Arming the Two Koreas: State, Capital and Military Power (Politics in Asia Series)

Arming the Two Koreas

Taik-Young Hamm’s book is a critical enquiry into the dynamics of the armament of North and South Korea from the Korean War period to the 1990s. The author’s controversial findings reveal that North Korean military superiority is a myth, used by South Korean governments to legitimise military expenditure. Moreover, defence spending has been used to consolidate authoritarian regimes and mobilise popular support. This close analysis describes and explains the armament processes of the two Korean states from a more objective, critical perspective. Hamm considers defence expenditure as the best indicator of armament, rather than bean counts or firepower scores. Finding most official sources unstable, inconsistent or biased, this book generates more valid, credible data; it reestimates the North Korean defence budget, taking foreign aid and depreciation into account. From this material, the author argues that, contrary to popular opinion, the South has been superior in military capital since the mid-1980s. Arming the Two Koreas provides a holistic, rather than reductionist, explanation of armament. Following the Gramscian conception of state power as the ‘sum of coercion and hegemony/consent’, the book argues that armament depends upon state power in its internal and external dimensions. Students and researchers in Asian studies, international relations, of strategic and security studies and international politics will find this book a comprehensive resource. Taik-young Hamm is Professor of Political Science and Associate Director for Research at the Institute for Far Eastern Studies, Kyungnam University, Seoul. He has written extensively on the security of Korea and the North Korean political Economy.

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Arming the Two Koreas State, Capital and Military Power Taik-young Hamm

Arming the Two Koreas State, Capital and Military Power

Taik-young Hamm

London and New York

First published 1999 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2001. © 1999 Taik-young Hamm All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Hamm, Taik-young, 1950– Arming the Two Koreas: state, capital, and military power/Taik-young Hamm. p. cm. – (Politics in Asia series) ISBN 0-415-20792-4 (alk, paper) 1. Arms race – Korea. 2. Korea (North) – Defenses. 3. Korea (South) – Defenses. 4. Korea (North) – Armed Forces – Appropriations and expenditures. 5. Korea (South) – Armed Forces – Appropriations and expenditures. I. Title. II. Series. UA853.K6H25 1999 355.0330519 – dc21 98–31536 CIP ISBN 0-415-20792-4 ISBN 0-203-02271-8 Master e-book ISBN ISBN 0-203-12954-7 (Glassbook Format)

Contents

List of tables Foreword Acknowledgements List of abbreviations 1 Introduction 2 State and armament: theory and hypotheses

vii viii x xi 1 12

Alternative modes of explanation 13 Poverty of raison d’état doctrine: arms race and incrementalism 16 Armament, resources, and state power 23 State and armament in perspective: a Gramscian approach 29 Summary of hypotheses 36 3 On military capabilities: facts and methods of assessment

38

Understanding military capabilities 39 Bean counts and other numbers 43 Defence expenditure 51 Data and measurement 57 Conclusion 61 4 Conflict and militarisation on the Korean Peninsula The Korean War period 62 Postwar buildups and consolidation 67 North Korean ‘self-reliant defence’ in the 1960s 71 The Korean conflict 1966–69 74

62

vi

Contents

Conventional arms race in the 1970s 79 ROK superiority in the 1980s 82 DPRK siege and nuclear option in the 1990s 86 5 Military balance and arms race between the two Koreas

90

DPRK defence expenditures revisited 91 Dynamics of the inter-Korean military balance: comparing military capital stock 104 Conclusion: external factors of armament 115 6 Resources, state power, and armament

118

Estimating North Korea’s GNP 119 Defence burden of the two Koreas 129 North Korea: from armed workers to working soldiers 137 South Korea: from coercion-intensive to capital-intensive state 146 Conclusion 160 7 Conclusion Appendices Notes and references Bibliography Index

162 167 172 213 238

Tables

2.1 3.1 3.2 4.1 4.2 4.3 4.4 4.5 5.1 5.2 5.3 5.4 5.5

Alternative conceptual models of state action. ROK–DPRK ratios in CCC and military capital stock. Estimated DPRK defence expenditures by the ACDA. Comparison of ground troops on 1 May 1951. ROKA–KPA manpower in the Korean War. Upper limits of the ROK forces. KPA unconventional operations, 1966–69. Growth of the KPA manpower. ROK defence expenditures. Official DPRK defence budget. Estimated DPRK defence expenditures. Comparison of estimated DPRK defence expenditures. A building-block estimate of DPRK defence expenditure, 1981. 5.6 ROK–DPRK annual and cumulative defence expenditures with 10 per cent depreciation. 5.7 ROK–DPRK military personnel expenses. 5.8 ROK–DPRK cumulative investment and O&M. 5.9 ROK/DPRK cumulative spending compared. 6.1 Official DPRK national income. 6.2 Estimated DPRK population and GNP (= NI). 6.3 Alternative estimates of DPRK per capita GNP. 6.4 ROK–DPRK GNP and budget. 6.5 ROK–DPRK defence burden. 6.6 ROK–DPRK force ratios. 6.7 DPRK extractive capacity and defence burden. 6.8 DPRK economic growth and defence burden. 6.9 Expansion of ROK FIP (I). 6.10 ROK extractive capacity and defence burden by year. 6.11 ROK extractive capacity and defence burden by period.

15 56 59 65 66 67 77 87 93 96 100 102 103 106 109 110 114 123 127 128 131 133 136 138 140 148 154 159

Foreword

Despite the end of the Cold War, an acute tension has persisted between the two Koreas whose relations are governed still by an armistice agreement concluded in 1953 and not a peace treaty. That tension has not been mitigated by the accord between Pyongyang and Washington in 1994 whereby the government of the North committed itself to giving up its nuclear option in return, in particular, for assistance in developing nuclear power for civilian use. Recurrent military intrusions into the South have been accompanied by a persistent denial of the legitimacy of its government, while the demonstration of a medium-range missile capability by the North has had the ironic effect of improving defence consultations between Seoul and Tokyo. North and South Korea have continued in a condition of armed hostility towards one another which has meant a heavy level of defence expenditure on both sides with the greater relative burden being carried by the North which has experienced economic penury as the price of maintaining a Stalinist political system. It is the continuing ‘garrison state’ condition of North and South, despite attempts to promote accommodation between them, which makes this analysis of the dynamics of arms procurements by the two antagonists from the Korean War to the 1990s both pertinent and timely. One of the great merits of Dr Hamm’s study is his dispassionate approach to the subject and his ability to cut through the rhetoric of justification on both sides. Indeed, he soberly challenges the conventional wisdom of Seoul’s rationale for defence procurements and points to the qualitative superiority of its weapons systems and also that it has outspent Pyongyang by an order of two to one since 1976. Moreover, he argues convincingly that the relationship between the two states is one of armed rivalry and not that of an arms race because the government in the North has not been in a position to compete given its ailing economy and the loss of foreign military aid. Apart from illuminating the nature of the military balance in the Peninsula, Dr Hamm is concerned to provide a more comprehensive explanation for arms procurements than that offered by the Richardsonian armsrace model and that governed by bureaucratic-organisational considerations. To

Foreword

ix

that end, he addresses the complementary significance of the resource-bases of the two states in question. In going beyond conventional ‘bean-counting’ in his assessment of the dynamics of the military balance between North and South, Dr Hamm provides a valuable politically detached account of an armed rivalry which remains a threat to peace in East Asia. His research findings will be of considerable interest to students of conflict analysis and arms control as well as to area specialists. Michael Leifer

Acknowledgements

This book is developed from my PhD dissertation at the University of Michigan. My special thanks go to those who have helped me to prepare this book. They are, first of all, my advisers, Professor Youngnok Koo at the Seoul National University and Professor Harold K. Jacobson. I am greatly indebted to their advice, inspiration, and unending moral support. I would particularly like to stress my debt to the late Professor A.K.F. Organski for his inspiration and critiques. Professor John Shy and Paul Huth provided me with invaluable advice, comments, and critiques. I would also like to express my deep gratitude to Professor Michael Leifer at the LSE and Routledge’s reviewer for their comments, suggestions, and benevolent critiques. Special thanks go to my professors at the Seoul National University and the University of Michigan whose ideas and information I benefited from over the years. Ms Victoria Smith, Senior Editor, and her colleagues at Routledge have provided superb editorial support with good humour and great patience. Without their help, this book would have been impossible. I would also like to thank on this occasion my colleagues, friends, students, brothers and sisters for their invaluable support. I am greatly indebted to Ms Im-Soon Moon and Mrs Joanne Heald who typed my drafts. Needless to say, I am to blame for the errors and contentions found in this book. Last but not least, I am greatly indebted to my wife KyoungHoo Lee and my son Peter Sung-Joon for their endless support during the lengthy process of the publication of this book. To them and to the memory of my mother this book is dedicated.

Abbreviations

ACDA ADE BC B-O BOK CBW CCC C3I CDE CEV CGE CIA CMEA DE DEF DIA DMZ DPRK EDA EPB FAA FEBA FIP FMS GNP GVIO GVSP IAEA IAF IDF IFES IISS KATUSA

Arms Control and Disarmament Agency armoured division equivalent border-constabulary bureaucratic-organisational Bank of Korea chemical and biological weapons combat capability coefficient command, control, communication and intelligence (C4I, including computer) cumulative defence expenditure combat effectiveness values central government expenditure Central Intelligence Agency Council for Mutual Economic Assistance (or COMECON) defence expenditure division equivalent firepower Defence Intelligence Agency Demilitarised Zone Democratic People’s Republic of Korea Excess Defence Articles Economic Planning Board Foreign Assistance Act forward edge of battle area Force Improvement Plan (Yulgok Project) Foreign Military Sales gross national product gross value of industrial output gross value of social product International Atomic Energy Agency Israeli Air Force Israeli Defence Forces Institute for Far Eastern Studies, Kyungnam University International Institute of Strategic Studies Korean Augmentation Troops to US Army

xii

Abbreviations

KCIA KGB KIDA KIFV KPA KVA KWP MAP MASF MBT MIC MLRS MND MNS MPAF MPS MSA NATO NDE NI NMP NNP NSE NSPA NUB O&M PE PLA POL PPP Pk R&D ROK ROKA ROKAF SAM SCM SIPRI SNA SSM TGE UNC USFK WEI/WUV WMEAT WRSA

Korean Central Intelligence Agency Commission of State Security Korean Institute of Defence Analysis Korean infantry fighting vehicle Korean People’s Army Korean Volunteer Army Korean Workers’ Party Military Assistance Programme Military Assistance Service Fund(ed) main battle tank military-industrial complex Multiple-Launch Rocket System Ministry of National Defence Ministry of National Security Ministry of People’s Armed Forces material product system Mutual Security Act North Atlantic Treaty Organisation national defence expenditure national income net material product net national product national security expenditure (Minjok-bowi-bi) National Security Planning Agency National Unification Board operation and maintenance people’s economy People’s Liberation Army petroleum, oil and lubricant purchasing power parity probability of kill research and development Republic of Korea ROK Army ROK Air Force surface-to-air missile social-cultural measures Stockholm International Peace Research Institute system of national accounts surface-to-surface missile total government expenditures United Nations Command US Forces Korea Weapons Effectiveness Index/Weighted Unit Value World Military Expenditures and Arms Transfers War Reserve Stocks Allies

1

Introduction

This work is an enquiry into the dynamics of the armament of the two Korean states from the Korean War period to the 1990s. Its purpose is to describe, analyse, and explain the armament processes of the two Korean states with a more objective and critical perspective. It is an effort to contribute to the recently emerged efforts for a more balanced understanding of the armament dynamics and national security of the two Koreas. Based on my previous descriptive and theoretical research, I have tried an analysis of the relationship between armament and state power in its internal and external dimensions. I have also tried to utilise and, in fact, generate more valid and credible data for further research, since various official and semiofficial data sets are internally unstable, misleading, or biased. With a few exceptions, numerous publications and conferences on the issue have been narrowly focused, repeating the redundant theme of North Korean aggressiveness and military superiority. Until the more or less liberal-democratic regime was established in 1988 after widespread popular struggles for democratisation and the consequent free presidential election in 1987, for the first time since 1971, objective, if not critical, research on national security had been taboo in South Korea. To be sure, the two divided states have been engaged in a continued bitter armed confrontation. Although a large-scale armed conflict has not occurred since 1953, each has maintained a high level of military preparedness to the extent that both can be defined as ‘garrison states’. Each side has been trapped in national security paranoia. Everything has been justified in the name of national security. Internal security, i.e. the security of the ruling power bloc, and external security has been closely interrelated. Leaders on both sides have reinforced and exploited the security complex of the people in order to justify their authoritarian rule or at least to mobilise popular support. In this sense they have shared a common interest in the ‘system of national division’. Nevertheless, modest efforts for a more balanced and even critical understanding of disarmament and arms control on the Korean Peninsula, including the nuclear issue, have recently become one of the most important topics of the Korean problem, as the global Cold War system has come to an end. Yet there exist confusion and

2 Introduction controversy in South Korea on national security issues. The government of the Republic of Korea (ROK, or South Korea) still maintains that North Korea has military superiority and aggressiveness, with a large number of experts parroting the policy rationale and data provided by the ROK or US government. To oversimplify, the ROK–US official position can be summarised as follows.1 First, it has been argued that the Democratic People’s Republic of Korea (DPRK, or North Korea) has maintained military superiority in spite of the ROK efforts to catch up, owing to its earlier defence industrialisation and much heavier defence burden. Second, the ROK armament has been justified as an effort to catch up with the DPRK in order to achieve self-reliant deterrence and defence capabilities. An external causation or arms race explanation, e.g. the Richardson ‘rivalry model’, has been the official rationale of the ROK armament. Third, however, internal factors that may be called the ‘military-industrial complex’ or ‘bureaucratic-organisational process’ have explained the DPRK armament. The DPRK has been alleged to continue considerable efforts to build up its military might ever since 1962 without making any significant change in its maximum self-reliant defence effort. The ROK and US estimates of the DPRK defence expenditures have been at least 30.0 (or 30.9) per cent of its total budget or 20–25 per cent of its GNP,2 guaranteeing a 100 per cent statistical explanation! The official government propositions cannot be warranted either theoretically or empirically. First of all, the ROK buildups have not been carried out merely to counter the alleged inferiority on the bean-counting balance sheet. Rather, it has developed new military doctrines and deployed qualitatively different/superior weapons systems that did not require an equivalence to the DPRK systems in sheer numbers. Also, the ROK has outspent the DPRK by an increasing margin since 1976. Even if we adopt the considerably inflated official ROK–US estimates of the DPRK military expenditures, the ROK military expenditures in recent years are more than twice as large as the estimated North Korean spending. The DPRK has assuredly increased its defence expenditures, but ever so slowly. Its budgetary trend coupled with economic growth shows distinct trends and cycles. Also, it has other means to counter the ROK military buildups. One is the more economical means of expanding manpower instead of more costly investment in capital stock. Or it can resort to diplomacy, that is, peace offensives such as proposals for arms reduction or the withdrawal of foreign (American) troops. Still another alternative is the development of non-conventional deterrents, allegedly, chemical weapons and the nuclear option. Rumours of these non-conventional weapons abound, but the exact nature of the DPRK nuclear capabilities in question has yet to be confirmed. Second, as has been noted, there exists a wide gap between the official DPRK release of data on its defence expenditures and the ROK (and US) estimates. It is highly probable that the DPRK is to blame for cheating or hiding. However, unlike

Introduction

3

the Soviet case, the hidden proportion, does not seem to be very large. For instance, official Soviet annual military spending has been 17.1 billion roubles (1971–84), 19.1 billion roubles (1985–88), and 20.2 billion roubles (1989) – the new announced figure for 1989 by Gorbachev was 77.3 billion roubles or about 9 per cent of the Soviet GNP – while the US CIA estimate for the 1965–82 period is 15–17 per cent of the Soviet GNP.3 The official DPRK defence expenditures rose from 19.0–19.8 per cent of the total budget during 1960–66 to 30.9 per cent (1967–71), but then gradually declined to 18.0 per cent (1971–76), 14.8 per cent (1978–84), and 13.0 per cent (1985–90).4 ROK government estimation is based on the simple extrapolation of the highest official DPRK figure (1967–71): a constant 30.9 per cent during 1967–86 and 30.0 per cent thereafter. Since the estimated size of the Soviet or the DPRK military budget usually receives more attention than any other variable in justifying the respective US or ROK military budget, debates concerning the proper estimation are of great academic as well as political importance. Decision-makers searching for information in this case usually end up with what they perceive and/or what they want to believe. Estimating the Soviet/DPRK defence expenditures involves not only the perception factors but also a high level of bureaucratic-organisational politics, such as the so-called ‘Team A’ and ‘Team B’ reports of the CIA in 1975–76, and the disputes between the CIA and DIA in the 1980s, etc.5 In the DPRK case, annual estimates by the US Arms Control and Disarmament Agency vary widely from about 10 per cent of its GNP to as high as 23 per cent for the same years without any explanation. Third, the implied explanations are dubious at best. If an arms race between the two Koreas had occurred, it would have been a one-sided race, not a classical Richardsonian action–reaction process. Without denying that there has existed an armed rivalry between the two states, we may conceive a better explanation adopting domestic variables as well as other external variables, especially the alliance factor. The assumption of a constant threat from the North and the constant share of its budget or GNP for armament should also be reconsidered, if relative capabilities as well as intentions (represented in its defence burden) are taken into account. Foreignmilitary policy decision-making in general, and the defence budgeting in particular, is the outcome of political and economic processes of resource mobilisation and allocation in which various governmental and non-governmental collective interests are involved: ‘policy making is politics’. In the ROK case, pressures from the United States should be counted as well; the rapid decline of grants/credits in military aid, US troop withdrawals in the 1970s and the requests for more defence burden-sharing in recent years. Several important works have tried to challenge predominant balance assessment and explanations of armament of the two Koreas. Yet few of them have succeeded in a systematic analysis of the dynamics of armament of the two Koreas during the entire postwar period. Most of them are partial in theory and scope. For instance,

4 Introduction the pioneering work of Lee, which was a severe blow to official claims and was actually instrumental in the publication of the Defense White Paper in 1988, is exclusively concerned with the balance assessment in the 1980s.6 He covers the entire postwar arms buildups and defence expenditures of the South, but his work remains descriptive rather than explanatory and excludes the North. Yet it shows the total defence expenditures, i.e. the ROK defence budget plus the US military aid.7 Hyun tries to explain the internal causation of defence expenditures of the South especially since the 1970s, but he does not include the North either.8 On the other hand, Park analyses the North–South Korean arms race, utilising the IISS data, but does not include the alliance factor or military aid, which was responsible for the greater part of total military spending of the South at least until the early 1970s.9 Among foreign analysts, Clough and Hayes stand out in their analytical depth and coverage of the entire postwar period. Hayes utilises many hitherto classified materials, yet his highly informative and critical analyses of the Korean military situation are unfortunately focused on the US military policy and nuclear weapons in Korea.10 Clough provides a well-balanced account of the inter-Korean rivalry and the foreign–domestic linkage, yet it is more descriptive than explanatory. It is somewhat outdated – it does not cover the dramatic turn of events in both Koreas in recent years.11 My previous work covers both Koreas during the entire postwar period, but it falls short of an explanation. My theoretical analysis of armament is not tested by empirical data, although a political economy analysis of the DPRK defence expenditures was tried elsewhere.12 Here, I will try a synthesis of my previous historical and theoretical research on armament of the two Koreas. As is explained further in Chapter 3, this work is basically an analysis of defence expenditures of the two Koreas. The monetary expression of defence effort is by far the best operational definition of military might, since it covers both quantitative and qualitative dimensions of the human, material, and the often-neglected organisational factors of military capabilities. It is also far superior to other alternatives for analysing the internal causation of armament, for its share of the government budget (or GNP) represents the burden of armament. Yet some modifications should be made. In the external explanation, it is not the flow but the stock of spending on defence that indicates military capabilities. Depreciation should be included as well. In the internal explanation, defence burden, i.e. the ratio of defence expenditures over the GNP, will be utilised. Since the official ROK– US estimates of the DPRK defence expenditures and the consequent balance assessment are quite distorted, more balanced estimates of the DPRK spending on defence and GNP will be provided. Still, it is a major challenge to explain the dynamics of armament beyond the generally accepted military expenditure analysis. Typically, two different

Introduction

5

approaches, or a certain combination of the two, are encountered in the field. The external approach, best represented in the arms race model, focuses on the action– reaction process between rival states, while the internal approach emphasises the bureaucratic-organisational pressures, the military-industrial complex, or military Keynesianism (business cycle, or other political economy cycles). 13 The Richardsonian action–reaction model, schematised in a mathematical form or its variants, was dominant in arms race research. However, arms race research soon gave way to arms expenditure research in which other domestic variables are introduced. The Richardson model is a perfect example of the elegance and parsimony that the realist theory provides. In this ‘state-as-actor’ or ‘state-centred’ paradigm, the political process of foreign policy decision-making is black-boxed and what remains is the mass and movement of the states conceived as billiards balls. Armament is the means to power and national security. The internal approach as an alternative to realism challenges the realist assumption that the state is a unitary actor. It rejects the black-box model of the state and focuses on what goes on inside. However, empirical research on the politics of foreign policy-making seldom goes beyond the top decision-makers or the national security bureaucracy. The ‘bureaucratic-organisational politics’ model, another powerful tool for analysing the armament process is a perfect example of the decision-making paradigm.14 Typically, it adopts the incrementalism model: the most simplified version is that the best predictor variable of Xt is Xt-1. A number of quantitative analyses of the US and Soviet defence expenditures have compared the relative merits of each model in terms of statistical explanatory power (usually R-square and t-tests) and/or tried to develop a superior model picking the better parts from each. To oversimplify, the incrementalism model performs better – the first conclusion would be that the hypothesis of internally stimulated armament usually prevails. Viewed from another angle, however, it is not surprising. First of all, no state acts exactly in the manner of the Pavlovian stimulus-response behaviourist model. Second, we cannot but doubt whether the incrementalism explanation (Xt = ƒ Xt-1) is an explanation or a mere prediction without explanation. If it is a prediction based on description, we need an explanation; if it is an explanation, we need a deeper explanation of the underlying dynamics that make incrementalism work. Armament is not simply the outcome of the Schumpeterian disposition of the military bureaucracy to unlimited expansion.15 Nor is it the essential requirement of monopoly capital. What we need is a holistic approach as opposed to the above-mentioned reductionist approaches. In addition to serving the parochial interests of some powerful forces, armament performs a general societal function internally as well as externally.16 However, the realist or pluralist conception of national interest is not accepted. The former presumes that the state represents the ‘interest for the

6 Introduction community’, and the latter view it as a simple ‘balance’ among competing, more-orless equal social groups.17 A deeper or more fundamental explanation requires superior concepts and theories rather than the statistical technique of a ‘curvefitting exercise’. In other words, it tries to establish a causal relationship between armament and social-structural variables, a relationship deeper than the action– reaction process or incrementalism. In a schematised form, it involves supplanting the endogenous variable in arms expenditures, Xt-1, and other parameters with exogenous variables. In fact, this effort has been prompted by the outcome of military expenditure analyses of the two Koreas.18 The research findings suggest several alternative hypotheses, since the statistical relationship can be interpreted as internal bureaucratic pressures, the fatigue factor in the Richardson model, or merely a statistical artefact. They suggest that the ‘threat’ and ‘fatigue’ factors in the Richardson model be closely related to the allocation of resources for national defence, though they are assumed independent from each other in the linear modelling for statistical tests. These hypotheses are strongly supported by historical evidence. The severe party bureaucracy vs. the military conflict in North Korea in the late 1960s is an excellent example. The rise and decline of the defence burden in the South for the last two decades has been influenced by rapid economic growth since the mid-1960s which has reduced the ‘guns vs. butter’ conflict to a quite manageable level. However, there was a decline in grant aid from the US in the 1970s and a strong incrementalism factor at work from the late 1970s to the mid1980s when defence expenditures were fixed at 6 per cent of GNP or roughly onethird of the total government budget. The rapid acceleration of arms buildup far exceeded the decline of US military aid and was not affected by the US decision in 1979 to halt troop withdrawals. Furthermore, it was the period when the most repressive (disguised) military dictatorship dominated the entire society. After partial democratisation in 1988, the defence burden has dropped to lower than 4 per cent of GNP in 1990. These alternative hypotheses based on simple quantitative tests and historical analyses of the two Korean cases should be further elaborated. An approach to the fundamental understanding of foreign policy in general and armament in particular should be general rather than partial. The various internal explanations are partial in the sense that they regard armament as the outcome of parochial corporative interests. A general explanation requires analyses of political and economic variables, even though they would not be highly susceptible to rigorous tests. For the sake of simplicity, this thesis begins with the concept of resources. Armament requires resources and, especially, material resources of the state in the industrialised era. Three variables, i.e. the overall resource base, the capacity of the state in resource mobilisation, and allocation are the focus of analysis. One can note that the resource concept refers to national power/capabilities.19 In other

Introduction

7

words, it is hypothesised that armament is determined by the capacity of the state in both internal as well as external aspects. The external expression of the capacity of the state as the system of domination is what we call national power. The internal capacity of the state is often called state capacity, strength, power, etc. Here, we use the term state power to denote the political capacity of a state-society complex, but it should be differentiated from the neo-Weberian concept of state power or state strength that usually means state autonomy, i.e. the capacity of the state apparatus/government vis-à-vis the civil society. State power, instead, refers to no less than the total capacity of domination, since the state is the system of domination in a society divided into classes and other groupings. This relational conception of the state would overcome the artificial separation of the state and civil society which are, in fact, deeply interrelated and interpenetrated. In the final analysis, state action should be viewed as the outcome of overall ‘social forces’, logically ‘prior’ to the state.20 Unashamedly, the thesis is based on the Gramscian synthesis (state = political society + civil society) in which both coercion and hegemony, or active consent, are exercised by the state apparatus and the dominant class(es).21 As it identifies the ruling power bloc, or ‘historical bloc’ in Gramsci’s conception, in both the state and the civil society, state power as the sum of coercion and consent should be identified in both the state apparatus and civil/bourgeois society. In terms of resource extraction, the former is taxation while the latter is private profit. The enlarged conception of the state and state power would better capture the extractive capacity of a capitalist state if we compare it with that of a socialist state where the state performs the role of capital accumulation. To be sure, capital formation or profit does not directly refer to the degree of consent, but it more or less reflects the outcome of consent mobilisation. Furthermore, the taxation plus profit formula would better indicate the potential capacity of resource extraction by a state apparatus in a total war, since the state apparatus and the dominant class(es) dichotomy is nothing more than a division of labour in domination. Yet owing to the division of labour and the virtual identification of the government with the state in the multi-state international system, the state apparatus is ‘relatively autonomous’. The autonomy of the state concept of the neo-Weberian approach means nothing more than that either government or politics is autonomous from the civil society or the market/ economy, respectively.22 How is armament related to state power? First, armament depends on the overall resource base, which in turn depends on economic growth. Second, the secular trend in the armament–economy relationship includes short- or medium-term variations in armament. The changing defence burden is dependent on the degree of resource extraction, operationalised in tax ratio or the overall state power ratio, i.e. tax plus profit over GNP. In fact, war, arms buildups, and increased taxation are closely related processes of state building. Yet the expansion of state power incurs

8 Introduction the rising cost of consent mobilisation represented by the struggles for political participation and the consequent expansion of the ruling coalition. In other words, since no state can exclusively rely on coercion, the marginal cost of expanded state power increases as consent mobilisation grows. Armament as the minimum requirement of state power, i.e. coercion, grows as state power expands, but the increasing marginal cost of consent mobilisation gradually deters the growth of armament to such an extent that armament, in terms of defence burden, decreases as consent becomes the dominant form of state power. That is why some analysts agree that a lack of legitimacy in a weak state leads to more concern with internal security and the tendency to identify internal security with national security.23 Yet a more liberal-democratic regime does not necessarily have a lower defence burden, since the overall state power (in extraction) as the sum of taxation and profit does not always correspond to the type of regime. The above discussion implies that armament depends not only on the overall degree of state power but on its composition. With a given level of resource extraction, a more coercive state, i.e. more tax than profit, would have a higher defence burden. That is, the allocation of resources for armament depends on the relative weight of coercion and consent. The rising cost of hegemonic projects, i.e. increased domestic capital formation in the South or capital formation and showpiece projects in the North have strongly constrained the defence burden. This explanation appears superior to an explanation by welfare spending, since any budget allocation in the optimisation model is zero-sum, which is especially true if we analyse the relative shares of GNP rather than the actual amount (in the latter case, both defence and welfare expenditures usually grow together). As for the state autonomy, it is a much used and abused concept. In Chapter 2, various dimensions of the relative autonomy of the state will be discussed; also, another kind of autonomy in resource mobilisation and allocation for armament of the two Koreas is identified with foreign military aid. To oversimplify, armament as the means of coercion depends on the overall degree of state power and its internal composition of coercion and consent. Without denying the external factors of armament, or the relative military capability of a state vis-à-vis the other, the research on armament of the two Koreas focuses on state power. The two Koreas are in fact divided states of the same nation, and internal security is invariably tied to national security. The degree of state power, or the cohesion of each regime, is dialectically related to armament. Since the indicator of overall state power is not identical in the two Koreas, a comparative case study is preferred. Likewise, the rough estimates of armament, especially in the case of North Korea, are not quite applicable to quantitative (statistical) tests. Rather, the research is a comparative case study of the two Koreas, utilising the interpretative method as well as simple data analysis including cross-tabulations. The contents of this book are as follows. Following this Introduction, Chapter 2

Introduction

9

will include discussions and hypotheses of armament in general. It evaluates the relative merits and disadvantages of the external and internal explanations. The arms race model is criticised for its state-centred bias, while various domesticsources explanations are rejected for their partiality in explanation or lack of empirical fit. A deeper or more fundamental explanation is then attempted by an approach based on the synthesis of the state and civil society, focusing on the resource potential, mobilisation and allocation. Armament as the basic means of state power (in coercion) is viewed as the reflection of overall state power defined in the Gramscian conception of the state, i.e. coercion supported by hegemony, not in the parochial corporative interests of the military bureaucracy or the MIC. Armament depends on resource potential and state power in extraction, yet its relationship is curvilinear with state power as the latter grows and the relative weight of its component elements, i.e. coercion and consent, change. Armament expands as state power grows but levels off and then, in a relative sense, declines as state power nears the maximum level (in peacetime, of course). Yet the external factors, i.e. arms race and alliance factor, are not discarded. Actually, it was military aid from their respective allies that provided both Koreas with a high degree of autonomy in resource mobilisation/allocation and consequent heavy defence effort. Chapter 3 is a minor digression, in an attempt to find the most appropriate indicator of armament that can simultaneously represent military capabilities and the defence burden. It criticises the widely used ‘bean counts’ and their variants including ‘firepower scores’ for their exclusive concern with ‘quantity’ in which a Soviettype army excels with its sheer number of simple and obsolescent systems. Military capabilities include human, material, and organisational components in quantitative and qualitative dimensions. Not surprisingly, defence expenditure is the best available indicator of military capabilities as well as defence burden. That is, the stock, rather than flow of defence expenditures of the two Koreas, should be compared in the balance assessment, while the ratio of defence expenditures over GNP represents the burden of national defence in resource allocation. Finally, it examines alternative data sets and balance assessments, since the official ROK– US claims are quite distorted and misleading. Chapter 4 is a historical description of armament efforts of the two Koreas and the consequent dynamics of military balance during the postwar years. A good explanation is first of all a good description. It reveals that the trajectories of the military buildups of the two Koreas have periods of acceleration, deceleration, status quo, and most likely even a decline. It is suggested that internal as well external factors are involved, and the former has become more important as both Koreas have become more self-reliant in armament funding. Chapter 5 is a more systematic and quantitative assessment of the inter-Korean military balance. Based on the military capital stock, i.e. ‘depreciated cumulative expenditures’, of total or procurement plus operation and maintenance, of the two

10 Introduction Koreas, it tries to test the arms race hypothesis. In order to generate a more objective balance assessment, however, the DPRK defence expenditures are independently estimated utilising the DPRK data, more balanced estimates of its hidden spending on defence, and military aid data. The new estimation is higher than the DPRK claims but somewhat lower than the ROK–US estimates. Likewise, US military aid is included in the ROK defence expenditures, while most official ROK–US accounts of the balance assessment exclude military aid or depreciation factor. As the DPRK data are estimates partly based on some of my hypothetical assumptions, a rigorous statistical analysis is not carried out but is left to those who would try alternative hypotheses against this data set. Yet the balance assessment shows some interesting trends that cannot be successfully explained as an arms race, even in a broader sense of the term. It shows some element of lagged action–reaction chain, but the trends of the North around 1970 and the South since the early 1980s do not. Furthermore, the DPRK military capabilities have remained stagnant or are even declining, implying its internal constraints, especially resource potential. On the other hand, the ROK military buildup since the early 1980s is not an arms race behaviour but the result of its rapid economic growth. Chapter 6 is the analysis of the internal sources of armament. Again, the DPRK GNP is estimated in order to generate a more reliable and consistent time-series data set, utilising the DPRK ‘national income’ data and reasonable assumptions of its inflation rates and the consequent exchange ratio of its won currency. As expected, defence expenditures in general depend on the resource potential (GNP) of each state. Yet the defence burden varies considerably over time. Resource mobilisation and allocation should be accounted for. The state power in extraction, i.e. the ratio of the DPRK total government budget over GNP or that of the ROK taxation plus private saving over GNP, strongly constrains the defence burden. Defence burden increases as state power increases, levels off and then declines, as the latter grows further. The increasing marginal cost of expanding state power involved in the mobilisation of consent begins to restrain armament as the means of coercion. The hegemonic projects involve domestic capital formation for rapid economic growth as the only legitimisation formula in the South, while it means capital formation and numerous prestige showpiece projects in the North. The conflict of bureaucratic politics in policy priorities and resource allocation, which represents the state vs. popular class struggle as well as intra-government conflicts, does not allow a secular trend of unchallenged bureaucratic-organisational incrementalism in armament. Other hypotheses, such as the MIC or business cycle approach, are not quite applicable and fare no better than the incremental growth thesis. Still, the autonomy of the state in resource mobilisation/allocation, i.e. foreign military aid, allowed a higher defence burden in the earlier years that neither Koreas could have endured. Chapter 7 is the summary and conclusion. Some proposals for further research

Introduction

11

and policy implications are also suggested. Overall, the armament of the two Koreas has been increasingly determined by internal factors, as each state has become more responsible for its national defence. Furthermore, the system of national division has made internal security, or solidarity of each regime, an intrinsic element of national security. The Korean conflict is an externalised intranational conflict. The level of state power is a vital element to internal security and the determining variable of armament as the means of coercion. Finally, a few comments on the literature and data. Every effort is made to utilise materials written in English for the readers. Yet many Korean materials are indispensable. As for the data provided in this project, alternative estimates of DPRK defence expenditures, manpower, and GNP are evaluated in terms of their validity and reliability (especially in internal consistency). My own estimation utilises the revised official DPRK data, based on corrections, modifications, and some reasonable assumptions. The DPRK data should be read with extreme care, but the ‘law of equal cheating’ may provide some degree of consistency in the time-series data, since the degree of exaggeration and cheating has been more or less consistent over time.24 The DPRK statisticians opted for omissions rather than cheating when its economic performance was poor. Yet considerable corrections to the DPRK defence expenditures, population, GNP, and exchange rates are made. It should be also pointed out that the Romanisation of Korean names in this volume is somewhat different from the McCune-Reischauer system that appears, in my opinion, to be rather awkward. Yet some widely known names such as Syngman Rhee, Kim Il Sung, or Park Chung Hee are used. Family names come first in the main text with a few exceptions, while first names come first in the Notes and references.

2

State and armament: theory and hypotheses

Why do states arm as they do? For those who believe in the state, including realist scholars in international relations and most political leaders of every nation, the answer is obvious; to survive. Each government of state-societies, called nations, arms itself for the sake of national security. Armament is an ‘irreducible minimum’ requirement of the state. It has been more often than not alleged that the pursuit of national security, that is, deterring a war or, sometimes preparation for a war leads to an arms race. Yet the seemingly obvious arms race explanation is theoretically flawed and has performed poorly against empirical data. In his broad survey of theory and research on the ‘external’ and ‘internal’ sources of armament, Russett successfully shows that the internal factors matter a great deal, probably more than the external factors or ‘arms race’.1 The bureaucraticorganisational process, pressures from the military-industrial complex, and the political economic cycles, among others, are cited as internal sources of armament. He recommends the comparative foreign policy approach for further research, and it is strongly supported by another broad survey on arms race modelling.2 Yet it seems that either arms race or internal process analysis is a partial explanation. The former puts an emphasis on the so-called ‘high politics’, or national security, and the latter on ‘low politics’, i.e. parochial subnational interests in armament. We may define them as ‘state centred’ and ‘civil society centred’ respectively, but state and civil societies are not reconciled with each other in either approach. The state is neither a black box nor a cipher that merely represents parochial subnational interests as it is viewed in the analyses on internal sources of armament. The study of armament, the essential element of state action, requires a more balanced understanding of the state. In this chapter, it will be proposed that armament performs a general societal function internally as well as externally, but society will be viewed as divided into classes. That is, armament as the means of organised coercion is dialectically related to state power, or to the level of cohesion of a class-divided society. In order further to clarify the relationship between state power and armament, we adopt the Gramscian definition of state power as the ‘sum of coercion and hegemony’

State and armament: theory and hypotheses

13

and reject the so-called ‘autonomy of the state’ approach. Armament is a function of the degree of state power (measured in its extractive capacity) and the composition of state power (coercion and hegemony/capital). Alternative modes of explanation ‘All state organization was originally military organization, organization for war.’ For Otto Hintze, this is ‘an assured result of comparative history.’3 About 70 years later, a noted American historical sociologist repeated the same theme: ‘War made the state, and the state made war.’4 Armament, or the preparation of war, has been the driving force in the formation of states. No matter what its ends may be, the state can achieve them only by the use of force or the threat to use it. As Max Weber puts it: ‘the State is a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory . . . [or] a relation of men dominating men, a relation supported by means of legitimate (i.e. considered legitimate) violence.’5 Certainly the state may have more valued activities or functions, but according to Hintze and Tilly, these (including legitimation) are the by-products of the state-building process. Or for the advocates of the Machtpolitik, the state qua power does not need legitimation, since it has no higher ends than strengthening itself: ‘the most essential attribute of all for a state was power, that is to say, the ability to maintain itself against other states.’6 Be that as it may, the ‘statist’ or ‘state-centred’ conception of the state provides only a partial definition. First, it is an organisational definition in which the state is no more than an autonomous, rational, bureaucratic organisation. But the state is neither a thing nor an agent; it is a relation. The state also entails a notion of the (fictitious) organic community that transcends the mere legitimation of the use of violence7 – the doctrine of the raison d’état (reason of the state), however, has gone too far in this direction. Second, as a relation of domination, the state interacts with and in fact is interpenetrated by other important social relations including another form of domination relation, i.e. exploitation. Elite theorists have done better than their statist counterparts in understanding the multi-dimensional aspects of power and domination relations. Marxists, in diametrical opposition to statists, maintain that the state is a superstructure, an epiphenomenon of exploitation. Consequently, they have downplayed the importance of coercion/violence.8 Once class exploitation disappears, the coercive power of the state as a political instrument of class domination will wither away, since they have no theory of revolution to eliminate the secondary evil, coercion,9 which is the essence of anarchist critique of Marxism as state socialism. Third, the statist conception is too externally oriented. Surely war and diplomacy, or ‘politics of us against others’ is the prime concern of the state, but it is inseparable from the shopkeeperish ‘politics as the authoritative allocation of values’.10 There is no such thing as the national interest, or the general interest of a state-society vis-à-vis others, not only because there are

14 State and armament: theory and hypotheses different perceptions of national interest on the part of foreign policy decisionmakers, but because there exist conflicts of interest. Whose interests are represented by whose decision according to whose rule: this conflict of interest and power makes the high politics ‘issue area’, i.e. national security, no exception.11 My criticism of the statist conception appears unbalanced or biased. On the first point, it is because this mode of explanation has been (unjustly) dominant in international relations research. On the second point, some explanations are in order. It is of course not true that Weber neglects class relations. Yet he makes every effort to belittle the class/materialist perspective in his self-appointed antiMarxist crusade to such an extent that equals or even surpasses the neglect of violence by Marx. Examples are the cultural interpretation of capitalism (the ‘Protestant ethics’) and more important, the pluralist conception of social forces, i.e. classes, castes, estates (Stände), and parties.12 Many followed his jealous emphasis on the intrinsic autonomy of the state which, in the final analysis, is conceived in terms of the professional, autonomous, rational bureaucracy. For Hintze, another great Prussian historian (perhaps less famous but more perceptive to the dual nature of the state), the critique would be more biased. The critique is not that he argues ‘[c]onflict between nations has been far more important’ but that he argues ‘class struggle and social tension. . . affect the state’s internal politics. . . [while] external conflict between states form the ‘shape’ of the state.’13 Once again, the high politics of rule, order and national security (domain of the state proper, viewed from the raison d’état perspective) and the low politics of interest representation/allocation (domain of the the civil society) are inextricably interpenetrated and intermingled. Finally, naming Tilly as a statist is only in a methodological sense, since he is undoubtedly anti-statist (meaning anti-raison d’état). His anti-statist position leads to what can be called Tilly’s unilinear conception of state power, combined with his intentional neglect of authority, i.e. legitimate violence.14 It is now evident there exist alternative modes of explanation in international relations research, deeply rooted in different normative and empirical theories of the state. The dominant mode in the field is beyond doubt the statist, or ‘statecentered’, approach. As will be discussed later, post-World War II realists are the successors of the centuries-old raison d’état doctrine. In spite of the ‘level-ofanalysis problem’15 or the dichotomy of international politics vs. foreign policy, a foreign policy analysis based on the ‘state as the unitary actor’ approach is not different from a systemic analysis – they are both state-centered. For the sake of simplicity, let the systemic approach be called (structural) ‘realist’ and the state-asactor approach, ‘statist’. Research on armament, the essential requirement of the state, has been dominated by the state-centred approach, that is to say, research on the arms race. Various models of the arms race have been proposed and tested, usually in quantitative analyses utilising military expenditures or weapons stock. However, arms race

State and armament: theory and hypotheses

15

Table 2.1 Alternative conceptual models of state action Civil society-centred

State-centred

Internal

Pluralist Marxist

Elitist Gramscian

Statist

External

World system

Neoliberal

Realist

research gave way to arms spending research including other variables, especially domestic political processes. The so-called ‘external vs. internal debate’ includes not only the level-of-analysis problem but also the state vs. the civil society problem. Some domestic variables, especially the ‘bureaucratic-organisational process’, are still state-centred. Yet others are definitely ‘civil society-centred’; the ‘militaryindustrial complex’(MIC) thesis or political economy analyses, including the military Keynesianism, are good examples. To oversimplify, the alternative modes of explanation in armament research as well as international relations research in general can be schematised in Table 2.1. Likewise, in his recent reformulation of the state-building process, Tilly suggests a 2 × 2 classification of alternative conceptions: ‘internal vs. external’ and ‘derivative vs. independent’ in relation to the economy. Yet the distinction between the two state-centred approaches, namely ‘statist’ and ‘geopolitical’ (realist in our typology) is somewhat confusing.16 The trouble is that foreign policy and international relations conceived by statist and realist analyses respectively are, in spite of the level problem, two sides of the same coin. For instance, the ‘balance of power’ model, a systemic explanation, and the ‘rational actor’ model explain the same thing. For all his categorical distinctions between international politics and foreign policy, Waltz sees that the rational actor analysis belongs to the field of international politics.17 It may be a semantic difference where foreign policy refers to the subnational processes. Likewise, Morgenthau, the great realist philosopher in the postwar period, uses the term ‘balance of power’ interchangeably; either system or policy. Each nation’s pursuit of power ‘of necessity’ leads to the balance of power, yet the system dictates ‘policies that aim at preserving it’.18 Beneath his diverse usage of balance of power, a careful reader finds two interrelated lines of argument: (1) the state can be secure ‘only if it can mobilize . . . power equal or superior to that which might be exercised against it’; and (2) statesmen should ‘keep policy aims in balance with the power resources available or likely to be available’.19 Or, as the recent debates on the ‘agent–structure problem’ suggest, the systemic level of analysis, i.e. the balance of power or international systems analyses of Kaplan or Waltz, is in a deep sense ‘reductionism’ to the extent that the system is defined as the configuration of major states.20 The ‘world system’ approach pioneered by Wallerstein suggests a systemic property that is distinct from its parts. Yet it has not thus far provided us with a better explanation of state action, since it does not

16 State and armament: theory and hypotheses pay much attention to the relative autonomy of politics or the state. The level of state power is derived from a state’s position in the capitalist world economy (strong in the core, weak in the periphery).21 Nor is it quite clear what is meant by strong vs. weak state power: it may be either the overall national capabilities vis-àvis other states or the capacity of the state vis-à-vis the civil society. The state vs. system dichotomy or the agent–structure problem is not as easy to reconcile as it appears. For practical purposes, the international vs. subnational (or intranational) dichotomy is more susceptible to identification. It follows that, for the time being, the state vs. the civil society dichotomy is more meaningful than the level problem. Poverty of raison d’état doctrine: arms race and incrementalism The arms race model can be either a state level- or a systemic level-of-analysis. Consider the Richardson ‘arms race model’ that has dominated arms race research. It schematises the arms buildup processes of two states in conflict, but in simultaneous equations. Suffice to say, it is a combination of both state and systemic levels, although the ‘unit of analysis’ is the individual states. At any rate, the Richardson arms race model, if not theory, is a perfect example of the parsimony and elegance of the state-centred approach. It depicts the ‘action–reaction process’ of an arms race in a mathematical form best known in the ‘basic model’.22 dX/dt = kY - aX + g dY/dt = l X - bY + h

2.1

In this model, there is a continuous positive feedback process between arms buildups of states X and Y. The change in military expenditure or military capital stock is caused by the expenditure or stock of the other side (kY and lX; k and l are ‘defence coefficients’). Yet Richardson hypothesises that the escalation will be dampened by the diminishing marginal returns on armament investment, the socalled ‘fatigue’ or economic constraint factor (aX and bY). Finally, the intercept term (g and h) is interpreted as ‘grievance’ in the interstate rivalry. Richardson shows other models, namely the ‘combined model’ (2.2) ‘submission model’ (2.3) and ‘rivalry model’ (2.4):23 d(X + Y)/dt = (k - a)(X + Y) + g + h

2.2

dX/dt = kY[1 - q(Y - X)] - aX + g dY/dt = lX[1 - p(X - Y)] - bY + h

2.3

dX/dt = k1(Y - X) - a1X + g dY/dt = l1 (X - Y) - b1Y + h

2.4

State and armament: theory and hypotheses

17

If the submission coefficients (p and q) are equal to zero, the submission model becomes the basic model. In the rivalry model, each state responds to an advantage in armament held by the rival state(s). The models look promising, but they are only schematic formulations. Direct empirical tests of these models utilising annual military expenditures of states in conflict or mutual rivalry would fall afoul of several conceptual, methodological, and data problems. As of 1989, more than 600 scholarly articles and books on the Richardson-type arms race research have been published; yet the overall result is somewhat disappointing.24 Usually, they can be put in linear models (2.5). X and Y may be the military stock, annual spending on arms or the change in annual spending. Xt = a0 + a1Yt–1 + a2Xt–1 + e Yt = b0 + b1Yt–1 + b2Xt–1 + e `

2.5

Although the ‘stock’ would be a better indicator of military capabilities,25 most analyses have worked on the ‘flow’ (annual spending). In this case, serious methodological problems arise; multicollinearity and autocorrelation.26 It has been pointed out that a linear model with a lagged endogenous variable violates the Gauss–Markov assumption for the least square (both Ordinary Least Square and Generalised Least Square) estimation.27 The use of differential spending (change) would alleviate the problem considerably; and it would make the model more sensitive to the rival’s spending behaviour. In the Richardson basic model, a decreased spending or stock cannot be interpreted as a response to the rival’s arms reduction, since the rival’s spending or stock always has a positive value. This is more in line with the assumption that the arms race is a ‘prisoners’ dilemma’ game in which mutual cooperation can be built through a ‘tit-for-tat’ process.28 Yet this would weaken the realist position that the pursuit of ‘relative’ gains, not ‘absolute’ gains through mutual cooperation, is preferred in international politics.29 It has been argued that some arms races are not prisoners’ dilemmas but the game of deadlock. The US–USSR disarmament negotiations in the 1950s were a game of deadlock, since the US did not want to lose its superiority.30 As will be discussed in Chapter 4, South Korea’s position in the late 1980s on the inter-Korean (conventional) arms control may have been a game of deadlock, also. Another problem is how to interpret the lagged endogenous variable. In the Richardson basic model, it is a ‘fatigue’ term, representing the economic or fiscal burden, with a negative coefficient. Yet a measure of defence burden, such as military expenditures over the GNP, would better indicate the fatigue term.31 Actually, the lagged dependent variable is used in most research as the bureaucraticorganisational incrementalism (with a positive coefficient). Usually, the lagged endogenous variable (X and Y ) in the time-series analysis has such a high t-1 t-1 correlation with the dependent variable that the effect of the exogenous variable

18 State and armament: theory and hypotheses turns out to be very weak. Various indicators, transformation of models and fancy statistical methods have been tried, but many of them might have led to ‘useless curve-fitting exercises’.32 At any rate, efforts to discriminate among various models or variables (action–reaction vs. incrementalism) would be difficult. The general ‘mutual arms process model’ can be simplified in (2.6). Xt = a1Yt–1 + a2Xt–1 Yt = b1Xt–1 + b2Yt–1

2.6

The above is formally equivalent to the ‘autonomous process model’ as follows: Xt = Xt–1 + a3Xt–2 Yt = Yt–1 + b3Yt–2

2.7

The two models are exactly the same thing!33 Furthermore, many analyses show that the arms race model has some explanatory power for some states while it is relatively weak for others. Also, many report the shift in key parameters (or the sign of the coefficients); key parameters are different for different states and different from one period to another for the same state.34 Finally, the problem of data. It has been pointed out that alternative data sets lead to different research findings.35 It may be argued that the estimated (and even distorted) Soviet military expenditure by the US government, or the ‘perceived’ variable, is a better indicator for arms race modelling. The seemingly less biased estimates by the IISS or the SIPRI are inferior to CIA estimates, since the latter better capture the US policy-makers’ perception of the Soviet intention or capabilities. On the other hand, the CIA data would be inferior to other data sets in the case of an autonomous domestic model.36 Be that as it may, the CIA data were greatly revised in 1976 although the Soviet stock remained the same; and the CIA estimation of the Soviet military stock may have been more important, with the estimated expenditures being used for public relations. Likewise, the estimated defence expenditures of North Korea by the ACDA and the ROK government have been unstable (see Chapter 3). We should build a more objective estimation of defence expenditures, especially in the North Korean case, before testing the arms race hypotheses. Overall, our survey of literature on the arms race shows the following several implications for research on the inter-Korean arms race. First, the action–reaction hypothesis formalised in the Richardson-type model should be understood only as a heuristic metaphor. The concept of an arms race should not be discarded, since it is the annual tit-for-tat model of an arms race that has failed. Major arms buildup programs entail important policy decisions that do not occur every year.37 In a broader sense, a race would include: belated as well as anticipated/pre–emptive arms buildups; more economic approaches to buildup (more manpower than

State and armament: theory and hypotheses

19

expensive weapons); responses to the level of hostility rather than the rival’s military buildup;38 ‘overshoot’ responses, and so on. A mathematical social physics model of an arms race is not possible yet. Other methods, including historical, comparative case studies, are ‘no less informative than quantitative analysis’.39 Second, there are other external variables in addition to the arms race. The alliance structure (especially for the client states), shift of alliance (such as the Sino-Soviet split), positions in the interstate system (hegemonic states, patron–client relations, etc.), regional differences, or even the cycle of the world system affect armament decisions. Third, internal processes are extremely important. No government acts in the manner of the Pavlovian stimulus-response process. We have to make enquiries into the domestic politico-economic processes, deeper than the government level. Fourth, a general, parsimonious, law-like theory is a remote possibility. Different variables have more explanatory power for different states or different periods. At the same time, however, we have to reject vulgar historicism. Middle-range theories based on a comparative foreign policy perspective would be more than desirable.40 Last but not least, there is another reason why we should go beyond the armsrace approach in particular and the state-centred approach in general. That is, they are based on a theory of the state that has been increasingly at odds with the contemporary political systems or the state–society complexes. The early modern doctrine of the raison d’état, prescribing a state external to and beyond the civil society, is the very foundation of the realist theory in international relations and, more recently, the so-called ‘statist’ or ‘bringing the state back in’ school. To put it simply, the raison d’état since Hegel means that ‘the state is its own excuse for being’.41 In their search for a viable institution that could provide public order and security (both internal and external), Machiavelli and others end up justifying and idealising the state as a sovereign authority. Thanks to Machiavelli, ‘for the first time, politics was approached, practiced, and analyzed without any concern other than that of effectiveness’.42 The state is viewed as an entity that represents the general interest of the the civil society. It is an organic being of its own. It has its own interest, more valuable and ideal than the earthly corporative interests of the the civil society; and it realises the general interest of every individual only by realising its own interest. Meinecke summarises it as follows: [The] ‘general welfare’ not only embraced the welfare of the separate individuals united in the nation; it also embraced the welfare of the collectivist whole which signified more than the mere sum of individuals, and which represented a collective personality. And not only was the people a collective personality, but also the state itself which led them was another such collective personality; indeed it was a much more active one than the mere people, because it was organized and could make its will effective at any instant. The

20 State and armament: theory and hypotheses law of this will was raison d’etat; this was the great discovery that was made by Machiavelli and the school of ragione di stato.43 The state, or Aristotle’s polis writ large, has a moral standard not only different from those of others (Machiavelli) but superior to them (Hegel). Treitschke, a noted spokesman of the Machtpolitik declares: ‘man fulfills his moral vocation only through the state . . . states realize their essence when they come to grips with each other.’44 Yet Machiavellians of our time accept raison d’état in disillusionment. They seek a ‘historian’s consolation’ in their search for a meaning in the irrational, sinful world of states.45 Furthermore, ‘in crossing the Atlantic, in becoming power politics, Treitschke’s Machtpolitik underwent a chiefly spiritual mutation. It became fact, not value.’46 For Morgenthau, man’s aspiration for national power stems from his pettiness, if not sinfulness. The state must ‘divert individual power drives into channels where they cannot endanger society . . . [and] power disguised as ideologies and pursued in the name and for the sake of the nation becomes a good for which all citizens must strive . . .’ Furthermore, ‘the emotional intensity of the identification of the individual with his nation . . . became permanent in the twentieth century as a result of the emancipation of the individual.’47 Whatever the goals may be, national interest is defined ‘in terms of’ or, in fact, ‘as’ power. However, for the neorealists, Morgenthau’s power politics is ambiguous, speculative, incomplete, and not scientific. For Krasner, the statist approach ‘sees the state autonomously formulating goals that it then attempts to implement against resistance from international and domestic actors’. He continues: The summation of individual utilities and the collective well being of the society are not the same thing. . . This is a political and ethical problem, not an economic one. Values are assigned by the state. State objectives refer in this study to the utility of the Community and will be called a nation’s general or national interest. The national interest is defined as the goals that are sought by the state.48 This is exactly the same argument as the raison d’état doctrine. Lentner actually declares that the term ‘reason of state’ is superior to national interest, since it is ‘less vague and open-ended and carries itself a great burden of justification’.49 The question is who puts the burden of justification on the state, defined as an actor insulated and autonomous from the civil society? It is not God, nor constitution or any other principle; it is the democratic struggle of the people, that is, politics. The new apostles of state worship take the state for politics in theory; in practice, the state is reduced to either the government bureaucracy or decision-making elites.50 The decision-making approach, on the other hand, rejects a pre-defined concept

State and armament: theory and hypotheses

21

of national interest and thus the conception of the state as a black box. It tries to focus on what goes on inside the state. However, earlier versions of the decisionmaking approach are coloured by subjectivism; the national interest is what decision-makers perceive it to be.51 A more social structural analysis of perceptions, belief systems or operational codes, that is, hypotheses such as ‘certain societies make certain elites with certain belief systems’, is desired.52 However, empirical research on the politics of foreign policy decision-making seldom goes beyond the top decision-makers or national security bureaucracy; it is still state-centred. In his widely quoted works, Allison compares the realist ‘rational actor’ model and the decision-making models of ‘bureaucratic politics,’ and ‘organizational process’ (or information-processing networks?). Yet Allison’s unconvincing distinction between the bureaucratic and the organisational models was actually discarded in later works.53 The bureaucratic-organisational model as another powerful tool for the analysis of the armament process is a perfect example of the decision-making approach. Usually the model adopts the incrementalism model proposed by Wildavsky and others.54 The most simplified version is that the best predictor variable of Xt is Xt–1.55 A number of quantitative analyses of the US and Soviet defence expenditures have compared the relative merits of arms race and incremental models in terms of statistical explanatory power (usually R-square and t-tests) or tried to develop a superior model, picking up the better parts from each.56 Basically, the incrementalism model performs better – the first conclusion would be that the hypothesis of internally stimulated armament usually prevails. However, we cannot but doubt whether the incrementalism model (Xt = ƒ Xt–1) is an explanation or just a mere prediction without an explanation. If it is a prediction based on description, we need an explanation; if it is an explanation, it is a shallow one at best. A time-series budgetary data like those of population or GNP is highly auto-correlated, but we do not explain GNP by GNP . The explanatory variables are, for example, t t-1 investment, labour productivity, government policies, etc. Likewise, we need a deeper understanding with superior concepts and hypotheses of the underlying dynamics that make the bureaucratic incrementalism work rather than fancy models or methods. Also from the empirical perspective, the model has a major weakness: it cannot explain sudden jumps or drops of armament, and especially in the US case the initial heavy investment in the early days of the Cold War. Explaining significant change in the time-series trend is more meaningful. It is now evident that arms race and incrementalism models betray the weakness of the state-centric approach, both theoretical and empirical. A deeper, ‘fundamental explanation’57 is in order. We should try to establish causal relationships between armament and social-structural processes, relationships deeper than bureaucratic incrementalism or decision-makers’ perception, without reducing the state to a cipher. In a schematised form, it involves supplanting the endogenous variable (Xt–1) with exogenous variables. Comparative case studies would be a more useful

22 State and armament: theory and hypotheses research design. Before continuing our theoretical discussions, however, a brief digression is necessary, that is, a preview over the arms buildup processes of the two Koreas. Actually, the above discussion on the state-centred approach is prompted by the findings of very few available empirical analyses on the inter-Korean arms race. Despite differences in the indicators, data and the coverage of the period – Park uses IISS budget data; while Hamm uses IISS data, alternative indicators of ‘armament effort’, and US military aid – the two analysts find that expenditures of the two Koreas behave in an opposed manner.58 The South responds somewhat to the efforts by the North, but not vice versa. Also, the North shows a highly significant negative influence from its past efforts (in dXt–1), while the South shows a lower but still significant positive influence from its previous efforts. Also, the growth of military expenditures of the North was strongly constrained by the brief improvement of mutual relations in 1972–73, while no significant effect of the ‘grievance’ factor is found in the South. The t-test outcomes suggest several alternative hypotheses, since they can be interpreted as the internal bureaucratic incrementalism pressures, the ‘fatigue factor’ in the Richardson model, or merely a statistical artefact. The hypotheses are that: (1) the North, with a relatively smaller population and economy, but with a higher defence burden (in the absolute size or the percentage share of GNP), feels ‘fatigue’ much more severely than the South; (2) the North, with the Korean Workers’ Party (KWP) under the hegemony of the ‘Great Leader Comrade Kim Il Sung’ prevailing over the military establishment, can better resist the pressures for accelerated growth in military spending; or (3) both fatigue and the relative heteronomy of the military are involved. It is noteworthy in this respect that the extractive capacity (in tax ratio) has a significant effect on armament in the South – no such test was conducted for the North, since a reliable data set was not then available. These findings suggest that the ‘threat’ and ‘fatigue’ factors in the Richardson model be closely related in the process of resources mobilisation/ allocation for national defence, though they are assumed independent from each other in the linear modelling for statistical tests. These hypotheses are strongly supported by historical evidence. When the Central Committee of the KWP decided to extend its original Seven Year Plan (1961–67) for another three years for its ‘Simultaneous Economic and Military Construction Policy’, two Politburo members in charge of organisation and liaison (South Korean affairs) respectively were purged and replaced by ranking generals. Military expenditures soared from 19.8 per cent (1961–66) to 30.9 per cent of the total government budget during 1967–71 period (see Chapters 5 and 6). The reduction in the percentage share of defence budget was possible only after the purge of key military leaders in 1969. Minister of National Security (Defence) Kim Chang-Bong, Chief of General Staff Choe Kwang, another Politburo member, in charge of the KWP Liaison Department, Hoh Bong-Hak, and a number of generals

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23

were purged for their disloyalty to the Party, trigger-happy attitudes demonstrated by commando/guerrilla infiltration into the South and the capture of the USS Pueblo in 1968, and objections to a more Maoist-like people’s war doctrine which emphasises light infantry and militia troops. More civilian technocrats entered the Politburo and the military was again put under the tight surveillance and control of the Party. General Oh Jin-Woo, then Director of the General Political Bureau of the Korean People’s Army, served as Chief of General Staff (1969–1976) and then as Defence Minister (1976–95), while Choe Hyon, a retired partisan general and a close friend to Kim Il Sung served as Defence Minister until 1976. In the South, massive military and economic aid from the US and rapid economic growth since the mid-1960s have reduced the ‘guns vs. butter’ conflict to a quite manageable level. However, the decline of grant aids from the US in the 1970s and the growth of North Korean military capabilities forced the government in Seoul to spend more of its GNP on military buildup. Actually, the combined threat perception, i.e. the decline of US security commitment and a growing threat from the North, led to the growth of Seoul’s resource mobilisation capacity. In 1975, it introduced the defence surtax to finance its armament programme. A strong incrementalism factor was in effect from the late 1970s to the mid-1980s, when defence expenditures were more or less fixed at 6 per cent of the GNP or roughly one-third of the total central government budget. The rapid acceleration in arms buildup far exceeded the decline of US military aid and was not affected by the US decision in 1979 to halt troop withdrawals. Furthermore, it is exactly in this period when the most repressive (disguised) military dictatorship dominated the entire society. After partial democratisation in 1988, the defence burden dropped below 4 per cent of GNP in the 1990s. These alternative hypotheses and some evidence derived from simple quantitative research should be further developed. However, there are other confounding variables such as military aid and the US troop presence in South Korea must be considered as another important external variable. More important, each Korea is only a part of a divided nation, that is, an ‘incomplete’ nation-state. National security is not a strictly external matter of the state, and armament has an important domestic role. This is true for all state-societies, especially so for weak states suffering internal security problems, but it is much more serious in the case of the two Koreas.59 Armament, resources, and state power Models and methods utilised in research on comparative foreign policy are quite valuable for an enquiry into the domestic sources of armament. Yet the earlier analytical framework proposed by Snyder and associates is nothing more than a set of numerous variables that may influence foreign policy decision-making; in the end, it becomes a loose framework for analysing the overall political process.60

24 State and armament: theory and hypotheses Worse still, various ‘national attributes’ or ‘dimensionalities of nations’ analyses try to correlate foreign policy behaviour with the whole gamut of national attributes, bypassing the political process that provides the linkage between domestic politics and foreign policy. In the end they pile up painfully and expensively accumulated data. Many of the sheer empiricist-behaviourist superfluities are simply atheoretical.61 Taxonomy suggested by Rosenau is useful for classifying and selecting major variable sets.62 Still more helpful is the notion of a concentric set of variables in foreign policy analysis.63 We can proceed from the external to the internal and from the broader categories to the more specific ones: decision-making is the selection of specific outcomes within a structurally limited range of possibilities.64 Similarly, the ‘issue area’ concept that different policy issues involve different set of actors, constituencies, types of conflict and the rules of the game may help us to identify the political process involved in armament.65 However, we need a clue, or a starting point, to simplify the entangled threads of variables. For the sake of parsimony, the starting point is the notion of resources; armament requires resources. Defence expenditure is military resources expressed in monetary terms, although it does not mean that expenditure is the sole indicator of armament in this project. Manpower is also considered. In the North Korean case military manpower was reduced in the 1950s but expanded steadily from around 1970 to the present, while it has been rather constant (about 600,000– 650,000) in the South since 1960 while it was over 700,000 during 1954–58 (see Chapter 4). Armament requires resources, especially material resources of the state in the industrialised era. This does not suggest that only material resources are important. Rather, it means human resources and organisational know-how can be also expressed in quantifiable, monetary terms. Thanks to the national capabilities equation of Organski and Kugler, three factors are considered for the analysis of armament: (1) overall resource base; (2) availability of resources to the state, i.e. its capacity for extraction-mobilisation; and (3) allocation.66 It can be formalised in the following equations. Armament (M) = Resource Base (R) × Extraction (E) × Allocation (A)

2.8

Armament Effort (ME = M/R) = E × A

2.9

It now becomes clear that the arms race and incrementalism models are primarily concerned with allocation: threat perception, the pressures from the service bureaucracy allied with certain beneficiaries of arms buildups, pressures for decreased military spending (opportunity costs), and so forth. One can note that R or R × E refers to the indicator of ‘national power/capabilities’. In the long run, either national capabilities or armament greatly depends on the resource base. For instance, the British arms expenditures for the last several

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25

hundred years closely reflect the secular trend of economic growth. The maximum performance of industrialised nations in war was strongly constrained by their economic capabilities.68 In this sense, ‘production is prior to coercion’. Yet history shows that economically weaker and, in the case of the nomadic invasion/conquest, less-developed states more often than not have demonstrated superior military capabilities. From a comparative historical perspective, extraction (E) varies greatly from one state to another and from one period to another in the same state. Tilly and his co-authors provide a causal linkage between state building, war and extraction. For instance, Ardant argues that ‘[t]he fiscal system was the “transformer” of the economic infrastructure into political structure.’ 69 Consequently, a number of scholars use the relative size (over GNP) of the government budget, taxation, or the public sector (either in budget or manpower) as indicators of ‘state power/strength’ or the ‘capacity of the political system’ to carry out societal tasks, albeit with different ideological implications (state = domination or rule; political system = function).70 However, these indicators need further refinement. First, industrialisation and the banking system made the growth of taxation and overall public finances rather easy. Organski and Kugler propose an adjusted tax ratio (tax effort) as the measure of political capacity of the state by controlling economic variables: tax effort = actual tax ratio/expected tax ratio.71 Second, the expansion of the public sector may not be a good indicator of state capacity in a cross-national research since the definition of public sector varies a great deal. It is rather difficult to pinpoint where the state ends and the civil society takes over. For instance, there are few, if any, private sectors in socialist systems, but it would be difficult to argue that socialist states are (or were) more developed or capable. Even developed capitalist states vary a great deal. As Jackman argues, in Sweden, in the late 1970s: 67

government spent about 60 per cent of GDP, while the corresponding figure for Japan was 30 per cent. . . . But this does not mean that the Swedish state was twice as strong as the Japanese State. . . . Instead, it is hard to conceive of a state with more national political capacity than Japan.72 Third, the extraction may not be a good indicator of the total or potential state power in peacetime (to which we will return later). For the time being, our tentative hypothesis is that armament is strongly controlled by extraction. One can also derive another hypothesis that armament (or military expenditures) is functional to economic growth by providing internal stability required for economic activities – thus the hypothesis of the positive effect of armament on economic growth in developing societies.73 However, it would be safer to contend that the hypothesis of positive effects of armament holds only during the early stage of state-building, or to the extent that armament does not reduce investment.

