actually manageable. In the event of a
collapse, most North Korean citizens would remain in their
home villages if aid were provided in place. The ROKG would
then begin building infrastructure, which would in turn
enable North Koreans to find gainful employment and lead to
development of further economic opportunities. Park's main
point was that the "follow-up (to a collapse) would not be as
monumental as people think." He added that at some point it
may make sense to push the DPRK regime toward a collapse.

--------------
COMMENT
--------------


8. (C) Park Chang-bong is a rarity: a veteran, senior MOU
official who persevered during the Kim Dae-jung and Roh
Moo-hyun administrations despite his strong opposition to
Sunshine Policy. Park said that he had hoped to win a
ranking position in the National Intelligence Service (NIS),
so that he could be more "hands-on" in managing the ROKG's
North Korea policy. But that was unlikely; he seemed
resigned to stay at the Ministry of Unification. Still, he
is eager to put some backbone back into the ROKG's approach
to the DPRK, believing that President Lee agrees. Park
appears to understand that the shift in the ROKG's approach
is likely to lead to hostile rhetoric, if not hostile action,
from the DPRK, but he wants to establish new ground-rules for
South-North relations in any case.
VERSHBOW