North Korea - Another pawn in Bush's power games

Jan/Feb 2003

In his "State of the Union" speech, on 29 January 2002, Bush lumped together North Korea, Iraq and Iran in his "axis of evil". Ever since that day, North Korea has been the target of increasingly aggressive rhetoric on the part of the US.

This culminated in the last months of 2002 with the US accusing North Korea of pursuing a secret research programme aimed at producing enriched uranium and, ultimately, nuclear warheads. Economic sanctions against North Korea were once again tightened. Washington's limited humanitarian aid was suspended. More importantly, the country's vital supply of heavy fuel, part of the 1994 Geneva Framework Agreement with the USA, was halted. In retaliation, Pyongyang declared on 22 December that it had ordered the removal of the International Atomic Energy Agency's (IAEA) seals and surveillance devices at its Yongbyon nuclear plant, which had been mothballed since 1994, and that its intention was to reactivate it in order to produce electricity for civilian use.

This announcement was met with all due outrage by the Bush administration. Senator Joseph Biden, the outgoing chairman of the Senate foreign relations committee warned that this crisis was "a greater immediate danger to US interests than Saddam Hussein". And Donald Rumsfeld, Bush's Defence Secretary, felt it necessary to advise Pyongyang not to become "emboldened" by the US immediate focus on Iraq, adding: "We are capable of fighting two major regional conflicts. We're capable of winning decisively in one and swiftly defeating in the other, and let there be no doubt about it." Although, at the same time, Bush's Secretary of State, Colin Powell, was careful to impress on the media the idea that the White House did not consider that Pyonyang's gesture of defiance required any form of military retaliation - not yet, in any case.

In fact, there had been a distinct hardening of US policy towards North Korea even before Bush launched his warmongering against Iraq, or his "war on terrorism". Under his predecessor Clinton, there had been several "crises" between the US and North Korea. But the last year of that administration saw a series of high-profile diplomatic initiatives, resulting, among other things in a significant increase in US economic aid to North Korea.

However, once Bush came into office, the new administration suddenly reneged on the promises made by Clinton and increased its demands on North Korea. In June 2001, an official statement issued by the State Department insisted that negotiations with Pyongyang would have to be based on "transparency", "verification" and "reciprocity" - meaning in diplomatic jargon that North Korea would have to satisfy US demands first. In addition, this statement made it clear that any negotiations would have to include what Washington considered as the three main issues - the implementation of the Geneva framework, the banning of missiles export and the reduction of North Korea's conventional weapons. At the same time Bush's officials announced a review of US policy in Korea.

There was undoubtedly an element of politicking in this shift against North Korea. Bush certainly wanted, in this field as well as in every other, to give the impression that his policy was distinctly different from that of his predecessor. Besides, the pressure of the powerful South-Korean lobby in Congress, which has well-known links with Bush's party as well as the arms industry, certainly played a role. All the more so, because the December 2002 presidential election in South Korea was getting closer. The South-Korean lobby is traditionally close to the main South Korean opposition party, the right-wing Grand National Party. And the policy of negotiated reunification with the North advocated by the outgoing president, Kim Dae-jung (the so-called "sunshine policy") was likely to be one of the main focuses of the election campaign. So the South-Korean lobby was certainly keen to get the Bush administration to help the Grand National Party by reasserting vocally the "rogue" and dangerous nature of the North-Korean regime, and therefore the inadequacy of the ruling party's "sunshine policy".

Beyond this short-term politicking, however, the attitude of the US leaders towards North Korea remains dictated by the interests of US imperialism in the Asian continent as a whole, as it always has been over the past half century. In fact, if it were not for this fact, there would never have been two Koreas, in the first place. And, in particular, the population of North Korea would not have been reduced to the utter deprivation to which it has been subjected over the past decade by the West's blockade.

Indeed, since World War II, North and South Korea have been and remain mere pawns in the power games of imperialism - mostly US and Japanese in that part of the world - to secure a balance of forces favourable to their looting of the Asian continent. In this respect there is very little which is new in Bush's policy - except, to an extent only, the way in which it is packaged.