26 State and armament: theory and hypotheses The armament efforts of the two Koreas measured in defence expenditures behave, in general, as it is predicted by variable R and E (see Chapter 5). In the South, with the US military aid excluded, defence expenditures were 3.5–7.5 per cent of GNP during 1954–94; and the variation of the defence effort (defence expenditure/GNP) roughly varies with the tax ratio until the mid-1980s. Since the mid-1980s, however, they are negatively correlated – defence effort has decreased while tax ratio has increased. In the North, the postwar state-building was swift: postwar reconstruction, complete collectivisation of farms by 1958 in addition to already nationalised industries, massive mobilisation of workers for its energetic economic growth drive in the Five Year Plan which started in 1957, etc. Its spending on defence, again with military aid excluded, has been 6.3–19.0 per cent of the national income – or, since 1972, 11.6–15.7 per cent. The defence effort roughly varies with the ratio of total government budget over NI (ranging from 40.4 per cent in 1958 to over 70 per cent in the 1990s); but the defence effort reached its peak during 1967–71 when the budget/NI ratio was around 60 per cent. The brief survey suggests still another hypothesis that the effect of extraction on armament is not linear but curvilinear in the long run. The relationship is positive in the earlier stage of state-building but negative in the later stage: the state has to spend more on other societal functions beside the monopoly of organised violence, albeit against the secular trend of growth in E. As Organski and others show, the ‘political costs’ involved in expanding the extractive capacity of the state increases with the expansion of political participation and of the consequent necessity of the legitimation function of the state.74 The third factor is allocation (A). It has already been demonstrated that exogenous variables are required to explore the pressures stimulating or constraining armament. Put in a broader perspective, the incrementalism hypothesis states that the proarmament coalition, i.e. the military, arms producers, conservatives and Cold War advocates, will demand increased arms spending or at least a constant share of the pie. On the other hand, the anti-armament or welfare coalition of the civilian-oriented business community, the liberals, peace movement activists, and recipients of state welfare favour disarmament. In other words, resource mobilisation and allocation is the very political process in which national interest is defined and formulated.75 This guns vs. butter conflict has been a well popularised political issue, even in South Korea. Be that as it may, we will examine a more sophisticated conceptualisation of the conflict of collective interests in three partially overlapping hypotheses: (1) the business cycle; (2) the so-called military-industrial complex (= MIC); and (3) the autonomy of the military as the core state apparatus. Usually the incrementalism notion refers to the second or third thesis. The MIC explanation of the Cold War-oriented US foreign defence policy was quite successful in drawing the attention of the public in the 1960s and 1970s. It is usually based on the elitist conception of a ‘power structure’ in which a strong

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bond of interests and ideological outlook of the political, business, and military elites exists.76 Despite the polemical tendency of elite theories in the American social science community (mainly due to their debates with the mainstream pluralist arguments), a number of more careful empirical analyses help us to understand better the mechanism of arms spending.77 The MIC thesis is also applicable to socialist regimes including North Korea, demonstrating the universal applicability of the elite theory; there are elites in any society, past and present. Yet the elite theory or the MIC thesis may be still descriptive rather than explanatory. That is, it is difficult to answer the question: Who become elites, when and how? Meisel points out that Mosca’s ‘social forces’, which are responsible for the circulation of elites, are ‘uncomfortably close to Marx’.78 Furthermore, the MIC thesis cannot explain armament of South Korea until the early 1970s, since there were no arms industries. The search for a deeper explanation of armament should go beyond the MIC thesis. For instance, Snyder tries to explain imperialist-expansionist policies by comparative analyses of domestic coalition politics; cartelised, democratic, or unitary regimes. Following Gerschenkron and Moore, he argues that the type of regime is in turn structurally shaped by the ‘timing and process of industrialization’.79 The economic explanation of the interest representation in the governmental budget allocation seems more promising. As such, the business cycle or ‘military Keynesian’ approach is usually adopted by political economists. Kurth, for instance, tries to identify the long-term relationship between the business cycle on the one hand and the regime type and foreign/defence policy on the other. For instance, the ‘marriage of iron and rye’ was responsible for militarism and arms buildup of Prussia/Germany. In the case of the US aircraft industry, major procurement decisions by the government were the ‘follow-on’ and ‘bail-out’ measures.80 Nincic and Cusack argue that significant short-term political economy cycles exist both in the US (election cycle) and the USSR (economic planning cycle).81 Yet it does not explain why the conservative ruling coalition in the US prefers armament to welfare policies. A structural perspective is required. Indeed, the business cycle approach has been dominated by Marxian analyses in the Leninist tradition. It is argued that military spending does not only respond to economic-corporative interests of the war coalition but also to a hegemonic project of the state on behalf of the monopoly capital. Armament in the capitalist economy is a preferred tool to counter a depression or the ‘tendency of rate of profit to fall’.82 Military Keynesianism works especially for advanced industrial societies, i.e. monopoly capitalism where there exists insufficient demand or excess production capacity.83 Increased social wages, i.e. wage plus government welfare spending, is not desirable for capital accumulation and for the ‘discipline’ of labour.84 Yet the business cycle hypothesis does not hold for either North Korea – an ‘actually existing’ socialist state – or South Korea where too much aggregate demand, not the under-utilisation of capacity, prevails for most of the period. The

28 State and armament: theory and hypotheses MIC or business cycle explanation is not quite satisfactory in South Korea for another reason. More arms are still purchased overseas directly and indirectly, i.e. royalties and imports of key components and spare parts.85 Nor do the spin-off effects of the arms industry on economic growth seem acceptable. Major arms producers in South Korea are companies of the Jaebols (business conglomerates, or Zaibatsu); who are primarily engaged in civilian/export industries.86 However, there is another (partial) economic explanation of armament of the two Koreas, that is, unemployment. South Korea in the 1950s maintained 630,000– 720,000 armed forces, or 2.5–3.3 per cent of its total population. The high force ratio was partly due to the US–ROK planning against a possible combined attack of the North Korean–Chinese forces, but force reduction was also opposed by South Korea and strategic/economic planners in the US since it would worsen the already high level of unemployment.87 Likewise, the ever expanding manpower of the Korean People’s Army since the mid-1970s reflects not only labour-intensive arms buildups but an effort to prevent unemployment, since North Korea had progressed from a labour-intensive growth state (actually, North Korea did not extend the stage with labour-intensive export industries such as textiles).88 Without denying altogether the above hypotheses of economic factors in allocation, let us turn to the hypothesis of the autonomy/influence of the military, the coercive but most vital apparatus of the state. In fact, the incrementalism thesis in a narrower sense refers to the influence/autonomy of the military. The North Korean case in the 1960s discussed above does appear to support the hypothesis. Also, Schmitter contends that military coups or regimes in Latin America led to increased arms spending.89 However, the military version of the economiccorporative interest does not successfully explain the ROK case. For many years after the successful military coup led by Major General Park Chung Hee, arms expenditures were lower in total size and percentage share than earlier or later periods, although Park doubled the salaries for ROK soldiers in 1962 to win the support from the military and to reduce corruption. Most coup leaders and their supporters transformed themselves into politicians, civilian bureaucrats and prospering businessmen. In fact, the generals did not remain corporative but became somewhat hegemonic – the so-called developmental military dictatorship.90 Park’s legitimation formula was not national security but ‘modernisation’, i.e. economic growth. This leads us to the above-suggested hypothesis of the curvilinear relationship between state power (E) and armament. To summarise the two, armament is a function of two different but related aspects of state power, namely coercion and legitimacy, backed by the performance of the government. Arms buildup is stimulated when coercion is the dominant form of state power, while it is constrained when legitimacy, or hegemony building, prevails. Whether the military is in charge does not matter. Militarism in Nazi Germany or Fascist Italy was led by the civilians.91 However, it does not mean that more liberal or democratic governments always constrain armament. Russett finds little evidence

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for this in his comparison of the Republican and Democratic administrations.92 Rather, Wolfe argues that the Democrats and/or weak Presidents were forced to be pro-war or pro-armament to win the support of the hegemonic bloc.93 Hence, a more dialectical conception of the state and state power is required. That is, the relationship between coercion and hegemony is not zero-sum, and the hegemonic project or the mobilisation of popular support does not necessarily require more welfare spending as it is usually assumed by the welfare liberals. Conservatives or the ‘New Right’ have rather successfully disestablished the Keynesian welfare state with their emphasis on the ‘small but strong state’ – strong army, public order and minimum intervention in the economy.94 The US arms buildup drive under President Reagan is a good example. To a lesser extent, Thatcherism is another. State and armament in perspective: a Gramscian approach How do we put the above hypotheses into a parsimonious theoretical formulation? An elegant general theory that integrates these hypotheses about external factors, resource mobilisation and allocation does not exist. A rigorous (i.e. quantitative) test of hypotheses is next to impossible. The answer looks to, first of all, the comparative case study method, as suggested above. Second, it relies on the recent debates of the state, especially the Gramscian synthesis (state = political society + the civil society): ‘By the state should be understood not merely the governmental apparatus, but also the “private” apparatus of hegemony of the civil society. . . [or] hegemony protected by the armour of coercion.’95 Unashamedly, we adopt the Gramscian ‘expanded state’ concept for the study of armament, since it would provide us with a conceptual framework to integrate the state-centred and the civil society-centred perspectives. It helps us better to define state power, societal interest representation, and the autonomy of the state. As a synthesis of Marx and Machiavelli, it identifies the exercise of hegemony or consent mobilisation both in the ‘civil/bourgeois society’ (bürgerliche Gesellschaft) and the state.96 It is surprisingly close to the concept of the political system in its ‘relational conception’ of the state.97 The state exists on a social plane; it is a relation, a relation of domination. It is an error to define the state, as many statists have done, as an independent entity or an agent that exists, with a clearly defined boundary, beyond the civil society. What is usually meant by the ‘autonomy’ of the state – state autonomy and state power are often used interchangeably in statist discourse – is the autonomy of politics or government.98 Beside its institutional expression, i.e. the government, law, or bureaucracy, the state entails notions (or ideology) of the community. Furthermore, it is a relation that is interpenetrated with the civil society. As Mitchell opines, the state ‘should be examined not as an actual structure, but as the powerful, metaphysical effect of practices that make such structures appear to exist’.99 Yet he resorts to a postmodern

30 State and armament: theory and hypotheses deconstruction project à la Foucault, in which the randomly given, anonymous power pervades all over the society.100 Historians such as Hintze and Tilly, on the other hand, have done better in identifying the nature of power. Hintze argues: Raison d’état and capitalism are after all closely allied sociologically. What else is capitalism than modern raison d’économie? Raison d’état and raison d’économie stem from the same root. The increase in activity of the economic and political entrepreneurs, the heightened intensity and rationality of economic operations and state administration and policy. . . all these fit together.101 Likewise, Tilly provides a typology of the state-building process in the interaction of capital (exploitation) and states (domination): namely ‘coercion-intensive’, ‘capital-intensive’, and ‘capitalized coercion’. He also confirms that ‘the concentration [of coercion] came to depend in important degree on the availability of concentrated capital’.102 Still, Tilly tends to exaggerate the weight of the autonomous medieval cities in his state vs. cities dichotomy and does not pay much attention to the feudal dominant classes, the landed aristocracy/gentry.103 However, the capital–states nexus is not just relations between externalities, but relations between two sides of the same system. As Anderson demonstrates, the rise of the absolutist states was the result of a division of labour in the feudal system of domination in the face of an increasingly non-servile peasantry and ascendant towns. Absolutism was essentially just this: a redeployed and recharged apparatus of feudal domination. . . . The absolutist state in the West was the redeployed political apparatus of a feudal class that had accepted the commutation of dues. It was a compensation for the disappearance of serfdom, in the context of an increasingly urban economy that it did not completely control and to which it had to adapt. The absolutist state in the East, by contrast, was the repressive machine of a feudal class that had just erased the traditional communal freedom of the poor. It was a device for the consolidation of serfdom, in a landscape scoured of autonomous urban life or resistance. . . . The transnational interaction within feudalism was typically always first at the political, not the economic level, precisely because it was a mode of production founded on extra-economic coercion: conquest, not commerce, was its primary form of expansion. . . . It was the international pressure of Western absolutism, the political apparatus of a more powerful feudal aristocracy, ruling more advanced societies, which obliged the Eastern nobility to adopt an equivalently centralized state machine, to survive.104

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The feudal rulers-landlords achieved absolute private property, i.e. land as capital, while their coercive power was concentrated in the monarch. With the victory of the bourgeoisie, the state was transformed from a (late-)feudal state into the ‘capitalist state’, not the ‘state in capitalist society’.105 As such, the state is defined as the ‘system of domination’ or arguably the ‘system of class domination’. State power refers to no less than the ‘total capacity of domination’ (or the sum of Tilly’s exploitation and domination). The state qua class state is not neutral, contrary to the assumption by pluralists, though it appears neutral, which is the very nature of the capitalist state.106 The state has a built-in bias/selectivity to the interests of capital. Even on an empirical ground, this is more tenable than to argue the state usually serves capital to avoid the ‘capital strike’, which implies that the state can do otherwise in the absence of the ‘voice’ or ‘exit’ of capital.107 But there never has been an incident where the state jeopardises capital as a class except in a class revolution. The state can be understood as an agent only in its relations with other states, not vis-à-vis civil society. Yet owing to the division of labour in domination between capital and the state, and the virtual identification of the government with the state in the multi-state international system, the state apparatus is ‘relatively autonomous’ from the economy, dominant classes, and other social forces. It has its own logic and inertia. This may have been the main idea of the German historical school and the Machtstaat doctrine that inspired realist theorists such as Morgenthau. It is no wonder the state re-emerged in Anglo-Saxon political science literature as a useful concept to identify the locus where domestic and international politics merge.108 State power in a broader sense of the term, i.e. the total capacity of the political system, is exercised by the state apparatus/government and the dominant class(es). In terms of extraction (E), the former is taxation and the latter is corporate profit.109 As Tilly suggests, it can be either capital-intensive, coercion intensive, or a mixture of moderate coercion and moderate capital.110 The synthesis allows us properly to compare extraction of both capitalist and socialist states. Socialist states performed the exploitative function, a role of capital without the presence of the capitalist class, in addition to coercive and legitimising functions. Generally speaking, the overall extractive capacity of capitalist states (= tax + profit) is a rough equivalent to the extractive capacity of socialist states (government budget + production fund held by enterprises). The total capacity of (capitalist) states is not easy to identify except in time of war when they try to mobilise all potential resources. This is a close parallel to the (adjusted) ‘maximum extraction ratio’ in war, that is, the sum of actual extraction ratio and ‘political costs’, with the self-funded welfare spendings controlled.111 The extractive capacity levels off as the marginal political costs increase, since the dominant bloc has to buy the support of an increasing number of constituencies or even accept them in the bloc, the blocco istorico of Gramsci, which means a coalition of both class and non-class forces.

32 State and armament: theory and hypotheses The political cost approach leads us to another closely related dimension of state power. That is, power is the sum of coercion and consent; and the relationship between the two is not zero-sum.112 No doubt organised coercion, the minimum of state power, is concentrated in the state (apparatus). Yet, few if any states rely exclusively on coercion; it has to rule by authority, or legitimised coercion. As most political scientists would agree, the state is the weakest when it uses violence – although it is more dangerous like a wounded beast. It is also true that hegemony, i.e. mobilisation of consent, of the state comes afterwards, if and only if there exists the coercive authority to consent.113 Useful and effective as it may be, ‘social contract’ is fiction. Consequently, there exists a bilateral relationship between armament (M) and state power. M is conditioned by state power in extraction (E), while at the same time M is the means to state power (coercion). The Gramscian conception of the state, i.e. state power as the sum of coercion and consent (and the sum of taxation and profit – the two are not identical, although highly related) leads to an understanding of the curvilinear (inverse U-shape) relationship between M and E. In the first phase, armament for coercion grows in proportion to extraction in the early process of state-building. Armament and the actual use of violence are required for domestic pacification as well as national defence.114 The distinction between the army and the police was ambiguous. The armed forces of the two Koreas grew out of the police/security forces (see Chapter 4). In the middle phase, consent building follows and the marginal utility of coercion declines. Armament effort levels off while extraction continues further. In the last phase, the relative importance of armament for coercion declines as state power relies more heavily on hegemony while extraction levels off in the face of higher costs for consent mobilisation. Armament effort declines as extraction reaches its maximum level (in peacetime, of course). The hypothesis may hold for a cross-national comparison, if external factors can be controlled. From a comparative world system perspective, states in the core area, with the exception of the hegemonic power, may spend less on defence than the late-developing, semi-peripheral states that in turn spend more on defence than those in the periphery.115 Moore and Snyder, for instance, suggest that late developers such as Prussia and Japan experienced a higher degree of militarism.116 However, the hypothesis will be tested against the two Korean cases. Armament has attained a new dimension of importance in the postwar superpower relations since it is intrinsically related to class relations, the stability of which depends on the state capacity (in coercion and consent).117 The Korean conflict is itself an inter-class conflict as well as an inter-state conflict. Each Korea has tried its best to arm itself to compensate for the lack of overall state power, especially legitimacy. Interest representation in resource/budget allocation refers to the opportunity cost of armament. In the optimisation perspective, any short-term allocation of

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resources for the interest of the state apparatus (armament), the dominant class (accumulation), and the working class (consumption including redistribution) is a zero-sum game. The question of ‘who gets what’ can be explained by the actors’ ‘influence’ or the ‘distributive power’ in the plays of the game. In the long run, ‘structural power’ (the rules of the game) and ‘systemic power’ (the class-based nature of the state) are at work; and extraction as well as allocation will be involved. Typically the three levels of power refer to the pluralist, elitist/managerial, and class perspective, respectively.118 The structural-systemic perspective, assuming certain bias in the state, allows us to develop hypotheses of similarities and differences in the tradeoffs between armament (M), accumulation (I), and redistribution (D) across regimes. The similarity is that the relationship between M and D is negative, although there may exist slight variations across regimes as the leverage in the hands of the working class varies. On the other hand, the tradeoff between M and I is clearly different. In the (actually existing) socialist states, the tradeoff is clearly observed.119 In the capitalist state, M may not be reduced when military Keynesianism works to counter the underconsumption; but there exists a tradeoff between them when idle capacity or underconsumption is low.120 The massive armament programme of the US in World War II and the Korean War worked, while the Vietnam War experience did not. Like the Third Reich, the ‘warfare-welfare state’ of the Johnson administration could not satisfy war and overconsumption simultaneously.121 Unfortunately, the tradeoff between M and D does not occur in South Korea whose welfare spendings (mostly on education and public health) have been rather constant in terms of the share of GNP or government budget. Finally, the autonomy of the state. It is overused and abused by neo-Weberians who define it as an autonomous social actor. The so-called ‘state-centred,’ ‘statist’, ‘neorealist’, or ‘bringing the state back in’ school define it as a power against ‘class power’.122 In recent years the dichotomy of strong vs. weak state, or more vs. less autonomy of the state, has become the central explanatory variable in the field of international/comparative political economy. Katzenstein tries to follow the tradition of Marx (in ‘the Eighteenth Brumaire of Louis Bonaparte’) and Moore, in which state autonomy is intrinsically related with class coalition/conflict.123 However, most neo-Weberians predefine the state as an autonomous entity. Some of them, especially the proponents of the welfare state, tend to identify the large public sector with state autonomy; but it should be pointed out that ‘growth in the potential power of the state is matched by a decline in the options in the state at its command’.124 Others think that those states that have relatively small public sectors but retain more regulative capacity, such as Japan and, with the exception of Singapore, the so-called ‘four dragons’ in East Asia, are more autonomous.125 Yet the statist discourse has not put forward a well-defined empirical referent or an operational definition of state autonomy. One can argue, as the raison d’état

34 State and armament: theory and hypotheses doctrine has done, that the state is intrinsically autonomous, since civil society does not have a say in foreign policy. Yet the autonomy of the state is no less a dogma than the vulgar Marxist notion of state heteronomy.126 In the end, Evans and colleagues admit that: Possibilities for state interventions of given types cannot be derived from some overall level of generalized capacity or ‘state strength’. . . . [It] can be fruitfully broached only via thoroughly dialectical analyses that allow for non-zero-sum processes and complex interactions between state and the civil society.127 The retreat to the ‘dialectical’ analyses of the state is in close parallel with the neoMarxist concept of ‘relative autonomy’: ‘[i]nside every neo-Marxist there seems to be a Weberian struggling to get out’.128 Still, the relative autonomy concept is useful in the study of armament. Otherwise, armament as the minimum requirement becomes the exclusive domain of the government, which is, of course, not true even in South Korea where the state is alleged to be highly autonomous. Furthermore, the theoretical premise of the statist argument is false. The state apparatus, insulated from civil society, does not formulate the interest of the community – surely colonial states and some dictators including Hitler, Stalin or Kim Il Sung were highly autonomous! It is politics, not the state, that is the process of formulating the interest of the community and the community itself. To make the government more responsible is what politics or political science is all about. If the state is totally heteronomous, on the other hand, then actually there is no state at all. A better approach would be to identify how much and in what dimension the state is autonomous. In this sense, state autonomy corresponds to the three dimensions of state power: systemic, structural, and conjunctural. The systemic autonomy can be a variable only in a long-term comparative history research, since it means the capacity of the state to destroy or radically transform the mode of production, i.e. the economy and class relations. New regimes in the process of revolution were systemically autonomous; and high levels of coercion and hegemony mobilisation were required. The structural autonomy may be what Marx had in mind in his analysis of Bonapartism: the state serves no immediate class interests in the middle of intense class conflict, but it does not jeopardise basic class relations.129 Another type of structural autonomy can be found in some colonial states or occupying military governments who attempt to transform the basic social relations. The Soviet Civil Administration, a de facto military government, in the North was structurally autonomous, while the US Military Government in the South was less structurally autonomous although it could have been so. Still there exists a third type of structural autonomy, albeit in a lower

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dimension. The state can be autonomous where the feudal landowning class is in charge of the state in a predominantly capitalist society; or where the capitalist class is not fully developed or organised, with the state taking the initiative in capital formation.130 The conjunctural autonomy means the ability of the government or decision-makers to withstand the pressures from the dominant classes or other major fractions of the power bloc in decision-making and budget allocation. South Korea may have been autonomous in the last category in the 1950s and the 1960s, but it has been gradually eroded in proportion to the growth of monopoly capital, i.e. Jaebols. By the conjunctural autonomy it is meant that the government is relatively resistant to parochial interests in allocation of values. It depends on the composition of the coalition in the ruling power bloc and the formula of consent mobilisation. It is where the pluralist perspective of political power, including the bureaucratic politics explanation (a miniature pluralism in the government), shows its best. In budgeting, it means ‘the flexibility or freedom a government enjoys . . . in raising greater sums of taxation . . . [and] flexibility in undertaking new programs’.131 It shows considerable variance historically and comparatively in the relative short run. However, some states can be categorised as highly autonomous in this respect if they have stable sources of extra resources, for instance, the national/dynastic ownership of oil wells in the Middle East – the so-called ‘distributive states’.132 In South Korea, we can rather easily identify it, that is, massive US military and economic aid, but this kind of autonomy is matched by external heteronomy! The final issue would be how to analyse North Korea by conceptual tools derived from discussions on capitalist states. Certainly there is no (economically) dominant class. Yet we can still argue that the state socialist regime is by definition a class society. This is not because it is allegedly a ‘dictatorship of the proletariat’ or a transitional ‘people’s democracy’. Rather, it is because the state is a product of the class society or, dare it be said, is another form of class relations. The distinct nature of the capitalist state, which appears separated from civil society, would make us reach the wrong conclusion (if no civil society, then no classes).133 The definition of the state as ‘alienated politics,’ an analogy to capital as ‘alienated production relations’,134 holds especially to state socialism where both capital and coercion are highly accumulated and concentrated under the control of the party/ state bureaucracy. Then who are the dominant class(es), or are they classes at all? They can be states, estates (stratum), or elites.135 For the sake of simplicity, there are ‘state classes’ that have accumulated means of coercion and thereby control means of production. The socialist state is not a dictatorship of the proletariat but a ‘regency of the proletariat’,136 if not a dictatorship over the proletariat. Its autonomy is derived from its lack of democracy, which has been reinforced by militarism.137 Still other types of conjunctural autonomy can be identified for our research on resource mobilisation/allocation involved in armament, that is, as it is the case in the South,

36 State and armament: theory and hypotheses extra resources; and the organisational influence of the military or the armament coalition in bureaucratic party politics.138 To conclude, armament as the means of coercion is a function of the overall degree and composition of the political capacity of a state-society, defined as ‘state power’. The representation of parochial interests in armament depends on the composition of state power, i.e. the distribution of coercion and capital, which is determined by the coalition of forces in the ruling power bloc. More important, armament is related with the state power as the sum of coercion and hegemony and performs a system-maintenance function. The level of armament tends to rise in a society that lacks hegemony reflected in capital formation. The ‘war of manoeuvre’ as opposed to the ‘war of position’, in Gramsci’s analogy,139 demands a larger standing army as the means of coercion, since the state has few reinforcements, i.e. hegemony mobilised in the civil society. South Korea has transformed from a highly coercion intensive state to a somewhat, if not stable, consent/capital intensive state. On the other hand, the relative importance of coercion has grown in North Korea as its ideological mobilisation and capital formation have been all but exhausted. Summary of hypotheses To sum up, we can make the following propositions of armament (M), derived from our discussion on the state and its resources as follows: H1-1. M responds to the armament trend of the rival state (M*). M* is operationalised either in flow or stock of military capabilities. H1-2. M is reduced when tensions with the rival are reduced. In the interKorean conflict, the tension reduction occurred in 1972 and, to a lesser extent, in 1991. H1-3. M expands when a major reduction in security commitment from allies occurs. It occurred in 1971 and 1977–78 (for South Korea) and in 1958, 1962– 63, 1966, and 1991–92 (for North Korea). H2-1. M is conditioned by the overall resource potential (R). R can be operationalised by GNP or, to a lesser extent, population. H2-2. M responds proportionately to the extractive capacity of the state (E); however, it levels off and declines thereafter as E grows further – an inverse U-shape curvilinear relationship. E is operationalised by tax ratio or the total extraction ratio (tax + profit over GNP). H3-1. M tends to grow in recessions of a capitalist economy with substantial arms industries (not applicable to the two Koreas).

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H3-2. M (especially manpower) tends to be higher when protracted high level of unemployment continues (especially in developing nations with compulsory military service). H4-1. With a given level of extractive capacity, M depends on the composition of tax and capital accumulation. M is higher when the regime depends more on taxation. A corollary is that M is higher in a more coercion-intensive regime, like authoritarian/military dictatorship; while M is reduced in a capital-intensive regime. H4-2. M expands when the state has extra resources (in the case of the two Koreas, foreign military aid). The first set of hypotheses is about external relations, while the remaining are about internal processes. Of course, the external and the internal are closely related, but external threat does not necessarily lead to authoritarianism or militarism; nor does it necessarily lead to higher level of armament or state. The second set of hypotheses covers the dialectical relationship between state power and armament. The third is about economic function of armament, while the fourth is about state power and autonomy. One can easily note close parallels between H4-1 and H4-2 on the one hand and H2-2 on the other. That is, the level and especially, composition of state power largely determines the degree of the autonomy of the military or the pro-armament coalition. Likewise, H1-3 and H4-2 refer to the same thing viewed from different perspectives. We will examine how the hypotheses about external factors fit the two Koreas in Chapter 5, and those about internal factors in Chapter 6. But how do we operationalise the dependent variable, M? The question will be answered in Chapter 3. As will be shown, defence expenditure either in stock or annual flow is the best measure, while manpower is also considered especially for North Korea. However, we use the annual defence burden (military expenditure over the GNP) in our analyses on internal sources of armament, with H2-1 automatically accepted, since it is the relative size of the pie that matters in value allocation. For the analyses of military capabilities of the two Koreas, the stock of military spending, i.e. the depreciated cumulative defence expenditures (including foreign military aid), will be used as the main indicator.

3

On military capabilities: facts and methods of assessment

A number of methods have been developed to estimate military capabilities for evaluating the arms buildup and comparing the pre-war capabilities of one side against those of another. Yet the so-called ‘net assessment’ or the more broadly defined ‘correlation of forces’ in numerous analyses of the US–USSR, NATO– Warsaw Pact, Arab–Israeli and North–South Korean military balance have produced more controversy than consensus. Since the East–West Cold War is ended with the disintegration of the huge Soviet military machine, the whole question of the US–USSR strategic nuclear balance or the conventional balance in Europe is academic. It turns out that the Soviet military power was not as formidable as it was evaluated to be by many pessimists in the West.1 The cold war is not over on the Korean Peninsula. In fact, assessing the Korean military balance, coupled with alarm over the North Korean nuclear programme is still one of the most important issues being discussed in South Korea’s national security policy and post-Cold War US military planning.2 The purpose of this chapter is to find out what is the best method available for the estimation of military capabilities (of the two Koreas). In other words, it is a search for the indicator(s) of arms buildup that can pass validity, reliability, and utility tests.3 Validity means how military capabilities should be understood and operationalised accordingly. What are the components of military capabilities, how are they related and how do we interpret the outcome of the inter-Korean balance assessment? Reliability refers to, at least in this chapter, the consistency and credibility of data. Declassified information of military affairs abounds with propaganda, distortions, and even disinformation. Testimonies, interviews, reports, new intelligence leaks to the press, and the like are more often than not tailored for certain policy aims. They should be carefully examined. At best, the reliability check will be carried out in terms of the degree of convergence among alternative sets of data – by different sources or by the same source at different time points.4 The indicator is also required to meet the utility criteria: (1) usefulness for balance assessment; (2) availability of time-series data for assessing the arms buildup process over an extended period, say, after the Korean War; and (3) relevance to the broader domestic societal process.

On military capabilities: facts and methods of assessment

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The contents of this chapter are as follows. First, the component variables of military capabilities, with their quantitative vs. qualitative aspects and their relationships are examined. Second, various indicators of military capabilities or of the components are evaluated according to their merits and disadvantages in validity, reliability and utility. Here, the so-called ‘bean counts’, ‘firepower scores’, or other related measures, in both static and dynamic dimensions, are evaluated. Finally, the chapter concludes with the identification of the proper indicators of military capabilities of the two Koreas: military capital stock, derived from military expenditures, backed by manpower. In addition, various sets of North Korea’s defence expenditure data are evaluated. Understanding military capabilities The Republic of Korea (ROK, or South Korea) and the Democratic People’s Republic of Korea (DPRK, or North Korea) have been almost continuously engaged in competitive arms buildups since the Armistice on 27 June 1953. There is no doubt that the Korean Peninsula has remained one of the most highly militarised and tension-ridden regions of the world. Official ROK and US sources show that out of less than 70 million Koreans in late 1997 there are about 1.8 million soldiers on active duty, plus 37,000 GIs, more than 100,000 para-military forces on each side (police/internal security units) and several million reserves.5 Furthermore, more than 65 per cent of the Korean People’s Army (KPA) ground forces are forward deployed between the 240 km long Demilitarised Zone (DMZ) and the PyongyangWonsan line, or within 100 km from the DMZ. In addition, four KPA corps (I, II, IV, and V) are positioned close to the forward edge of the battle area (FEBA) along the DMZ and the Han River estuary.6 Likewise, probably the entire 21 active ROK Army (ROKA) divisions, organised into its First and Third Armies, and the US 2nd Division are forward deployed. No further declassified information of the ROKA deployment is available, but it is believed that no less than five corps are positioned close to the FEBA.7 In this situation, an armed conflict would quickly escalate to a brutal, large-scale war. Unfortunately, ‘Koreans demonstrated that they were quite capable of killing one another in 1950–53, and both populations have been exhorted . . . to do it again.’8 Assessing the required deterrent and defensive capabilities is a critical task indeed. However, ‘the military balance in Korea has been the subject of both confusion and debate.’9 The confusion is brought about by a glasnost in South Korea. Under the militaryauthoritarian dictatorship, there was little confusion: the ‘North Korean puppets’, far superior to the ROK in military capabilities, were believed to be ready to invade the South at any time to unify the Korean nation under Communism. Americans must have been confused in the late 1970s by the changes in President Carter’s plan to withdraw US ground troops from Korea. In South Korea, however, most

40 On military capabilities: facts and methods of assessment people were relieved when the withdrawal plan was suspended. In post-military authoritarian South Korea, however, there is much confusion. In 1988, the ROK Ministry of Defence (MND) began to publish, for the first time in the history of the Republic, its annual Defence White Paper. Yet people are still confused. It is further reinforced by the ‘propaganda debate, conducted mainly in the media’ and ‘the real debate among serious analysts, conducted largely in scholarly publications’.10 The confusion and controversy are the products of misunderstanding, if not propaganda. The first mistake in the analysis of military capabilities would be to focus on the ‘forces-in-being’ rather than the ‘war potential’. Studies of major wars show that overall national capabilities determine the outcomes of most wars.11 As the saying goes, ‘victory goes to the (bigger) battalions’. A 1985 Rand study points out, ‘the larger, more dynamic, and more technically advanced South Korean economy provides the South with an impressive pool of assets. . . .’ It has a far superior economic organisation and structure ‘more adaptable to surges in military output’, and overwhelming civilian assets for rapid mobilisation (civil air fleet, merchant marines, civilian trucks, backup support for repair and maintenance, and technicians).12 A noted liberal scholar in Korea also dared to challenge the official ROK–US position on the Korean military balance by pointing out the ROK superiority in resource mobilisation potential and the qualitative edge of the ROK weapon systems.13 Consequently, the Defence White Paper 1989 and following editions admit the ‘potential’. However, the MND maintains its emphasis on forcesin-being: ‘while the ROK is far superior in war-fighting potential, the two Koreas are relatively equal in military [reserve] mobilisation capabilities, and North Korea possesses a predominant superiority in standing armies.’14 In a nutshell, the MND takes an ‘in the long run we are all dead’ approach: ‘Considering the formidable destructive power of modern weapons and North Korea’s blitzkrieg war plans, it is assumed that the outcome of any future war on the Korean peninsula would be determined after only a few days of engagement.’15 The fear of the KPA blitzkrieg attack is further aggravated by the geographic location of the all-important Seoul metropolitan complex, only 40 km by air from the DMZ. A strategic retreat ‘to trade space for time’, which sounds plausible from a military perspective, would mean the fall of Seoul to the North Koreans, and the war would be over.16 If the ROK forces do not retreat strategically, and follow the prearranged plan ‘to hold its defensive positions to the last man and last round . . . termed “the defence-to-the-end”,’17 Seoul would still probably be lost to the KPA breakthrough and envelopment in certain scenarios, and the war will be over. That is why the ROK moved one step further from the static forward defence strategy formulated in the 1973 Hollingsworth Plan to the ‘AirLand Battle’ doctrine in 1983 and began to practise it in annual ROK–US Team Spirit Exercises.18 Surely, the ROK military have been deeply impressed by the Israeli Defence Forces (IDF) blitzkrieg and the Coalitions’ AirLand Battle during the Gulf War – The AirLand

On military capabilities: facts and methods of assessment

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Battle is a blitzkrieg par excellence. Desert areas or, to a lesser extent, the Eurasian plains provide suitable terrain for this kind of operation. Unfortunately for the military planners who usually prefer offence, but fortunately for the people of Korea, the extremely rugged terrain provides a defence advantage. Numerous ridges and hills that dominate the Korean landscape, limited road networks, lowland rice paddies and rapidly expanding urban areas preclude a largescale armoured/mechanised attack.19 Pessimists who really believe in the KPA blitzkrieg do not appear to pay attention to the war of attrition between Iraq and Iran – a more or less well-financed (by other Arabs) and well-equipped army vs. an army of Islamic warriors with a fundamentalist revolutionary cause, a situation not quite dissimilar from the two Koreas. More important, they do not seem to draw lessons from the Korean War. The terrain definitely favours the area defence oriented around key positions; and the decisive military arm is most likely to be the infantry backed by artillery.20 Armoured forces played a surprisingly small role during the Korean War, except during the initial first weeks when the ROKA had virtually no anti-tank weapons or tactics. In fact, the KPA and the Chinese Volunteer Army deployed no sizable armoured/mechanised forces to the front during the entire 1951–3 period.21 The relatively less rugged terrain on the western front that includes two historic invasion routes from the North to Seoul, the Munsan and Chorwon-Uijongbu corridors, are more accessible to armoured/mechanised attacks.22 However, the ROK–US military planners concentrated their best forces, i.e. the US–ROK I Corps Group in the 1970s, the Combined Field Army in the 1980s, and the ROK Third Army including the US 2nd Infantry Division in the 1990s, in multiple layers of fortified defensive positions. A large-scale KPA combined arms attack, probably led by the famous KPA Light Infantry/Special Operations Units and armoured/ mechanised troops would lead to a savage battle that neither side could win. The invasion routes are too narrow for such large size armies – more than ten divisions on each side – to manoeuvre. The very high force-to-space ratio simply would not allow it. Even if the KPA made a breakthrough, it would be unable to commit a sizeable manoeuvre group to the exploitation phase for several reasons. First, the KPA manoeuvre forces would suffer from the lack of mobile air defence and logistical support.23 Second, the road-bound armoured columns would be bogged down in heavy military and civilian traffic around Seoul. So much for the KPA blitzkrieg. Even if we accept the overwhelming importance of forces-in-being in the Korean situation, there exists another serious error. The second mistake in assessing military capabilities is the so-called ‘bean-counting’ approach. Before we continue our discussion on bean counts, however, an operational definition of military capabilities is in order. Military capabilities, in the narrow sense of the term, are defined as ‘the combat potential of a state’s active and ready reserve armed forces’. It is the sum total of the combined effects of human resources (manpower), material resources

42 On military capabilities: facts and methods of assessment (equipment, supplies, C3I, etc.) and organisational resources (effectiveness) that a state brings to bear on war.24 The human and material resources are more ‘visible’ and thus sometimes called ‘quantitative’ as opposed to the organisational components that are usually dubbed ‘qualitative’. As the former components can be more easily identified and counted, it is quite understandable that manpower and weapon numbers, usually arranged in the order-of-battle, are most widely used. However, numbers do not equate power. Human and material resources, as well as organisational capacity, have their own qualitative dimensions, namely, the productivity or, for that matter, destructibility, of an average soldier – that is, his/her ‘level of skills’ and morale or ‘will to fight’ if he is asked to do so – and the quality and performance of weapons. The organisational capacity includes strategy, tactics, supplies, and the ‘unit cohesion’, which includes discipline, leadership and the so-called Command, Control, Communications and Intelligence (C3I, or C4I including computer).25 These organisational variables are even more difficult to measure, as is true for many important variables in social sciences. But history shows, or at least the Israelis and a number of historians believe, that organisational effectiveness is more important than the sheer number of troops and equipment. Some military historians and war-game designers, who have tried to quantify the organisational dimension, suggest that the variance in combat effectiveness of otherwise equivalent units is in the order of several hundred per cent.26 Arms buildups of a state require a balanced growth in human, material and organisational components. In reality, each government tends to put a premium on one or two components due to its historic, demographic, socioeconomic or political factors. To begin with, the most elementary approach towards military power is what can be called the ‘labour-intensive approach’, or to arm as many conscripts as possible with basic weapons. Most armies before the Industrial Revolution and many contemporary Third World armies belong to this category. The ROKA from the pre-Korean War period to the 1960s and the KPA during the Korean War and the 1950s followed this route. The opposite is definitely the ‘capital-intensive approach’ adopted by many industrialised nations that have more discretionary income.27 Typical examples of this second alternative are the US – public opinion would not allow a high level of casualties – Israel, and Saudi Arabia (for demographic factors). In addition, the capital-intensive approach is divided into two more or less distinct subcategories, namely, the ‘technology-oriented’ (or ‘high-tech’) vs. the ‘hardware-oriented’ (or ‘low-tech’). Definitely the US leads the so-called ‘emerging technology’ or ‘revolution in military affairs’, while the Soviet Union, the former champion of the hardware-oriented school, ruined its economy in her efforts towards a ‘hi-lo mix’ army. Still, a third alternative is available for less developed nations, which can be called the ‘organisation-intensive approach’. China, Vietnam, and to a lesser extent

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Israel until the 1960s for instance, demonstrated how to make quality out of quantity (in manpower), with basically nothing more than their revolutionary and nationalist appeal to the population at large. They were rather successful in their struggle for national unification/liberation and the ‘struggle against US Imperialism’, owing to party leadership, discipline and the morale of their peasant armies as well as to the state’s effective popular mobilisation for revolutionary wars.28 There exists a fourth category for which a proper label cannot easily be found. For practical purposes, let us call it the ‘demonstration-oriented’ or ‘numberoriented’ approach. Unfortunately, not a few Third World states such as Nationalist China (on the mainland), South Vietnam, many Arab states including Iraq, Libya as well as those who fought in the wars against Israel, and the ROK in the 1950s may belong to this less desirable category. Their armies did appear strong in terms of the number of troops, weapons or the combination of both, yet they suffered dearly from a lack of organisational effectiveness. In spite of their fancy uniforms and medals, more expensive weapons, better supplies and sometimes the unusual valour of their soldiers, they could be quickly disorganised, often leaving precious equipment behind in their retreat. The relative size of the army, population or the economy does not allow us to predict the outcome of war in such cases. Organski and Kugler solved this puzzle by analysing and measuring the state capacity in extraction, or the ‘tax effort’, the ratio of actual tax over expected tax.29 Here, the organisational capacity in a micro-perspective, that is, the effectiveness of ‘forcesin-being’, of the two Koreas will be analysed. Bean counts and other numbers The ‘bean-counting’ methodology is the most simple and elementary form of balance assessment and, as such, is widely used in the ‘media debate’.30 It is the comparison of numbers of the visible components of military might: the order-of-battle, manpower, number of tanks, artillery tubes, ships, aircraft, missiles, special forces, or whatever is available for an armchair general or a (security) concerned scholar. Especially since 1978–9, when the US Army and other intelligence agencies discovered the undetected growth of the KPA in the 1970s, probably all ROK and US official documents and a great majority of articles, media reports, and monographs have repeated the same theme; the KPA numerical superiority. In 1979, the DPRK military superiority over the ROK was reported to be 1.1:1 in manpower, 2.1:1 in tanks, 2.3:1 in artillery and 2.3:1 in armoured personnel carriers, while the ratios in 1977 were 0.9:1, 1.5:1, 1.9:1 and 1.9:1, respectively. The ratio of naval vessels was alleged to have been 4:1 while that of combat aircraft was 2:1.31 After 15 years of heavy arms investment by the ROK, these ratios have not changed much. Overall, it was concluded in 1993 that ‘the North enjoys relative military supremacy with approximately 1.6 times as many troops and twice as much equipment as the

44 On military capabilities: facts and methods of assessment South.’32 Even in 1998, the official ROK position is that the KPA lead is 1.5 times in manpower, 1.9 times in equipment, and 2.3 times in firepower.33 The numbers may go further, but are not helpful. A variation of the theme is the more sophisticated ‘combat capability coefficient’ (CCC). It is a Korean version of the armoured division equivalent (ADE), or the division equivalent firepower (DEF) that followed the ADE, developed by the US Army Concepts Analysis Agency.34 The ADE methodology is based on standard measures of a unit’s total capabilities in firepower, mobility, and protection, i.e. the ‘judgmental firepower scores’ or the Weapons Effectiveness Index and Weighted Unit Value (WEI/WUV) methodology.35 A given unit’s capability is the weighted sum total (WUV) of its weapons: the number of each weapon category times WEI (say, a typical Soviet tank is 1.02 times more effective than a US M60A1 tank, the category’s standard) times weight (a tank receives a 64 weight score against 1.0 for a small arm in an offensive posture, or 55 against 1.2 for a small arm in defence). The comparison of WEI/WUV scores of a particular unit will provide its ADE index against the 1976 standard US armoured division (by definition, 1.0 ADE). For instance, a US mechanised infantry division is 0.94 ADE, a US infantry division 0.87 ADE, a West German armoured division 0.72 ADE, a standard Soviet motorised rifle division 0.68 ADE, a tank division 0.66 ADE (standard) to 0.90 ADE (in East Germany), and so forth.36 The DEF that followed the WEI/WUV-II and III uses a new base division, a fully modernised US ‘Division 86’ formation, more new equipment in its tallies, and probably some new techniques including dynamic modelling and ‘laboratory firepower scores’ called the Index of Combat Effectiveness. The DEF methodology is classified, but ‘it varies little from the ADE methodology.’37 The same can be said for the CCC in the Korean balance assessment, although little declassified information exists. Measured in the CCC, the ROK military capabilities were 65 per cent, or 70 per cent if we add the US Forces in Korea, of the KPA’s in 1988,38 which is not quite different from the above quoted simple bean counts. Surely, the ‘bean-counting’ or ‘number-oriented’ approach has its own merits, namely, simplicity and straightforwardness. Almost any numerical assessment of military capabilities are variations of bean counts or at least use them as the baseline.39 To oversimplify, bean counters believe or want to believe in the ‘numbers don’t lie’ maxim. Certainly, quantifying the qualitative dimensions to produce an overall picture of military capabilities is a very challenging task. It should be based on numerous subjective judgements, assumptions, and estimates thereby losing parsimony and persuasiveness. Bean counts are frequently preferred in one’s own arms buildup planning as well as the assessment of the enemy’s capabilities, since these numbers appear to demonstrate how effectively the defence dollars are spent. ‘Politicians, civil servants and generals are sometimes child-like: they prefer to have the bright shiny new toys of more tanks, rather than buy fewer tanks but have enough spares and the like to keep what they have bought going.’40

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Crude or sophisticated, bean-counting methodology provides a poor and distorted snapshot of military capabilities. First, bean counts do not fully cover quantitative components. Second, they do not give due credit to the quality of weapons. This is still true for the ADE or DEF methodology believed to include some qualitative factors in its judgemental firepower scores. Third, it does not take into account the all-important organisational effectiveness. Last but not least, it cannot deal with the process through which the various categories of units and weapons are brought to bear in actual combat. Bean counting is not a ‘dynamic’ but a ‘static approach’.41 In short, these considerations show that we should introduce ‘force multipliers’ in order to arrive at a reasonable balance assessment. These problems will be discussed in further detail. First of all, bean counting tends to ignore some important numbers. In the order of battle comparison, for instance, ROKA and KPA infantry divisions are counted as equals. Actually, the manpower of a KPA division was no more than 65–70 per cent of that of the 14,700-man strong regular ROKA division in the 1980s, with 12 instead of 9 infantry battalions in its three regiments (and a divisional patrol/ reconnaissance battalion).42 Even if the firepower of the two were equal, a ROKA division enjoys superior ‘staying power’ owing to its better support troops.43 Furthermore, the KPA artillery corps/brigades are counted separately, but it would be another folly to identify them as independent manoeuvre units. The KPA motorised rifle and tank/armoured brigades are counted as if they are equivalents to a division, while their size is smaller by a factor of two-and-a half44 – in fact, they are reinforced regimental combat teams. In the case of equipment, the number of artillery tubes or armoured vehicles would be less meaningful without consideration of ammunition supply or petroleum, oil and lubricants (POL). It should be pointed out that the ADE firepower score ‘does not take into account such factors as ammunition availability, logistical support, training, communications, and morale’.45 To oversimplify, the ADE/CCC firepower scores are ‘flow’ rather than ‘stock’. In the naval balance, the comparison of numbers is almost meaningless. The KPA Navy has been alleged to enjoy 2.4:1 (460:192) numerical superiority in surface combatants and submarines combined, while most of its surface combatants are small patrol craft/boats under 100 tons.46 The total tonnage or ship-days would be a better naval indicator. The same is true for aircraft: it is the number of sorties rather than the number of aircraft that counts. Ship-days or sortie rates are the combined product of simple bean counts and organisational effectiveness that leads us to the quantity vs. quality debate. Second, it is generally agreed that US weapons are superior to Russian-made ones. This is also true for the two Koreas. However, the CCC firepower scores adopted by the ROK do not appear to appreciate fully the ‘quality multipliers’. Behind the alarm bells of the Soviet/North Korean numerical superiority, the US/ ROK military planners have maintained a double standard in their belief in numbers.

46 On military capabilities: facts and methods of assessment While they admired the peculiar ‘Russian quality called quantity’, Americans have not adopted the ‘quality through quantity’ approach in their force planning. American strategy ‘does not require equivalence, much less superiority, in every category of military hardware’. Instead, they prefer technological domination, making ‘no attempt to match any conceivable adversary’s forces . . . on a one-forone basis’.47 In the US–Soviet arms race, decision-makers in Washington and the public alike were deeply attracted to new technologies. The US led Russia and, for that matter, all other countries in the qualitative arms race. The American love affair with high tech, especially electronics, brought about the so-called ‘emerging technology’ or ‘revolution in military affairs’. They have produced the so-called ‘soft kill’ weapons with a ‘stand-off capability’ as opposed to ‘hard kills’, albeit with some key components from Japan. Meanwhile, the less adept Ivans, still oriented to early twentieth century-type industrialisation – coal, steel, machine tools, power generation, etc.48 – drained their resources for stockpiles of low- and medium-tech hardware. They designed (or copied), produced, stockpiled and exported a large number of every category of weapons at least one generation behind those of the US. Furthermore, almost every new generation of Soviet tanks, aircraft and missiles, such as the T-62, T-64, T-72 and T-80 tanks, MIG-23 and MIG25 fighters, the Blackjack bombers and a series of surface-to-air missiles (SAMs) failed to solve various critical problems that plagued those they were intended to replace and to perform on a par with their Western counterparts.49 The ‘performance’ inferiority of weapons is not the only problem that plagued the Soviet-type armed forces. Contrary to common expectations, the ‘quality’ or ‘reliability’ of Russian-made weapons, especially more expensive new models, is more often than not lower than that of Western models. The lower level of manufacturing technology, skills, quality control and management are responsible for this. A good example is the Soviet main battle tank (MBT), in which the Russians were expected to show a much better than average quality. MBTs were the backbone of the Red Army, as they really believed in tanks: ‘Soviet tactics are tank tactics. The Soviet Army depends more on the main battle tank than on any other type of weapon system.’50 In fact, they retrofitted many used tanks with laser range finders, night vision systems and reactive armour – an exceptional case for the Soviets who preferred producing new models to upgrading old systems. Yet ‘contrary to conventional wisdom, the relative simplicity of the engine and transmission of T54s, T-55s and T-62s do not guarantee a high degree of reliability . . . [and] it appears that the reliability gap between Eastern and Western tanks has been widening still further.’51 The ‘T-62 has a breakdown every 160-200 Km vs. every 240-320 Km for the US M-60A1’,52 although the latter is equipped with automatic transmission and power steering as opposed to the former’s manual systems and simple dead tracks. The life of T-55 and T-62 engines is ‘about 500–1,200 running hours’, which is ‘a quarter the comparable US figure’.53 The main tank guns, with which the Soviets enjoyed more ‘punch’ with their larger-calibre smooth-bore guns

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(115mm on T-62s and 125mm on T-64s, T-72s, and T-80s) – at least until the arrival of 120mm smooth-bore guns on US M-1A1 and German Leopard II or 120mm rifled guns on British Chieftain and Challenger tanks – also suffered from the weakness of Soviet technology. The 115mm U-5TS gun on T-62 tanks, the main MBT of the Red Army in the 1960s and still the most advanced model for the KPA, has a gun barrel life of ‘120 rounds, compared to the NATO 105mm gun’s 400 rounds’.54 Furthermore, problems in gun stabilisation and poor quality control on ammunition production degrade the accuracy of the main tank guns. So much for the rugged Soviet weapons. If we add the ‘performance quality gap’ in the comparison, e.g. the inferior observation, fire control, armour and ‘human engineering’ such as crew comfort and survivability, we would arrive at an expected ‘exchange ratio’ more favourable for Western tanks or, for that matter, the ROK-US tanks.55 USFK deployed M-60s in South Korea for more than two decades and, since 1994–5, has M-1A1s, arguably the best MBT ever built. The ROKA inventories include some M-47s, the first tank with an accurate optical rangefinder using one’s own vehicle as a baseline for triangulation; hundreds of K-1 (Type 88) tanks, basically a scaled-down version of the M-1; and almost one thousand M-48A5s. The ROK launched the M-48 tanks upgrading programme in the second half of the 1970s – which is almost identical to the M-60 and ‘with modern fire control may be superior to the T-80 in tank vs. tank encounters’.56 Furthermore, the DPRK vs. ROK–US MBT ratio is not 2:1 but 1.38– 1. 54:1 or 3,400–3,800 vs. 2,469, if we add the 144 MBTs (two battalions) of the US 2nd Division and the 275 M-48A5s provided to the ROK in 1991–2 for the War Reserve Stocks Allies (WRSA) to the 2,050 + MBTs of the ROK Army and Marine Corps.57 It would probably be unwise to push these sorts of weapon vs. weapon comparisons further at this time. Suffice it to say that Soviet aircraft and missiles would perform even poorer than tanks, which was amply demonstrated during the wars in the Middle East, Vietnam, and Afghanistan.58 However, so far we have discussed the weapon quality factors, or the ‘validity’ of bean counts. ‘Reliability’ is still another matter. Here, we will discuss two salient issues in capability assessment that would create a bias against the ROK: (1) the quantity of weapons and (2) its quality expressed in quantified terms, such as the WEI scores. First, the Soviets were noted for their persistent stockpiling. They never retired old models of weapons that should have been sent to museums or scrapyards – which is exactly what Russia is doing these days. Similarly, the KPA ‘seldom retire old models of weapons and tend to maintain a large number of equipment stock’.59 We do not know, for instance, how many World War II-vintage T-34 tanks, the 1950s-vintage T-54/55/59 tanks, MIG-15/17 fighters and IL-28 bombers, and the obsolete V-75 Dvina (SA-2 ‘Guideline’) SAMs in the KPA inventories can be operational. But a rule of thumb would predict that a considerable portion of these obsolete or obsolescent systems is mere junk.

48 On military capabilities: facts and methods of assessment Second, the WEI scores that may have entered the CCC methodology developed by the Korean Institute of Defence Analysis (KIDA) and others would lead to a considerable overestimation of KPA strength. For instance, the WEI of MBTs in the ADE methodology show exaggerated scores for the Soviet tanks in ‘offensive’ posture: 0.89 for a T-55 and 1.02 for the average value of T-54/55/62/72 tanks vs. 1.0 for a US M-60A1. A US M-1 tank is valued ‘roughly 10 to 15 per cent better than a T-72’.60 This is a far cry from a US Department of Defense report on the Gulf War which admits that ‘M1A1 systems overmatched Iraqi systems [mostly T-72s] in acquisition, fire control, lethality, mobility, and survivability’.61 Nevertheless, the MND still maintains that the KPA with their choesinhyong (most recent version) T62 tanks has a tank inventory ‘superiority over the ROK in both quality and quantity’, although it admitted the superiority of the K-1.62 At any rate, it is interesting to note that the military all over the world tend to overestimate enemy casualties in war but underestimate their own strength in peacetime. The Soviet version of the WEI/WUV scores released in 1991 shows several ‘commensurability coefficients’ of units and weapons. For instance, a US armoured division is assessed at 1.67 (or 2.47 with its organic AH-64 Apache helicopters) vs. 1.0 for a Soviet motorised rifle division; the T-80B tank is assessed ‘as only marginally superior to the old M-60A1 and distinctly inferior to the M1A1’ (about 1.2 to 1) or the British Challenger (about 1.7 to 1, probably due to its even more accurate, longer-range rifled gun with HESH projectile) tank; the latest SU-27 Flanker fighter is equivalent to the German F-4F and ‘markedly less potential than the F-15C Eagle’, and so forth.63 Despite their own bias and hidden intentions, the Soviet assessments would probably be closer to what it is. Our third criticism of bean counts is the omission of organisational capacity. As suggested in the discussions on total artillery rounds, ship-days and aircraft sorties, the organisational effectiveness of a unit should be counted as a force multiplier. Among the various organisational components that enter the assessment equation, ‘unit cohesion’, or ‘combat management’ is the most important. Leadership, discipline, morale, and C3I are the major inputs of unit cohesion.64 It has an inverse relationship with what von Clausewitz called ‘friction in war’. The military machine . . . is basically very simple and therefore seems easy to manage. But we should bear in mind that none of its components is of one piece: each part is composed of individuals, every one of whom retains his potential of friction . . . [and] the least important of whom may chance to delay things or somehow make them go wrong.65 The days of heroes, warriors, and geniuses are gone. We live in an age of mundane but large and complex bureaucratic organisations, where ‘management’, not virtue, honour or genius, matters.66 Organisational capacity determines the

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‘relative combat effectiveness’. Colonel Dupuy, a military historian and an admirer of German/Israeli military effectiveness, shows that the Germans and the IDF performed consistently better than the Allies and the Arabs, respectively. His ‘combat effectiveness values’ (CEV) – the ratio of actual performance over expected performance that takes armament and other factors into account – for the Wehrmacht units is over 1.2:1 against US or British units and 2.0–2.5:1 against the Red Army; and the CEV of the IDF was 1.5–3.0:1 against the Arabs.67 The Israelis themselves strongly believe that their victories were not due to better Western weapons but to their superiority in organisational and manpower quality. The IDF Chief of Staff during the 1982 War, General Rafael Eitan said, ‘[i]f we had had their weapons, and they had had ours, the result would have been exactly the same’. David Ivry who commanded the IAF explained that it was because the Israelis were able to exploit their weapons to the maximum of their potential, while the Arabs could not.68 The organisational capacity of military forces depends on the managerial effectiveness or professionalism achieved through investment in C3I and logistics, as well as the investment in ‘human capital’ (education and training). A behavioural/ historical calculation of combat effectiveness à la Colonel Dupuy would suggest that the two Korean armies are roughly equal in this category, as they were in the second half of the Korean War period under the US and Soviet/Chinese tutelage. However, like the economy or society at large, both armies have changed dramatically in the last four decades.69 Hence, we should identify the indicator of organisational effectiveness from the input factor: education, training and investment in C3I, and logistics. As it is the case for weapons quality, the US has enjoyed a substantial advantage over the Soviets, who spent much less on operation and maintenance (O&M). Stories of the poor training and operational readiness of the Red Army are legion: tank units normally trained with mockups or older models while the mothballed ‘real tanks’ were used only in annual field exercises; only about 15 per cent of Soviet naval vessels are at sea against 40–60 per cent of US ships; more than two-thirds of its 175-strong divisions were maintained at either category 2 or 3 status; and the pilots had fewer training sorties and flying hours, etc.70 Most Soviet-type armies suffer similar problems of extremely low ‘O&M to stock ratio’, and the KPA is no exception. Large-scale manoeuvre exercises are very rare and there are very few daily aircraft sorties simply because the KPA has been short on oil, spare parts, and other O&M resources.71 In order to compensate for the low level of ‘training’, the KPA emphasises ideological indoctrination and, like most poor armies including the ROKA in the 1950s and 1960s, tactical ‘drills’. Furthermore, a large number of KPA troops have been constantly engaged in large-scale construction projects. The ROK soldiers have enjoyed a high level of combat training and operational readiness since at least the 1970s, although they have by no means reached the level of the overequipped and oversupplied Americans. Still, it would be difficult to derive an ‘organisational force multiplier’ from the

50 On military capabilities: facts and methods of assessment input factor. We will tackle this problem in the discussion on defence spending. Another difficulty in preparing a ‘dynamic’ assessment is how to quantify the effects of the environmental factor (climate, weather, geography, terrain, etc.), the operational factor (offence vs. defence, or surprise), or the combination of both in a dynamic combat analysis. Usually the defender receives some premium or a force multiplier, as von Clausewitz argues, ‘defence is the stronger form of waging war’ since ‘it is easier to hold ground than take it’.72 The conventional rule of thumb is that an attacker needs more than a ‘3:1 superiority’ in the main axis of attack – the 3:1 threshold is further raised to 5:1 for a successful breakthrough in many scenarios, especially those of the Soviets.73 However, the defender usually receives a force multiplier 1.3–1.4 (hasty defence) or 1.5–1.7 (prepared defence), which would be again multiplied by 1.4–1.5 times if the terrain is rugged.74 That is, either Korean force could enjoy about a 2.1–2.5:1 advantage in defence, and the advantage would be increased even further in case of rain or cold weather, which degrades the mobility of attacking mechanised forces or the effectiveness of close air support. On the other hand, war game analysts suggest a force multiplier of ‘surprise attack’ that can compensate for the 3–5:1 superiority requirement for the attacker, say from 1.3 for minor surprise to 3–5 for substantial/complete surprise, although the advantage of surprise diminishes rather quickly.75 The ROK–US war games, especially the pessimistic ones, must have included a considerable force multiplier for the KPA surprise attack. For one thing, most analyses on the Korean military balance put a heavy emphasis on ‘early warning’ for a successful defence of the South – the warning time has been reportedly 4–48 hours.76 However, considering the preparedness of the forward deployed ROK–US forces and, to quote von Clausewitz again, the fact that ‘by its very nature surprise can rarely be outstandingly successful’,77 the success of a KPA surprise is simply the worst case scenario. A tactical surprise is also feasible for the defender. The ambush is a classical example. Dynamic analyses ranges from rather conventional analyses (for example, à la Cordesman, Mearscheimer or Posen, or simple mathematical models such as the Lanchester linear or square law)78 to complex war games utilising sophisticated methods of operational research, artificial intelligence, computer programs, etc. It puts these numbers and other parameters into a certain conceptual model to generate combat outcomes most commonly expressed in terms of casualties or the change in the front line.79 It also involves an additional order of assumptions, judgements, and calculations. That is why many arms producers are engaged in their own war games to promote sales. For instance, ‘[w]e run the game again, adding three batteries of the Army’s multiple-launch rocket systems [in Korea] . . . you then would create a condition that would put the FEBA more where you want it at the end of seven days.’80 Models and games can serve as a heuristic tool. The more we move away from simple bean counts, the more powerful the ROK military strength becomes. Since dynamic analysis depends too much on artificially generated

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parameters, however, we need a more simple and straightforward indicator far superior to bean counts or numbers that may not lie, that is, the ‘military capital stock’ derived from defence expenditure. Defence expenditure By its very nature, defence expenditure (DE) is the sum total of factor costs invested in human, material, and organisational resources for a state’s armed forces. As such, it is the most important measure of military capabilities defined in this chapter. Its validity is further enhanced by numerous analyses of arms race – or domestic pressure models of armament.81 Although DE is tacitly regarded as another bean count in many balance assessments, it is immensely superior to any bean counting or dynamic analysis comparison. As will be shown, DE can successfully capture the qualitative dimension, i.e. quality of weapons, support systems, and organisational effectiveness. However, there are two caveats: one conceptual and the other methodological. One of the conceptual problems is that government spendings on defence in the two Koreas may not mean the same thing. The two differ greatly in economic systems, fiscal tools, and price mechanisms. Fortunately, both Korean states have adopted a de facto, if not de jure, conscription system. Furthermore, they do not include state/internal security expenses in their respective ‘national defence budget’. Although North Korea may have more subsidies than the South for military personnel or arms industries not included in its defence budget, this may be covered in the ‘maximum definition’ of DE, which will be discussed presently. Like the unreasonably low official defence budget of the Soviet Union, the official DPRK defence budget since 1972 has been suspected by the ROK–US side to exclude ‘hidden spending’.82 In 1989, it was Gorbachev who revealed that the Soviet ‘defence budget’, 17.1 billion roubles from 1970 to the early 1980s and 20.2 billion roubles thereafter, would be 77.3 billion roubles. In a news briefing, Major General Vladimir Kuklev, Deputy Chairman of the General Staff, said that the budget – about 9 per cent of its GNP – included procurement, research and development (R&D), construction, pensions, and others. He admitted that ‘it is very difficult to [calculate] research in mathematics or space programmes, which don’t have a military character, but which can indirectly be linked.’ The previous lower figures were explained as O&M expenses, or ‘what we could call the budget of the Ministry of Defence’.83 Meanwhile, the US has relied on its estimate of the ‘real’ Soviet DE either in US dollars or roubles since the so-called 1976 ‘Team B report’ of the Central Intelligence Agency (CIA) under Director George Bush. The estimate was about twice as high as that of previous reports, which was mainly due to reevaluations of the productivity/price of Soviet defence industries.84 The dollarbased estimation was especially prone to an upward bias. Although the CIA (factorcost or micro-estimation) and the DIA (macro-estimation) finally reached agreement

52 On military capabilities: facts and methods of assessment in the mid-1980s, the debate on the real Soviet defence budget continued.85 The US Department of Defense still believed in 1989 that the Soviet DE could be as high as 17–19 per cent of its GNP. The North Korean case is not very different. Official DPRK budget data have shown the total amount of revenues and expenditures and, except for the 1964–66 period, the percentage share for defence. However, the budget data since 1953 show distinct patterns for different periods, which can be classified in three categories: (1) the ‘minimum definition’ from some time in the 1950s to 1963; (2)the ‘maximum definition’ for the 1967–71 period, retroactively applied by official DPRK sources to the 1960–66 period; and (3) since 1972, the ‘in-between definition’. The official DPRK figure dropped from 31.4 per cent of the total budget in 1971 to 17.0 per cent in 1972.86 Consequently, the ROK strongly believed that Pyongyang excluded a large amount of ‘hidden spending’, and the US followed suit in the late 1970s. The ROK estimation for the real DPRK military spending has been (at least) 30.9 per cent, an extension of the 1967–71 average.87 Similarly, the US Arms Control and Disarmament Agency (ACDA) has estimated the DPRK defence spending at 20–25 per cent of its GNP each year – the figures vary from one edition to another.88 However, it is increasingly unrealistic to argue that Pyongyang has consistently spent 30.0–30.9 per cent of its total budget on defence for more than 20 years,89 especially considering the gradual increase in the budget/GNP ratio (from about 60 per cent in the 1970s to over 70 per cent in the 1990s). In fact, a factor-cost estimate of North Korean defence spending for 1971–75 by the Korean Central Intelligence Agency (KCIA) showed lower figures than other estimates. Like the US CIA case of course, it was subsequently raised in the 1978–82 estimate by the National Security Planning Agency (NSPA; the new name of the KCIA).90 We will discuss the ‘real’ DE of North Korea and develop a more consistent time series in the next chapter. The second conceptual problem is whether the ‘total’ defence budget or the expenses for ‘military investment’, that is, procurement or R&D and construction, is a better measure. Another question is whether the combat value of weapons and equipment is a linear function of the monetary value in comparing the two Koreas armed with different weapon systems. We will discuss the latter issue first. The ‘more-bang-for-the-buck’ argument in favour of the Soviet-type weapons has been repeated by the MND. The MND maintains that KPA personnel, O&M and procurement costs are much lower, owing to the characteristics of the socialist economy, lower per-capita income and lower production costs. Personnel expenses – reportedly one-half of those of the ROK, but it is not clear whether they mean ‘total’ or ‘per soldier’91 – must be lower, at least since the mid-1970s when the ROK surpassed the DPRK in per capita GNP (or 2:1 in the GNP, since the population of the South has been twice as large as the North). Also, the Soviet- and DPRK-made weapons are cheaper. The MND shows that a MIG-29 fighter ($22 million) or a T-62

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Tank (150 million won, or roughly $220,000 at the 1991/2 exchange rate) is cheaper than an F-16 ($35–43 million) or a K-1 Tank (1.84–2.3 billion won, or roughly $2.3– 2.8 million) respectively.92 However, the price tag of a T-62 is questionable. ‘In 1970 when an M-60A1 cost $250,000, a T-55 cost about $115,000 and a T-62 $175,000.’93 Using the ACDA price deflator to account for inflation, a T-62 would have cost at least $542,500 in 1991. It is also very difficult to assume that the DPRK productivity in the tank/tracked vehicle industry – with a reported annual production capacity of 100–150 tanks or 300 tracked vehicles (including self-propelled guns) – reaches the ‘economy of scale’ of the Soviet tank industry that produced 1,150–3,000 tanks a year in the 1980s.94 The alleged price effectiveness of Soviet-type weapons would diminish rapidly if we move our comparison to the more expensive, high-tech category, which is increasingly more responsible for defence dollars/roubles, namely, the highperformance aircraft and missiles. No doubt Soviet weapons in this category are cheaper than their supposed counterparts in unit cost. However, their costeffectiveness in performance and quality, as discussed above, is lower; and it is much lower than expected in exchange ratios in actual combat. The US F-86 Sabers vs. the MIG-15 air combat in the Korean War; the French Mirage III vs. the MIG-21 in the 1967 Middle East War; the US F-4 vs. the MIG-21 in Vietnam; the Mirage III/ F-4 vs. the MIG-21J (new version) – many flown by Russian pilots for Nasser’s Egypt during the peak of the ‘War of Attrition’ in 1970, and again in the 1973 Yom Kippur War; the F-15/16 vs. the MIG-21/23/25 in the War in Lebanon; and the Coalition’s F-15/16/18 vs. Iraqi MIG-21/23/25/29 and Mirage F-1 (a 1970s vintage French fighter in the US F-4 class) in the Gulf War have repeatedly demonstrated that US/Western fighters have a clear superiority in exchange ratios.95 These ratios would outweigh any price difference. In the extreme case, the IDF scored 82–92 to 0 in air-to-air exchanges in Lebanon during 1982.96 Less well known is the kill or hit ratio of air defence missiles. The V-75 Dvina (or more famous as SA-2 ‘Guideline’) SAMs that shot down several US U-2 spy planes, averaged 5.7 per cent probability of kill (Pk) in Vietnam in 1965. But in total it achieved 1.7 per cent Pk in the Vietnam War, about 150–160 kills with over 9,000 missiles fired, a far cry from the 80 per cent Pk in trials in the USSR or the 50 per cent Pk in combat conditions expected by the Soviet Air Defence Forces (PVO).97 In the Arab-Israeli War in 1973, the average Pk of the combined SA-2/3s and the new and mobile SA-6s was 1.33–2.0 per cent. The new Kub (SA-6 ‘Gainful’) scored a better Pk – the PVO advertised 98.5 per cent Pk before the war – but it also showed a high rate of ‘fratricide’: it shot down more friendly aircraft (about 40) than the IAF aircraft (20–30).98 In comparison, US HAWK missiles achieved about one kill for every three fired, a Pk of 33 per cent. That is, the HAWKs produced 15–25 times more kills per round than the SA-2/3/6s, which were not much cheaper than the HAWKs.99 In the Bekaa Valley in 1982, the IAF destroyed 17 of the 19 SA-6 sites

54 On military capabilities: facts and methods of assessment plus several SA-2/3 sites, in addition to 82–92 air-to-air kills, while it lost only two aircraft and several helicopters to air defence missiles and guns.100 If the statistics appear biased in favour of the more skilful and effective Israelis, consider the cases in Afghanistan and Angola. In Angola, Soviet-made Strela 2 (SA-7 ‘Grail’) portable SAMs scored 9 kills plus 6 damaged per 470 rounds fired, about a 2–3.2 per cent Pk. In the 1973 War the IAF lost 2–6 aircraft plus 28 damaged to about 4,500–6,825 SA7 rounds, a Pk less than 0.1 per cent or a hit rate of less than 1 per cent.101 The less skilful Mujahideen guerrillas, disappointed with the poor performance of the SA7s, scored later at least one kill for every three US Stinger portable SAMs, a 33 per cent Pk, or 269 hits out of 340 rounds fired before the Soviet withdrawal, ‘a hit rate of 79 per cent, including misfires and gunner errors’.102 The aircraft and missile saga tells us that the Soviet-type air force–air defence system has been a great failure thus far. It was the Soviet Union that paid dearly for their heavy emphasis on strategic air defence because they could not believe in Soviet air superiority in future wars. Against bombers and peacetime intruders, the PVO spent about $30 billion for 4,000 Dvina launchers alone. In contrast, the US Nike Hercules programme, a more sophisticated and longer-ranged system, cost $0.5 billion for development and $2.7 billion for 500 launchers with a larger number of per launcher reloads by 1968; the Manhattan project cost less than $2 billion in then-year dollars.103 In the mid- to late 1960s, the heyday of the PVO-Strany, its budget was reportedly increased by over 50 per cent in order to fund the new SA5 ‘Gammon’ against the US YF-12/SR-71 mach 3+ aircraft and the soon discarded XB-70 Valkyrie supersonic bombers and the defunct ‘Griffon’ anti-ballistic missiles.104 It also procured hundreds of MIG-25 fighters against the unrealised threat of the XB-70s. Even with thousands of interceptors and multiple layers of SAMs, the PVO showed dismal performance against intruders, including Korean Air Lines jetliners in 1978 and 1983. Many elaborately built Soviet air defence systems also failed in Egypt, Syria, Iraq, and elsewhere. If these cases are not well matched duels between equally skilful or effective forces, consider the case of Angola again. During the 1980s, South African aircraft regularly penetrated ‘the most elaborate [Soviet] air defence system found outside Europe’, mostly maintained by East German mercenaries.105 The Israelis were not surprised by the lopsided victory in the air combat in 1982 thanks to better ‘combat management’ with far superior C3I and tactics as well as better weapons. It shows that air superiority is a much better and, for that matter, a more economical approach towards air defence. The lagging technology, such as the lack of long-range strategic bombers, inferior fighters, missiles, radar, and ground-based control tactics, etc. of the Soviet air force/air defence forces caused a tremendous drain on its defence budget. Total Soviet spending in strategic air defence was estimated at $500 billion, ‘yet it has produced very little net result’.106 The Gulf War again demonstrated the effectiveness of the US doctrine of air superiority.107

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In a nutshell, it is not the unit price but the overall weapon systems or the entire force structure that should be counted in the cost-effectiveness of military investment. It is interesting to note that the KPA invested more than $2 billion in the second half of the 1980s, albeit with Soviet loans, mainly in order to ‘modernize’ its air defence with dozens of MIG-23/29 fighters and the obsolete Neva (SA-3 ‘Goa’) and SA-5 SAMs.108 The long-range high-altitude SA-5 system was probably deployed to intercept US SR-71 reconnaissance planes, but it is ironic that the ‘blackbirds’ are no longer operational in the 1990s – probably replaced by the topsecret Aurora stealth reconnaissance plane. Nevertheless, the more-bang-for-the-buck argument is also applied to the overall ROK–DPRK military capital stock comparison. The aforementioned combat capability coefficient (CCC) of the ROK against the DPRK is assessed at 71 per cent at the end of 1992, while the ROK ‘cumulative investment’ in military capital stock is 82.3 (82.4 per cent) of the North.109 That is, the North has about a 1.16 times advantage over the South in the cost-effectiveness of military capital stock. However, as the MND data in Table 3.1 shows, the cost-effectiveness between the two was almost on a par in 1988, and it was the South that enjoyed a cost-effectiveness advantage before 1988. The figures in Table 3.1 suggest a very strange picture, although they clearly show that the ROK is in the process of catching up. The ROK stock in the 1970s appears unreasonably low ($450 million in 1975 and $1.61 billion in 1976, both in constant 1990 dollars), while the South/North CCC ratios were unreasonably high, a more-bang-for-the-buck in favour of the South. Overall, there exists a very low one-for-one correspondence between CCC ratios and stock ratios. There is something critically wrong in all three series, provided by the most reliable sources: the MND (with the assistance of KIDA), a Rand report prepared for the Director of Net Assessment, Office of the US Secretary of Defense, and Professor Rhee, a well-known expert on Korean security issues.110 Either the methodology or the data, or both, is wrong. For one thing, the MND and Professor Rhee might have used ‘gross investment’, that is, military capital stock without depreciation, but the margin of error should not have been amplified to such a great magnitude. The real problem is the data. For all their endeavours, the three authorities on Korean security issues omitted US military aid to Seoul that was almost entirely responsible for the ROK stock until the early 1970s. The aid amounted to $5.25 billion in ‘grants’ and direct spending (1954–55) during 1954–74 even if we exclude the 1966–72 Military Assistance Services Funded (MASF; US spending for the Korean troops in Vietnam) and the Foreign Military Sales (FMS) credits since 1971.111 It is not quite clear whether Soviet and Chinese aid to the DPRK is counted, although it must have been much less.112 Finally, the capability assessment of the USFK at 5 per cent of the KPA’s CCC, or one-thirteenth of the ROK’s (5 per cent against 65 per cent) is problematic. In fact, the MND assessed the USFK stock in

56 On military capabilities: facts and methods of assessment Table 3.1 ROK-DPRK Ratios in CCC and Military Capital Stock ROK–DPRK CCC Year

MNDa

1960 1965 1970 1973 1975 1976 1978 1980 1981 1983 1984 1986 1988 1989 1990 1991 1992 1994 1996

— — 50.8% +e 50.8% — — — — 54.2% — — 60.4% 65.0% — — — 71.0% — —

ROK–DPRK military capital stock MNDb — — — — 3.3%f (0.45:13.47) 10.4% (1.61:15.80) — 35.8% (7.77:21.72) — — 49.8% (14.97:30.04) — 67.2% (26.27:39.09) 71.0% 75.8% (33.11:43.68) 80.0% 82.4% (40.79:49.50) 82.9% (48.48:58.45)c 91.9% (56.79:61.81)c

Rheec 46.7% 11.5% 7.3% — 13.6% 19.9% 34.4% 47.4% 54.3% 68.0% 74.2% — — — — — — — —

Randd — — 13% 13% 13% 18% 37% 58% 68% 94% — — — — — — — — —

Sources: Defence White Paper; MND, National Security and Defence Expenditure in the IMF Era; Wolf et al., The Changing Balance: South and North Korean Capabilities for Long-Term Military Competition, pp. 45–9; Rhee, The Security Environment of Korea. Notes: a Excludes US Forces, Korea (if included, 70 per cent in 1988). b Figures in parentheses are $ billion in constant 1990 prices. c In current dollar. d In constant 1979 prices with 8 per cent/year depreciation. e ‘Reduced to 50.8 per cent in 1973’ (Defence White Paper 1988, p. 137). f Stock minus investment in 1976.

the early 1990s at $15.9 billion, or roughly 60 per cent of the total ROK stock in 1988.113 The MND apparently does not include the sophisticated intelligence and early-warning systems of the USFK in the CCC calculation, while it evaluates them very highly – again, a clear indication of the inadequacy of sheer firepower scores. To go back to the ‘total spending vs. investment’ spending argument, it should be pointed out that investment usually covers the material component of military capabilities. Although some investment in procurement, R&D and construction goes to the organisational components including C3I, the organisational capacity remains largely unexplored. Instead of directly comparing the organisational effectiveness with behavioural/historical analyses, such as a ROKA vs. KPA

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effectiveness ratio during the Korean War, we will adopt the input factor costs as the measure of organisational effectiveness. That is, the O&M (for both ‘unit’ and ‘equipment’ in the ROK definition) expenses should be added to investment spending. Or, it can be said that O&M is an investment in ‘organisational capital’. A better equation would be to generate an O&M effectiveness multiplier such as the ratio of O&M(SK)t/Stock(SK) over O&M(NK)t/Stock(NK)t.114 It was pointed t out that the KPA has been very low in this O&M/Stock ratio. However, the MND also complains about the recent decline in the O&M/Stock ratio of the ROK armed forces,115 which is another clear indication of unbalanced investment in hardware. The lack of data, however, renders the better equation inapplicable. The final question, then, would be how to treat the expenses for ‘personnel’. The cost of an average ROK soldier is almost equivalent to per capita GNP in the 1990s.116 It is around three times the cost of the average KPA soldier (if we accept the MND’s 2:1 ratio as the ratio of total, not persoldier, personnel expenses and about 1.5:1 manpower superiority of the North). Can we say that a ROKA soldier would fight three times as much as his brother across the DMZ? Yes and no. Common sense would dictate a definite ‘no’ on a one-for-one basis. Napoleon Bonaparte implied a ‘yes’ when he reportedly said that ‘the moral is to the physical as three is to one’. A military historian quotes some Israeli and Arab sources to the effect that the relative organisational ineffectiveness of the Arab forces is due to ‘cultural’ factors.117 However, the two average Korean soldiers in question do share the same culture, albeit with quite different ideologies. Still the answer may be a yes if we consider the overall ‘productivity’ of ROK soldiers taking into account the so-called ‘spatiotemporal parameters’ or ‘system residual’ effect118 – that is how we calculate ‘labour productivity’. For those who do not believe in the effect of economic, technological and managerial development, both the cumulative ‘total’ DE and the cumulative ‘total DE minus personnel costs’ will be used. However, there is no doubt that an army heavily engaged in civilian economic activities and the production of a considerable portion of its own food, even in the forward deployed troops, would fight much less effectively than it should. ‘[A]ny nation that can’t feed the soldiers guarding its very border is, indeed, in serious trouble.’119 The methodological issue in a technical sense is mainly related to the ‘reliability’ of DE data. We will discuss it in the following section. Data and measurement Defence expenditures of the two Koreas do vary by a considerable margin from one source to another. The problem with the ROK military expenditure is the intentional exclusion of US aid by the official ROK sources that exceeded its military budget at least until 1970. However, the efforts of Lee, Ha and Hamm, for instance, made it possible to identify the ‘total’ ROK defence expenditure.120 Another minor problem still exists, namely, the artificial exchange rates of the ROK Won currency,

58 On military capabilities: facts and methods of assessment especially in the 1950s. However, this can be converted using the adjusted exchange rate adopted by the Bank of Korea (BOK) or the International Monetary Fund. The DPRK military expenditure data should be examined more carefully. There exist at least five official or semi-official sets of data for DPRK military expenditure: 1 2 3 4 5

the official DPRK ‘national defence budget’ expressed as a percentage of its total government budget each year; the ROK government’s, i.e. the National Unification Board (NUB), the MND and, occasionally, the KCIA–NSPA estimates; estimates by the US ACDA, sometimes supplemented by the Pentagon and the CIA; the International Institute of Strategic Studies (IISS) estimates; and the Stockholm International Peace Research Institute (SIPRI) estimates.

