The Next Korean War?

24-Nov-2010

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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.







By Leslie H. Gelb, The Daily Beast,

North Korea’s attack on a South Korean island likely won’t escalate into a full-blown battle. But the Hermit Kingdom is pushing its neighbor—and the U.S.—toward danger.

This may be the most dangerous moment on the Korean Peninsula since the truce ending the Korean War in 1953. North Korea’s artillery attack on a densely populated South Korean island, harming civilians, represents a whole new level of escalation. Notably, the South Koreans fired back—which sent a good strong message. The Pyongyang crazies never attacked civilians this way before. But they torpedoed a South Korean naval vessel in March, killing 46 sailors, and they hadn’t done anything that provocative before either. Not to be forgotten, they just took American scientists to view their new uranium enrichment facility, which could add to North Korea’s stockpile of eight to 12 nuclear weapons. Is war looming on the peninsula once again? Why has Pyongyang taken these alarming military actions? What can South Korea and the United States do now?

First, North and South Korea have never been closer to war since 1953, but close is actually not too close because of the terrible consequences of war for both sides.

Second, Pyongyang wouldn’t be sticking its finger so brazenly in South Korean and American eyes if the regime didn’t want something. And this something, interestingly, might be its desire for new negotiations—or it might be something to do with Pyongyang’s Byzantine succession dance now under way.

Third, Seoul and Washington don’t have very good options, as usual, but they can’t just do nothing. In the face of these two North Korean attacks, alliance credibility is flatly on the line.

North Koreans have done crazy and dangerous things before, but never so blatantly as now. On the other side, the new South Korean President, Lee Myung-bak, has stated many times that he wouldn’t put up with such provocations and was going to be tougher than his predecessors. On top of this, relations between China and North Korea have been “warming,” says Evans Revere, one of America’s leading experts on the region. This warming certainly emboldens Pyongyang further. And the Obama administration has recently dispatched the U.S. Navy to Asian waters to send Beijing a message about its muscle-flexing. This all adds up to a combustible situation.

War would destroy both sides, and neither side can afford war. Thus, war is closer than in decades, but not really on the horizon.

But the underlying reality on the peninsula is that war makes no sense. Both sides know it beyond dispute. Here’s what happens if war breaks out: half of South Korea’s population is within 50 miles of North Korea’s arsenal of almost 12,000 artillery guns and rockets. Those weapons are more than sufficient to destroy much of what South Korea has created in over half a century. As for North Korea, a U.S. air and missile attack would destroy what’s left of that country and leave its dictatorship in want of a home. Thus, war would destroy both sides, and neither side can afford war. Thus, war is closer than in decades, but not really on the horizon. American political leaders wanting to look tough will undoubtedly propose some unspecified U.S. military actions, but fortunately, they won’t get their way. Any game of chicken will have to be up to our South Korean allies.

Beyond question, Pyongyang knows all this. So when they ratchet up the danger level, they’re doing it for some other reason. Explanation No. 1 is that the shooting is part of Pyongyang’s succession problems. The Supreme Leader Kim Jong-Il is in poor health and fading. It appears that he has jumped over his second son and intends to empower his third son instead. This third son, Kim Jong-Un, has some exalted military title and he may be ordering the high-wire military actions to show how tough he is. But there may be an additional explanation. Asia experts think that Pyongyang is taking these actions as the only way it knows of getting our full attention. And what they think Pyongyang wants is to resume the usual negotiations—our concerns regarding their nuclear program and their desires to have more economic assistance. In fact, that has been the message the North Koreans have provided quietly during several recent visits by private American groups.

It’s fair to ask why Pyongyang has chosen threatening war to get our attention when other means are available. From their point of view and from their experiences, Washington pays attention to them only when the warning flags go up. There is some truth to their perception. But it’s not the whole story. The Obama administration might be willing to talk if they felt there were real prospects of making actual progress. The White House doesn’t want to talk for talk’s sake. And more importantly at this moment, they believe they cannot talk with Pyongyang after its recent military attacks because that would only look like America is caving to North Korean pressure and rewarding its belligerence. And here the White House is absolutely right.

So, what policy choices does the United States have? Above all, there is agreement within the administration now, as before, that America must follow the South Korean lead. It is their country, and it is they who will be most at risk. Almost certainly, Seoul and Washington will agree to beef up America’s naval presence in the area, and that’s the right military move. Also, Seoul will move to cut off its recent shipments of rice and manure to the North. President Lee said he would order military strikes on northern bases if Pyongyang seemed poised to launch further attacks. Beyond that, Seoul will join with the United States to go to the United Nations. Now, the United Nations has become a true sinkhole in recent years, but it’s a better diplomatic option than going to China once again for help. Beijing simply won’t take a stance against the North, no matter what it does, for fear that this Communist regime will collapse and leave China to pick up the pieces. Of course, the United States will also need to consult with other allies in the region, chief among them being Japan.

So, alas, the South Korean-American policy road will be the U.N., and the aim will be to ratchet up economic sanctions against Pyongyang. Current sanctions are already making North Korea pay a heavy price—or rather the North Korean people pay a heavy price. Communist party members and the military make sure to feed themselves. China will be sure to object to, or even veto, harsher sanctions. And yet, it might be worth compelling China to do this in order to show Beijing’s imperviousness to right and wrong on the peninsula. The bottom line is the bad guys in Pyongyang don’t have any good choices, nor do South Koreans and Americans. The good news is that the leaders in Pyongyang will see this if we hold firm and realize that if they really want to get our attention and resume negotiations, they will have to put something positive on the table. Then and only then, can all parties climb off the war track and resume negotiations. Don’t expect much, but don’t expect war either.

Leslie H. Gelb, a former New York Times columnist and senior government official, is author of Power Rules: How Common Sense Can Rescue American Foreign Policy (HarperCollins 2009), a book that shows how to think about and use power in the 21st century. He is president emeritus of the Council on Foreign Relations.


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