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1. VOLUME 12, ISSUE 4 SUMMER 2003
NATIONAL
STRATEGY
FORUM
REVIEW
ASIA IN THE SHADOW OF A RISING POWER
THE US—PRC—TAIWAN TRIANGLE A PACKAGE DEAL: CONTENDING
WITH CHINA’S RE-INTEGRATION
John Allen Williams INTO THE GLOBAL ECONOMY
David Welker
CHINA AND THE FUTURE OF THE NORTH KOREA: WHAT ARE THE
KOREAN PENINSULA ISSUES AND US OPTIONS?
Bradley O. Babson
BOOK REVIEW: 20:21 Vision STRATEGY WATCH
by Bill Emmott
RESEARCH REPORTS: The Transformation of National Security ~ International Law and the
Preemptive Use of Force ~ Geriatric Teenagers ~ Post-Saddam Iraq: The Shiite Factor ~ The
US and Israel: The Road Ahead ~ Why the Security Council Failed
RECENT SPEAKERS: Ambassador Richard Williamson ~ Ambassador Thomas Pickering

2. The National Strategy Forum Review
is a quarterly publication of
NATIONAL STRATEGY FORUM
Richard E. Friedman
Chair/President
Board of Directors
Lester Crown
The National Strategy Forum is a not-for-profit, non-
Richard A. Behrenhausen partisan organization committed to the following principles:
James R. Donnelley • The goal of United States national strategy is a genuine and just
peace, sought in common cause with the community of free and
Michael P. Galvin independent nations.
• The advancement and preservation of democracy is essential to
James N. Pritzker promote human rights, inspire principled cultural achievement,
and maximize economic development.
William Wolf • Informed public opinion and an enduring non-partisan consen-
sus are fundamental parts of national security in a democratic
Morris I. Leibman society.
(1911–1992) • • •
Founding Chair The National Strategy Forum has no membership fee, but it de-
pends upon the support of its members. The Forum is a publicly
supported charitable institution under section 501(c)(3) of the Inter-
nal Revenue Code. As a non-profit organization, the Forum is
funded solely by contributions from individuals, foundations, and
National Strategy Forum Review corporations. All contributions to the Forum are tax deductible.
• • •
Publisher The opinions expressed in the National Strategy Forum Review do
Richard E. Friedman not necessarily reflect those of the National Strategy Forum or its
members.
Editor • • •
Lauren Bean © 2003 National Strategy Forum, Inc.
Editorial Board National Strategy Forum
Marilyn Diamond 53 W. Jackson, Suite 516, Chicago, IL 60604
Rachel E. Golden
John Allen Williams
Endy Zemenides
2

3. NATIONAL STRATEGY FORUM REVIEW
Volume 12, Issue 4 Summer 2003
TABLE OF CONTENTS
Letter from the Publisher 4
The US—PRC—Taiwan Triangle 5
John Allen Williams
China and the Future of the Korean Peninsula 9
Bradley O. Babson
A Package Deal: Contending with China’s Re-integration into 14
the Global Economy
David Welker
North Korea: What are the Issues and US Options? 19
Book Review: 20:21 Vision by Bill Emmott 25
Reviewed by Lauren Bean
Recent Speakers 27
Strategy Watch 30
Research Reports 36
NATIONAL STRATEGY FORUM REVIEW
3

4. LETTER FROM THE PUBLISHER
he theme of this issue of the National • The Korean Peninsula: North Korea’s nu-
Strategy Forum Review is “Asia in the clear weapons development program threat-
Shadow of a Rising Power.” The focus is ens stability in the region. How will the US
on East Asia. However, we expanded the strate- react to North Korea, and will there be a
gic geographic boundaries of Asia to include: on multilateral coalition formed to deal with
the west, Iran; on the east, Japan; on the north, North Korea? Could the Korean problem
the Arctic Ocean; and on the south, the Indian strengthen the US-China relationship?
Ocean. About one-half of the world population • The PRC-Taiwan-US triangle: Can a PRC-
lives in Asia. Iran and India loom large in future Taiwan conflict be avoided? Is there a role
US strategic calculations. for the US? Does continuing tension be-
Iran, a hybrid Islamic theocracy/democracy, tween China and Taiwan threaten the evolv-
is identified by the United States as having a nu- ing China-US relationship?
clear weapons development program and provid-
ing a safe harbor for international terrorism. It Another article looks behind the scenes at the
also has a young generation with western aspira- formulation of US foreign policy and how to
tions who chafe at restrictions imposed by con- identify subjective judgments that frequently
servative religious leaders. The issue is whether guide and justify strategic decisions. The test
this pivotal state can contribute to world stability case is North Korea. We have adapted an ingen-
and how can this be achieved. ious software program developed by scholars at
India is well positioned to become a major the University of Chicago Graduate School of
Asian regional power and may become a world Business to identify a wide range of issues af-
power, as well. It may now have more people fecting the Korean Peninsula to see how disci-
than China. It is the world’s most populous de- plined probability equations may apply to these
mocracy and has the world’s second largest Is- issues.
lamic population. A strong India-US relationship A critical strategic decision for the US is
is developing. whether it will seek to become part of a condo-
minium of Asian states, including the PRC, Ja-
Three articles in this issue focus on major prob- pan, and India. China’s strategic objectives are
lems affecting Asia: unknown: Will it seek hegemony or shared
• Economic development: What does increas- power in the region? The reciprocal considera-
ing integration of world trade and financial tion is whether the US strategic objective is
markets mean for Asia? What are the effects dominance or shared power in the region. An-
of the PRC as an economic magnet in the swers to these questions will define future US-
region? Is globalization a positive or nega- China relations and future stability for Asia.
tive factor for Asia?
SUMMER 2003 4 NSF REVIEW

5. THE US–PRC–TAIWAN TRIANGLE
John Allen Williams
he Chinese pictogram for "crisis" is a would become important if that happened. Fi-
combination of "challenge" and nally, everyone needs to consider the effect of
"opportunity." That is certainly true of public health issues in the region on the rest of
the crisis-laden relationships among the United the world.
States, the People's Republic of China, and the The underlying political problem is the unre-
Republic of China on Taiwan. This brief essay solved status of Taiwan. It is an almost intracta-
can only touch upon the complex interactions ble issue, with the PRC regarding Taiwan as a
among these international actors, but it hopes to renegade province, Taiwan enjoying its de facto
outline some of their more important aspects. (but not de jure) independence but uncertain as
To begin with the conclusions, the trilateral to its best political future, and the United States
relationship between the US, the PRC, and Tai- hoping to keep the issue dormant to preserve
wan need not degenerate into armed conflict, stability in the region.
although the possibility of this happening is the
greatest conventional military threat faced by the The United States’ Perspective
US. The US needs to consider carefully the re-
spective places of the PRC and Taiwan in its The main concern of the United States is re-
long term economic and security interests. gional stability. With the significant exception
Based on this assessment, the US needs to con- of recent North Korean actions, the US is gener-
sider in advance what it would do to support Tai- ally happy with the status quo in the Far East: a
wan if the PRC decided to use force to resolve prosperous and increasingly democratic Taiwan,
the issue of Taiwanese independence once and a China that is engaged with the world politically
for all. Similarly, the possibility of catastrophic and economically, and a US viewed by most in
political or economic collapse of the PRC, while the region as a benign and even welcome he-
remote, is not outside the realm of possibility. It gemon. Certainly there are storm clouds on the
is important to think now about the issues that horizon, in particular the looming confrontation
Dr. John Allen Williams is a Professor of Political Science at Loyola University Chicago and chairs the
Academic Advisory Committee of the National Strategy Forum. A frequent media commentator, he is a
retired Captain in the U.S. Naval Reserve with extensive experience in the Pentagon as a strategic plan-
ner. He is Executive Director and President Elect of the Inter-University Seminar on Armed Forces and
Society.
NSF REVIEW 5 SUMMER 2003