The problem is, of course, that most Pyongyang watchers do not believe in the official DPRK defence budget figures. Like their comrades in Moscow, those in Pyongyang concealed a large amount of defence spendings before 1967: the original ‘national security budget’ (minjok-bowibi) in 1960 was 3.1 per cent of total government budget and 2.6–12.0 per cent in 1961–66, while it was later admitted to be 19.0 per cent and 19.8 per cent, respectively.121 Whether or how much Pyongyang concealed its defence spending after the 1967–71 peak of 30.9 per cent is anyone’s guess. The official ROK–US position is that a considerable amount of hidden spending exists; those who are more sympathetic to the DPRK accept the official budget figures, while others maintain intermediate or ambivalent positions.122 We need to carefully examine the four remaining estimates of the DPRK defence expenditures. It would be more convenient to begin with the two semi-official estimates. Both the IISS and the SIPRI data have included the DPRK defence expenditures in their well-known annual reports covering the period from the 1960s. The SIPRI estimated DPRK defence spending for 1961–66/67 (the IISS did not provide any figures) but then both have used the official DPRK budget as their estimates thereafter.123 However, the exact figures vary somewhat as they used budget ‘plan’ or ‘outlays’ interchangeably. Another discrepancy arises from the exchange rate: the DPRK have used the ‘basic rate’, which values its won 2–2.2 times higher than the ‘commercial/trade rate’. The IISS adopted the commercial/trade rate before the 1985–86 report, the basic rate since then to the 1991–92 edition, and then again the ‘commercial rate’ and the trade rate that replaced it since 1971.124 Then it began to provide estimates of North Korean DE that are quite close to the ROK and US estimates, instead of accepting the DPRK source.125 The 20-year (after the 1980 report, 10-year) series of the SIPRI annual publications report the official DPRK budget data from 1967 on and retroactively estimated the 1960–66 period by a

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Table 3.2 Estimated DPRK defence expenditures by the ACDA (Unit: Current $ billion) Series Year

I

1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

0.280 0.300 0.350 0.350 0.470 0.610 0.615 0.700 0.750 0.500 0.625 0.700 — — — — — — — — — — — — — — — — — — — — —

II — — — — — 0.587 0.617 0.576 0.757 1.025 0.625 1.368 1.800 2.002 2.112 — — — — — — — — — — — — — — — — — —

III — — — — — — — 0.576 0.757 1.025 1.084 1.368 1.243c 1.305 1.253 1.310 1.315 1.30 — — — — — — — — — — — — — — —

IV — — — — — — — — — 1.03 1.08 1.37 1.08 1.31 1.25 1.31 1.32 3.0E 3.24E 3.5E 3.6E — — — — — — — — — — — —

Va — — — — — — — — — — — 1.37 2.0 2.2 2.5 2.8 3.2 3.5 4.2 4.6 4.9 5.2 5.4 5.6 5.9 — — — — — — — —

VIb — — — — — — — — — — — — — — — 4.04 4.18 4.38 4.54 4.70 4.88 5.06 5.26 5.44 5.64 5.84 6.00 5.94 4.66 5.50 5.30 5.50 6.00

Sources: Series I: WMEAT 1963–73; 1965–74; 1966–75; Series II: WMEAT 1967–76; 1968– 77; 1969–78; Series III: WMEAT 1970–79; 1971–80; Series IV: WMEAT 1972–82; 1985; Series V: WMEAT 1986; 1987; 1988; Series VI: WMEAT 1990; 1991–92; 1993–94; 1995; 1996. Notes: a Rough estimates. b Rough estimates based on 20 per cent of GNP (25 per cent in 1992–). c $1.8 billion in WMEAT 1971–80.

60 On military capabilities: facts and methods of assessment simple extrapolation. Like the IISS, it adopted the trade rate except for the 1975, 1976, 1982, 1983 and 1984 editions. Consequently, both IISS (before 1992) and SIPRI data yield similar figures for the North Korean defence burden. This is not so in the ACDA data set that provides a 10- or 11-year series of worldwide defence expenditures in current and constant dollars. It also provides the size of armed forces and arms trade as well as GNP, population and (sometimes) central government expenditures (CGE) in annual World Military Expenditures and Arms Transfers (WMEAT). First of all, the current and constant DE, GNP and CGE of the DPRK are so unstable that we cannot generate a consistent time-series data set. The revision of the GNP of both Koreas is plausible as many governments make update revisions to their national account statistics, but in general the ACDA data set is quite unreliable (see Table 3.2). It is evident that Series I (reports up to December 1976) uses the official DPRK defence budget for the 1967–74 period with commercial/trade rates and also extrapolates back to 1963. The ‘defence budget cut’ in 1972 is clearly visible. Series II, prepared after the new, upward assessment of the KPA strength by the US intelligence community in 1978–79, does not accept the 1972 budget cut. It is generally within the 15–20 per cent range of the GNP suggested by a 1978 CIA report that was repeated in many congressional hearings and reports.126 Considering CGE in dollars, the trade rate is still applied to the purchasing power parity (PPP) of the North Korean won. Series III differs from Series II in the 1975–80 period in that it is much lower in absolute amount or in DE/GNP ratio (8–13 per cent). Series IV, prepared in 1984 and 1985, is identical to Series III except for the period since 1980 when there is a big jump from $1.3 billion in the former series to $3.0 billion. Both Series III and IV adopt a PPP somewhat higher than the trade rate, if we compare the official DPRK budget with the reported CGE in US dollars. Series V makes another upward revision and retroactively applied it back to 1975. The numbers have only two digits, which, considering the fact that CGE is no longer quoted, casts further doubt on reliability. Still, the GNP is shown in both current and constant dollars, and DE is in the 22–3 per cent range. Series VI, that begins with the 1989 edition (published in October 1990), makes still another upward revision for the 1978–81 period, implying the renewed emphasis on the North Korean ‘threat’ in the ebb of the Cold War. It simply estimates DE at 20 per cent of GNP for the 1978–91 period (25 per cent for 1992) without providing CGE data. Another remarkable point is that it shows, for the first time, a slow but steady decline in the GNP (in constant dollars) since 1988, with which many Western observers agree. In general, however, the ACDA data set is too inconsistent and unstable for us to adopt as a main source. The 1986, 1987, and 1988 editions, each covering the 1974–84, 1975–85, and 1977–87 periods respectively, show that the North spent more DE than the South during the entire period covered. The 1989 and 1990 editions do the same for the period up to 1981. This is in stark contrast to the official position of the ROK, which has every reason not to underestimate the

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‘North Korean threat’, that Seoul began to outspend Pyongyang in 1976. However, we have to accept the ACDA data for the DPRK arms trade simply because it is the only one available that covers an extended period. For the ROK arms imports, especially in US military aid and FMS credits, the US Defense Security Assistance Agency (DSAA) data are the most accurate.128 For the two ‘official’ data from the two governments on the Korean Peninsula, much has been said in the beginning of this section. To repeat, each contains more than a grain of truth, but in the final analysis each has its own inconsistencies and biases. The DPRK source underreports, while the ROK authorities including the NUB, MND, KCIA-NSPA, and recently, the BOK tend to overestimate (however, the ROK estimation is far superior to others in terms of consistency). One should carefully examine the DPRK population, national account, defence budget, military manpower, and foreign military aid in order to generate a more solid estimate of its DE. 127

Conclusion In this chapter, we have reached several conclusions. First, ‘forces-in-being’ does not faithfully reflect the military capabilities of the two Koreas since they do not include mobilisation. This is also true even in the case of some KPA success in a surprise attack. Second, the ‘bean-counting’ methodology or its derivative firepower scores, such as the ADE or the DEF by the US Army or the CCC by the ROK MND/ KIDA, does not fully represent the capabilities of forces-in-being. Qualitative factors of weapons, organisational effectiveness and manpower as well as some related quantitative dimensions (ammunition delivered, ship-days, aircraft sorties, etc.) are not included. Third, cumulative defence expenditures are the best single measure of the ‘actual’ military capabilities as they represent the human, material and organisational components in terms of factor costs. It may be argued that ‘the dollar cost of weapon systems in the South are higher because these systems embody more costly US technology, and so (not necessarily) represent higher military effectiveness.’129 Our survey reveals that there exists more than a necessary correlation. The Soviet-type weapons of the KPA are definitely inferior to the ROK’s in quality (both performance and reliability) and overall cost-effectiveness. It should be emphasised that the ROK could have achieved much better beancounting ratios ‘if it opted for less expensive weapon systems that could still match or outperform those of the North’.130 Fourth, the official ROK and DPRK ‘defence budgets’ (and ROK–US estimates thereof) are not reliable measures of real defence expenditures as they omit US aid to the South and have some hidden spendings of the North. Here, we are faced with a dual task of ‘data-making’ and ‘data analysis’. The following two chapters try to find a way to muddle through, if not a solution.

4

Conflict and militarisation on the Korean Peninsula

In this chapter, we will describe the history of arms buildups of the two sides in terms of major shifts in policies and strategies as well as the trends in manpower and equipment. In addition, we will try to find out whether the arms buildups on both sides of the DMZ have been conducted on a competitive or mutually responding fashion – in other words, an ‘arms race’. Surely, the arms race is the official explanation given by both parties of the inter-Korean conflict. We will discuss the two issues in a series of distinct periods. Since a good explanation is first of all a good description, we will let the facts speak for themselves first; more rigorous quantitative analyses will be carried out in the next chapters. Although arms buildups during war are not usually classified as an ‘arms race,’ military buildups in the Korean War are to be carefully examined since they constituted the basis of the postwar buildups. The Korean War period The outbreak of the Korean War represented a forceful effort for the reunification of a nation divided by the US and the Soviet Union on the part of North Korea. The North commanded military superiority over the South due to its more successful state-building and economic growth during the post-liberation period (1945–50). South Korean leaders also cherished their own version of military solution, Bukjin (March to North), but they had neither the ability nor a well-prepared plan to do so. Yet there were numerous ‘border clashes’ along the 38th Parallel and guerrilla struggles in South Korea in 1948–49. As a well-known revisionist historian on the Korean conflict puts it, the war was a ‘civil war’ – ‘[W]ho started the Korean War is the wrong question. . . . No one cares anymore that the South fired first on Fort Sumter; they may still care about slavery or the union.’1 Nevertheless, it soon became an ‘international war’ with the US (and other members of the United Nations Forces) and Chinese intervention. We will first address the military expansion of the leader in the prewar ‘race,’ the DPRK. Numerous ‘self-defence forces’ or ‘red guards’, voluntarily organised after

Conflict and militarisation on the Korean Peninsula 63

the liberation, were dissolved by the Soviet occupation forces on 21 October 1945. Instead, the North organised the centrally controlled ‘Security Forces’, from which the military forces grew. The North Korean Interim People’s Committee (NKIPC) established ‘Security Cadres Training Centres’ and the General Headquarters of Security Cadres Training on 15 August 1946. These organisations were under the control of the Department of Public Security, NKIPC. The cadres were recruited from the Pyongyang Academy as well as the anti-Japanese partisans under the leadership of Kim Il Sung; the rank-and-file were from the Railway Constabulary. They were trained and equipped by the Soviets. On 8 February 1948, before the formal establishment of the government, the North Korean ‘People’s Committee’ announced the establishment of the ‘Korean People’s Army’ (KPA) which comprised two rifle divisions and one combined arms brigade. From July 1948, North Korea began to expand the KPA by enlarging conscription, as the Soviet occupation troops began to withdraw. Also, the Korean Volunteer Army (KVA), who had fought in the Chinese Civil War, returned to North Korea.2 In terms of regular troops, the KPA maintained about 135,000-men strong ground forces, whereas South Korea had about 98,000 in June 1950. The KPA deployed in the front seven infantry divisions, from the 1st to the 7th (12th), one armoured brigade, one independent regiment, another independent regiment-sized special operation unit, and one border-constabulary (BC) brigade on June 25. Then, it added one full-strength and two half-strength recently activated divisions (the 10th, 13th and 15th divisions) immediately after the all-out attack. Three new divisions were hastily organised (the 7th, 8th, and 9th) out of the several BC brigades.3 On the other hand, South Korea deployed four divisions at the front along the 38th Parallel and four divisions including the Capital Division in the rear. Overall, in terms of size and composition of military forces, the 98,000-men strong Republic of Korea Army (ROKA) was definitely inferior to the KPA. Each of the four rear echelon divisions and one frontal division possessed only two regiments instead of three. Also, the KPA held an overwhelming advantage over the ROKA in equipment such as artillery, automatic weapons, aircraft, and the ‘invincible’ tanks (Soviet-made T-34s, arguably the best World War II tank). The ROKA had no tanks, heavy artillery, combat aircraft or other heavy equipment. It had neither effective anti-tank tactics nor anti-tank weapons including the simple but quite effective anti-tank mines. Americans planned the ROKA as the National Constabulary, or a police reserve force like that of the Philippines; its T/0 was 6 instead of 8 divisions and nearly 100,000 men were equipped with weapons for 65,000 strong forces.4 Furthermore, the ROK lacked training higher than the battalion level; their commanders did not have enough combat experience, either.5 Among Seoul’s top brass, those who had the background of the Korean Kwangbok (Independence) Army usually lacked experience as professional soldiers. As they did in their choice of South Korean leaders and government officials who lacked credentials as patriots,

64 Conflict and militarisation on the Korean Peninsula Americans preferred in the process of building the ROKA, the younger, Japanesetrained officers and the so-called ‘student soldiers’ who had more proper military training or English language skills. In addition, after the establishment of the Republic in 1948, President Syngman Rhee intentionally favoured younger officers with previous experience in the Imperial Japanese Army or the puppet Manchukuo Army who consequently had a weak political background in Korea.6 For instance, when the Korean War broke out, the ROKA Chief of Staff, Lieutenant General Chae Byong-Dok, had been a major of the Imperial Japanese Army and his successor, Chong Il-Kwon, had been a captain of the Manchu Army. Consequently, experienced senior military officers such as Kim Hong-Il (former division commander in the Chinese Nationalist Army), Yoo Sung-Ryol or Kim Sok-Won (colonels of the Imperial Japanese Army) did not have an influential post within the ROKA. By contrast, the leaders of the KPA commanded more war experience, for they had participated in the anti-Japanese guerrilla warfare in Manchuria or the Chinese Civil War. More than three divisions or half of its rank-and-file soldiers of the seven assault divisions were veterans of the Chinese Civil War.7 Moreover, reportedly up to 10,000 men including the ‘Soviet Koreans’ received some military training in the Soviet Union. In addition, they believed in the cause of the war based upon proletarian internationalism as well as patriotism. In short, ‘the ROKA was in an inferior position by a wide margin to the KPA not only in terms of human and material capacity but also in organizational capacity like experience, training and morale.’8 The early defeat of the ROKA at the critical Euijongbu corridor, the main axis of the KPA attack, was a clear indication of poor planning, coordination, and leadership. As the war progressed, both the South and the North Korean armies faced setbacks respectively: early defeat of the ROKA in June; and the Inchon landing operation by the US–ROK forces in September for the North. About 44,000 men of the ROKA were killed, captured or missing in the first five days of war; it also lost an ‘estimated 70 per cent of its supplies and equipment’.9 Only the ROKA 6th and 8th divisions in the mountainous eastern area withdrew with their troops and equipment intact, inflicting heavy damage on the advancing KPA forces. As of 1 September, 1950, when the war reached a stalemate along the Naktong river, the KPA maintained 13–14 half-sized divisions (98,000: one-third of them were the ‘volunteers’ from the ‘liberated’ South) at the war front, although it suffered heavy casualties. However, it declined to 70,000 in mid-September after the failure of its final offensive, and only 25,000–30,000 forces could retreat northward after the Inchon landing operation by the UN forces. However, thanks to the intervention of the Chinese PLA, the KPA recovered its organisational vitality and its total forces reached 210,000 (July 1951), and 260,000 (May 1952).10 Both sides were able to obtain massive aid from their respective allies. Their military strength grew stronger than the prewar level. After the Chinese People’s Liberation Army (PLA) intervened

Conflict and militarisation on the Korean Peninsula 65 Table 4.1 Ground forces on May 1, 1951 (Unit: 1,000 men) UN forces

KPA–PLA

ROKA USA and others

234.99–251.92 (230) 269.77 (460)

KPA PLA

197 (340) 542 (770)

Total

504.8–521.7

Total

739 (1,110)

(690)

Source: Schnabel, United States Army in the Korean War: Policy and Directions; China Today, War to Resist US Aggression and Aid Korea. Note: Figures in parentheses are from Chinese sources, including rear area support troops and other (air and naval) units.

in October 1950 in the guise of the so-called ‘Anti-American Volunteers’, the US forces and the Chinese PLA replaced the two Korean armies as the major belligerents in the war. As of 1 May 1951, when the KPA– PLA allied army attempted the fifth major offensive of the PLA, the strength of both sides can be summarised in Table 4.1.11 Meanwhile, the South Korean government requested that the United States expand the ROK army from 10 divisions up to 20 on several occasions. However, the requests were repeatedly rejected because military decision-makers in Washington, including the Joint Chiefs of Staff and field commanders in the Far East, such as Douglas MacArthur and his successor Matthew Ridgway, saw that the current manpower level was appropriate.12 Contrary to the Koreans, they believed that the ROKA should not focus on quantitative expansion but on qualitative improvement in its organisational capacity, especially training and leadership. However, their position changed after the war came to a stalemate along the front, which was not greatly altered for the next two years, and a war of attrition persisted after June 1951. Faced with this situation, US military planners came to see that the expansion of the ROKA would replace or at least supplement the US ground troops. As a result, Ridgway allowed the expansion of the ROKA manpower while maintaining the 10-division ceiling. His successor General Mark Clark and General Van Fleet (the 8th Army commander), and General Lawton Collins, Army Chief of Staff, acknowledged the need for the ROKA expansion. Thus, they began to prepare a plan to expand the ROKA up to 20 divisions based on the calculation that every two ROKA divisions would replace one US division.13 The expansion plan concentrated on infantry troops while ignoring the navy and air force, as the postwar South Korean economy was estimated as being unable to maintain them; the US navy and air force would have to intervene anyway in case of emergency. It was concluded that maintaining a token level of the ROK navy and air force would be enough. Based on this expansion plan, the manpower of the ROKA in 1952–53 doubled, reaching 591,000 troops (including KATUSA and new recruits) in 16 divisions (plus four more divisions forthcoming) and one

66 Conflict and militarisation on the Korean Peninsula fighter wing of the propeller-driven P-51 (Mustang) fighters. Five divisions could maintain regular-size artillery units, each with three 105mm howitzer battalions and one 155mm howitzer battalion. In addition, nine tank companies (22 M-36 tanks each) were added.14 On the other hand, the KPA also expanded its force level with aid from China and the Soviet Union, building seven hastily organised corps by January 1951. However, each corps comprised three divisions with only 3,000–8,000 men each. In May 1951, Bang Ho-San’s V Corps and Choe Hyon’s II Corps crushed the ROKA III Corps in the so-called ‘Hyonri Campaign’. These two corps were estimated by South Koreans and Americans alike as having better combat capability than the PLA forces.15 However, the reconstructed KPA was, like its Southern counterpart, an improvised army. It was mainly composed of new recruits with a few veterans as cadres; each corps was composed of one or two veteran division(s) and one or two newly activated division(s). Furthermore, North Korea had difficulty in building up military manpower since it suffered an abrupt drop in its population. The manpower shortage was due to the ‘horrendous losses among the cadres’, refugees to the South, and the emergency projects in the rear such as the reconstruction of railroad and communication networks and digging underground shelters; the number of KPA corps deployed in the front decreased from four in 1951 to two in the second half of 1952, since ‘the PLA relegated them to a relatively inactive role as a general reserve . . .’.16 The rest of the KPA focused on reorganisation, training and preparation for possible landing operations of the enemy in the rear (see Table 4.2). As the war progressed, the ROKA, which had been inferior in the beginning, seemed to achieve a numerical balance a year later and then gained superiority

Table 4.2 ROKA–KPA manpower in the Korean War ROK Forces Manpower 25 May 1950 10 Oct. 1950 30 Apr. 1951 30 June 1951 31 Dec. 1951 30 Apr. 1952 30 June 1952 1 Nov. 1952 30 Mar. 1953 31 July 1953

95,000 — 235,000–252,000 273,000 282,000 341,000 376,000 463,000 537,000 591,000

KPA Division 4+4 5+5 10 10 10 10+ 10+ 12+ 14+ 16+

Manpower 135,000 — 197,000 211,000 225,000 — — 190,000 260,000 260,000–275,000

Division 8 + 2 div. — 7 corps 7 corps — — — 6 corps 6 corps 6 corps

Source: Schnabel, United States Army in the Korean War: Policy and Directions; Hermes, US Army in the Korean War: Truce Tend and Fighting Front.

Conflict and militarisation on the Korean Peninsula 67

over the improvised KPA. However, as the PLA mauled the ROKA at the central front in the last months of the war, it turned out that the ROKA was not strong enough to defend itself against massive manoeuvre operations of the disciplined PLA. Although they were not as disorganised as they had been in the winter and spring of 1950–51, it was pointed out by American advisers that South Koreans lacked the ability to cope with emergency situations.17 When President Rhee showed reluctance for a truce negotiation and insisted on a ‘March to the North’ for reunification, it was in fact political rhetoric with the aim of attaining a Mutual Defence Treaty with the United States, economic and military aid, and support for the reunification proposal of the Republic of Korea. The investment in, as well as the maintenance of, the rapidly expanded ROKA was largely dependent upon weapons, equipment, and supplies from the United States; all that South Korea could do was to provide sheer manpower. Actually, the US spent $1,655 million on the ROKA alone in FY 1953, the last year of the war, while the ROK defence budget spending was only $120 million in 1953.18 Postwar buildups and consolidation Even after the war ended, both South and North Korea continued their military buildups irrespective of the Armistice agreement. On the one hand, Washington transferred an immense amount of equipment to South Korea in order to make the ROK forces take on more responsibility. Although it maintained that ten divisions of about 200,000–250,000 forces were at the proper level, the United States helped to expand the ROKA up to its upper limit of 20 divisions of 650,000 men for several years after the Armistice. As a result, the ROK expanded its forces to 18 divisions by the end of 1953, and to 20 divisions in 1954. In this buildup process, the proposal by the Rhee government to further expand the ROKA up to 35–40 divisions and to send ROKA troops to Laos was declined. Instead, it was agreed that the ROK would add ten reserve divisions.19 The upper limits for the Korean armed forces prescribed in FY 1954 and FY 1955 are summarised in Table 4.3. In 1955, the ROK forces were comprised of 720,000 men including a 660,000-man strong army in 20 active divisions and 10 reserve (skeleton) divisions. This was Table 4.3 Upper limits of the ROK forces FY1954 Army Navy Marine Corps Air Force Total

655,000 15,000 23,500 9,000 702,500

FY1955 (20 divisions) (83 crafts) (1 brigade +) (1 wing)

Source: FRUS 1952–54, Vol. 15 (Korea), Part 2.

661,000 15,000 27,500 16,500 720,000

(20 divisions)

68 Conflict and militarisation on the Korean Peninsula largely due to massive US military aid. Americans provided $500 million in FY 1954 and $420 million in FY 1955 in Defense Department direct expenses, not in the Military Assistance Program.20 But military planners in Washington estimated that the annual South Korean military expenditure for peacetime would be about $1 billion, funded by US military aid of $400 million and $600 million from the ROK government budget, an overburden for the Korean economy. However, the US did not map out a detailed economic reconstruction plan for the ROK except for a scheme to recover the Korean economy to prewar level for the economic basis of its armed forces.21 After the war, economic aid to South Korea was largely composed of consumer goods under the name of ‘defence support’. Another major form of aid was ‘direct military support’ which came from the sales of surplus agricultural products provided under the Public Law 480 programme.22 Yet neither the ROK government nor the US spent $1 billion annually, the projected level for the ROK military expenditures. However, the US came to see the expansion of the ROKA as more economical since the Korean army could replace US ground troops and cost much less than expected. According to the report (15 June 1953) by Henry Tasca, who visited Korea to investigate the economic situation, the Pentagon could save $100 million by replacing one division with a Korean one. Also, Tasca wrote that maintaining 100,000 forces of the US army cost $375 million in salaries and other personnel expenses, while the same number of Koreans would cost 1/8 that amount. Likewise, a report in 1954 pointed out that if the US withdrew one division, it could finance five ROKA divisions.23 In a word, the United States and South Korea established a ‘military division of labour’ combining US capital and Korean labour during the war and the following 20 years until the early 1970s. However, Washington found it increasingly difficult to sustain its own massive military aid to South Korea’s 720,000 strong armed forces. In addition, Americans were concerned about the possibility that Korea would demand more military aid as its army expanded and that the Rhee government might commit military action on its own against the North with the expanded army.24 Furthermore, there was another reason for the United States to oppose further expansion of the ROKA. According to its intelligence sources, the enemy concentrated on reconstruction projects rather than military buildups and one-half of the PLA forces in North Korea withdrew back to China within a year after the Armistice. Thus, the US concluded that it was enough to maintain minimal organisation and equipment for the ROKA on an economical basis. Especially, strongly concerned with possible military action by Korea on its own, General Maxwell Taylor, the Eighth Army Commander, once wrote in a briefing (9 June 1954, Top Secret) that: ‘The ROK Army is being kept on the lowest possible level. This means 6 or 7 days of supplies.’ This secret record contained significant information about the situation of the ROK armed forces at that time.25

Conflict and militarisation on the Korean Peninsula 69

• • • • • •

The ROK maintains 18 divisions (14,000 men for each) and a manpower ceiling of 650,000 as of today and two more divisions in training will be activated by the end of this fall. The air force programme is ‘way behind’. Presently, the ROK Air Force is ‘totally inadequate’. It will take ‘from 3 to 4 years’ to modernise it with jet aircraft. But, ‘if faced by the North Korean army alone, the ROK Army would prevail’, even taking into account the ‘present ROK air inferiority’. Ultimately, General Taylor envisages that the size of the ROK Army is about 200,000–250,000 men plus 800,000–900,000 in reserve, to which General John Hull, Commander in Chief of the UNC concurred. President Rhee, on the other hand, suggests a 35-division force. Training of the ROK armed forces focuses on technologies and logistics and it needs guidance and help from US military advisers. ‘[T]he real deterrent’ lies not in the UN army in Korea but in ‘our determination’ to defend the ROK. Thus, if one army corps of UN army stay in Korea, it would become ‘a hostage to President Rhee’.

Like South Korea, North Korea endeavoured to expand its military strength after the Korean War. First, the DPRK introduced MIG-15 Jet fighters from China immediately after the Armistice.26 The DPRK effort to enhance its air force was largely due to the fact that it suffered a great deal from enemy air raids during the war. In other words, China and the Soviet Union focused their efforts to help North Korea to build its own ground and air capabilities in order to minimise their direct involvement and to leave matters to the North Koreans in the future. On the other hand, the US concentrated on strengthening the ROK ground troops. By July 1954, 8 out of 19 PLA armies withdrew – one army included about 30,000 troops, the equivalent to a KPA corps – while KPA ground forces were expanded from six to seven corps. But it was estimated that, thanks to the substantial expansion during the war, the UN side outnumbered its opposite.27 Meanwhile, North Korea increased its troop strength from 275,000– 310,000 men to 410,000–420,000 by 1955. However it pronounced in 1956 the reduction of 80,000 troops, probably due to the shortage of civilian labour force and the extension of the PLA force presence.28 The amount of military aid from China and the Soviet Union, although substantial, was not comparable to the massive US aid to the ROK. The Soviet Union provided economic aid of one billion roubles ($250 million) during 1954–55; China offered 300 million Chinese yuan ($120 million) in 1954 and 500 million yuan ($200 million) during 1955–57 and provided reimbursement for the payment of goods and services incurred during the war.29 While it is not clear whether military aid was included in the DPRK total government budget (TGE), it listed considerable unexplained items in addition to its minjok bowibi (national security expenditure) 1953 and 1954. We have estimated the DPRK defence budget spending ($760 million) and military aid ($670 million) during 1954–59 (Table 5.3). Anyhow, the reduction of manpower in

70 Conflict and militarisation on the Korean Peninsula 1956 and the record of arms imports from China and the Soviet Union implied that military buildup in North Korea decreased significantly during the mid-1950s. Although SIPRI data show that China provided hundreds of MIG-15s and MIG17s (J-5 in China) and some IL-28(H-5) light bombers from 1958 to the early 1960s, the Soviet Union did not, however, provide a significant amount of military aid.30 In short, the military buildup in North Korea till the early 1960s focused on air force/ air defence rather than ground troops. Even faced with the final withdrawal of the PLA (250,000 men in 15 divisions and supporting troops) in 1958,31 North Korea did not expand its ground troops. The DPRK reaction involved the organisation of a militia organisation, the ‘Workers–Farmers Red Guards,’ in January 1959. The organisation of Gyododae (Training and Guidance Forces, or the reserve) may have begun at this time, too. More evidence for the slow force expansion was the massive purge of the ‘Yeonan [Yanan] faction’ in the KPA, i.e. the ex-Korean Volunteer Army in the Chinese Civil War, and some Soviet Koreans in 1958–59 following the purge of ‘August Jongpa’. The KPA was overwhelmed with the issues of purges, reorganisation, reshuffling and reindoctrination rather than force buildups.32 Faced with the KPA manpower reduction and the phased withdrawals of the PLA from North Korea on one side, and the congressional budget cuts on the other, Washington urged the ROK to reduce its armed forces. The US proposed, in exchange, the modernisation of equipment during FY 1958–FY 1961. The USFK strength was reduced from the peak of over 300,000 in July 1953 to less than 70,000 men in two divisions and supporting units in 1958.33 It was at this time that the UNC confirmed the deployment of nuclear weapons in South Korea. As a result, the ROK manpower was reluctantly reduced to 630,000 at the end of 1958 with the deactivation of two army divisions (the 20th and the 22nd; the 29th division was redesignated as a new 20th division thereafter) and ‘no more than’ 600,000 at the end of 1960.34 Instead, its air force and firepower and mobility of ground troops were somewhat enhanced. Since expenses for O&M were not flexible, a reduction in military aid led to decreased investment in capital stocks. Thus, the military buildup decelerated except for the expansion of the ROK Air Force: three wings of F-86Fs and two squadrons of F-86D all-weather interceptors.35 In the meantime, Seoul’s military expenditures were mainly spent on salaries and other personnel maintenance costs, but even these spendings were largely financed by the sale of US surplus agricultural goods. In addition to the Military Assistance Program since FY 1956 (including the International Military Education and Training until 1975), US military aid was also provided in the form of excess defence articles, which was not included in the US government budget. However, from FY 1962, the total amount of military aid was reduced by the Kennedy administration as the corresponding law of Mutual Security Act (MSA) changed into the Foreign Assistance Act (FAA). The Military Assistance Services Fund(ed) during 1966–73

Conflict and militarisation on the Korean Peninsula 71

was regarded as military aid by Americans, while Koreans saw it as war expenses for ROK troops in Vietnam. The Vietnam War again confirmed the very nature of the US–ROK ‘military division of labour’. At any rate, it is noteworthy that the ROK soldiers who were severely defeated by the North Koreans and the ‘Chinese Communist barbarians’ in 1950 gained substantial strength and morale within a decade. North Korean ‘self-reliant defence’ in the 1960s It was in December of 1962 that Pyongyang turned to a significant military buildup programme. The Central Committee of the Korean Workers’ Party (KWP) held its 5th plenum on 10–14 December and after discussing ‘the issue of national defence in the changing environment’, agreed ‘to strengthen defence capabilities even delaying economic development’.36 This meeting also agreed on the agenda of jeonmin mujanghwa (arming the entire population) and jeonkukto yosaehwa (fortification of the entire country), and ‘training the whole military forces to cadres’, laying the foundation of the ‘Four Military Doctrines’. The famous clause that all party members and workers must build socialism ‘with arms in the one hand and hammer and sickle in the other hand’ was also declared. According to sources collected by South Korean governmental institutions, Kim Il Sung was alleged to emphasise that ‘even at the expense of economic development, we need to accomplish, as soon as possible, our own military strength for another namchin (invasion into the South) without the help from the Soviet Union’.37 However, it is not confirmed that he made any official announcement or report in that meeting. It was in October 1966 that Kim Il Sung officially mentioned the ‘Four Military Doctrines’ in his speech on the principles of the Juche (selfidentity and/or self-reliance) including the independence of North Korea from China and the Soviet Union. The DPRK self-defence policy in 1962 did not result from domestic political-economic pressures but from pressures from international relations.38 It was true that Pyongyang took advantage of the Sino-Soviet disputes, consolidating its political independence. For instance, North Korea came to make mutual friendship and cooperation treaties with the Soviet Union and China on 7 July 7 1961 and 11 July 1961, respectively. Both Article I of the DPRK–Soviet Union treaty and Article II of DPRK–China treaty hold that if one party was invaded, the other party should ‘provide military aid and other measures immediately by all means’. Also the second and the third articles state that each party should not act against the interests of the other party.39 However, the in-between position of North Korea kept it from obtaining any substantial economic and military aid from its allies in the period of the Sino-Soviet conflict. In the early 1960s, Pyongyang already tilted towards China. However, the Chinese economy was not healthy enough to provide North Korea with substantial economic aid due to the failure of

72 Conflict and militarisation on the Korean Peninsula the ‘Great Leap-Forward Movement’ in the late 1950s and the halt of economic and technological aid from the Soviet Union. What China could provide was only the model of economic development based upon one-nation socialism in a developing society emphasising self-reliance. The relationship between Pyongyang and Moscow, which had deteriorated since the late 1950s, was damaged severely when North Korea opened its attack on the Soviet Union and showed its support for China in 1962.40 North Korean distrust towards or criticism of the Soviet Union was intensified as Moscow took a proIndian position during the Sino-Indian border conflict in October 1962 and especially when Khrushchev became perplexed during the Cuban missile crisis. The Soviet Union retaliated by cutting economic and military aid and withdrawing the Soviet advisers from North Korea. Pyongyang sent Deputy Premier and former Minister of National Security Kim Kwang-hyop to Moscow during 29 November–5 December to ask for military aid, but the visit was not successful.41 While the halt of aid from the Soviet Union was detrimental to the North Korean economy, the impact was more fatal in the military sector as North Korea had been relying upon the Soviets for fuel, advanced weapons and spare parts. What made matters worse was that Pyongyang felt uncertain whether or not the Soviet Union would provide enough military aid even in an emergency. The DPRK did not disclose its military expenditures in absolute amount or in the share of the TGE in 1962–66. Abruptly, it revealed a huge increase in military expenditure in 1967. Pyongyang changed the title of ‘national security expenditure’ into ‘national defence expenditure‘ (= NDE) and announced that its NDE occupied more than 30 per cent of TGE that year. It is quite clear that North Korea manipulated its military budget before this period. In other words, the official defence budget during those years might include, like that of the Soviet Union before 1989, only the direct disbursement by the National Security Ministry. For instance, the announced share of the military budget was 3.1 per cent of total government budget in 1961. However, as we have discussed, the actual ratio was 19 per cent according to official sources released later. The ‘self-reliant defence’ policy led to the development of an independent military strategy. Especially, Kim Il Sung and military leaders developed a new military strategy combining guerrilla war tactics, the Chinese ‘people’s war’ doctrine, and historical lessons from the Korean War. For instance, Kim Il Sung laid the foundation for subsequent military strategy in his report to the Central Committee of the Korean Workers’ Party on 21–23 December 1950 – the so-called Byolori Conference – as he analysed the Korean War in terms of military strategy.42 In the report, Kim pointed out such problems as the shortage of ‘reserve units’, improper leadership of officers, insufficient support from ‘the rear’, and ‘inappropriate political propaganda’. More specifically, he emphasised ‘the ability to fight against the enemy with superior firepower, air force and navy’ and pointed out the problems of ‘inexperience in mountain combat and night operations under heavy air raids by the enemy’. Thus, he stressed enhancing the skill of irregular warfare. These

Conflict and militarisation on the Korean Peninsula 73

analyses were fully developed in Kim’s address, titled the ‘Five Factors of Victory’, to senior KPA officers on 4 February 1952.43 Based on this analysis, North Korean military leaders seemed to attempt the Koreanisation of Soviet military strategy, to prepare a protracted ‘defensive war’, and to request resource allocation for it, as the Soviet Union refused to provide further military aid to North Korea in late 1962. It led to the principles of ‘arming the entire people’ and ‘making the entire country fortresses’, as we discussed earlier. The Party Conference of October 1966 established the ‘Four Military Doctrines’ by formally adding ‘modernising the entire army’ to the three other principles. As of 1966, North Korea’s strategic shift from gradual military buildups, based upon import-substitution and mass mobilisation, to rapid buildups was motivated not only by internal factors (that will be discussed in Chapter 6) but external factors, including its threat perception and the resumption of aid from the Soviet Union. First, the DPRK threat perception was driven by the escalation of the Vietnam War of 1965, the normalisation of relations between South Korea and Japan, and South Korea’s economic growth. Threat perception was also inspired by the deteriorating relationship with China as the latter fell into the political turmoil of the ‘Great Proletarian Cultural Revolution’ in 1966 (Kim was criticised by the Chinese Red Guards as a ‘fat pro-capitalist’). Furthermore, Pyongyang was perplexed by the deployment of the ROK army to Vietnam. Consequently, Kim Il Sung pronounced the so-called Samdae Hyokmyong Ryokryang-ron (Theses of Three Capabilities [Stages] of Revolution) in his speech at the Ali Arham Social Science Academy of Indonesia on 14 April 1965. Specifically, he asserted the ‘construction of a bastion for revolution’ for the purpose of ‘the reunification of Korea and the victory of revolution’, emphasising ‘the construction of socialism and revolutionary initiative in the Northern part of the Republic’ more than ‘revolutionary energy in the Southern half and abroad’.44 In the report ‘Current Situation and the Task for Our Party’ on 5 October 1966, Kim Il Sung criticised ‘American imperialists’ and ‘Japanese militarism’ in relation to the Vietnam War. He did not conceal his perception of threat from the normalisation between Korea and Japan and the intensification of the Vietnam War by saying that ‘a trilateral military alliance has been formed among US imperialism, the Sato government of Japan and the South Korean puppet cliques’.45 Then, in an address titled ‘On the Construction of Socialism and Reinforcement of Our Socialist Bastion’, Kim argued: for the unification of our country and the victory of Korean revolution, it is necessary to build socialism and revolutionary energy in the northern part of the Republic. We need to promote the construction of socialism and to strengthen our revolutionary bulwark politically, economically, and militarily, by mobilizing all efforts of the party and the people. The most critical point in

74 Conflict and militarisation on the Korean Peninsula our task of revolutionary struggle is to promote economic development and military buildup simultaneously for the purpose of reorganizing socialist construction and national defence against the possible attack from the enemy. . . . We have to maximize economic development as well as to reinforce our defence capability by all means.46 The Second Party Conference in 1966 agreed on the extension of the Seven Year Plan to 1970 and confirmed the plan of modernising the armed forces. Military modernisation meant the import and production of new weapons that required advanced technology and a significant increase in military expenditure. As a result, the ratio of military expenditure in the government budget soared from an estimated average of 19.8 per cent in 1961–66 (or 23–25 per cent in 1965–66) to 30.4 per cent in 1967. The phenomenal growth rate of the TGE in 1968 (21.9 per cent) and 1970 (18.9 per cent) implied that military and economic aid from the Soviet Union might have been included.47 In the Central Committee of the Fifth Workers’ Party Congress on 2 November 1970, Kim Il Sung remarked that North Korea accomplished ‘a transition to socialist industrial country’. Then he emphasised ‘the establishment of defensive system by the entire people and the entire country’.48 In sum, the DPRK established its defence policy and military doctrine not only for regular warfare but also for irregular warfare like mountain combat, guerrilla tactics, and militia mobilisation through the principle of the ‘self-reliance principle in national defence’. In other words, it prepared for a ‘people’s war’ with an emphasis on ideological preparation. Also, considering geographic peculiarities and economic conditions, it complied with the idea of ‘self-reliance and creativity’. It was a labourintensive, economical defence policy that would mobilise civilians while maintaining a minimum force level and supplemented expensive modern weapon systems with inexpensive conventional ones. The DPRK built considerable defence industries and began the underground construction projects in the rear areas. Also, it imported a considerable quantity of modern weapons including hundreds of aircraft including MIG-21 fighters, Su-7 fighter-bombers, SA-2 missiles, W-class submarines, Osa and Komar guided missile patrol boats, FROG missiles, T-54 tanks and other armoured vehicles from the Soviet Union from 1966 to 1971. Thus, it accomplished phenomenal military buildups compared to previous years.49 In short, we can say that the DPRK changed its military strategy from a defensive one to an ‘offensive defence strategy’ including irregular warfare against the South in the 1960s – a North Korean version of ‘people’s war’. The Korean conflict 1966–69 How were the DPRK ‘irregular warfare’ campaigns or, in the US military jargon, ‘low intensity conflict’ developed and how did the ROK react? Before answering these

Conflict and militarisation on the Korean Peninsula 75

questions, a few comments on the ROK armed forces are in order. After the brief hiatus caused by the military coup d’état by Major General Park Chung Hee and the young colonels (from the 8th class of the Korean Military Academy, including Kim Jong-Pil) on 16 May 1961, the ROK armed forces were again under the tight control of the UNC. The major military concern of Washington and the military junta in Seoul was not the military threat from the North but the political instability in the South. The DPRK military capabilities before its major buildup in December 1962 were estimated at 18 rifle divisions, 1 armoured brigade, 5 reserve divisions, some 500,000 Red Guard militias, some 500 jet aircraft, and a token navy. Meanwhile, the ROK forces maintained 19 larger divisions (18 infantry and 1 marine), 10 reserve divisions, about 180–200 jet aircraft and a coastal navy with some amphibious capabilities to support marines.50 Its 600,000-men force outnumbered that of the KPA, with the highest estimate about 400,000 men. The quantity and quality of major equipment were roughly comparable, with the exception of jets, but a US air division equipped with 75 F-100 supersonic fighter-bombers (replaced by more heavily armed F-105s and, in the second half of the 1960s, F-4s), stationed in South Korea on a rotational basis, filled the air power gap. Overall, a series of secret reports to the President during the Kennedy administration admitted that the ROK military capability was superior to the DPRK’s.51 Furthermore, the US maintained two infantry divisions in the South: the 2nd infantry division was deployed along the western sector of the DMZ with the 7th behind it in a defence-in-depth formation. The USFK of more than 65,000 men and hundreds of nuclear weapons provided the ROK with a clear margin of superiority over the KPA. In fact, the ROK-US forces were not prepared against an attack by North Korea solely but against a combined KPA–PLA attack. The US military aid in 1962–64 reached its lowest level (see Table 5.1); the only notable arms transfers were the plan to provide the ROK with HAWK SAMs and F-5A/B lightweight supersonic fighters (the poor man’s F104, the standard NATO equipment) from 1965 on. A further reduction of the ROK ground troops was also being discussed.52 It was under these circumstances that the US pressed the Park government to send combat troops to Vietnam. Park reluctantly agreed to it against severe opposition in South Korea. The ROK force strength in Vietnam reached 47,000 men including two crack infantry divisions (the Capital ‘Tiger’ Division and the 9th ‘White Horse’ Division), one marine brigade (‘Blue Dragon’) and supporting units. The US funded all expenses of the Korean troops in Vietnam through Military Assistance Service Funded (MASF) in 1966–73. The US agreed to activate one ROK reserve division (the 32nd), create a new reserve division, and modernise the equipment of the ROK forces as compensatory measures for the inter-Korean military balance. Washington also suspended the MAP Transfer Program which required the ROK to be responsible for its O&M expenses.53 That is, the ROK combat troops in Vietnam guaranteed the continued US military and economic

76 Conflict and militarisation on the Korean Peninsula grant aid as well as troop presence in Korea – again, a telling testimony of the military division of labour between US capital and Korean labour. The ROK soldiers in Vietnam fought well, albeit with heavy casualties: 3,844 killed in action, 3,344 wounded in action, and 3,738 non-combatant casualties.54 After ‘they obliterated the Vietcong’s 18th Division’, at Na Trang during the Tet Offensive in early 1968, ‘Communist forces began to avoid contact with the Koreans’.55 Of course, the ROKA had its own problems and weaknesses: the operations were too limited in scale, methodical – with a heavy reliance on Field Manuals – and oriented towards positional defence, lacking flexibility, manoeuvrability and initiatives.56 As early as 1964, the US advisers in Korea began to turn over routine training and planning to the ROK forces, yet they were not quite ready to carry out operations for themselves. If things went according to the field manual, the ROKA excelled; if not, its operations left much to be desired. The ROK forces were also criticised for harsh disciplinary measures inherited from the Imperial Japanese Army and, in Vietnam, atrocities against civilians. Yet ‘[i]t is doubtful . . . that this aspect of Korean conduct was appreciably worse than that of other combatants of either side.’57 However, most Americans rated very highly the leadership of junior officers and discipline and high morale of rank-and-file. Meanwhile, the KPA modernisation in 1963–66 showed results: 20 active divisions (16 rifle, 3 motorised rifle and 1 tank), 10 reserve divisions, and several separate brigades/regiments including some 3,000 special operations forces (especially the 17th Foot Reconnaissance Brigade), organised in 7 corps as of November 1966. The KPA air force began to receive MIG-21 fighters from the Soviet Union in 1965. If fully mobilised, the KPA could have deployed about 34 division equivalents against the fully mobilised ROK–US forces of 30 division equivalents (18 ROKA, 2 USA and 10 ROKA reserve divisions, excluding the ROK forces in Vietnam).58 To mobilise and fully equip its 10 reserve divisions, the ROKA would have waited for the arrival of equipment from the US, thereby causing inferiority in the number of division equivalents in case of an all-out attack by the KPA. Yet KPA manpower and equipment could not have sustained the 34 division equivalents, either. North Korea ‘could not reasonably expect to succeed in a risky blitzkrieg. . . [s]omething had to be done to undermine ROK strengths in favor of the DPRK.’59 The newly emergent KPA military doctrine of ‘the combined regular and irregular warfare’ promised a solution, namely, commando/guerrilla operations. Kim Il Sung and his partisan generals might have seen a window of opportunity: the US was bogged down in Vietnam and some 47,000 ROKA troops were in Vietnam, too. By late 1966, the KPA Reconnaissance Bureau under the supervision of the Party Liaison Department (in charge of the ‘southern affairs’) assumed the leading role in its unconventional warfare. In line with the ‘three capabilities [stages] of revolution’ envisaged by Kim Il Sung in 1965, the DPRK tried to ‘strengthen the revolutionary capability in the southern half’, or at least to explore that capability.

Conflict and militarisation on the Korean Peninsula 77 Table 4.4 KPA Unconventional operations, 1966–69 Category Infiltration KPA casualties Killed Defected/captured Agents seized ROK–US casualties Killed Wounded Captured

1966 37 13 17/1 205 35 (6) 29 (1) 0

1967 444

1968

1969

46

67

126 10/4 787

233 5/4 1,245

25 1/3 225

131 (16) 294 (51) 0

162 (17) 294 (54) 82 (82)a

46 (36b) 44 (5) 3 (3)

Source: Bolger, Scenes from an Unfinished War. Notes: a Crew of the USS Pueblo, an electronic intelligence ship, captured off the coast of Wonsan on 23 January 1968. b Includes 31 crew killed when an EC-121M electronic intelligence aircraft was shot down by the KPAF on 15 April 1969.

North Korean leaders must have been deeply impressed by the success of the Cuban revolution and guerrilla struggles in Vietnam.60 As a US Congressional report put it, ‘the ultimate aim of these operations [was] to create as much trouble as possible in South Korea, including difficulties in our [US] relationships with the South Koreans.’61 Beginning in 1964, the KPA infiltrators caused a number of skirmishes at the DMZ with the ROKA; frustrated ROKA troops conducted a cross-border retaliatory raid without seeking UNC approval in late October 1966. The KPA, in return, took action against the Americans during President Johnson’s visit to Seoul in the early morning of 2 November killing six GIs and one KATUSA. The KPA infiltration/ guerrilla operations escalated thereafter (see Table 4.4). On 12 April 1967, the ROK units fired artillery rounds across the DMZ in response to a large KPA probe, for the first time since the Armistice in 1953. The ROKA used artillery and mortar fire only three times in 1966–69; the KPA ‘seldom fired their own tubes unless covering the withdrawal of an agent team in contact’.62 The ROK–US side began to install multi-layered barriers along the DMZ, organised some 100 Combat Police companies and created 8–10 new ROKA counter-guerrilla battalions. However, the KPA Reconnaissance Bureau commenced a crash programme to create an elite, Spetsnaz-type troop in 1967 in addition to the Raydoviki (or Ranger)type Light Infantry units and the Vysotniki (or Special Forces)-type 17th Foot Reconnaissance Brigade. The all-officer 124th (and the shadowy 283rd) Army Unit became famous after a nearly successful raid on the ROK presidential mansion on 21 January 1968.63 A 31-man team of the 124th Army Unit was ordered by Lieutenant General Kim Jeong-tae, the KPA Reconnaissance Bureau chief, ‘to go to Seoul and

78 Conflict and militarisation on the Korean Peninsula cut off the head of Park Chung Hee’.64 Two days later, the USS Pueblo, a signal intelligence ship, was captured by the North Koreans off the coast of Wonsan. President Park was enraged by the Americans’ lack of attention to the Blue House raid – a week after the Pueblo incident, the Tet Offensive swept across South Vietnam – as well as their inclination to talk with the North Koreans. Park and his generals threatened the Americans that the ROK would attack the North. An alarmed UNC tightly controlled the supply of POL to the ROK forces.65 Although the US saw, or at least President Johnson believed, the Blue House raid, the Pueblo incident and the Tet Offensive as a Communist master plan, the Pueblo was just ‘a by-product of the heightened militarization of the North’, an opportunity that the DPRK snatched and exploited.66 Park was finally wooed by a special envoy from Washington, Cyrus Vance, who agreed that the US would provide the ROK with an additional $100 million in grant aid. The ROK consumed well over one-third of the $100 million to purchase the much awaited 18 F-4D Phantom IIs, ‘an ugly brute of a plane’ but by far the best fighter-bomber in the world at that time, rather than mundane counter-infiltration equipment. More important, the ROK organised its counter-guerrilla battalions into Special Warfare brigades and the 2.5 million-strong partly armed Homeland Defence Reserve Forces. On 30 October 1968, 120 men of the 124th Army Unit, organised in eight teams, landed at the area of Samchok and Uljin on the east coast and headed into the Taebaek Mountains to create guerrilla bases. They began to conduct ideological education sessions, but in the end, killed some of the villagers who just stared back dumbfounded. Many villagers immediately reported the ‘Communist bandits’ to police stations. Eventually, some 70,000 troops participated in the counterguerrilla operation. Although they were not wholehearted supporters of the Park regime, South Korean citizens rallied to the government, which was in General Bonesteel’s opinion ‘what finally turned off the North’.67 Thanks to a series of land reforms by the US military government, the Rhee administration and the occupying North Koreans during the War, most South Korean peasants had become smallscale owners. Unfortunately, the fear of ‘North Korean invasion’ became a highly valuable excuse for Park in his efforts to amend the constitution in 1969 and again in 1972 that guaranteed him a de facto lifetime presidency. On the other hand, leaders and citizens in North Korea also suffered from the fear of war with the US–ROK. After the Pueblo, the US deployed some 600 air force and navy aircraft, the Seventh Fleet and other contingency troops in or near Korea for several months to press the DPRK in the negotiations for the release of the Pueblo crew. Kim Il Sung later (in 1973) admitted in his explanation of the shortage of young farm workers that ‘after the Pueblo incident in 1968, a considerable number of rural youths were taken to the People’s Army to build up the country’s defence power’.68 On 15 April 1969, an EC-121M signal intelligence plane was shot down by KPAF MIG interceptors. Again, the US conducted a ‘show of force’,

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although President Nixon and his national security adviser Kissinger seriously considered retaliatory air strikes; the Soviets tried to help the Americans in their search for the remains of the aircraft and its crew. Overall, however, numerous KPA unconventional operations were a series of haphazard commitments by half-prepared special warfare troops who lacked coordination. In the winter of 1968–69, key KPA generals were purged; the special warfare units were dissolved and reorganised in the VIII Special Purpose Corps that was expanded to 15,000 men. The special operations forces’ mission came ‘to support’ conventional forces ‘with light infantry operations’.69 The new special warfare troops were oriented towards ‘a role clearly subordinate to the conventional military’, with quality inevitably diminished as numbers went up.70 From 1969 on, both North and South Korean military turned their attention to conventional threat, with one exception: the digging of underground tunnels by the KPA across the DMZ in the 1970s. Conventional arms race in the 1970s In parallel with its small-scale unconventional warfare, the DPRK commenced unilateral crash arms buildup programmes during 1967–71. The South did (or could) not follow suit. The ROK–US alliance may have either considered the military balance on the peninsula as favourable or believed the ROK buildups less urgent. In fact, the only ROK buildup effort after the Blue House raid and the Pueblo incident was the crash programme to organise the HDRF militias (and to equip some of them with basic firearms) and build an M-16 rifle factory. However, the ROK entered a new phase in the 1970s and the inter-Korean arms race re-emerged as the South started to react to the North’s buildups. The ROK decision for buildups was a response to two developments: first, the growth of the KPA capabilities in modern equipment; and second, the decline of the US military assistance in aid, including troop presence as well as alliance strategy. The ROK scepticism towards US security commitment which emerged during the crisis of 1968 was further reinforced by the ‘Nixon Doctrine’ in 1969 and its implementation in Korea, namely, the withdrawal of the US 7th Infantry Division in 1970–71. The ‘Guam Doctrine’, enacted by the newly elected President Nixon, required ‘a sufficient degree of self-reliance on the part of its allies as a precondition of effective American commitment’.71 The doctrine and the consequent troop withdrawal represented the necessity to cut the US defence budget, the desire to avoid another Vietnam War in Asia and the perception of a proper inter-Korean military balance. Yet the Guam Doctrine or Nixon Doctrine led President Park and his aides to reconsider the security commitment of the US. In particular, Seoul expected military grant aid of $1.5 billion during 1971–75 for its ‘Force Modernisation Plan’ in return for the withdrawal of the US 7th Division in 1971. The ROK and the US agreed

80 Conflict and militarisation on the Korean Peninsula upon, in 1972, the reintroduction of the MAP Transfer Programme, suspended in the 1960s, in return for the ROK force deployment in Vietnam, which required $50 million annually from Seoul.72 However, the ROK Force Modernisation Plan met with difficulties because the US Congress cut the size of aid substantially for reasons of economic growth and human rights violations in South Korea. Furthermore, among the planned aid of $1.5 billion, more than $500 million was covered by the Foreign Military Sales (= FMS) credit. As a result, the form of US military aid changed from MAP to FMS in the second half of the 1970s. In the middle of these developments, the fall of Vietnam in 1975 motivated the Park government, feeling insecure with the US security commitment, vehemently to pursue its own military buildups. Even with the reassurance of a ‘nuclear umbrella’ by the US, President Park seriously considered the option of developing South Korea’s own nuclear weapons.73 In addition, the ROK began to impose a national defence surtax with the purpose of financing the energetic Force Improvement Plan (= FIP I, 1974–81), which enabled it to outspend the North on defence since 1976. The conflict between Seoul and Washington on security issues intensified significantly when President Carter, in order to keep a campaign promise, declared the withdrawal of the entire US ground troops from Korea within a few years. Congress began to deal with the issue of Korean security in various hearings and reports. Around 1978, a group of officials at the State Department and the Pentagon and several congressmen began to perceive that the withdrawal plan would undermine the trustworthiness of the US security commitment to East Asian nations. After a series of unsuccessful opposition tactics by the Army, including the ‘Singlaub incident’ in 1977, the US intelligence community cautiously revealed in early January 1979 that the KPA strength had been substantially underestimated.74 Finally, after President Carter’s visit to Korea in July 1979, the White House announced that he would suspend the withdrawal plan. Although the new intelligence reports ‘provided a convenient excuse for public consumption’, the decision ‘had little to do with military factors . . . The major motivation was to preserve the United States’ reputation’.75 Overall, the uneasiness in the ROK government and the media coverage of the ups and downs regarding the withdrawal plan illustrated the South Korean perception that the security of Korea ultimately depends upon the deterrence by and support of the United States irrespective of South Korea’s resolution for ‘self-reliant defence’. Another byproduct of the withdrawal incident was that the strength of KPA ground troops was revised upward from 470,000 in 25 divisions to 670,000–700,000 in 40 divisions.76 More objective sources in Washington surmised that there were several smaller units, reserve formations, and even ‘ghost divisions’ among the estimated 40 divisions of the KPA.77 Although Pyongyang made a significant defence budget cut, the DPRK military spending and the military aid from China were still significant. Both North and

Conflict and militarisation on the Korean Peninsula 81

South Korea explored the possibility of reducing mutual hostility and tensions on the Korean Peninsula in 1972–73 – a reaction by both Koreas to another ‘Nixon shock’, that is, the announcement in 1971 that he would visit China the next year. The North–South Joint Communique on 4 July 1972, a product of secret mutual visits by the KCIA director Lee Hoo-Rak and the DPRK Deputy Premier Bak SeongCheol – the first mutual dialogues between top decision-makers of the two Koreas – clearly reflected the desire of both regimes to decide their own destinies. Both Koreas tried to reduce tensions along the DMZ and, in fact, did not increase military spending in that period: the North in 1972–3 and the South in 1973 (see Tables 3.1 and 3.3). The consequent North-South Coordination Committee produced little, however. It was abruptly suspended by the North in 1973. Rather, the two tried to consolidate their respective regimes through constitutional amendments in 1972. Although the Soviets did not provide a significant amount of new weaponry to the DPRK from 1973 to 1984, with the exception of the agreement on the licensed production of the 1960s-vintage T-62 tanks in the late 1970s,78 Pyongyang continued incrementally to expand its ground troops (manpower and equipment) since the Pueblo incident. The heavy investment in defence industries in the 1960s made the DPRK self-sufficient in most items except for advanced systems such as aircraft, missiles, and radar. The ‘axes of August’, in 1976, in which KPA soldiers killed two US officers with axes during a poplar tree cutting job in Panmunjom, a neutral zone in the DMZ for the Armistice Commission talks, caused a consequent US ‘show of force’ with the nuclear-capable B-52 and FB-111 bombers flying very close to the DMZ. The US show of force together with their determination to cut the tree in question – reportedly, General Stilwell and President Park agreed that they would commit a limited attack on the North if the North opposed it by force79 – was intended to send a message to the US public as well as the North Koreans. The US administration needed to boost the ‘macho image’ of President Ford against his GOP competitor Ronald Reagan and Democrat Jimmy Carter in the coming election. Yet the North Koreans were really scared. Not a single KPA aircraft was seen south of the Pyongyang–Wonsan line on the morning of 21 August although the KPA was in a ‘wartime’ posture following the high alert status of the USFK, for the first time since 1953, two days earlier. For the first time, Kim Il Sung expressed regret for the incident!80 The incident must have forced the DPRK to reconsider its defence strategy and capabilities. Yet it is a mistake to interpret the 1978–9 US Army intelligence reassessment of the KPA capabilities as the result of the crash buildup programme; rather, it was the outcome of a steady, incremental growth of the KPA ground troops in the 1970s. As Han points out, ‘military buildups [of North Korea] in the 1970s were the outcome of plans designed in the 1960s or even earlier.’81 The new net assessment of the ROK vs. DPRK military capabilities in 1979 was for political consumption in the bureaucratic politics in Washington. According to

82 Conflict and militarisation on the Korean Peninsula Richard Holbrooke who coordinated the bureaucratic opposition to Carter’s withdrawal plan, ‘[i]f bean counting had gone the other way, we would still have found a reason to suspend the withdrawal’.82 The new Army intelligence estimates of the KPA tanks, artillery, and, finally, manpower in the 1975–8 studies were suspected by the DIA to have ‘as much to do with the potential loss of a four-star command in Korea as with a search for an accurate order of battle’.83 The new KPA manpower estimate, partly affected by the ROK estimate that contains a larger number of soldiers in the VIII Special Purpose Corps, was suspected as a ‘number game’. A still bewildered Jimmy Carter said later that he ‘never fully comprehended’ the basis of the re-evaluation of the Korean military balance.84 Yet the estimated KPA manpower was not an exaggeration: demographic research validated its steady growth since 1970.85 Still, the 1979 reassessment left much to be desired. Like most bean counts, it was self-fulfilling. When the Nixon administration was considering further troop withdrawals from South Korea in the first half of 1970s, the secret balance assessment by the DIA and the Rand Corporation was more optimistic. For instance, a 1972 Rand report predicted that ‘without US support’ the ROKA would be unable to hold Seoul ‘against a combined North Korean–Chinese attack’ but if upgraded, it would able to hold ‘without US support, against even combined attack’.86 Even after the KPA superiority in bean counts was acknowledged, officials in the DIA and other agencies admitted that there was no agreed definition or method for Korean balance assessment. In public, however, ‘they did not hesitate to assert that [North Korea] had achieved unambiguous offensive superiority over South Korea’.87 Be that as it may, Senator John Glenn, who led the opposition to Carter’s troop withdrawal plan on Capitol Hill, argued that there was a proper balance in air force capabilities between the two Koreas and that the transfer of advanced aircraft, such as the F-16, would trigger an unnecessary arms race.88 Nevertheless, the ‘bean counters’ began to dominate the inter-Korean as well as the US–USSR military balance assessment in the 1980s. ROK superiority in the 1980s President Park, who had ruled South Korea since his coup in 1961, was assassinated by one of his key lieutenants, KCIA chief Kim Jae Kyu, in late October 1979. Young generals from the 11th class (or the first 4-year regular class) of the Korean Military Academy led by Major General Chun Doo Hwan, chief of the powerful ROK Defence Security Command, rose to power after a series of coups d’état in December 1979 and in May 1980. The military junta, brutally repressing the uprisings in Kwangju in May 1980 – atrocities by the ROKA special warfare paratroopers escalated the peaceful demonstrations into an armed resistance – established a new military authoritarian regime. The Carter administration, already cornered by the

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conservatives and bogged down by the Iran hostage crisis, could not but allow the turn of events in Korea. In fact, it did its best to warn Pyongyang that the US would not stand for any North Korean adventure that would exploit the crisis in the South. Consequently, many South Korean students and revisionist scholars began to realise the nature of ‘American imperialism’, a supporter to or senior partner of ‘colonial semi-capitalism’ or ‘fascist neocolonial state monopoly capitalism’ in Korea. Ronald Reagan came to the White House in January 1981, and Chun, now elected as president by a rubber-stamp indirect electoral body, was the first foreign head of state to visit Reagan. The new leaders in Seoul were more than ready to spend 6 per cent of the GNP on defence as had been agreed on in the Carter–Park summit talks in July 1979. The defence spending trends of the two Koreas in the first half of the 1980s (Tables 5.1, 5.3 and 5.5) would be misleading. A low rate of growth or even a decline was not exactly what happened. It was the abnormally high exchange rate of the US dollar that distorted the time-series data (on the other hand, the relatively low exchange rate of the dollar in the mid-1970s somewhat overvalued the DE of both Koreas). Still, the data clearly demonstrate that the South surpassed the North in the 1980s in military capital stock, i.e. either ‘cumulative total DE’ or ‘cumulative investment and O&M’ by any standard (or estimates). The Reagan administration’s anti-Soviet crusade found a parallel in Korea. The Reagan–Nakasone–Chun triple alliance in East Asia signalled accelerated arms buildups in the US, Japan, and South Korea against the Soviet Union and North Korea. Although the share of the GNP spent on defence was lowered for economic reasons in the mid- and late-1980s (see Chapter 5), the ROK military buildup was considerable. Contrary to the original plan, the Force Improvement Plan was succeeded by FIP II (1982–6) and FIP III (1987–92). The FIP I, which required $1.526 billion in its original planning phase in February 1974, cost more than $5 billion.89 It enabled the ROK: (1) to modernise its obsolete or obsolescent systems with domestically (licence-) produced firearms, artillery, patrol boats, helicopters, tanks (upgrading) and even surface-to-surface missiles (SSM) – again a remodelled version of Nike Hercules SAMs – as well as imported aircraft, missiles and large surface combatants; (2) to construct multiple anti-tank barriers and underground bunkers between the DMZ and Seoul, hardened aircraft bunkers, and other facilities; (3) to create another marine division and reinforce several reserve divisions into ‘mobilisation reserve divisions’; and (4) to invest in R&D including the covert development project of nuclear weapons. Chun killed the nuclear project in order to buy US support for his authoritarian regime. Washington had other agendas as well: to sell more US agricultural products and weapons to the ROK; and to soften Chun’s harsh measures, including efforts to save the life of Kim Dae Jung, the most well-known dissident to Park’s (and Chun’s) dictatorship.