A 58-year old "temporary" partition

During the forty years leading up to the end of World War II, Korea was a Japanese colony. Back in 1905, a US- Japanese treaty had defined the respective spheres of influence of the two countries in Eastern Asia: the Philippines had been parcelled off to the US while Japan was allocated control over Taiwan (already annexed in 1895), Korea (which it had just occupied) and the coastal trade with Siberia.

Within a few decades, Korea had become Japan's industrial workhouse, thanks to its vast natural resources and cheap manpower. By 1945, it had a large rail and road network, a fully- fledged banking system, modern textile, steel and engineering industries, huge hydroelectric plants and extensive mining facilities. Of course, the Korean economy had been entirely shaped to serve the needs of Japanese capital, rather than those of the Korean population. But it was unparalleled in any other Asian country, except Japan itself.

If only for this reason the rival Allied powers were in no hurry to consider the prospect of Korea's independence. The December 1943 Cairo declaration, signed by the US, Britain and China, stated hypocritically that "the aforesesaid three powers, mindful of the enslavement of the people of Korea, are determined that in due course Korea shall become free and independent." Eventually, what exactly was meant by "in due course" was spelt out by president Roosevelt at the February 1945 Yalta conference, when he suggested that Korea should remain under the "joint trusteeship" of the US, Britain, USSR and China for 20 to 30 years before it was allowed to become independent. At that point, Washington was mainly determined to ensure that Korea, with its sizeable industry and large mineral resources, would remain open to US companies for the foreseeable future.

As to Roosevelt's offer of a "joint trusteeship" involving the USSR, it was primarily a sop to Stalin in return for his agreement to declare war against Japan. Of course, words like "joint trusteeship" were music to Stalin's ears, in so far as they implied some form of long-term recognition by the imperialist powers of the Soviet bureaucracy. But for the US leaders, these words were merely an expression of political expediency. The fact was, that the US army was too overstretched to deal with what was expected to be fierce resistance by Japan's elite troops based in Korea and Manchuria, not to mention the local colonial machineries. It was hoped that while the Red Army was keeping these troops busy, the US army would be able to concentrate on its final assault against Japan's mainland. Securing Stalin's co-operation with the Allies, both in the war effort itself and in the postwar restoration of the imperialist world order, required a number of token gestures towards the Soviet Union. For Roosevelt, this suggestion of a "joint trusteeship" was just another such gesture, nothing more.

In fact, Roosevelt's real agenda was exposed when Japan's resistance collapsed in the wake of the atomic bombings of Hiroshima and Nagasaki, just as the Red Army was entering Korea from the North. Suddenly US leaders became wary of the Red Army's rapid progress into Korea at a time when the US army was in no position to be present on the ground. So, on 11 August 1945, Washington declared unilaterally that the country would be split into two occupation zones, on either sides of the 38th parallel. The Northern zone, which was occupied by about one third of the population, was allocated to the Soviet Union, while the Southern zone was placed under US control - this, even though not one US soldier had set foot in Korea so far and it was to take another four weeks before the first contingent of US marines eventually landed, on 8 September 1945! Probably much to Roosevelt's surprise, however, Stalin endorsed his decision without hesitation.

On paper, of course, this division was meant to be temporary, pending the replacement of the Japanese colonial administration with new Korean institutions. The December 1945 protocol, which formalised the status of Korea as a "joint trusteeship", talked about Korea as a single country, with a single set of institutions, although it remained conveniently silent as to when it would become independent.

Nevertheless, to date, fifty-eight years later, Korea remains divided by the same border line decreed by the US authorities in August 1945.

The US "democratic" occupation

As it happened, the US leaders' plans for an orderly occupation of Korea were thrown off course even before the first US marine reached the country.

The sudden collapse of the Japanese colonial administration prompted a popular explosion. Having emerged from its underground existence, the Communist Party formed a coalition with the various nationalist tendencies. Committees for Preparation of Korean Independence (CPKI) sprang everywhere. On 6 September 1945, a national conference of CPKIs met in Seoul to proclaim a Korean People's Republic (KPR).