6. THE US–PRC–TAIWAN TRIANGLE
with North Korea on the issue of their nuclear including missile tests near Taiwan intended to
program and technology exports. Overall, how- influence the Taiwanese presidential election
ever, the US can be pleased with the direction (which it did, but in the opposite direction from
the region has taken. that intended by the PRC), amphibious landing
The US has long viewed itself as a protector exercises, and a significant deployment of sur-
of China, and many felt betrayed by the success- face to surface missiles across the strait from
ful Communist revolution there and – worse still Taiwan. US Congressional support for Taiwan
– Chinese involvement the following year in the has led some in Taiwan to believe (falsely) that
war in Korea. Much of that paternal interest was US assistance can be assumed, even in the face
transferred to the Kuomintang regime of Chiang of a Taiwanese declaration of independence
Kai-shek when his nationalist government fled to from China. The position of the US executive
Taiwan in 1949. Despite the rapprochement branch is one of studied ambiguity, but the cur-
with China since President Nixon’s 1972 visit, rent administration has been more supportive of
there remains considerable public and govern- Taiwan than others in recent memory.
mental support for Taiwan. This is particularly The US has not sold the Taiwanese all the
true of the US Congress, which has passed a sophisticated armaments they want, but bases its
number of resolutions of support for Taiwan in sales on the threat from across the strait. The
its resistance to forcible integration with China. PRC regards all such sales as illegitimate inter-
The official US position is that it does not ference in the internal affairs of China. PRC
care about the eventual resolution of the Taiwan cross straits military pressure is the rationale for
issue, so long as it is accomplished peacefully the US sale of weapons to Taiwan.
and with the consent of the Taiwanese people.
This is somewhat disingenuous, since the US The Mainland Chinese Perspective
would clearly not like to see an early integration
of the Taiwanese economy with a China still After the fiasco getting the US Navy EP-3 , elec-
under the authoritarian control of the Communist tronic surveillance airplane back from China (in
Party and seeking to increase its strategic power. pieces) in 2001, US observers may view the Chi-
Still, the US would have no choice but to accept nese perspective as arrogant and perhaps reck-
a peaceful integration, and this is the best long lessly overconfident. In fact, actions that may
term (perhaps very long term) outcome. appear as arrogant and reckless to an outside
Of greater concern is what the US should do observer are often grounded on a combination of
in the event of increasing pressure by the PRC to deep-seated and persistent PRC insecurities and
get the Taiwanese to agree to accelerate the pace genuine national security considerations. Ameri-
of integration on PRC terms. Many forms of cans tend to forget the years of Western domina-
PRC military pressure have already been seen, tion of China in the 1800s, with spheres of influ-
SUMMER 2003 6 NSF REVIEW

7. THE US–PRC–TAIWAN TRIANGLE
ence, preferential trading relationships, and even government.) One suggestion, made by NSF
extraterritoriality in large parts of coastal China. President Richard Friedman and the author in the
The Chinese have not forgotten, and for them Washington Times, was for a loosely defined
national sovereignty is paramount. They do not confederation that delayed the difficult decisions
wish to be subservient to another power, and are and permitted at least the appearance of a politi-
hypersensitive to any slight, real or imagined. cal movement. This proposal is not on the table
Taiwan is a central concern to the leaders of at this time. Any action that forces this issue pre-
the PRC, and they are capable of viewing the maturely, such as PRC provocations or a unilat-
most remote events as somehow related to the eral declaration of independence by Taiwan, is a
possible independence of Taiwan. Central to grave threat to regional stability that could well
this is the desire to limit the international influ- involve the United States.
ence of the Taiwanese government as much as In the long run, the PRC wishes to become
possible. In particular, Taiwan must be excluded the hegemon of the region, and may have ambi-
from membership in any international organiza- tions beyond that. This means that the influence
tion that assumes government to government of the US, Japan, and perhaps South Korea must
relations. This applies also to the Taiwanese bid be counterbalanced by an increase in Chinese
for observer status in the World Health Organi- economic and military power. Whatever the
zation. The current SARS crisis in Taiwan may international developments may be, one may be
have been exacerbated by the lack of official certain that the elites governing mainland China
connection with the WHO, and the PRC’s reluc- will attempt to preserve their status at all costs.
tance and delay in permitting official WHO visi-
tors to Taiwan. Given the origins of SARS in a The Taiwanese Perspective
remote Chinese province and the Chinese cover-
up of the existence and extent of the disease in The Taiwanese are in no hurry to move closer to
its early stages, this was particularly galling to the mainland politically, and would like to pre-
the Taiwanese. serve the status quo as long as possible – at least
Now that the status of Hong Kong and Ma- until the PRC evolves politically and economi-
cao is settled, the PRC wants to move ahead as cally. There are differences among Taiwanese
quickly as possible toward the eventual reunifi- leaders on the desirability of closer economic
cation of Taiwan with the mainland. The “one ties, however. From a recent visit to Taiwan, it
China” policy is sufficiently vague to permit appears that leaders of the Kuomintang Party
various interpretations, but the devil is in the (KMT) are more supportive of close economic
details. (Recall that Chiang Kai-shek and Mao ties than are the leaders of the currently ruling
Zedong each had a “one China” policy, with the Democratic Progressive Party (DPP), whose
difference being who represented its legitimate charter explicitly calls for an independent Tai-
NSF REVIEW 7 SUMMER 2003

8. THE US–PRC–TAIWAN TRIANGLE
wan. One problem presented by closer ties is possibilities that would greatly alter the terms of
that Taiwanese business elites tied to cross-strait the triangular relationship were they to occur:
economic arrangements become a pressure • PRC impatience with the pace of change,
group for friendlier relations with the mainland leading to military provocation.
than may be desired by political elites. Despite • Taiwanese misunderstanding of the limits of
the misgivings of some, economic relations are US support, leading to a unilateral declara-
growing and the amount of Taiwanese invest- tion of Taiwanese sovereignty.
ment in China is a significant part of the Chinese
• Some action on the part of Japan, such as the
economy, particularly in the high technology
development of Japanese nuclear weapons in
sector.
response to the challenge from North Korea.
The Taiwanese are generally circumspect in
• Expansion of the SARS epidemic or some
their dealings with the PRC and in other dealings
other pandemic.
that relate to the PRC-Taiwanese relationship.
Most leaders, even in the ruling DPP, understand
Economic and/or political collapse of the
that US and international support cannot be
PRC, perhaps in response to the significant cen-
guaranteed if they provoke the PRC unnecessar-
trifugal forces already existing in the society and
ily. In that connection it is interesting to note
the additional stresses of a health crisis. Ironi-
current calls by the Taiwanese government for
cally enough, westernized Taiwanese political
international condemnation of the PRC for cov-
elites would be ideal candidates to strengthen a
ering up the SARS epidemic and demanding a
unified Chinese government, something current
PRC apology for this. It seems a safe enough
leaders on the mainland may realize all too well.
issue to make the point that the PRC was negli-
Whatever the future may hold for the rela-
gent in its international obligations, and it puts
tionship between the United States, the PRC, and
the PRC’s subsequent reluctance to let official
Taiwan, it would behoove US strategists to con-
WHO representatives visit Taiwan in a particu-
sider the range of possibilities so they are not
larly bad light. Health issues transcend national
caught unawares by developments.
boundaries, and their resolution was clearly im-
peded by PRC policies with respect to Taiwan.
Problems and Complications
Predictions about the future tend to be linear ex-
trapolations of current trends. One cannot antici-
pate radical discontinuities and so they often do
not figure into planning. But there are several
SUMMER 2003 8 NSF REVIEW

9. CHINA AND THE FUTURE OF THE
KOREAN PENINSULA
Bradley O. Babson
he critical role that China played in end of the Korean war. The sequence of events
bringing the U.S. and the Democratic Peo- leading up to this shift is important:
ples Republic of Korea (DPRK) together
for initial talks in Beijing in April 2003 is a har- • September 1990 -- the Soviet Union and the
binger of the future. This revealed the reality Republic of Korea (ROK) established diplo-
matic relations.
that China must play a proactive and not acqui-
escent role in creating an environment of coop- • September 1991 -- DPRK became a member
eration towards finding solutions to the complex of the United Nations in its own right, repre-
senting a de facto recognition by the interna-
set of issues involved. China cannot avoid this tional community of the two separate Ko-
role, and the U.S. cannot avoid adopting a strate- rean states.
gic partnership with China in managing the
• December 1991 -- The Agreement on Rec-
global and regional dimensions of change on the onciliation, Non-Aggression, Exchanges and
Korean peninsula. This article will examine Cooperation (Basic Agreement) was signed
by the two Koreas.
China’s relations with the two Koreas, explore
the underlying forces driving China and the U.S • February 1992 -- The Joint Declaration of
towards this strategic partnership, and assess De-nuclearization of the Korean Peninsula
was signed by the two Koreas.
implications for future U.S. policy in Northeast
Asia. • August 1992 -- China and ROK normalized
relations.
China and the Two Koreas • December 1992 – The Soviet Union disinte-
grated.
Chinese policy towards the two Koreas under-
went a fundamental change in the early 1990’s, The formal recognition of ROK, coupled with a
reflecting a shift in the underlying structure of period of warming relations between the two
relationships that had remained stable since the Koreas and UN acceptance of the two state
Bradley O. Babson is a consultant on Asian affairs with a specialization on economic engagement with
DPRK and Northeast Asia economic cooperation, as well as Southeast Asia. He worked for the World
Bank for 26 years before retiring in 2000, serving as a Senior Loan Officer on Indonesia from 1983-87,
Division Chief for Education and Health for eight Asian countries from 1997-92, and the first Resident
Representative to Hanoi, Vietnam from 1994-97. From 1997-2000 he served as Senior Advisor in the
office of the Regional Vice President for East Asia.
NSF REVIEW 9 SUMMER 2003

