Outside the North Korean city of Kaesong, there is an industrial park that is meant to be a symbol of a new era of cooperation between Stalinist North Korea and democratic South Korea. Located close to their heavily armed border, the park houses South Korean factories that crank out clothing and other merchandise produced with the help of more than 23,500 North Korean laborers. It's a bubble of congeniality between two countries that are still technically at war one that abruptly burst on March 24, when North Korean authorities ordered 11 South Korean government officers stationed at Kaesong to leave the country. The incident was only the start of a North Korean temper tantrum that has plunged North-South relations to their lowest point in a decade. On March 28, North Korea test-fired a barrage of missiles into the sea and warned it would "mercilessly wipe out" any South Korean vessels that violated its territorial waters. Two days later, a military official threatened to turn South Korea to "ashes."
Pyongyang is prone to such outbursts when it's in a diplomatic headlock. And increasingly, Kim Jong Il's government is being tag teamed by the U.S. and South Korea in international efforts to get Kim to dismantle his nuclear arms program. After a promising start to carrying out landmark denuclearization agreements signed by the North in 2007 deals reached through the six-party talks involving North Korea, South Korea, the U.S., China, Russia and Japan Pyongyang is no longer cooperating. North Korea shut down its main reactor at Yongbyon in July and allowed in international inspectors, as called for by its agreements. But a deadline to disclose all of its nuclear programs and disable the Yongbyon facilities came and went at the end of last year. To try to break the impasse, U.S. Assistant Secretary of State Christopher Hill on April 8 met with North Korea's top nuclear negotiator, Kim Kye Gwan, in Singapore. Hill, however, reported no major breakthroughs.
Hill will need to turn up the heat on North Korea even more. His somewhat unlikely ally in pressuring Pyongyang is Lee Myung Bak, 66, the newly inaugurated President of South Korea. Lee, a conservative who says he wants closer ties with Washington, has vowed to take a tougher line toward his uncooperative Northern neighbor, in stark contrast to the "Sunshine Policy" Seoul has pursued for the past 10 years. This program of engagement allowed North Korea, without giving up much of anything, to gorge on a smorgasbord of South Korean aid amounting to more than $800 million in the past five years alone. The gravy train reached full throttle in October when Lee's predecessor, Roh Moo Hyun, held a summit with Kim in Pyongyang and agreed to provide a laundry list of goodies to the impoverished North, including the construction of shipbuilding facilities, the development of a special economic zone and the expansion of the Kaesong industrial park.
Lee, however, has placed these costly projects on hold. He says he expects the North's cooperation on issues important to Seoul, such as holding reunions of families that have been separated since the end of the Korean War. Perhaps more importantly, Lee is making greater economic ties contingent on progress in denuclearization. If Kim completely abandons all of his nuclear programs, Lee says he'll institute a vast aid package aimed at tripling North Korea's annual per capita gross national income to $3,000. (South Korea's is more than $20,000.) Says Kim Tae Hyo, Lee's secretary for national strategy: "Big-scale inter-Korean projects will be linked to the progress of the six-party talks."
North Korea has responded to Lee by getting personal. A recent editorial in the Rodong Sinmun, a North Korean newspaper, called him a "political charlatan" and "a pro-U.S. stooge," and warned of "catastrophic consequences" due to his new policies. "The North Koreans are asking how hard they have to slap Lee until they push him back on the Sunshine road," says Nicholas Eberstadt, a North Korea expert at the American Enterprise Institute, a Washington, D.C.-based think tank. Lee has shown no intention of changing his mind. Kim, Lee's national-strategy secretary, calmly dismisses the North's rhetoric as "not a new phenomenon." In late March, South Korea's representative voted for a U.N. resolution criticizing North Korea's human-rights record, a reversal of Seoul's previously nonconfrontational stance on the issue.
And if anything, it looks like Lee's resolve can only get stronger. That's partly because members of his Grand National Party had a strong showing in April 9 parliamentary elections, which may make it easier for Lee to push his get-tough agenda. To further boost his position, on April 15-19 Lee is scheduled to visit the U.S., where he'll meet with President George W. Bush at Camp David. During the Roh years, relations between the two longtime allies sank to a nadir, partly due to Roh's refusal to go along with Bush's efforts to squeeze the North into submission through economic sanctions. Lee's foreign-policy outlook is much more closely aligned with that of the Bush Administration. Indeed, the two countries seem to be taking pains to present a united front. U.S. Secretary of State Condoleezza Rice in March stood shoulder to shoulder with Lee's Foreign Minister Yu Myung Hwan in Seoul while Yu said that "time and patience is running out" on Pyongyang's foot-dragging.
Whether or not this U.S.-South Korea partnership will budge Pyongyang is an open question. The current bottleneck in negotiations is over an American demand that Pyongyang fully reveals all of its nuclear facilities, as well as acts of proliferation of nuclear know-how (including a suspected instance involving Syria). But the tide may turn in favor of the allies: after growing slightly for seven years, the North Korean economy contracted by 1.1% in 2006, according to South Korea's central bank, and a bad harvest has worsened chronic food shortages, say North Korea watchers. Lee has pledged to maintain humanitarian aid to the North. But if Pyongyang's plight continues to worsen, Lee's tourniquet on other potentially vital economic arteries could force the Kim regime to heel.
Of course, the strategy could also backfire. Pyongyang at the moment is still talking to the U.S., but North Korea in the past has proven almost impervious to economic punishment. The Rodong Sinmun already warned that Lee's hard line "throws a hurdle in the way of the settlement of the nuclear issue." Kim Jong Il, after all, is always looking for an excuse to break his word.