84 Conflict and militarisation on the Korean Peninsula With the Americans more than eager to cooperate, the FIP II was carried out successfully. It was planned: (1) to create the second ROKA mechanised infantry division (the first was the Capital Mechanised Division, formerly the ‘Tiger’ in Vietnam), another infantry division and about 17 reserve divisions; (2) to produce locally or assemble advanced weapon systems including 68 F-5E/F fighters, dozens of 1,800-ton Ulsan class light frigates and somewhat smaller Donghae class corvettes armed with Exocet or Harpoon naval SSMs; (3) to purchase aircraft, missiles, airdefence radar, etc.; and (4) to prepare war reserve stocks in cooperation with the US. In spite of the repeated emphasis on the DPRK military superiority, Washington and Seoul agreed to end the FMS credits to the ROK by FY 1986, which was another indication of the ‘relaxed’ attitude of the two governments. Nevertheless, the FIP III (1987–92) was also formidable. It included: (1) to mechanise two infantry divisions in the 1990s, totalling four mechanised divisions, and create two new mobilisation reserve divisions under the Capital Defence Command as well as a new infantry brigade; (2) to produce and deploy new equipment including ships, helicopters and hundreds of K-1 tanks (a scaled-down version of the US M-1 with diesel engines and L-7/M-68 105mm guns), the Korean Infantry Fighting Vehicles (KIFV), M-109 155mm self-propelled howitzers; (3) to purchase F-16 fighters and more F-4D/E fighters, Lynx naval attack helicopters (from Britain), Type 209 submarines (from Germany; more from the Okpo Shipyard of the Daewoo company), more TOW anti-tank missiles and Mistral SAMs (from France), among others.90 In 1995, the ROK Navy deployed newly built P-3 naval patrol/ASW aircraft. After a series of bribery scandals, it was also planned to purchase/produce 120 F-16 fighters, instead of the F-18 which had been selected for the Korean Fighter Programme (KFP, or FX) in the first place. It was also planned to build a number of over 3,000ton class destroyers to replace aged World War II vintage ex-US destroyers. The purchase of early-warning aircraft, Patriot SAMs, counter-artillery radars, MLRS, and other advanced/sophisticated weapon systems were being seriously considered as well.91 The ROK arms buildups were achieved rather easily, thanks to rapid economic growth, compared to those of the DPRK whose economic growth came to a standstill in the 1980s. However, rapid ROK arms buildups and the introduction of the US AirLand Battle doctrine into Korea in 1983, which included deep (preemptive) strikes across the DMZ and counter-offensive operations including the use of tactical nuclear weapons, must have been a serious threat to Pyongyang. It was also leaked out that the Reagan administration planned a ‘horizontal escalation’ in Korea in case of a Soviet invasion in the Middle East.92 The North Korean response to these increased ROK–US threats was constrained by its lagging economy: it opted for a labour-intensive buildup of ground troops. Its estimated manpower grew from roughly 670,000–700,000 in 1980 to more than one million in the 1990s.

Conflict and militarisation on the Korean Peninsula 85

Around 1983, probably as a response to the US–ROK AirLand Battle doctrine, the KPA commenced a major reorganisation by splitting its armoured and motorised infantry divisions into 2 ½ brigades and deploying more units in defence-in-depth formations and strategic reserves.93 The ROK, of course, interpreted the threeechelon deployment of the KPA as a new threat,94 while forward deployments in the late 1970s were also regarded as offensive. The ROK arms buildups pressed Pyongyang to tilt to the Soviet Union. As early as 1981, Professor Clough, a moderate conservative scholar who has maintained a well-balanced perspective on Korean security, opined in a congressional hearing that ‘improvement in the quantity and quality of South Korean armaments and arms production is needed . . . [but] the need is not urgent’, and predicted ‘[o]nce the South Koreans have F-16s, Kim Il Sung will be under strong pressure to seek comparable aircraft from the Russians’.95 In fact, the DPRK tried hard to enhance their capability to breach the ROK air defence and provide the KPA with improved close air support: for instance, it purchased some 87 Hughes/MD500 helicopters, identical with some 200 helicopters assembled and used by the South, through a West German firm.96 In the fall of 1983, the Soviets shot down a Korean Air passenger airliner and North Korean agents killed a number of high officials of the South in a bombing attempt to kill the visiting ROK President Chun in Rangoon, Burma. Moscow and Pyongyang came ‘to stand shoulder to shoulder in the face of worldwide condemnation of their behavior’.97 After Kim Il Sung visited Moscow in 1984 for the first time in 23 years, Moscow provided more than $2 billion in military aid (in credits) mainly to modernise the KPA air force/air defence capabilities. In addition to MIG-23 and SU-25 aircraft and SA-3 and SA-5 SAMs during the mid1980s, Moscow provided the North with the latest generation of Soviet fighters, the MIG-29. Still the KPA Air Force ‘has a marginal capability for defending North Korean airspace and a limited ability to conduct air operations against South Korea’.98 In the 1980s, however, Pyongyang’s aggressive posture towards Seoul shifted from infiltration to terrorism, including the Rangoon bombing and the blowing up of another Korean Air airliner in November 1987. The ROK consideration of a retaliatory air strike against the North in the latter incident was discarded partly because the ROK Air Force ‘determined that the F-16s in the ROKAF did not have adequate night-time strike mission capabilities.’99 The considerable amount of Soviet military aid appeared ‘as a Soviet attempt to placate Pyongyang for Moscow’s participation in the Seoul Olympics or as a counterbalance for new equipment the South received. . .’.100 Or, it may have been a part of a desperate Soviet move aimed at strengthening its position ‘as an independent player’ throughout the Asian– Pacific region and Korea in the face of ‘what it saw as an emerging US–Japan– China entente’.101 Overall, the desperate attempt of the North to counter the arms buildups in the South was evident, considering that Pyongyang spent most of its Soviet aid on defence rather than on its ailing economy.102

86 Conflict and militarisation on the Korean Peninsula DPRK siege and nuclear option in the 1990s In the 1990s, the DPRK entered an entirely different phase. The unsuccessful reforms and consequent collapse of the ‘actually existing socialism’ in the Soviet Union and Eastern Europe, especially the tragic end of Ceaucescu in Romania and the collapse of the Berlin Wall, reinforced the already deep-rooted ‘siege mentality’103 of Pyongyang. The DPRK concern with the danger of being isolated was further accelerated by the South’s dramatic economic growth, democratisation, and the aggressive Nordpolitik under President Roh Tae-Woo, newly elected in a direct popular ballot. Moscow and Beijing established diplomatic relations with the ROK without ‘cross-recognition’ of the DPRK by the US or Japan. To make matters worse, the two former socialist allies cut their already shrinking aid to Pyongyang and demanded hard currency payments in mutual trade.104 The ailing North Korean economy, which had already shown virtually no ‘real growth’ in the 1980s, was badly hit. From 1990 on, its economy is estimated (by official North Korea watchers in Seoul including the Bank of Korea) to have had a continuous ‘negative growth’ for seven years in a row. Actually, the DPRK officially reported, for the first time in the history of the Republic, the failure of its Third Seven Year Plan (1987–93) by the end of 1993.105 The North had neither internal resources nor foreign aid for its economic recovery and arms buildups to offset the virtually ended alliance relationship with the Soviet Union/Russia. Arms deliveries from Moscow and Beijing had been drastically reduced from the peak of $2.02 billion in 1987–9 ($1 billion in 1988) to a mere 65–70 million in 1992–4.106

Although North Korea has some defence industrial capacity, it seems likely that it could not compensate for such a dramatic reduction in imports. Therefore it seems likely that the conventional military capabilities of North Korea have been degraded over the past few years.107 All it could do in a conventional arms race was to expand the KPA manpower (see Table 4.5). However, due to the labour-intensive buildups since the late 1980s, the KPA has become more ‘lightly armed’ than before, except for the long-range artillery. On the other hand, the ROK achieved a major political and diplomatic victory. It established diplomatic relations with the CIS/Russia, China and East European countries; trade, investment and other economic exchanges have flourished since the 1988 Seoul Olympics. After the disappearance of the Berlin Wall and the consequent unification of Germany, North Korean officials and media began to criticise the German-style Hupsu-Tongil (unification by absorption) by the South, a formula seriously considered by some South Koreans. It has never been an official ROK policy, especially in the light of the huge ‘cost’ of an early reunification;

Conflict and militarisation on the Korean Peninsula 87 Table 4.5 Growth of the KPA manpower (Unit: 1,000 men)

Year 1975 1980 1982 1985 1986 1987 1988 1989 1990 1992 1994 1996 1997

Eberstadt a 714 909 1,004 1,130 1,202 1,249 — — — — — — —

ACDA 470 700 782 784 838 838 842 1,040 1,200 1,200 1,200 — —

IISS 467 678 700 838 840 838 842 1,040 1,110 1,132 1,128 1,054 1,055(+74b)

ROK MND — — — — — — 870 980 990 1,010 1,030 1,055 1,147(-50c)

Source: MND, Defence White Paper; US ACDA, World Military Expenditures and Arms Transfers; IISS, The Military Balance; Eberstadt and Banister, North Korea: Population Trends and Prospects. Notes: Counting all ‘mobile males’, roughly 1.5 times of ACDA or IISS estimates. b Security troops. c Security troops transferred to the KPA. a

yet Seoul has considered it as a quite Tprobable alternative. The Gulf War demonstrated many weaknesses in the Soviet-type weapon systems, while South Korea continued to build up its war machines with advanced Western, mostly US, equipment. The socialist regime in the North is faced with an unprecedented overall crisis – political, economic, and military – that threatens its very survival. The sudden death of the ‘Great Leader Comrade Kim Il Sung’ in July 1994 further raised the challenge of leadership succession by his eldest son, Kim Jong Il. Although junior Kim has been the ‘heir designate’ to his father since 1980, he has ruled his ‘socialist hermit kingdom’ as Supreme Commander of the Korean People’s Armed Forces for more than three years. He was nominated as General Secretary of the KWP in October 1997. Until then, the DPRK did not have a head of the state (President) or the party (General Secretary). Nor did it have a Defence Minister in 1997 after the death of Marshal Choe Kwang.108 The political and economic troubles of the North have grown to such an extent that its government budget, usually announced in April by the Supreme People’s Assembly, has not been spelled out for 1995. Instead, Pyongyang asked Japan for food aid to which the ROK and Japan responded by providing 150,000 tons and 300,000 tons of rice respectively in June and July. To add insult to injury, the North suffered a severe flood all over the country in

88 Conflict and militarisation on the Korean Peninsula August. In the midst of a crisis that threatens its existence, North Korean leaders have not tried serious reform or an open-door policy. They fear that it would bring the regime to an end, i.e. the ‘reunification by absorption’, and they are probably correct.109 Still, Pyongyang has prepared a coup, namely, the nuclear option. The nuclear project might have provided the North with a double-edged sword to solve its energy crisis, especially the drastic cut of oil supply from the CIS and China in a ‘friendly price’ or non-convertible DPRK won, and to gain a ‘great leap forward’ in the arms race.110 It should be noted that the DPRK has been threatened with US nuclear retaliation since at least 1955, while neither Moscow nor Beijing has officially confirmed a nuclear guarantee to Pyongyang. Reportedly, the North Koreans approached Moscow for their own nuclear bomb project as early as 1963, but the Russians refused to cooperate.111 Nevertheless, US satellites found that Pyongyang was building the so-called ‘radioactive laboratory’ or according to the International Atomic Energy Agency (IAEA), a plutonium reprocessing plant at Youngbyon. Pyongyang later confirmed to the IAEA that it reprocessed ‘test’ quantities of plutonium from the spent fuel of its small gas-cooled graphite reactor. The plant, if completed, could reprocess enough plutonium (from the spent fuel of a larger power reactor also located in Youngbyon) to fabricate several bombs a year. Suddenly the North Korean nuclear programme ‘has replaced MIGs, forward deployment, commandos, tunnels, dams, and the million-man army as the number one concern’.112 A pessimistic Robert Gates, Director of the CIA, warned in a congressional hearing in February 1992 that the DPRK could obtain a bomb ‘in a few months to a few years’.113 The CIA estimated at the end of 1993 that North Korea might have obtained enough plutonium for one or two bombs. Of course, no one really knows ‘whether’ or ‘how far’ the North Koreans have progressed in their alleged nuclear bomb project. As of 1995 the ‘guesstimates’ vary from none (just a bargaining chip) to five bombs. During the crisis, President Clinton received diametrically opposed estimates from the CIA and the State Department. In retrospect, the CIA analysis was based on a worst-case scenario, overestimating the amount of reprocessed plutonium.114 Although Pyongyang must not have initiated the nuclear programme as a ‘bargaining chip’, it soon realised that the North Korean version of the ‘neither denial nor confirm’ policy was its last trump card. The North Korean nuclear diplomacy or brinkmanship finally bore fruit by the US–DPRK ‘Agreed Framework’ signed in Geneva on 21 October 1994, after a series of crises on the Korean Peninsula.115 Meanwhile, the two Koreas and the US made threats and counter-threats. In April 1991, the ROK Minister of National Defence Lee Jong-Koo suggested that an ‘Entebbe-style’ pre-emptive operation (or the Osirak-style air raid?) was an option for Seoul.116 Not to be outdone, the US commenced various escalatory measures as ‘sticks’ for negotiations with North Korea. US President Clinton, during his visit

Conflict and militarisation on the Korean Peninsula 89

to South Korea, warned North Koreans that if they ever develop and use nuclear weapons, ‘it would be the end of their country’.117 Various measures including a surgical strike or the United Nations embargo were suggested. Meanwhile, the DPRK also developed the Rodong I missile, an extended-range version of the Soviet Scud SSMs, through reverse engineering and deployed them – reportedly the Scuds were also exported to Iran in the ‘missiles for oil deal’.118 It is in this period that a ROK–US AirLand Battle scenario, the so-called OPLAN 5027 prepared in the 1980s, became public. The plan calls for not only counterattacks but, with a massive expeditionary force from the American continent, the virtual elimination of the North Korean state itself.119 The drama was finally ended by the visit of former President Jimmy Carter to Pyongyang. However, during the climax of the nuclear crisis in June 1994, the Clinton administration was about to decide an additional force deployment option in Korea.120 Being who they are, North Koreans responded citing the ROK’s critical weakness: ‘Seoul is not far from here [i.e. Panmunjom, located in the DMZ]. . .’, if things go wrong, ‘Seoul would become a sea of fire.’121 It has become increasingly less probable that Seoul would be taken by the North in a surprise attack. But its fragile complex and accident-prone infrastructure, as well as its 12 million population, would be badly hurt by KPA missiles and, at least in theory, long-range artillery (the 170mm Juche gun) and rockets (240mm multiple rocket launchers). Furthermore, North Korea has allegedly stockpiled a considerable amount of chemical agents. Due to the economic crisis and the weakening of ties with its allies, the North has concentrated on the more economical ‘strategic weapons’, i.e. both conventional and non-conventional deterrents.122 There exists an ‘asymmetric military balance’: the superiority of the South in conventional war-fighting capabilities vs. nonconventional and conventional deterrent capabilities of the North. Further buildups of conventional war-fighting capabilities of the South would yield ‘diminishing returns’ on investment. Herein lies the dilemma of the security of both Koreas. It does not matter who will win in the end, since both will lose. The two Koreas possess such military strengths (and vulnerabilities) that a ‘mutually assured destruction’, with or without nuclear weapons, is highly probable. The situation cannot be overcome by an arms race. The dilemma needs a political solution.

5

Military balance and arms race between the two Koreas

As we have seen in Chapter 4, the competitive arms buildups of the two Koreas started before the Korean War and continued during and after the war. As the peace conference at Geneva in 1954 did not bring political solutions to the conflict, the Korean War has not technically ended. The ROK did not sign the Armistice Agreement on 27 July 1953, although the ROK armed forces were under the operational command/control of the United Nations Command (UNC). More important, the War produced a rigid and enduring system of national division characterised by opposing ideologies and regimes, deep-rooted mutual suspicion and hostility, and an arms race.1 Both sides agreed, nineteen years after the Armistice, on the July 4th Joint Communique in 1972 that emphasised the reunification of the nation through peaceful means. In December 1991, again 19 years thereafter, the two Koreas agreed on the Agreement on Reconciliation, Nonaggression, Exchanges and Cooperation, with a six-point Joint Declaration on the Denuclearisation of the Korean Peninsula. However, little progress has been achieved; the agreements have been lip service. Military preparedness has been the principal occupation of elites on both sides of the DMZ. This chapter is an analysis of the changing dynamics of military balance on the Korean Peninsula. First, it purports to develop more valid and reliable time series data of military capabilities. As was shown in Chapter 3, official ROK, DPRK, and US data of the military situation on the peninsula are not acceptable. Second, the dynamic military balance is assessed in terms of stock rather than flow of military spending, i.e. cumulative defence expenditure (CDE) and CDE minus personnel expenses, or the ‘investment in organisational and material components’ of military capabilities. Third, it tries to answer the questions of whether and how the interKorean ‘arms race’, or a competition to improve one’s relative military power vis-àvis the other, has developed in the postwar years. However, since the DPRK data are based on assumptions of threat perception as well as domestic politicoeconomic variables, a statistical test of the Richardson-type arms race hypothesis is not carried out. Rather, we will try to interpret the trends of arms buildup of the

Military balance and arms race between the two Koreas 91

two Korean states. Fourth, among other ‘external’ sources of armament, relations with allies is identified as another important variable in explaining the arms buildups. 2

DPRK defence expenditures revisited According to the ROK Defence White Paper, the DPRK started full-fledged buildups as early as 1962 while the ROK followed suit in 1974. As a result, although the South began to outspend the North in the mid-1970s, it is the North who still enjoys military superiority in both bean counts and cumulative investment.3 The observation implies that until 1962 the DPRK had more or less maintained its previous level of military capabilities as did the ROK until 1974. Consequently, the reported gap of military capabilities between the two Koreas reached a peak in the early 1970s. As has been shown in Table 4.1, the ROK/DPRK CCC ratio was ‘reduced’ to 50.8 per cent in 1973; while the ROK military capital stock was alleged to be only 3.3–13.6 per cent of the North’s in 1975. We are faced with the question of why the DPRK, with its alleged goal of reunification by force under Communism, did not take outright military actions with a great magnitude of military superiority. Pyongyang only attempted small-scale infiltration and commando/guerrilla operations like the nearly successful raid on the presidential mansion in Seoul on 21 January 1968; in 1971–72 Pyongyang even opted for a dialogue with Seoul. Most answers would point out the deterrent role of the US with its troops in Korea, including tactical nuclear weapons. The issue is not whether the US troops have compensated for the ROK military weaknesses, but whether the US ‘extended deterrence’4 has been a critical factor in the inter-Korean conflict. Viewed from this perspective, it is more reasonable to conclude that the DPRK defence policy has been based upon the realistic perception of the US military presence in and commitment to South Korea. There is more than a grain of truth in Pyongyang’s propaganda charge that the South is a mere ‘puppet regime of American imperialism’. Whereas an indigenous military parity or even superiority is a desirable goal of ‘self-reliant defence’ in the eyes of South Koreans, the role of the US in Korea should be seriously considered in assessing the changing military balance on the peninsula. Without the US force presence or military aid, an analysis of the inter-Korean military balance would lead to a wrong conclusion. As we have noted in Chapter 3, the ‘cumulative investment’ calculations by the ROK Ministry of Defence (= MND) and others simply omit military aid from the US. Consequently, the alleged maximum gap in ROK–DPRK cumulative investment is quite misleading. In fact, US intelligence reports submitted to the President and Congress in the 1970s show a rough inter-Korean military parity in 1970, which served as a rationale for the withdrawal of the US 7th Infantry Division in 1971.5 In short, the denouncement of US military aid to the ROK or the Soviet/PRC military aid to the DPRK regarding cumulative investment would significantly distort the

92 Military balance and arms race between the two Koreas picture. The Reagan administration maintained North Korean military superiority even in the face of massive arms buildup on the part of the South by delaying the projected target year of the ROK catch-up. This kind of argument has been more often than not criticised by the Congress.6 Table 5.1 shows the ‘total’ defence expenditure of the ROK. A more serious problem in the inter-Korean balance assessment is the estimation of the ‘real’ defence expenditures (DE) of the DPRK. Estimates of North Korean DE by the US and the ROK are based upon a simple but disputable assumption. Theoretically, the US (ACDA) and the ROK (NUB or MND) estimates would yield a 100 per cent statistical explanation, or 1.0 R2, with a single variable, namely, the GNP or the total government expenditures (TGE), since they are no more than a constant share of the GNP or the TGE. It is a perfect example of ‘a procedure guaranteed to ‘support’ hypotheses like those of bureaucratic inertia’.7 Much of this problem, however, is discussed in the previous chapter. Here, we are to develop a more probable estimate of the real DE of North Korea. The best strategy would be to start with the official DPRK budget data: the ‘national security expenditure’ (NSE; Minjok-bowi-bi) or since 1967, the ‘national defence expenditure’ (Gukbang-bi) announced in the percentage of the TGE annually. It is not clear whether military aid was included in the DPRK budget – economic aid was included in the 1950s. However, official statistics listed unexplained items of 76 million won in 1953, the last year of the Korean War, and 34 million won in 1954 in addition to the NSE of 75 million won in 1953 (15.17 per cent of the TGE) and 64 million won in 1954 (8.0 per cent). Also the Korea Central Yearbook 1954 reports over 290 million won of ‘other’ items that includes NSE and ‘state administration’ expenditures. Excluding administrative expenses (67 million won), the total DE would be over 220 million won.8 Utilising the unexplained residuals in the TGE, we may estimate that North Korean DE was 152 million won (30.6 per cent of the TGE) in 1953 and 100–230 million won (up to 28.4 per cent of the TGE) in 1954. Yet relevant sources are not available for tracing the DE; the official NSE, smaller than expected even in the 1953–54 period, was further reduced in the following years. On the average, it was only about 60 million won per year (or 2.1–3.7 per cent of the TGE) for the 1959–63 period. The North Koreans most likely included in the official defence budget only the direct disbursement of personnel expenses by the Minjokbowi-seong (Ministry of National Security = MNS) for propaganda and deception. However, these amounts of personnel expenses are still unacceptable if we take into account the considerable overall wage hikes in the late 1950s. Also, the 150–160 won per soldier (60 million won for 375–400 thousand-men armed forces) is much lower than the estimated DPRK per capita national income (NI) of 372–488 won for 1959–63. As shown in the next section, the per soldier personnel cost of the ROK forces has always been higher than per capita GNP (by a factor of

Military balance and arms race between the two Koreas 93 Table 5.1 ROK defence expenditures Defence budget Year 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Billion wona 3.3 (3.8) (5.9) (7.5) 11.25 12.73 13.92 14.71 16.59 20.47 20.48 24.93 29.87 40.54 49.50 64.71 84.38 102.34 134.74 173.64 183.63 296.84 442.44 703.75 949.62 1,289.4 1,525.9 2,257.4 2,849.0 3,180.1 3,402.4 3,573.4 3,957.9 4,158.0 4,745.7 5,520.2 6,014.8 6,637.8 7,452.4 8,410.0 9,215.4 10,075.3 11,074.4 12,243.4 13,786.5

US military aid (billion US $)

Billion % GNP MAPc US $b

Net loansd

0.120 ? (0.100) (6.1) (0.100) (6.1) (0.100) (6.1) 0.124 6.90 0.143 7.40 0.155 7.51 0.148 6.98 0.126 5.59 0.136 5.76 0.114 4.19 0.102 3.56 0.112 3.71 0.144 3.93 0.167 3.90 0.212 4.04 0.269 4.05 0.299 3.69 0.374 3.95 0.442 4.16 0.461 3.42 0.697 3.92 0.914 4.40 1.454 5.09 1.962 5.36 2.644 5.32 3.036 4.88 3.705 6.07 4.145 6.22 4.345 6.09 4.382 5.51 4.436 5.10 4.546 5.07 4.717 4.59 5.770 4.33 7.556 4.20 8.960 4.07 9.375 3.72 10.159 3.48 10.771 3.52 11.480 3.45 12.514 3.32 14.363 3.18 15.214 3.17 14.495 3.31

— — — — — — — — — — — — — — — — — — 0.015 0.016 0.023 0.051 0.039 0.100 0.208 0.165 0.078 –0.072 –0.072 –0.098 –0.076 –0.029 –0.002 –0.074 –0.199 –0.210 –0.252 (–0.100) (–0.100) (–0.100) (–0.100) (–0.100) (–0.100) (–0.100) (–0.100)

1.655 0.503 0.461 0.231 0.266 0.356 0.212 0.213 0.233 0.188 0.211 0.177 0.243 0.176 0.154 0.231 0.267 0.350 0.278 0.374 0.152 0.127 0.146 0.182 0.023 0.036 0.019 0.161 0.108 0.139 0.001 0.002 — — — — — — — — — — — — —

Total (billion US $)

Otherse Subtotal Current Constantf — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — –0.045 –0.070 –0.150 –0.180 –0.220 –0.260 –0.300 –0.330 –0.363

1.655 0.503 0.461 0.231 0.266 0.356 0.212 0.213 0.233 0.188 0.211 0.177 0.243 0.176 0.154 0.231 0.267 0.350 0.293 0.390 0.175 0.178 0.185 0.282 0.231 0.201 0.097 0.089 0.036 0.041 –0.075 –0.027 –0.002 –0.074 –0.199 –0.210 –0.297 –0.170 –0.250 –0.280 –0.320 –0.360 –0.400 –0.430 –0.463

1.775 8.068 0.603 2.718 0.561 2.448 0.331 1.403 0.389 1.596 0.499 2.002 0.367 1.435 0.361 1.389 0.359 1.364 0.324 1.204 0.325 1.196 0.289 1.042 0.355 1.250 0.320 1.087 0.321 1.059 0.441 1.400 0.536 1.604 0.649 1.844 0.667 1.797 0.832 2.143 0.636 1.541 0.875 1.948 1.099 2.235 1.736 3.320 2.193 3.922 2.865 4.751 3.143 4.798 3.794 5.291 4.174 5.290 4.385 5.233 4.307 4.939 4.409 4.845 4.544 4.814 4.643 4.792 5.571 5.571 7.346 7.109 8.663 8.074 9.205 8.153 9.909 8.412 10.491 8.663 11.160 9.036 12.154 9.638 13.963 10.700 14.784 11.077 14.032 10.309

94 Military balance and arms race between the two Koreas Table 5.1 Continued Sources: Korea Statistical Yearbook; Defence White Paper; US House of Representatives, Foreign Operations Appropriations; US Department of State, Foreign Relations of the United States 1952–1954, Korea; US DSAA, Military Assistance and Foreign Military Sales Facts; US Department of Commerce, National Income and Product Accounts of the United States; Survey of Current Business; Lee, ‘National Defence and State Budget’; Hamm, ‘State Power and Armament of the Two Koreas’. Notes: a Rough estimates for the 1954–56 period, due to changes in the ROK fiscal year. Budget outlays till FY1985, budget plans thereafter. b Based on implicit exchange rates by the Bank of Korea, with a minor revision. c Deliveries, not programme, of the MAP, EDA, and MASF. IMET and the Vietnam-related MASF for FY1966–72 excluded. d FMS loans minus repayment. e ROK defence budget earmarked for a part of the O&M of the USFK. f In 1987 constant dollar, based on implicit US GNP deflator.

more than 1.5 in the 1950s and the early 1960s but almost by a par in 1994). We can reasonably assume that there must have been a significant amount of subsidies in foodstuffs, housing, and other welfare services to the KPA soldiers and especially to the officer corps, which may have been included in the expenditures for ‘people’s economy’ (PE) and ‘social-cultural measures’ (SCM) until 1966.9 Pyongyang did not disclose even its official defence budget during the 1964–66 period; but it can be more or less accurately estimated by calculating the growth rates of the PE, SCM and ‘state administration’ expenditures: about 7.5 per cent of the TGE in 1964, 9.8–10.0 per cent in 1965 and 11.8–12.0 per cent in 1966.10 In short, the official DPRK defence budget expanded considerably during the 1964–66 period. Yet the NDE jumped to over 30 per cent of the TGE during the next five years (1967–71) after the decision by the Korean Workers’ Party on the ‘simultaneous development of economic and defence construction’ in October 1966. It is not known whether military aid from the Soviet Union and China or subsidies to the KPA soldiers (and the families of its officer corps) is included in the NDE in 1967–71. Yet the officially claimed figures of the North Korean DE most likely represent the maximum level. Pyongyang, who had once boasted the achievement of its Three Year Plan (1954–56) and Five Year Plan (1957–60; ahead of schedule), explained the delay of its (first) Seven Year Plan (1961–67) for three years for the very reason of heavy defence burden.11 The average NDE of 30.9 per cent of the TGE in 1967–71 is, therefore, the maximum North Korean DE. It must have included some military aid from Moscow (in loans) and after 1970, from China (in grants). On the other hand, the maximum DE again implies a significant amount of ‘hidden’ DE before 1967. In fact, leaders in Pyongyang themselves admitted it: while the NSE in 1960 was claimed as 3.1 per cent of the TGE, First Deputy Premier Kim Ihl revealed in 1970 that the NDE was actually 19 per cent in 1960 and ‘almost 8 billion won’ in 1961–69.12 From the newly released statistics the real DE for the 1961–66 period can

Military balance and arms race between the two Koreas 95

be calculated: about 3.7 billion won or 19.8 per cent of the TGE. Based upon these numbers, the KCIA estimated the North Korean DE in 1960–66 at 19 per cent of its TGE.13 The ROK sources did not provide reliable estimation of the North Korean DE for the period before 1960. For the time being, we may add the hidden 15.9 per cent of the TGE (in 1960; it was 15.4 per cent in 1953) to the original NSE. The estimated DE of the DPRK would be 19.0–22.0 per cent of the TGE for the Five Year Plan period (1957–59). The ‘estimated’ hidden DE in 1961–66 would be 13.3–13.5 per cent of the TGE, if we assume the annual hidden shares of the TGE are the same (except 1961 for which the estimated hidden portion is 13.5 per cent). It implies that the estimated hidden DE in 1957–60 (15.9 per cent) would be rather generous. At any rate, we can reasonably conclude that the average DE (25.4 per cent of the TGE) in the Seven Year Plan (1961–70) is higher than the estimated DE of 19.0–22.0 per cent in the Five Year Plan (1957–60). The average DE in 1967–71 (30.9 per cent of the TGE) is much higher than those of the late 1950s and the 1961–66 period (19.8 per cent). That is, the peak of 30.9 per cent in 1967–71 is an exception rather than a norm. The problem is, of course, that the official DPRK national defence expenditure was reduced to 17.0 per cent of its TGE in 1972 after a series of announced budget cuts, and has declined gradually thereafter (14–15 per cent in the first half of the 1980s and less than 12 per cent in the 1990s). The ROK authorities, the NUB and the MND in particular, do not accept the official DPRK claims; they have estimated the North Korean DE as 30.9 per cent of the TGE or ‘over 30 per cent’ since 1987 and ‘investment’ for military capital stock (procurement and R&D) as 48 per cent of the DE.14 It is, of course, not indisputable that Pyongyang may have begun to conceal some of its military spending in other items like PE and SCM to show its advocacy of peace during the North–South Korean Talks in 1972–73. Yet it is not quite convincing to estimate North Korean DE as a constant 30.9 per cent share of the TGE for more than a quarter century since 1967. Seoul’s Defence White Paper shows that the 30.9 per cent average was also applied to the estimation for the 1962–66 period, which is a gross overestimation compared against 19.8 per cent derived from the same source that indicates a 30.9 per cent average in 1967–71 (See Table 5.2). There are some good reasons why the official ROK–US estimates should not be accepted without reservation. In the first place, as shown in Chapter 6, the TGE growth rate of the DPRK has been higher than that of its NI (or GNP). Consequently, if the DE/TGE ratio is set at a constant 30.9 per cent level, then the DPRK ‘defence burden’ (DE over NI or GNP) would gradually increase. In fact, the 1978 CIA estimates of the North Korean DE for the 1965–76 period (15–20 per cent of GNP) would imply a 49–65 per cent TGE/GNP ratio.15 The recent MND and US ACDA estimates are 20–25 per cent of the GNP (with an implied the TGE/GNP ratio of 65– 81 per cent),16 which tends to underestimate North Korea’s GNP. For instance, the

96 Military balance and arms race between the two Koreas Table 5.2 Official DPRK defence budget (Unit: billion current won or US $) Official DPRK budget (in won) Year

Total budget

1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970

0.496 0.806 1.006 0.956 1.022 1.321 1.649 1.968 2.338 2.729 3.028 3.418 3.476 3.571 3.948 4.813 5.049 6.003 5.082e 6.302 7.389 8.314 9.672 11.368 12.326 13.349 14.744 16.973 18.837 20.333 22.204 24.019 26.158 27.329 28.896 30.085 31.661 33.383 35.514 36.909 39.303 40.243 41.442 — — —

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Official ROK estimates

NSE(%)a NDE(%)b Amount %total budgetc

Won

15.17 8.0 6.15 5.91 5.27 4.81 3.7 3.1 2.53 2.16 2.1 (7.5) (9.8) (11.8) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

— — — — — — — 0.374 0.444 0.519 0.575 0.649 0.660 0.678 1.201 1.565 1.560 1.753 — 1.960 2.283 2.569 2.989 3.513 3.809 4.125 4.556 5.245 5.821 6.283 6.861 7.422 8.083 8.445 8.929 9.026 9.498 10.149 10.654 11.073 11.791 12.073 12.433 — — —

(30.6) (28.4) — — — — — 19.0

0.152 0.229 — — — — — 0.374

19.8

3.675

30.4 32.4 31.0 (29.2) (29.2) 31.1 17.0 15.4 16.1 16.4 16.7 15.7 15.9 15.1 14.6 14.8 14.6 14.7 14.6 14.4 14.0 13.2 12.2 12.0 12.0 12.1 11.4 11.5 11.4 — — —

1.201 1.565 1.560 1.753 1.484 1.960 1.256 1.280 1.557 1.864 2.058 2.096 2.344 2.563 2.750 3.009 3.242 3.531 3.819 3.935 4.045 3.971 3.863 4.006 4.262 4.466 4.481 4.628 4.724 — — —

— — — — — — — 19.0(30.9) 19.0(30.9) 19.0(30.9) 19.0(30.9) 19.0(30.9) 19.0(30.9) 19.0(30.9) 30.4 32.4 31.0 29.2 — 31.1 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 > 30.0 > 30.0 > 30.0 > 30.0 > 30.0 > 30.0 > 30.0 > 30.0 > 30.0 > 30.0 > 30.0

Exchange US$ rated — — — — — — — 2.57 2.57 2.57 2.57 2.57 2.57 2.57 2.57 2.57 2.57 2.57 — 2.57 (2.36)f "(") 2.37 2.37" 2.05 2.15 2.15 1.86g 1.794g 1.79g 1.94 2.12 2.18 2.36 2.43 2.23 2.14 2.15 2.15 2.14 2.15 2.13 2.15 — — —

— — — — — — — 0.145 0.173 0.202 0.224 0.253 0.257 0.264 0.467 0.609 0.607 0.682 — (0.831) 0.888 (0.967) 0.084 1.261 1.714 1.771 1.919 2.449 2.923 3.252 3.239 3.236 3.404 3.425 3.475 4.004 4.218 4.418 4.658 4.979 5.150 5.536 5.615 5.783 (5.2)i 6.3 —

Military balance and arms race between the two Koreas 97 Table 5.2 Continued Sources: Korea Central Yearbook; Workers Daily; Europa Yearbook; EIU Country Report; Vantage Point; ROK National Unification Board, Compiled Statistics of North Korean Economy; Institute of North Korean Studies, A General Survey of North Korea (1983–1993); Lee, ‘North Korea’s Economy and Military Spending’; and Hamm, ‘State Power and Armament of the Two Koreas’. Notes: a ‘National security expenditure.’ b ‘National expenditure.’ Figures in parentheses are calculated by growth rates of other items. c Official ROK CIA estimates. Figures may vary somewhat due to slight variation in exchange rates, differences in budget plan and outlays, or rounding. d Commercial or trade rates. e In 1971 retail prices. f Estimated exchange rate after the devaluation of the Pound Sterling in 1971. g Probably non-commercial rate. h Period of major arms transfers from the Soviet Union. i Quoting IISS data.

DPRK ‘national income’ of 47.02 billion won in 1987 – the first and only statistics of its national account in absolute amount provided to the US population census personnel17 – reveals a TGE/NI ratio of 64 per cent (TGE of the same year was 30.09 billion won). The alleged high DPRK military burden highlights its aggressiveness or at least high level of militarisation, while it also leads to an underestimation of its economy. As will be discussed in Chapter 6, the TGE/NI ratio of North Korea from 1970 to the mid-1980s has been around 60 per cent (40–50 per cent in the Five Year Plan and 50–55 per cent in the 1960s), while it exceeded 70 per cent in the 1990s due to negative economic growth. In other words, the official DPRK national defence expenditure in 1972, 17 per cent of the TGE, is not lower than the 1961–66 average of 19.8 per cent in its share of GNP or NI. Second, ROK estimation of the North Korean DE also lacks persuasiveness if one examines its components. For instance, the MND shows that the DE of the South increased from $2.46 billion to $9.33 billion in constant 1990 price during the 1974–90 period (by a factor of 3.79 or annual growth rate of 8.7 per cent), while the North’s rose from $2.88 billion to $4.96 billion (by a factor of 1.72 or annual growth of 3.5 per cent) in the same period.18 It also shows that the ROK has spent 33 per cent of its DE on investment, while the DPRK is alleged to have spent 48 per cent of its DE on investment. Furthermore, the DPRK has reportedly doubled its military manpower during the same period (from 467,000–562,000 to 990,000– 1,200,000 depending on various sources), while the ROK manpower increased by less than 5 per cent (from 625,000–634,000 to 655,000). This kind of argument is simply unacceptable. North Koreans are not 10 feet tall.19 The DPRK cannot have doubled its manpower and at the same time spent 48 per cent of its DE on investment with such a low DE growth rate, even if it has spent much less on O&M. If one state increases its military manpower or capital stock, then it would lead to a consequent

98 Military balance and arms race between the two Koreas increase in O&M spending which in turn would result in an increased share of its GNP for defence.20 Or, if it increases the manpower or capital stock with a constant share of GNP for defence, it would have to freeze or reduce either its capital stock or manpower. That is, the estimated spending for investment for the KPA at a constant 48 per cent is unattainable, especially in light of the very low economic growth rate of North Korea. The case of the ROK is a telling testimony. It has maintained an average 33 per cent of its DE for investment with much higher growth rates of both DE and GNP, but it has maintained a more or less constant manpower level. Third, as implied in the above critique, the ROK estimation does not fairly reflect the trend of the DPRK arms buildups in terms of bean counts. Its crash buildup of air force/air defence capabilities in the second half of the 1980s, which cost $2–3 billion and must have created a hump in its DE trend curve, is not recognised (this is also the case for the official DPRK defence budget). What is more striking is that the KPA has been increasingly ‘lightly armed’ for the past 15 years or so, if the ratio of manpower over major equipment (tanks, ships, aircraft, etc.) in the 1980–90s is considered. Excluding air defence capability buildups with Soviet aid, the KPA air and naval capabilities have not been improved in either equipment or manpower. The growth of KPA tank inventory in the 1970s was considerable. However, since the 1979 re-evaluation of the KPA strength by the US intelligence community, even its ground troops have become lighter with the exception of some 4,500 self-propelled artillery pieces.21 That is, the DPRK must have adopted a rather labour-intensive arms buildup programme in the face of the relatively much more capital-intensive buildups of the ROK.22 The poor economic performance of the state socialist regime in the North is responsible for the slowdown of its military investment. As will be further clarified in the next chapter, there is another economic reason for the manpower-heavy KPA. Also for Pyongyang, another alternative to the military spending race is available, that is, ‘playing the nuclear card’. Fourth, there is some evidence supporting the DPRK claim of a defence budget cut in 1972. Kim and other officials told US visitors in 1971–72 the necessity of and the plan to reduce defence spending in order to pursue the Six Year Plan, 1971–76.23 Also, military aid from China was resumed in the early 1970s, whereas major arms transfers from the Soviet Union halted in the same period. Furthermore, most military aid from China was free while the Soviet charged for their arms transfers, albeit with the provision of some loans.24 Arms transfers from China were considerably helpful as they totalled $360 million during 1973–77, for the first time exceeding those from the Soviet Union.25 Meanwhile, the DPRK industrial growth and non-productive construction projects, i.e. housing and public monuments, were much more substantial in the Six Year Plan period than the previous decade. In other words, the defence burden (15–20 per cent of the GNP) that had a negative impact upon the growth of the capital-scarce North Korean economy must have been substantially reduced. Notwithstanding, its defence budget increased considerably

Military balance and arms race between the two Koreas 99

in both relative and absolute terms in 1974– 76, exceeding the 1971 peak in current price. However, we are not completely sure that the DPRK did not conceal parts of its DE in other items as well. ‘Analysts now conclude that even though military expenditures did decline somewhat as a proportion of the total budget after 1971, the drop was by no means as large as portrayed in official statistics.’26 Although arms imports from the Soviet Union in 1985–89 were considerably higher than before and the KPA manpower was increased at the same time, the official national defence budget did not grow. Of course, it was partly due to the lower growth rate of its TGE and GNP. Yet the virtual standstill or reduction of the DE does not fit well with the trend of the KPA strength. The arms transfers from the Soviet Union, almost entirely in loans, must have been excluded from the official DPRK budget. Consequently, two assumptions explaining these discrepancies can be made. First, the purchasing power of the won in military goods was higher than that of civilian goods, due to probable changes in the pricing system in 1971–72. The assumption was originally held by the US CIA prior to the so-called ‘Team B’ report in 1976, which made an upward adjustment of Soviet military spending by a factor of almost two.27 The second assumption is that military aid, either Chinese grants or Soviet loans, has not been included in the DPRK defence budget from 1972 on. The two assumptions, namely the ‘price superiority of military goods’ and the ‘exclusion of military aid from the official defence budget’ are not mutually exclusive. But it is next to impossible to obtain a reliable estimation of the overall price advantage of military goods – the Soviet/Russian case suggests that even experts in Pyongyang cannot correctly assess it either – although a rough annual arms imports data set from the ACDA reports may be obtained. The estimation in Table 5.3 is derived from: (1) the addition of arms imports from China and the Soviet Union; and/or (2) multiplying the official national defence budget by 1.5. The parameter of 1.5 is derived from the reasonable assumption that the real DE/TGE ratio in 1972 was roughly identical to the 1961–70 ‘average’ (25.4 per cent), rather than the 1967–71 ‘peak’ of 30.9 per cent (17 per cent × 1.5 = 25.5 per cent). For the 1972–76 period, the first alternative would be the lower end of the estimated range of the DPRK’s real DE, while the second, the higher end. In 1976 Pyongyang suffered a humiliating setback in face of the massive ‘show of force’ and threat of escalation by the US–ROK forces after the ‘axe murder’ incident in August. It was also around 1976 that the KPA began to focus on firepower and conventional operations in the ‘combination of regular and irregular warfare’, spelled out by the ‘Great Leader’, which had put a premium on light infantry operations in the first half of the 1970s. Its consequent secret arms buildup (detected in 1978–79) may not have allowed the reduction of its defence burden to less than 16 per cent after 1976, as suggested in the official DE/TGE ratio (see Section 3). Consequently, the ceiling of its estimated DE would be pushed upward: military aid plus 1.5 times that of the official defence budget. For the 1991–94 period, when military aid is no

100 Military balance and arms race between the two Koreas Table 5.3 Estimated DPRK defence expenditures (Unit: billion won or US$) Defence/total budget (%) Year

Official Hiddena Totala

1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

15.17 15.4 8.0 20.4 6.15 (15.9) 5.91 (15.9) 5.27 (15.9) 4.81 (15.9) 3.7 (15.9) 3.1 15.9 2.53 13.46 2.16 (13.32) 2.1 (13.32) (7.5) (13.32) (9.8) (13.32) (11.8) (13.32) 30.4 none 32.4 none 31.0 none 29.2 none 31.3 none 17.0 (8.5) 15.4 (7.7) 16.1 (8.05) 16.4 (8.2) 16.7 (8.35) 15.7 (7.85) 15.9 (7.95) 15.1 (7.55) 14.6 (7.3) 14.8 (7.4) 14.6 (7.3) 14.7 (7.35) 14.6 (7.3) 14.4 (7.2) 14.0 (7.0) 13.2 (6.6) 12.2 (6.1) 12.0 (6.0) 12.0 (6.0) 12.1 6.05–8.5 11.4 5.7–8.5 11.5 5.75–8.5 11.4 5.7–8.5 — — — — — —

30.6 28.4 22.05 22.81 21.17 20.71 19.6 19.0 16.0 15.48 15.42 20.82 23.12 25.12 30.4 32.4 31.0 29.2 31.3 17.0–25.5 15.4–23.1 16.1–24.15 16.4–24.6 16.7–25.05 15.7–23.55 15.9–23.85 15.1–22.65 14.6–21.9 14.8–22.2 14.6–21.9 14.7–22.05 14.6–21.9 14.4–21.6 14.0–21.0 13.2–19.8 12.2–18.3 12.0–18.0 12.0–18.0 18.15–20.6 17.1–19.9 17.25–20.0 17.1–19.9 — — —

Estimated DE Won 0.152 0.229 0.222 0.209 0.216 0.274 0.318 0.374 0.374 0.422 0.467 0.712 0.804 0.897 1.200 1.559 1.565 1.484 1.960 1.256–1.884 1.280–1.921 1.557–2.336 1.864–2.797 2.058–3.088 2.096–3.144 2.344–3.516 2.563–3.844 2.750–4.125 3.009–4.514 3.242–4.863 3.531–5.296 3.819–5.729 3.935–5.903 4.045–6.068 3.971–5.957 3.863–5.794 4.006–6.009 4.262–6.393 6.700–7.603 6.721–7.821 6.942–8.049 7.087–8.247 — — —

Military

($)

aid ($)b

0.089 0.120 0.132 0.124 0.108 0.670 0.106 0.130 0.147 0.166 — 0.162 (0.030) 0.181 (0.030) 0.200 (0.030) 0.304 (0.030) 0.343 (0.043) 0.387 (0.070) 0.513 (0.081) 0.672 (0.070) 0.681 (0.010) 0.742 (0.060) 0.975 (0.170) 0.616–0.924 0.170 0.631–0.946 0.210 0.787–1.180 0.130 0.956–1.434 0.140 1.067–1.600 0.080 1.103–1.654 0.140 1.260–1.891 0.080 1.385–2.078 0.210 1.495–2.242 0.090 1.618–2.427 0.210 1.706–2.559 0.340 1.829–2.744 0.190 1.949–2.923 0.120 1.968–2.952 0.380 2.043–3.065 0.420 2.037–3.055 0.420 1.961–2.941 1.000 2.003–3.005 0.600 1.982–2.973 0.200 2.947 3.345 0.090 2.668–3.129 (0.030) 2.559–2.967 (0.005) 2.370–2.772 (0.090) — (0.100) — —

Total ($) 0.209 1.417

0.166 0.162 0.181 0.200 0.304 0.343 0.387 0.513 0.672 0.681 0.742 0.975 0.786–1.094 0.841–1.156 0.917–1.310 1.096–1.574 1.147–1.680 1.243–1.795 1.340–1.971 1.595–2.288 1.585–2.332 1.828–2.637 2.046–2.899 2.019–2.934 2.069–3.043 2.348–3.332 2.463–3.485 2.457–3.475 2.961–3.941 2.603–3.605 2.182–3.173 3.037–3.435 2.668–3.129–3.638c 2.559–2.967–3.744c 2.370–2.772–3.836c 2.353–2.745–3.318d 2.259–2.636–3.012d 2.147–2.505–2.863d

Sources: WMEAT; Hamm, The Political Economy of National Security. Notes: a Based on estimated PPPs of won. b Arms imports of the DPRK reported by the ACDA, which is defined as ‘aid’. during 1972–91. c Defence sector PPP during 1992–94 assumed to be identical to the 1991 rate (US$1 = 2.273 won). d Simple estimates based on 15.0–17.5–20.0 per cent of estimated GNP.

Military balance and arms race between the two Koreas 101

longer reported (albeit with rumours of some Chinese aid), the floor of the estimated range would be 1.5 times that of the official defence budget; and the ceiling would be the official defence budget plus 8.5 per cent of the TGE (also derived from the 1972 estimate: 17 per cent × 1/2 = 8.5 per cent). Finally, as Pyongyang has not released any budget data after 1994, we cannot but estimate the range of North Korean DE at 15–20 per cent of its GNP. The result is shown in Table 5.3. Finally, there is the problem of the exchange rate of the won. It is not quite reasonable to accept the commercial/trade rate as a reliable indicator of the North Korean economy, as its trade dependence with the West has been minimal (although the overall trend reflects the DPRK foreign currency reserve).28 This was especially true when the North Korean economy was in good shape. Another problem is that most arms imports from the USSR must have been counted in basic exchange rates used in the DPRK–CMEA trade. In this project, a purchasing power parity (PPP) will be used for the DPRK National Income derived from differential rates of inflation of the won and the US dollar (see Chapter 6 for further detail). The suggested PPP of the won is somewhat lower than the arithmetic means of basic rates and commercial/trade rates during the 1953–90 period. The PPP becomes lower than the trade rates after 1992 when the DPRK economy showed considerable inflation by increasing wages more than 40 per cent and the state purchasing price of agricultural products29 without any visible additional supply of consumer goods – the food supply became worse than ever. Table 5.4 is a comparison of our estimation for North Korean DE against others including the official ROK–US estimates. Our estimates show consistently higher spending from 1960 up to 1971 with the higher end of the estimated range in 1972– 76 roughly identical to other estimates, while it shows a consistently lower level of spending than the others afterward, except for the late 1980s. The divergence is partly due to the adoption of different exchange rates of the won, but the main cause is military aid as well as the estimated share of the TGE. For the mid-1990s, our estimates show a consistent decline of North Korean DE, while the official estimates show a slow but steady growth. It is worthwhile to mention that a classified KIDA report, based on a building block estimate of North Korean DE, shows a considerable decline in the 1990s, especially in the ‘investment’ category.30 Comparing the DE estimates of North and South Korea in an identical unit, i.e. the US dollar, is prone to error. The aggregate estimates for the DPRK in Table 5.3 should be further tested against factor costing estimates and additional declassified information. Here, we will examine two alternatives: one by the KCIA/NSPA and the other by the Rand Corporation. The KCIA estimates for 1971–75 North Korean DE are lower than the above-mentioned NUB/MND estimates or the ACDA’s. For the 1978–82 period, the NSPA estimates, in the DPRK won, show higher figures than the 30.9 per cent-based estimates. Further declassified breakdown of the NSPA estimates has not been available.

102 Military balance and arms race between the two Koreas Table 5.4 Comparison of estimated DPRK defence expendituresa

ROK MND/CIA b ACDA b Year % $ billion ROK CIAc I II budget 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

19.0 19.0 19.0 19.0 19.0 19.0 19.0 30.4 32.4 31.0 29.2 31.3 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 30.9 >30.0 >30.0 >30.0 >30.0 >30.0 >30.0 >30.0 >30.0 >30.0 >30.0

0.145 0.173 0.202 0.224 0.253 0.257 0.264 0.467 0.609 0.607 0.682 0.763 0.888 1.084 1.261 1.714 1.771 1.919 2.449 2.923 3.252 3.239 3.236 3.404 3.425 3.475 4.004 4.218 4.418 4.658 4.979 5.150 5.536 5.615 5.783 (5.2) 6.3

— — — — — — — — — — — 0.800 0.950 1.200 1.400 1.470 — 2.048(4.404) 2.661(4.950) 3.692(6.623) 3.778(6.765) 3.657(7.095) 3.703(7.850) — — — — — — — — — — — — — —

— — — 0.280 0.300 0.350 0.350 0.470 0.610 0.615 0.700 0.750 0.500 0.625 0.700 — — — — — — — — — — — — — — — — — — — — — —

Leeb Hamm d % budget $ billion $ billion

— — — — — — — — 0.587 0.617 0.576 0.757 1.025 1.084 1.368 1.080–2.0 1.305–2.2 1.253–2.5 1.310–4.04 1.315–4.18 1.300–4.38 3.24–4.54 3.5–4.7 3.6–4.88 5.06–5.2 5.26–5.4 5.44–5.6 5.64–5.9 5.84 6.0 5.94 4.66 5.50 5.30 5.50 6.0 —

— — — — — — — — — — — 31.1 30.3 29.1 29.7 30.0 30.1 29.9 30.5 29.7 29.8 29.4 29.4 29.4 28.6 28.8 28.3 27.6 26.9 26.8 — — — — — — —

— — — — — — — — — — — 0.763 0.872 1.020 1.213 1.662 1.727 1.858 2.415 2.801 3.087 3.078 3.083 3.242 3.170 3.240 3.598 3.874 3.954 4.189 — — — — — — —

0.166 0.162 0.181 0.200 0.304 0.343 0.387 0.513 0.672 0.681 0.742 0.975 0.786–1.094 0.841–1.156 0.917–1.310 1.096–1.574 1.147–1.680 1.243–1.795 1.340–1.971 1.595–2.288 1.585–2.332 1.828–2.637 2.046–2.899 2.019–2.934 2.069–3.043 2.348–3.332 2.463–3.485 2.457–3.475 2.961–3.941 2.603–3.605 2.182–3.173 3.037–3.435 2.688–3.129–3.638 2.559–2.967–3.744 2.370–2.772–3.836 2.353–2.745–3.318 2.259–2.636–3.012

Sources: Appendix 2; Defence White Paper; World Military Expenditures and Arms Transfers; ROK National Unification Board, Compiled Statistics of North Korean Economy; Institute of North Korean Studies, A General Survey of North Korea (1983–1993); Lee, ‘North Korea’s Economy and Military Spending’. Notes: Figures in bold are within the ± 10 per cent range of the estimates of this research. b In commercial/trade rates. c Factor cost estimates in commercial/trade rates. d In PPPs adopted in Table 6.4. a

Military balance and arms race between the two Koreas 103 Table 5.5 A building-block estimate of DPRK defence expenditure 1981 Item I II III IV 1. 2. 3. V

Personnel Unit O&M Equipment O&M Investment and R&D Procurement of equipment Construction Defence industries Others

Total (30.9% of budget, 24% of GNP)

Percentage

Amount (million US$)a

17.2 4.6 17.6 48.6 8.2 4.6 35.8 12.0

610 160 630 1,740 (1,735) (293) (164) (1,278) 430

100.0

3,570

Source: Institute of North Korean Studies, A General Survey of North Korea. Note: a Figures in parentheses are from the percentage share.

However, a building-block estimation of the North Korean DE in 1981, reported in a publication of a subsidiary institution of the NSPA, is believed to represent a compromise of the classified version and the 30.9 per cent of TGE estimation (see Table 5.5). The ‘personnel’ expense is somewhat lower than expected, since it accounts for 4.13 per cent of the GNP (17.2 per cent of the 24 per cent of the GNP) while the manpower/population ratio is about 4.19 per cent. The equipment O&M expense is unusually high for a Soviet-type army with a low level of ‘real time’ training. However, more serious problems arise when we examine ‘investment’ and ‘others’. While ‘procurement,’ probably including some cash-purchased arms imports, and ‘construction’ are quite plausible, the unreasonably high level of ‘defence industries and R&D’ and ‘others’ is not warranted by bean counts in the Military Balance or from other sources. It is not quite clear whether the item of ‘defence industries’ represents the total military production by or subsidies to the defence industries. In any case, it is too high. The ‘others’ item may represent pensions, military aid to Third World states, loan repayment, etc. or it may be just a residual to make up the 30.9 per cent of the TGE as an aggregate estimate. Overall, we cannot but conclude that the estimation is a gross exaggeration. The lower end of our 1981 estimation ($1.836 billion) is roughly equivalent to the sum of Items I, II, III and IV (1 and 2), or $1.857 billion. The Rand report provides data on personnel, O&M and procurement, and ‘military capital stock’ of the two Koreas in 1968–83.31 However, as we have already discussed in Chapter 3, it omits military aid in the ROK data. Its data on North Korea also suffer from dubious assumptions. First, its estimated personnel costs of the DPRK, derived from a regression analysis on KPA manpower size, are too low: ‘the South

104 Military balance and arms race between the two Koreas has spent between two and a half and four times as much on personnel costs as the North’ (p. 46). Yet it was the North who led the South in per capita GNP until the mid-1970s in most estimates including the official ROK–US versions. Considering manpower size and a very close parallel between per soldier personnel cost and per capita GNP, the estimation for the DPRK personnel expenses are too low, especially in the 1960s and the 1970s. Second, the estimation of O&M expenses is based on an incorrect assumption. ‘The North has also spent considerably more on operations and maintenance than the South, presumably reflecting the North’s larger military capital stock, as well as a high rate of utilization of this stock in more active patrols and more frequent military exercises’.32 The estimated ROK/DPRK ratio in O&M is only 15–73 per cent. Yet interviews with former KPA soldiers who defected to the ROK have revealed that the contrary is true, which is confirmed by the ROK authorities.33 Finally, the estimation for the DPRK procurement, ‘derived as residuals by deducing expenditures on personnel and operations from total defence expenditures’ (p. 47), is somewhat erratic. For instance, it is unusually high in 1972 ($1,015 million) but too low in 1982–83 ($338 million and $359 million respectively, in 1979 price). Although it shows correctly that the South was in the process of catching up, the Rand report is not much better than the NSPA estimation. Our estimation for the DPRK defence expenditures is superior to the building-block estimates in the plausibility of assumptions, overall trend and consistency (however, we use the 8 per cent per year depreciation rate of the military capital stock adopted in the Rand report). Dynamics of the inter-Korean military balance: comparing military capital stock We have already concluded that defence expenditure is the best single indicator of military capabilities since it represents the human, organisational, and material components. To make the inter-Korean comparison more meaningful, some conversions of the raw DE data are in order. The usual measurement of DE in annual terms does not directly represent military capabilities. First, there must be a time lag between spending and military capabilities, especially when North and South Korea started defence industries in the mid-1960s and the mid-1970s respectively. Second, it is the ‘stock,’ like the cumulative investment adopted by the MND, as opposed to the ‘flow’ that counts. Annual spending may represent the differential growth of military capabilities. Third, ‘cumulative DE (CDE) minus personnel costs’, i.e. the sum of O&M and investment, will be used as well as the CDE for those who believe that investment in military capital stock is more important than sheer manpower. However, a comparison of the capital stock is not made since a reasonably acceptable estimation for the DPRK military investment is not available and, more

Military balance and arms race between the two Koreas 105

important, the ‘O&M plus investment’ is a superior measure of military capabilities. For the hardware-oriented school, let me repeat that O&M is a good measure of the very important organisational capacity of the armed forces. Many Soviet-type armies stockpiled too many weapons (without retiring obsolete systems) properly to operate and maintain them. The DPRK is one of them. Military capabilities depend on how much training the army has with its equipment. Last but not least, there is the ‘depreciation’ factor. For the ‘O&M plus investment’ 8 per cent a year is adopted, as suggested in the Rand report. This may be somewhat low – the original value would be reduced to 18.9 per cent after 20 years – but it is quite acceptable considering the relatively long equipment life cycles of the two Korean armies. It should also be pointed out that the expenditures include construction and R&D whose effects presumably last longer than hardware. For the cumulative DE, a 10 per cent/year depreciation is adopted since spending on manpower contain more consumption factors – men retire from active (and reserve) duty sooner than the equipment. The calculation is based on the equation, S = E + (1 - a)S , where t t t-1 S and E represent stock and flow respectively and a designates the depreciation ratio. Table 5.6 is a comparison of annual and cumulative DE in constant 1987 US dollars, with 10 per cent depreciation, of the two Koreas. The cumulative DE of the ROK is derived from the postwar (1954-59) DE in Table 5.1. The DPRK cumulative DE, derived by the same method from Table 5.3, is much lower than the ROK’s. It should be pointed that the ROK government and military misallocated much of the abundant US aid in the 1950s and the early 1960s. Here, we assume that the cumulative DE of the North is 75 per cent in 1959, which would be rather generous for the North who received considerably smaller amount of military aid from Moscow and Beijing. In addition, an effectiveness parameter less than par is applied to the ROK spending for the early and mid-1960s. Although not shown in Table 5.6, the South consistently outspent the North in the 1953–59 period mainly due to the large amount of US military aid (see Tables 5.1 and 5.3). Furthermore, the ROK maintained a much higher manpower level than the DPRK while their equipment is roughly comparable (except the mid-1950s when the North was far superior in jet air capabilities). At any rate, the more or less stable ROK superiority until 1963 was eroded thereafter by a rapid DPRK catch-up when the North began to outspend the South in 1964. The DPRK achieved a slight lead in 1968, the year of the Blue House commando raid and the Pueblo incident, and expanded it until the early 1970s. The ROK First Force Improvement Plan (FIP I: 1974–81) enabled it to outspend the DPRK in 1976 with an almost 50 per cent real growth in DE. The ROK cumulative DE exceeded the DPRK’s in 1977–79, depending on the lower or higher end of the estimated DE of the North (or in 1981 if we adopt the official ROK estimates revised with the depreciation factor). That is, the Reagan– Chun Doo Hwan era coincided with the ROK lead in military capabilities even if unreasonably high official estimates of the DPRK spending were accepted. In the 1990s, the ROK superiority has become more than 2-to-1.

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981

(1.042)b 1.091b 1.023b 1.017b 0.938b 1.125b 2.033b 1.006b 1.400 1.604 1.844 1.797 2.143 1.541 1.948 2.234 3.320 3.922 4.751 4.798 5.291 5.290

Annual

ROKb

6.957 7.353 7.641 7.900 8.048 8.368 8.564 8.714 9.243 9.922 10.774 11.494 12.487 12.780 13.450 14.339 16.225 18.524 21.423 24.079 26.962 29.556

cumul.

(0.695) 0.616 0.673 0.735 1.097 1.208 1.316 1.693 2.114 2.037 2.108 2.628 2.025 2.036 2.041 2.228 2.193 2.224 2.223 2.436 2.210 2.317

I

— same same same same same same same same same same same 2.380 2.291 2.627 2.915 3.059 3.210 3.268 3.493 3.252 3.342

II

DPRK Annualc

— same same same same same same same same same same same 2.819 2.799 2.917 3.199 3.212 same same same same same

IIId — 0.658 0.751 0.824 0.913 0.905 0.898 1.541 1.915 1.817 1.938 2.057 2.289 2.625 2.808 3.484 3.386 3.433 4.061 4.463 4.536 4.105

IVd 5.218 5.312 5.454 5.644 6.177 6.767 7.407 8.359 9.637 10.711 11.748 13.201 13.906 14.551 15.137 15.851 16.459 17.036 17.555 18.236 18.622 19.077

I same same same same same same same same same same same same 14.261 15.126 16.241 17.531 18.837 20.164 21.416 22.767 23.743 24.710

II

DPRK Cumulativee

Table 5.6 ROK–DPRK cumulative defence expendituresa (Unit: 1987 billion US$)

same same same same same same same same same same same same 14.699 16.029 17.343 18.808 20.129 21.336 22.470 23.716 24.597 25.479

III same 5.354 5.570 5.836 6.166 6.454 6.707 7.577 8.735 9.679 10.648 11.640 12.757 14.113 15.510 17.443 19.085 20.609 22.610 24.811 26.866 28.284

IVe

133.3(133.3) 138.4(137.3) 140.1(137.2) 140.(135.4) 130.3(130.5) 123.7(129.7) 115.6(127.7) 104.2(115.0) 95.9(105.8) 92.6(102.5) 91.7(101.2) 87.1(98.7) 85.0–89.8(97.8) 79.7–87.8(90.6) 77.6–88.9(86.7) 76.2–90.5(82.2) 80.6–98.6(85.0) 86.8–108.7(89.9) 95.3–122.0(94.8) 101.5–131.9(97.0) 109.6–144.8(100.4) 116.0– 154.9(104.5)

(%)

ROK/DPRKf

5.233 4.939 4.854 4.814 4.792 5.571 7.109 8.074 8.153 8.412 8.663 9.036 9.638 10.824 11.077

31.833 33.589 35.075 36.381 37.535 39.353 42.526 46.348 49.866 53.291 56.625 59.999 63.637 67.973 72.253

2.442 2.316 2.273 2.487 2.542 2.457 2.865 2.426 1.933 2.578 2.220 2.072 1.919 1.803 1.693

3.460 3.365 3.344 3.529 3.596 3.475 3.814 3.359 2.811 2.837 2.583 2.402 2.198 2.104 1.975

same same same same same same same same same same 3.004 3.031 3.042 2.404 2.257

3.862 3.904 3.764 3.681 4.132 4.218 4.275 4.341 4.410 4.372 4.571 4.547 4.586 3.908 4.721

19.611 19.966 20.242 20.705 21.176 21.515 22.229 22.432 21.919 22.306 22.295 22.137 21.843 22.462 21.008

25.699 26.494 27.188 27.999 28.795 29.390 30.265 30.598 30.240 30.053 29.637 29.070 28.361 27.629 26.841

26.391 27.117 27.749 28.503 29.249 29.799 30.633 30.929 30.508 30.294 30.269 30.273 30.287 29.663 28.953

29.317 30.289 31.024 31.603 32.575 33.535 34.439 35.336 36.213 36.963 37.839 38.601 39.327 39.302 40.093

120.6–162.3(108.6) 123.9–168.2(110.9) 126.4–173.3(113.1) 127.6–175.7(115.1) 128.3–177.3(115.2) 132.1–182.9(117.3) 138.8–191.3(123.5) 149.9–206.6(131.2) 163.5–227.5(137.7) 175.9–238.9(144.2) 187.1–254.0(149.6) 198.2–271.0(155.4) 210.1–291.3(161.8) 229.2–316.7(172.2) 249.5–343.9(180.2)

Notes: a With 10 per cent/year depreciation. b 1960–67 data include some deductions, considering misallocation or corruption. See text. c Series I (minimum estimates): official defence budget for 1961–71, including retroactive application for 1960–66; defence budget plus military aid for 1972–90; 150 per cent of defence budget for 1991–94; 15.0 per cent of GNP thereafter. Series II (in-between estimates): identical to Series I for 1961–71; 150 per cent of defence budget for 1972–76; 150 per cent of defence budget plus military aid for 1977–90; defence budget plus 8.5 per cent of total budget for 1991–94; 17.5 per cent of GNP thereafter. Series III (maximum estimates): identical to Series I for 1961–71; 150 per cent of defence budget plus military aid for 1972–91; defence budget plus 8.5 per cent of total budget for 1992–94 with 1991 exchange rate; 20.0 per cent of GNP thereafter. d Series IV: official ROK estimates in commercial/trade rates. e DPRK cumulative spending in 1960 is assumed to be 75 per cent of the ROK’s. A higher estimate would yield even lower figures for the following several years due to higher depreciation. f Figures in parentheses are ratios from ROK estimates, with ‘total’. ROK expenditures including US aid.

Source: Derived from Tables 5.1, 5.2 and 5.3

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

108 Military balance and arms race between the two Koreas How about the compared military capabilities of the two Koreas if we exclude the manpower costs? In order to make the cumulative investment plus O&M expenditures, some conversions are in order. For the ROK since 1961, expenditures on personnel can be directly deduced from the total DE (ROK budget plus US military aid).34 For the 1954–60 period, US military aid is defined as investment plus O&M. It yields a lower estimation, since it does not include the ROK budget spending on O&M.35 The 1961–94 data of the ROK personnel expenditures reveal a close parallel between the per soldier cost and per capita GNP: the former used to be higher by a factor of 1.5–2.0 in the early 1960s but the gap has been gradually closed to almost even in the 1990s. That is, per soldier cost has been consistently higher than per capita GNP, although the growth elasticity of the former is lower than 1.0. A cross-nation survey of several former-CMEA states also shows that per soldier personnel cost and per capita GNP are almost identical.36 The wealthier a heavily militarised, developing society becomes, the less it will be for the relative cost for military personnel, if the conscription system is maintained. It needs more civilian consumption and more important, an increasing share of GNP for savings/ investment. The same can be said for the DPRK which has maintained a conscription system since 1956, although its economic growth rate since the mid-1970s has been lower than that of the ROK. Here, we can estimate the DPRK expenditures on military personnel by calculating the percentage of estimated manpower/population, applying a multiplier, and generating its share of GNP. The multipliers are 1.25 (1961– 66), 1.2 (1967–71), 1.15 (1972–78), 1.12 (1979–90), 1.15 (1991), 1.2 (1992), and 1.25 (1993), all somewhat lower than the corresponding values of the ROK. We may underestimate personnel costs of the KPA enlisted men who ‘receive food, clothing, and housing superior to those available to the average peasant’.37 Again, we are rather generous regarding the DPRK expenditures for investment and O&M. For DPRK military manpower, the NUB estimation is used up to the late 1970s, since it is more consistent than the ACDA/IISS estimates that include a sudden jump in 1979 after the new intelligence reports.38 The almost identical ACDA and IISS estimates are used until 1987, while the MND estimation is used thereafter, since, again, it is more consistent. The result is shown in Tables 5.7 and 5.8. The DPRK spent more on a per soldier basis till 1975, but the ROK began to outspend the North thereafter to such an extent that the South/North ratio was more than 6-to-1 (or 4-to-1 in total manpower costs) in 1993–94. It also shows that the KPA soldiers as well as the civilian sector, have been increasingly underfed and supplied since the early 1980s. Still, Pyongyang is reported to have expanded its manpower during the same period – again, a clear indication of its labour-intensive arms buildup programme. Table 5.8 shows the ROK vs. DPRK cumulative investment and with an 8 per cent depreciation in constant 1987 US dollars. The ROK annual stock (investment) includes the ROK spending on investment and US military aid for procurement

Military balance and arms race between the two Koreas 109 Table 5.7 ROK–DPRK military personnel expenses (Unit: Current US$) ROK

DPRK estimated

Amount Manpowera Per Manpower Force ($ million) (× 1,000) soldier (× 1,000) Ratio

1961 1962 1963 1964 1965 1966c 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

97.0 111.2 93.3 85.4 92.0 113.6 119.7 146.9 177.5 201.6 226.9 246.9 271.5 338.6 431.2 617.7 812.6 1,037.2 1,181.3 1,300.7 1,658.1 1,738.0 1,752.9 1,774.3 1,695.0 1,887.0 2,082.9 2,727.6 3,404.7 3,759.6 4,327.6 4,750.0 5,171.9 5,724.8 6,551.7 6,844.9

600 602 607 600 604 572+ 612 620 620+ 645+ 638+ 635+ 634+ 634+ 630+ 610+ 635+ 642+ 638+ 601+ 606+ 602+ 622+ 622+ 600+ 604+ 629+ 650+ 650+ 655+ 655(830) 655+ 655+ 655+ 655+ 690

162 185 154 142 152 199 196 237 286 313 356 389 428 534 685 1,023 1,280 1,616 1,852 2,164 2,436 2,887 2,818 2,853 2,825 3,124 3,311 4,196 5,238 5,740 6,607 7,252 7,896 8,755 10,003 9,920

397.9 389.3 375.1 411.3 411.3 411.3 412.5 433.5 466.1 467.3 466.7 468.2 504.7 561.8 567 567 570 612 692 700 768 782 784 784 784 838 838 870 980 990 995 1,010 1,030 1,030 1,040 1,055

3.586 3.412 3.243 3.409 3.332 3.208 3.113 3.166 3.295 3.197 3.136 3.053 3.203 3.481 3.441 3.377 3.336 3.521 3.914 3.889 4.194 4.199 4.139 4.069 4.000 4.202 4.130 4.213 4.662 4.626 4.571 4.558 4.571 4.494 4.446 4.529

ROK/DPRK Percentage Amount Per of GNPb ($ million) soldier

4.483 4.265 4.053 4.261 4.164 4.010 3.736 3.800 3.954 3.836 3.763 3.510 3.683 4.003 3.957 3.884 3.837 3.944 4.383 4.356 4.697 4.703 4.636 4.557 4.480 4.706 4.625 4.718 5.221 5.181 5.257 5.470 5.714 5.618 5.780 5.888

95.7 96.6 98.2 110.6 115.7 113.0 122.7 138.5 146.1 169.9 193.2 206.8 355.1 326.9 383.0 409.7 442.4 521.0 650.6 726.7 847.7 938.9 963.7 986.5 986.7 1,087.1 1,115.2 1,192.4 1,347.1 1,246.1 1,177.1 1,114.8 1,059.3 973.1 906.8 886.7

241 248 262 269 281 275 297 320 313 363 414 442 505 581 683 723 776 851 940 1,038 1,104 1,201 1,229 1,258 1,258 1,297 1,331 1,370 1,375 1,257 1,183 1,104 1,028 945 872 840

Manpower %

150.8 154.6 161.8 145.9 146.9 139.1+ 148.4 143.0 133.0+ 138.0+ 136.7+ 135.6+ 125.6+ 112.9+ 111.1+ 108.9+ 111.4+ 104.9+ 92.2+ 85.9+ 78.9+ 77.0+ 79.3+ 79.3+ 76.5+ 72.1+ 75.1+ 74.7+ 66.3+ 66.2+ 65.8+(83.4) 64.9+ 63.6+ 63.6+ 63.0+ 64.5

Source: Tables 5.1 and 5.3; Military Balance; World Military Expenditures and Arms Transfers; NUB, Comparative Trend Analysis of the Total Capability of North and South Korea 1979. Notes: a Excludes ‘defence call-ups’ since 1969, which is over 170,000 in 1991, but abolished in 1996. b Derived from the force ratio, multiplied by 1.25 (1961–66), 1.2 (1967–71), 1.15 (1972–77); 1.12 (1978–90); and 1.15 (1991), 1.2 (1992), 1.25 (1993), 1.3 thereafter. c Probably excluding ROK troops in Vietnam. d Reinforcements from the Ministry of Public Security troops.