10. CHINA AND THE FUTURE OF THE KOREAN PENINSULA
framework, anchored China’s shift to active rela- China’s accession to the World Trade Organiza-
tions with both Koreas. The collapse of the So- tion (WTO). Beijing has also worked closely
viet Union created major complications for this with ROK both openly and quietly to manage
new set of relations, as DPRK lost both political expanding bilateral relations and sensitive as-
and economic support from the Soviet Union pects of relations with DPRK, including the on-
and was forced to rely increasingly on China as going need for food aid and increasing flow of
its benefactor, just when China was pulling back refugees.
from its traditional role through warming ties The expansion of Chinese-ROK ties also
with ROK and hardening of terms of economic are having an affect on public opinion in ROK,
assistance to DPRK. The nuclear and food cri- with attitudes towards China becoming increas-
ses that followed in the mid-1990’s tested ingly favorable at the same time that attitudes
China’s new policy of even handedness. The towards the U.S. are becoming more negative.
U.S. took center stage through the negotiations There are many factors affecting shifts in public
that led to the Agreed Framework, and inter- perceptions, but among them is the realization
Korean reconciliation was put on the back- that ROK has a growing stake in its future rela-
burner. This led to a situation where China’s tions with China and that it is in the Korean in-
role came to be dominated by efforts to maintain terest to balance this perception with future rela-
stability through expanded economic support to tions with the U.S.
the failing DPRK system and encouragement of Chinese relations with DPRK have been
ROK to continue to pursue a policy of engage- strained in recent years, but have retained the
ment with DPRK. Relations with the U.S. on essential characteristics of DPRK dependence on
DPRK remained awkward for both countries, but Chinese political and economic aid to maintain
bound by a shared desire to seek a peaceful out- the viability of the DPRK regime, which has
come that was reflected in cooperation for the been faced with great external and internal pres-
Four Party peace talks that took place in a fitful sures for change. DPRK’s decision to establish
way in the late 1990’s. an industrial enterprise zone in Shiniju in 2002
In recent years China’s relations with ROK and appoint a Chinese businessman with ques-
have deepened considerably. China is now tionable credentials as the administrator, and the
ROK’s largest trading partner and the trend is for Chinese response of placing him under house
accelerating trade and investment ties following arrest for tax evasion, illustrates the lack of close
SUMMER 2003 10 NSF REVIEW

11. CHINA AND THE FUTURE OF THE KOREAN PENINSULA
coordination of DPRK and Chinese policy. Driving Forces Towards a Strategic Part-
China’s active courting of ROK and contin- nership with the U.S. on Korean Issues
ued willingness to buttress the DPRK regime,
despite embarrassing North Korean behaviors, The nuclear crisis that was triggered by DPRK’s
are consistent with its larger national security admission of a clandestine uranium enrichment
objectives. In order to counter post Cold War program in October 2002 spelled the effective
dominance by the U.S., China adopted in the late end to the Agreed Framework, which had ex-
1990s a “new concept of security” in which it cluded China as a partner in containing DPRK’s
embraced regional security dialogue and coop- nuclear program. U.S. recognition that a multi-
eration. It has pursued this policy actively with lateral rather than bilateral dialogue process
the Asia Regional Forum sponsored by ASEAN, would be needed to forge a viable replacement
and the Shanghai Cooperation Organization, for the Agreed Framework, was a tacit accep-
which it helped create with Central Asian coun- tance that China’s influence on the Korean pen-
tries. In Northeast Asia, this tactic has been re- insula should be harnessed to achieve shared
flected in the pursuit of the two Korea policy. goals through active collaboration on the secu-
Looking ahead, China can be expected to rity agenda. This new working relationship has
retain an honest broker relationship with the two fundamentally altered the dynamics for manag-
Koreas, respecting the legitimate interests of ing the crisis and can be expected to be a major
each and seeking peaceful means to advance in- factor in future handling of Korean issues.
ter-Korean reconciliation, regional stability and The need to contain the nuclear crisis is the
increased economic ties. The recent change in primary reason that China has taken a more pro-
Chinese leadership is also likely to lead to a active role in international efforts to resolve Ko-
hardening of Chinese intolerance for DPRK mis- rean issues. China’s interests are both short-term
behaviors, even if there is no shift from the fun- and long-term and its behavior is guided by both.
damental policy of not permitting the regime to In the short-term, China wants to maintain stabil-
collapse. The fact that China recently felt com- ity and avoid military confrontation over the nu-
pelled to cut off temporarily oil pipeline flow to clear issue while aiming for a negotiated solu-
DPRK to constrain potential actions that would tion. It also wants to minimize overflow prob-
escalate tensions with the U.S. in the wake of the lems of the breakdown in DPRK and create an
Iraq war, can be interpreted as a recognition and environment supportive of a managed change
signal that the new leadership is prepared to act process. Longer term, China would like to see a
to reinforce its views on DPRK behavior.
NSF REVIEW 11 SUMMER 2003

12. CHINA AND THE FUTURE OF THE KOREAN PENINSULA
nuclear free Korean peninsula, a reduced mili- sion of U.S. hegemony and methods that are in-
tary presence by the U.S., maintenance of a two compatible with China’s own interests. In deal-
state framework of peaceful coexistence between ing with DPRK, this requires that China actively
the two Koreas with a gradual process of re- collaborate with the U.S.
integration, and a reform process for DPRK that Longer term forces are active as well. A
reduces direct dependence on China while transformation process for DPRK aimed to inte-
DPRK becomes increasingly integrated in re- grate DPRK into the international community
gional economic and security relationships that will require that new forms of regional security
are consistent with maintaining stability and ex- and regional economic cooperation be devised to
panded cooperation among the countries of the reinforce the dynamics of managed change on
region. the Korean peninsula. The architecture of con-
The U.S. has accepted global responsibility ventional security structures based on Cold War
for leadership in combating terrorism and prolif- alliance frameworks will need to give way to a
eration of weapons of mass destruction. The new order in Northeast Asia. This will have to
success of the wars in Afghanistan and Iraq have be buttressed by improved institutional mecha-
convinced the world that the U.S. will not shirk nisms for regional economic cooperation. An-
these responsibilities, and the main question for choring the solution to the DPRK issues in these
the future is how this leadership will be exer- new regional cooperation mechanisms would
cised. These developments have not fundamen- both be consistent with China’s “new concept of
tally altered the equation of interests and objec- security” and with the U.S. view that a multilat-
tives of containing DPRK’s nuclear program, but eral framework will be needed to ensure that
they have altered perceptions of U.S. priorities DPRK does not shirk its transformation process
and methods of achieving these objectives. This and revert to old ways. The new administration
has consequences for the way the U.S. manages of President Roh in ROK has already embraced
its relations with both Koreas and creates a new the idea of regionalism as the future path for Ko-
rationale for a continuing active policy towards rean security and prosperity. If this vision is to
the two Koreas that supercedes the old and now become reality, Chinese willingness to provide
defunct Cold War rationale. For its part, China more proactive regional leadership will be essen-
recognizes that it must accept U.S. leadership on tial. Support and encouragement from the U.S.
the post Cold War global agenda, while at the will also be required, both in aligning future
same time it seeks to constrain potential expan- Asian security policy and deployment of the
SUMMER 2003 12 NSF REVIEW