Following Moscow's line, the Korean Communist Party - by far the strongest political current in this movement - was careful not to allow any space for the exploited masses to fight for their own social interests. It argued that this was the time for "national emancipation" and not for social emancipation, on the fallacious ground that any other policy would have divided the "Korean nation". In political terms, like in every other country in that period, the Communist Party was putting the Korean poor masses in the tow of their own exploiters and using their mobilisation to ensure the continuation of capitalist rule.

But even this respect for the capitalist order was not enough to please the US leaders. It was not the KPR's basic democratic programme, with its call for universal suffrage and democratic state institutions, which worried the US. Nor was it even the KPR's call for nationalisations and land reform - after all, most of Korea's industries and large rural properties no longer had any owner, since they had been Japanese-owned. No, what the US leaders resented most was the fact that the fledgling regime had been set up without their prior approval, on the back of a popular mobilisation. Such a regime did not need the US for its political survival. Therefore it could not be trusted to be pliable to US interests. So, when the KPR executive committee approached the US general staff with an offer of collaboration, they were told to get lost.

Instead the US authorities proceeded to put into place their own version of a "democratic" regime in their occupation zone. The old colonial police force was restored, with virtually the same Korean personnel it had under the Japanese occupation and even the same uniform. Positions in the new institutions were handed out to a mixed bag of politicians who had either collaborated with the Japanese during the colonial days or had sought refuge under the protection of China's military dictator, Chiang Kai-shek. Either way, they were vocally anti-communist and had strong social ties with the Korean land-owning class. To lead the new regime, Washington chose a well-known right-wing nationalist, Syngman Rhee, who had high connections both in the US and in Chiang Kai-shek's regime. Then, in February 1946, the US set up a South Korean Interim Government, under Syngman Rhee's chairmanship, in which half of the members were appointed directly by the occupation authorities and the other half was elected by the better-off, according to rules and regulations which had been operating under Japanese occupation.

The policy of the new regime proved as reactionary and socially conservative as one could have expected from the social composition of the government. Calls for a comprehensive land reform were ignored, while officials were building up huge fortunes by appropriating the land of formerly Japanese-owned estates, while landless farmers were left to starve. Corruption and black marketeering became rife.

To all intents and purposes, there was very little difference between this US-sponsored regime, which officially proclaimed the Republic of Korea in August 1948, and the former Japanese colonial administration - except some, but not all, of the uniforms.

The formation of North Korea

In the Soviet occupation zone, on the other hand, the CPKIs and KPR had been accepted by the occupation authorities as representatives of the local population in the day-to- day running of affairs. In a gesture of goodwill towards the US as well as the Korean privileged, the Korean Communist Party had refrained from making a show of its strength, supporting instead, a Christian nationalist, Cho Man-sik, to head the northern KPR. Kim Il Sung himself, the West's future bogeyman, only appeared on the scene by the end of 1945, and even then only as the leading figure of one of the many factions which divided the Korean Communist Party.

Unlike the US in the South, the Red army stuck to the "joint trusteeship" agreement by making no attempt at setting up a Northern state apparatus, police or otherwise, at least not until February 1946, when the US took the initiative of setting up a government in the South. At that point, an Interim People's Committee was formed in Pyongyang, this time under the leadership of Kim Il Sung, who seems to have been chosen not because of his links with Moscow but almost for the opposite reason. Indeed, unlike many CP leaders, Kim Il Sung had not spent the previous decade in Moscow. Instead he had been organising a Korean guerilla force against the Japanese in Manchuria in association with the Chinese resistance. He could, therefore, be portrayed as a hero of the national resistance against Japan, but without being associated, like the leaders of the underground CP, with the mass mobilisation caused by Japan's collapse. In every respect, Kim Il Sung was the perfect spokesman for a "national" government.

As soon as it was formed, the new regime embarked on a two- year programme of nationalisation of the formerly Japanese- owned industries, while a comprehensive land reform was launched, which involved the confiscations of large estates without compensation and their redistribution for free, to landless farmers. Labour laws and an embryonic welfare programme were introduced.