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977

Year

0.555b 0.796b 0.672b 0.725b 0.661b 0.833b 0.666b 0.631b 0.932 1.126 1.271 1.185 1.507 0.883 1.195 1.358 2.139 2.469

Investment

O&m +

0.358 0.501 0.347 0.428 0.273 0.521 0.239 0.085 0.363 0.522 0.719 0.511 0.911 0.274 0.551 0.765 1.864 1.555

Investment

ROK Annual

4.703 5.122 5.385 5.679 5.866 6.248 6.414 6.532 6.941 7.512 8.182 8.713 9.523 9.644 10.067 10.620 11.909 13.426

Investment

O&M+

(5.83) (5.87) (5.74) (5.71) (5.53) (5.61) (5.40) (5.05) (5.10) (5.13) (5.44) (5.52) (5.98) (5.78) (5.87) (6.16) (7.51) (9.46)

Investmentc

ROK Cumulative

? 0.252 0.315 0.376 0.699 0.802 0.931 1.288 1.678 1.600 1.626 2.107 1.492 1.418 1.313 1.447 1.409 1.432

I

Annuald

? same same same same same same same same same same same 1.847 1.673 1.899 2.134 2.275 2.419

II ? same same same same same same same same same same same 2.286 2.182 2.189 2.419 2.404 same

III

DPRK Investment and O&M

Table 5.8 ROK–DPRK cumulativeinvestment and O&Ma (Unit: 1987 billion US$)

II

III

3.762 same same 3.713 same same 3.731 same same 3.808 same same 4.202 same same 4.668 same same 5.225 same same 6.095 same same 7.285 same same 8.303 same same 9.264 same same 10.630 same same 11.272–11.618–12.065 11.788–12.361–13.383 12.158–13.272–14.408 12.633–14.344–15.674 13.031–15.454–16.849 13.421–16.637–17.920

I

Cumulativee

125.0 138.0 144.3 149.1 140.1 133.9 122.8 107.2 95.3 90.5 88.3 82.0 78.9–84.5 72.6–81.8 69.9–82.8 67.8–84.1 70.7–91.4 74.9–100.0

ROK/DPRK

3.030 2.994 3.477 3.181 3.159 2.929 2.895 3.108 2.844 3.488 4.469 4.901 4.823 4.738 4.741 4.849 5.090 5.679 5.720

1.689 1.566 1.664 1.327 1.435 1.268 1.413 1.501 1.676 2.042 2.635 2.944 2.965 2.925 2.852 2.861 2.920 2.900 2.906

15.382 17.145 19.250 20.891 22.379 23.518 24.531 25.587 26.384 27.761 30.009 32.510 34.732 36.691 38.497 40.266 42.135 44.443 46.606

(9.47) (10.28) (11.12) (11.56) (12.07) (12.37) (12.79) (13.27) (13.89) (14.82) (16.27) (17.91) (19.44) (20.81) (22.00) (23.10) (24.17) (25.14) (26.03)

1.359 1.442 1.197 1.242 1.321 1.211 1.189 1.442 1.420 1.341 1.659 1.170 0.829 1.579 1.299 1.214 1.108 1.108 1.028

2.404 2.500 2.239 2.268 2.327 2.260 2.260 2.484 2.474 2.360 2.660 2.104 1.707 1.839 1.663 1.544 1.427 1.409 1.310

same same same same same same same same same same same same same same 2.083 2.173 2.270 1.709 1.592

Notes: a With 8 per cent/year depreciation. b 1960–67 data include some deductions, considering misallocation or corruption. See text. c Military capital stock provided during the Korean War and the 1954–60 period, with depreciation. d Total defence expenditures minus estimated personnel expenses. See text. e Assumed to be 80 per cent of the ROK’s in 1960.

Source: Tables 5.6 and 5.7; Hamm, ‘State Power and Armament of the Two Koreas’.

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

13.706–17.710–18.890 14.052–18.793–19.879 14.124–19.528–20.527 14.237–20.234–21.153 14.419–20.942–21.788 14.476–21.527–22.304 14.507–22.064–22.780 14.788–22.783–23.441 15.025–23.435–24.040 15.164–23.919–24.477 15.610–24.666–25.178 15.463–24.797–25.268 15.430–24.520–24.897 15.055–24.398–24.744 15.495–24.109–24.848 15.469–23.725–25.034 15.340–23.252–25.301 15.221–22.801–24.986 15.031–22.288–24.580

81.4–112.2 86.2–122.0 93.8–136.3 98.8–146.7 102.7–155.2 105.4–162.4 107.7–169.1 109.2–173.0 109.7–175.6 113.4–183.1 119.2–192.2 128.7–210.2 139.4–230.7 148.3–237.8 154.9–248.4 160.8–260.3 168.6–274.7 177.9–292.0 189.6–310.1

112 Military balance and arms race between the two Koreas reported in the US House of Representative hearings and a few extrapolations.39 The ROK cumulative investment plus O&M in 1960 is derived from the 1954–59 military aid data, and the DPRK’s is based on the assumption that it was 80 per cent of the ROK’s in the same year, a somewhat higher estimate than the cumulative DE. The ROK stock is derived from the estimated stock in 1953 and postwar investment. The ROK stock at the end of the Korean War is estimated as follows. First, the ROK stock in 1949 was $56 million in original cost or $110 million in replacement cost for 50,000 men, or about 1.3 times of the amount, since additional equipment was supplied afterward for a total of 65,000 men (actually, the size of the ROKA manpower was almost 100,000 in 1950). Second, a conservative estimate of the ROK stock in 1949 is at least 1.25 times $56 million, but a 1.25 times $83 million (the mean of $56 million and $110 million) is more probable. Third, the 1953 stock is calculated by multiplying these figures by the 1953/1949 ROK manpower ratio. Finally, convert the 1953 figures (in 1949 price) into 1987 US dollars.40 The ROK stock in 1953 is estimated as $3.198–4.797 billion in 1987 prices. The postwar ROK stock can be generated by applying the formula, S = I + (1 - 0.08)S , where S is the stock and I t t t-1 is annual gross investment. The ROK investment in military capital stock in 1954– 59 is estimated by subtracting a generous amount of spending on O&M for equipment from US military aid. The estimated O&M expenditures are $150 million for 1954–55, $130 million for 1956–58, $120 million for 1959 and $110 million for 1960, assuming intensive education and training of the ROK troops during the expansion period (1954–55) and the actual manpower trend thereafter.41 If we take into account the fact that the ROK troops were more heavily armed than they had been in the prewar period, the estimated stock in 1953 or consequent years is very conservative. It can cover considerably the misallocation of resources including widespread corruption in the ROK military in the 1950s. The estimated DPRK cumulative stock plus O&M (80 per cent of the ROK’s in 1960) would be even more generous. At any rate, depreciation makes the effect of the misallocation on ROK capabilities in later periods increasingly less significant. The ROK stock in 1960 ($5.832–6.724 billion) may appear overestimated if we compare cumulative investment plus O&M ($7.054 billion), but it should be remembered that the latter figure is based on only the postwar spending. Table 5.8 shows a picture of the ROK vs. DPRK military balance similar to that of the cumulative DE comparison. The North began to outspend the South in nonpersonnel DE as well as total DE in 1964 and maintained the lead in annual spending until 1975 (or 1976 in case of the higher estimates). Consequently, the DPRK became superior in cumulative non-personnel DE in 1968–69, which it maintained until 1977 or 1980. On the other hand, the ROK superiority in the 1960s was lost due to the lower level of US aid and the rapid buildup of the DPRK military capabilities in the second half of the 1960s. The ROK Force Modernisation Plan 1971–75 (completed in 1977) with US aid of $1.5 billion could not make up for its inferiority,

Military balance and arms race between the two Koreas 113

since it was basically a compensatory measure for the depreciation of obsolescent stock. Accordingly, the DPRK enjoyed about a 40 per cent superiority over the ROK in 1975 in the most pessimistic estimate. However, the DPRK superiority by a factor of 1.25–1.4 may not have been enough to commit a major military initiative. US ground troops in Korea and air/naval capabilities in the Far East were an important factor to fill the gap. The KPA superiority was qualitative rather than quantitative in such areas as automatic assault rifles (AK-47) and especially naval/ air capabilities, and the latter could have been matched by quick US reinforcement.42 As is the case for the comparison of cumulative total DE, however, the ROK regained superiority in the 1980s and gradually expanded the gap. Furthermore, the reduction or halt of Soviet and Chinese aid and the continued negative economic growth in the 1990s have been major blows to the KPA. Arms transfers from Moscow or Beijing have been reduced to almost zero in the 1990s (see Table 5.2) but its defence industrial capacity could not compensate for the dramatic reduction in arms imports. Consequently, ‘it seems likely that the conventional military capabilities of the North have been degraded over the past few years’.43 Its investment can hardly make up for the depreciation of the last 6–7 years. The DPRK military capabilities in 1997 are estimated as 30–50 per cent of the ROK, or about 27–37 per cent if we use the cumulative total DE. Even the ROK stock alone exceeded the lower end of the DPRK cumulative stock plus O&M by the end of the 1980s and was almost even with the highest estimate in 1994. How do we interpret the findings, especially compared against the official ROK claim that the DPRK still maintains a military superiority? The official claim is not warranted. There are three good reasons why the official ROK claim should be rejected. First of all, as we have demonstrated, the ROK estimation exaggerates the DPRK spending on defence. However, even the cumulative total DE of the DPRK based on the ‘exaggerated’ ROK estimation would yield a clear, if somewhat less pronounced, ROK superiority from the early 1980s (in 1994 the S/N ratio is 149.7 per cent). This is because there are two other factors omitted in the official ROK balance assessment. The second factor is, of course, the US military aid to the South. As Table 5.9 shows, the cumulative investment of the South is ridiculously low – 3.3 per cent in 1975 and 10.4 per cent in 1976. To maintain that the South could triple its cumulative investment in one year is absurd. How could it maintain 50.8–54.2 per cent of CCC of the North during the 1970s with such a low investment stock? This nonsense is fabricated by the omission of US military aid that was almost entirely responsible for the ROK investment and equipment O&M till the early 1970s. On the other hand, foreign military aid is included in our assessment of the capabilities of both Koreas. Third, the depreciation factor. The official ROK data of cumulative investment in Table 5.9 do not include depreciation. One may argue that the DPRK

— — — —(50.8) 3.3 10.4 — 35.8 —(54.2) — 49.8 —(60.4) 67.2(65) 71 80 82.4(71) 82.9 — 91.9 —(75)

1960 1965 1970 1973 1975 1976 1978 1980 1981 1983 1984 1986 1988 1989 1991 1992 1994 1995 1996 1997

46.7 11.5 7.3 — 13.6 19.9 34.4 47.4 54.3 68.0 74.2 — — — — — — — — —

Investment Excluded No —

Notes: a Figures in parentheses are ROK/DPRK CCC. b Official ROK data with 8 per cent depreciation.

Source: Tables 2.1, 5.6 and 5.8.

Investment Excluded No — — — 13 13 13 18 37 58 68 94 — — — — — — — — — —

Investment Excluded Yes 8%

(III)

(II)

(I)a

Expenditure Military aid Depreciation (per annum)

Rand

Rhee

MND

133.3 129.7 101.2 90.6 82.2 85.0 94.8 100.4 104.5 110.9 113.1 115.2 123.5 131.2 144.2 149.6 161.8 172.2 180.2 —

Total Included Yes 10%

(IV)b

This research

Table 5.9 ROK–DPRK cumulative spending compared (Unit: ROK/DPRK %)

133.3 123.7 91.7 87.8–84.5–87.8 90.5–81.8–90.5 98.6–86.1–98.6 95.3–100.0–122.0 109.6–113.6–144.8 116.0–119.6–154.9 123.9–126.8–168.2 126.4–129.0–173.3 128.3–130.4–177.3 138.8–140.5–191.3 149.9–161.5–206.6 175.9–177.3–238.9 187.1–191.1–254.0 210.1–224.4–291.3 229.2–246.0–316.7 249.5–269.2–343.9 267.5–289.8–367.8

Total Included Yes 10%

(V)

125.0 133.9 89.3 72.6–78.0–81.8 67.8–74.0–84.1 70.7–77.1–91.4 81.4–86.9–112.2 93.8–98.6–136.3 98.8–103.3–146.7 105.4–109.2–162.4 107.7–111.2–169.1 109.7–112.6–175.6 119.2–121.7–192.2 128.7–131.1–210.2 148.3–150.4–237.8 154.9–159.7–248.4 168.6–181.2–274.7 177.9–194.9–292.0 189.6–290.1–210.1 200.8–225.9–327.8

Investment + O&M Included Yes 8%

(VI)

Military balance and arms race between the two Koreas 115

inventories should be less depreciated than the ROK’s, since the KPA has operated its equipment less frequently due to a lower level of training. However, the seemingly higher depreciation on the part of the ROK is partly compensated by its higher level of spending on O&M, which include maintenance and repair. Furthermore, the spending on construction of military facilities to which the DPRK must have allocated relatively higher proportions of its DE (for underground military facilities, key defence-related plants, tunnels, etc.) should be depreciated equally44 – or in favour of the South which has maintained fewer underground facilities. Hence, the 8 per cent depreciation does not favour the ROK side. Finally, it should be remembered that the calculation of cumulative total DE or non-personnel DE is rather conservative for the ROK and more liberal for the DPRK. To conclude, the ROK regained its military superiority, which it enjoyed during the postwar period up to the mid-1960s but lost in the next decade or so, in the 1980s. It has continued gradually to widen the gap. The magnitude of the ROK superiority in recent years is higher than that of the DPRK in the 1970s, but even then, the superiority of the North was more or less matched by US forces in Korea or, if required, ROK troops in Vietnam (1966–72). In 1995, the DPRK military capabilities are estimated to be 32–56 per cent of the ROK’s, or that is what our findings tell us. And we are not alone. A 1995 comparison of projected ‘combat power’ by a war-game specialist gives the ROK a score of 1,020 (second in East Asia, next to China) including 35 for naval power, while the DPRK (ranked 5th after Vietnam and Taiwan) receives a score of 389 including 14 for its naval power, that is, about 38 per cent of the ROK score.45 Also, Chinese officials in private conversations with US officials and scholars have expressed the view that ‘US and South Korean intelligence estimates exaggerate North Korean military strength’.46 Conclusion: external factors of armament The arms race ‘model’, if not theory, suggests an action–reaction chain of arms buildups between the states in mutual conflict. The model has an intrinsic appeal especially in the Korean case where two divided regimes have been engaged in a life-and-death struggle in the literary sense of the term. However attractive it may be, a peaceful coexistence or even the Korean ‘confederation’ proposed especially by Kim Il Sung would not be a viable solution. Although it is highly desirable, a long-term, functionalist integration, i.e. the civil society-centric approach, cherished by many South Koreans would not necessarily create a unified Korean nation. The state (in either the South or the North) would not just ‘wither away’, or that is at least what I would like to argue. The dilemma of the divided Korea makes the arms race explanation even more appealing. Yet our survey of defence expenditures, strategies, manpower, and equipment comparisons shows that the arms race explanation is only partially correct.47 In

116 Military balance and arms race between the two Koreas terms of annual manpower level, both Koreas were engaged in a race in the early postwar years – a more or less precise estimation of the DPRK defence spending is not available. Even the manpower reduction of the North in 1956 was reciprocated by a roughly equivalent level of reduction by the South in 1958–59, albeit under strong US pressure. The two maintained a status quo till 1962. However, the South did not respond to the DPRK arms buildup drive from 1963 on and further acceleration in 1967–71. Instead, the South sent troops to Vietnam, which suggests a US/ROK perception of military superiority or a proper balance. During the height of North Korean infiltration/guerrilla operations, the ROK buildup in 1966–68 was minimal, except for the creation of mostly unarmed militias, the Homeland Reserve Forces. It was not until the 1970s that the ROK became more seriously concerned with the conventional military balance. The US-financed Force Modernisation Plan (1971–77) was not enough; the ROK commenced the FIP (1974–81), mostly funded by its own efforts. Meanwhile, the DPRK slowed its pace in the early 1970s but continued to expand its manpower in ground troops and finally exceeded the South by the end of 1970s. The North tried hard to substitute manpower for spending on advanced equipment from the late 1970s to the mid-1980s. Considerable military aid from the Soviet Union in 1985–89 helped the DPRK to modernise its obsolete air force/air defence capabilities. However, the buildups of the North in the 1980s were more labour-intensive. In the 1990s, the North, no longer able to match the conventional strength of the South, opted for a cheaper alternative: the ‘nuclear card’. On the other hand, the ROK achieved parity in conventional capabilities by the end of FIP-I. Yet it continued its buildup programmes, the FIP-II and III, which were not considered during the FIP-I period. Although its defence burden has been reduced from 6 per cent of the GNP to less than 4 per cent in the 1990s, rapid economic growth enabled it to continue arms buildups. The foreign currency/ financial crisis of the South that started in late 1997 will reduce the level of arms imports, but it only means a slowdown of its buildup drive. Overall, the South, superior to the North until the mid-1960s, lost the edge in the following 10 to 15 years, but regained it and has expanded the gap since the early 1980s. Yet it has not responded to the slowdown or halt of the DPRK buildup in the 1990s. Nevertheless, it accepted to ‘buy peace’ by its commitment (to the US) to contribute more than $2 billion to the Korean Peninsula Energy Development Organisation which would, under the US-DPRK agreement in 1994, build two de facto South Korean-type 1,000-megawatt light-water reactors in North Korea. To oversimplify, there have been periods of simultaneous buildups, status quo, and a one-sided race. The one-sided ROK race especially in the 1980s and 1990s has been justified by a misperception (or intentional distortion) of the DPRK military capabilities, which would lead to the bureaucratic-organisational inertia explanation. ‘[E]external threats may serve as the initial mechanism of legitimisation that permits a nation to begin arming in earnest. Once the armament program has begun, however,

Military balance and arms race between the two Koreas 117

external threats are of little importance in its continuance.’48 As long as one side is threatened by the very existence of the other regime, arms buildups on the Korean Peninsula will be sustained by the internal lock-in mechanism that is more often than not dominated by the hawkish coalition. However, the arms race explanation cannot be rejected altogether. Competitive armament efforts occurred on the Korean Peninsula in the mid-1950s, and for the most part in the 1970s and 1980s. The North has tried since the late 1970s to maintain a balance by its own qualitative race: first, the labour-intensive approach; and second, an asymmetric arms race including the nuclear card or the alleged chemical-biological warfare capabilities (CBW), in the face of the ROK–US conventional superiority.49 An arms race does not have to conform to the Richardsonian model of a symmetrical annual tit-for-tat game.50 The buildup programmes of the North in the 1960s and the second half of the 1980s, or the FIPI of the South, might have been a belated response to the military superiority of the opponent, or a seesaw game. Furthermore, the bureaucratic-organisational pressures do not exist in a vacuum. They need positive feedback on the political as well as bureaucratic conflict over resources. It has to be periodically or intermittently justified by new tangible threats to national security, which partially supports the arms race explanation. The post-Cold War arms reduction by the US, albeit with the Pentagon’s search for a new enemy, is a good example. Last but not least, there is another external variable of arms buildups of the two Koreas, i.e. foreign military aid. The wartime and postwar arms buildups of the Koreas were by and large funded by aid. The decision for the buildup programme in the North in 1962 was neither a response to the South’s buildups nor to internal pressures. It was a desperate attempt to fill the gap created by the reduced aid and commitment from Moscow.51 The DPRK response to the final PLA withdrawal was the creation of a militia; in return, China provided considerable military aid, especially jet aircraft in the late 1950s. Likewise, a series of self-armament decisions by the ROK in the 1970s were a response to reduced US aid and troop withdrawals. It should be noted that the ROK did not energetically respond to arms buildups and provocation by the North in the 1960s when the US did not reduce its security commitment. It was President Nixon’s and, later, President Carter’s troop withdrawals that triggered the ROK crash arms-industry programmes. While the ROK buildups since the early 1980s can be better explained by internal pressures, this explanation does not hold for the ROK before 1974, since it was US aid that was almost entirely responsible for the ROK armament. Furthermore, the US has also played a deterrent role against a possible ROK attack on the DPRK or the nuclear armament of either Korea.52 The Soviets and the Chinese deterred North Korea as well. Moscow restrained major arms transfers to Pyongyang during the 1972–84 period and Beijing followed suit since 1984, although the latter has provided North Korea with economic aid and diplomatic support.

6

Resources, state power, and armament

It was demonstrated in Chapter 5 that a liberal or generous application of the arms race model does not quite successfully explain the arms buildups of the two Koreas. External factors, to be sure, are primarily responsible for the survival of the two opposing regimes and the expansion of their armed forces during the war as well as the origin of the Korean conflict, that is, the division of the nation. Armament efforts of the two Korean states have been determined to a large extent by external factors: changes in the dynamic military balance and major withdrawals of security commitment from the US or the Soviet Union/Russia or China. Yet external factors are necessary, not sufficient, causes of arms buildups for two reasons. First, North and South Korea began to ‘nationalise’ their national security by self-reliant defence policies in the 1960s and the 1970s respectively. Second, the perception of a national security threat is the combined outcome of both internal and external factors. The debate in the United States on Soviet military capabilities or the less pronounced debate on the inter-Korean military balance since the late 1980s reveal that threat assessment is a political process.1 However, the military industrial complex (MIC) or the bureaucratic-organisational incrementalism as the ‘domestic sources’ of armament is a static explanation. These analyses imply that the threat assessment, defence policy decision-making, and budgeting remain more or less constant. The incrementalism model can explain neither significant changes in armament nor the beginning of an arms buildup drive. As discussed on pages 137–60 the MIC or military Keynesianism thesis is not satisfactory for the two Koreas. In this chapter, it will be demonstrated that armament depends on the surplus resource that a state is able to generate. As it has been argued, the surplus depends on the overall resource base, degree of mobilisation and the process of allocation. Major threats to national security affect the mobilisation and allocation of resources for arms buildup. However, it is not sufficient. The overall resource base, e.g. the GNP or population, strongly conditions the level of armament (military expenditures or manpower). To repeat, production is logically prior to coercion. The economy is the engine of armament: it may either facilitate or restrain armament. Yet the degree of resource mobilisation of the two Korean states in each period is another

Resources, state power, and armament 119

determining variable of armament. The extraction of resources, e.g. taxation or tax plus profit (or government revenue in North Korea), further determines the level of spending for national defence. Finally, interest representation and the relative autonomy of government affects the budget allocation for national defence. We will analyse the influence of the military and extra resources, such as foreign aid, that provide the government with the autonomy in budgeting. However, we have to estimate North Korea’s GNP, since available estimates are incomplete, unstable or biased. In Section 1, a more valid and reliable estimate of North Korea’s GNP or National Income (NI) will be proposed and compared against South Korea’s. Section 2 is a comparison of the defence effort, i.e. the ratio of defence expenditures over the GNP (or military manpower over population) of the two Koreas. Sections 3 and 4 will be devoted to the analyses of the relationship between defence effort and state power and autonomy of the two Koreas respectively. Estimating North Korea’s GNP It has been repeatedly pointed out that comparing the economic size of the two Koreas is a challenging task indeed. It is especially true for an analyst who lacks training in economics. Yet the estimated North Korean GNP varies widely from one to the other, and each estimate itself is unstable over time. That is why we will try to estimate North Korea’s GNP rather than use the data provided by South Korean authorities, i.e. the Central Intelligence Agency (KCIA), the National Unification Board (NUB), and the Bank of Korea (BOK).2 For instance, a semi-official North Korean per capita national income (NI) in 1991 was $2,580 while it was estimated at $1,430 ($30 billion for a population of 21 million; ACDA), $987 (or $1,123 in a new estimating method; NUB) or as low as $400 by a Soviet analyst.3 Although a new estimate is not likely greatly to improve the validity of these estimates, it is still highly probable that it will improve the reliability of the estimates. The problem is, of course, that the national account data of the DPRK have been, like those of most Soviet-type economies, published in index numbers and, furthermore, these numbers are very rare since 1965. Another problem is how to estimate North Korea’s economic production in a measure that is comparable to the GNP or the GDP used in market economies. Nevertheless, various estimates of North Korea’s GNP have to be made out of the few pieces of information released by Pyongyang. Among them, estimates by the IISS, SIPRI, US ACDA and CIA are unreliable as is the case with the estimated defence expenditures of the DPRK. Their time series are unstable, lacking a sound theoretical or factual basis or adopting diverse exchange rates of the DPRK won.4 The more stable, if not more reliable, estimates are provided by the ROK authorities, a declassified report by the US Central Intelligence Agency (CIA) in 1978, and a few independent analysts, which will be examined presently.

120 Resources, state power, and armament The NUB provided various estimates of the DPRK economy, including the GNP. It is believed that the NUB has relied on official DPRK statistics and intelligence data provided by the Korean CIA (KCIA).5 In the 1990s, it has been succeeded by the BOK estimation. The NUB estimation is based on: (1) the assumption that North Korea’s GNP is 60 per cent of its gross value of social product (GVSP); and (2) the commercial/trade rates of the won used in Pyongyang’s trade with nonCommunist states.6 It once showed that South Korea’s per capita GNP exceeded that of the North in 1969 – the cross-over period was changed to the mid-1970s in later versions – and tends to underestimate North Korea’s GNP more than other estimates. Its most serious problem is the adoption of the commercial/trade rates and the lack of attention to inflation. The BOK estimation repeats the same error: the calculation of the GNP growth rate is based on a constant price for most years while the current GNP itself is estimated in dollars.7 The CIA estimate for the period 1965–76, utilising trade data and official DPRK industrial growth rate, and presumably a purchasing power parity (PPP) of the won, shows somewhat higher GNP figures.8 Among various independent estimates, we will examine a few interesting ones. Yeon adopts a most simple but rather convincing method, which assumes that the DPRK government budget is 60 per cent of its GNP.9 It is a very crude measure, but it avoids the confusion involving the current vs. constant price problem that mars the NUB/BOK estimates. Hwang’s estimate is based on the assumption that North Korea’s GNP is 63 per cent of its GVSP (from the 80 per cent of NI/GNP ratio and the 50 per cent of NI/GVSP ratio), which is somewhat higher than the NUB’s. More important, Hwang argues that the basic rate of the DPRK won, used in its trade with the Soviet Union and other CMEA nations, may better represent its economic size. Its trade with the West has been much smaller than that with the CMEA (the official exchange rates of won have been 2.1–2.2 times higher than the commercial/ trade rates). Hwang prepares two series based on the alternative exchange rates for comparing the economic growth of the two Koreas.10 Another inter-Korean comparison is proposed by Kim who suggests that the net material product (NMP), instead of the GNP, would be a better measure. The NMP of South Korea (GNP minus non-productive services) is estimated at 60–70 per cent of its GNP.11 Consequently, the South began to exceed the North in this comparison in 1980. Yet it ignores the fact that North Korea’s NMP includes a considerable amount of ‘net indirect tax’ (indirect tax minus subsidy). Nor is it quite acceptable that nonproductive services should be excluded in the calculation of economic capabilities. It is true that a capitalist economy tends to produce a great deal of unnecessary goods and services, but the irony is that the prospering service sector is one of the vital strengths of capitalism. Finally, let us examine the pioneering work of Lee. Professor Lee’s estimation of North Korea’s NI is based on: (1) the DPRK official index numbers of NI (1946–64);

Resources, state power, and armament 121

(2) the 1966 per capita income of 500 won (510 won in later reports), which is 1.2 times that of 1962; (3) the official and/or estimated population; and (4) a PPP of the won derived from the comparison of non-commercial rates of the won and East European currencies, a method proposed by Peter J. D. Wiles ($1 = 1.66 won in 1966).12 Although it turns out that the official DPRK index numbers are given in current price, contrary to the assumption that they are in constant price. Nevertheless, this methodology yields the most valid and reliable estimation of North Korean economic performance. Our estimation of North Korea’s GNP adopts the method pioneered by Lee, with a few revisions. First, the relations between the NI defined by the DPRK and the GNP should be accounted for. Second, the inflation rates of the won are estimated, utilising some price index data. Third, the PPP of the won in current price should be provided by comparing the inflation rates of the won and US dollar. Fourth, North Korea’s GNP is estimated in US dollars. First, it is well known that the GVSP or the NI used in the material product system (MPS) is different from the GNP or the NI in the system of national accounts (SNA) used in market economies. In the MPS, ‘non-productive services such as commerce, (passenger) transportation. . . and non-productive services of officials, lawyers, doctors, teachers, artists, etc.’13 are not included. The GVSP is defined as ‘the sum of the gross output of all the [productive] sectors, double-counting and all’.14 The extent of double counting, however, has been reduced with the improvement in accounting methods such as the independent accounting system introduced by Pyongyang in the 1960s. On the other hand, the NI as defined by Pyongyang refers to the NMP: it is ‘equal to the GVSP minus all costs of means of production incurred in the production of GVSP.’15 The definition in the Dictionary of Economics is as follows: GVSP = C + V + m

(6.1)

where C is the material costs including capital depreciation, V is the total wage, and m refers to the net social income (in a pure capitalist economy, it would mean total surplus value).16 The problem is that the NI ( = V + m) includes the ‘Gorae-Suipkum’ (transaction revenue), or turnover tax, as the social income (m) is composed of the net income of cooperative and national enterprises and transaction revenue, which is ‘the difference between retail price minus wholesale price . . . mainly paid in the price of consumer goods’.17 Furthermore, as is the case with the Soviet Union, turnover tax is the most important item of the DPRK state budget revenue, estimated to comprise of more than 65 per cent of the budget revenue.18 Since the NI in the SNA is defined as ‘the net national product [NNP; GNP minus capital depreciation] minus turnover tax plus subsidies’,19 we need to make some conversions to estimate North Korea’s GNP. First, the omitted non-productive service (NP) and depreciation (D) should be added. The NUB estimates that North

122 Resources, state power, and armament Korea’s official NI is about 88.5 per cent of its GNP, assuming that non-productive service and depreciation account for 6.8 per cent and 3.7 per cent of GNP respectively.20 The estimated shares of the GNP of non-productive services and depreciation are rather small. The depreciation rate is based on DPRK statistics in the 1950s, but it must be higher than 3.7 per cent in the following years due to the growth of industrial production. Likewise, the BOK estimation of North Korea’s service sector is 20.9 per cent (including 7.9 per cent of the non-governmental sector) in 1992, a much higher figure than 6.8 per cent suggested by the NUB.21 Hwang suggests that the average NI/GNP ratio of both socialist and market-oriented developing economies is about 80 per cent.22 That is, 25 per cent of the NI should be added in the calculation of the GNP. Second, the net indirect tax, i.e. total turnover tax minus government subsidies to enterprises and households, should be subtracted in order to calculate the NI defined by the DPRK. A reasonable assumption is that subsidies account for as much as one-third of the spending on the People’s Economy and the social-cultural measures which account for 80–85 per cent of the total government expenditures (TGE), or 27–28 per cent of the TGE. The net indirect tax is estimated at 37–38 per cent of the TGE – 65 per cent of the TGE (gross indirect tax) minus 27–28 per cent of the TGE (subsidies). As the few available TGE/NI ratio figures are 60–65 per cent, the net indirect tax would be 22– 25 per cent of the NI. In sum, North Korea’s estimated GNP is as follows:23 GNP = NI (MPS) + NP + D - Indirect tax = NI (MPS) + 0.25 NI (MPS) - 0.22 ~ 0.25NI (MPS) = 1 ~ 1.03 NI (MPS)

(6.2)

In other words, North Korea’s NI (defined in MPS) is almost identical to its estimated GNP. Of course, it tends to underestimate North Korea’s GNP in the late 1950s and the early 1960s when the shares of TGE and turnover tax over the NI were supposedly lower than the estimated averages. On the other hand, it may overestimate North Korea’s GNP in the 1990s when the TGE/ NI ratio exceeds 70 per cent in the 1990s. This finding is implicitly supported by the North Koreans themselves; they have not declared until 1997 any national income statistics other than per capita NI in the face of ever increasing per capita GNP of the South, even though the two have been engaged in a bitter prestige race. For all purposes, North Korea’s NI data defined in the MPS will be used as its estimated GNP. Table 6.1 shows the officially announced, albeit intermittently, NI (GNP) of North Korea in won or US dollar converted in basic rates Third, the PPP of the won should be provided so that we may compare the GNP statistics of the two Koreas. Although the GNP time series in constant dollar converted from a constant won series may be more desirable, there is no way to obtain a reliable price index or implicit deflator of the won. Nor is it recommended to

Resources, state power, and armament 123

Table 6.1 Offiiical DPRK national income (Unit: current won) Per Capital NI Year 1946 1949 1953 1956e 1957 1960 1964 1966 1967 1970f 1974 1979 1982 1984 1986 1987 1988 1989 1991

$

Exchange

a

Won

a

64–65.5(‘67÷9) 131.8(‘67÷4.4)

1,000 1,920 2,200 2,300 2,400

510 580 606 (‘46×9.4) 0.96 1,030 0.84 1,613 0.97 2,134 1.02 (2,300)h 1.02 (2,400)h

2,530 2,580 2,460

(1.0) (1.0) (1.0)

2,530 2,580 2,460

Populationb Sex

National income

(× 1,000) ratioc

Indexd

9,257 9,622 8,491 9,359 (9,691) 10,789 (12,066) (12,822) (13,249) 14,619 (15,703) (17,027) 17,774 (18,446) 19,060 19,346 (19,677) (20,001) (20,688)

100.0 98.8 88.3 91.6 93.8 95.7

Billion won

100 209 100 245 70 309(314) 146(153) 417 200 683 328 >1,000 476

95.1 86.9g 85.5 84.2 84.2

(6,500)

0.607 1.268 0.880 1.936 2.530 4.159 6.074 6.539 7.684 8.856 16.17 27.46 37.93 42.43 45.74 47.02i 49.78 51.60 50.89

Sources: Korea Central Yearbook, various years; INKS, A General Survey of North Korea, 1983–1993; NUB, Economic Indicators of North and South Korea; Eberstadt, Korea Approaches Reunification; Eberstadt and Banister, North Korea: Population Trends and Prospects; and Hamm, ‘Economic Decline and Foreign Relations of North Korea’. Notes: a Basic rate. b Figures in parentheses are extrapolations. c Shows hidden males especially since 1970. d Available for every year up to 1964 (except the 1950–52 period). f In 1957 price. f In 1971 price. g 1975 statistics. h Exchange rate (1.0) is used, since the data is highly rounded. i Only NI data announced in absolute value.

compare it against the constant dollar series of South Korea (also from the constant ROK won series), since the comparison would depend to a great extent on the base year’s exchange rates of the two Koreas. Consequently, the current price PPP series is more attainable and in fact desirable. There have been about three available exchange rates for the DPRK won: basic, commercial/trade, and non-commercial rates. As it has been mentioned, the basic rate has been 2.1–2.2 times higher than the commercial/trade rate in favour of the won. The former has been $1 = 0.86–1.2 won, while the latter, $1 = 2.05–2.57 won. For obvious reasons, the North has used the basic rate in its economic statistics, while the South has opted for the commercial/trade rate. To be sure, both North

124 Resources, state power, and armament and South Korea have manipulated their currency exchange rates for economic and other policy objectives – it is in the 1990s that Seoul leaves its exchange rates to the market mechanism.24 The basic rate of the DPRK won used in its trade with the Soviet bloc had been 1 rouble = 1.33 won (or 1 old rouble = 0.3 won in the 1950s), convertible to US dollar through the sterling pound until 1972 ($1 = 1.2 won) when the pound was floated. It was $1 = 0.86–1.11 won until 1992.25 Overall, the basic rate leads to an overestimation of North Korean economy, since the nominal price of Soviet exports to and imports from the bloc countries were higher than the export prices to non-bloc countries.26 The basic rate after the collapse of the rouble in 1991–92 is not known, but it may have been discarded. On the other hand, the commercial rate, established in January 1961, for its trade with the West, especially Japan, was £1 = 6.17–7.2 won or $1 = 2.57 won. Again, it was discarded after the sterling pound was floated in 1972 and was succeeded by the trade rate ($1 = 2.05–2.36 won), announced intermittently by the Trade Bank.27 Converted through the exchange rates with the sterling pound and other European currencies, it was unusually high in the second half of the 1970s ($1 = 3.363–3.718 won, or about 3.5 won in 1976–78) when Pyongyang defaulted its debt payment to several European nations.28 Finally, the non-commercial rate is a kind of PPP, presumably based on consumption other than housing for all CMEA currencies; it was $1 = 2.26–2.76 won (or 1 rouble = 1.44–1.72 won) in the 1960s, 2.128 won since 1973, and 1.86 won in 1978.29 Whether it refers to the exchange rate for tourists/foreign currency shops is not confirmed, but it is believed that they are almost identical. The problem is that the basic rate or even the trade rate does not faithfully represent the status of the North Korean economy in the 1990s, as its bank notes are no longer an effective medium of exchange. In 1997–98, the official exchange rate for trade and/or tourists is $1 = 2.16 won, but it is as low as 200 won in the Najin-Seonbong Free Trade Zone. The privileged few use US dollars, Japanese yen or the special notes that can be exchanged with hard currencies. Which exchange rate should be chosen in our estimation of North Korea’s GNP? The answer is not easy. Nor is it highly desirable to use the mean score of basic and commercial trade rates. The best possible alternative is: (1) to compare the preKorean War per capita GNP of the two Koreas; (2) to estimate the rates of inflation in the DPRK for some, if not all, periods; and (3) to use the trend (not the actual figures) of basic and trade rates since 1972. According to Table 6.1, per capita GNP of the North in 1949 is 132 won ($110 in basic rate), while the South’s is estimated at $75–90.30 The North had been more developed (industrialised) due to the Japanese war efforts. Most chemical–heavy industries, mines and hydroelectric power stations had been developed in the North. The per capita net commodity production in 1940 was 102.5 yen in the southern provinces and 166.3 yen in the five northern provinces.31 That is, the North had been more productive by 62 per cent. To be sure, the damage to industrial facilities in the immediate post-liberation period

Resources, state power, and armament 125

must have been much higher in the North – the Japanese fought the incoming Red Army for a week and actually damaged 1,015 large and medium-sized enterprises by flooding mines, turning off the steel mill, etc. North Korean industry produced at 26 per cent of its 1944 output.32 Yet North Korea could operate 840 of the damaged enterprises by the end of 1947 with the help of the Soviets and even hundreds of Japanese who were forced to remain there. In 1949, the official DPRK industrial production was 337 per cent of the 1946 level, surpassing the 1944 output (or 88 per cent of the 1944 output according to the Soviet estimate of the 1946 output), agriculture 151 per cent, and NI 209 per cent of 1946 outputs, respectively.33 Meanwhile, per capita growth in the South must have been much lower, due to rapid increase in population (repatriates from Japan, China, and refugees from the North), political instability and the lack of recovery/development measures. That is, North Korea’s per capita GNP of $120 or about 1.5:1 times of that of the South ($75–90) in 1949 is not an exaggeration. We can accept the basic exchange rate of the DPRK won in 1949 as a proper one. That cannot be said, however, for the post-Korean War exchange rate. For instance, the consumer price index in 1953 soared to 265 of the 1949 price (= 100). Based on the share of consumer industries (18.1 per cent), commerce (6.0 percent), small commodity production (1.2 percent) over the GVSP of 1953, we can calculate that at least 25.3 per cent of total output in 1953 is priced at 265 per cent of the 1949 price.34 Assuming there was no price increase in producer goods industries (Group A) and agriculture comprising 74.7 per cent of GVSP in 1953, the overall price index in 1953 would be 141.7 (= 0.253 × 265 + 0.747 × 100). In other words, the PPP of the won in 1953 is no better than $1 = 1.70 won (= 1.2 × 1.417). Likewise, there exists a difference in the growth rates of the nominal and real wages reported up to the year 1963.35 Furthermore, Pyongyang increased the overall wholesale price by 4.5–5.0 per cent in 1957 in order to collect more tax revenues; in 1962, it lowered the wholesale price by about 2 per cent in its effort to clear the market. Overall, the estimated annual inflation rate in the 1954–61 period (except the wholesale price shift), based on the nominal/ real wage ratio and the estimated share of consumption over NI, is about 6 percent. Then the annual PPPs of the won can be estimated as follows: PPPt = PPP0 × Dt/Wt

(6.3)

where W and D refer to the price index of the won and the US dollar of the year t; t t and PPP refers to the index of the base year (1953). As the inflation rate of the 0 dollar was much lower than that of the won in the 1950s, the PPP of the won has been lowered: from 1.7 won for $1 in 1953 to 2.07 won in 1957 and 2.33 won in 1962.36 Unfortunately, no price index of the won is traceable thereafter, although it is known that Pyongyang cut the wholesale price by about 15 per cent in 1971 (partly to correct the exaggerated report of the total output in 1970, the target year of its

126 Resources, state power, and armament troubled Seven Year Plan). The best possible solution would be: (1) to adopt the formula (6.3) to the 1969– 70 period, assuming there was no significant change in the PPP of the won in the 1963–69 period (the years of greater inflation of the US dollar), and (2) to adjust the PPP for 1970, and then apply the post-1970 trends of basic and trade rates. The official non-commercial rate or basic rate plus special premium of 1978 ($1 = 1.86 won) is used as another benchmark, since the trade rate in 1976–78 was unusually higher, as has been mentioned. Overall, the PPP of the won was identical to the basic rate in 1949, became about 1.42 times lower in 1953, and, with a few exceptional years, has come closer to the trade rate to the extent that it became identical to the latter in 1990. Due to the collapse of the rouble, the basic rate no longer exists after 1991.37 The overall price again increased by at least 10 per cent in 1992 when Pyongyang increased the wholesale price of agricultural goods by over 40 percent. The PPP series is provided in Table 6.2 (and they are used in the tables in Chapter 5). Based on the NI data in Table 6.1, and the estimated PPP of the won, North Korea’s GNP (NI) is estimated in Table 6.2. Estimates for a few years are based on industrial and agricultural products, government budget, and extrapolation. As the NI series (in won) in Table 6.1 does not cover the period since 1992, we use arithmetic means of the growth rates of BOK estimates and the much doubted DPRK data of its GNP (1988–95) delivered to the United Nations in 1997. The unprecedented DPRK report of its GNP in absolute amount (both in won and US dollars) shows a rapid decline of the GNP since 1990: $16.756 billion in 1990, $13.842 billion in 1992, $9.334 billion in 1994, and only $5.215 billion in 1995. Its per capita GNP fell from $835 in 1990 to as low as $239 in 1995 ($719 in a previous report).38 For 1995, per capita GNP of $719, multiplied by the DPRK ‘official’ population is more probable, and used as another benchmark for our estimate. For 1996 and 1997, we cannot but use the nominal growth rates of BOK estimates. In order to derive per capita GNP, however, the DPRK census data should be carefully examined. In Table 6.1, the ‘sex ratio’ of North Korea’s population has been lowered considerably since 1970 (from 95.1 in 1970 to 86.9 in 1975), while it increased gradually during the postwar period – it fell from 98.8 to 88.3 during the Korean War, an indication of the tremendous war casualties.39 Based on the official DPRK population data to the UN Fund of Population, Eberstadt and Banister reconstructed the real population of North Korea, which shows about 1.25 million missing males, mostly adults, in 1987. The North Koreans accepted the missing males and explained it as the mobile population not covered in the Central Statistical Board census.40 That is, Pyongyang withheld a large number of adult males – many of them must have been in the Korean People’s Army (KPA) and the Ministry of Public Security troops as well as in jails, overseas work camps, etc. – and consequently generated a somewhat higher per capita NI data. In Table 6.2, the estimated population data by Eberstadt and Banister are used after the year 1970.

Resources, state power, and armament 127 Table 6.2 Estimated DPRK population and GNP (=NI) Year 1946 1949 1953 1956 1957 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996e 1997e

NI Populationa NI p/c won billion (×1,000) won 0.607 1.268 0.880 1.936 2.530 4.159 4.933 5.276 5.643 6.074 6.500 6.539 7.684 8.460 8.500 8.856 10.32 12.02 14.06 16.17 18.92 20.36 21.91 24.57 27.46 31.03 33.57 37.93 40.12 42.43 44.05 45.74 47.02 49.78 51.60 51.71 50.89 50.94 50.30d 51.80d ? ? ?

9,257* 9,622* 8,491* 9,359* 9,691 10,789* 11,095 11,410 11,568* 12,066 12,400* 12,822 13,249 13,691 14,147 14,619* 14,881 15,338 15,759 16,140 16,480 16,788 17,084 17,379 17,682 17,999 18,314 18,623 18,941 19,267 19,602 19,944 20,292 20,652 21,023 21,412 21,791 22,190 22,589 22,996 23,295 23,295 23,295

64–65.5 132 104 207 261 385 445 462 488 503 524 510 580 617 600 606 693 784 892 1,002 1,148 1.213 1.282 1.414 1,553 1,724 1,833 2.037 2,118 2,202 2,247 2,293 2,317 2,411 2,454 2,417 2,338 2,272 2,174 2,173 ? ? ?

Exchangeb NI $1= billion 1.2 1.2 1.7 1.923 2.04 2.25 2.31 2.33 2.33 2.34 2.34 2.32 2.34 2.32 2.30 2.00 2.01 2.04 2.03 1.98 1.95 1.93 1.90 1.86 1.85 1.86 1.86 1.90 1.93 1.96 2.00 1.98 1.95 1.97 2.00 2.15 2.273 2.50 2.713 2.99 ? ? ?

0.506 1.057 0.518 1.007 1.240 1.848 2.135 2.264 2.422 2.596 2.778 2.819 3.284 3.647 3.696 4.428 5.134 5.892 6.926 8.167 9.703 10.55 11.53 13.21 14.84 16.68 18.05 19.96 20.79 21.65 22.03 23.10 24.11 25.27 25.80 24.05 22.39 20.38 18.54 17.32 15.69 15.06 14.31

NI p/c $ 54 110 61 108 128 172 192 198 209 215 224 220 248 266 261 303 345 384 440 506 589 628 675 760 839 927 985 1,072 1,097 1,124 1,124 1,158 1,188 1,224 1,227 1,124 1,029 920 823 756 673 646 614

Budget/NI (%) c 15.58 56.36 (48.89) 49.38 (42.80) 40.41 (43.40) 47.32 (47.58) 47.40 51.73 53.66 56.28 53.48 54.62 51.38 56.89 59.40 57.38 61.08 61.47 59.12 59.82 60.08 60.54 60.93 60.01 61.81 60.70 60.57 58.54 59.87 61.89 62.04 63.17 63.98 63.60 64.70 68.67 72.53 78.57 (80.00)d (80.00)d ? ? ?

Source: Tables 5.1 and 6.1; and Hamm, The Political Economy of National Security. Notes: a Estimated population except for the official figures marked by asterisks. b Estimated PPP based on consumer price indices and national income by factor in the 1950s; price adjustments in 1962 and 1971; wage/price hikes in 1992; inflation rates of US dollar and estimated inflation of the won. c Expenditures/GNP ratio. Figures in parentheses are internal revenue/GNP, without economic aid included in the budget. d Assuming that the Expenditures/GNP ratio is 80 per cent. e Assuming no population growth due to widespread famine.

128 Resources, state power, and armament Table 6.3 Alternative estimates of DPRK per capita GNPa Year

NUB/BOKb Hwang Ib Hwang IIc Kimd

1946 1949 1953 1956 1957 1960 1965 1970 1975 1980 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

— — 58 67 85 137 193 286 579 758 765 860 936 980 987/1,123 1,064 1,038 943 904 923 957 910 741

46 97 84 160 — 325 454 650 1,603 2,295 2,220 2,324 2,544 2,558 2,481

25 53 46 78 — 177 248 304 751 1,161 978 1,063 1,117 1,145 1,146 924 875 882 802 816

CIAe

36 72 56 — — 208 292 375 (214) 312 425 (301) 605 590 1,000 1,192 — — 1,266

ACDAf

589 1,342 1,367 1,389 1,417 1,429 1,388 1,069 991 980 906 894

Hamm g

54 110 61 108 128 172 224 303 (1,197) 927 1,124 1,158 1,188 1,224 1,227 1,124 1,029 920 823 756 673 646 614

(322) (552) (277) (456) (524) (662) (788) (861) (1,293) (1,190) (1,195) (1,188) (1,184) (1,137) (925) (873) (760) (666) (599) (516) (484) (451)

Source: Revised from Hamm, The Political Economy of National Security. Notes: a Figures in bold are within ± 10 per cent range of the estimate by this research. b A new series since 1989 based on a new estimation method. c In basic rates. d In commercial/trade rates. e In 1975 constant price (figures in parentheses are in converted current price; and 590 won in 1976. f Converted from constant price series. Exchange rate unknown (probably PPP similar to trade rates). g Figures in parentheses are in constant 1987 price.

How does our estimated GNP of North Korea perform against others? Table 6.3 shows the alternative estimates of North Korea’s GNP. First of all, it leads to the conclusion that most estimates share, that is, per capita GNP of the North was higher than that of the South until the mid-1970s. Second, it shows higher figures than other estimates in the 1950s, which is amply supported by rapid postwar reconstruction and the successful Five Year Plan (1957–60). Third, ours is consistently higher than the official NUB estimate until 1992 which shows the lowest figures. However, it is not quite different from others after 1960, especially estimates by Hwang (in trade rates) and the ACDA, in the overall trend if not the absolute figures.41 Fourth, it supports the widely shared observation that the North Korean economy became stagnant in the 1980s and has definitely shrunk in the

Resources, state power, and armament 129

1990s. As it is based on arithmetical means of the ROK estimate and the recent DPRK data of its GNP, our estimation shows lower per capita GNP than the NUB version since 1992 and, consequently, a much higher negative growth rate. These observations are not a statistical artefact. In fact, it is what North Korean statisticians have implied between the lines. The official per capita NI was $1,920 in 1979 – a relatively overrated figure due to the unusually high exchange rate of the won in the 1978–79 period – $2,430 in 1987, $2,530 in 1988, $2,580 in 1989, and $2,460 in 1991. In constant 1987 dollars, it has been reduced from $2,931 in 1979 to $2,430 (1987), $2,448 (1988), $2,404 (1989), and $2,088 (1991).42 In 1993, the DPRK actually accepted the failure of the Third Seven Year Plan, 1987–93 (see the next section). On the other hand, the NUB tends to underestimate the DPRK economic crisis in the 1990s. The problem is that the NUB/BOK estimates treat the GNP growth rates as if at a constant price, but provides North Korea’s GNP in current dollars without generating any GNP figures in won. Consequently, the TGE/GNP ratio, announced each year in current price, tends to increase in the BOK estimate: 91.3 per cent in 1993 and 89.1 per cent in 1994.43 In fact, the ratio in 1987 is 64.0 per cent – based on the only NI data in absolute monetary terms (47.02 billion won) – and our won-based estimate for 1993–94 is 80.0 percent. One of several probable interpretations is that the official ROK estimate of DPRK defence expenditure would produce increasingly lower numbers for the 1990s, i.e. the period of economic decline for North Korea even in the current dollar GNP, without dramatically increasing the budget share of the GNP. Defence burden of the two Koreas Having estimated North Korea’s GNP (or NI defined by North Korea) independent of its estimated defence expenditure (DE), we can examine how the GNP, as the resource base, controls the DE and compare the ‘defence burden’, i.e. the DE/GNP ratio of the two Koreas. As has been pointed out in Chapter 5, the ACDA estimate of North Korea’s DE would yield a 100 per cent statistical explanation (or 1.00 R2) with its GNP, since the estimated DE is nothing but 20 (or 25) per cent of its GNP. It is of course not true, but nevertheless shows the importance of the resource base. Hence, it would be more convenient to compare the GNP of North and South Korea in US dollars so that the readers may have a snapshot of the resource base of armament as well as the degree of economic development (in per capita GNP). South Korea’s GNP and per capita GNP statistics, provided in Appendix A, is based on the up-to-date revised data and implicit exchange rate for the GNP used by the BOK. Yet some modifications are made since the ROK census and the implicit exchange rate for GNP in the 1950s are not quite satisfactory.44 Consequently, the ROK mid-year population in the 1950s is partly based on extrapolation. The ‘real’ exchange rate for the 1953–60 period is generated by the formula (6.3), since

130 Resources, state power, and armament the official rate in the 1950s greatly overvalued the ROK won. The estimated real exchange rate is almost identical to the BOK implicit rate in 1953, but is slightly higher than the latter thereafter. Likewise, the estimated exchange rate in 1974 is adjusted to $1 = 425.64 won against the BOK implicit exchange rate of 404.5 won, which may underestimate the ROK spending on defence in 1974. It may distort the cumulative DE comparison in Chapter 5 slightly in favour of the North. Table 6.4 shows the GNP and per-capita GNP of the two Koreas. Several observations can be made from Table 6.4. First, the war damage in the North was much greater: its per capita income in 1953 is only half of the 1949 figure, while the comparable decline in real per capita GNP in the South for the same period is 19 percent. Second, the North showed tremendous efforts of postwar reconstruction. In 1958, its per capita GNP surpassed the 1949 level, while the South was not able to do the same as late as 1965 (both showed relatively identical population growth rates). The poor performance of the South is also demonstrated by another independent observation that its per capita output in 1960 is over 20 per cent lower than the 1940 level.45 Third, the poor performance of the South continued well into the mid-1960s, contrary to most observations that Park Chung Hee’s First Five Year Plan (1962–66) started the rapid growth drive as early as 1962. Rather, it is since 1966 that the ROK showed a high rate of growth, owing to its export promotion, which was in turn possible largely by the influx of Japanese aid and investment after the normalisation of relations in 1965 and by the ROK earnings in the Vietnam War. Fourth, North Korea’s lead in per capita GNP, which reached about two times that of the South in the first half of the 1960s. The DPRK lead was gradually lost during the next decade (the GNP of South Korea at that time may be underestimated due to the continuous devaluation of the won in order to promote exports). In 1975, per capita GNP of the South almost equalled that of the North and definitely surpassed it in 1976. By 1980, a bad year for the South (for the first time it showed a negative growth in GNP), the South’s lead over the North was about 3.7 times in GNP and 1.7 times in per capital GNP. The central government expenditures of the South surpassed the total government expenditure of the North in 1978. As shown in Chapter 5, the South began to outspend the North on defence in 1976. Finally, per capita GNP of the South grew 8.8 per cent per year for the next decade (1981–90), while the annual growth rate of the North’s was minus 2.0 per cent in constant price. That is, the total DPRK output in the 1980s shows virtually no growth even if we do not consider population growth. South Korea’s lead in 1995 turned out to be over 14:1 in GNP and over 7:1 in per capita GNP. North Korea had definitely lost the economic race in the 1990s, and knew it: Pyongyang has not published its annual industrial growth rate since 1982.46 Visitors as well as dozens of North Korean dissidents and refugees who somehow have made their way to the South, unanimously report the ever worsening standard of living and especially, the diminishing food supplies since the late 1970s.47 The widespread

Resources, state power, and armament 131 Table 6.4 ROK–DPRK GNP and budgeta (Unit: billion current US$) ROK Year 1946 1949 1953 1956 1957 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997c

GNP

DPRK GNP p/c

— 1.510 75 1.390 68 1.614 73 1.796 79 2.119 85 2.263 88 2.366 89 2.718 100 2.876 103 3.006 105 3.671 125 4.274 142 5.226 169 6.625 210 8.105 252 9.456 288 10.63 318 13.45 395 18.70 512 20.79 590 28.55 797 36.63 1,008 50.01 1,353 62.37 1,662 61.07 1,605 66.6 1,735 71.3 1,824 79.5 2,002 87.0 2,158 89.7 2,242 102.8 2,505 133.4 3,218 179.8 4,295 220.4 5,210 251.8 5,883 292.0 6,757 305.7 7,007 330.8 7,513 378.0 8,508 452.6 10,076 480.2 10,543 (437.4) 9,511

CGE

b

(377) (311) (300) (322) (326) 0.430 (34) 0.449 (320) 0.506 (366) 0.448 (371) 0.337 (370) 0.377 (425) 0.581 (468) 0.844 (533) 0.999 (629) 1.498 (716) 1.524 (774) 1.777 (819) 2.167 (955) 2.146 (1,141) 3.335 (1,199) 4.244 (1,523) 5.505 (1,803) 6.764 (2,245) 9.107 (2,537) 11.96 (2,238) 12.61 (2,199) 14.83 (2,174) 15.90 (2,296) 15.71 (2,371) 16.69 (2,375) 17.08 (2,585) 18.07 (3,218) 22.10 (4,156) 28.58 (4,856) 38.25 (5,211) 47.03 (5,736) 54.95 (5,786) 60.14 (6,083) 65.89 (6.747) 65.68 (7,811) 97.54 (7,900) 110.13 (6,987) 100.50

GNP 0.510 1.060 0.518 1.007 1.240 1.848 2.135 2.264 2.422 2.596 2.778 2.819 3.284 3.647 3.696 4.428 5.134 5.892 6.926 8.167 9.703 10.55 11.53 13.21 14.84 16.68 18.05 19.96 20.79 21.65 22.03 23.10 24.11 25.27 25.80 24.05 22.39 20.38 18.54 17.32 15.69 15.06 14.31

US$ GNP p/c 54 110 61 108 128 172 192 198 209 215 224 220 248 266 261 303 345 384 440 506 589 628 675 760 839 927 985 1,072 1,097 1,124 1,124 1,158 1,188 1,224 1,227 1,124 1,029 920 823 756 673 646 614

(322) (552) (277) (456) (524) (662) (732) (738) (770) (777) (788) (748) (818) (838) (782) (861) (930) (990) (1,064) (1,127) (1,197) (1,201) (1,208) (1,261) (1,282) (1,293) (1,249) (1,279) (1,259) (1,235) (1,190) (1,195) (1,188) (1,184) (1,137) (995) (873) (760) (666) (599) (516) (484) (451)

GE

b

0.292 0.497 0.501 0.879 1.012 1.171 1.299 1.461 1.485 1.539 1.687 2.075 2.195 2.541 3.135 3.622 4.096 4.885 5.830 6.387 7.026 7.927 9.174 10.13 10.93 11.69 12.49 13.35 13.66 14.59 15.43 16.07 17.94 16.69 16.52 15.72 14.83 13.86 — — —

Source: Table 6.5 and Appendix A. Notes: a Figures in parentheses are in 1987 US dollar. b CGE = central government expenditure; and GE = total government expenditure. c Provisional statistics.

Deflator

19.9 22.0 23.6 24.4 26.0 26.3 26.9 27.2 27.7 28.4 29.4 30.3 31.8 33.4 35.2 37.1 38.8 41.3 44.9 49.2 52.3 55.9 60.3 65.5 71.7 78.9 83.8 87.2 91.0 94.4 96.9 100.0 103.34 107.3 112.9 117.8 121.1 123.5 126.1 130.5 133.46 136.12

132 Resources, state power, and armament malnutrition problem is evident: the height of the younger generation has become increasingly shorter. In 1996, the South’s defence spending alone exceeded the GNP of the North. Yet it would be an error to attribute the dramatic decline of the North Korean economy mainly to its heavy defence burden as implied by US/ROK estimates (this will be discussed further on pages 137–46). Table 6.5 shows the defence effort of the two contending Korean regimes. The table, however, should be read with care. First, the annual variations in the defence burden may not be caused by the ups and downs of defence expenditures but by economic factors, such as a poor harvest, an unusual high economic growth, or a high inflation. The trend of the defence burden, rather than the annual variation, is more important and is especially true of North Korea since its expenditure data are gross estimates except for the 1960–71 period (see Chapter 5, pages 91–104). Second, the ROK defence budget data in Columns 1 and 2 would be misleading, since they include the direct defence support from the US and the counterpart fund earned from the sales of the US Public Law 480 surplus agricultural products. The ROK expenses from its own budget were heavily subsidised by this counterpart fund until 1973.48 The indigenous ROK defence burden is provided in the parentheses by subtracting the share of the counterpart fund (its values for the 1954–61 period are recalculated by the implicit, not official, exchange rate, as has been done in the GNP comparison in Table 6.4). Third, the military aid North Korea received from Moscow and Beijing are rough intelligence estimates reported by the ACDA. Furthermore, the data before 1977 may include underestimated figures because the ACDA has revised the value of Soviet arms transfers by 40–50 per cent since the 1988 report (back to 1977).49 Unfortunately, as the annual breakdown of the Soviet and Chinese military aid is not available, a revision for the period before 1977 cannot be provided. The amount of aid during 1966–70 may be especially underestimated since most aid came from Moscow at that time – North Korean– Chinese relations were at the lowest during the worst period of the Cultural Revolution in China. Yet the omission of the ‘missing aid’ during 1966–76 does not distort the overall picture. As has been already discussed, military aid may have been included in the DPRK expenditures for the 1961– 71 period (see Tables 5.3 and 5.6). Some amount of economic aid, included in the budget in the 1950s, may have been used for military spending, especially in the first several postwar years (see Chapter 5, pages 91–104). At any rate, several interesting conclusions can be drawn that not only support the analysis of external factors (in Chapter 5) but also substantiate the hypothesis of state power and autonomy involved in resource mobilisation and allocation. First, the heavy defence burden of both Koreas in 1953, the final year of the Korean War, can be noted. The ‘total’ defence burden, i.e. the sum of defence budget spending and military aid over GNP, was about 40 per cent in the North and 127 per cent in the South. The ROK defence burden was mostly borne by the US (118.5

Resources, state power, and armament 133 Table 6.5 ROK–DPRK defence burden ROK

DPRK

Year

Own burden (%)a Total burden (%)b Own burden (%)a

Total burdenc

1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

8.47

40.3

6.07(2.20) 6.90(1.56) 7.40 (2.43) 7.51(2.37) 6.98(3.13) 5.59(0.11) 5.76(1.58) 4.19(1.13) 3.56(1.41) 3.90(1.34) 3.71(1.41) 3.93(1.75) 4.04 (2.66) 4.05(3.20) 3.69(3.01) 3.95(3.62) 4.16(3.99) 3.42(3.37) 3.92 4.40 5.09 5.36 5.32 4.88 6.07 6.22 6.09 5.51 5.10 5.07 4.59 4.33 4.20–4.38 4.07–4.16 3.72–3.84 3.48–3.88 3.52–3.94 3.47–3.64 3.32–3.48 3.17–3.27 3.17–3.23 3.31–3.39

127 40.9 35.3 20.5 21.7 25.8 17.8 17.0 15.9 13.7 12.0 10.0 11.8 8.72 7.51 8.44 8.09 8.01 7.05 7.82 4.73 4.92 5.28 6.08 5.99 5.73 5.04 6.21 6.27 6.15 5.51+ 5.10+ 5.07+ 4.59+ 4.33+ 4.38 4.16 3.84 3.88 3.94 3.64 3.48 3.27 3.23 3.39

17.6(8.6) 19.3(5.4) 14.9(?) 10.8 (?) 8.54(?) 8.48 (?) 8.22(?) 8.99(?) 7.58 8.01 8.27 11.7 12.4 13.7 13.2–15.6 16.5–8.4 18.1–18.4 15.4–16.8 15.7–19.0 10.5–13.1(15.7) 9.10–10.9(13.7) 9.63–13.0(14.4) 9.85–13.0(14.8) 10.1–14.4(15.2) 9.57–14.4 9.54–14.3 9.33–14.0 8.86–13.3 8.96–13.5 8.55–12.8 8.80–13.2 9.04–13.6 8.93–13.4 8.84–13.3 8.45–12.7 7.76–11.6 7.76–11.6 8.24–12.4 13.2–14.9 13.2–15.4–17.9 13.8–16.0–20.2 13.7–16.0–22.1 15.0–17.5–20.0d 15.0–17.5–20.0d 15.0–17.5–20.0d

19.7

8.99 7.58–8.99 8.01–9.25 8.27–9.52 11.7–12.9 12.4–13.9 13.7–16.2 15.6 18.4 18.4 16.8 19.0 13.1–15.7 (18.6) 12.1–13.7 (16.7) 11.2–14.4 (16.0) 11.3–14.8 (16.2) 10.9–15.2 (15.9) 10.8–15.6 10.1–14.9 10.8–15.4 9.50–14.0 10.1–14.6 10.3–14.5 9.71–14.1 9.56–14.1 10.7–15.1 10.7–15.1 10.2–14.4 11.7–15.6 10.1–14.0 9.07–13.2 13.6–15.3 15.4 –17.9 16.0–20.2 16.0–22.1 17.5–20.0d 17.5–20.0d 17.5–20.0d

Source: Tables 5.1, 5.3, and 6.4. Notes: a Defence expenditures/GNP. Figures in parentheses are indigenous spending, i.e. defence budget minus subsidies by the US PL-480 ‘food for aid’. b Defence expenditures plus non-budgetary military aid over the GNP until 1982, or since 1988 ‘special accounts’, excluding veterans’ pension accounts. c Defence expenditures plus arms imports (regarded as military aid) over the GNP except the 1967–71 period (see text); or maximum spending since 1992.