13. CHINA AND THE FUTURE OF THE KOREAN PENINSULA
U.S. military in Northeast Asia with these new parties.
frameworks, and in active participation in the Another issue is the future of the Korea Pen-
economic agenda. insula Energy Development Organization
(KEDO). Neither China nor Russia are members
Implications for Future U.S. Policy in of KEDO. If KEDO will be given any new role
Asia in the future as a result of a negotiated solution
to the DPRK nuclear crisis, it would be desirable
One implication for the U.S. of expanding coop- to include both countries in a multilateral effort
eration with China on Korean issues is that the to deal with DPRK’s energy needs, using this
informal alliance structure with ROK and Japan mechanism to forge a link to regional economic
will need to be realigned to embrace this reality. cooperation in energy.
The Trilateral Coordination Group (TCOG) that More broadly, U.S. policy towards Northeast
was established during the Clinton Administra- Asia in the future should be guided by a desire to
tion to coordinate policy towards DPRK between promote long term stability in the region, based
the U.S., has been an important mechanism to on increased transparency and expanded interde-
smooth differences in perception and approach pendence in security and economic relations.
to engagement with DPRK, even though the American economic interests should be pursued
driving interests of the three countries do not with an eye to expanded trade and investment
completely coincide. Finding a way to broaden opportunities driven by regional and not just
the consultation framework to include China, globalization dynamics. Building an environ-
rather than relying solely on bilateral meetings ment in which China’s rise to power and exer-
with China by the three alliance countries would cise of leadership can be congruent with U.S.
seem to be a desirable direction for the future. security and economic interests is the major pol-
If a nuclear agreement can be successfully icy challenge facing the U.S. in Asia. Putting a
negotiated with DPRK, then verification of com- process of transformative change on the Korean
pliance will be an important and long term re- peninsula into this framework would anchor U.S.
quirement. Chinese participation in a future Korea policy in the larger agenda to promote
verification arrangement would be one way to peace and prosperity in this critically important
help ensure DPTK compliance and reduce the region.
risk of nuclear materials being shipped over the
DPRK-Chinese border for potential sale to other
NSF REVIEW 13 SUMMER 2003

14. A PACKAGE DEAL: CONTENDING
WITH CHINA’S RE-INTEGRATION INTO
THE GLOBAL ECONOMY
David Welker
hina’s domestic situation has histori- on the international scene, there are more limita-
cally been the only limiting factor as to tions on how China may act, as there are more
how much influence China could exert channels for smaller Asian nations to counter
in its neighborhood. When the internal forces China’s actions either multilaterally or through
contributed to civil war and disarray in China, international law. After emerging from its post-
the people at China’s periphery were left alone revolution self-isolation of the Mao years, even
to practice some form of ‘self-government’ with- China’s autocratic but “pragmatic” leadership
out paying homage to the distant Chinese capital. recognized that there were rules to the game and
When China’s imperial rulers maintained solid have to one degree or another curbed the age-old
central control, the neighboring peoples could impulse to dictate to its neighbors. The develop-
expect emissaries, raiding parties and expecta- ment of the rule of international law in the sec-
tions of some form of subservience to the Chi- ond half of the 20th century placed the large and
nese Son of Heaven. The post-colonial inde- powerful nations under some restraints.
pendent states in Asia are only facing the most David Zwieg, in his book
recent instance of China’s latest ‘emergence’ “Internationalizing China: Domestic Interests
from itself. How to contend with China’s inte- and Global Linkages”, defines the re-integration
gration to the regional and global economy is a or ‘internationalization’ of China in the last 25
question that China’s neighbors have had to ask years in his recent book in this way: “the ex-
themselves for centuries. They’ve been here panded flows of goods, services and people
before. across state boundaries, thereby increasing the
The difference is that now the inter-relations share of transnational exchanges relative to do-
between nation-states are at least nominally the mestic ones, along with a decline in the level of
realm of international law, governing regulation regulation affecting those flows many sections of
of maritime navigation, international commerce, China’s society and economy have become in-
exchange of alleged criminals or even in the con- creasingly more internationalized.”
duct of warfare. Marking China’s ‘emergence’ Other Asian leaders (there are exceptions,
David Welker is Special Projects Director at the Food & Allied Service Trades Department of the AFL-
CIO. He previously was an Economic Policy Analyst at the Congressional U.S.-China Security Review
Commission.
SUMMER 2003 14 NSF REVIEW

15. CONTENDING WITH CHINA’S RE-INTEGRATION INTO THE GLOBAL ECONOMY
such as the Burmese junta or North Korea under By the mid-1990s, some observers of the
both Kims) accepted the need to hitch their for- regional economy felt China lagged behind its
tunes to the global institutions and practices that neighbors due to its ‘half-hearted’ embrace of
fed internationalization. And the Asian leaders, globalization: China still maintained a huge
to one degree or another, implemented domestic state-owned industrial sector and banking sys-
policies that accommodated the flows in goods, tem, it controlled its foreign exchange flows and
services, capital and people. Japan and the four flows of ‘hot capital’ into its nascent, flawed
Asian Tigers – the Republic of China on Taiwan, equity markets, and it refused to let its currency
South Korea, Singapore and the British colony be traded on the open market. Ethnic Chinese
Hong Kong – rode this wave to rapid industriali- from Hong Kong, Taiwan and elsewhere in Asia
zation and development. China was very late to were the early adopters of China as the preferred
this internationalization trend, making its tenta- investment destination, but overall the invest-
tive steps to reopen to the world only in 1979. ment flows into Asia were balanced until the
China was always going to be bigger than its mid-1990s. Then the Asian contagion of 1997-
neighbors, but it was starting from a very low 1998 hit, where a series of competitive devalua-
level of integration that would attract the global tions, a sudden evaporation of hot capital invest-
players in the 1980s. ment into Asian markets, a rolling wave of bank
Following the negative international reaction failures, an overall interruption in trade and capi-
to the Tiananmen Massacre in 1989, the other tal flows, and the implosion of budgets in capital
Asian nations were able to make gains in the after capital shocked the entire region.
international market for trade and capital at the Oddly, China was not infected – at least that
expense of the politically out of favor Chinese. was the analysis at the time. Now there are con-
Indonesia, Thailand, Malaysia, the Philippines siderable academic disputes ongoing as to
and, to a lesser degree, India saw investment whether China’s actually achieved its officially
levels rise, trade flows increase, economic announced growth rates for the years 1998 to
growth quicken and living standards rise steadily 2000 – and mostly because of what previously
during the period of ‘globalization’ of the late were policies criticized by the investing commu-
1980s to mid 1990s. China’s massive market nity. Its policies in implementing incremental
always loomed large in the international players’ reforms now were seen as the factors of China’s
minds, but the infrastructure – the ‘hardware’ of
‘stability’ in the days following the Asian crisis.
airports, highways, seaports, electricity grids and
The economic crisis created widespread political
waterways – and the economic regime – the
change in Indonesia and the Philippines or
‘software’ of macro-economic policies, reliable
caused reforms of otherwise sclerotic economic
contract regulation and an investor-friendly bu-
policies in Thailand and South Korea. Yet these
reaucracy – often lagged in China.
countries fell out of favor due to the ensuing
NSF REVIEW 15 SUMMER 2003

16. CONTENDING WITH CHINA’S RE-INTEGRATION INTO THE GLOBAL ECONOMY
‘instability’ after the crisis. The one-party sys- Credit Lyonnais Securities Asia (CLSA) and the
tem in China provided ‘stability’ and the concept Asian Corporate Governance Association
of the Chinese process of economic reforms as a (ACGA) released a report on 380 publicly traded
‘model’ emerged. companies, which gave an average score of 62
The overall improved attitude towards out of 100 using such benchmarks as discipline,
China’s model in the investing community oc- transparency, independence and accountability.
curred at a time when the improvements in The governments and corporations in Asia could
China’s infrastructure reached a ‘critical mass’ use the poor level of governance in China today
to facilitate large investments in the export- as a measuring standard to raise their own prac-
processing sector in China. As many large mul- tices. Having made limited progress so far, they
tinational companies invested in ever-larger pro- still must improve their supervisory bodies to
jects in China (following scores of smaller convince investors that there have been real
manufacturers from Hong Kong, Taiwan, South changes to set them apart from their Chinese
Korea and Singapore, who moved production to competition.
China over the decade to take advantage of Another possible way for Asian countries to
lower wages), the other Asian nations contem- improve their investment climates for interna-
plated how to adjust their practices to compete tional investors is to lower the bureaucratic hur-
against the Chinese model. dles for foreign companies. In comparing their
One would have assumed that the questions regulatory regimes to those of China, some na-
of poor corporate governance and government tions have determined that they can lessen de-
oversight that were at least in part fingered for mands in such areas as environmental controls or
the Asian crisis would have resulted in one pos- trade union rules to bring them closer to China’s
sible means for Asian countries to differentiate standards.
themselves from China. But in the last few The Indian government began a policy in
years, the government’s policies and individual 2000 to establish special economic zones, meant
firms’ practices have been two steps forward and to copy China’s success in attracting foreign in-
one step back. In South Korea, for example, the vestment in export processing sectors; the plan
government has tolerated the purchase of control attempts to create “areas with new infrastructure
in banks or large industrial conglomerates by and relaxed labor, customs and tax regulations.”
foreign interests. It’s also pushed insolvent com- But the democratically elected government in
panies into bankruptcy to advance settlements to India must be more considerate of larger politi-
foreign creditors, while at the same time tolerat- cal questions. As the Wall St. Journal notes, “the
ing the creditors of Hynix Semiconductor to government is treading carefully on how to relax
keep that company on life-support. Similarly, labor laws within the zones” and leaving many
SUMMER 2003 16 NSF REVIEW