Eventually, in September 1948, three weeks after the proclamation of the Republic of a Republic in the South, a Democratic People's Republic of Korea was formed in Pyongyang. Shortly after, Soviet troops withdrew from Korea, except for a few hundred military advisers.

In the meantime, in August 1946, the North Korean Workers' Party was formed, as a merger between the Korean CP and various other radical and nationalist groups. The political currents which had not joined the new party were first sidelined and then prosecuted if they went on agitating against the regime.

The Northern regime was unquestionably a repressive regime, which had all the features of many Third World military dictatorships during that period. Its first victim, like in the European People's Democracies set up under the protection of the Red army, was the working class - both politically but also physically due to the enormous demands put on workers to rebuild the economy. But at the same time, the combination of its anti- imperialist stance, its radical land reform and its privatisation programmes were very popular - in the North itself but also in the South, as it stood in stark contrast with the continuation of the parasitic rule of the Southern landlords.

A UN-sponsored dictatorship

Meanwhile, in the South, the CPKIs had been banned together with all "non-approved" political parties. Of course, this included the communist parties and the newly-formed National Council of Korean Labour Unions. In November 1945, the US military and Korean police launched a huge wave of arrests of political and trade-union activists, while US soldiers were sent to dislodge workers who had taken over formerly Japanese-owned factories.

But the Korean masses and activists were not intimidated by this repression. The discontent was growing among the population, especially after news of the radical measures taken in the North spread among the population. Until the Autumn of 1946, there was a long series of skirmishes with new factory owners and managers who tried to restore the working practices of the colonial days. Despite the efforts of the US general staff to keep their troops away from the population, there was constant friction, often leading to demonstrations and rioting.

Eventually, the situation came to a head in September 1946, when a railway strike, starting in the southern harbour of Pusan, turned into a general rail strike. From the railways, it spread to other industries and within a few days, 250,000 workers were on strike across the South. The range of demands broadened as the strike expanded: better wages and working conditions, but also labour laws similar to those adopted in the North, the release of political prisoners and the legalisation of the CPKIs.

The US army and Korean police were sent in to break the strike. But while their brutality failed to weaken the strikers' resolve, it sparked off a large wave of protest marches and rioting in the main towns. Police officers were killed in street confrontations, police stations were looted and set alight. The houses of government officials were destroyed. Taken unawares, the US general staff declared martial law and US soldiers were ordered to open fire on any gathering. Tanks and troops were sent to deal with the flashpoints.

Despite these repressive measures, what amounted by then to an uprising, spread like wildfire across the country, setting alight the countryside as well. For the first time the movement spread to the rural areas. Large marches took place in the agricultural southern region behind banners demanding an immediate land reform and a "return of the Korean government to the People's Committees".

Although the underground Communist Party was undoubtedly the marching wing of this movement, it was primarily seeking to make a show of strength, in the hope that the US leaders would understand that they could not run the show in South Korea without its help. For this reason the CP was certainly unwilling, but probably also unable, to offer the mobilised masses a policy which would have allowed them to build a democratic leadership of their own, which was capable of leading the struggle on a national level. Partly as a result of this, but partly also due to the heavy weaponry of the US military, they were able to crush the uprising village by village, town by town and region by region. But it took them three months, until the end of December 1946, to achieve this result.

Officially, the repression left over a thousand dead and 30,000 activists were arrested. But many of the activists who managed to escape returned to the guerilla war of the colonial days, which they were to carry on for over four years. The repression, whether carried out by the US or by Syngman Rhee's troops, was to be consistently ferocious. Thus, in June 1948, Korean troops attacked the southern island of Cheju, where the nationalist guerilla force had taken over control. The fighting lasted almost a year, with the death of 12% of the island's population and the forced deportation of one-third of this population to "protected villages". During this campaign, several regiments of the South Korean Army stationed in the harbour of Yosu refused to leave on an assignment to join the repression in Cheju. They took over control of the town and started sending delegations to invite soldiers to take control of neighbouring towns. This time, it was the US army which undertook to crush the mutiny and all those taken alive were handed over to Syngamn Rhee's police and executed unless they helped to track down their former associates.