134 Resources, state power, and armament percent). A considerable amount of military aid provided in the form of direct expenses of the US government must have been spent on civilian projects such as relief activities, but the much higher defence burden of the South is not an exaggeration. Most battles in 1953 occurred between the South Koreans and the Chinese. [T]he enemy used Chinese rather than North Korean troops during most of the important attacks [in 1953] and that the bulk of the offense was directed against the ROK forces. It suggested that the Communists desired to improve the relative strength of the North Koreans and ROK forces prior to the truce.50 The postwar arms buildups were represented in the still high defence burden of the two Koreas especially in 1954 and 1955. Second, both Koreas were ‘overarmed’: the heavy defence burden was only possible by military aid. The total DPRK defence burden in the 1954– 59 period was on average 19.7 percent, while the share of its budget spending on defence, which may have included some economic aid, was 11.7 percent. Again, the ROK dependence on aid was much higher for the same period: its own burden was about 6.7 per cent while the total burden was 27 percent. As shown above, even the 6.7 per cent defence burden of the South was heavily subsidised by the US ‘defence support’. Up to 1970, the US was responsible for more than half of the total defence burden of the South. On the other hand, the table shows that the North had to be much more self-reliant from the early 1960s. However, it is interesting to note that the South had transformed itself from an aid recipient to a self-funding state in the 1980s, while the North had to rely on Soviet military aid (loans). The widening gap in economic capabilities between the two Koreas forced the North to desperate measures in the inter-Korean arms race. It was a far cry from the almost fanatical emphasis on Juche, which means autonomy in politics, independence in foreign policy, and self-reliance in economy and defence.51 Third, the North has shown a consistently higher defence burden since 1964. It can be interpreted as an indication of an arms race or at least a rivalry in which the side with the smaller resource base bears the higher burden. Another interpretation is the ‘pull’ rather than the ‘push’ factor, or the degree of resource mobilisation. As we will see, it is the North which has shown higher extractive capacity. Furthermore, the defence burden of the South in the 1970s and early 1980s increased due to the introduction of the defence surtax in 1975. Seoul’s own burden increased as early as the late 1960s, due to the growth of the ‘tax ratio’. That is, the change in each state’s defence burden depends as much on its resource extraction as on its position in the military balance. North Korea has done its utmost. Its own/total defence burden has been 12.7–14.4/13.8–15.6 per cent from the mid-1970s to 1987 (in the maximum estimation). It reduced its own burden to below 12 per cent with Soviet aid in 1988–89 in its effort to fund numerous showpiece projects; but now it has to

Resources, state power, and armament 135

increase its extraction from the shrinking economy in order to bear the rising defence burden in the 1990s. It is now evident that the defence burden is not only determined by a state’s position in the military and overall capability balance but by its capacity in extraction and allocation of resources. Finally, how does the force ratio, or the defence burden in terms of human resource (military manpower/population) behave?52 Again, the annual variation in the DPRK force ratio should be read with care, as it is derived from the ROK–US intelligence estimates of the KPA manpower. However, the force ratios of the two Koreas show a pattern similar to the defence burden (Table 6.6). The force ratios of the two rivals were reduced gradually as both reduced their manpower after the buildups in 1954. Since 1961, the ROK manpower has been rather constant, if Bangwi-byong (defence call-ups) are excluded. Consequently, its force ratio has been gradually reduced from 2.5 per cent in 1960 to 2.0 per cent in 1970 and less than 1.5 per cent in the 1990s. The defence call-ups, active duty servicemen between the levels of ‘regulars’ and ‘reserves’, were originally assigned to supportive roles. The call-up system was introduced in 1969 as a measure to compromise the universal conscription system and the ever growing population; yet they were gradually assigned to combat formations in reserve divisions especially in the 1980s.53 Their numbers approached 170,000 in 1991 when the ROK government decided to change their roles to non-military service duties, but their size had never been disclosed or included in the North–South bean counts before.54 It appears that the defence callups could maintain about a 2.0 per cent force ratio during 1969–90. Nevertheless, the overall trend of the South is a gradual decline in its force ratio. On the other hand, the North’s force ratio has increased from a low of 3.1 per cent in the mid-1960s to over 4.5 per cent in the late 1980s. The ROK– US estimates of the KPA manpower tend to underestimate the real buildup, because the number of hidden males in the official DPRK census data grew dramatically during the 1970– 75 period when the sex ratio was reduced from 95.1 to 86.9 (see Table 6.1). Nevertheless, the North’s force ratio increased thereafter, while its defence burden did not rise in proportion to the force ratio. The ‘relative expense index’, the ratio of total defence burden to force ratio is a ratio of ‘per soldier DE’ over per capita GNP since: Relative expense index

= DE/GNP ÷ Manpower/Population = DE/Manpower ÷ GNP/Population

(6.4)

That is, the relative expense ratio refers to the relative per soldier spending in relation to the level of economic growth (we witnessed in Chapter 5 that the ROK’s per soldier personnel expense in the 1990s became almost identical to its per capita GNP).55 On average, a ROK soldier cost more than six times the per capita GNP in the 1950s, but the ratio has been reduced to below 3.0 in the 1990s, although it

136 Resources, state power, and armament Table 6.6 ROK–DPRK force ratios ROK Year 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Manpowera (× 1,000) >600 702.5 720 720 720 710 630 630 600 602 607 600 604 (612)c 612 620 >620 >645 >638 >635 >634 >634 >630 >610 >635 >642 >638 >601 >606 >602 >622 >622 >600 >604 >629 >650 >650 >655 655(830) >655 >655 >655 >655 690 690

DPRK Force ratio Relativeb (%) expense index 2.957 3.361 3.298 3.231 3.150 3.015 2.596 2.519 2.329 2.271 2.227 2.144 2.104 (2.079) 2.031 2.011 >1.965 >2.001 >1.940 >1.895 >1.859 >1.828 <1.786 >1.702 >1.744 >1.737 >1.700 >1.576 >1.565 >1.531 >1.559 >1.539 >1.470 1.466 1.511 1.546 1.531 1.528 1.513(1.917) 1.497 1.482 1.467 1.453 1.515 1.500

42.9 12.2 10.7 6.34 6.89 8.56 6.86 6.75 6.83 6.03 5.39 4.66 5.61 (4.19) 3.70 4.20 <4.12 <4.00 <3.63 <4.13 <2.54 <2.69 <2.96 <3.57 <3.43 <3.30 <2.96 <3.94 <4.01 <4.02 <3.58 <3.31 <3.45 <3.13 <2.87 <2.83 <2.87 <2.66 2.02–2.56 <2.63 <2.46 <2.37 <2.25 2.13 2.26

Manpower Force ratio Relativeb (× 1,000) % expense index (339) (410) 410–446 340–366 (380) 381.6 382.5 395.2 397.9 389.3 375.1 411.3 411.3 411.3 412.5 433.5 466.1 467.3 466.7 468.2 504.7 561.8 567 567 570 612 692 700 768 782 784 784 784 838 838 870 980 990 995 1,010 1,030 1,030 1,040 1,055 1,147d

3.99 4.66 4.49–4.88 3.63–3.91 3.92 3.80 3.68 3.66 3.59 3.41 3.42 3.41 3.33 3.21 3.11 3.12 3.29 3.20 3.14 3.05 3.20 3.48 3.44 3.38 3.34 3.52 3.91 3.89 4.19 4.20 4.14 4.07 4.00 4.20 4.13 4.21 4.66 4.63 4.57 4.56 4.57 4.49 4.45 4.53 4.92

10.1

4.88–5.01

>2.46 2.11–2.50 2.35–2.74 2.42–2.78 3.43–3.78 3.72–4.18 4.27–5.05 5.02 5.90 5.59 5.25 6.05 4.37–6.09 3.79–5.21 3.22–4.61 3.28–4.72 3.20–4.71 3.23–4.66 2.88–4.24 2.75–3.94 2.44–3.60 2.42–3.49 2.44–3.46 2.35–3.41 2.35–3.45 2.67–3.78 2.54–3.59 2.47–3.49 2.78–3.71 2.16–3.00 1.96–2.85 2.97–3.36 2.90–3.92 3.02–4.42 3.04–4.93 3.37–4.50 3.31–4.42 3.28–4.38

Sources: Tables 4.5, 5.7, 6.5 and Appendix A. Notes: a Does not include ‘defence call-ups’ during 1969–95 (except 1991). b The ratio of ‘defence burden’ over ‘force ratio’, or the ratio of per soldier defence expenditure over per capita GNP. c 572,000 in IISS and ACDA reports, presumably excluding the ROK troops in Vietnam. d Including transfers from the internal security forces.

Resources, state power, and armament 137

exceeded 4.0 in 1980–81. In the North, a KPA soldier cost less than 2.5 times the per capita GNP in the early 1960s but more than 5 times during the period of massive buildup (1967–71). Although the estimated figures contain a considerable margin of error – the higher end of the DPRK expenditures, especially in the 1990s, appear overestimated – it is evident that the ratio has been gradually reduced. Again, it is confirmed that the KPA relied on a labour intensive buildup, with the exception of its air defence capabilities, in the mid- and late 1980s. North Korea: from armed workers to working soldiers How is the changing defence burden of the DPRK related to its state power and autonomy? Before we answer the question, some preliminary remarks on the state in the North are in order, since the concept of state autonomy vis-à-vis the civil society or social classes is next to meaningless. North Korea is the most bureaucratised society in the world. Even before the Korean War, more than 90 per cent of its gross industrial output was from the socialist sector. The socialist sector in agriculture, responsible for 3.2 per cent of gross agricultural output in 1949, grew 73.9–75.0 per cent in 1956, 88.0 per cent in 1957, and 100 per cent in 1958 with every farm household organised into cooperative or state farms. Since 1959, the DPRK has boasted a 100 per cent socialisation of the entire economy in both GVSP and NI. The private sectors have not been completely abolished – each farm household is allowed to cultivate a tiny plot up to 50 pyong (about 165 square metres, or slightly less than 0.15 acres) and small farmers’ markets as well as informal or even illegal markets have emerged recently. However, even Stalin might have envied the high degree of socialisation and total control of the populace in North Korea. There is little evidence of civil society in the sense of the bürgerliche Gesellschaft (bourgeois society), or even in the broader sense of the term, the Zivilgesellschaft (civilian society).56 The North Korean state is more ‘distributive’ than ‘extractive’. It claimed the abolition of agricultural tax in kind in 1966 and of all taxes on 1 April 1974. Of course, it does not mean that the state extracts less than before; it relies heavily on the aforementioned ‘transaction revenue’ (turnover tax) primarily levied on consumer goods. The problem for economic planners in Pyongyang is not how much to extract but how much to allocate for the wage bill of the population, since enterprise profits as the secondary source of state revenue are already extracted resources. Whether they are retained in the state enterprises or transferred to the state budget matters little. Consequently, the budget revenue of the state is not equivalent to the tax or total government revenue in South Korea. Rather, it is comparable to the sum of tax plus profit in capitalist societies, as argued in Chapter 2. Of course they are not directly comparable, since the true extractive capacity of the North Korean state may be higher or lower than the budget/GNP ratio. The budget revenue does not include the portion of enterprise profit retained for the production fund, but it

138 Resources, state power, and armament does include considerable transfers to household consumption in its subsidies for food, housing, etc., funded by the spending on the People’s Economy, and for welfare expenses, funded by the Social-Cultural Measures. There is no data of retained enterprise profits and subsidies (roughly estimated at up to 30 per cent of the People’s Economy and Social-Cultural Measures in our estimation of GNP), but it is not unreasonable to assume that retained profits and household subsidies cancel out each other. That is, there is no other alternative than the budget/GNP ratio, although it may underestimate the extractive capacity in the late 1950s when the ratio was around 40 per cent and thus must have had higher retained profits. On the other hand, it tends to overestimate the capacity in the 1990s when the ratio exceeds 70 per cent with presumably the least, if any, retained enterprise profits.57 Table 6.7 shows a general picture of the relationship between defence burden and state power in extraction, arranged in economic planning periods of the DPRK. Table 6.7 DPRK extractive capacity and defence burden Period (Years)a

Extraction (Budget/GNP)

Defence burden Min.b Max.

5YP (-1) 1957–60

42.8%

?

7YP (+3) 1961–65 52.5 1966–70d 55.9(56.8) Totald 54.2(54.8) 6YP (+1) 1971–77d 60.4(60.3)

8.6%

Defence burden (+ aid)c Min. Max. ?% 9.6 16.6(17.0) 13.1(13.6)

14.8%

9.6 14.9(15.0) 12.2(12.6)

9.6 16.6(17.0) 13.1(13.6)

10.9 16.6(17.0) 13.8(14.2)

10.6 (9.8)

13.4 (13.1)

12.7 (11.6)

9.0

13.5

10.1

14.6

15.3–16.9 (14.7–16.5)

7YP II (+2) 1978–86 61.0 7YP III 1987–89 64.1 1990–94e 76.0

8.0 12.4

12.0 14.9–17.5

10.7 12.8

14.7 17.7

71.5

10.8

13.8–15.4

11.9

16.6

Totalf

Source: Same as Tables 5.3, 6.2, and 6.5. Notes: a Years in parentheses are the extension period or ‘buffer’ years. b Based on official DPRK data. c Based on the assumption that military aid has been excluded from defence budget except the 1967–71 (or 1961–71) period. d Ratios in parentheses include the year 1971 into the extended Seven Year Plan. e Ratios in parentheses reflect the upwardly revised estimates of defence expenditures for the 1990–93 period (see text). f Defence burden since 1995 is not included, since it is based on a simple estimate as a percentage of the GNP.

Resources, state power, and armament 139

It has been hypothesised that: (1) the higher the extractive capacity grows, the higher the defence burden; but, (2) the defence burden levels off and declines as extraction continues to grow. The increasing political cost of the expansion of state power, spent on welfare and other legitimate functions, is responsible for the levelling off and decline of the defence burden. In other words, the relative importance of armed forces declines as the state relies increasingly on consent rather than coercion.58 Data in Table 6.7 substantiates the argument. Extraction grew in the 1960s, levelled off in the 1970s and the first half of the 1980s, and grew again in the late 1980s to over 70 per cent of the GNP in the 1990s. The defence burden grew in the 1960s up to 15.3–17.0 per cent of the GNP in the 1966–71 period, an era of intense DPRK military buildups and unconventional operations towards the South. The defence burden declined considerably during the Six Year Plan period and remained stable during the Second Seven Year Plan period, as the extraction ratio remained stable, too. The burden was somewhat lowered as the extraction ratio grew higher during the Third Seven Year Plan period. The 1990–93 period shows an increase in defence burden, but it is based on an upward revision of the DPRK defence expenditure. The 1990–93 period is an exceptional case since the DPRK received little, if any, aid from its allies. In fact, Pyongyang has been in a wartime stance during its overall crisis. One may argue that Pyongyang’s maximum estimated defence burden, which includes military aid, is due to bureaucratic-organisational pressures, as it has been rather stable since the early 1970s. Yet it should be noted that it was much higher in the 1966–71 period and the maximum estimation is partly based on the incrementalism model in our effort to produce a generous amount of defence expenditures of North Korea (see Chapter 5, Section 1). The minimum estimation, albeit with some margin of underestimation, better represents the trend in Pyongyang’s defence burden. Another possible objection to this finding would be that the defence burden continues to grow in proportion to extraction, which is actually the case, if one accepts the official ROK estimate of the DPRK defence expenditures. The ROK estimate is based on nothing more than 30.0–30.9 per cent of the total budget.59 It would consequently yield a proportionately higher defence burden as the level of extraction (i.e. budget/GNP) goes up! As we have already demonstrated, the ROK estimates exaggerate the DPRK defence expenditures since 1972 and somewhat underestimate its GNP. In order to support our finding further, let us examine the composition of state power in the DPRK, i.e. coercion vs. consent or coercion vs. capital. To be sure, there is no capitalist class in North Korea, but the socialist state has performed the role of capital accumulation. The accumulation of this state capital, so to speak, consists of the above-mentioned portion of enterprise profit retained as the investment fund as well as the People’s Economy expenditures in the state budget earmarked for capital formation. As the PE spending also includes subsidies to households, it would be an error to identify it with gross capital formation. In the

140 Resources, state power, and armament Table 6.8 DPRK economic growth and defence burden Period

Offical annual growth rates

(year)

GVIO

Budget NI(GNP)a

Estimated GNPb

5YP (-1) 1957–60

36.6%

19.8%

20.9%

16.7(13.6)%

7YP (+3) 1961–65 1966–70

14.4 8.3

12.1 11.5

9.9 (6.4)

8.5 (6.6) 9.8(5.2)

9.6 14.9–16.6 (15.0–17.0)c

1961–70

11.2

11.8

(8.1)

9.2 (5.9)

12.2–13.1

6YP (+1) 1971–77

15.0

14.8

13.8

14.7(7.3)

10.6–13.4 (9.8–13.1)c

7YP II(+2) 1978–82 1983–86

(13.0)d ?

10.7 6.8

(10.0) (4.8)

11.6(2.9) 3.7(0.0)

9.0–13.6 8.9–13.4

12.1(10.3)e

9.0

(8.5)

8.0 (1.6)

9.0–13.5

(6.5)f ? ?

4.9 4.8 ?

(4.1) (0.1) ?

3.9(-0.5) –7.9(-11.1) –6.3(-8.5)

8.0–12.0 12.4–14.9–17.4 15.0–17.5–20.0

4.8g

1.6g

–4.3(-7.2)

12.1–16.4–16.9

1978–86 7YP III (+?) 1987–89 1990–93 1994–97 1987–97

?

Defence burden

8.6%

Sources: Korea Central Yearbook, various years; RINU, Comparative Trend Analyses of NorthSouth Korea’s National Capabilities; Hamm, ‘Economic Decline and Foreign Relations of North Korea’; and Tables 6.2 and 6.7. Notes: Figures in parentheses are from estimated NI statistics arranged in Table 6.1. b Figures in parentheses are estimated GNP growth rates in constant US dollars. c Including 1971 in the extended Seven Year Plan. d Based on growth rates of 1978, 1979, 1980, and 1982, with an assumption of no growth in 1981. e Average annual growth rate of 1978–84 (12.1%), or no growth in 1985 or 1986. f Based on the 1985–89 growth rate (554/431), assuming no growth in one of the two ‘buffer years’ (1985 or 1986). g 1987–93 (94) average. a

absence of reliable data of gross savings in North Korea, the best available alternative would be to examine the rate of economic growth as the measure of gross capital formation.60 Table 6.8 shows the relationship between the economic growth rate and defence burden of the DPRK. As a developing socialist economy, the North Korean economy does not have the underconsumption problem that is often alleged to facilitate higher military spending in advanced capitalism. That is, the state in North Korea has squeezed private consumption as far as possible – it has occasionally increased

Resources, state power, and armament 141

wages as if the wage hikes are ‘presents’ from the ‘great leader’ – and experienced a strong trade-off between capital formation and defence expenditures. Higher economic growth rates as the outcome of increased domestic capital formation strongly constrain the defence burden. Since foreign military aid is not directly related to the defence expenditures-gross savings trade-off, North Korea’s own defence burden is examined here. For official economic indicators, there are annual government budget expenditures, the annual growth rate of the Gross Value of Industrial Output (GVIO)up to 1982 (not reported in 1966, 1969, 1971, 1976, 1977, and 1981), the average annual growth rate of GVIO in each planning period, and the average annual growth rates of NI. GNP growth rate based on the current price estimation in Table 6.2 can also be calculated (official GVIO and NI growth rates must have been reported in current price as well). From Table 6.8, we can note a gradual, long-term decline in North Korean economic growth. It does not mean a decline in the ratio of capital formation, i.e. rate of savings; instead, it is a decline in marginal productivity of capital that is common to most state socialist economies heavily dependent on the so-called extensive growth strategy. Yet variations in the 1960s and 1970s are quite observable, and the growth rates in all categories behave as predicted: the higher the growth rate, the lower the defence burden. The Five Year Plan (1957–60) scores the highest growth rate and the lowest defence burden. Growth rates decline considerably in the first half of the 1960s, indicating increased defence burden as well as the decline in the impetus of the postwar reconstruction (1954–56) and the completion of socialisation (in 1958–59). The decline is more due to the levelling off of the rapid postwar growth drive rather than the increased defence burden.61 However, the military buildup drive in the second half of the Seven Year Plan (extended to 1970 and actually completed in 1971) causes the highest defence burden (15.1–16.6 percent) and the lowest growth rates, if we exclude the Third Seven Year Plan (1987–93). Considerably higher growth rates in the 1970s, i.e. the Six Year Plan and the first half of the Second Seven Year Plan, bring about a lower defence burden. Yet the gradual decline of capital productivity is clearly observable in the 1980s and 1990s; consequently, growth rates decline consistently even if the defence burden remains more or less stable. A careful examination of the defence burden in relation to economic growth rates suggests that the lower end of the estimated defence burden (and defence expenditures) in the Six Year Plan period is probably closer to the real DPRK spending on defence. The defence burden in this period should be lower than those of the later periods as well as those in the 1960s. Likewise, it is highly probable that the defence burden has gradually come closer to the estimated higher end in subsequent periods. However, the most dramatic changes in the DPRK defence burden occurred in the 1960s and the early 1970s, as we have witnessed in Chapter 4. Each dramatic shift is not a mere choice among alternative strategies but an outcome of a serious political conflict.

142 Resources, state power, and armament The decision to commence the ‘import substitution military industrialisation’ in December 1962 was a desperate response to the withdrawal or drastic reduction of Soviet economic and military assistance (see Chapter 4.) Yet the decision, formalised in the Four Military Doctrines during 1962–66, brought the military establishment to the centre of the Korean Workers’ Party (KWP). The partisan generals who fought with Kim Il Sung in the Sino-Korean Northeast Anti-Japanese Army in Manchuria began to dominate the military after the purges of the Yanan faction and those who had come from the Korean Volunteer Army during the Chinese Civil War. In 1956 ex-partisans and their domestic colleagues, or the so-called Gapsan faction, defeated the Yanan faction and those Soviet Koreans who challenged Kim’s cult of personality and heavy industry-oriented growth strategy at the expense of consumer industry and agriculture. Kim owed a great deal to his partisan generals who controlled the security apparatuses, i.e. the military and the internal security organisations. By the Fourth Congress of the KWP, in September 1961, ‘Kim consolidated his power beyond challenge’,62 but the partisan generals rose to power as well. With the demise of the South Korean Workers’ Party led by Pak Hon-Young, who had been the head of the Korean Communist Party (in the North as well as the South) but was prosecuted and executed after the War, and the coalition of the Soviet Koreans and the Yanan group, the partisans dominated the party with the help of technocrats. Yet the primary concern with national security led to an ‘over-militarisation’ of the party as well as increased defence spending. The Military Committee, which had been established during the early days of the Korean War, was re-established within the party. At the Second Conference of the KWP in October 1966 (party conferences can be convened between party congresses), it was announced that the Seven Year Plan would be extended another three years. Kim Il Sung had already admitted in his New Year’s Speech 1965 that economic growth had slowed down in the previous two or three years due to increased military expenditures.63 Another important change was that non-partisan members of the Political Committee (or Politburo) were removed and replaced by partisans. The strategic shift from defensive, import substitution military buildups and mass mobilisation was facilitated not only by Pyongyang’s perception of external threat but by the growing influence of the military in the party. Among the 15 members of the Political Committee, military leaders occupied four positions: Deputy Premier Kim Kwang-Hyop, Minister of National Security Kim Chang-Bong, General Choe Hyon, and Admiral Lee YoungHo. In addition, ex-partisan generals, including Choe Yong-Kon and Bak SeongCheol, sat on the committee. Four of the nine candidate memberships were occupied by partisan generals: Minister of Internal Security Sok San, the KPA Chief of General Staff Choe Kwang, and Generals Hoh Bong-Hak and Oh Jin-Woo. The militarisation of the KWP led to the exclusion of even technocrats who were replaced by partisan generals on active duty. It ‘resembled somewhat the trend in Japan in the 1930s when fanatic military officers controlled politics’.64

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However, the allocation of resources for economic development and military buildups inevitably led to a contest between policy priorities reflected in the conflict of bureaucratic politics within the party. Since rival factions were eliminated and the influence of technocrats was rather weak, the conflict meant a ‘party bureaucrats vs. the army’ contest.65 In 1967, party bureaucrats suffered a crippling blow. They lost Bak Gum-Cheol and Lee Hyo-Soon, fourth and fifth members of the Politburo respectively and party secretaries since the Third Party Congress in April 1956, and several members of the Central Committee, including Kim Do-Man, Koh Hyok, and Hoh Seok-Seon, all of whom had worked in propaganda and agitation. Since Bak and Lee, the highest ranking civilians in the party, came from Kim’s own ‘Gapsan faction’, the 1967 purge signalled the breakdown of the Gapsan–guerrilla coalition. Bak was charged with lukewarm support of the new military line, and Lee was purged for the lack of success in covert operations in the South. The sudden reshuffling of the party, and especially the replacement of Lee by General Hoh Bong-Hak (who had been director of the KPA General Political Bureau) as the director of the Liaison Department, i.e. the department in charge of South Korean affairs, signalled the onset of more aggressive operations towards the South. As we have witnessed in Chapter 4, Pyongyang’s commando and guerrilla struggles replaced the subtle and cautious approach. In his speech in December 1967, Kim Il Sung declared that ‘the present situation requires us to conduct all our work in a more active, more revolutionary manner and subordinate everything to the struggle to accomplish the South Korean revolution by giving them support in their struggle and to reunify our country.’66 As we have already seen, Pyongyang tried to test and heighten the ‘revolutionary potential’ within South Korea by conducting commando raids in 1968. As the KPA acquired hegemony within the party, it dominated politics in North Korea, pursued more active strategies and tactics, and demanded more resources for its modernisation projects. As usual for professional soldiers, the generals in North Korea preferred a modernised warfare doctrine based on regular armed forces to the ‘arming the entire people’ doctrine espoused by Kim Il Sung, who opted for more economical means such as ideological mobilisation. Kim tried to send a warning to the generals in his report to the Second Conference of the KWP in 1966. In order to strengthen defence capacity, we have to, first of all, reinforce the political ideology of the army and the whole people. Based upon it, we need to pursue military strategy of our Party. . . Revolutionary army would be particularly powerful when its strong political ideology was supported by modern military technology. . . In modernising our people’s army and developing military science and technology, we have to take into account our circumstance of numerous mountains and long coastlines. In addition, we need to combine modern weapon and conventional weapon. Arming of the entire people and making the entire country fortresses are mighty defence system against any kinds of invasion of enemies.67

144 Resources, state power, and armament As a result, while the army purged the party bureaucrats in 1967, it received a decisive setback in the winter of 1968–69, after the failure of commando raids and the Pueblo crisis. Most top-ranking generals were purged: Minister of National Security [Defence] Kim Chang-Bong, Chief of the Party Liaison Department Ho Bong-Hak, and Admiral Lee Young-Ho, all members of the Politburo; Minister of Public Security Sok San and KPA General Chief of Staff Choe Kwang, both candidate members; and other high ranking ex-partisan generals including Choe Min-Cheol, Jeong Byong-Kap, and Kim Chang-Dok. Kim Kwang-Hyop, the highest ranking partisan general (after Premier Kim Il Sung and the titular head of state Choe YongKon), may have been purged also during this period. According to sources collected by the ROK authorities, Kim Chang-Bong and others reportedly ‘violated policies, initiatives and ideology of the party’. Specifically, Kim Il Sung criticised them for importing ‘supersonic airplanes’ and ‘direct-firing artillery [long-range guns]’ rather than ‘howitzers or mortars’ and ‘low-speed, low-flying airplanes’ better suited for the geographic conditions of Korea. Kim further chided them for ‘opposing the establishment of the Workers–Farmers Red Guards’, ‘neglecting the party’s order to organise light infantry units’, and ‘opposing the principle of fortifying the entire country’. He claimed that these ‘revisionism, militarism, sectarianism, and antirevolutionary attitudes resulted from the decay of party organisation within the Party.’68 It was declared that the system of political commissars should be strengthened as a means of party control over the army. The purge of the KPA top brass demonstrated that the party would not allow the autonomy or the dominant position of the army. General Choe Hyon, a nearly illiterate but very famous partisan fighter and Kim Il Sung’s closest friend, became the new Minister of National Security, and General Oh Jin-Woo took the position of the KPA Chief of General Staff. In the Central Committee of the Fifth Workers’ Party Congress on 2 November 1970, Kim Il Sung declared that his country had accomplished ‘the transition to a socialist industrial country’. Then he emphasised the establishment of a self-reliant defence as follows: The most significant accomplishment of recent military buildup was the arming the whole people and making the whole country fortresses. In our country, the whole people handle and possess their own firearms. Also, we constructed defensive facilities all over the country and thus, protecting major facilities of industrial production. . . We also accomplished a conspicuous development in defence industry . . . Today, we can produce various modern weaponry and military supplies, which are necessary for our own defence, in our own factories of defence industry. It costs a lot to develop these defence capabilities. Frankly speaking, current military expenditure is an overburden for the strength 69 and population of our country.

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With the completion of the extended Seven Year Programme in 1970–71, Pyongyang declared a sharp reduction of its defence budget in 1972.70 We have discussed the probable existence of hidden military spending since 1972, but it is evident that the unusually heavy defence burden during 1967– 71 was over. After the adoption of a new constitutional amendment in December 1972, which gave Kim Il Sung the title of Juseok (President or Chairman), North Korea’s main security apparatuses, namely, the Ministry of People’s Armed Forces (= MPAF; a new name for the defence ministry) and the Ministry of Public Security, were no longer under the Administrative Council (a reduced cabinet), which had been headed by economic technocrats. As a result of defence budget cuts, the MPAF was allowed, as well as forced, to rely on self-funding. More and more KPA soldiers became engaged in economic functions, such as large-scale construction projects and farming for their own food. A considerable amount of extra-budgetary funds were made possible by the provision of some enterprises under the MPAF management, which included several mines and the Yongaksan and the Maebong trading companies.71 In other words, the MPAF was forced to rely more and more on its own economic activities, while its share in the government budget was gradually reduced. The MPAF had to adopt the ‘combined regular and irregular warfares’ doctrine espoused by Kim in his effort to build more economical, labour-intensive armed forces, best represented in his emphasis on ideological preparation, light infantry units, and the Red Guard militias. Even the modernisation of weapons and equipment ‘should correspond to the level of industrial development and modern and conventional weapons should be combined in order to meet the physical conditions of the country’.72 It is now evident that North Korea’s economic constraints have substantially influenced the pattern and pace of military buildups. The procurement of advanced weapons has been greatly reduced in the 1990s.73 We have already noted in Chapter 4 and Table 6.6 that the KPA has been increasingly lightly armed in terms of its labour-capital composition. The DPRK has become a more or less labour-intensive army. Still, there exists another economic reason behind the manpower-heavy military buildup. Pyongyang has conscripted more young men in its effort to prevent widespread unemployment, which is a far cry from the days of the manpower shortage during the period of labour-intensive reconstruction and industrialisation. To be sure, the expansion of KPA manpower since the Pueblo crisis caused a labour shortage in the rural areas. Yet it is also true that Pyongyang made ‘a shift in national population policy toward anti-natalism’ in the early 1970s, although no such policy was publicly announced.74 Kim Il Sung actually complained in 1978 that 25 per cent of those employed in local industries constitute ‘surplus labour’ and that enterprises under the central jurisdiction ‘also have surplus hands’.75 The expansion of KPA manpower must have been a double-edged sword: increasing military capabilities and solving the surplus labour problem, which was partly

146 Resources, state power, and armament responsible for the decline in labour discipline. Since the 1970s, an increasing number of soldiers have been assigned to large-scale construction projects and other economic activities. Reportedly, from one-third to one-half of the KPA manpower, or the service duration of an average soldier, has been allocated to these projects and activities.76 In addition, manpower expansion in the late 1980s and 1990s has been aimed at internal security rather than national defence. For instance, North Korea organised a new regular corps in the rear areas and a new Border Constabulary Brigade on the Chinese border in 1993.77 The regime has been increasingly dependent on the military for its survival, and the generals are amply rewarded. As of October 1995, North Korea has three Marshals including Kim Jong Il and eight Vice Marshals, as a result of the promotion of 19 high-ranking generals (Kim Jong Il already promoted more than six hundred generals in 1992).78 Until October 1997 when he became the General Secretary of the Party, the junior Kim ruled the country as Chairman of the National Defence Committee and Supreme Commander of the People’s Armed Forces. To conclude, the ‘arming the entire population’ principle, brought about by the DPRK efforts to build an economical but powerful army, has made North Korea one of the most highly militarised states in terms of force ratio. Yet, for economic and political reasons, the principle has been changed from armed workers to working soldiers. In spite of the increased extractive capacity and, in fact, the increased influence or autonomy of the armed forces in the unprecedented regime crisis, North Korea has been unable to accelerate its arms buildup. Even its budgetary autonomy in defence spending, i.e. military aid, has been dramatically reduced in the 1990s, as neither Russia nor China provide any substantial aid. Arms imports have been reduced from several hundred million dollars a year in the second half of the 1980s to almost none in the 1990s.79 Last but not least, the regime allocated a larger share of its limited resources to legitimation functions, that is, numerous unproductive ‘showpiece projects’ in addition to capital formation. Best examples are the West Sea Lock-Gate at Nampo, which is officially reported to have cost $4 billion, and the construction of the Kwangbok apartment complex and other facilities for the 13th World Youth Festival in 1989 (a North Korean counterpart to the Olympics, held in South Korea the year before) that cost $4.9 billion.80 In the 1990s, Pyongyang has built the massive ‘Shrine of Tankun’ and, of course the tomb of the great leader himself. South Korea: from coercion-intensive to capital-intensive state We have noted that the ROK defence expenditures have varied a great deal in absolute and relative terms, i.e. the actual amount of spending and defence burden respectively. Table 6.5 shows that both direct and indirect military aid was

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responsible for maintaining and strengthening the ROK armed forces until the early 1970s. However, South Korea began to finance an increasing share for its defence thereafter. In 1977, Seoul’s contribution exceeded 90 per cent of its total defence burden, owing to the (first) Force Improvement Plan (FIP), or the ‘Yulgok project’ code-named after the pen name of Yi Yi, a famous scholar-bureaucrat who reportedly preached a strong army in the wake of the Japanese invasion in the late sixteenth century. The US military assistance programme ended in 1976, albeit with some deliveries of the past programme and some transfers of equipment from the US forces in Korea. The foreign military sales (FMS) credit ended in FY1986, but Seoul became 100 per cent responsible for its defence burden in 1983, as the repayment of the credit exceeded the new FMS credit as early as 1980.81 However, the impact of external factors on South Korea’s defence burden has become rather marginal. It is true that the FIP-I was mainly an effort to compensate for the decline and closure of US grant aid, but it was more than a compensatory measure. An action–reaction chain of armament, or an arms race with North Korea, may have occurred, but the data in Tables 5.6 and 5.8 show that the ROK superiority gap has widened in the 1980s and the 1990s. South Korea’s changing defence burden is not a direct response to the change in North Korea’s defence burden or expenditures. Nor is it closely matched to the North–South military balance. It is evident that internal factors have been more responsible for the change in the ROK defence burden. As we know more about South Korea’s politics and economy than those of North Korea, we can substantiate or falsify some hypotheses of internal factors before we try our own explanation. As will be shown, the bureaucratic-organisational (B-O) pressures, the autonomy of the military, the military industrial complex (MIC), or the business-cycle thesis does not successfully explain South Korea’s defence burden. Furthermore, the guns vs. butter explanation, usually modelled in a tradeoff between military spending and welfare spending, does not hold either since the latter has been more or less constant in terms of its ratio to GNP. First, the B-O model, best represented in the incremental growth of defence expenditure, is more of a description than an explanation. It is usually formalised in the equation X = ƒ X , but any time-series budgetary data are highly autot t-1 correlated. Explaining significant changes in the time series is more meaningful than establishing a high R-square value of the correlation between X and X . A t t-1 deeper, ‘fundamental explanation’ would require us to supplant the lagged endogenous variable (X ) with exogenous variables. Defence expenditure of South t-1 Korea in the last two decades (1974–94) shows an incremental growth (See Table 5.1), but Table 6.5 shows that it has varied a great deal in all categories, i.e. the ROK own spending, the defence ‘budget’ (including US subsidies from the PL 480-1), and ‘total’ expenditures that include the budget and direct US military aid. Still, one may argue that the FIP-I, -II, and -III are typical examples of B-O incrementalism.

148 Resources, state power, and armament Table 6.9 Expansion of ROK FIP (I) Year 1974 1975 1976 1977 1978

(25 Feb.) (12 June) (8 Aug.) (18 July) (26 July)

Plan

Budget requirement

Original Revision 1 Revision 1–1 Revision 2 Revision 3 Revision 4 Revision 5

$1,526 million (current) 1,668 2,140 3,845 4,662 5,000 5,500

Sources: MND, The Yulgok Project: Past, Present and Future; US House of Representatives, Investigations of Korean–American Relations, Appendix A.

The original FIP was planned with no follow-up programmes. President Park himself, who developed a can-do attitude in the face of US troop withdrawals and aid cuts, told the New York Times in August 1975 that ‘South Korea alone could handle the North Korean threat in five years’ [1980] with US military aid.82 His generals began to demand more and more funds for the FIP (1974–81): it required $1.526 billion in the original plan on 25 February 1974, but was increased to over $5.5 billion in 1978.83 The expansion of the Yulgok Project (FIP) clearly represents the military B-O incrementalism, even if inflation is taken into account (see Table 6.9). As has been argued in Chapters 4 and 5, the scale of FIP-II and -III might have been greatly reduced without jeopardising an inter-Korean military balance still favourable to the South. The FIP-II and -III were based on the misperception of North Korean military superiority, which has been illustrated in Chapter 5. In the 1990s, the MND has emphasised the potential threats from East Asian powers, especially Japan, in its effort to mobilise support for continued arms buildups.84 In short, the three FIPs may be examples of the B-O incrementalism. Yet we have to explain why the incrementalism did not work in the previous period or in the 1990s and why it varied over time (in terms of defence burden) even in the period in question. One may argue that the ROK manpower represents the B-O incrementalism, for the manpower level shows a quite stable incremental growth (from 600,000 in 1961 to 655,000 in the 1990s). Yet it does not explain the manpower reduction in 1958 (from 720,000 to 630,000) and in 1960–61 (to 600,000). Furthermore, in terms of force ratio, the ROK manpower has been gradually reduced, if we do not include the ‘defence call-ups’, in effect since 1969. The call-up system was introduced in order to match the universal conscription system with population growth. The more or less stable ROK manpower, at least since 1961, may be interpreted as the effect of pressures from the MIC. Actually, the military establishment was quite reluctant to reduce manpower in 1958 and 1960; it was the US who demanded the reduction. The Rhee government was quite opposed to the reduction in 1958, since a larger ROKA manpower was a guarantee of US military and economic aid.

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The army was also the source of a ‘political fund’ for Rhee’s ruling Liberal Party as well as the source of personal enrichment for and corruption of many generals and politicians. Even in the liberal regime of the Democratic Party headed by Premier John M. Chang (Chang Myon), the military was asked to transfer some $2.5 million to the Chang government, leading to the resignation of ROKA Chief of Staff Lieutenant General Choi Kyong-Rok.85 The liberal Chang government (1960–61), again under pressure from the US who tried to convert the ‘security aid’ into ‘developmental aid’, tried to reduce manpower by more than 100,000 in 1960.86 The effort was a serious threat to the vested interest of the officer corps. The Chang government was toppled in a coup on 16 May 1961, led by Major General Park Chung Hee and members from the Eighth Class of the Korean Military Academy, including Kim Jong-Pil. Although the young colonels, who had already tried a ‘purification campaign’ in 1960, declared their intentions to save the country from Communism, poverty and corruption, the basic motivation for the purification campaign and the coup came from the promotion bottleneck. The generals and the colonels were recruited from the same age group, but those who had been ‘first on the scene were catapulted into the rank of general in their twenties and thirties’.87 The postwar partial demobilisation of the ROKA further blocked the promotion of young colonels, while the ‘corrupt’ young generals, still in their thirties and forties, were there to stay. The coup provided the young Turks with not only promotion but unchallenged political power. The military junta purged several dozen corrupt generals, but the new leaders turned out to be no more immune to corruption or factional struggle than the civilians they replaced. Immediately they established the Capital Garrison Command, a countercoup force, and the powerful Central Intelligence Agency (KCIA), modelled after its American namesake. It has been mentioned that the KCIA equals the CIA plus the FBI in the US, but a better analogy would be the Soviet KGB. To further mobilise support from and reduce corruption in the officer corps, the junta doubled their salaries in 1962,88 yet inflation and the defence budget freeze in 1963 caused a decline in the ROK per soldier defence spending in constant prices. It should be remembered that the ROK ‘budget’ funded only personnel and ‘unit’, i.e. organisational, O&M expenses. Actually, the ROK defence expenditures and defence burden, in either its own or subsidised budgets, were at the lowest in the mid-1960s (see Tables 5.1, 5.7, and 6.5). This is not exactly what is expected from a military version of the MIC thesis. The military became not only autonomous but dominant in the ruling power bloc, yet military spending was reduced in both absolute and relative terms! There are two reasons for this seemingly unexpected behaviour. First, the military did not remain corporative but transformed themselves into politicians, bureaucrats, and even managers (in public enterprises) and, by so doing, became somewhat hegemonic. Realising that the only solution to the lack of legitimacy was economic growth, after some nationalist, populist measures were

150 Resources, state power, and armament opposed by the US, they allied themselves with technocrats and more important, with ‘corrupt’ civilian politicians in Rhee’s Liberal Party, and business tycoons.89 The pressures from Washington to readjust the fiscal and economic policies, along with the notification of the gradual termination of economic grant aid, led the Park regime to adopt an export promotion development strategy. It was not the exhaustion of the import-substitution industrialisation but the decline of US economic grant aid that, in the opinion of Eberstadt, caused a fundamental shift in the ROK economic growth.90 The shift from the ‘aid maximising,’91 rather than the importsubstitution industrialisation, to the export-promotion industrialisation required economic planning, managerial skills and entrepreneurship. It led to a coalition of the military, technocrats, and businessmen. The badly needed foreign capital came from the US and from Japan after the normalisation of relations in 1965. The antiJapanese posture of the Rhee government and its claim of at least $2 billion in reparation payments from Japan had not produced any progress in the ROK– Japan relations. Anti-Japanese posture was its only legitimisation formula except anti-Communism.92 The normalisation of diplomatic relations with Japan by the Park government in 1965 was strongly reinforced by the US in the so-called policy of katagawari (shift a burden onto another’s shoulders) by which Japan was called upon to assume greater responsibility in Korea.93 Second, the corporative interests of the military, especially the promotion opportunities, increased salaries, and high civilian posts for retiring generals, were partially met by the ROK participation in the Vietnam War. South Korea did not send its troops to pursue its economic interests or the corporate interests of its officer corps. Actually, the Park government was forced by Washington to send its combat troops. Seoul may not have had any alternative, since a possible relocation of US troops from Korea to Vietnam would be avoided. Yet the ROK participation was handsomely rewarded by the US. Seoul received the military assistance service fund(ed) (MASF) for its troops in Vietnam, some additional military aid, and considerable economic benefits. From 1966 to June 1972, the ROK ‘foreign exchange earnings from Vietnam totaled about $925 million’ ($397 million for US military commodity procurements and service construction contracts, $356 million in remittances by Korean personnel in Vietnam, $81 million for exports to Vietnam, $72 million for others, and $18 million in death and disability gratuities for the soldiers in Vietnam).94 The ROK troops dispatched to the Vietnam War were harshly criticised as ‘mercenaries’ at home and abroad,95 but the Park regime found another source of badly needed hard currency in addition to the economic aid from the US and Japan. Economic benefits accrued from the troop dispatch to Vietnam may lead one seriously to consider the economic interpretation of the ROK arms buildups. It is true that the ‘aid maximising’ Rhee government tried to maintain a high manpower level to get more military and economic aid, since the ROK armed forces were the guarantor of US ‘security assistance’ (see Chapter 4, pages 67–71). The patron–

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client state relationship fostered what may be called ‘growth through defence’ in South Korea.96 Yet the aid maximisation policy backfired. The intentionally overvalued won currency (which undervalued the US budget assistance in order to receive more aid) minimised South Korea’s export earnings which in turn made the Rhee government more dependent on aid. The high manpower level was also a measure to reduce unemployment.97 As has been noted in the North Korean case for the last decade or so, however, this kind of measure is a temporary one. So far, the alleged economic benefits of armament occurred only when the ROK received considerable US military and economic aid. A more solid economic explanation of armament, on the other hand, should propose a causal relationship between indigenous arms efforts and the economy. Viewed from this perspective, the indigenous ROK arms buildups were uneconomical, and President Park and his economic planners knew it. They made every effort to minimise the ROK defence burden and tried to make the FIP as economical as possible in planning the FIP. They developed a linkage between armament and the chemical-heavy industrialisation in the mid- and late 1970s.98 The Jaebols (business conglomerates, or Zaibatsu in Japan) were called upon to participate in defence industries from which they reaped handsome dividends. As has been true in government–business relations in overall economic policies and practices, business has been a junior partner in the import substitution defence industrialisation. The defence industries have been definitely import substitution-oriented, considering the meagre export of military goods.99 Export promotion industrialisation and diversification, in addition to monopoly and strong government guidance and support, has been the name of the game. The Jaebols have been notorious rent-seekers, especially in the ‘diversion of subsidised loans for use in land speculation’.100 Yet they have been the firstcomers in the government-sponsored ‘sunrise sectors’, including trade, automobile, chemical-heavy, and electronics industries but not banking, which has been under either government ownership or control.101 Defence industries have not been their main occupation. The increasing level of ‘nationalisation’ of arms procurement is misleading, since the government classifies any won-based contract as domestic procurement, while most Korean contractors are in fact assemblers, with their added value being surprisingly low.102 The pressures from the ‘industrial’ sector of the MIC have been very low, if not absent. If influence from the business sector does exist, it is not Korean but American industries that put pressure on the government towards arms buildups. The indigenous ROK defence burden was the highest (over 6 per cent of GNP) in the early 1980s, a period of economic stagnation, but the new military rulers headed by Chun Doo-Hwan killed most military research and development programmes. Instead, the new rulers purchased more US agricultural products and weapons in order to mobilise support from the Reagan administration.103 In the 1990s, US congressmen, as well as administration officials,

152 Resources, state power, and armament have tried to force the ROK government to buy more advanced US-made weapons, including the Patriot missiles, Apache attack helicopters, counter-battery radars, MLRS, and so on.104 This does not mean that the ROK does not use defence spending as a fiscal tool. But it may have done it in the opposite direction, i.e. curbing the expenditures on defence as a means of budget control. Although the military establishment became dominant again in the 1980s under the disguised military rule of Chun Doo-Hwan, the Economic Planning Board (EPB) managed to exercise some control on the ever expanding demand from the military. The EPB represented other civilian sectors of the state bureaucracy and private business sectors in the bureaucratic conflict between the EPB and the MND in budget allocations.105 The available data show that the EPB managed to cut 2.2–5.5 per cent of the MND proposal in the 1986–88 period (in the 1990s it has been around 10 percent).106 Nor has military spending been used as a counter-cyclical tool in South Korea for an obvious reason. In addition to the low level of indigenous defence production, South Korea has not experienced surplus capital. A military Keynesian fiscal policy has been a remote possibility. A data analysis, albeit without any consideration of the fact that the ROK defence budget only covered personnel and organisational O&M expenses until the early 1970s, shows that economic growth and defence spending in South Korea are negatively correlated.107 Our survey thus far leads us to conclude that none of the above-mentioned B-O incrementalism, autonomy of the military, MIC, and business cycle hypotheses successfully explain the ROK arms buildups. Some of them better capture the defence expenditure trend, but their explanatory power is limited to a certain period. From a theoretical perspective, they are all partial explanations, as they hypothesise armament as the outcome of parochial interests. A more general explanation of armament is required; and it is possible by the analysis of state power, since armament as the irreducible minimum requirement of state action is intrinsically related to state power. As it is the principal means of irreducible state power, i.e. coercion, armament is conditioned by the degree of state power, or the level of cohesion of a state-society complex divided into classes. Yet it also responds to the degree of state power. That is, armament depends on the extractive capacity of the state, but their relationship is not linear but curvilinear. The capacity of the state in our project includes taxation and profit, or extraction by the dominant class(es), for two reasons. First, it is theoretically superior to the statist (or the autonomy of the state) conception in which the capacity of the government (state apparatus) is decoupled with legitimacy.108 The ‘Gramscian conception of the state,’ on the other hand, better captures the nature of state power as the sum of coercion and consent, or the power of the state apparatus and capital. Second, it is empirically superior to the narrowly defined and measured capacity of the state, e.g. government revenue or taxation, since the ‘public’ domain varies from one state to another. A

Resources, state power, and armament 153

comparative analysis of the capitalist South Korea and the state socialist North Korea demands a proper measure of the state capacity, since the state performs the role of capital formation of the dominant class(es) in the socialist systems. To repeat, our main hypothesis is that armament effort (measured in defence burden) of the two Koreas expands as state power in extraction grows but, as state power is the sum of coercion and consent, it declines after the threshold where consent mobilisation becomes the dominant factor of state power. In other words, the marginal cost of capital formation and legitimation tends to exceed the marginal resource extraction as the coalition of forces in the ruling power bloc expands in proportion to the extractive capacity of the state. The overall extractive capacity and the relative weight of coercion and consent thereof, roughly measured in tax and profit respectively, determines the level of the defence burden. Another side of the same coin is that a state that lacks legitimacy/consent mobilisation tends to show as much a higher burden as it is supported by a given level of extractive capacity, since it tries to compensate for the lack of the Gramscian hegemony. The two Koreas are perfect examples since the Korean conflict is an ‘inter-class’ as well as ‘inter-state’ conflict in which national security is intrinsically related to public security or to the stability of the regime.109 How does the (overall) ROK extractive capacity of the state vary over time for the postwar period, and how is it related to its defence burden? Table 6.10 is one answer. First, the tax ratio decreased in the first half of the 1960s, increased gradually for the next 15–20 years, decreased somewhat in the second half of the 1980s, and again has increased in the 1990s. It should be noted that the definition of tax revenues has changed. The tax ratios in the late 1950s were higher than those of the early and mid-1960s, but the former included the foreign currency tax, a surcharge levied on the foreign currency exchange that was based on the artificially overvalued won. Likewise, tax ratios after 1988 do not include the monopoly tax (on tobacco, ginseng, etc.) – it has been reclassified as public enterprise revenues – which amounted to 0.7–0.8 per cent of the GNP in 1987–88.110 Yet the ROK tax ratio has been somewhat lower than those of comparable nations. Its ‘tax effort’, i.e. the ratio of the actual tax ratio over the ‘expected’ or ‘normal’ tax ratio (with the given politico-economic attributes) has been well below 1.0.111 Nevertheless, it does not mean that the South Korean state has been weak. Most analysts of South Korea’s economic development have agreed that it owed much to the developmental ‘strong state’. It has been pointed out that the government has tightly controlled financial resources, e.g. foreign capital (grants and loans) and domestic finance (banking). Furthermore the government has guided investment and other business decisions, and its guidance has been supported by various demand- and supply-side measures of reward and punishment.112 The South Korean state is an excellent example of the Gerschenkronian late industrialising nation. The already relatively strong, or autonomous, state (vis-à-vis the civil

154 Resources, state power, and armament Table 6.10 ROK extractive capacity and defence burden by year Extraction Ratio (%) Year 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996d 1997d

Taxa 6.8 11.3 ? ? 9.1 9.9–10.7 11.7–14.3 10.2–13.6 9.6–11.0 10.8 8.9 7.2 8.6 10.8 12.1 14.4 15.1 15.4 15.6 13.6 13.3 15.1 16.0 17.6 17.6 16.9 17.2 17.9 18.1 18.8 18.5 17.7 17.3 17.0 16.1 17.2 17.7+ 18.6+ 17.9+ 18.7+ 18.9+ 19.9+ 20.7+ 21.3+ 21.2+

Defence burden (%)c

Private savingsb

Total

Indigenous

? ? ? ? (7.2+) (6.9+) (3.6+) (3.4+) (6.3+) (4.9) (8.3) 6.9 5.8 9.0 7.9 7.4 13.4 10.5 10.4 12.2 19.4 18.2 14.6 15.5 22.3 22.1 22.2 16.0 17.4 17.4 20.7 22.8 22.8 26.6 30.8 31.5 28.4 27.4 28.3 27.1 26.7 26.0 25.7 23.6 24.3

? ? ? ? 16.3 17.6 17.9 16.0 17.3 15.7 17.2 14.1 14.4 19.8 19.0 21.8 28.5 25.9 26.0 25.8 32.7 33.3 30.6 33.1 39.9 39.0 38.4 33.9 35.5 36.2 39.2 40.5 40.1 43.6 46.9 48.7 46.1+ 46.0+ 46.2+ 45.8+ 45.6+ 45.9+ 46.4+ 45.9+ 45.5+

? (2.20) (2.20) (2.20) 1.56 2.43 2.37 3.13 0.11 1.58 1.13 1.41 1.34 1.41 1.75 2.66 3.20 3.01 3.62 3.99 3.37 3.92 4.40 5.09 5.36 5.32 4.88 6.07 6.22 6.09 5.51+ 5.10+ 5.07+ 4.59+ 4.33+ 4.20–4.38 4.07–4.39 3.72–3.84 3.48–3.88 3.52-3.94 3.47–3.64 3.23–3.48 3.17–3.27 3.17–3.23 3.31–3.39

Budget with Total US subsidies with aid 8.47 (6.07) (6.07) (6.07) 6.90 7.40 7.51 6.98 5.59 5.76 4.19 3.56 3.90 3.71 3.93 4.04 4.05 3.69 3.95 4.16 3.42 3.92 4.40 5.09 5.36 5.32 4.88 6.07 6.22 6.09 5.51+ 5.10+ 5.07+ 4.59+ 4.33+ 4.20–4.38 4.07–4.16 3.72–3.84 3.48–3.88 3.52-3.94 3.47–3.64 3.23–3.48 3.17–3.27 3.17–3.23 3.31–3.39

127.0 (40.9) (35.3) (20.5) 21.7 25.8 17.8 17.0 15.9 13.7 12.0 10.0 11.8 8.72 7.51 8.44 8.09 8.01 7.05 7.82 4.73 4.92 5.28 6.08 5.99 5.73 5.04 6.21 6.27 6.15 5.51+ 5.10+ 5.07+ 4.59+ 4.33+ 4.38 4.16 3.84 3.88 3.94 3.64 3.48 3.27 3.23 3.39

Sources: Korea Statistical Yearbook, various issues; Monthly Statistical Bulletin, various issues; and Tables 5.1 and 6.5. Notes: a Figures since 1989 do not include the monopoly tax (about 0.7–0.8 per cent of GNP in 1987–88) which became classified into the revenue of public enterprises. b Figures in parentheses are estimates from national income accounts. c Figures since 1988 include ‘special accounts’, which are not accounted for in the previous period. d Provisional statistics.

Resources, state power, and armament 155

society) has been reinforced by the decline of the landed classes before and during the war and by the aid-state-capital formation in the 1950s and the guided export promotion industrialisation in the 1960s and 1970s. It was the state, with its linkage to the world capitalist economy mediated through the patron–client relationship with the US, that fostered the earlier formation of the monopoly capital, i.e. the Jaebols.113 The lower than normal tax effort of the ROK does not indicate a lower level of state capacity but does indicate unused tax capacity available to finance economic growth.114 The military rulers, first led by Park Chung Hee and then by Chun Doo-Hwan, strongly favoured a ‘growth first’ strategy. Following the Japanese development strategy, the state-led industrialisation and the consequent expansion of employment opportunities have been the solution to social welfare.115 The low ROK tax ratios have been coupled with an extremely low level of spending on social welfare (except education). Moreover, the government more often than not limited wage increases for its development as well as for stabilisation policies.116 It also controlled trade unions on behalf of the capital. A social democratic party or programme has been taboo under the strong anti-Communist ideological terrain. The above discussion on the capacity of the South Korean state is supported by the rise of extraction in the civil society and the consequent rise of the overall extractive capacity of the state. The ratio of corporate profit in the private sector, or the accumulation of capital by the capitalist class, over GNP would better indicate the degree of extraction in the private sector. Instead, we choose the ratio of private savings, i.e. corporate plus household savings, over GNP for two reasons.117 First is the availability of data. Second, private savings better represent the degree of capital accumulation, since many medium and small enterprises in South Korea are not incorporated. It has additional merit because household savings reflect the degree of trust in the politico-economic stability held by the upper and middle classes. For all its problems (dictatorship, societal polarisation, corruption, etc.), the legitimisation formula of the authoritarian developmental state, i.e. capital accumulation, has worked.118 The private savings ratio rose from less than 5 per cent in the late 1950s and early 1960s to over 10 per cent by the late 1960s and over 20 per cent in the late 1970s, dropped below 20 per cent during the crisis in the early 1980s, but increased thereafter to more than 25 per cent in the second half of the 1980s and the first half of the 1990s (over 30 per cent in 1987–88).119 Consequently, the overall extractive capacity has steadily increased from below 15 per cent in the mid-1960s to over 45 per cent in the late 1980s and 1990s. With the exception of the early 1980s, private savings exceeded taxation as early as 1973. Ironically, the illegitimate and autonomous state in South Korea has in the end transformed itself into a more powerful and more or less (functionally) legitimate state. It is interesting to note that the crossover occurred in the first year of the highly authoritarian Yushin (revitalising reform, named after the Meiji Restoration in Japan) regime. President Park justified the Yushin regime in the name of national security

156 Resources, state power, and armament – it was after the withdrawal of the US Seventh Division and during the period of the first North–South Korean talks after the war – and economic growth. The rapid expansion of the private savings rate in 1973 (from 12.2 per cent in 1972 to 19.4 percent) supports the claim that the Yushin regime was a response to the rising state–popular class conflict as well as a preventive measure for industrial deepening. The state vs. popular class (including students) struggle was a disguised form of class conflict in the unique Korean ideological terrain coloured by strong antiCommunism.120 On 3 August 1972, the government declared a total freeze on the high-interest curb market that had financed a great portion of investment and operational funds of private firms and thereby enabled firms to accumulate and invest more capital. Private savings soared dramatically in the 1973–74 period. In 1973, President Park launched the ambitious chemical-heavy industrialisation policy that was also expected to provide a basis for defence industries. In 1975, the Defence Surtax was introduced to finance the FIP discussed above. The government, and President Park in particular, however, became captives to their own propaganda, the ‘cry wolf’ syndrome. After his wife was shot to death on 15 August 1974 – in an attempt to assassinate him by a Korean resident in Japan allegedly attached to the Chosoren, a pro-Pyongyang association of Korean residents in Japan – Park began to link his own and his government’s security with the national security. It was in the late 1970s when his chief bodyguard, Cha JiCheol, became the de facto Number Two man in South Korean politics. In the end, Park and Cha were shot to death by Kim Jae Kyu, chief of the powerful KCIA, in October 1979, after a series of violent anti-government demonstrations in the cities of Busan and Masan. The fall of Saigon in 1975 and the decline of US security commitment, coupled with rising criticism towards the human rights problem in Korea and the Koreagate scandal in Washington, further reinforced the security complex of the Park regime. Immediately after the fall of Saigon, DPRK President Kim Il Sung visited China and many Third World states (as far as Algeria and Mauritania), a trip that must have been arranged long before the Saigon saga.121 Yet Park and his government-controlled media, repeating the ‘imminent danger of northern invasion’, sponsored mass anti-Communist rallies.122 The incredible inferiority complex held by many conservatives in the South, originating from the fear of communism and the memory of the ROKA defeat during the early days of the Korean War, was reinforced by the security complex developed in the 1970s. Park’s sudden death was preceded by problems with the chemical-heavy industrialisation, labour disputes and civil unrest, which are clear indications of the crisis of the accumulation regime, rooted in the so-called ‘collusion’ of politics and economics. The new military rulers, headed by Major General Chun DooHwan, chief of the powerful Defence Security Command and leader of the Hanahwoey (One Mind Society), a highly cohesive informal faction of the officer corps recruited from the ‘regular’ four-year classes of the Korean Military Academy,

Resources, state power, and armament 157

rose to power after a series of coups in December 1979 and May 1980. The uprising in Kwangju, capital of South Jeolla Province, in May was brutally suppressed, but the Chun group exploited the Kwangju massacre for their usurpation of rule. Yet the economic crisis, inherited from the last years of the Park government and further aggravated by the political crisis, greatly reduced the extractive capacity of the capitalist class. The higher defence burden in the 1980s was sustained by an increased tax ratio. That is, the early years of the Chun government were the period in which increased coercion supplemented the declining consent/capital formation.123 It was agreed in the 1979 Park– Carter summit talks that Seoul should spend 6 per cent of its GNP on defence, and the generals now in power were more than willing to do so. Yet economic growth and another legitimation formula, this time the ‘development into an advanced society’, require more capital formation for ‘spending on infrastructures and social welfare’.124 Meanwhile, Seoul tried with US support to tender several billion dollars of Japanese loans to respond to its debt crisis, insisting that the ROK bore the burden of Japan’s national security.125 Again, it was foreign capital mediated through the patron–client inter-state relations, this time a kind of dependencia between a core and a subperiphery, that provided the South Korean state with its high relative autonomy.126 The relative autonomy of the state was rooted in the demise of the landed gentry through a series of land reforms by the US Military Government, the ROK government, and, in the Summer of 1950, the occupying North Koreans.127 It was further reinforced by the underdevelopment of capitalist classes in the formative years and in the system of national division in which national security held sway. However, without the US and Japanese support, the South Korean state might have crumbled. In other words, the internal (relative) autonomy of the state was proportionately matched by its external heteronomy.128 Although the ROK armed forces may have been able to defend the South in a possible conventional or unconventional armed conflict with the North, at least from the early 1980s (see Chapter 5), its psychological dependence on the US, coupled with its incredible inferiority complex, has reinforced the structural heteronomy of the South Korean state vis-à-vis the US (and Japan).129 Yet it is remarkable to note that economic recovery and the limited liberalisation in 1985 enabled the ruling power bloc to be more confident in capitalist development. It became evident that the South had won the economic race against the North. Private savings rose to over 25 per cent of the GNP in the second half of the 1980s and the total extraction ratio exceeded 45 percent. South Korea enjoyed even a balance of trade surplus for a few years in the second half of the 1980s. Finally, the massive but peaceful popular struggle for liberalisation and the direct presidential election in 1987 brought about a new era of South Korean politics. An unprecedented series of massive strikes followed the struggle for the constitutional amendment, which brought about large-scale wage hikes. Roh Tae-Woo, one of

158 Resources, state power, and armament Chun’s closest colleagues, was elected president, thanks to the divided opposition led by Kim Dae Jung and Kim Young-Sam. The Seoul Olympics in 1988 and the demise of the actually existing (or existed) socialism in Russia and Eastern Europe that fostered Roh’s Nordpolitik to envelop Pyongyang, allowed the ruling coalition in South Korea to become even more confident. For one thing, the National Assembly has been able to reduce, albeit symbolically, the already shrinking defence burden. More important, the Korea Development Institute, an EPB think-tank of economic planning and forecasting, and the powerful Korean Federation of Industries, the organisation of the Jaebols, demanded defence budget cuts and manpower reduction.130 It is now evident that a high level of (private) capital formation and the consequent high level of total extraction reduced the defence burden. First, the high level of extractive capacity, definitely an indicator of overall power, requires an increased marginal political cost of coalition formation. The state, or the ruling power bloc, has to meet the demands of the newly mobilised/participating classes or factions. Anti-government struggles and labour disputes are no longer automatically branded as ‘jeopardising national security’. Even in the past, the security agencies ‘never convincingly established a direct connection between the dissidents and the North’ in spite of the ‘similarities between North Korean propaganda and dissident statements’.131 Second, the state or the ruling power bloc becomes more confident in the regime security, both internally and externally. The Kim YoungSam government (1993–8) has moved forward by purging politically compromised or corrupt generals, mostly members of the Hanahwoey, and the bribery scandals in the Yulgok projects was everyday media topics. Former Presidents Chun and Roh, arrested and prosecuted for other charges in late 1995, are alleged to have collected astronomical amount of kickbacks and bribes for ‘political funds’ and personal enrichment. Overall, the relative weight of coercion begins to decline after a certain threshold – about 40 per cent of total extraction ratio or in the mid-1980s. The FIP-III (1987– 91) and the Defence Surtax introduced in 1975 to finance the original FIP (-I), both of which had been planned to last for only five to six years, were finally terminated in 1991. With the disestablishment of the Defence Surtax, automatically earmarked for military investment since 1979 some of the surtax revenues have been allocated for O&M spending as well132 – and the arrival of a more genuine ‘civilian democratic’ government led by Kim Young-Sam, the good old days are gone for the generals. They are no longer able to demand increased military spending from a commanding height. Recent MND information publications emphasise the decline of the standard of living and social status of professional soldiers.133 The military no longer maintains their ‘hegemonic/dominant’ interests and even their ‘corporative’ interests are at stake.

Resources, state power, and armament 159 Table 6.11 ROK extractive capacity and defence burden by period

Period I II III IV IVa IVb V Va Vb VI VIa VIb

1957–61 1962–66 1967–71 1972–79 1972–75 1976–79 1980–87 1980–84 1985–87 1988–97 1988–92 1993–97

Extraction ratio

Defence burden

Tax

Indigenous budget

Budget with subsidies

Total withaid

1.92% 1.37 2.85 4.54 (3.92) (5.16) 5.37+ (5.80+) (4.66+) 3.54–3.77 (3.80–4.13) (3.29–3.40)

6.88% 4.22 3.93 4.57 (3.98) (5.16) 5.37+ (5.80+) (4.66+) 3.54–3.77 (3.80–4.13) (3.29–3.40)

19.64% 11.24 7.82 5.70 (5.69) (5.71) 5.40+ (5.85+) (4.66+) 3.77 (4.13) (3.40)

10.1–11.7% 9.3 14.5 16.2 (14.5) (17.3) 17.7 (18.2) (16.8) 19.2+ (18.0+) (20.5+)

Tax & private savings 17.0% 16.2 24.1 34.1 (30.6) (37.6) 39.5 (37.1) (43.5) 46.2+ (46.6+) (45.9+)

Table 6.11 further illustrates the curvilinear relationship between overall state power and the indigenous defence burden. If taxation is used as the measure of state power, the relationship appears linear, but the two periods of highest tax ratio (1980–84 and 1988–93) differ widely in defence burden. One may argue that the difference in regime characteristics, e.g. authoritarian vs. liberal-democratic, makes the difference in defence burden. But a more liberal democratic regime does not necessarily spend less on defence.134 Yet it is exactly this concept of democracy or legitimacy that we have to build in the conception of the total extractive capacity as the indicator of overall state power. In this schema, state capacity and legitimacy are not decoupled as it has been often the case in recent discussions on state and society (see Chapter 2, pages 29–36). Viewed from this perspective, the curvilinear relationship between overall state power and the defence burden is well demonstrated in Table 6.11. The indigenous defence burden grows as taxation and the total extractive capacity grow. Tax ratio grew considerably in the 1974–76 period with the introduction of the Defence Surtax. It is interesting to note that the defence burden grew as well, although the total extraction ratio remains about the same as the 1973 level (30.6–33.3 percent). That is, a higher weight of taxation/coercion in a given level of overall state capacity leads to a higher level of defence effort. Yet defence effort continues its growth with the rise of the total extraction ratio, reaches a plateau (1980–84), and then declines as the extraction ratio grows further, exceeding 40 percent, and private profit (saving) becomes the dominant form of extraction. Then how do we interpret defence burden measured in terms of the ‘subsidised’ defence budget or total expenditures (with direct aid)? It is the ‘structural autonomy’ of the South Korean state in resource mobilisation/ allocation, i.e. US military and economic aid, that is responsible. Yet the defence ‘budget’ at least since Period III

160 Resources, state power, and armament (1967–71), also shows the above similar curvilinear relationship. The total expenditures, however, are another story. The continued relationship is confounded by the massive US aid that was responsible for more than 50 per cent of the ‘total’ ROK defence burden, at least until the early 1970s. We have to conclude, therefore, that the unusually high autonomy of the state in South Korea was a product of the US hegemony during the Cold War.135 The South Korean state was not only extractive but, like some oil-rich Arab states that spend much on defence, distributive. Yet this hypothesis needs further elaboration on cross-nation data (and definitions of indicators and measurement), which is beyond the scope of this project. To oversimplify, South Korea has experienced a dual transformation: from an aid recipient to self-financing developing economy and from a coercion-intensive to a consent/capital-intensive state. Even with its deep concern regarding national security threats, its defence burden has risen and declined as it passes through the transformation. The rise of defence burden is matched by more authoritarian rule, while its fall is definitely the product of popular struggle which in the end brings about increased state capacity as well as the liberalisation of the regime. Conclusion We may conclude, without denying the arms race between the two Koreas, that armament of the two Koreas has been greatly determined by internal dynamics. First, the overall resource base sets the limit of armament. Second, the limit varies considerably. The upper limits are about 20 per cent of GNP in the North and 7 per cent in the South, which indicates the impact of the overall resource base of the two states in conflict. The resource constraint is more strong in the North, as its much smaller, heavily taxed resource base has not expanded for the last decade. Third, the defence burden of each Korean state depends on the degree of overall state power. Since our measure of the overall state power of a capitalist state (tax + private savings) still falls short of an identical measure for all social formation, the relationship between state power and defence burden is explored in a comparative case study. But the hypothesis of a curvilinear relationship is substantiated in both cases: defence burden grows as state power in extraction grows, reaches a plateau, and then declines as state power further grows. The increased marginal political cost of state power or, on the other side of the same argument, the increased weight of consent/capital in the composition of state power, tends to reduce the relative importance of armament as the means of coercion. This relationship holds even in the presence of strong pressures from, or autonomy of, the military and conflicts of policy priorities and reallocation of resources that occurred in both Koreas. Finally, the autonomy of the state in resource mobilisation (or the external heteronomy) accrued from massive aid from patron states that enabled both Koreas

Resources, state power, and armament 161

to overarm themselves until the early 1960s in the North and until a decade later in the South. It has been pointed out also that other hypotheses of internal sources of armament are not well substantiated. The MIC or business cycle thesis is a partial explanation in theory and does not hold in practice for both Koreas. Another rival hypothesis, i.e., the B-O incrementalism, appears powerful. Yet it is theoretically shallow and cannot explain the changes in defence expenditures or defence burden. There are indications of B-O incrementalism in the absolute level of defence expenditures or manpower of each Korea, but the incremental trends are interrupted by abrupt changes. Nor does it show a cyclical pattern of repeated ups and downs. Like the action–reaction model of the arms race, however, it may be useful for a prediction, but a prediction without explanation.

7

Conclusion

There exists a growing body of literature on the disarmament and arms control of the Korean Peninsula. For propaganda and presumably economic purposes, North Korea has proposed on numerous occasions since the 1950s mutual force reductions to 100,000 men for each. With the demise of the Cold War, discussions on the inter-Korean arms control emerged in South Korea in the second half of the 1980s. Yet the deep-rooted hostility and suspicion between the two divided states, i.e. governments and citizens, and their differing approaches to national reunification have impeded progress in disarmament and arms control in theory and practice. Actually, the ROK government has paid only lip service. It has justified its arms buildups in the name of arms control, since only the inter-Korean military parity, coupled with confidence-building measures, is believed to bring about any genuine mutual arms reduction. Nor has the North shown any sincere arms reduction. Leaders in Pyongyang may have feared that a Gorbachev-style unilateral disarmament would have led to ‘self-abnegation’, and they may have been probably correct. Faced with an unprecedented political, diplomatic, economic, and military crisis, Pyongyang has reinforced its garrison state by expanding military manpower and playing the nuclear card. As has been the case with many approaches to and scenarios of the Korean national reunification, discussions on disarmament and arms control have been coloured by pessimism beneath the seemingly idealistic overtones. In fact, both the unification and arms control issues have served the two governments of the divided nation as tools for the ‘management of the national division’. In order to overcome national division and arms race, we need a better understanding of the armament processes of the two Koreas. A positive realism instead of disillusioned idealism is required. It is the purpose of this book to describe arms buildups of the two Koreas and analyse the dynamics of the military balance in terms of the military capital stock, i.e. the ‘depreciated cumulative spending’ on defence, which is a measure far superior to ‘bean counts’. It also develops a political economy explanation of arms buildups that goes beyond the arms race thesis by focusing on ‘internal’ as well as ‘external’ variables.