17. CONTENDING WITH CHINA’S RE-INTEGRATION INTO THE GLOBAL ECONOMY
of the decisions to the states to tackle the harder duction of certain segments of the global supply
questions. Maharashatra state “is set to enact chain from these nations to China is a harbinger
legislation that will exempt the zones from of longer-term trade relations. If China emerges
regulations that help govern the formation of as a steady market in its own right, not simply
unions and the right to lay off workers.” as a transfer point for goods that are eventually
Indonesia and Singapore are seeking to cre- headed to the U.S. or other developed markets,
ate similar zones, where regulations governing then Asian nations would also be pulled along
trade between the U.S. and companies on two by a steadily growing Chinese customer base.
islands are exempted in a bilateral trade agree- Export figures from many Asian countries to
ment. Sandra Polaski, formerly of the State China were up over the last few years, while the
Department and now with the Carnegie Endow- larger developed markets were experiencing
ment for International Peace, notes the agree- slow growth (or in Japan, no growth). The al-
ment (which passed Congress in May 2003) ways astute CLSA puts it this way in a January
“allows products produced in the Indonesian 2002 report: “China may have an absolute ad-
islands of Bintan and Batam to be treated as if vantage in producing toys, shoes, semiconduc-
they were of Singaporean for benefits under the tors, and everything else, but it would make no
agreement. However, neither Indonesia nor sense for China to produce all of these goods
Singapore would be required to assume any of exclusively. The reason is that it will have a
the obligations of the agreement…Adherence to comparative advantage in some goods while
labor laws, environmental protections, and other other countries (producers) will have a com-
provisions of the trade agreement would not parative advantage in others….China will not
apply in the Indonesian territory.” Polaski displace the rest of the world’s production but
warns, “A U.S. congressional mandate that all rather it will add impetus to the forces of spe-
U.S. trade agreements include such protections cialization that are the root of endogenous
would be flouted and a dangerous precedent growth.”
will be set.” The governments in Asia again CLSA makes its comments on China’s com-
seem to be missing an opportunity to rise above parative advantage in the context of China’s
China’s poor standard by providing more pro- entry into the WTO. They conclude that discus-
tective and socially responsible regulatory re- sion by saying, “China’s entry to WTO is good
gimes. for everyone.” The Asian leaders have learned
Many Asian nations are experiencing a de- some lessons better than others, but their com-
gree of export growth that is tied to producing mitments to international rules and norms per-
goods destined for China. The question remains versely still seem to put them at a disadvantage.
open as to whether the shift of assembly or pro- In that context, the conclusion that China’s en-
NSF REVIEW 17 SUMMER 2003

18. CONTENDING WITH CHINA’S RE-INTEGRATION INTO THE GLOBAL ECONOMY
try in WTO is good for everyone seems blithe. China is not yet known. Neither is the scientific
China signed the most complex accession docu- evidence yet gathered that would provide a con-
ment in the WTO’s brief history. The deal con- clusive decision on its origins. China scholars
stituted a series of future dates and commit- must investigate the reaction of the Chinese gov-
ments; China’s economy at the date of the sign- ernment to the disease in its earliest days of ap-
ing was certainly not compliant with the spirit pearance. SARS has the potential to threaten the
(and in places, even the law) of the WTO. Most 25 years of methodical economic reform, while
observers give even odds that China will meet its at the same time it also has the potential to
commitments or will fail to meet its commit- stimulate long overdue political reforms. Some
ments.
are calling the SARS outbreak China’s Cherno-
So the other Asian nations are held to a dif-
byl. It remains to be seen what will be the out-
ferent standard than their big neighbor China
come.
when it comes to the WTO. (Not to mention the
The snapshot of the disease and its impact at
obvious double standard toward a country like
this point is provided by a Wall St. Journal piece
Russia, which is expecting similar ‘deals’ for
from May 2, 2003. The article notes that Warren
‘future commitments’ in exchange for admission
Buffett’s holding company Berkshire Hathaway
today into the WTO.) But beyond the general
has quietly built up a 13% stake in state-run oil
respect for the rule of law, there are specific eco-
behemoth PetroChina. The author portrays this
nomic questions of fairness. China still main-
as a reflection of Buffett’s belief in the economic
tains a soft peg of its currency to the American
potential in China. But the author also states,
dollar; so as the greenback goes through its pre-
“As Berkshire was buying, China’s cover up and
sent softness (read: revaluation), the Chinese
bungling of the outbreak of SARS was in full
currency gains in competitive pricing against the
swing. To some investors, the way China re-
currencies of other Asian nations. In this regard,
acted to SARS demonstrated the danger of in-
the go-for-slow policies in China could be seen
vesting in Chinese companies.” Just as a savvy
to be poised to undermine the market mecha-
investor like Buffett must consider the risks and
nisms and norms of other international actors.
rewards of China’s full return to the world com-
Any article on China’s ‘re-emergence’ on the
munity, so do China’s neighbors and the rest of
international scene at the opening of the 21st
us.
Century must address, even incompletely, the
current epidemic of severe acute respiratory syn-
drome (SARS) now afflicting Asia. At the time
of this writing, the full extent of the illness in
SUMMER 2003 18 NSF REVIEW

19. NORTH KOREA: WHAT ARE THE ISSUES
AND US OPTIONS?
The decision-making process leading to the formulation of US foreign policy remains something of a
mystery. We know that foreign policy decision makers base their decisions on some combination of sub-
jective judgments and objective data, but it is possible that the latter may become blurred.
Is there a way for the National Strategy Forum members who are keen observers of US national security
and national strategy to exercise disciplined judgment to guide their opinions? Can this technique work
for foreign policy decision makers?
We explored this issue with Professor Willard Zangwill of the University Of Chicago Graduate School
Of Business and his colleagues to determine whether his unique forecasting array could be applied to
foreign policy issues. The result is heartening.
We chose the contemporary, vexing problem of North Korea’s nuclear weapons program as a test case
to analyze the decision-making process. The following section describes the methodology used. The
next section is a matrix that applies the methodology to possible options and outcomes available to the
US.
PART ONE: SOFTWARE FOR STRATEGY DECISIONS
by Keith Blume, Srikumar Chakravarty, and Willard Zangwill
hen evaluating a complex problem, another and the process is repeated.
we tend to overemphasize information For example, a case officer from a US intel-
that supports our preferred hypothesis ligence agency presents information he or she
or solution and minimize evidence that suggests obtained from a high ranking contact of an infil-
something different. The decision making proc- trated terrorist organization to an analyst. The
ess involves an enormous quantity of interacting analyst filters the case officer’s personal biases,
factors and issues, so many that no human mind and processes information from multiple
can possibly grasp and understand them. The sources, including HUMINT, satellite recon-
information glut problem is real. naissance, and electronic surveillance. The ana-
Human intelligence (HUMINT) is not im- lyst encounters several challenges, from han-
peccable. It is susceptible to personal bias─ if dling information volume, to sorting through
the evidence supports the hypothesis, the indi- conflicting information, to timely reporting.
vidual stops the analysis because the hypothesis When bombarded with data from various
is “correct.” If the evidence does not support sources, an analyst may miss the most crucial
the initial hypothesis, the individual formulates facts.
NSF REVIEW 19 SUMMER 2003