By the end of the 1940s, US aid, military and otherwise, was pouring into South Korea to sustain Syngman Rhee's regime, which seemed now firmly in control, so that the US pulled out its troops. However, US leaders were more determined than ever to stand by the regime they had brought about in South Korea, unsavoury though it was. The Cold War and Truman's containment policy against the Soviet Union, but above all against Third World nationalism, had been declared in the Spring of 1947. There was no question of US leaders conceding an inch of land from their sphere of influence. All the more so, as Mao Zedong's victory in China in 1949, had marked the first setback for their containment policy, but what a setback! The world's largest country was openly defying imperialism by defeating Chiang Kai- shek's US-backed dictatorship, without the world's largest imperialist power being able to do anything about it!

The North relegated to the Dark Ages

On 25 June 25 1950 North Korean troops crossed the 38th parallel with some 70,000 men and a few dozen tanks, apparently without having bothered to seek Moscow's approval. It must be said that Kim Il Sung had never made any secret of his determination to re-unify the country and that he had good reasons to worry about a possible offensive by the Syngman Rhee's regime, now that it seemed to have succeeded in crushing any opposition in the South.

US leaders, however, decided to make a drastic example in order to spell out the fact that they would not allow the Chinese precedent to encourage poor countries to go against imperialism's diktats. The United Nations was called upon to order economic sanctions against North Korea and sponsor a military intervention - which the US army proceeded to carry out, with the reinforcement of contingents from Britain (50,000 soldiers), France, Australia, etc...

At first the North Korean troops met with little resistance as the population welcome the perspective of the reunification they had been awaiting for four years, and, above all, the hope of agrarian reform. Even after the US intervention had begun, the North Korean troops were able to push UN troops back. By September 1950, they were reduced to a small pocket around the Southern port of Pusan. The US Navy had to use all its resources to reverse the situation by staging a massive landing just south of the 38th parallel, in order to hit the North Korean troops from the rear. This time it ended in complete US victory, all the more so because the North Koreans had neither air force, nor aerial defence. Syngman Rhee's troops immediately proceeded to "cleanse" Seoul of "traitors", in a bloodbath which, according to US military papers, left 100,000 dead.

At this point, president Truman ordered the US army to cross the 38th parallel and finish off the North. But when, after just over two months, US troops approached the Chinese border, they were met with a counter-offensive by 200,000 Chinese soldiers. Truman did not dare to risk an open confrontation. The US army retreated hastily to behind the 38th parallel. From this point onwards, the war became a war for positions, in which soldiers rotted in trenches, where they were often gassed or burnt alive. They died for the sake of taking a hilltop or just a yard of land which they were ordered to hold on to at any cost. It was a ferocious but also terribly unequal war where, on the Chinese side millions of men went to fight without tanks or planes, under rockets and napalm, opening the smallest breach at the cost of thousands of lives.

Negotiations started in July 1951 under the auspices of the USSR. But US leaders, who pretended not to be party to them, made a point of ensuring that the war dragged on for another two years, in order to maximise the "punishment" inflicted on the Korean population. By the time the armistice was signed, in July 1953, neither side could have claimed victory. The border between North and South Korea remained unchanged. The North- South conflict remained unresolved as neither side had agreed to a peace settlement which would have resulted in mutual recognition, so that technically, the two countries remained at war - as is still the case today. But up to one million Koreans had been killed. The North had been subjected to systematic bombings which had left almost no modern buildings standing. Roads, bridges, power plants, steel mills and coal mines which North Korea had inherited from the Japanese were virtually destroyed. The whole country was returned more or less to the state where it had been at the beginning of the century. Which was precisely the aim of imperialism and the purpose of its policy.

The North strangled by imperialism

It takes a great deal of hypocrisy to talk about North Korea as a "reclusive" or "secretive" country, as the media does constantly. This is a convenient way of ignoring that for over half-a-century, this country has been the victim of a comprehensive blockade by the world's richest countries, thereby depriving it of any access to the world market.