Conclusion 163

Several empirical, analytical and theoretical findings have been made. First, the historical survey of the postwar period shows that each Korea has been transformed from a dependent client power to a semi-independent power in military capabilities. Measures of the self-reliant defence policies of the two Koreas were the efforts to reinternalise the externalised class conflict of the Korean nation in the 1945–50 period. Yet the legacy of indigenous armament efforts in the North is national paranoia and economic decline. In the South, self-reliant defence was not the cause of authoritarianism; yet it was well exploited by the authoritarian dictatorship of the late Park and Chun era. Second, the survey shows ups and downs of arms buildups during the span of more than forty years of division after the Korean War. It also shows that, contrary to the ROK claim, the South was superior in military capabilities in the 1950s and the early 1960s, while it was well behind the North in postwar reconstruction and economic growth. Analytically, we have reached the conclusion that defence expenditure is the single most important indicator of arms buildup and military capabilities. Especially, the ‘depreciated cumulative total defence expenditure’ including military aid captures the human, material and organisational components of military capabilities of the two Koreas. On the other hand, bean counting does not account for the qualitative and organisational dimensions: it hides more than it shows. Based on either total spending or the spending on investment plus operation and management, the net assessment shows that the South became inferior to the North in the late 1960s and the 1970s but regained its superiority in the 1980s which it has expanded relentlessly. This is a far cry from the official ROK claim that the North is still superior. It turns out that the official claim in Seoul is based on a much distorted picture: the beancounting methodology, the calculation of military capital stock that excludes military aid and depreciation, and exaggerated military spending of the North. In this book, the official ROK or US estimates of North Korea’s defence expenditure and GNP are rejected. Instead, we have generated a more consistent and reliable time-series data of North Korea’s defence expenditure and GNP independently from each other, utilising official DPRK data and other sources including more objective academic works. The capability trajectories show that a mutual action–reaction process occurred sometimes but is not quite as strongly as alleged by both governments. The mere existence of a hostile rival regime on the other side of the peninsula has been enough for each to commence and justify arms buildups, and each has been successful in amplifying the threat of the other. The trajectory of North Korea definitely shows a levelling off since the late 1980s. Despite its heavy investment in national defence, the North has barely maintained its previous level of military capabilities due to its ailing economy as well as the reduction in foreign military aid. Yet the expansion of its manpower to over one million as well as the expansion of expenditure in the South to over $10 billion in the 1990s needs further scrutiny, which leads us to attempt to explain the internal sources of armament. Theoretically, the research is an approach to a ‘general’, as opposed to partial,

164 Conclusion explanation. It does not reject the arms race model or its rival theses such as the bureaucratic-organisational incrementalism or the military-industrial complex, but accepts them only as partial explanations. The theses of bureaucratic-organisational incrementalism, military-industrial complex, or military Keynesianism are partial in the sense that they tend to explain armament as the outcome of powerful but still parochial interests in a society. It is true that the military bureaucracy or the arms industries are at best corporative interests, but these are fractions of the dominant classes or the ‘historical bloc’, a concept proposed by Gramsci. Being a ruling power bloc, the historical bloc has to mobilise hegemony or the active consent of the people in addition to the capacity of coercion that has been the core of state power. Yet the state as an organisation of monopolised coercion, understood by Weber, is a partial definition. Coercion and armament as the fundamental means of coercion should be viewed from a dialectical perspective. The state and civil society are so deeply interpenetrated and interrelated that the neo-Weberian ‘state autonomy’ thesis cannot explain the dynamics of social forces which is the true origin of the state and state power. Armament understood as the minimum requirement of state action is not only the outcome of the powerful corporative interests but the outcome of the hegemonic project of the historical bloc. Armament is the fundamental means of organised coercion, yet it also performs more than a symbolic role of national power and unity. The level of armament depends on the available resource, which in turn depends on the economy and the state power in extraction. Armament of the two Koreas has been constrained by the size and level of production as well as foreign military aid. With economic potential controlled, the defence burden, i.e. the ratio of defence expenditure over the GNP, depends on the extractive capacity of the state. In order to make the potential extractive capacity of the capitalist state in the South comparable to that in the North, it is argued that the sum of taxation and profit (or private saving) is a better measure of the ‘true’ political capacity of the capitalist state for several reasons. First, the socialist state in the North performs the role of capitalists, i.e. the accumulation of capital. Second, since state power is the sum of coercion and consent and the state is, according to Gramsci, the sum of the ‘political society’ and the ‘civil society’, taxation as an indicator of coercion does not cover the potential power of the capitalist state except in a total war. Profit is not automatically related to hegemony, but it reflects the outcome of the exercise of hegemony of the dominant class(es) organised in the state. It was minimal in the South in the 1950s, but expanded steadily in the 1960s and 1970s, although foreign capital (loans) played a critical part in investment. The highly authoritarian Yushin regime in the 1970s and the harsh military dictatorship in the first half of the 1980s represented the deepening of industrial capitalism led by the state. However, private savings began to exceed 25 per cent of the GNP in the second half of the 1980s, and the hegemony of the monopoly capital, Jaebols – business conglomerates who

Conclusion 165

themselves prefer being called ‘groups’ – is well established. Global capital may replace the local Jaebols in the current financial crisis, but the power of monopoly capital would be stronger than ever. Armament as the fundamental means of state power grows as overall extraction grows, but it tends to level off and actually declines in terms of defence burden after a certain threshold. That is, as state power expands it has to pay the cost of consent mobilisation in the expanding coalition of social forces which, in the final analysis, is the outcome of popular struggle. The marginal political cost of state power, i.e. spending on social welfare and further capital accumulation, increases rapidly to the extent that it squeezes the defence burden. Another side of the same story is that the role and relative weight of armament tend to decrease as consent rather than coercion becomes the dominant element of state power. In the South, the defence burden began to decline as the total extractive ratio, i.e. tax plus private saving over the GNP, exceeded 40 per cent and private savings far exceeded taxation. In the North, the growth in extraction, i.e. state budget revenue over GNP, has increased steadily, but its defence burden since the 1970s levelled off and then declined because the state has had to spend more and more on investment and legitimation projects. However, the abrupt end of military aid from its two former allies in the 1990s has not allowed further decline. In short, armament as the fundamental means of state power performs a system maintenance function internally as well as externally. It is critical in the formative years of the two Korean states, or for that matter, all states, since state power predominantly relies on coercion during the initial period of state-building. It expands as state power grows, but it levels off and declines as the ‘gross’ state power is maximised. The cost of hegemony mobilisation increases rapidly with the rise of popular/working-class struggle and the ‘net’ extraction tends to level off or even decline, to the disgust of conservatives in capitalist societies who prefer more net state power in their ‘small but powerful government-military’ formula. The hypothesis of state power and armament relationship is well substantiated in the case study of the two Koreas. It is especially so since internal security and national security is closely interrelated in the two divided states and regime solidarity and performance, as well as military capabilities, is a critical element of national security. The theory or hypothesis may be applied to other states as well. It should be further tested against cross-nation data as well as time-series data of individual states, utilising a careful measure of state power – the definitions of taxation and profit vary widely from one state to the other. Yet a general, cross-nation enquiry is another matter, since many states are in different stages of development and the degree of external threat of a state or its position in the world system varies widely. Comparative case studies would be more fruitful. Finally, a few policy implications can be drawn – by ‘policy’ is meant not only government policies but also strategies for the democratic struggle of the people. 1

166 Conclusion First, it is now demonstrated that the South is far superior to the North in military as well as overall capabilities. Yet it cannot overwhelm the North since Seoul is so closely located to the DMZ. The South would win with or without US support in a future war. Since Seoul would be heavily damaged, however, it would lose what it has striven to defend. Consequently, the second point is that overarming does not guarantee more security. The current ROK buildups of conventional war-fighting capabilities have been countered by the more economical but effective nonconventional deterrent capabilities of the North. There exists a ‘law of diminishing return’ in the arms race. The ROK–US alliance system, especially the role of US troops in South Korea, should be carefully re-examined as well. South Korea’s dependence on the US in national security should be overcome. Third, the Korean conflict is not a classical ‘prisoners’ dilemma’. A ‘tit-for-tat’ in confidence-building has not worked well in the past. Moreover, the two are not equal partners in economic and military capabilities; generating military threat is the only remaining card for the North. This reminds us that a high defence burden can be a syndrome of a regime in decline and that a premature approach to arms reduction would be counterproductive. Fourth, since armament is the outcome of both external and internal processes, one cannot do much with the internal dynamics of North Korea. A more practical approach would be to ‘buy peace’ in the literal sense of the term, i.e. massive investment aid from the South, which would in the end bring about stability and reform in the North. Economic cooperation is the best ‘confidencebuilding measure’ of the South. For the incredible security complex still held by many anti-Communists in the South, their fear of Communism in Korea, which is in fact the fear of the weakness and instability of capitalism in the South, a ‘house built on sand’, so to speak, is no longer justified. For all its lack of legitimacy in the formative years, dictatorship, corruption and increasing social conflict, the capitalist state in the South has grown stronger than ever. The hegemony of the monopoly capital, i.e. the Jaebols, is being more or less firmly established. The serious force reduction proposals by the economic think-tanks and business community in recent years represent the sense of confidence in regime stability or survival of the South. Actually, it is the Jaebols who are more interested and active recently in North–South Korean economic cooperation. A civil society-centred (and, unfortunately for the North, market-oriented) approach would not automatically lead to national reunification, as the state in either Korea would not wither away, but would produce a fertile ground for the two states to reconsider their armed rivalry. However, only the popular struggle would keep the monopoly capital and the governments responsible in the coming period of ‘great transformation’ of the two Korean societies.2 Democracy is the best approach towards national reunification.

Appendices

168 Appendices Appendix A ROK population, GNP and tax ratio (Unit: billion current won and US$) Year 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996c 1997c

Populationa GNP × 1,000 billion won (20,290) (20,899) (21,830) (22,282) (22,856) (23,551) (24,267) 25,012 25,766 26,513 27,262 27,984 28,705 29,436 30,131 30,838 31,554 32,241 32,883 33,505 34,103 34,692 35,281 35,849 36,412 36,969 37,534 38,124 38,723 39,326 39,910 40,406 40,806 41,214 41,622 42,031 42,449 42,869 43,296 43,783 44,195 44,642 45,093 45,545 45,991

38.94 56.67 95.02 121.98 162.89 172.08 185.45 210.71 297.1 348.9 488.5 700.2 805.3 1,032.4 1,270.0 1,598.0 2,081.5 2,776.9 3,406.9 4,177.5 5,355.5 7,564.5 10,065 13,818 17,729 24,225 31,249 37,205 45,775 52,182 61,722 70,084 78,088 90,599 109,726 131,371 147,942 178,262 214,240 238,705 265,518 303,773 348,979 386,438 416,068

Exchangebc rate 28.0 38.45 59.8 75.55 90.75 89 89.9 99.44 131.3 150.26 179.7 243.5 267.9 281.3 297.1 305.8 314.2 342.6 360.3 392.9 398.3 425.64 484.0 484.0 484.0 484.0 501.0 609.2 687.3 731.9 776.4 805.6 870.6 881.4 822.5 730.6 671.3 708.0 733.6 780.8 802.7 803.62 771.05 804.7 951.1

(18.0) (18.0) (50.0) (50.0) (50.0) (50.0) (50.0) (65.0) (130.0) (130.0) (130.0) (256.53) (272.06) (271.46) (274.6) (281.5) (304.45) (316.65) (373.3) (398.9) (397.5) (484) (484) (484) (484) (484) (484) (659.9) (700.5) (748.8) (795.5) (827.4) (890.2) (861.4) (792.3) (684.1) (679.6) (716.4) (760.8) (788.4) (808.1) (788.7) (774.7) (844.2) (1,415.2)

GNP GNP p/c billion won $

Tax ratio

1.390 1.474 1.589 1.614 1.796 1.934 2.064 2.119 2.263 2.366 2.718 2.876 3.006 3.671 4.274 5.226 6.625 8.105 9.456 10.63 13.45 17.72 20.79 28.55 36.63 50.01 62.37 61.07 66.6 71.3 79.5 87.0 89.7 102.8 133.4 179.8 220.4 251.8 292.0 305.7 330.8 378.0 452.6 480.2c 437.4c

6.8 11.3 14.1 — 9.1 9.9–10.7 11.7–14.3 10.2–13.6 9.6–11.0 10.8 8.9 7.2 8.6 10.8 12.1 14.4 15.1 15.4 15.6 13.6 13.3 15.1 16.0 17.6 17.6 16.9 17.2 17.9 18.1 18.8 18.5 17.7 17.3 17.0 16.1 16.5 17.7+ 18.6+ 17.9+ 18.7+ 18.9+ 19.9+ 20.1+ 21.3+ 22.1+

68 70 74 73 79 82 85 85 88 89 100 103 105 125 142 169 210 252 288 318 395 512 590 797 1,008 1,353 1,662 1,605 1,735 1,824 2,002 2,158 2,194 2,505 3,218 4,295 5,210 5,883 6,757 7,007 7,513 8,508 10,037 10,543 9,511

Sources: Korea Statistical Yearbook, various years; and Bank of Korea, Monthly Statistical Bulletin. Notes: a Estimation based on extrapolation (census data in the 1950s do not yield a smooth timeseries). b For 1953–61, estimated PPP is based on inflation rates of the won and US dollar, using 1962 as the base year; for 1962–94, implicit GNP exchange rates by the Bank of Korea. Figures in parentheses are official exchange rates. c Provisional statistics.

Appendices 169 Appendix B Net US military aid to ROK (Unit: million current $)

Year

a

1948/49 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Grantsb Direct

MAPc

EDd

56–110 1,655 500 420 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

— 3.7 3.4 20.2 201.5 258.8 333.1 190.5 187.1 192.2 136.9 160.4 125.7 171.8 153.1 149.8 197.4 216.3 216.3 140.5 164.3 113.5 91.7 134.0 175.6 15.3 18.9 17.4 — — — — — — — — — — — — — — — — — —

— — — 3.1 5.0 4.0 22.4 21.9 22.9 40.5 (26.0) (26.0) (26.0) 46.2 22.45 4.06 26.23 49.28 133.58 51.02 24.62 37.26 35.29 12.4 6.8 7.3 1.67 1.2 0.43 0.31 — — — — — — — — — — — — — — — —

Otherse — — — 12.8 24.7 2.7 — — 3.1 — (25.0) (25.0) (25.0) (25.0) — — 7.5 0.2 0.2 86.2 184.65 1.5 — — — — — — (160.3) (107.7) (139.1) 0.7 1.6 — — — — — — — — — — — — —

FMS Credits ROK Credits Repayments Cost share

Net Total

— — — — — — — — — — — — — — — — — — — 15 17 24.2 57 59.0 140 275 275 225 129 162 166 185 230 230 163 — — — — — — — — — — —

56–110.0 1,658.7 503.4 460.5 231.2 265.5 355.5 212.4 213.1 232.7 187.9 211.4 176.7 243.0 175.55 153.86 233.13 266.68 350.08 292.73 389.57 175.26 177.99 185.4 282.4 230.6 200.55 96.6 88.73 36.01 41.1 –75.3 –29 –2 –74 –199 –210 –297 –170 –250 –280 –320 –360 –400 –430 –463

— — — — — — — — — — — — — — — — — — — — –1 –1 –6 –20 –40 –67 –110 –147 –201 –234 –264 –261 –259 –232 –237 –199 –210 –252 (–100) (–100) (–100) (–100) (–100) (–100) (–100) (–100)

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — –45 –70 –150 –180 –220 –260 –300 –330 –363

170 Appendices Appendix B (Continued) Sources: US DSAA, Military Sales, Foreign Military Construction Sales and Military Assistance Facts; U.S. Department of State, Foreign Relations of the United States 1952–1954, Vol. 10, Pt. 182; U.S. House of Representatives, Foreign Operations Appropriations, various years; U.S. AID, Overseas Loans and Grants and Assistance from International Operations, various years; Hamm, ‘An Analysis of the North-South Korean Arms Race and Military Balance’; and Hwang et al., Evaluations of US Security Assistance to Korea and Prospects of ROK-U.S. Defense Cooperation. Notes: a US fiscal year, except FMS (1971–) in Korean fiscal year (= calendar year). b Excludes Counterpart Funds of PL 480–1 or the ‘Direct Military Support’, i.e. support for won-based ROK defence expenditure, MASF 1966–72 (Military Assistance Services Funded), or US expenses for ROK troops in the Vietnam War, IMET (International Military Education and Training; $1–2 million per year). Also excluded is the ROK non-budgetary burden for USFK (leased real estate, tax exemption, non-budgetary subsidies, etc.). Figures in parentheses in the 1960s are estimates from multi-year total. c Some ACDA publications include MASF 1966–72. d Included in MASF in some ACDA publications. e Includes the USFK equipment transfers.

Appendices 171 Appendix C ROK military capital stock Year 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Annual Investments ($ million) Currenta $ deflatorb — 353.4 310.5 110.2 135.5 225.5 82.4 93.1 131.8 93.4 116.5 75.6 147.9 70.2 25.9 115.3 174.2 253.1 189.5 353.4 113.2 247.3 376.6 765.6 869.4 1,018.4 1,025.5 1,193.4 1,046.9 1,105.5 1,202.5 1,285.5 1,417.4 1,624.4 2,042.1 2,737.3 3,158.8 3,347.9 3,445.7 3,453.7 3,532.9 3,682.4 3,784.8 3,877.9 3,721.0

— 0.222 0.229 0.236 0.244 0.249 0.256 0.260 0.263 0.269 0.272 0.277 0.284 0.294 0.303 0.318 0.334 0.352 0.371 0.388 0.413 0.449 0.492 0.523 0.559 0.603 0.655 0.717 0.789 0.838 0.872 0.910 0.944 0.969 1.000 1.039 1.073 1.129 1.178 1.211 1.235 1.261 1.305 1.335 1.362

Constant — 1,591.9 1,355.9 466.9 555.3 905.6 321.9 358.1 501.1 347.2 428.3 272.9 520.8 238.8 85.5 362.6 521.6 710.9 510.8 910.8 274.1 550.8 765.5 864.3 1,555.4 1,688.5 1,565.7 1,664.4 1,326.9 1,434.9 1,267.8 1,412.6 1,501.5 1,676.4 2,042.1 2,634.6 2,943.9 2,965.4 2,925.0 2,851.9 2,860.6 2,920.2 2,900.2 2,905.6 2,733.7

Stock (1987 $)c with 8% depreciation 3,198–4,797c 4,536–6,008 5,529–6,883 5,554–6,800 5,665–6,811 6,177–7,172 5,950–6,920 5,832–6,724 5,866–6,687 5,744–6,500 5,713–6,408 5,529–6,168 5,607–6,196 5,398–5,939 5,051–5,549 5,010–5,468 5,130–5,519 5,439–5,827 5,515–5,871 5,984–6,313 5,780–6,082 5,868–6,146 6,164–6,420 7,505–7,770 8,460–8,704 9,472–9,696 10,280–10,486 11,219–11,312 11,559–11,734 12,069–12,230 12,371–12,519 12,794–12,930 13,272–13,397 13,887–14,002 14,818–14,924 16,267–16,336 17,910–17,800 19,442–19,525 20,812–20,888 21,999–22,069 23,100–23,164 24,172–24,231 25,138–24,193 26,033–26,083 26,684–26,730

Sources: Same as Appendix B; MND, Defense White Paper, various issues; Lee, ‘National Defense and State Budget’ and US Department of Commerce, National Income and Product Accounts of the United States, Vol. 1 & 2. Notes: a Expenditures on procurement, construction and R&D. For the period prior to 1974, US military aid minus O&M expenses; for the period since 1974, ROK spending on investment (in absolute amount or share of DE) plus net military aid. b GNP Deflator for US dollar. c Calculated in Chapter 4, pages 67–71, based on the ROK manpower and 1949 ROK stock.

Notes and references

Chapter 1 1 2 3 4 5 6 7

8 9

10

See, for instance, ROK Ministry of National Defence, Defence White Paper, various annual editions since 1988. Ibid.; US Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers 1993–1994 (Washington, DC: GPO, 1995). SIPRI Yearbook 1990; 1991. Korea Central Yearbook (in Korean), various issues. Franklyn D. Holzman, ‘Politics and Guesswork: CIA and DIA Estimates of Soviet Military Spending’ (International Security, Vol. 6, No. 4, 1989), pp. 101–31. Young-Hee Lee, ‘A Comparative Study of War-Fighting Capabilities of North and South Korea’ (Society and Thought, Vol. 1, No.1, in Korean, 1988), pp. 140–66. Young-Sun Ha, War and Peace on the Korean Peninsula (in Korean, Seoul: Cheongkye Institute, 1989). Cf. Kyong-Hun Lee, ‘National Defence and State Budget’ in ChongKi Park and Kyu-Ok Lee, State Budget and Policy Objectives (in Korean, Seoul: Korea Development Institute, 1982), pp. 139–75. In-Taek Hyun, Defence Expenditures of Korea (in Korean, Seoul: Hanwool, 1991). Tong Whan Park, ‘The Korean Arms Race’ (Asian Survey, Vol. 20, No. 6, 1980), pp. 648–60; ‘Political Economy of the Arms Race in Korea’ (Asian Survey, Vol. 26, No. 8, 1986), pp. 839–50. For other major works on military affairs and defence expenditures of the two Koreas, see: Man-Won Chi, The Korean Armed Forces: Where Should It Go? (in Korean, Seoul: Kimyoungsa, 1991); Jong Chun Baek and Min Yong Lee, Comprehensive Security of the Korean Peninsula (in Korean, Seoul: Ilshinsa, 1993); Kwanhee Hong, ‘Defence Burden and Economic Performances: Evidence from South Korea PhD dissertation, University of Georgia, 1990; Dal-Hee Lee, ‘North Korea’s Economy and Military Spending’ in Joseph S.H. Chung et al., The Development of North Korean Economy (in Korean, Seoul: IFES, 1990), pp. 173–220; Chung-In Moon, ‘The Political Economy of Defence Industrialisation in South Korea: Constraints, Opportunities and Prospects’ (The Journal of East Asian Affairs, Vol. 5, No. 2, Summer/ Fall 1991), pp. 438–65. Peter Hayes, Pacific Powderkeg: American Nuclear Dilemmas in Korea (Lexington: Lexington Books, 1991).

Notes and references 173 11 12

13

14 15 16

17

18

19 20

21 22 23

24

Ralph N. Clough, Embattled Korea: The Rivalry for International Support (Boulder: Westview Press, 1987). Taik-young Hamm et al., Arms Race and Arms Control on the Korean Peninsula (in Korean, Seoul: IFES, Kyungnam University, 1992); ‘Juche and National Defence Policy of North Korea’ in Jae-In Yang et al., Political Ideology of North Korea: Juche (in Korean, Seoul: IFES: Kyungnam University, 1990), pp. 155–85. Bruce M. Russett, ‘International Interactions and Processes: The Internal vs. External Debate Revisited’ in Ada Finifter, ed., Political Science: The State of the Discipline (Washington, DC: APSA, 1983), pp. 541–68; Kendall Moll and Gregory M. Luebbert, ‘Arms Race and Military Expenditure Models’ (Journal of Conflict Resolution, Vol. 24, 1980), pp. 153–85; Charles H. Anderton, ‘Arms Race Modeling: Problems and Prospects’ (Journal of Conflict Resolutions, Vol. 33, No. 2, 1989), pp. 346–67. See, for instance, Graham T. Allison, Essence of Decision: Explaining the Cuban Missile Crisis (Boston: Little, Brown, 1971). Joseph Schumpeter, Imperialism and Social Classes: Two Essays (New York: Signet, 1951). R.P. Smith, ‘Military Expenditure and Capitalism’ (Cambridge Journal of Economics, Vol. 1, 1977), pp. 61–76. Cf. James O’Connor, The Fiscal Crisis of the State (New York: St. Martin’s, 1973), pp. 150–74. Cf. Stephen Krasner, Defending the National Interest (Princeton: Princeton University Press, 1978); Gabriel A. Almond, The American People and Foreign Policy, 2nd ed. (New York: Praeger, 1960). For further detail, see: Taik-young Hamm, ‘Internal Sources of North–South Korean Military Buildups’ (Proceeding of National Security Studies, Vol. 3, No. 1, in Korean, 1992), pp. 257–379. A.F.K. Organski and Jacek Kugler, The War Ledger (Chicago: University of Chicago Press, 1980), pp. 66–86. Robert W. Cox, ‘Social Forces, States and World Orders: Beyond International Relations Theory’ in Robert O. Keohane, ed., Neorealism and Its Critics (New York: Columbia University Press, 1986), pp. 204–54. Antonio Gramsci, Selections from the Prison Notebooks (New York: International Publishers, 1971). Robert W. Jackman, Power without Force: The Political Capacity of Nation-States (Ann Arbor: University of Michigan Press, 1993), pp. 62–71. Barry Buzan, People, States and Fear: The National Security Problem in International Relations (Chapel Hill: University of South Carolina Press, 1983), pp. 65–9. Cf. Fred Block, ‘Economic Instability and Military Strength’ (Politics and Society. Vol. 10, No. 1, 1980), pp. 35–58. Cf. Joseph S. H. Chung, The North Korean Economy: Structure and Development (Stanford: Hoover Institution Press, 1974), pp. 174–5.

Chapter 2 1

Bruce M. Russett, ‘International Interactions and Processes: The Internal vs. External Debate Revisited’ in Ada Finifter, Political Science: The State of the Discipline (Washington: APSA, 1983), pp. 541–68.

174 Notes and references 2 3

4

5 6 7

8

9 10

12 13 14 15

16 17 18

19

Ibid., p. 553; Charles H. Anderton, ‘Arms Race Modeling: Problems and Prospects’ (Journal of Conflict Resolution, Vol. 33, No. 2, 1989), pp. 346–67. Otto Hintze, ‘Military Organization and the Organization of the State’ in Otto Hintze, The Historical Essays of Otto Hintze, Felix Gilbert, ed. (Oxford: Oxford University Press, 1975), p. 181. Charles Tilly, ‘Reflections on the History of European State-Making’ in Charles Tilly, ed., The Formation of National States in Western Europe (Princeton: Princeton University Press, 1975), p. 42. Max Weber, From Max Weber, H.H. Gerth and C. Wright Mills, eds. (New York: Oxford University Press, 1946), p. 78. Friedrich Meinecke, Machiavellism: The Doctrine of Raison D’Etat and Its Place in Modern History (London: Routledge, 1957), p. 354. Barry Buzan, People, States and Fear (Chapel Hill: University of North Carolina Press, 1983), pp. 44–53. Cf. Kenneth H.F. Dyson, The State Tradition in Western Europe (Oxford: Martin Robertson, 1980). Anthony Giddens, A Contemporary Critique of Historical Materialism, 2nd ed. (London: Macmillan, 1995), pp. 177–81. Cf. Anthony Giddens, The Nation-State and Violence (Berkeley: University of California Press, 1985). Ernest Gellner, State and Society in Soviet Thought (Oxford: Basil Blackwell, 1988), pp. 51–2, 65–8. Gianfranco Poggi, The Development of the Modern State (Stanford: Stanford University Press, 1978), pp. 5–15. 11 I have discussed the difficulty in defining the national interest and the state elsewhere. Taik-young Hamm, ‘National Interest Revisited: Toward a Holistic Approach’ (The Korean Journal of International Studies, Vol. 19, No. 3, 1988), pp. 415–57. Bueno de Mesquita argues that the concept is untenable, albeit in a formal-procedural sense à la Kenneth Arrow. Cf. Bruce Bueno de Mesquita, The War Trap (New Haven: Yale University Press, 1981), pp. 12–8. Weber, op. cit., pp. 180–95. However, it should be noted that classes, estates, and castes are classes of different modes of production. Otto Hintze, ‘The Formation of States and Constitutional Development’ in Hintze, op. cit., p. 160; ‘Military Organization and the Organization of the State’ p. 183. Charles Tilly, ‘War Making and State Making As Organized Crime’ mimeo, 1982. J. David Singer, ‘The Level-of-Analysis Problem in International Relations’ in James N. Rosenau, ed. International Politics and Foreign Policy, 2nd ed. (New York: Free Press, 1969), pp. 20–9; and J. David Singer and James Lee Ray, ‘Aggregation and Inference: The Level Problem Revisited’ mimeo, 1972. Charles Tilly, Coercion, Capital, and European States, AD 990–1990 (Cambridge: Cambridge University Press, 1990), pp. 6–9. Kenneth N. Waltz, Theory of International Politics (Reading, MA: Addison-Wesley, 1979), p. 122. Hans J. Morgenthau, Politics among Nations: The Struggle for Power and Peace, 5th ed. (New York: Knopf. 1973), p. 161. Morgenthau suggests four different usages of the term balance of power: ‘policy aimed at a certain state of affairs; actual state of affairs; approximately equal distribution of power; and any distribution of power’. Inis L. Claude, Jr., Power and International Relations (New York: Random House, 1962), p. 36.

Notes and references 175 20 21 22 23 24 25

26 27 28 29

30 31 32 33 34

35

36

Alexander Wendt, ‘The Agent-Structure Problem in International Relations Theory’ (International Organization, Vol. 41, No. 3, 1987), pp. 335–70. Immanuel Wallerstein, ‘The Rise and Future Demise of the World Capitalist System’ (Comparative Studies in Society and History, Vol. 16, 1974), pp. 387–415. Lewis F. Richardson, Arms and Insecurity: A Mathematical Study for the Causes and Origins of War (Chicago: Quadrangle Books, 1960), pp. 14–5. Ibid., p. 35; and Craig Etcheson, Arms Race Theory: Strategy and Structure of Behavior (New York: Greenwood Press, 1989), p. 33. Etcheson, op. cit., pp. 25, 56–7. Jacek Kugler, A.F.K. Organski, and D.J. Fox, ‘Deterrence and the Arms Race’ (International Security, Vol.1, No.1, 1980), pp. 105–38; R. Taagepera, ‘StockpileBudget and Ratio Interaction Models for Arms Race’ (Peace Science Society International Papers, No. 29, 1979/80), pp. 67–78; and Michael Don Ward, ‘Differential Paths to Parity: A Study of the Contemporary Arms Race’ (American Political Science Review, Vol. 78, No. 2, 1984), pp. 297–317. Kendall D. Moll and Gregory M. Luebbert, ‘Arms Race and Military Expenditure Models’ (Journal of Conflict Resolution, Vol. 24, No. 1, 1980), pp. 153–85. Philip Schrodt, ‘Statistical Problems Associated with the Richardson Arms Race Model’ (Journal of Peace Science, Vol. 3, 1978), pp. 159–72. Robert Axelrod, The Evolution of Cooperation (New York: Basic Books, 1984), pp. 181–3. Joseph M. Grieco, ‘Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism’ (International Organization, Vol. 42, No. 3, 1988), pp. 485–507. Note that the concept of a state ‘sensitivity coefficient’ to gaps in the joint payoffs is similar to the ‘defence coefficient’ in the Richardson model (p. 500). Matthew Evangelista, ‘Cooperation Theory and Disarmament Negotiations in the 1950s’ (World Politics, Vol. 42, No. 4, 1990), pp. 502–28. Russett, op. cit., p. 549. Helmut Rattinger, ‘From War to War’ (Journal of Conflict Resolution, Vol. 20, 1976), p. 529. For the proof in algebraic presentation, see, Etcheson, op. cit., pp. 44–5. Nazli Choucri and Robert C. North, Nations in Conflict: National Growth and International Violence (San Francisco: W.H. Freeman, 1975), pp. 203–18; W. Ladd Hollist, ‘An Analysis of Arms Processes in the United States and the Soviet Union’ (International Studies Quarterly, Vol. 21, 1977), pp. 503–28; C.E. Lucier, ‘Changes in the Values of Arms Race Parameters’ (Journal of Conflict Resolution, Vol. 23, 1979), pp. 17–39. Also cf. Moll and Luebbert, op. cit. Thomas R. Cusack and Michael Don Ward, ‘Military Spending in the United States, Soviet Union, and the People’s Republic of China’ (Journal of Conflict Resolution, Vol. 25, 1981), pp. 429–69. Anderton, op. cit., p. 351. Also see: Kugler, Organski and Fox, op. cit. It is also pointed out that estimated Soviet military expenditures, sometimes made by extrapolations, guarantee to support hypotheses of bureaucratic inertia. Russett, op. cit., p. 545. For the problems of CIA and DIA estimates, see, Franklyn D. Holzman, ‘Politics and Guesswork: CIA and DIA Estimates of Soviet Military Spending’ (International Security, Vol. 14, No. 2, 1989), pp. 86–104.

176 Notes and references 37 38

39 40 41

42 43 44 45

46 47 48 49 50

51

52

53 54 55

Albert Wohlstetter, ‘Rivals, But No Race’ (Foreign Policy, No. 16, 1974), pp. 48–81. William Zimmerman and Glenn Palmer, ‘Words and Deeds in Soviet Foreign Policy: The Case of Soviet Military Expenditures’ (American Political Science Review, Vol. 77, No. 2, 1983), pp. 358–67. Yet the verbalised Soviet attitudes towards the US may not have been the cause of but the excuse for the Soviet military buildups. Anderton, op. cit., p. 363. Cf. Etcheson, op. cit., pp. 107, 166. Russett, op. cit., p. 553. Hamm, op. cit., p. 416. For the theoretical exposition of Hegel’s theory of the state, see, Bernard Bosanquet, The Philosophical Theory of the State, 4th ed. (London: Macmillan, 1923/1951); and Z.A. Pelczynski, ed., The State and the Civil Society: Studies in Hegel’s Political Philosophy (Cambridge: Cambridge University Press, 1984). For Marx’s critique of Hegel, see, Karl Marx, ‘Critique of Hegel’s Philosophy of Right’ in Karl Marx, Selected Writings, David McLellan, ed. (Oxford: Oxford University Press, 1977), pp. 26–35. For a classic pluralist critique of the raison d’état, see, Harold D. Laski, The State in Theory and Practice (New York: Viking, 1935). Alexander P. D’Entreves, The Notion of the State: An Introduction to Political Theory (Oxford: Oxford University Press, 1967), p. 35. Meinecke, op. cit., p. 344. Quoted in Raymond Aron, Peace and War: A Theory of International Politics (Garden City, NJ: Doubleday, 1966), p. 586. Meinecke, op. cit., pp. xiv–xv. Theologian Niebuhr views that man’s pursuit of power stems from his sinfulness. Reinhold Niebuhr, Moral Man and Immoral Society (New York: Scribner’s, 1947). Aron, op. cit., p. 592. Morgenthau, op. cit., pp. 97–105. Stephen D. Krasner, Defending the National Interest: Raw Materials Investments and US Foreign Policy (Princeton: Princeton University Press, 1978), p. 12. Howard H. Lentner, ‘The Concept of the State: A Response to Stephen Krasner’ (Comparative Politics, Vol. 16, No. 3, 1984), pp. 362–77. Taik-young Hamm, ‘A Critical Synthesis of State Theories: Class State, Raison d’état, and Political System Reexamined’ (Korea and World Politics, Vol. 10, No. 1, in Korean, 1994), pp. 39–64. Richard C. Snyder, H.W. Bruck and Burton Sapin, Foreign Policy Decision-Making (New York: Free Press, 1962), pp. 60–74. Also see, Robert Jervis, Perception and Misperception in International Politics (Princeton: Princeton University Press, 1976). Henry A. Kissinger, ‘Domestic Structure and Foreign Policy’ in Rosenau, op. cit., pp. 261–75. Kissinger’s classification of leadership closely resembles Weber’s famous typology of Herrschaft. Graham T. Allison, Essence of Decision: Explaining the Cuban Missile Crisis (Boston: Little, Brown, 1971). Aaron Wildavsky, Otto A. Davis, and M.A.H. Dempster, ‘A Theory of Budgetary Process’ (American Political Science Review, Vol. 60, 1966), pp. 529–47. Graham T. Allison and Morton Halperin, ‘Bureaucratic Politics: A Paradigm and Some

Notes and references 177

56

57 58

59 60

61

62

63

64

65

Policy Implications’ in Raymond Tanter and Richard H. Ullman, eds., Theory and Policy in International Relations (Princeton: Princeton University Press, 1972), pp. 40–79. Cf. Charles Ostrom, Jr., ‘A Reactive Linkage Model of the US Defence Expenditure Policy Making Process’ (American Political Science Review, Vol. 72, 1978), pp. 941–57. See, for instance, W. Ladd Hollist, ‘Alternative Explanations of Competitive Arms Processes’ (American Journal of Political Science, Vol. 21, 1977), pp. 313–40; Charles Ostrom, Jr., ‘Evaluating Alternative Foreign Policy Models: An Empirical Test between an Arms Race Model and an Organizational Politics Model’ (Journal of Conflict Resolution, Vol. 21, 1977), pp. 239–65; J.C. Lambelet, U. Luterbacher, and P. Allan, ‘Dynamic of Arms Races: Mutual Stimulation vs. Self-Stimulation’ (Journal of Peace Science, Vol. 4, 1979), pp. 49–66; Kugler, Organski and Fox, op. cit.; Cusack and Ward, op. cit., and W. Isard and Charles H. Anderton, ‘Arms Race Models: A Survey and Synthesis’ (Conflict Management and Peace Science, Vol. 8, 1985), pp. 27–98. Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), pp. 6–9. Tong Whan Park, ‘The Korean Arms Race’ (Asian Survey, Vol. 20, No. 6, 1980), pp. 648–60; ‘Political Economy of the Arms Race in Korea’ (Asian Survey, Vol. 26, No. 8, 1986), pp. 839–50; and Taik-young Hamm, ‘National Power and National Interest in Foreign Policy’ mimeo, 1983. Buzan, op. cit., pp. 59, 65–9. Cf. Snyder, Bruck, and Sapin, op. cit. For an insider’s critique, see James N. Rosenau, ‘Premises and Promises of Decision-Making Analysis’ in James C. Charlesworth, ed., Contemporary Political Analysis (New York: Free Press, 1967), pp. 189–211. See, for instance, Rudolph J. Rummel, ‘Indicators of Cross-Nation and International Patterns’ (American Political Science Review, Vol. 63, 1969), pp. 127–47; Bruce M. Russett, ed., International Regions and the International System (Chicago: Rand McNally, 1967). For a good summary, see, Michael P. Sullivan, International Relations: Theories and Evidence (Englewood Cliffs: Prentice-Hall, 1976), pp. 102–41. Payne also suffers from a lack of theoretical depth in his otherwise important cross-national research on armament. James L. Payne, Why Nations Arm (Oxford: Basil Blackwell, 1989). James N. Rosenau, ‘Pre-theories and Theories of Foreign Policy’ in Robert B. Farrell, ed., Approaches to the Comparative and International Politics (Evanston: Northwestern University Press, 1966), pp. 27–92. Harold K. Jacobson and William Zimmerman, eds., The Shaping of Foreign Policy (New York: A. Atherton, 1969); and Charles Kegley, Jr. and Eugene R. Wittkopf, American Foreign Policy (New York: St. Martin’s, 1979). Eric Olin Wright, Class, Crisis and the State (London: New Left Books, 1979), pp. 15–27. Cf. Arthur L. Stinchcombe, Constructing Social Theories (New York: Harcourt, Brace & World, 1968). Theodore Lowi, ‘Making Democracy Safe for the World: National Politics and Foreign Policy’ in James N. Rosenau, ed., Domestic Sources of Foreign Policy (New York: Free Press, 1967), pp. 295–331. Cf. Gabriel A. Almond, The American People and Foreign Policy, 2nd ed. (New York: Praeger, 1960); and Roger Hilsman, To Move a Nation (Garden City, N.J.: Doubleday, 1967). Zimmerman, however, adds ‘protection’ as the proper function of the state, which brings the state back in. Cf. William

178 Notes and references

66 67 68

71 72 73

74

75

77 78

Zimmerman, ‘Issue Areas and Foreign Policy Process’ (American Political Science Review, Vol. 67, 1973), pp. 1204–12. A.F.K. Organski and Jacek Kugler, The War Ledger (Chicago: University of Chicago Press, 1980), pp. 71–86. Gernot Köhler, ‘Toward a General Theory of Armament’ (Journal of Peace Research, Vol. 16, No. 2, 1979), pp. 117–35. Organski and Kugler, op. cit., pp. 30–8, 218. Maximum defence efforts of major industrial powers in World War II were relatively similar, although Great Britain and the Soviet Union scored higher than others in their defence effort in terms of war expenditures over GNP. Yet the Soviets ‘had to fight the war out of a diminishing rather than a rapidly increasing national product and from an industrial base much smaller than the pre-war one’. Alan S. Milward, War, Economy and Society, 1939– 1945 (Berkeley: University of California Press, 1977), pp. 55–98, at p. 92. 69 Gabriel Ardant, ‘Financial Policy and Economic Infrastructure of Modern States and Nations’ in Tilly, The Formation of National States in Western Europe, p. 220.70. John Boli-Bennett, ‘Global Integration and the Universal Increase of System Dominance, 1910–1970’ in Albert Bergensen, ed., Studies of the Modern World System (New York: Academic Press, 1980), pp. 77–107; Karl de Schweinitz, ‘Growth, Development, and Political Modernization’ (World Politics, Vol. 22, 1970), pp. 518– 40; Bruce E. Moon and William J. Dixon, ‘Politics, the State, and Basic Human Needs: A Cross-Nation Study’ (American Journal of Political Science, Vol. 29, 1985), pp. 661–94; Richard Rubinson, ‘Dependence, Government Revenue, and Economic Growth’ (Studies in Comparative International Development, Vol. 12, 1977), pp. 3– 28; and Klaus von Beyme, ‘The Role of the State and the Growth of Government’ (International Political Science Review, Vol. 6, 1985), pp. 11–34. Organski and Kugler, op. cit., pp. 74–8. The tax effort coefficient is also used as the indicator of the efficiency of allocation. Robert W. Jackman, Power without Force: The Political Capacity of Nation-States (Ann Arbor: University of Michigan Press, 1993), pp. 58–9. Emile Benoit, Defence and Economic Growth in Developing Countries (Boston: Heath, 1973). Cf. Saadet Deger, Military Expenditure in the Third World Countries: The Economic Effects (London: Routledge & Kegan Paul, 1986). A.F.K. Organski, Jacek Kugler, J. Timothy Johnson, and Youssef Cohen, Births, Deaths, and Taxes: The Democratic and Political Transitions (Chicago: University of Chicago Press, 1984), pp. 44–61. Hamm, ‘National Interest Revisited,’ pp. 445–54. 76 John C. Donovan, The Cold Warriors: A Policy-Making Elite (Lexington: Heath, 1974); Richard J. Barnet, Roots of War (Baltimore: Penguin Press, 1973); and Morton Berkowitz, P.G. Bock and Vincent Fuccillo, The Politics of American Foreign Policy (Englewood Cliffs: Prentice-Hall, 1977). Steven J. Rosen, ed., Testing Theories of the Military-Industrial Complex (Lexington: Lexington Books, 1973). Quoted from, T.B. Bottomore, Elites and Society (New York: Basic Books, 1964), pp. 26–7. On the other hand, a noted postwar elite theorist in America, maintaining a revisionist-liberal stand, complains that the Marxist ‘ruling class . . . does not allow

Notes and references 179

79 80

81

82

83

84

85

86 87

88

enough autonomy to the political order and its agents, and it says nothing about the military as such. . .’. C. Wright Mills, The Power Elite (New York: Oxford University Press, 1956), p. 277. Jack Snyder, Myths of Empire: Domestic Politics and International Ambition (Ithaca: Cornell University Press, 1991), pp. 31–59. James R. Kurth, ‘The Political Consequence of the Product Cycle: Industrial History and Political Outcomes’ (International Organization, Vol. 33, No. 1, 1979), pp. 1–34; and ‘Why We Buy the Weapons We Do’ in Thomas Ferguson and Joel Rogers, eds., The Political Economy: Readings in the Politics and Economics of American Foreign Policy (Armonk, NY: M.E. Sharpe, 1984), pp. 314–26. Miroslav Nincic and Thomas R. Cusack, ‘The Political Economy of US Military pending’ (Journal of Peace Research, Vol. 16, No. 2, 1979), pp. 101–15; Miroslav Nincic, The Arms Race: The Political Economy of Military Growth (New York: Praeger, 1982); and Cusack and Ward, op. cit. The economic planning cycle, i.e. higher Soviet military spending during the mid-subperiods of its five-year plans, was quite observable until the 1960s. Raymond Hutchings, ‘Pattern of Fluctuations and Visibility of Soviet Post-War Defence Expenditures’ (Jahrbuch der Wirtschaft Osteuropas, Bd. 7 (1977), pp. 257–83. Karl Marx, Capital, Vol. 3 (New York: International Publishers, 1967), pp. 211–66. Cf. Thomas E. Weisskopf, ‘Marxian Crisis Theory and the Rate of Profit in the Postwar US Economy’ (Cambridge Journal of Economics, Vol. 3, 1979), pp. 341–78. Larry Griffin, Joel A. Devine and Michael Wallace, ‘Monopoly Capital, Organized Labor, and Military Expenditures in the United States, 1949–1976’ in Michael Burawoy and Theda Skocpol, eds., Marxist Inquiries: Studies of Labor, Class, and States, Supplement to American Journal of Sociology, Vol. 88, 1982), pp. 113–53; Massimo Pivetti, ‘Military Spending As a Burden on Growth: An Underconsumptionist’ Critique’ (Cambridge Journal of Economics, Vol. 16, 1992), pp. 373–84; J. Cypher, ‘Military Spending, Technical Change, and Economic Growth’ (Journal of Economic Issues, Vol. 21, 1987), pp. 33–59. For a critique of the ‘underconsumption’ or ‘effective demand’ thesis, see, R.P. Smith, ‘Military Expenditure and Capitalism’ (Cambridge Journal of Economics, Vol. 1, 1977), pp. 61–76; and Gert Krell, ‘Capitalism and Armaments’ (Journal of Peace Research, Vol. 18, 1981), pp. 241–60; Pivetti, op. cit., pp. 381–2. Cf. Raford Boddy and James Crotty, ‘Class Conflict and Macro-Politics: The Political Business Cycle’ (The Review of Radical Political Economics, Vol. 7, 1975), pp. 1–19; Paul Baran and Paul Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966). Taik-young Hamm, ‘Internal Sources of the North–South Korean Military Buildups’ (Proceedings of National Security Studies, Vol. 3–1, in Korean, 1992), pp. 347–8. Cf. US Congress, Office of Technology Assessment, Global Arms Trade (Washington, DC: GPO, 1991), pp. 131–40. Edward A. Olsen, ‘The Arms Race on the Korean Peninsula’ (Asian Survey, Vol. 26, No. 8, 1986), pp. 851–67. John H. Hannah, Korea, Japan, Taiwan (Formosa), and the Philippines, Report on US Foreign Assistance Programs to Senate Special Committee to Study the Foreign Aid Program, No. 5 (Washington, DC: GPO, 1957), p. 12. Taik-young Hamm, ‘Economic Decline and Foreign Relations of North Korea’ in

180 Notes and references

89 90

91 92

93 94 95

96

97

98

IFES, Economic Decline and Recovery Measures of North Korea (in Korean, Seoul: IFES, Kyungnam University Press, 1995), pp. 97–135. Cf. M. Glebova and V. Mikheev, ‘Some Aspect of Economic Development of the Democratic People’s Republic of Korea’ (Far Eastern Affairs, January 1983), pp. 88–97. Philippe Schmitter, Military Rule in Latin America: Function, Consequences and Perspective (Beverly Hills: Sage, 1973), pp. 117–87. Taik-young Hamm, ‘State, State Power and Military Buildup of Korea’ in Toward a New Horizon of Political Science in Korea (in Korean, Seoul: Bakyongsa, 1994), p. 250. Cf. Alfred Stepan, Authoritarian Brazil (New Haven: Yale University Press, 1973), pp. 47–65. Volker R. Berghanan, Militarism: The History of International Debate 1861–1979 (New York: St. Martins, 1982), pp. 105–18. Bruce M. Russett, ‘Defence Expenditures and National Well-Being’ American Political Science Review, Vol. 76, No. 4 (1982), pp. 767–77. Cf. William K. Domke, Richard C. Eichenberg, and Catherine M. Kelleher, ‘The Illusion of Choice: Defence and Welfare in Advanced Industrial Democracies, 1948–1978’ American Political Science Review, Vol. 77, No. 1 (1983), pp. 19–35. Alan Wolfe, The Rise and Fall of the Soviet Threat (Washington, DC: Institute for Public Policy, 1979). Anthony Giddens, Beyond Left and Right: The Future of Radical Politics (Stanford: Stanford University Press, 1994), pp. 22–50. Antonio Gramsci, Selections from the Prison Notebooks (New York: International Publishers, 1971), pp. 216, 213. Cox finds Gramscian synthesis useful, albeit in a different problematic, for international relations research. Robert W. Cox, ‘Social Forces, States and World Orders’ in Robert O. Keohane, ed., Neorealism and Its Critics (New York: Columbia University Press, 1986), pp. 204–54. Eric J. Hobsbawm, ‘Gramsci and Marxist Political Theory’ in Anne S. Sassoon, ed., Approaches to Gramsci (London: Writers and Readers, 1982), pp. 20–36; Walter L. Adamson, Hegemony and Revolution: A Study of Antonio Gramsci’s Political and Cultural Theory (Berkeley: University of California Press, 1980), pp. 169–228; and Perry Anderson, ‘The Antinomies of Antonio Gramsci’ (New Left Review, No. 100, 1976/77), pp. 5–78. Althusser coins the term ‘ideological state apparatus’ from Gramsci’s narrowly defined ‘civil society’, which is understood as an instance distinct from the economic structure in a technical sense. Louis Althusser, Lenin and Philosophy and Other Essays (New York: Monthly Review Press, 1971), pp. 127–58. Easton finds a close parallel between his own systems theory and the structural Marxism à la Althusser and Poulantzas. Cf. David Easton, The Analysis of Political Structure (New York: Routledge, 1990). Jackman, op. cit., pp. 62–71. Cf. Walter Korpi, The Democratic Class Struggle (London: Routledge & Kegan Paul, 1983), for the usage of the term government. Statists tend to narrowly understand what Huntington may have meant by institutionalization: ‘The most important political distinction among countries concerns not their form of government but their degree of government.’ In spite of its emphasis on order and hence controlled/restrained participation, the formula implies governability and legitimacy. Samuel P. Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968), p. 1.

Notes and references 181 99 100 101 102 103

104 105

106 107

108

109 110 111 112 113 114

115

116 117

Timothy Mitchell, ‘The Limits of the State: Beyond Statist Approaches and Their Critics’ (American Political Science Review, Vol. 85, No. 1, 1991), pp. 77–96, at p. 94. Bertell Ollman, Dialectical Investigations (London: Routledge & Kegan Paul, 1993), pp. 94–101. Otto Hintze, ‘Calvinism and Raison D’Etat in Early Seventeenth-century Brandenburg’ in Hintze, op. cit., p. 92. Tilly, Coercion, Capital, and European States, AD 990–1990, pp. 28, 30. For the importance of the feudal landed classes in the conflict involved in the transformation from agrarian to modern industrial societies, see Barrington Moore, Social Origins of Dictatorship and Democracy (Boston: Beacon Press, 1966). Perry Anderson, Lineages of the Absolutist State (London: New Left Books, 1974), pp. 18, 195, 197–8. This was the main theme of the so-called Miliband–Poulantzas debate. See, Ralph Miliband, The State in Capitalist Society (New York: Basic Books, 1969); Nicos Poulantzas, ‘The Problem of the Capitalist State’ (New Left Review, No. 58, 1969), pp. 67–78; and ‘The Capitalist State: A Reply to Miliband and Laclau’ (New Left Review, No. 95, 1976), pp. 63–83. Nicos Poulantzas, Political Power and Social Classes (London: New Left Books, 1968/1975), especially pp. 273–95. For a ‘capital strike’ explanation, see, Charles Lindblom, Politics and Markets (New York: Basic Books, 1977); Claus Offe, Contradictions of the Welfare State, John Keane, ed. (London: Hutchinson, 1984). For neo-Marxist efforts to ‘prove’ the class nature of the state after the widely publicised Miliband–Poulantzas debate, see, among others, John Holloway and Sol Piccioto, eds., State and Capital: A Marxist Debate (London: Arnold, 1978); Nicos Poulantzas, State, Power, Socialism (London: New Left Books, 1978); and Ellen Meiksins Wood, The Retreat from Class: A New ‘True’ Socialism (London: Verso, 1986). J.P. Nettl, ‘The State as a Conceptual Variable’ (World Politics, Vol. 20, No. 4, 1968), pp. 559–92; and Michael Mastanduno, D.A. Lake, and G.J. Ikenberry, ‘Toward a Realist Theory of State Action’ (International Studies Quarterly, Vol. 33, No. 4, 1989), pp. 457–74. Hamm, ‘State, State Power, and Military Buildup of Korea’ p. 253. Tilly, Coercion, Capital, and European States, AD 990–1990, pp. 127–60. Organski et al., op. cit., p. 75. Maurice Godelier, ‘Process of State Formation’ in Ali Kazancigil, ed. The State in Global Perspective (Paris: UNESCO, 1986), pp. 3–19. Jang-Jip Choi, ‘The Concept of Gramsci’s Hegemony’ (Korean Political Science Review, Vol. 18, in Korean, 1984), pp. 19–40. Youssef Cohen, Brian R. Brown and A.F.K. Organski, ‘The Paradoxical Nature of State-Making: The Violent Creation of Order’ (American Political Science Review, Vol. 75, 1981), pp. 901–10. Strong states are not necessarily mean strong powers in international relations. ‘Even major powers, like China and the Soviet Union, have serious weaknesses as states.’ Buzan, op. cit., p. 66. Cf. Moore, op. cit.; J. Snyder, op. cit. Fred Block, ‘Economic Instability and Military Strength’ (Politics and Society, Vol.10,

182 Notes and references No.1, 1980), pp. 35–58. 118 Robert Alford and Roger Friedland, Powers of Theory (London: Cambridge University Press, 1985). For earlier discussions on the different levels/instances of power, see, Peter Bachrach and Morton S. Baratz, ‘Two Faces of Power’ (American Political Science Review, Vol. 56, 1962), pp. 947–52; and Steven Lukes, ‘Power and Authority’ T.B. Bottomore and Robert Nisbet, eds., A History of Sociological Analysis (New York: Basic Books, 1978), pp. 633–76. Cf. Robert A. Dahl, Dilemmas of Pluralist Democracy: Autonomy vs. Control (New Haven: Yale University Press, 1982). 119 Boris Rumer, ‘Soviet Investment Policy: Unresolved Problems’ (Problems of Communism, September–October, 1982), pp. 53–82; Myron Rush, ‘Guns over Growth in Soviet Policy’ (International Security, Vol. 7, No. 3, 1982/83), pp. 167–79; US Congress, Joint Economic Committee, Soviet Military–Economic Relations: Proceedings of a Workshop (Washington, DC: GPO, 1983); and Stanley H. Cohn, ‘Declining Soviet Capital Productivity and the Soviet Military Industrial Complex’ in US ACDA, World Military Expenditures and Arms Transfers 1972–1982 (Washington, DC: GPO, 1984), pp. 111–16. 120 Michael Edelstein, ‘What Price Cold War? Military Spending and Private Investment in the US, 1946–1979’ (Cambridge Journal of Economics, Vol. 14, 1990), pp. 421–37 shows no relationship between M and I; while M expands at the sacrifice of ‘private consumption’ or ‘social wage’. 121 James O’Connor, The Fiscal Crisis of the State (New York: St. Martin’s, 1973), pp. 150–74. 122 See, for instance, Krasner, Defending the National Interest; Theda Skocpol, States and Social Revolution (New York: Cambridge University Press, 1979); Eric A. Nordlinger, On the Autonomy of the Democratic State (Cambridge, MA: Harvard University Press, 1981); Peter Evans, Dietrich Rueschemeyer, and Theda Skocpol, eds., Bringing the State Back In (Cambridge: Cambridge University Press, 1985); and G.J. Ikenberry, Reasons of State: Oil Politics and the Capacities of American Government (Ithaca: Cornell University Press, 1988). 123 Peter Katzenstein, ed., Between Power and Plenty (Madison: University of Wisconsin Press, 1978), pp. 879–920. Also see, Thomas Ferguson, ‘From Normalcy to New Deal: Industrial Structure, Party Competition, and American Pubic Policy in the Great Depression’ (International Organization, Vol. 38, No. 2, 1984), pp. 41–94. 124 Alan Wolfe, The Limit of Legitimacy: Political Contradictions of Late Capitalism (New York: Free Press, 1977), p. 258. 125 Frederic C. Deyo, ed., The Political Economy of the New Asian Industrialism (Ithaca: Cornell University Press, 1987); Stephan Haggard, Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries (Ithaca: Cornell University Press, 1990). 126 Bob Jessop, State Theory: Putting Capitalist States in Their Place (University Park: Pennsylvania State University Press, 1990), pp. 287–8. 127 Evans, Rueschemeyer, and Skocpol, op. cit., pp. 353, 355. 128 Frank Parkin, Marxism and Class Theory: A Bourgeois Critique (New York: Columbia University Press, 1979), p. 25. 129 Karl Marx, ‘The Eighteenth Brumaire of Louis Bonaparte’ in Marx, op. cit., pp. 300– 25.

Notes and references 183 130 Cf. Hamm, ‘State, State Power, and Military Buildup of Korea’ pp. 257–8; Ho-Chul Sonn, ‘Problems Surrounding the Concept of State Autonomy’ Korean Political Science Review, Vol. 25, No. 2 (in Korean, 1989), pp. 296–318. 131 Organski et al., op.cit., p. 77. 132 Jacques Delacroix, ‘The Distributive State in the World’ (Studies in Comparative International Development, Vol. 15, 1980), pp. 3–21. 133 This is the error committed by Marx and Engels in their formulation of the ‘Asiatic mode of production’ concept. For critiques of this perspective, see Gellner, op. cit., pp. 39–68; and Anderson, Lineages of the Absolutist State, pp. 465–90. 134 Bertell Ollman, Alienation: Marx’s Conception of Man in Capitalist Society, 2nd ed. (Cambridge: Cambridge University Press, 1976), pp. 212–20. 135 Anthony Giddens, The Class Structure of the Advanced Societies (London: Hutchinson, 1973), pp. 223–54. 136 Ollman, Dialectical Investigations, pp. 109–12. 137 Ejub Kucuk, ‘The Socio-class Determinants of Militarism’ in Asborn Eide and Marek Thee, Problems of Contemporary Militarism (New York: St. Martins, 1980), pp. 148–72. 138 Cf. Dennis Ross, ‘Coalition Maintenance in the Soviet Union’ (World Politics, Vol. 34, No. 2, 1982), pp. 258–80. David E. Albright, ‘A Comparative Conceptualization of Civil–Military Relations’ (World Politics, Vol. 32, No. 4, 1980), pp. 553–76; Roger E. Kanet, ed., Soviet Foreign Policy in the 1980s (New York: Praeger, 1982), pp. 17–36; Suck-Ho Lee, Party–Military Relations in North Korea: A Comparative Analysis (Seoul: Research Center for Peace and Unification, 1983). 139 Gramsci, op. cit., pp. 229–39.

Chapter 3 1

2

3 4

For critiques of the exaggerated Soviet military power, see, among others, Franklyn D. Holzman, ‘Are the Soviets Really Outspending the US on Defence?’ (International Security, Vol. 4, No. 4, 1980), pp. 86–104; Matthew Evangelista, ‘Stalin’s Postwar Army Reappraised’ (International Security, Vol. 7, No. 3, 1982–83), pp. 110–38; Richard Ned Lebow, ‘The Soviet Offensive in Europe: The Schlieffen Plan Revisited?’ (International Security, Vol. 9, No. 4, 1985), pp. 44–78; and John J. Mearscheimer, Conventional Deterrence (Ithaca: Cornell University Press, 1982). After the Pentagon ended in 1990 its most powerful propaganda, The Soviet Military Power, which the Reagan administration had started in 1981, it published a similar one on North Korea in 1991. See, US Defence Intelligence Agency (DIA), North Korea: The Foundations for Military Strength (Washington, DC: DIA, 1991). Cf. The Defence Monitor, Vol. 23, No. 1 (1994), pp. 1–6. Claire Selltiz et al., Research Methods in Social Relations (New York: Holt, 1976), pp. 159–97. Cf. Donald T. Campbell and Donald W. Fiske, ‘Convergent and Discriminant Validation by the Multitrait-Multimethod Matrix’ (Psychological Bulletin, Vol. 56, 1959), pp. 81–104.

184 Notes and references 5

6

7

8 9

10 11

12 13 14 15 16 17 18

19

See, ROK Ministry of National Defence [MND], Defence White Paper 1994–1995 (Seoul: MND, 1994); The Military Balance 1994–1995 (London: IISS, 1994); and US House of Representatives, Committee on Foreign Affairs, The Security Situation on the Korean Peninsulas, Hearings (Washington, DC: GPO, 1994). Defence White Paper 1991–92; and 1994–95. Also see, Guy R. Arrigoni, ‘National Security’ in Andreas Matles Savada, ed., North Korea: A Country Study, Department of the Army Area Handbook Series, 4th ed. (Washington, DC: GPO, 1994), pp. 221, 6. For a rough picture of the deployment of ROK forces, see, Rodney P. Katz, ‘National Security’ in Andreas Matles Savada, ed., South Korea: A Country Study, Department of the Army Area Handbook Series, 4th ed. (Washington, DC: GPO, 1994), pp. 281– 2. James F. Dunnigan and Austin Bay, A Quick and Dirty Guide to War, rev. ed. (New York: Quill, 1991), pp. 478–9. Young-Sun Ha, ‘The Korean Military Balance: Myth and Reality’ in William J. Taylor, Jr. et al., The Future of South Korean–US Security Relations (Boulder: Westview Press, 1989), p. 89. Quoted from, John J. Mearscheimer et al., ‘Correspondence: Reassessing Net Assessment’ (International Security, Vol. 13, No. 4, 1989), p. 128. A.F.K. Organski and Jacek Kugler, The War Ledger (Chicago: University of Chicago Press, 1980); Klaus Knorr, The War Potential of Nations (Princeton: Princeton University Press, 1956); Paul Kennedy, The Rise and Fall of the Great Powers: Economic Change and a Military Conflict from 1500 to 2000 (New York: Random House, 1987). Cf. J. David Singer, Frank Wayman and Garry Goertz, ‘Capabilities, Allocations and Success in Militarized Disputes and Wars, 1816–1976’ (International Studies Quarterly, Vol. 27, 1983), pp. 497–515. Charles Wolf, Jr. et al., The Changing Balance: South and North Korean Capabilities for Long-Term Military Competition (Santa Monica: Rand, 1985), pp. 35–42. Young-Hee Lee, ‘A Comparative Study on War-Fighting Capabilities of North and South Korea’ (Society and Thought, Vol. 1, in Korean, 1988), pp. 140–66. Defence White Paper 1989 (in Korean), p. 185. Defence White Paper 1993–1994, p. 85. Edward N. Luttwak, Strategy: The Logic of War and Peace (Cambridge, MA: Belknap Press, 1987), p. 114. David C. Isby, ‘Weapons and Tactics of the Republic of Korea Army’ (Jane’s Defence Review, Vol. 3, No. 1, 1982), p. 59. For a detailed description of the AirLand Battle in Korea, see, Chung Min Lee, ‘Holding the ‘Hollingsworth Line’: Conventional Deterrence in the Korean Peninsula’ in Harold Hinton et al., The US–Korean Security Relationship (Washington, DC: PergamonBrassey’s, 1988), pp. 55–81. For the implications and problems of the Korean AirLand Battle, see, Peter Hayes, Pacific Powderkeg: American Nuclear Dilemmas in Korea (Lexington: Lexington Books, 1991), pp. 89–103. US Senate, Committee on Foreign Relations, US Troop Withdrawal from the Republic of Korea: An Update, 1979, Report by Sen. John Glenn (Washington, DC: GPO, 1979), p. 8; and US Congressional Budget Office [CBO], Force Planning and Budgetary Implications of US Withdrawal from Korea (Washington, DC: CBO, 1978), pp. 36–7; and Isby, op. cit., pp. 58–9.

Notes and references 185 20 21

22 23

24

25

26 27 28

29 30

31

32 33 34

Stuart E. Johnson and Joseph A. Yager, The Military Equation in Northeast Asia (Washington, DC: Brookings Institution, 1978), p. 57. Walter G. Hermes, United States Army in the Korean War: Truce Tent and Fighting Front (Washington, DC: GPO, 1966), p. 80; and ROK Ministry of National Defence, Korea in War 1951–1952 (in Korean, Seoul: n.p., 1953), Figs. 4 and 13. Taek-Hyung Rhee, US–ROK Combined Operations: A Korean Perspective (Washington, DC: National Defence University Press, 1986), pp. 15–6. The KPA does not have mobile air defence systems such as SA-6 Gainful tactical SAMs that the Soviets supplied to the Arabs since the 1970s. Also, ‘the KPA, like the Soviet Army, reflects heavy investment in initial combat power at the expense of the logistic support capabilities required to sustain a prolonged conflict. A force so organized. . . might suffer a logistic breakdown.’ Ralph N. Clough, Deterrence and Defence in Korea: The Role of US Forces (Washington, DC: Brookings Institution, 1976), p. 11. Taik-young Hamm, ‘An Analysis of the North–South Korean Arms Race and Military Balance’ in idem., ed., The North–South Korean Arms Race and Arms Control (in Korean, Seoul: Institute for Far Eastern Studies [IFES], 1992), pp. 6–7. Allan R. Millett, Williamson Murray, and Kenneth H. Watman, ‘The Effectiveness of Military Organizations’ in Allan R. Millett and Williamson Murray, eds., Military Effectiveness, Volume I: The First World War (Boston: Allen & Unwin, 1988), pp. 1– 30. Cf. Trevor N. Dupuy, Numbers, Predictions and War (London: Macdonald & Jane’s, 1979), pp. 95–139. Cf. James P. Payne, Why Nations Arm (Oxford: Basil Blackwell, 1989), pp. 36–46. Jonathan R. Adelman, Revolution, Armies, and War: A Political History (Boulder: Lynne Rienner, 1985), pp. 139–44; Theda Skocpol, ‘Social Revolutions and Mass Military Mobilization’ (World Politics, Vol. 40, No. 2, 1988), pp. 147–68. Organski and Kugler find a great difference in tax effort of the state, especially among developing societies. Organski and Kugler, op. cit., pp. 64–103. Probably hundreds, if not thousands, of books and articles have been published on inter-Korean bean counts, mostly using the OB data in The Military Balance. Virtually all authors draw gloomy pictures of ROK’s self-reliant deterrence and defence. As a matter of courtesy, I will not list them as ‘journalists’. US House of Representatives, Committee on Armed Services, Impact on Intelligence Reassessment of Withdrawal of US Troops from Korea, Report by Investigations Subcommittee (Washington, DC: GPO, 1979), pp. 2, 5.; US Senate, Committee on Armed Services, US Troop Withdrawal from the Republic of Korea: An Update, 1979, Report of the Pacific Study Group (Washington, DC: GPO, 1979), p. 3. Defence White Paper 1993–94, p. 77. Also see, Defence White Paper 1994–1995 (in Korean), p. 74. ROK, National Security and Defence Expenditure in the IMF Era (Seoul: MND, 1998), p. 35. Defence White Paper 1988 (in Korean), pp. 151–2. English translation is from later English versions.

186 Notes and references 35 36

37 38 39 40 41 42

43 44

45

46

47 48

US CBO, Assessing the NATO/Warsaw Pact Military Balance (Washington, DC: CBO, 1977), p. 56. William P. Mako, US Ground Forces and the Defence of Central Europe (Washington, D.C.: Brookings Institution, 1983), pp. 105–25. Eastern European formations receive lower ADE scores than Soviet divisions (pp. 123–5). Barry R. Posen, ‘Is NATO Decisively Outnumbered?’ (International Security, Vol. 12, No. 4, 1988), p. 190. Defence White Paper 1988 (in Korean), p. 152. US CBO, Assessing the NATO/Warsaw Pact Military Balance, p. 53. P.D. Foxton, Powering War: Modern Land Force Logistics (London: Brassey’s, 1994), p. 2. US CBO, Assessing the NATO/Warsaw Pact Military Balance, p. 62. James D. Marett, ‘The Republic of Korean Army: The Light Infantry Division’ (Military Review, November 1987), pp. 65–71, quoting ROK Field Manual 10110-1 (1985). ROK officers informally relate that some divisions have nine battalions and that infantry divisions in the 1994–95 period have fewer than the quoted 14,700 manpower, implying force restructuring programmes. It is reported that the force strength of the ROKA divisions would be reduced from 12,000 in 1996 to 10,000 in the next decade. The Dong-A Ilbo, 1 October 1996. A KPA rifle [infantry] division is estimated to have about 10,000 men, while some sources quote as low as 8,700 men. Larry Niksch, ‘North Korea’ in Richard A. Gabriel, ed., Fighting Armies, Nonaligned, Third World and Other Ground Armies: A Combat Assessment (London: Greenwood Press, 1983), p. 107; Nena Vreeland and Rinn-Sup Shinn et al., Area Handbook for North Korea, Department of the Army Area Handbook series, 2nd ed. (Washington, DC: GPO, 1976), p. 320. US CBO, Force Planning and Budgetary Implications of US Withdrawal from Korea, p. 34. The KPA infantry/shock infantry brigades had 8,065–8,795 men in the 1960s and 1970s but, through reorganisations, their manpower strength was reduced to 2,849 (shock brigades in the early 1980s) and 3,483 (combined arms brigade, 1986–). Joseph S. Bermudez, Jr., North Korean Special Forces (Coulsdon, Surrey: Jane’s, 1988), pp. 136–40. Barry R. Posen, ‘Measuring the European Conventional Balance’ (International Security, Vol. 9, No. 3, 1984/85), p. 58. Also note that ‘[t]he UNC advantage in artillery lay in better fire control equipment and techniques and in the supply of ammunition . . . The Communists had [in the later period] over twice as many battalions in Korea as the UNC had and a considerable edge in the number of guns as well.’ Hermes, op. cit., p. 510. Defence White Paper 1994–1995 (in Korean), p. 74. For the tonnage and equipment of KPAN ‘crafts’ or ‘boats’ see Jane’s Fighting Ships 1992–93; 1993–94 (Coulsdon, Surrey: Jane’s, 1992, 1993). Even US DIA rates KPAN as ‘a coastal defence force’ and reports, ‘[m]ost naval vessels are small patrol sized craft unable to operate over 50 nautical miles from the coast . . . .’ US DIA, op. cit., p. 44. Donald D. McLaurin and Chung-in Moon, The United States and the Defence of the Pacific (Boulder: Westview Press for IFES, Kyungnam University), p. 49. Likewise, some measures of overall national capabilities heavily dependent on these indicators should be ‘modernised’. For instance, see, J. David Singer, Stuart Bremer

Notes and references 187

49

50 51

52 53 54 55

56

57

58

59

and John Stuckey, ‘Capability Distribution, Uncertainty, and Major Power War, 1820–1965’ in Bruce Russett, ed. Peace, War and Numbers (Beverly Hills: Sage, 1972); and Ray S. Cline, World Power Trends and US Policy for the 1980s (Boulder: Westview Press, 1980). It should be noted that North Korea’s economic plans are still oriented towards these kinds of indicators – iron, coal, and all. For a brief, but an overall survey of Soviet weapons and tactics, see: David C. Isby, Weapons and Tactics of the Soviet Army, new ed. (London: Jane’s 1988); James F. Dunnigan, How to Make War, 3rd ed. (New York: Quill, 1993); and Tom Gervasi, Soviet Military Power: The Pentagon’s Propaganda Document, Annotated and Corrected (New York: Vintage Books, 1988). For comparison of weapons on both sides in actual combat, see, Anthony H. Cordesman and Abraham R. Wagner, The Lessons of Modern War, 3 vols. (Boulder: Westview Press, 1990). Even the latest generation Soviet fighters, the MIG-29s, that can roughly match or, in some areas, outperform their Western counterparts such as the F-16, F-18 or Mirage-2000 ‘have far inferior electronic warfare capabilities, avionics, computers, and combat displays . . . .’. Ibid., Vol. 1: The Arab-Israeli Conflicts, 1973–1989, p. 284. Isby, Weapons and Tactics of the Soviet Army, p. 107. Malcolm Chalmers and Lutz Unterseher, ‘Is There a Tank Gap? Comparing NATO and Warsaw Pact Tank Fleets’ (International Security, Vol. 13, No. 1, 1988), pp. 36– 7. Anthony H. Cordesman, ‘The NATO Central Region and the Balance of Uncertainty’ (Armed Forces Journal International, July 1983), p. 77. Isby, Weapons and Tactics of the Soviet Army, p. 117. Ibid. Chalmers and Unterseher, op. cit., pp. 31–2. All KPA inventories, T-54/55/59/62s, belong to the first generation postwar Soviet tanks equipped with the cruder stadia reticle triangulation system. It uses the length of the target as a baseline that yields less than one half of the hit probability of the stereo coincidence system on M-47/48s at 1,000m range. For further detail, see, Isby, Weapons and Tactics of the Soviet Army, p. 116. For ROK tank inventories, see, Jane’s Armour and Artillery 1992–93 (Coulsdon, Surrey: Jane’s, 1992). Cordesman, op. cit., p. 47. Probably an overstatement, which, anyway, would be examined by the ROK, as it will receive the latest version of T-80 series, the T-80U, which was once referred to by NATO as the SMT (Soviet Medium Tank) M-1989 and is at least two generations ahead of the best tank in the KPA inventories (T-62s), in loan repayment. See, The Economic Daily, 22 April 1995. Defence White Paper 1995–1996, p. 71; The Military Balance 1995–96, pp. 186–8; and ROK Military History Research Institute, The Treaties of the National Defence, Vol. II: 1981–1992 (in Korean, Seoul: MHRI, 1993), pp. 369–405, for WRSA tanks. See, Cordesman and Wagner, op. cit. Although somewhat dated, the following sources show the most detailed performance data of Soviet aircrafts and missiles. Barton Wright, ed., World Weapon Database, Vol.1: Soviet Missiles (Lexington: Lexington Books, 1986); and Neta Crawford, ed., World Weapon Database, Vol.2: Soviet Military Aircraft (Lexington: Lexington Books, 1987). Arrigoni, op. cit., p. 222. Also see, Defence White Paper 1989 (in Korean), p. 181; and Defence White Paper 1992–1993 (in Korean), p. 69.