20. NORTH KOREA: WHAT ARE THE ISSUES AND US OPTIONS?
Professor Willard Zangwill of the University evidence that is an influence on the results and
of Chicago Graduate School of Business and his providing a blindside factor, the software directs
team of graduate students (Jonathan Wilkenfeld, the analysis. By focusing research efforts on a
Amit Israni, and Swapan Jha) have developed few key points, one can better quantify and qual-
IdealDecisions, a statistical software package ify the possible outcomes, and therefore reduce
that helps address this flaw in strategy analysis. the blindside factor and improve one’s confi-
The software analyzes what events may happen dence in the results.
in the future, gives their probability of occur- The human mind is one of the most impres-
rence, and provides the chance you will be sur- sive tools of all time, but it can be fooled and has
prised or blindsided by an unforeseen event. Al- limitations. With the imminent challenges our
though it cannot specify what the surprise will nation faces in the war on terrorism, the Middle
be, using advanced statistics it estimates the East and North Korea, the ramifications of our
chance such a blindsiding event will occur. decisions become increasingly risky. The soft-
The software tool is most useful when inputs ware helps overcome problems with conflicting
are incorporated from several people, ideally information, personal bias, and groupthink.
with different backgrounds and/or perspectives. These features combine to create a more precise
However, this can introduce the issue of and comprehensive analysis than could be
“Groupthink.” Keith Blume, a student of Profes- achieved otherwise.
sor Zangwill, developed a methodology to mini-
mize this concern.
PART TWO: WHAT ARE THE ISSUES
The approach is easy. As a group, partici-
pants develop a set of hypotheses pertaining to a AND US OPTIONS?
specific question. Individually, participants by Richard Friedman and Lauren Bean
evaluate each item of information to determine
what hypotheses it supports or contradicts. This The strategy options available to the US for
allows each participant the opportunity to evalu- resolving the North Korea crisis are multifac-
ate the hypotheses and information devoid of eted. We have examined the issue from the per-
outside influences. The software calculates prob- spective of the major players: the US, China,
abilities based on their beliefs forcing the partici- Japan, South Korea, and Russia. For the pur-
pants to confront their biases and assumptions. poses of this exercise, the variables are catego-
Quantification exposes biases and enables a rized: fundamental interests, levers of power,
greater understanding of why we believe what and US strategy options. This exercise is de-
we believe. signed to provide a structure that will enable Na-
It is imperative to increase the accuracy and tional Strategy Forum members to consider the
confidence of one’s analysis and decision mak- variables and questions leading to options for the
ing ability. The software provides a logical US.
framework for resolving issues. By identifying
SUMMER 2003 20 NSF REVIEW

21. NORTH KOREA: WHAT ARE THE ISSUES AND US OPTIONS?
FUNDAMENTAL INTERESTS
The fundamental interests are divided into four subsets: security, economic, regional, and humanitarian.
SECURITY ECONOMIC REGIONAL HUMANITARIAN
US • International • Domestic prosperity • World stability • Assist the North Korean
terrorism base for world leader- • Political stability in the people without military in-
• Reduction of nuclear ship US tervention
weapons • Ability to fund US • Retain prominent posi-
military forces tion in Asia
• Counterbalance China’s
ascension to regional
hegemony
CHINA • Protect its northern • Protect its economic • Maintain its diplomatic • Protect population from a
border from a military viability charm offensive in an- potential war on the Korean
invasion by North Ko- ticipation of the 2008 peninsula
rea Olympics
• Eliminate a nuclear • Enhance its role as a
weapon capability regional and interna-
from the Korean Pen- tional power
insula and the region
• Prevent a flood of
North Korean refugees
JAPAN • Protection against a • Protect its economic • Retain its position as a • Protect population from a
North Korean missile viability regional power in Asia potential war on the Korean
attack • Avoid becoming a nu- peninsula
clear power, or signifi-
cantly increasing its
military force
SOUTH • Protection against an • Safeguard economic • Phased reunification • Prevent population casual-
KOREA invasion by North Ko- stability with North Korea, pro- ties in the event of an attack
rean military forces vided that South Korea by North Korea
• Protection against a remains the dominant
North Korean nuclear, partner
artillery, or missile
attack
RUSSIA • Prevent a downslide to • Safeguard bilateral • Involvement in the for-
diminished world im- trade with North Ko- eign policy of North
portance rea and the region Korea
NSF REVIEW 21 SUMMER 2003

22. NORTH KOREA: WHAT ARE THE ISSUES AND US OPTIONS?
LEVERS OF POWER
The US, China, Japan, South Korea, and Russia have levers of power that may be used to induce North
Korea to disarm.
LEVERS OF POWER
US • Form and lead a multilateral coalition
• Political Capital
• Military strength and dominance:
• Precision targeted bombs capable of hitting nuclear facilities (unknown capability to hit under-
ground facilities)
• Anti-missile defense system (Patriot System) that can be used by South Korea and Japan.
• US military force of 37,000 troops in South Korea is a trip wire (troops may be vulnerable in
the early phase of the North Korean attack and may be repositioned)
• Nuclear theater tactical weapons to stop a North Korean military offensive before reaching Seoul.
• Use of MOAB (Missile Optimized Anti-Ballistic) system against North Korean troop move-
ment
• Economic aid
CHINA • North Korea depends on China’s electric power grid (several years ago China cut off North Korea’s
electric power for three days)
• China maintains a large military force that can repel a North Korean ground invasion and can seal off
its border to prevent a flood of North Korean refugees
• China can threaten to use military force against North Korea. This could restrain North Korea from in-
vading South Korea
• Cooperate with US on international terrorism intelligence gathering
• Use of naval forces to interdict North Korean shipments of nuclear weapons and technology to other
states
JAPAN • Threaten and/or create nuclear weapons capability and increase its military force
• International terrorism intelligence gathering
• Use of naval forces can interdict North Korean shipment of nuclear weapons to other states
SOUTH • Offer incentives such as supplies of energy in return for disarmament
KOREA • Economic aid
RUSSIA • International intelligence gathering
• Use of naval forces to interdict North Korean shipment of nuclear weapons to other states
SUMMER 2003 22 NSF REVIEW

23. NORTH KOREA: WHAT ARE THE ISSUES AND US OPTIONS?
US STRATEGY OPTIONS
The following matrix provides seven strategy options for the US: economic incentives, burden shifting,
regime change, defend South Korea, defend Japan, and interdiction of North Korea’s nuclear weapons
shipments and technology.
US STRATEGY OPTIONS OBJECTIVES
Economic Incentives • Provide economic and humanitarian aid mixed with Induce North Korea to disarm
contributions from other states conditioned on disar-
mament and verification.
• Organize an international economic blockade
Burden Shift • Seek to have China, Japan, and South Korea play an Eliminate North Korea’s nuclear
important role in a coalition weapons and nuclear capability by
• Negotiate a non-aggression treaty with North Korea using the political and economic
in return for total disarmament coupled with a verifi- leverage of other states
able inspection regime
Regime Change • Military intervention similar to the Persian Gulf War Destabilize the Kim regime
and the most recent Iraq military campaign
• Organize an international economic blockade
Defend South Korea • Provide military assistance to South Korea (Patriot Limit the adverse consequences
anti-missile defense system and technical aid). of a North Korean military or
• Re-deploy 37,000 troops in South Korea for force missile attack; prevent population
protection purposes. and economic loss
• Introduce 250,000-500,000 US troops in the event of
a North Korean attack
• Induce South Korea to spend more on defense by
reducing or repositioning 37,000 US troops.
Defend Japan • Provide Patriot anti-missile defense system to Defend Japan against a missile at-
Japan tack by North Korea; protect Japan
in the event the US launches a re-
taliatory attack against North Korea
Diplomatic Initiative • Recognize the potential for US decreased influ- Maintain US leadership position
ence and China’s increased influence in the re- in the region
gion.
Interdiction of North • Seek international law change to allow interdiction Prevent North Korea’s nuclear
Korea’s nuclear weapons of North Korean shipments of nuclear weapons and weapons and technology exports
technology
and technology
• Gain commitments from the China, South Korea,
Japan, and Russia to interdict the shipment of North
Korea’s nuclear weapons and technology, and pro-
vide intelligence aimed at preventing future exports
NSF REVIEW 23 SUMMER 2003