Yet, unlike China, which was subjected to the same treatment, North Korea did not have a huge population nor a wide variety of natural resources. It was entirely dependent on willing trading partners for a whole range of products and raw materials which it did not have - partners that had to be found outside the imperialist bloc due to the blockade imposed by the US.

These trading partners were mainly China, the Soviet Union and a number of Eastern European countries, at least until the late 1980s. But since the collapse of the Eastern Bloc and the development of China's relationship with the US, the situation of North Korea has become desperate. After the collapse of the Soviet Union, according to a US academic study published in July 2001, "over just a few years, subsidised oil shipments, technical aid, and imports of parts for Soviet-designed factories declined to a few percent of their pre-1990 levels. The collapse of the USSR also meant that most North Korean exports, earmarked for the consumers and factories of the Soviet Union and Eastern Europe, suddenly had no markets (..) In total it is estimated that the North Korean economy may have lost $1bn in annual aid from China and the USSR over the past decade."

The comparison which is often made between the poverty of North Korea and the "economic success story" of the South is nothing but a cynical joke, especially when it is supposed to "prove the failure of communism" in North Korea - as if political dictatorship, nationalised poverty and forced autarchy had anything to do with communism, in the first place!

On this account, it should be recalled, for instance, that in the three decades following 1945, the USA pumped about $6bn in economic aid into South Korea, almost as much as the total aid provided over the same period to all African countries put together. So that in the 1950s more than 80% of all Korean imports were financed by US aid. Not to mention the fact that throughout the Vietnam war, Korea was one of the main suppliers of the US army in Vietnam (these supplies represented 20% of all South Korean exports by the end of the war).

Yet, despite the enormous US subsidies to South Korea, the CIA estimated that up until 1976, the two Koreas had a more or less comparable Gross Domestic Product per head - which, if anything, points to the fact that the South Korean economy was hardly more "efficient".

From the late 1970s, however, a gap did develop in the South's favour. But this was mostly due to the over-exploitation imposed on the South-Korean working class by the long series of brutal military dictatorships which ran the country until the early 1990s. This severe exploitation of South-Korean workers, together with the enormous sums that Seoul was able to borrow from imperialist banks (after all, its "political stability" and support from US leaders gave South Korea a top credit rating, unlike the North), allowed the development of an export-oriented industry, based on subcontracting production for Japanese and American companies. North Korea certainly never had such opportunities - even though one may wonder if the word "opportunities" should be used from the point of view of the South Korean workers who paid for this economic development with their sweat and damaged health!

The consequences of North Korea's forced political and economic isolation have become catastrophic over the past decade. The study quoted above provides a graphic illustration of this: "North Korea's energy infrastructure is disintegrating in many ways. The national electrical grid is essentially non- existent, operating at best as a series of unreliable regional grids using poorly-maintained equipment that is 50 years out of date to begin with. (..) The lack of electricity, diesel fuel and spare parts for trains and trucks has crippled the system for transportation of goods (including coal) and people, while the lack of energy and market for goods has reduced the output of heavy industry to a small fraction of 1990 levels. Residential and commercial lighting, heating and cooking have been affected by energy shortages, with indirect effects on health, productivity and the quality of life. Hospitals are unheated in winter, lack electricity for lighting and medical equipment and even lack fuel to boil water for human consumption (..) The lack of power idles coal mines, resulting in coal shortages at power plants."

And to complete this grim picture, one should add the impact of "poor grain harvests in the early 1990s, exacerbated by droughts, floods, tidal surges and typhoons in the latter half of the 1990s" resulting in "an acute shortage of food throughout most of the decade."

And yet, this is a country that Bush is trying to portray as a nuclear threat to the rest of the world, a country that hardly manages to feed its own population and is no longer able to maintain its power network!

Attempts to break from isolation

Despite the alleged "reclusiveness" of the North Korean regime, no-one can claim that it has not tried hard to break out of its isolation in every respect, even long before Kim Il Sung's death, in 1994.

