One of the most oft-repeated axioms of Asian geopolitics is that there won’t be a new war on the Korean Peninsula because neither North and South Korea nor their principal backers (China and the US) want it to happen. The South and the US will not attack the North because that would lead to a devastating war, with Pyongyang killing tens (perhaps hundreds) of thousands of people in the South and possibly even Japan – even without the use of nukes. Meanwhile, the North will not attack the South because the combined power of Seoul and Washington would eventually overwhelm Pyongyang, bringing down the regime of Kim Jong Il. So goes the conventional wisdom.

What If We’re All Wrong?

While I still believe that a new Korean War is unlikely, I am becoming increasingly concerned about the possibility of a limited armed conflict caused by miscalculation – an idea I adumbrated in Business Monitor Online on June 3 2009. Call this a half-way house between war and peace.

Here’s the crux of my concern. South Korea is adopting a series of punitive measures against the North to punish Pyongyang for sinking its warship Cheonan on March 26 – which is to be expected, of course, given the gravity of the situation. Among these is a more aggressive military posture, such as anti-submarine drills with the US, a more active role in intercepting North Korean ships suspected of carrying nuclear and missile material, and forbidding Northern ships from transiting through the Jeju channel off the South’s south coast. Seoul is also restarting propaganda broadcasts to the North at their joint border, and Pyongyang is threatening to attack the loudspeakers that are used for these purposes.

May The Best Korea Win

Essentially, these measures will increase the chances of Northern and Southern ships clashing again. Now imagine a situation where the two navies start shooting each other in the West Sea. In order to ensure victory, the North then starts using its land-based coastal defences. The South then counter-attacks these artillery and missile placements, thus escalating the conflict from a sea battle to a ground conflict. Pyongyang then retaliates using its extensive artillery against parts of South Korea (or even parts of Seoul). Both sides then move to war footing, and neither can be sure how far the other is willing to go. By this stage, I’d expect both the US and China to be furiously talking to South Korea and North Korea respectively to contain the crisis, but what if the military chain of command breaks down, especially in the North? What if Northern commanders refuse orders to stand down? This would be a possibility if Kim Jong Il becomes incapacitated. Things could easily spin out of control.

The overall result could be a limited war in which hundreds are killed without fundamentally changing the status quo, other than to preclude any rapid improvement in inter-Korean relations. Even without a full-scale war, the ‘limited war’ scenario would be enough to rattle investors and significantly increase South Korea’s risk profile. Meanwhile, don’t be too surprised if Pyongyang carries out another nuclear test this year to demonstrate its displeasure.