Why The Latest North Korean Provocation?
North Korea’s artillery attack on the South Korean island of Yeonpyeong in the hotly disputed maritime border region is a provocative move to say the least. Although North and South have clashed at sea before, most notably resulting in the sinking of the Southern warship Cheonan in March, and have exchanged gunfire at the Demilitarised Zone (DMZ) separating the two states, Pyongyang’s attack on a civilian-populated target was different from previous moves.
In an article in Business Monitor Online today, I examine the reasons for North Korea’s behavior. Essentially, I see three motives:
- Kim Jong Un, the late 20-something leader-in-waiting, needs to demonstrate his military credentials to his father, the Pyongyang defence (offence?) establishment, and international audiences.
- Having just revealed the existence of a new advanced nuclear facility to a visiting American scientist, North Korea is demonstrating its commitment to its nuclear programme and an aggressive military posture.
- North Korea may have been seeking to disrupt South Korean military exercises taking place in the maritime border region, or was expressing its displeasure with comments from the South’s defence minister that US tactical nukes could be redeployed to the South after an absence of 18 years.
In addition, although I find it unlikely, I cannot totally rule out that the Yeonpyeong incident was the result of local commanders acting overzealously – although this would represent a dangerous loss of control of the military by Pyongyang.
In light of the November 23 attack, I do not preclude further clashes between North and South, maybe not necessarily over the coming days or weeks, but certainly over the coming months as Kim Jong Un asserts himself. I also see scope for a new nuclear test over the coming year.
Tuesday’s attack came too late to affect the South Korean KOSPI stock market, but the won took a beating, experiencing its biggest one-day drop in many months and touching a three-month low of KRW1,170/US$ at one point, from KRW1,126/US$ at the open. This prompted the central bank to announce that it would act to stabilise the markets if necessary. From my experience, Korean financial markets are generally resilient to Northern shenanigans, and so provided we don’t see any more aggression or retaliation over the near term, I would expect markets to steady themselves.
I reiterate that the greatest danger on the Korean Peninsula stems from the possibility of miscalculation, especially by the North. One day, and overly provocative move by Pyongyang could result in a bigger-than-expected Southern response, setting the scene for a more dangerous clash.