Up to the early 1970s, North Korea remained totally squeezed by the US-enforced boycott of China. But as soon as Nixon made the first openings to China in 1971, first by suspending China's total blockade and then by admitting China to the United Nations, Kim Il Sung initiated high-level talks with South Korea, leading to a common declaration that both sides would seek reunification peacefully. Two years later, North Korea joined the IAEA and subsequently agreed to IAEA supervision of its two Soviet-built nuclear power plants.

From then onwards, an official line of political communication was established with the Western powers, involving a long diplomatic saga in which the imperialist leaders' attitude was always, basically, that it was up to the Pyongyang leaders to jump through the hoop that was being held up for them. Whatever they did, their concessions were never enough to satisfy Washington, which never kept its part of the deal.

Thus, for instance, in 1985, the North Korean leaders agreed to join the Nuclear Non-Proliferation Treaty in return for the promise of a lifting of economic sanctions - a major concession given that North Korea lives permanently under the threat of the 47,000 US soldiers based in South Korea and a similar number based in nearby Japan. But this did not stop the US from re-imposing these sanctions three years later, by adding North Korea to its list of "nations sponsoring terrorism", using the pretext of its alleged "complicity" in the bombing of a Korean Airlines jet, the year before, for which Washington did not have a shred of evidence.

Negotiation followed negotiation. Pyongyang's attempts to get the stranglehold of its economic isolation relaxed came up again and again against the same obstacles - the more it made concessions, the more concessions were demanded, without anything in return. Thus, during the 1970s, when North Korea turned to the West to purchase "turnkey" plants in order to replace old ones which were falling apart, Japan was the only country to show any interest - and then just for very small projects.

Over the past two decades, however, North Korea has bent over backwards to offer business opportunities to foreign companies. From 1985 a legal mechanism providing a framework for joint ventures with foreign companies was set up, thereby offering local industrial facilities as subcontractors. But its success has been limited, especially because Pyongyang insisted on retaining control over these operations. By 2001, there were still only 250 such joint ventures, mostly with South-Korean companies which, since the financial crisis of the late 1990s, have been keen to take advantage of the North's relatively low wages.

In order to overcome foreign companies' reluctance, North Korea embarked over a decade ago on a road followed by most Third World countries - the setting up of Special Economic Zones (SEZ).

The first SEZ, which was opened in 1989 at Mount Kumgang, was designed to be entirely devoted to luxury tourism. It is run by Hyundai-Asan, a subsidiary of the South Korean giant, and is meant to include eventually 9,000 hotel rooms, 3 golf courses, a ski resort, a theme park, etc., but nothing that most North Koreans will be able to afford anyway. Then came Rajin Songbong in 1991. It is located in the northeastern part of the country, close to the Chinese and Russian borders. But apart from a luxury hotel and a casino, which attract mainly Chinese gamblers (casinos are still illegal in China), most of its activity is confined to being used as a port for transit trade, storage and repackaging - meaning that foreign companies use its facilities, at a price of course, but without making any investment. So that by now, the port installations are in such a bad state of repair that a major investment would be needed, which will have to come from the state since foreign companies won't pay!

Another SEZ, whose status is modelled on Hong Kong's status with respect to China (meaning that it has its own administrative and justice system), was opened last year in Siniuji, next to the northwestern Chinese border. In the hope of making it more attractive to Western companies, Pyongyang has appointed a Dutch tycoon of Chinese origins, Yang Bin, as its administrator. However, since then, Yang Bin has been arrested by the Hong Kong police for tax evasion. Yet the only investment recorded so far in Sinuiji was a grandiose project for producing flowers in huge quantities for Yang Bin's company!

Maybe the latest industrial SEZ launched in 2002 by Hyundai- Asan, in Kaeson, which is planned to employ 160,000 workers by the year 2010, will prove more successful. Indeed, this time, it is a South Korean state-owned company which will lend the funds for the building of the infrastructure - something that Hyundai could not have done since it is itself overburdened with an enormous debt. But whether that will be enough to attract companies remains to be seen.

Significantly, one of the main complaints that potential investors have made to justify their reluctance to move into North Korea's SEZ, is Pyongyang's adamant refusal to relax labour laws and regulations on wages. One can only deduce from this that for the SEZ to deliver, North Korean workers will have to pay the price themselves, with deteriorating health and standards of living.