24. NORTH KOREA: WHAT ARE THE ISSUES AND US OPTIONS?
NORTH KOREA-US RELATIONSHIP
North Korea and the US do not trust each other. North Korea reneged on the 1994 Agreed Framework
under which North Korea agreed to freeze and eventually dismantle its nuclear program, which would
be verified by the International Atomic Energy Agency (IAEA). However, North Korea believes that the
US reneged on its promise to provide economic aid. North Korea’s negotiating posture may be to use
extreme bluster. North Korea’s primary negotiating asset is its nuclear weapons capability. Given these
conditions, the traditional negotiating strategies may not be useful.
QUESTIONS TO BE ADDRESSED
Bearing in mind the three matrices (fundamental interests, levers of power, and US strategy options),
consider the following questions to determine the best US policy for resolving the conflict with North
Korea:
• Does North Korea have nuclear weapons?
• Can the presence or absence of North Korea’s nuclear weapons be determined with certainty?
• Will North Korea agree to a robust inspection and verification regime?
• Will economic sweeteners persuade North Korea to disarm?
• If North Korea has nuclear weapons, will it seek to make additional nuclear weapons?
• If North Korea continues production of nuclear weapons, will this change the underlying military
and political equation?
• Is it likely that the US will initiate military action with North Korea?
• If the US does initiate military action, what is the likelihood that North Korea would invade South
Korea?
• If the US interdicts the export of North Korea’s WMD technology, what is the likelihood that Kim
will retaliate and launch a missile attack on South Korea or Japan?
• What are the options available to the US other than military action for resolving the conflict with
North Korea?
BLINDSIDE FACTORS
• Kim Jung Il is unpredictable ─ rational analysis of his behavior and policy may be inapplicable.
Economic incentives and disincentives may have a low probability of affecting a desired result.
• Whether China will increase pressure of North Korea to disarm, and whether it will cooperate with
the US.
SUMMER 2003 24 NSF REVIEW

25. BOOK REVIEW
20:21 Vision: Twentieth-Century Lessons
for the Twenty-first Century
by Bill Emmott
Farrar, Straus, and Giroux, 2003, $25.00, 373 pp.
Reviewed by Lauren Bean about the America–China conflict over Taiwan.
“If there is ever a fight between the United
ill Emmott believes that the two most States and China, it is likely to arise from what
important questions for the twenty-first would be the greatest and most fateful miscalcu-
century are: Will American leadership lation in the history of mankind.”
endure, or will it “go the way of Britain in the Adding to tensions in East Asia is what Em-
twentieth century and decline?” And will capital- mott terms “Japanese Vulnerability.” Since Ja-
ism survive in the twenty-first century with all of pan’s stock and property markets crashed in
its strengths and weaknesses, or will it be chal- 1990, the country has endured recurring bouts of
lenged? frustration and a continuing economic slump.
Emmott, Editor-in-Chief of the Economist, Emmott states that “a more national government,
believes that one of the most notable events of a more powerful navy and air force, a more visi-
the twentieth century was the US “taking over ble military presence in the region, even, in the
from Britain” as the policeman for world order. end, a publicly acknowledged program of nu-
Emmott argues that American power is benign ─ clear research and development: all these must
it is not a “true hegemon.” America seeks to op- be considered likelihoods for Japan during the
erate alongside multilateral institutions such as first few decades of the twenty-first century.”
the UN and its allies. For the twenty-first cen- Emmott is confident that the European Union
tury, Emmott envisages the persistence of strong will not challenge America’s global dominance.
American leadership ─ but not without friction. He does not deny the success of the EU. How-
The greatest challenge to American power ever, the EU is “far from united.” It is the ac-
will be China. However, Emmott writes that commodation of each country’s concerns that
“China is several decades away from overtaking will prevent it from playing a dominant role in
America in terms of any important measure.” the international community. “In the end,” Em-
China is in the process of reconstructing the mott writes, “they are happy that the real adults,
economy; this process is nascent if one considers the Americans, are there to sort things out, to
that China began adopting capitalism only provide a secure home, and to pay the bills.”
twenty years ago. Thus, China should not be Emmott believes that international terrorism
feared simply on the grounds of a burgeoning will be the chief threat in the twenty-first century
economy. Yet Emmott is properly concerned given the proliferation of weapons of mass de-
NSF REVIEW 25 SUMMER 2003

26. BOOK REVIEW: 20:21 VISION
struction (WMD). However, Emmott states that growth. Given the growth of world trade, invest-
“terrorism can be contained, even if not entirely ment flows, and technological advancements,
quelled.” American leadership, coupled with the Emmott states the promise of economic and so-
collective action of the international community, cial development in the twenty-first century for
should be effective in both combating terrorism the world’s poor “is real.”
and containing the desire for and use of WMD. Emmott notes that globalization and the re-
As for capitalism, Emmott is cautiously opti- sulting inequality could threaten capitalism. Yet
mistic that it will survive the twenty-first cen- Emmott argues that globalization has made the
tury. Emmott defends capitalism against the ob- world open. “Liberalization and integration with
jections that it is unpopular, unstable, unequal, the world economy has recently spread to many
and unclean (the chapter headings). Capitalism is poor and former communist countries.” Still,
unpopular because it is “ruthless.” However, “globalization entails change, and change is de-
Emmott argues that better government regula- stabilizing.”
tions will make capitalism “behave properly” by As for the environment, Emmott argues that
correcting its dysfunctions ─ capitalism will the world’s environmental problems are not the
continue to produce good and bad times. fault of capitalism but of government. Emmott
Emmott argues that the instability of capital- acknowledges the importance of the environ-
ism during the 1930’s can be avoided given the ment and its problems, yet he argues that dra-
lessons of the Great Depression. He notes that matic forecasts of many environmentalists “are
evidence of capitalism’s continuing instability, unlikely ever to become true in any meaningful
such as the East Asian financial crisis of 1997- fashion.” Emmott agrees with Bjorn Lomborg,
98, is apparent in any decade. Yet capitalism is author of The Skeptical Environmentalist, who
flexible, and can adapt quickly once problems or claims that the world is getting better rather than
opportunities emerge. worse, and that the green movement is manipu-
On inequality, Emmott notes that the gaps lating the truth to support its case.
have widened between rich countries and poor In the epilogue, titled “Paranoid Optimism,”
countries; he argues that the gaps have narrowed Emmott concludes that no one knows what will
within countries. According to him, the solution happen in the twenty-first century; however, it
to the first problem lies in “improvements in should to be possible to make calculated predic-
public education” and efforts to ensure that eco- tions based on the trends of the twentieth cen-
nomic growth is beneficial to both rich and poor. tury: America’s political and economic ascent;
The solution to inequality within countries can the growth of global trade and investment flows;
be seen in poor countries that have advanced the rise of social mobility, the fall of aristocracy;
economically. A government that encourages developments in technology, communication,
and transportation, etc. It is a matter of maintain-
economic freedom, “an open, competitive econ-
ing “positive expectations and a keen awareness
omy, a stable macroeconomic framework…and
of risk.”
peace and consent,” is likely to enjoy economic
SUMMER 2003 26 NSF REVIEW

27. RECENT SPEAKERS
On April 1, 2003, Ambassador Richard Wil- 10,000 nerve gas warheads, 1,500 chemical
liamson, US Representative for Special Political weapons, 412 tons of chemical agents, 25 long-
Affairs for the US Mission to the United Nations, range missiles, and biological agents. The UN
addressed the National Strategy Forum on the
discovered ten times the declared number of
military conflict in Iraq and the future of the
chemical weapons in Iraq.
United Nations Security Council. Following is a
summary of his remarks. All fifteen members of UN Security Council
knew Iraq had WMD, they knew Iraq was in
Ambassador Williamson states that problems material breach, and they understood clearly that
with the UN’s procedures, performance, and Resolution 1441 authorized use of force. The
structure were exposed as a result of the conflict Security Council failed to act.
in Iraq. Williamson believes the UN has a role. Adding to these tensions, the UN has funda-
However, he questions whether that role encom- mental structural problems. For example, the
passes legitimizing the use of force. smallest country that has a vote equal to the US
Williamson believes that the Bush admini- has a total geographic area of 1.7 kilometers.
stration was correct to bring the Iraq issue to the Williamson believes that the UN Security
UN, and to challenge a “brutal tyrant”. He noted Council could be useful in resolving regional
evidence that confirms Saddam Hussein’s cru- conflicts in Sierra Leone and the Congo, but
elty. For example, Iraq has more unresolved dis- questions whether the Security Council can act
appearances than any other UN member state ─ on larger issues and whether it should be the sole
over 16,000 people. In 2000, Iraqi authorities venue for legitimizing the use of force. He con-
introduced tongue amputations as punishment cludes that the process of reconstruction will be
for criticizing Hussein. The regime has tortured long, but there is a role for the UN.
and executed children, and taped the drugging
and rapes of female relatives of government offi- Questions and Answers
cials as a method of coercion. Hussein has
launched a number of brutal attacks on his own Williamson states that the UN “does not have the
people, the Kurds, and his neighbors. Also, there moral legitimacy” to deal with Israel and the
is evidence that Iraq has a nuclear weapons pro- reformation of the Palestinian authority. Accord-
gram. In the early 1990’s, Iraq declared it had ing to Williamson, some of the five permanent
NSF REVIEW 27 SUMMER 2003