The current crisis and Bush's agenda

It is against this backdrop of desperate isolation and economic catastrophe that the current crisis in the relationship between the US and North Korea must be seen.

Back in 1994, president Carter negotiated with North Korea the so-called Geneva Framework Agreement. In return for allowing the mothballing by the IAEA of an homegrown 5GW graphite- moderated nuclear reactor, North Korea was promised the delivery in 2003 of two 1GW light-water refrigerated nuclear plants, together with the supply by the US of an annual total of up to 500,000 tons of heavy fuel oil to compensate for the shortage of energy in the meantime. In addition, as usual, a vague promise of relaxing economic sanctions was made, which never materialised. However, as it happens, the construction project has been accumulating delays and the two promised nuclear plants are not likely to become operational before 2005 at best. Moreover, Bush has now decided to suspend all deliveries of fuel to North Korea, as part of his "axis of evil" rhetorical escalation, and cancelled US humanitarian aid.

It is cynical for Bush, the president of the world's largest nuclear power, to portray this 5GW reactor as something that could possibly help in producing weapons-grade uranium (which is still a long way from producing a warhead) when this reactor is first of all designed to produce electricity for a country which is dramatically short of it. It is even more cynical for Bush to portray North Korea as a military threat for the world, when its entire annual budget represents 80% of what South Korea spends on its army (which is four times larger than the British army!) and only one fifth of the US army budget in Eastern Asia alone!

Of course, imperialism has nothing to fear from North Korea, its alleged nuclear bomb or its missiles! But Bush has a whole range of strategic reasons to use North Korea as a bogeyman for the benefit of the US regional interests.

In this part of the world, South Korea and Taiwan have both been, since WWII, the main pillars of the US influence. With China's slow re-integration into the world market over the past three decades, imperialism has now a powerful policeman in the region. But this is a country which is far too big for the US to be able to count on a willingness to put the interest of US companies first, under whatever circumstances, let alone to allow its resources to be plundered at will by these companies. Neither South Korea nor Taiwan are in a position to bargain with the US, let alone to go against the interests of US capital.

Given this situation, US imperialism has every reason to hang on to South Korea as tightly as possible, in particular, by keeping the country's military establishment closely under its control and a close watch on its population - whose mobilisation has, time and again, threatened the country's regime, including its worst dictatorships. Re-unification, if it ever happens, involves a number of risks for US imperialism, especially after the impact of the financial crisis on the South. Its economy may not be capable of absorbing the empoverished North, thereby leading to the development of a social powderkeg in a unified Korean population which would then be 70 million strong.

Moreover the current in favour of re-unification, which is strong in the South, as the December presidential campaign illustrated once again, goes together with a growing anti-US feeling among the population. This was illustrated by the wave of demonstrations calling for the withdrawal of today's 47,000 US troops from South Korea, which followed the deaths of two schoolgirls, who were run over by a US armoured vehicle last June. At a time when Bush is trying to use the "war on terrorism" to justify the return of US troops in countries like the Philippines and Indonesia, the US is unlikely to take the risk of having to withdraw from South Korea. And what better justification is there for the continuation of the US military presence, if not an alleged North- Korean "threat"?

The same reasoning goes for the US public opinion. What can justify today the $50bn spent each year on the 100,000 US troops based in Japan and South Korea, if not a significant threat? And since China cannot be promoted both as a threat and as the "economic miracle" which proves that capitalism works, the North Korean bogeyman still has a role to play. Just as it has a role to play in justifying the enormous state expenditure in anti-missile systems (and the resulting enormous profits for defence contractors) since North Korea is the only remaining "rogue" state that Bush can still accuse (although without any proof) of having long-range nuclear missiles.

In the meantime, as a result of these imperialist calculations, the population of North Korea goes on paying an exorbitant price for the economic sanctions and retaliatory measures imposed on their country. But this should not come as a surprise. The populations are always the first victims of the imperialist order, when they are not the direct targets.

2nd January 2003