28. RECENT SPEAKERS
members of UN Security Council (P5) have di- Ambassador Thomas Pickering states that
minished influence, and use their position for Russia and China will play an increasing role in
political leverage. Israel has been the whipping world affairs in the next two decades. However,
boy of the UN for forty years. In the sixties and this process will not occur without obstacles and
seventies, the UN relied on the Arab states to tension.
attack apartheid in Africa. The quid pro quo is After September 11th Russia and China were
that the UN helped the Arab states isolate Israel. supportive of the US and the war on terrorism.
Williamson believes that the US-European For Russia, September 11th offered Russian
divide is based on power and influence. During President Vladimir Putin a chance for reorienta-
the Gulf War, European allies realized that they tion and integration into the international com-
were far behind the US militarily. Since the munity. He made a strategic change to align
1990’s, European defense spending has de- Russia with the US and perhaps, Western
creased. These countries rely on the US. The Europe. For China, September 11th provided an
problem is that these countries want the US to opportunity for cooperation with the US. Even
help them but fail to understand that less power though China had misgivings about the US at-
means less influence. tack on Iraq, it did not take the lead in the Secu-
Williamson forecasts that post-conflict Iraq rity Council to thwart US efforts. China contin-
reconstruction will take many years. At present ues to help the US in post-conflict Iraq.
in Afghanistan, ethnic groups have representa- For Russia, its weak economy hinders its
tion in the government. Williamson believes that ability to expand its relations with the interna-
the same potential exists for ethnic groups in tional community. Economic reform is a critical
Iraq. objective of President Putin’s agenda; he wants
_____________________________ to attract greater foreign investment. Pickering
suggests that Russia should focus on the export
On April 28, 2003, Ambassador Thomas of agriculture by removing the old, continuing
Pickering, former Ambassador and Representa- state farm system, and replacing it with a new
tive to the United Nations, addressed the Na- agricultural system. Also, improvements in do-
tional Strategy Forum on the relationship of the mestic law could result in a decline in corruption
US, Russia, and China. Professor Charles and attract more foreign investment. Pickering
Lipson of the University of Chicago facilitated suggests that the US work with Russia on issues
the question and answer portion of the event. regarding trade and security, support Russia’s
Following is a summary of their remarks. entry into WTO, and work with the EU on better
relations between Europe and Russia.
SUMMER 2003 28 NSF REVIEW

29. RECENT SPEAKERS
China’s economic performance, unlike Rus- their relationships. Together, these three coun-
sia’s, is significant and positive. Last year, China tries will begin to share the responsibility of
saw 7%-8% growth. It is pursuing an active world leadership.
campaign to attract investment from the US and
elsewhere. Questions and Answer
Politically, Russian democracy must be fos-
tered. Russia needs to be pushed to make an ef- Professor Charles Lipson believes that the Euro-
fort to stop crime and corruption. It is a perma- pean Union (EU) and Russia will develop a
nent member of the UN Security Council, and closer relationship. Yet there is a continuing de-
the US must work with Russia on the interna- bate over the enlargement of the EU. At a mini-
tional scene, global missile defense, and outer mum, it is a free trade organization. The problem
space. Also, the US must support changes in is that some states want it to be an organization
Russian policies regarding non-proliferation of that formulates foreign policy. However, a lar-
WMD. It is important that Russia’s oil and gas ger organization will make it more difficult for
reserves be developed to bolster the Russian the member states to agree. Thus, the EU needs a
economy and provide the world with an alternate central authority and a constitution.
resource to Middle Eastern oil reserves. In addressing democracy in Russia, Lipson
For the US and China, the most critical area states that there are no stable Russian institu-
of tension and potential future conflict is Taiwan tions. But given the efforts of the Putin admini-
and the Taiwan Straits. Pickering believes that stration, it is likely that Russia will democratize.
both sides of the Strait have made efforts to re- Lipson states that China is a long way from
duce the possibility of conflict and are looking to becoming a peer competitor. It is showing eco-
the future. The US and China have a common nomic growth, but needs to develop full-range
interest in the Korean Peninsula. Both oppose components of a modern economy. The emerg-
nuclear weapons on the peninsula. However, ing infrastructure needs to decentralize its eco-
China does not want to pressure North Korea nomic power to adapt to its growth.
with sanctions and believes that the US should Lipson states that the prospects for move-
negotiate directly with North Korea. China ment on the Palestinian and Israeli front are bet-
played a major role in organizing and hosting ter than in 1994. The US has a larger footprint
talks in Beijing between North Korea and the in the Arab-Muslim world. And, the threat of the
US. militant Islamic world pre-commits the US to
According to Pickering, the US, China, and deal with failed states, rogue states, and terror-
Russia understand the strategic importance of ism.
NSF REVIEW 29 SUMMER 2003

30. STRATEGY WATCH
Asia China participated in the talks. In Bangladesh,
two ferries sink in storms, killing 134 people.
In early March, Brigadier-General Boer Buis is The trial of Abu Bakar Basyir, an Islamic cleric
sentenced to five years in jail by an Indonesian accused of plotting to overthrow the government
court for failing to prevent massacres of civilians in order to establish a Muslim state, begins in
in East Timor in 1999. Zhu Rongji resigns as Indonesia. The US states that it is considering a
prime minister of China and is succeeded by his conditional offer by North Korea to disband its
deputy Wen Jiabao. In Hong Kong, scientists nuclear weapons program but that it will not be
identify the virus responsible for a fatal form of rewarded.
pneumonia called Severe Acute Respiratory
Syndrome (SARS). Beijing reports over 1,440 Middle East
confirmed cases and 75 deaths. At least 10,000
people are quarantined. More than 372 people Mahmoud Abbas is appointed to the new post of
have died of the disease worldwide. North Ko- prime minister of the Palestinian authority. Tay-
rea withdraws from regular talks with US offi- yip Erdogan, leader of the governing Justice and
cers at Panmunjom, on the border of South Ko- Development party, becomes Prime Minister of
rea. Both India and Pakistan test-fire surface- Turkey. In mid-March, the US-led war against
to-surface missiles capable of delivering nuclear Iraq begins with missile attacks on the Iraqi lead-
weapons. In mid-March the guerrillas of the ership in Baghdad. The UN withdraws its weap-
Moro Islamic Liberation Front in the Philip- ons inspectors from Iraq. Three of Britain’s
pines attack a village killing five people. Weeks prime ministers resign in protest of Tony Blair’s
later, bombers kill 16 people in the city of Da- decision to go to war without the backing of the
vao. Malaysia bans tourists from mainland UN. In Afghanistan, American and Italian bases
China in an effort to stop the spread of SARS. are attacked by rocket and machine gun fire from
The US says it plans to move its garrison in cen- suspected Taliban and al-Qaeda forces. In
tral Seoul to a less conspicuous site outside the northern Iraq, Kurdish peshmerga fighters,
capital. In late March, North Korea abandons supported by American Special Forces, capture
its demands that any talks on its nuclear program the stronghold of an extremist Islamist group
should be solely with the United States. Japan which the US has accused of having links with
faces possible power cuts this summer as many terrorism and al-Qaeda. Indian troops kill the
of the country’s nuclear reactors are shut down deputy leader of Kashmir’s main militant group,
for safety checks. James Kelly, an American of- Hizb-ul-Mujahideen. In April, American forces
ficial, holds talks in Beijing with North Korean topple the regime of Saddam Hussein with large-
negotiator Li Gun in a move to try to persuade scale assaults. Iraqis celebrate the fall of the Sad-
the North to end its nuclear weapons program. dam’s regime with widespread looting. Looters
SUMMER 2003 30 NSF REVIEW

31. THE NSF REVIEW STRATEGY WATCH
March 15, 2003—June 3, 2003
31
In the Moroccan capital of In Riyadh, Saudi Arabia, nine suicide President Bush meets with South Ko- Both India and Pakistan test-fire
Casablanca, simultaneous sui- bombers ram their vehicles packed rean President Roh Moo-hyun to dis- surface-to-surface missiles capable
cide bombings kill 42 people, with explosives into three compounds cuss the North Korea crisis. of delivering nuclear weapons.
wound over 100. housing expatriates, killing at least 34
people, eight of them American.