188 Notes and references 60 61

62 63

64

65 66

67

68 69 70

71

72 73

74 75

Mako, op. cit., pp. 121–5; and Posen, ‘Assessing the Conventional Balance’ p. 193. US Department of Defence, Conduct of the Persian Gulf War: Final Report to Congress (Washington, DC: GPO, 1992), pp. 751–2. A total of 18 M-1A1s were damaged, of which 9 were permanent losses by friendly forces’ fire, and the other 9 were mostly from mines. Defence White Paper 1990 (in Korean), pp. 112–13. Steven Zaloga, ‘Soviets Denigrate Their Own Capabilities’ (Armed Forces Journal International, July 1991), pp. 18, 20. The coefficient of a US armoured division is about 10 per cent higher than the ADE scores in the 1970s (a Soviet motorised rifle division = 0.66 ADE). Barry Posen, among others, applies a force multiplier of 1.5 to NATO forces in C3I and support, considering NATO’s heavy investment in these areas and the higher ‘tooth-to-tail ratios’. Posen, ‘Measuring European Conventional Balance,’ pp. 67– 70. Carl von Clausewitz, On War, Michael Howard and Peter Paret, eds. and trans. (Princeton: Princeton University Press, 1976), p. 119. For the importance of management in the ROK defence policy and planning, see, Man-Won Chi, The Korean Armed Forces: Where Should It Go (in Korean, Seoul: Kimyongsa, 1991). Dupuy, op. cit., pp. 95–139. The per soldier CEV of the IDF was calculated at 3.48 against 1.0 for Iraq, 1.35 for Syria, 1.73 for Egypt, and 1.82 for Jordan in the 1973 War, while it was 3.5 against 1.0 for Palestine, 1.33 for Syria, 2.0 for Egypt, and 2.28 for Jordan in 1967 – a lot of variation among the Arabs. Trevor Dupuy, Elusive Victory: The Arab-Israeli Wars 1947–1974 (New York: Harper & Row, 1978), pp. 623–33. Trevor Dupuy, Understanding War: History and Theory of Combat (New York: Paragon House, 1987), p. 216. Peter G. Tsouras, Changing Orders: The Evolution of the World’s Armies, 1945 to the Present (London: Arms and Armour, 1994), pp. 70–5, 137–9, 214–8, 313–5. See, for instance, Isby, Weapons and Tactics of the Soviet Army; Gervasi, op. cit.; Dunnigan, op. cit.; and John J. Mearscheimer, ‘Why the Soviets Can’t Win Quickly in Central Europe’ (International Security, Vol. 7, No. 1, 1982), pp. 3–39. This is tacitly admitted by the ROK Ministry of Defence. For instance, the annual on board training hours of KPA air and naval components are only a third to half of those of the South. Defence White Paper 1991–1992 [in Korean], p. 135. Informal sources relate that the annual flying hours of KPA pilots are a few hours in recent years. von Clausewitz, op. cit., pp. 358–9. John J. Mearscheimer, ‘Assessing the Conventional Balance: The 3:1 Rule and Its Critics’ (International Security, Vol. 12, No. 4, 1988), pp. 54–87. The Soviets, from their experience with the qualitatively superior Wehrmacht, suggest the attacker’s threshold ‘ratio of 5:1 in personnel, 8-9:1 in artillery, and 3-4:1 in tanks and selfpropelled artillery’. [A.A. Sidorenko] Ibid., p. 61. US CBO, Assessing the NATO/Warsaw Pact Military Balance, pp. 59–61; Dupuy, Numbers, Predictions and War, pp. 228–31. Dupuy, Numbers, Predictions and War, p. 231.

Notes and references 189 76

77 78

79

80 81 82

83

84 85

86 87

88 89

This theme has been repeated in numerous testimonies, interviews and media reports for many years. In 1993, the warning time was ‘as little as 12 to 24 hours’. However, Lieutenant General Howell Estes III, Commander of the US 7th Air Force in Korea, said, ‘We have a very sophisticated indications and warning system. Unless he went from an absolute dead start – in which case he couldn’t sustain momentum without mobilizing his tactical and operational reserves – we’d see something happening. I am very comfortable with our indications and warning over here.’ Armed Forces Journal International, March 1993, p. 40. von Clausewitz, op. cit., pp. 198, 201. Lanchester laws model the combat attrition/casualties in a mathematical formula, which is rather similar to the Richardson arms race models. The model includes the size of forces of each side and the availability of information on the enemy deployment – the ‘unaimed fire’ (linear law) and ‘aimed fire’ (square law) equations. For further detail, see, John W. R. Lepingwell, ‘The Laws of Combat? Lanchester Reexamined’ (International Security, Vol. 14, No. 2, 1989), pp. 64–100. For a non-classified dynamic war game analysis of the Korean conflict, see: Yong-Sup Han, Designing and Evaluating Conventional Arms Control Measures: The Case of the Korean Peninsula (Santa Monica: Rand, 1993). Thomas B. Allen, War Games: The Secret World of the Creators, Players, and Policy Makers Rehearsing World War III Today (New York: McGraw-Hill, 1987), p. 76. Cf. Charles H. Anderton, ‘Arms Race Modeling: Problems and Prospects’ (Journal of Conflict Resolution, Vol. 33, No. 2, 1989), pp. 346–67. See, Taik-young Hamm, ‘The Political Economy of North Korea’s Military Buildup’ in ROK National Unification Board, Studies on Disarmament and Arms Control (in Korean, Seoul: NUB, 1989), pp. 107–59. Jane’s Defence Weekly, 10 June 1989 (emphasis added). The breakdown was 20.2 billion roubles for personnel and O&M, 32.6 billion roubles for procurement, 15.3 billion roubles for R&D, 4.6 billion roubles for military construction, 2.3 billion roubles for pensions, and another 2.3 billion roubles for miscellaneous activities. SIPRI Yearbook 1990, p. 163. US Central Intelligence Agency, Estimated Soviet Defence Spending in Rubles, 1970– 1975 (n.p.: CIA, 1976). See, Soviet Military Power, various years. For alternative estimating methods, see, Carl G. Jacobsen, ed., The Soviet Defence Enigma: Estimating Costs and Burdens (Oxford: Oxford University Press for SIPRI, 1987). For the problems of CIA–DIA estimates, see, Franklyn Holzman, ‘Politics and Guesswork: CIA and DIA Estimates of Soviet Military Spending’ (International Security, Vol. 14, No. 2, 1989), pp. 101– 31. Korea Central Yearbook 1973 (in Korean), p. 253. Numerous publications of the ROK National Unification Board, Ministry of National Defence and affiliate institutes of Central Intelligence Agency/National Security Planning Agency contain North Korea’s DE data. The best English source is the monthly publication of the Naewoe Press, Vantage Point. See, US ACDA, World Military Expenditures and Arms Transfers (Washington, DC: GPO, various years). Dal-Hee Lee, ‘North Korea’s Economy and Military Spending’ in Joseph S.H. Chung

190 Notes and references

90 91

92 93 94

95 96 97 98 99 100 101 102 103 104 105 106 107

108 109 110

et al., The Development of North Korean Economy (in Korean, Seoul: IFES, 1990), p. 207. For KCIA estimates, see, Choon-Sam Park, ‘Assessing the Size of North Korean Military Spending’ (National Defence Proceedings, No. 15, in Korean, 1991), pp. 88– 99. Defence White Paper 1990 (in Korean), p. 121; Defence White Paper 1991–1992 (in Korean), pp. 127–8, 37. According to a recent MND publication, the per soldier personnel expenses in 1995 are $9,949 in the South and $725 in the North. MND, National Security and Defence Expenditure in the IMF Era, p. 37. Ibid. Also see, MND, Questions and Answers of the Nation’s Defence Spending (in Korean, Seoul: MND, 1994), p. 42. Isby, Weapons and Tactics of the Soviet Army, p.117. Soviet Military Power 1987, p. 122; and Gervasi, op. cit., pp. 122–3. For North Korean tank production, see, Richard T. Detrio, Strategic Partners: South Korea and the United States (Washington, DC: National Defence University Press, 1989), p. 60; and David R. Cotter and N.F. Wikner, ‘Korea: Force Imbalances and Remedies’ (Strategic Review, Spring 1982), p. 64. Cf. Benjamin Franklin Cooling, ed., Case Studies in the Achievement of Air Superiority (Washington, DC: Center for Air Force History, 1994), especially articles by Hone, Greenhouse, and Holley. Cordesman and Wagner, op. cit., Vol. 1, pp. 193–202. Steven Zaloga, Soviet Air Defence Missiles: Design, Development and Tactics (Coulsdon, Surrey: Jane’s, 1989), pp. 55–65. Ibid., p. 222; and Cordesman and Wagner, op. cit., Vol.1, p. 57. Cordesman and Wagner, op. cit., Vol. 1, p. 82. Ibid., pp. 193–202. Zaloga, Soviet Air Defence Missiles, pp. 240–3. Cordesman and Wagner, op. cit., Vol. 3, pp. 176–7. Zaloga, Soviet Air Defence Missiles, pp. 12, 37. Ibid., p. 15. Dunnigan, op. cit., p. 202. Herbert York, Does Strategic Defense Breed Offense? (Lanham, MD: University Press of America, 1987), p. 24. DOD estimation in 1987 was $400 billion. Soviet Military Power, 1987, p. 45. Cf. US Department of the Air Force, Gulf War Air Power Survey, Volume II: Effects and Effectiveness (Washington, DC: GPO, 1993). The Coalition vs. Iraqi fixed-wing sorties were 92,517:610 or roughly 150:1 (Pt. 2, pp. 106–7), losses/sortie rates were 0.055–0.077 per cent vs. 7.6 per cent (p. 115), and the air-to-air exchange ratio was 33:0 or 1 (p. 113). Also, the effect of new technology on bombing was such that ‘high value point targets that had often required thousands of sorties over periods of weeks or months in World War II were frequently destroyed during Desert Storm by one or two bombs from an F-117 or F-111F.’ (p. 14). US DIA, op. cit., p. 34; Zaloga, Soviet Air Defence Missiles, pp. 91, 107. For the size of arms imports from the Soviet Union, see, World Military Expenditures and Arms Transfers 1993–94 (1995), pp. 95, 116. MND, Questions and Answers of the Nation’s Defence Spending, pp. 37, 40–1. Ibid.; Defence White Papers, various issues. Wolf et al., op. cit., pp. 45–9; Sang-Woo Rhee, The Security Environment of Korea, Vol. 2 (in Korean, Seoul: Sogang University Press, 1986), p. 734.

Notes and references 191 111 Hamm, ‘An Analysis of the North–South Korean Arms Race and Military Balance,’ pp. 27–8. 112 Cf. US ACDA, The International Transfer of Conventional Arms, Report to the Congress (Washington, D.C.: GPO, 1974), Table 3, A-11. Also see, World Military Expenditures and Arms Transfers, various years. 113 It was argued that an additional 3 per cent of the GNP, or 8 per cent of the GNP for total defence spending, would be required to replace it in a 5-year programme (including the O&M expenses of $10 billion). Defence White Paper 1989 (in Korean), p.167; and Defence White Paper 1992–1993 (in Korean), p. 140. The breakdown is $4.5 billion of weapons and equipment, $3.3 billion of other equipment and supplies, $4.6 billion of ammunition stockpiles, $3.5 billion of early warning systems, and $10 billion for 5years’ O&M costs in constant 1988 dollars. Myung-Gil Kang, ‘Defence Spending of Korea’ in Jong-Chun Baek and Min-Yong Lee, eds., Korean National Defence Today (in Korean, Seoul: MND, 1994), p. 265. 114 Hamm, ‘An Analysis of the North-South Korean Arms Race and Military Balance,’ p. 11. 115 Defence White Paper 1993–1994, pp. 189–90; MND, Questions and Answers of the Nations Defence Spending, pp. 69–70. 116 The average manpower cost in 1993 is W6.34 million (W415.15 billion for 655,000 men, or roughly $7,800), while GNP p/c of the same year is W6.07 million (about $7,500). Calculated from data in Defence White Paper 1993–94; and Korea Statistical Yearbook 1994. 117 Dupuy, Understanding War, pp. 137–8. Also see, Cordesman and Wagner, op. cit., Vol. 1, p. 17, for an Israeli perspective on Arab weaknesses. For the socio-cultural approaches to the study of war and military power, see: John Shy, ‘The Cultural Approach to the History of War’ (Journal of Military History, Special Issue 57, 1993), pp. 13–26; Stephen Peter Rosen, ‘Military Effectiveness: Why Society Matters’ (International Security, Vol. 19, No. 4, 1995), pp. 5–31. 118 Adam Przeworski and Henry Teune, The Logic of Comparative Social Inquiry (New York: Wiley, 1970), pp. 26–30. 119 Remarks made by General William Livesy, C-in-C of USFK, on slash-and-burn farming by some forward deployed KPA units, quoted in Hayes, op. cit., p. 166. 120 Kyong-Hun Lee, ‘National Defence and State Budget’ Chong-Ki Park and Kyu-Ok Lee, eds., State Budget and Policy Objectives (in Korean, Seoul: Korea Development Institute, 1982), pp. 139–75; Young-Sun Ha, War and Peace on the Korean Peninsula (in Korean, Seoul: Chong-kye Institute, 1989); and Hamm, ‘An Analysis of the NorthSouth Korean Arms Race and Military Balance.’ 121 See, Korea Central Yearbook, various years. The defence budget was not announced for the 1962–66 period, but it can be derived through calculations of increases in other expenses. Cf. D. H. Lee, op. cit., pp. 198–202. 122 For instance, IISS and SIPRI belong to this category. See, The Military Balance, various years; and SIPRI Yearbook, various years. 123 SIPRI Yearbook 1968/1969; 1969/70; and 1974. 124 English sources on DPRK exchange rates are available in various issues of Europa Yearbook and quarterly Economist Intelligence Unit [EIU] Country Report. 125 The Military Balance 1992–93, p. 152. The GNP and ‘defence budget’ are calculated

192 Notes and references

126 127

128 129

130

in trade rates, which makes them less than one-half of previous estimates based on basic rates. The estimated ‘defence expenditures’ almost identical to ROK–US estimates, are more than twice of the official ‘defence budget’. US CIA, Korea: The Economic Race between the North and the South (Washington, D.C.: CIA, 1978), p. 6. Defence White Paper 1990 (in Korean), p. 117; and MND, Questions and Answers of the Nation’s Defence Spending, p. 40. According to the same source, ‘investment’ of the South exceeded that of the North in 1986. US DSAA, Military Assistance and Foreign Military Sales Facts, various years. Wolf et al., op. cit., p. 49. For an excellent weapon-to-weapon comparison of the two Korean armed forces, see, Stephen Goose, ‘The Military Situation on the Korean Peninsula’ in John Sullivan and Roberta Foss, eds., Two Koreas – One Future (Landham, MD: University Press of America, 1987), pp. 55–94. Hamm, ‘An Analysis of the North-South Korean Arms Race and Military Balance,’ p. 7.

Chapter 4 1

2

3

4 5 6 7

Bruce Cumings, The Origin of the Korean War, Vol. 2 (Princeton: Princeton University Press, 1990), p. 619. Yet Professor Cumings spent a whole chapter (pp. 568–621) on his futile argument that the North might not have fired first. For the creation and early expansion of the KPA, see: Hak Soon Paik, ‘North Korean State Formation, 1945–50’ (PhD dissertation, University of Pennsylvania, 1993), pp. 307–88. Roy Applemann, United States Army in the Korean War: South to the Naktong, North to the Yalu (Washington, DC: GPO for US Army, 1961), pp. 8–12; Jum-Kon Kim, Korean War (in Korean, Seoul: Korea Association of Public Relation, 1973), p. 244. Kim and many other Korean sources write that North Korean forces were 198,380 including ‘special units’ of 61,820. Excluding the unidentifiable special units, total forces of the KPA were 136,560, almost the same as the official US estimates. Robert K. Sawyer, Military Advisors in Korea: KMAG in Peace and War (Washington, DC: US Army/GPO, 1962), pp. 13, 58. Ibid., pp. 76–9. The problem of leadership was pointed out as the greatest weakness of the ROKA. Yong-Won Hahn, Building the Army (in Korean, Seoul: Bakyoungsa, 1984), pp. 47– 51, 139–43. Military leaders from the Korean Volunteer Army who participated in the Chinese civil war included I Corps commander Kim Ung, II Corps commander Moo Jeong, and the four divisional commanders, Lee Kwon-Moo (4th division), Kim Chang-Dok (5th division), Bang Ho-San (6th division), and Jeon Woo (7th division). Military leaders who belonged to anti-Japanese partisans and fought in Manchuria after 1945 included Chief of General Staff Kang Kon, II Corps commander Kim Kwang-Hyop (replaced by Moo Jeong). Also, commanders Choi Kwang (1st division), Lee Young-Ho (3rd division), Lyu Kyong-Soo (105th tank brigade/division) were former anti-Japanese partisans. Joo Young-Bok, My Experience in the Korean War (in Korean, Seoul: Koryowon, 1990); Wan-Kyu Choi, ‘The Formation and Development of the North

Notes and references 193

8

9

10

11

12

13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28

Korean Army’ in Il-Pyung Kim et al., The Establishment of the North Korean Regime (in Korean, Seoul: IFES: Kyungnam University, 1991), pp. 139–76. Taik-young Hamm, ‘An Analysis of the North–South Korean Arms Race and Military Balance’ idem., ed., The North–South Korean Arms Race and Arms Control (in Korean, Seoul: IFES: Kyungnam University, 1992), p. 13. Larry Niksch, ‘South Korea’ in Richard A. Gabriel, ed., Fighting Armies: Nonaligned, Third World and Other Ground Armies (London: Greenwood Press, 1983), p.139. General Bradley, Chairman of the US Joint Chiefs of Staff, testified in a congressional hearing that the ROK had lost the equivalent of ten divisions of equipment for the first 11 months of the war. Jon Halliday and Bruce Cumings, Korea: The Unknown War (New York: Viking, 1988), p. 141. Appleman, op. cit., pp.395, 546, 604; Walter G. Hermes, United States Army in the Korean War: Truce Tent and Fighting Front (Washington, DC: GPO, 1966), pp. 76– 7, 283, 477. Incidentally, the manpower ratio is almost identical to that of the 1990s. It is interesting to note that the UNC repulsed the PLA–KPA counter-counterattacks and could have achieved further major breakthroughs, but ‘the JCS withheld permission for any general advance’ searching for an alternative, i.e. negotiation. Hermes, op. cit., p. 13. US Department of State, Foreign Relations of the United States 1952–1954 [FRUS 1952–1954], vol. 15, pt. 2 (Washington, DC: US GPO, 1984), p. 1315; James F. Schnabel, United States Army in the Korean War: Policy and Direction, the First Year (Washington, DC: GPO, 1972), pp. 394–5; and Hermes, op. cit., pp. 62–3. Hermes, op. cit., pp. 62–3, 210–14, 340–5, 357–61, 440–1. Ibid., pp. 360-1. Roy E. Appleman, Ridgway Duels for Korea (College Station: Texas A & M Press, 1990), p. 561. Peter G. Tsouras, Changing Order: The Evolution of the Worlds’ Armies, 1945 to the Present (London: Arms and Armour Press, 1994), pp. 72–3; Hermes, op. cit., Map VI–X. FRUS 1952–1954, Vol. 15, pt. 2, p. 1402. Also see, Hermes, op. cit., pp. 465–76. FRUS 1952–1954, Vol. 15, pt. 2, p. 1255. Also see, Table 5–1. Ibid., pp. 1850–6. FRUS 1952–1954, Vol. 15, pt. 1, p. 775. Ibid., pt. 2, pp. 1245–63. United States, Mutual Security Program, June 1956 (n.p., 1956), p. 21. FRUS 1952–1954, Vol. 15, pt. 2, pp 1255, 1792. The Tasca Report assumed an immediate build-up of ROKA to 20 divisions for a three-year period, phasing down to 10 divisions thereafter, and the restoration of the living standard of 1949/50, from a per capita GNP of $50–60 in 1953/54 to $75–90 (pp. 1246–9, 1391–3). Ibid., p. 1787; FRUS 1955–1957, Vol. 10 (1989), p. 184. FRUS 1952–1954, Vol. 15, pt. 2, pp. 1782, 1805. Ibid., pp. 1464, 1642. Ibid., p. 1824. Institute for Far Eastern Studies, North Korea: A Complete Survey, Vol. 2 (in Korean, Seoul: Institute of Far Eastern Studies, 1973), p. 26.

194 Notes and references 29 30

31 32 33

34

35 36

37

38

39 40

Joseph Sang-hoon Chung, The North Korean Economy: Structure and Development (Stanford: Hoover Institution Press, 1974), pp. 118, 22. SIPRI, Arms Trade Registers: The Arms Trade with the Third World (Cambridge, MA: MIT Press, 1975), pp. 10–12. According to ACDA, The International Transfer of Conventional Arms, Report to the Congress (Washington, DC: US GPO, 1974), Table 3, A-11, the Soviet Union provided North Korea with weapons worth $505 million from 1961–71 ($115 million from China). Also, A General Survey of North Korea (in Korean, Seoul: North Korea Institute, 1983) reported that the Soviet Union supplied North Korea with weapons worth $670 million from 1954–60 and $1.1 billion in total during 1954–71 (p. 1449), and most of these grants were offered during the period of military buildup (1954–56). During 1954–60, the US provided military aid worth $2.21 billion ($920 million from direct disbursement, $1,210 million from MAP, and $80 million from the grant of surplus stocks). US AID, US Overseas Loans and Grants and Assistance from International Organizations 1946–1961, p. 76; United States [President], Mutual Security Program, June 1955 (1955), p. 11; FRUS 1952– 1954, vol. 12, pt. 1, p. 775. Editors, China Today, War to Resist US Aggression and Aid Korea (in Chinese, Beijing: China Social Sciences Publishing Co., 1990), pp. 459–61. For a detailed story about the purge of Yeonan faction, see Ryo Jeong, The Red Taedong River (in Korean, Seoul: Dong-A Ilbo, 1991). Kwan-Chi Oh, Young-Koo Cha and Dong-Joon Hwang, The Development and Future Prospects of the ROK–US Military Cooperation (in Korean, Seoul: Sekyongsa, 1990), p. 56. Sun-Ho Lee, The ROK Armed Forces: What is the Problem (in Korean, Seoul: Palbokwon, 1992), pp. 112–13. Cf. Institute of Defence and Military History Studies, War Memorial Society, Chronicles of the History of National Defence (in Korean, Seoul: War Memorial Society, 1994), pp. 191–9. 207–8, 231. The American University, Foreign Areas Studies Division, US Army Area Handbook for Korea (Washington, DC: GPO, 1964), p. 581. Korea Central Yearbook 1963, pp. 157–9. For more about this decision, see Taik young Hamm, ‘Juche Philosophy and Defence Policy of North Korea’ in Jae-in Yang et al., Political Ideology of North Korea: Juche Philosophy (in Korean, Seoul: IFES, Kyungnam University, 1990), pp. 155–85, especially, pp. 163–7. Most studies in South Korea have concluded that the ‘Four Military Doctrines’ of North Korea were established at that time. In fact, the principle of ‘modernization of military equipment’ was not, however, declared at that time. The modernisation that required a large amount of investment was officially declared in 1966. Institute of North Korean Studies, A General Survey of North Korea 1983, p. 1439. The quoted remarks are not reliable since they include peculiar South Korean terminology such as namchim (invasion into the South). For a good analysis of the external factor, see Ho-min Yang, ‘Ideological Structure of Juche Philosophy’ North Korean Politics (in Korean, Seoul: Institute of Far Eastern Studies, 1976); Chin O. Chung, Pyongyang between Moscow and Peking (Tuscaloosa: University of Alabama Press, 1978). Institute of North Korean Studies, A General Survey of North Korea 1983, pp. 1849– 50, 55. 40 For instance, see the editorial of Rodong Shinmun [Workers’ Daily], 28 December

Notes and references 195

41 42

43 44 45 46 47

48 49 50

51 52 53

54 55 56 57 58 59 60

61

1963, whose title was ‘Protect the Socialist World’ criticised the Soviet Union for its intervention into North Korean domestic politics and even its ‘effort to overthrow the head of Korean Communist Party’. Rodong Shinmun, 6 December 1962, reported this visit very briefly. This exceptionally short report indicated that the visit did not achieve its goal. According to the DPRK official report, this conference was held in Gangkye, which Kim Nam-Sik, a specialist on North Korean affairs, confirmed in informal discussions in November 1989. For more about the ‘Byolori Conference’, see Ki-Taek Lee, ‘Military and Politics’ in Institute of Far Eastern Studies, Politics of North Korea, pp. 223–91. The Collected Works of Kim Il Sung, 20 (1982), p. 415. Ibid., p. 383. Also Kim showed a deep concern with the Vietnam War and emphasised support for the positions of the ‘Vietnamese Communist Party’ (pp. 385–7). Ibid., pp. 415, 423. From various issues of Korea Central Yearbook; and ROK National Unification Board (NUB), Compiled Statistics of North Korean Economy, 1946–1985 (in Korean Seoul: NUB, 1985). Korea Central Yearbook 1973, p. 253. The Military Balance 1972–73; SIPRI, Arms Trade Registers: The Arms Trade with the Third World pp. 10–12. Daniel P. Bolger, Scenes from an Unfinished War: Low Intensity Conflict in Korea, 1966–1969 (Fort Leavenworth, KA: Combat Studies Institute, US Army Command and General Staff College, 1991). p. 14. Dong-joo Choi, ‘The Motives of Korea’s Participation in the Vietnam War Revisited’ (Korean Political Science Review, Vol. 30, No. 2, in Korean, 1996), p. 274. The Military Balance 1962–1963; 1963–1964. The US compensatory measures were agreed to in the so-called ‘Brown Memorandum’ in 1966. For further details, see US House of Representatives, Committee on Appropriations, Foreign Assistance and Related Programmes Appropriations for 1971 (Washington, DC: GPO, 1970), p. 430; for 1974, pp. 1511–12. Cf. ROK Ministry of National Defence, The Yulgok Programme: Past, Present and Future (in Korean, Seoul: MND, 1994), pp. 17–18. Hahn, op. cit., p. 295. Niksch, ‘South Korea,’ p. 142. Cf. Tsouras, op. cit., p. 216. David C. Isby, ‘Weapons and Tactics of the Republic of Korea Army’ (Jane’s Defence Review, Vol. 3, No. 1, 1982), pp. 55–61; Niksch, ‘South Korea,’ pp. 142–3. Niksch, ‘South Korea,’ p. 143. Bolger, op. cit., pp. 13–16. Cf. Military Balance 1966–67; 1967–68. Bolger, op. cit., p. 15. Kim evaluated the two revolutions most highly and put an emphasis on the importance of political-ideological struggles in his address to senior party, government, and military officials on February 1963. Kim Il Sung, ‘Our People’s Army is an Army of the Working Class, an Army of the Revolution’ in idem., Works, Vol. 17, pp. 114–15. US Senate, Committee on Armed Services, Combat Readiness of United States and South Korean Forces in South Korea (Washington, DC: GPO, 1968), p. 2.

196 Notes and references 62 63

64 65 66 67 68 69

70 71 72 73 74

75 76

77

Bolger, op. cit., p. 52. For the creation and expansion of the KPA special operation forces, see, Joseph S. Bermudez, Jr., North Korean Special Forces (Coulsdon, Surrey: Jane’s, 1988), pp. 28–40. Ibid., p. 32. Based on the radio-broadcasted Q-and-A session of Lieutenant Kim Shin-Jo who was captured alive. MND, The Yulgok Programme: Past, Present, and Future, p. 20. Dae-Sook Suh, Kim Il Sung: The North Korean Leader (New York: Columbia University Press, 1988), p. 234. Ibid., p.119. Kim Il Sung, ‘For a Great Change in Agricultural Production’ in idem., Works, Vol. 28, 1986, p. 10. The special operations forces of the KPA since the 1980s have been estimated at 100,000 by the ROK or 121,500 by an independent analyst, while the US DIA estimation was 41,000 (in 1978) and ‘nearly 60,000 [in wartime]’ (in 1991). The discrepancies are due to classification: estimates by the MND and Bermudez include what can be called marines, (regular) light infantry, reconnaissance/patrol battalions in the ROKA divisions, and even combined arms brigades. Cf. MND, Defence White Paper, various years; Bermudez, op. cit., p. 7; US DIA, North Korea: The Foundations for Military Strength (Washington, DC: DIA, 1991), pp. 5, 54. Bolger, op. cit., pp. 90–4. Joo-Hong Nam, America’s Commitment to South Korea (Cambridge: Cambridge University Press, 1986), p. 100. US Senate, Committee on Foreign Relations, Korea and the Philippines: November 1972 (Washington, DC: GPO, 1973), pp. 5–7. The Washington Post, 26 June 1975. Yet it has been rumoured that a covert nuclear programme existed till his death in 1979. US Senate, Committee on Foreign Relations, US Troop Withdrawal from the Republic of Korea: An Update, 1979, Report by Senator John Glenn (Washington, DC: GPO, 1979), pp. 1–8. The new estimation of the KPA strength since 1975 by a USFK team led by former army officer John Armstrong was later accepted by the DIA after a series of bureaucratic competition: ‘the whole estimate was based on a series of sequential steps of deductions [and assumptions]’. The CIA came to agree to the Army estimates in early 1979. See, Joseph R. Wood, ‘President Carter’s Troop Withdrawal from Korea’ in Phil Williams et al., Security in Korea: War, Stalemate, and Negotiation (Boulder: Westview Press, 1994), pp. 161–84. Peter Hayes, Pacific Powderkeg: American Nuclear Dilemmas in Korea (Lexington: Lexington Books, 1991), p. 83. US Senate, Committee on Armed Services, Korea: The US Troop Withdrawal Program, Report of the Pacific Study Group (Washington, DC: GPO, 1979), pp. 3–4. US House of Representatives, Committee on Armed Services, Impact of Intelligence Reassessment on Withdrawal of US Troops from Korea, Report by the Investigations Subcommittee (Washington, DC: GPO, 1979), pp. 1–6. Far Eastern Economic Review, 18 May 1979, p. 49. The re-estimated strength of the KPA was not 440,000–450,000 troops but 550,000–600,000 and 2,600 tanks. See also Military Balance 1979–1980; 1980–1981. Franklin Weinstein and Fuji Kamiya, eds., The Security of Korea: US and Japanese

Notes and references 197 78

79

80

81

82 83 84

85

86 87 88

89

90 91 92 93 94

Perspectives on the 1980s (Boulder: Westview Press, 1980), pp. 24–41. US House of Representatives, Foreign Assistance Legislation for FY 1982, Pt. 5 (1981), p. 397. Although the Soviet Union supplied its Warsaw Pact allies and several Middle East countries with more advanced weapons such as MIG-23s or T-72 tanks since the mid-1970s, they did not supply MIG-23s to Pyongyang (until 1984) or T72 tanks. Jeong-Ryom Kim, Thirty Years’ History of Economic Policies in Korea (in Korean, Seoul: Joong-Ang Daily News, 1990), pp. 349–50. Kim was Chief Secretary to President Park at that time. A US intelligence analyst who monitored the KPA front-line communications during the operation recalled: ‘They didn’t know what was in them [B-52 and FB-111 bombers] and it blew their fucking minds. . . We scared the living shit out of them.’ Quoted from, Hayes, op. cit., pp. 60–1. Sungjoo Han, ‘Security Policies and Military Strategy’ in Joo-Yop Kim and Robert A. Scalapino, eds., North Korea: Present and Future (in Korean, Seoul: Bopmunsa, 1982), p. 263. Around 1976, North Korean generals cautiously emphasised more ‘firepower’ and modern equipment (e.g., Kim Cheol-Man’s article in Kulloja, August 1976), in addition to Kim Il Sung’s emphasis on politico-ideological factors and ‘light infantry’. Guy R. Arrigoni, ‘National Security’ in Andrea Matles Savada, ed., North Korea: A Country Study, Department of the Army Area Handbook Series, 4th edn (Washington, DC: GPO, 1994), pp. 248–9. Hayes, op. cit., p. 180. Wood, op. cit., p. 177. International Herald Tribune, 4 April 1985; Also quoted in Jon Halliday, ‘The Democratic People’s Republic of Korea: Is It Democratic–And Is It Even a Republic?’ Mimeo, 1989. Nicholas Eberstadt and Judith Banister, ‘Military Buildup in the DPRK: Some New Indications from North Korean Data’ (Asian Survey, Vol. 31, No. 1, 1991), pp. 1095– 115. Yet their estimation includes all ‘mobile population’ including internal security forces, overseas workers, persons in jail, etc. Quoted from, Hayes, op. cit., p. 121. Ibid., pp. 156–7. US Senate, US Troop Withdrawal from the Republic of Korea: An Update 1979, p. 10; US House of Representatives, Foreign Assistance Legislation for FY 1982, Pt. 5, pp. 347, 356. MND, The Yulgok Programme: Past, Present and Future, pp. 25–9. Details of the P II and III are based on this source and various issues of Jane’s Defence Weekly and Military Balance. 90 Ibid; and The Hankyoreh, 12 November 1993. Jane’s Defence Weekly (Asian Edition), 10 July 1993; 29 January 1994; 5 November 1994; and The Joong-ang Daily News, 22 April 1994. Bruce Cumings, The Two Koreas: On the Road to Reunification? (New York: Foreign Policy Association, 1990), p. 79; and Hayes, op. cit., p. 93. Bermudez, op. cit., pp. 137–8. Cf. Young Choi, ‘The North Korean Military Buildup and Its Impact on North Korean Military Strategy in the 1980s’ (Asian Survey, Vol. 25, No. 3, 1985), pp. 341– 55.

198 Notes and references 95 96 97

98 99

100 101

102

103 104 105

106 107

108

109

110

US House of Representatives, Foreign Assistance Legislation for FY 1982, Pt. 5, pp. 347, 356. DIA, op. cit., p. 50. Ralph A. Clough, Embattled Korea: The Rivalry for International Support (Boulder: Westview Press, 1987), p. 251. Pyongyang’s relations with Beijing, on the other hand, deteriorated after the Rangoon bombing incident – China has not delivered any significant amount of military aid to the DPRK since 1983. Cf. World Military Expenditures and Arms Transfers, various issues. Arrigoni, op cit., p. 232. US Congress, Office of Technology Assessment, Global Arms Trade (Washington, DC: GPO, 1991), p. 138. The ROK Air Force has been deeply interested in lowaltitude nighttime strike capabilities such as LANTIRN-pods for F-16s and (German) Panavia Tornado ECR fighter-bombers. Cf. Jane’s Defence Weekly, 12 March 1994. DIA, op. cit., p. 34. William T. Tow, ‘The Military Dimensions of the Korean Conflict’ in Sheldon W. Simon, ed., East Asian Security in the Post-Cold War Era (Armonk, NY: Sharpe, 1993), p. 69. The Soviet military aid in loans during the 1986-91 period was about 1.4 billion roubles, while economic aid was minimal except the loans for North Korea to pay overdue debts. Cf. Vasily Mikheev, ‘Reforms of the North Korean Economy’ (Korean Journal of Defence Analysis, Vol. 5, No. 1, 1993), pp. 92–3; and Natalia Bazhanova, Between the Dogmas and Practical Requirements: External Economic Relations of North Korea, 1945–1990 (in Korean, Seoul: The Korea Economic Daily, 1992). Manwoo Lee, ‘How North Korea Sees Itself’ in C.I. Eugene Kim and B.C. Koh, eds., Journey to North Korea (Berkeley: University of California Press, 1983), pp. 135–8. EIU Country Report: North Korea 1992; 1993. Rodong Shinmun, 9 December 1993. For further detail, see: Taik-young Hamm, ‘Economic Decline and Foreign Relations of North Korea’ in IFES, Kyungnam University, ed., Economic Decline and Recovery Measures of North Korea (in Korean, Seoul: IFES, 1995), pp. 100–8. World Military Expenditures and Arms Transfers 1995. On the other hand, arms deliveries to South Korea in 1992–94 were $2.97 billion, ranking first in East Asia. SIPRI, SIPRI Yearbook 1996, p. 468. Former US Secretary of Defence William Perry stated in his interview on 4 September 1997 that the KPA war-fighting capabilities decreased further after the nuclear crisis in 1994. KPA Chief of General Staff Choe Kwang, who had re-emerged after the purge of generals in the late 1960s, became Minister of People’s Armed Forces on 8 October 1995, eight months after the death of Minister Oh Jin-Woo. Kim Young-Chun, a relatively unknown figure to the West, succeeded him as Chief of General Staff. Naewoe Press, No. 974, 12 October 1995. For a succinct summary of North Korea’s security crisis, see, Paul Bracken, ‘Nuclear Weapons and State Survival in North Korea’ (Survival, Vol. 35, No. 3, Autumn 1993), pp. 137–53. Andrew Mack, ‘North Korea and the Bomb’ (Foreign Policy, Vol. 83, 1991), pp. 87– 104

Notes and references 199 111 Selig S. Harrison, ‘Breaking the Nuclear Impasse: The United States and North Korea’ in US House of Representatives, Committee on Foreign Affairs, Tensions on the Korean Peninsula, Hearings (Washington, DC: GPO, 1993), Appendix, pp. 31, 49. 112 Stephen D. Goose, ‘The Comparative Military Capabilities of North Korean and South Korean Forces’ in Doug Bandow and Ted Nolan Carpenter, eds., The US–South Korean Alliance: Time for a Change (New Brunswick: Transaction Publishers, 1992), p. 55. 113 New York Times, 26 February 1992, p. A1. 114 The CIA had estimated the reactor was shut down in 1989 for 110 days but, much later, it ‘reassessed its method of observation and concluded that the lower figure cited by North Korea, 60 days, could well have been right’. Don Oberdorfer, The Two Koreas: A Contemporary History (Reading, MA: Addison-Wesley, 1997), p. 307. 115 For a good summary of the North Korean nuclear issue, Leonard S. Spector, Tracking Nuclear Proliferation (Washington, DC: Carnegie Endowment for International Peace, 1995), pp. 103–7. 116 Mack, op. cit., p. 96. 117 The Korea Times, 13 July 1993. 118 US House of Representatives, Committee on Foreign Affairs, Korea: North–South Nuclear Issues, Hearings (Washington, DC: GPO, 1991), pp. 30–3. David Wright and Timur Kadyshev, ‘The North Korean Missile Program: How Advanced Is It?’ (Arms Control Today, April 1994), pp. 9–12, shows that Rodong–1 is ‘essentially the longestrange missile that North Korea could build with its existing level of missile technology’. 119 The Dong-A Ilbo, 7 February 1994; 25 March 1994; and The Joong-ang Daily News, 24 March 1994. 120 Oberdorfer, op. cit., pp. 324–5. 121 The Joong-ang Daily News, 19 March 1995. 122 Defence White Paper 1996–1997, p. 45.

Chapter 5 1

2 3 4

Young-Won Sohn, ‘Structure of Division: A Conjuncture of the Internalised World Historical Moment and the History of State-Building’ in Hong-myong Kim et al., State Theories and Divided Korea (in Korean, Seoul: Hanwool, 1985), pp. 59–60; and Woon-Sun Paek, ‘Inter-Korean Disarmament–Arms Control and the Structure of Division’ in Taik-young Hamm et al., North–South Korean Arms Race and Arms Control (in Korean, Seoul: IFES, Kyugnam University, 1992), pp. 219–36; Nakchung Paik, ‘South Korea: Unification and the Democratic Challenge’ (New Left Review, No. 197, 1993), pp. 67–84. A preliminary version of this part was published in: Taik-young Hamm, ‘An Analysis of North–South Korean Arms Race and Military Balance’ in idem., op. cit., pp. 3–42. ROK Ministry of National Defence (MND), Defence White Paper 1988 (in Korean, Seoul: MND, 1988), pp. 152–3. Paul Huth, ‘Extended Deterrence and the Outbreak of War’ (American Political Science Review, Vol. 82, No. 2, 1988), pp. 423–43.

200 Notes and references 5

6

7

8 9 10

11 12

13 14 15 16 17 18 19

20

21

Donald R. Cotter and N.F. Wikner, ‘Korea: Force Imbalances and Remedies’ (Strategic Review, Spring 1982), p. 65; US Senate, Committee on Foreign Relations, US Troop Withdrawal from the Republic of Korea, Report by Senators Hubert H. Humphrey and John Glenn (Washington, DC: GPO, 1978), p. 27. In secret reports during the Kennedy administration in the early 1960s, the ROK army was evaluated to be superior to the KPA. See, Ch. 4. US House of Representatives, Committee on Foreign Affairs, Foreign Assistance Legislation for FY 1984–1985, pt. 5: Hearings and Markup (Washington, DC: GPO, 1983), pp. xxxii, 360–1; Foreign Assistance Legislation for FY 1985, pp. 144–5; Foreign Assistance Legislation for FY 1990–1991, pp. 117–19. Bruce Russett, ‘International Interactions and Processes: The Internal vs. External Debate Revisited’ in Ada Finifter, ed., Political Science: The State of the Discipline (Washington, DC: APSA, 1983), p. 545. 8 See various annual publication of Korea Central Yearbook. The statistics are converted into the new denominated won of 1959 (= 100 old won). Hamm, op. cit., pp. 24, 29. Calculated from Korea Central Yearbook, various years. Cf. ROK National Unification Board (NUB), Compiled Statistics of North Korean Economy 1946–1985 (in Korean, Seoul: NUB, 1985), pp. 834: 156–9. The NUB estimation is somewhat lower (5.0, 7.5, and 10.0 per cent respectively), as it tends to overestimate spending on state administration. Hamm, op. cit., pp. 29–30. Rodong-Shinmun [Workers’ Daily], 10 November 1970. Also quoted in: Asiatic Studies Institute, Korea University, Compiled Sources of North Korean Studies, Vol. 7 (in Korean, Seoul: Korea University, 1981), p. 738. ROK Central Intelligence Agency (KCIA), The Comparison of North–South Korean Economic Capabilities, Vol.3 (in Korean, Seoul: KCIA, 1974), pp. 461–2. See Chapter 3, section 3. US Central Intelligence Agency (CIA), Korea: The Economic Race between the North and the South (Washington, DC: CIA, 1978), p. 6. Defence White Paper, various years; US ACDA, World Military Expenditures and Arms Transfers, 1991–92; 1993–94. Nicholas Eberstadt and Judith Banister, North Korea: Population Trends and Prospects (Washington, DC: US Bureau of Census, 1990), pp. 13–4. MND, Defence White Paper 1991–1992 (in Korean), p. 136. For that matter, an average KPA soldier may be somewhat taller that 5 feet and much shorter than an average ROKA soldier. A US Army officer, having watched two North Korean soldiers who had strayed south return home through Panmunjom, reported: ‘Neither man was even 5 ft. tall . . . and they couldn’t have weighed much more than 45 kilos. The surprising thing was that we later saw them with their units on North Korean television. No one in their units was any bigger.’ Time, 4 April 1994, p. 21. For the relationships between spending on investment and increased O&M expenses, see, Jin Min, ‘Decision-Making in Defence Budget’ (National Defence Studies, Vol. 32, No. 2, in Korean, 1989), pp. 31–49. For the ground troops inventory, see Military Balance, various years. North Korea appears to ‘have mated Soviet vehicle chassis and towed artillery in the absence of

Notes and references 201 22 23

24

25 26 27 28 29 30

31 32 33 34

35

36 37

suitable ready-made hardware’. Jane’s Armour and Artillery 1991–92, p. 566. Taik-young Hamm, ‘North Korean Socialist Economy and National Defence Construction’ in Hamm et al., op. cit., pp. 107–8. Kim Il Sung, Kim Il Sung, Works, Vol. 25 (in Korean, Pyongyang: Korean Workers’ Party Press, 1983), p. 258. For Kim’s announcement (in 1971–72) of budget-cut plans, see: Donald S. Zagoria and Young Kun Kim, ‘North Korea and the Major Powers’ in William J. Barnds, ed., The Two Koreas in East Asian Affairs (New York: New York University Press, 1976), p. 36; and quoted in many sources. Also, see Selig Harrison, ‘One Korea?’ (Foreign Policy, Vol. 17, Winter 1974/75), pp. 42–3. Anne Gilks and Gerald Segal, China and the Arms Trade (London: Croom Helm, 1985), pp. 32–7, 57–73, 126–7, 167–9; and US Senate, Committee on Foreign Relations, Korea and the Philippines: November 1972, Staff Report (Washington, DC: 1973), p. 28. World Military Expenditures and Arms Transfers 1968–1977, p. 156. Ralph N. Clough, Embattled Korea: The Rivalry for International Support (Boulder: Westview Press, 1987), p. 102. US CIA, Estimated Soviet Defence Spending in Rubles 1970–1975 (Washington, DC: CIA, 1976). Eui-Gak Hwang, On North Korean Economy (in Korean, Seoul: Nanam, 1992), pp. 140–1. Economist Intelligence Unit, EIU Country Report: North Korea 1992, No. 1, p. 38. Quoted in Chae-Ki Sung, ‘An Empirical Analysis of the Factors Contributing to the North Korean Economic Crisis’ (National Defence Proceedings, No. 49, in Korean, 1997), pp. 73–107. Charles Wolf, Jr. et al., The Changing Balance: South and North Korean Capabilities for Long-term Military Competition (Santa Monica: RAND, 1985), p. 46. Ibid., p. 46. Institute of North Korean Studies, A General Survey of North Korea 1983 (in Korean, Seoul: Institute of North Korean Studies, 1983), pp. 1522–4. For the personnel costs of the ROK, see: Kyong-Hun Lee, ‘National Defence and State Budget’ in Chong-Ki Park and Kyu-Ok Lee, State Budget and Policy Objectives (in Korean, Seoul: Korea Development Institute, 1982), pp. 139–75; Defence White Paper, various years. For a few years in the 1980s, an extrapolation is used. For the 1950–60 period, 77.2 per cent of the ROK national defence budget was spent on personnel expenses, while unit O&M, equipment O&M, and investment accounted for 17.2 per cent, 2.6 per cent, and 2.3 per cent respectively. Institute of National Defence and Military History Studies, History of the Development of National Defence Policy 1945–1994 (in Korean, Seoul: Institute of National Defence and Military History Studies, 1995), p. 148. Taik-young Hamm, ‘An Estimation of Military Personnel Costs of Socialist States’ forthcoming, 1999. Larry Niksch, ‘North Korea’ in Richard A. Gabriel, Fighting Armies Nonaligned, Third World, and Other Ground Armies: A Combat Assessment (London: Greenwood Press, 1983), p. 111.

202 Notes and references 38

39

40

41

42

43 44

45

46

47

48

NUB, Comparative Trend Analysis of the Total Capability of South and North Korea (in Korean, Seoul: NUB, 1979), pp. 346–55. The new US intelligence estimates of the KPA ground troops may have been affected by the ROK estimates that included more KPA special operation forces. Cf. US House of Representatives, Committee on Foreign Affairs, Security Issues: Korea and Thailand, 1979, Hearings before the Subcommittee on Asian and Pacific Affairs (Washington, DC: GPO, 1979), pp. 6–9. US House of Representatives, Committee on Appropriations, Foreign Assistance and Related Agencies Appropriations for 1970, Hearings: Pt. I (Washington, DC: GPO, 1969), pp. 701–3; for 1972, p. 203; for 1973, p. 721; for 1974, pp. 1138, 1151– 2. For the ROKA stock and manpower in 1949–50, see: James F. Schnabel, United States Army in the Korean War: Policy and Direction, the First Year (Washington, DC: US Army/GPO, 1972), p. 35. For the ROK manpower on 31 July 1953, see: Walter G. Hermes, United States Army in the Korean War: Truce Tent and Fighting Front (Washington, DC: US Army/GPO, 1966), Appendix A-1. The O&M for equipment, entirely funded by US aid until 1970, amounted to $77 120 million annually (in current price) in the 1964–71 period. See the sources in footnote 35. According to the MND, the ‘combat capability coefficient’ (CCC) of the South was 50.8 per cent of the North in 1973, and about 60 per cent in ground force capabilities and about 40 per cent in air/naval capabilities. MND, The Yulgok Programme: Past, Present and Future (in Korean, Seoul: MND, 1994), p. 34. Although these numbers contain a built-in bias in favour of the enemy, as we have demonstrated in Chapter 3, they clearly show that the KPA superiority was rather qualitative. It included air force capabilities such as advanced fighters at that time, MIG-21s and SU-7s, and considerable ‘sea denial’ capabilities, i.e., submarines and missile-attack patrol boats against the ROK, not the US, navy. SIPRI Yearbook 1996, p. 468. US CIA estimated that the underground construction of industrial and military facilities is ‘at the very least. . . three or four times more expensive than similar aboveground construction and much more time consuming’. CIA, Korea: The Economic Race Between the North and the South, pp. 6–7. James F. Dunnigan, How to Make War, 3rd ed. (New York: Quill, 1993), p. 591. The comparison includes manpower, equipment and ‘force quality’ as well as population, GDP, defence spending, and reserve manpower. It was 61:48 (or 610:480) for 1982 in the 1982 edition (pp. 414, 424). Clough, op. cit., pp. 179, 261. The present author has heard similar comments from retired US officials and former North Korean high officials who want to remain anonymous. Findings from regression analyses of the inter-Korean arms race are, not surprisingly, quite limited. There are two empirical problems as well: (1) how to deal with foreign military aid; and (2) how to estimate the spending of the North. Cf. Tong Whan Park, ‘The Korean Arms Race’ (Asian Survey, Vol. 20, No. 6, 1980), pp. 648–60; and ‘Political Economy of the Arms Race in Korea’ (Asian Survey, Vol. 26, No. 7, 1986), pp. 839–50. A.F.K. Organski and Jacek Kugler, The War Ledger (Chicago: University of Chicago Press, 1980), p. 200. Cf. Russett, op. cit., pp. 546–7.

Notes and references 203 49

50

51 52

Bruce Bennett, ‘Implications of Proliferation of New Weapons on Regional Security’ (Paper presented the Eleventh Conference on Korea–US Security Studies, Seoul, 24– 25 October 1996). C.H. Anderton, ‘Arms Race Modeling: Problems and Prospects’ (Journal of Conflict Resolution, Vol. 33, No. 2, 1989), pp. 346–67. Also, it would be a mistake to analyse arms race or arms control exclusively by the ‘prisoners’ dilemma’ game. See, Matthew Evangelista, ‘Cooperation Theory and Disarmament Negotiations in the 1950s’ (World Politics, Vol. 42, No. 4, 1990), pp. 502–28. Hamm, ‘North Korean Socialist Economy and National Defence Construction’, pp. 93–4. William M. Carpenter, ‘The US Force Presence in South Korea: A Strategic Perspective’ in Richard B. Foster et al., Strategy and Security in Northeast Asia (New York: Crane, Russack, 1979), p. 136.

Chapter 6 1

2

3

4

5

6

7

8

The assessment of external threats is intrinsically related with that of internal threats, which depends on the capacity of the state including the legitimacy of the regime. Barry Buzan, People, States and Fear (Chapel Hill: University of North Carolina Press, 1983), pp. 65–69. This section is a revised and abridged version of my previous work. Cf. Taik-young Hamm, ‘A Comparison of Economic Capabilities of North and South Korea in the Half Century of National Division’ in Taik-young Hamm et al., Politics and Economy of the two Koreas in the Half Century of Division (in Korean, Seoul: IFES, 1996), pp. 173–203. US Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers 1993–1994 (Washington, DC: GPO, 1995), p. 70; ROK National Unification Board (NUB), An Overall Evaluation of the Third Seven-Year Plan of North Korea (in Korean, Seoul: NUB, 1994), p. 17; Economist Intelligence Unit (EIU), EIU Country Report: North Korea 1991, No. 1, p. 38. ACDA estimates of North Korea’s GNP were gradually revised down in the 1970s while they have been revised upward in the 1980s and 1990s, leading to an overestimated DPRK defence expenditure. See various issues of World Military Expenditures and Arms Transfers. ROK Central Intelligence Agency, The Comparison of North–South Korean Economic Capabilities, 7 vols. (in Korean, Seoul: KCIA, 1974) have remained as the most extensive research on North Korean economy. For NUB estimates of North Korean economic capabilities, see NUB, op. cit.; Compiled Statistics of North Korean Economy 1946–1985 (in Korean, Seoul: NUB, 1985). Cf. Research Institute of National Unification (RINU), Comparative Trend Analyses of North–South Korea’s National Capabilities (in Korean, Seoul: RINU, various years). Bank of Korea, ‘Estimate of North Korea’s GNP in 1992’ June 1993 (in Korean). The 1994 estimate includes the inflation of the dollar. Cf. The Korea Economic Daily, 19 June 1995. US Central Intelligence Agency (CIA), Korea: The Economic Race between the North and the South (Washington, DC: CIA, 1978).

204 Notes and references 9 10

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

26 27 28 29 30

31

Ha-Chung Yeon, Economic Policy and Management of North Korea (in Korean, Seoul: Korea Development Institute, 1986). Eui-Gak Hwang, The Economy of North Korea (in Korean, Seoul: Nanam, 1992), pp. 127–45. However, Hwang discarded the basic rate in his later publication, which contains the estimated GNP of North Korea in current dollar converted through a much lower exchange rate. Eui-Gak Hwang, ‘Economic Decline in North Korea: An Introduction and Gross Output Analysis’ in Eui-Gak Hwang et al., Economic Decline and Recovery Measures of North Korea (in Korean, Seoul: IFES, 1995), p. 17. Byong-Lo Philo Kim, Two Koreas in Development (New Brunswick: Transaction Publishers, 1992), pp. 70–1. Pong S. Lee, ‘An Estimate of North Korea’s National Income’ (Asian Survey, Vol. 12, No. 6, 1972), pp. 518–26. DPRK Academy of Social Sciences, Institute of Economics, Dictionary of Economics (in Korean, Pyongyang: Social Sciences Publishing House, 1970), Vol. 1, p. 219. Alec Nove, The Soviet Economy (New York: Praeger, 1965), p. 274. Dictionary of Economics, Vol. 1, p. 216; Vol. 2, pp. 133–4. Ibid., Vol. 2, p. 134. Ibid., Vol. 1, pp. 35–36; Vol. 2, pp. 8–9. Hwang, The Economy of North Korea, p. 111. Dictionary of Politics, Vol. 1, p. 219. NUB, An Explanation of Methods for Estimating North Korea’s GNP (in Korean, Seoul: NUB, 1988), p. 34. BOK, op. cit., p. 4. Hwang, The Economy of North Korea, p. 139. Hamm, op. cit., pp. 12–13. Hwang, The Economy of North Korea, pp. 112–13. Also see Section 2 of this chapter. See various issues of EIU Country Report: North Korea; and Europa Yearbook. Cf. Hwang, The Economy of North Korea, pp. 80–1. Trade with China was set in a rate established by agreements between the two governments. In 1978, the Chinese export price rose by 50 per cent while the DPRK export price rose by 35 per cent. V. Smirnov, ‘Development of Foreign Economic Ties of the Democratic People’s Republic of Korea’ (Far Eastern Affairs, 1984, No. 4), p. 109. Joseph Sang-Hoon Chung, The North Korean Economy: Structure and Development (Stanford: Hoover Institution Press, 1974), p. 189. Nitcho Boeki [Japan–Korea Trade] is the most widely used source of the trade rate, as it reports the rates set by the DPRK Trade Bank. Europa Yearbook 1977; 1978; and 1979. Cf. EIU Country Profile 1991–92: North Korea, p. 63. Lee, op. cit., p. 524; Korea Central Yearbook 1978. US Department of State, Foreign Relations of United States [FRUS] 1952–1954, Vol. 15 (Korea), Pt. 2 (Washington, DC: GPO, 1984), p. 1246. Per capita GNP in 1953 was $60, compared with $200 in Japan and $2,000 in the US (p. 1249). Kwang Suk Kim and Michael Roemer, Growth and Structural Transformation: Studies in the Modernization of the Republic of Korea, 1945–1975 (Cambridge, MA: Harvard University Press, 1979), p. 23.

Notes and references 205 32 33

34 35

36 37

38

39 40 41

42

43

44

Erik van Ree, Socialism in One Zone: Stalin’s Policy in Korea, 1945–1947 (Oxford: Berg, 1989), pp. 179–80. Korea Central Yearbook 1958, pp. 176–7. Cf. DPRK State Planning Commission, Central Statistical Board, Statistical Returns of National Economy of the DPRK, 1946– 1960 (Pyongyang: Foreign Language Publishing House, 1961). Korea Central Yearbook 1959, pp. 324–5. Korea Central Yearbook, various issues; Statistical Returns of National Economy of the DPRK, pp. 28–30. The monetary wages index in 1960 was 386 (1949 = 100) while the real wages index was only 203. Figures in the early 1960s vary slightly in different editions of the yearbook. For further detail, see Hamm, op. cit., pp. 17–18. Some analysts argue that even the trade rate tends to overestimate the value of the DPRK won, even before the collapse of the rouble, but do not provide any evidence. See, for instance, Sung-Hoon Lee, ‘Quantitative Assessment of Research Findings on North Korean Economy’ in NUB, North Korean Economy in Transition (in Korean, Seoul: NUB, 1987), p. 49. Weekly Trends of North Korea (in Korean), 21 June 1997; The Dong-A Ilbo, 24 June 1997. If the report is to be believed, the average annual growth rate is -20.8 per cent, while the ROK estimate shows a -4.5 per cent growth rate for the same period. The DPRK report, prepared to request a reduction in its contribution to the United Nations, seems to exaggerate its economic crisis, while the BOK tends to underestimate the seriousness of the DPRK economic crisis. For instance, its GNP is smaller than the state budget that was officially released up to 1994. Nicholas Eberstadt and Judith Banister, North Korea: Population Trends and Prospects (Washington, DC: US Bureau of Census, 1990), p. 52. Ibid., pp. 53, 194–8. Our estimate is somewhat higher than the estimated NI by Lee and Chung who used 1966 as the base year (per capita NI = 500/510 won, or 120% of the 1962 level). Instead, we use 1967 as the base year (per capita NI = 580 won, 8 times the 1946 level and 4.4 times the 1949 level), since the latter numbers have more meaningful digits and a smaller margin of error. All the numbers are from various issues of Korea Central Yearbook and are quoted in NUB reports. Pyongyang’s official and semi-official announcements of its per capita GNP are compiled in the following sources, among others. Institute of North Korean Studies (INKS), A General Survey of North Korea 1993 (in Korean, Seoul: INKS, 1994), p. 400; Nicholas Eberstadt, Korea Approaches Reunification (London: Sharpe, 1995), pp. 11–12. For dollar deflators, see US Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts of the United States, Vol. 2, 1959–88 (Washington, DC: GPO, 1993), p. 295; and Survey of Current Business, issues up to March 1998. Vantage Point, November 1994, p. 26; Korea Economic Daily, 19 June 1995. The BOK estimates for 1996 and 1997 was based on factor cost approach based on the ROK won and converted into US dollar, utilising implicit exchange rates. For the implicit exchange rate of the won in the 1950s, see various issues of the Korea Statistical Yearbook. Accordingly, per capita GNP is reduced from $70 in 1954 to $65 in 1955, while the economic growth rate in 1955 is 4.5 per cent, higher than the population growth rate.

206 Notes and references 45 46

47

48 49 50 51

52

53

54 55

56 57

58 59

60 61

Eberstadt, op. cit., p. 26. Korea Central Yearbook, various issues. Pyongyang announced the average growth rate of industrial output for the second Seven Year Plan as 12.2 per cent/year and 5.6 per cent/year for the Third Seven Year Plan, yet both appear overrated. For instance, see Chosun Ilbo-sa, North Korea: The Shocking Reality (in Korean, Seoul: Chosun Ilbo, 1991). The author’s interviews with some of the defectors/refugees revealed similar conclusions. Young-Sun Ha, War and Peace on the Korean Peninsula (in Korean, Seoul: Cheongkye Institute, 1989), pp. 38–9, 45. World Military Expenditures and Arms Transfers 1988 (1989), p. 133. Or the new estimates may overrate Soviet military aid to the North. Walter G. Hermes, United States Army in the Korean War: Truce Tent and Fighting Front (Washington, DC: GPO for Department of Army, 1966), p. 477, Map VII-IX. Taik-young Hamm, ‘Juche and National Defence Policy of North Korea’ in Jae-In Yang et al., Political Ideology of North Korea: Juche (in Korean, Seoul: IFES, Kyungnam University, 1990), pp. 159–63. However, the Juche doctrine has been transformed to the principle of Suryong [great leader], formerly attributed to Stalin, which argues that the revolutionary masses attain their full self-identity only under the leadership of the Great Leader. Some analysts argue that the force ratio is a better indicator of the relative degree of armament than the defence burden. Cf. James L. Payne, Why Nations Arm? (Oxford: Basil Blackwell, 1989), pp. 24–9. The ROK Army created 17 reserve divisions in the Second Force Improvement Plan (1982–86), mostly manned by defence call-ups. ROK Ministry of National Defence (MND), The Yulgok Programme: Past, Present and Future (in Korean, Seoul: MND, 1994), p. 38. The MND maintained a double standard for its comparison of manpower, announcing ‘a reduction of military manpower to 700,000’. See Dong-A Ilbo, 6 September 1991. The ratio may be an indicator of the capital/labour ratio in the composition of military indicators. Yet the high relative expense ratios of the two Koreas in the 1950s show that both Koreas were overarmed with equipment they could not afford for themselves. For the difference of the two concepts, see, Reinhard Bendix, ‘State, Legitimization, and “Civil Society” ’ (Telos, No. 86, 1990/91), pp. 143–52. Likewise, the provincial governments experienced declining budget, i.e. net transfers to the central government, according to a rare Soviet source. EIU Country Report: North Korea, 2nd quarter, 1994, p. 46. See Chapter 2, Section 4 for further detail. MND, Defence White Paper, various years. Cf. Dal-Hee Lee, ‘North Korea’s Economy and Military Spending’ in Joseph S. H. Chung et al., The Development of North Korean Economy (in Korean, Seoul: IFES, 1990), pp. 173–220. Taik-young Hamm, ‘Economic Decline and Foreign Relations of North Korea’ in Hwang et al., op. cit., pp 131–2. The growth rate of GVIO declined as early as 1960 (15 per cent), from 45 per cent year during the 1957–59 period. Korea Central Yearbook 1961, p. 158.

Notes and references 207 62 63 64 65 66

67 68

69 70

71

72 73

74 75

76 77 78 79 80

Dae-Sook Suh, Kim Il Sung: The North Korean Leader (New York: Columbia University Press, 1988), p. 211. Rodong Shinmun [Workers’ Daily], 31 December 1964. Suh, op. cit., p. 223. Hamm, ‘Juche and National Defence Policy of North Korea,’ p. 171. Kim Il Sung, Let Us Embody More Thoroughly the Revolutionary Spirit of Independence, Self-Sustenance and Self-Defence in All Fields of State Activity (Pyongyang: Foreign Language Publishing House, 1967), p. 28. Kim Il Sung, Collected Works of Kim Il Sung, Vol. 20 (in Korean, Pyongyang: KWP Publishing House, 1982), pp. 423, 425–6. Reportedly, Kim’s speech was obtained from documents held by a certain Lieutenant Roh Kwan-Bong who defected to the South in March 1969. INKS, A General Survey of North Korea 1983, pp. 1468–70. Kim reportedly told Lee Hoo-Rak, chief of the KCIA, who made a secret visit to Pyongyang in 1972, that these generals had been purged for their extreme leftist errors. Chosun Ilbo-sa, op. cit., p. 362. Kim, Collected Works of Kim Il Sung, Vol. 25 (1983), p. 253. The (First) Seven Year Plan, officially completed in 1970, must been have extended to 1971, considering that a Five Year Plan approved in 1969 was changed to the Six Year Plan (1971–76) and that the North Korean media reported the efforts ‘to accomplish two years’ target in advance’ in 1971. See, Korea Central Yearbook 1972, pp. 313, 315. Cf. Suh, op. cit., pp. 245–6. Interviews with Mr Kim Jeong-Min, a former high ranking official of the DPRK, in April and March 1995. For the independent ‘court economy’ engaged in hard currencyearning projects for the economic security of the ruling class, see Vasily Mikheev, ‘Reforms of North Korean Economy: Requirements, Plans and Hopes’ (Korean Journal of Defence Analysis, Vol. 5, No. 1, 1993), pp. 81–95. DPRK Academy of Social Sciences, Dictionary of Politics (in Korean, Pyongyang: Social Sciences Publishing House, 1973), p. 874. For instance, two MIG-29s were assembled from kits supplied by Russia, but further assembly was halted ‘because of North Korea’s inability to pay for more parts’. Guy R. Arrigoni, ‘National Security’ in Andreas Matles Savada, ed., North Korea: A Country Study (Washington, DC: GPO for Federal Research Division, Library of Congress, 1994), p. 251. Eberstadt, op. cit., p. 19. Rodong Shinmun, 29 September 1979. Measures including a more rational allocation of labour force and stronger labour discipline were mentioned as well. Cf. M. Glebova and V. Mikheyev, ‘Some Aspects of Economic Development of the Democratic People’s Republic of Korea’ (Far Eastern Affairs, January 1983), pp. 96–7. Asia Watch and Minnesota Lawyers International Human Rights Committee, Human Rights in the DPRK (Washington, DC: Asia Watch, 1988), p. 184. MND, Defence White Paper 1994–1995 [in Korean], p. 68. Naewoe Press, No. 974, 12 October 1995; No. 975, 19 October 1995. See Ch. 4. Cf. World Military Expenditures and Arms Transfers 1995. Eberstadt, op. cit, p. 25. A Chinese economist of Korean origin who wants to remain anonymous quoted North Korean specialists’ claims that these projects in the second half of the 1980s required about $10 billion.

208 Notes and references 81

82

83

84 85

86

87

88 89

90 91

92 93

94 95

See Appendix B. Cf. Dong-Joon Hwang et al., Evaluations of U.S. Security Assistance to Korea and Prospects of ROK–U.S. Defence Cooperation (in Korean, Seoul: Minyongsa, 1990), pp. 34–8. US Senate, Committee on Foreign Relations, US Troop Withdrawal from the Republic of Korea, Report by Senators Hubert H. Humphrey and John Glenn (Washington, DC: GPO, 1978), pp. 23, 39. Among the $5.5 billion, foreign exchange cost amounted to $3.5 billion. US House of Representatives, Committee on Foreign Relations, Investigations of Korean-American Relations, Appendix A (Washington, DC: GPO, 1978), pp. 380–7. The Dong-A Ilbo, 28 January 1992; Far Eastern Economic Review, 3 January 1991. Cf. Defence White Paper 1991–1992; 1992–1993. Se-Jin Kim, The Politics of Military Revolution in Korea (Chapel Hill: University of North Carolina Press, 1971), p. 83. The most common forms of corruption in the 1950s included marketing commercially valuable items such as cars and trucks, parts, petroleum, and foodstuffs and diverting monetary allowances earmarked for the purchase of secondary foodstuffs for the soldiers (pp. 75–6). Yet Rhee used factionalism and military corruption for his own personal control. Gregory Henderson, Korea: The Politics of Vortex (Cambridge, MA: Harvard University Press, 1968), p. 349. Sungjoo Han, The Failure of Democracy in South Korea (Berkeley: University of California Press, 1974), p. 170. Cf. The Dong-A Ilbo, 27 August 1960. Cf. Institute of International Affairs, A General Guide to Defence (in Korean, Seoul: IIS, 1986), p. 385. Jae Souk Sohn, ‘Political Dominance and Political Failure: The Role of the Military in the Republic of Korea’ in Henry Bienen, ed., The Military Intervenes: Case Studies in Political Development (New York: Russell Sage Foundation, 1968), pp. 103–21. Yong-Won Hahn, Military Rule in Korea (in Korean, Seoul: Daewangsa, 1993), p. 241. Sohn, op. cit., pp. 110–16; Ho-Chul Sonn, ‘Toward a Synthetic Approach of Third World Political Economy: The Case of South Korea’ (PhD dissertation, University of Texas, Austin, 1987), pp. 265–6. Eberstadt, op. cit., pp. 27, 48 David C. Cole and Princeton Lyman, Korean Development: The Interplay of Politics and Economics (Cambridge: Harvard University Press, 1971), pp. 170–2. The artificially high exchange rate of the won under the Rhee government provided little incentive for export. Cf. Alexander Joungwon Kim, Divided Korea: The Politics of Development, 1945 1972 (Cambridge, MA: Harvard University Press, 1975), p. 242. Gavan McCormack, ‘Japan and South Korea, 1965–1975: Ten Years of Normalization’ in Gavan McCormack and Mark Selden, eds., Korea North and South: The Deepening Crisis (New York: Monthly Review Press, 1978), p. 175. US Comptroller General, Assistance for the Economic Development of the Republic of Korea, Report to the Congress (Washington, DC: np, 1973), p. 60. The Joong-Ang Daily News, 21 November 1966, quoted in Wookhee Shin, Dynamics of Patron–Client State Relations: The United States and Korean Political Economy in the Cold War (Seoul: American Studies Institute, Seoul National University, 1993), p. 134.

Notes and references 209 96 97

98

99

100 101 102 103 104

105 106

107 108

109 110 111

Ibid., p. 160. John H. Hannah, Korea, Japan, Taiwan (Formosa), and the Philippines, Report on US Foreign Assistance Programs to Senate Special Committee to Study the Foreign Aid Program, No. 5 (Washington, DC: GPO, 1957), p. 120; Han, op. cit., pp. 170–1. Likewise, high education was an effort ‘partly to escape or postpone unemployment’. Henderson, op. cit., p. 170. Jeong-Ryom Kim, Thirty Years’ History of Economic Policies in Korea (in Korean, Seoul: Joong-Ang Daily News, 1990), pp. 314–70; Won-Cheol Oh, ‘Memoirs, Part I: Construction of Defence Industries’ (Monthly Chosun, in Korean, June 1994), pp. 458–98; July 1994, pp. 546–71. The decision was made by Park and his economic technocrats, including his chief of staff Kim Jeong-Ryom and Senior Secretary for Economy II (for defence and chemical-heavy industries) Oh Won-Cheol, while the military preferred arsenals under their own control. Except the early 1980s when both Koreas exported considerable amounts of arms and other military goods to Iran and Iraq, the arms export of South Korea has been extremely low. Young-Sun Ha, ‘South Korea’ in James E. Katz, ed., Arms Production in Developing Countries (Lexington: Lexington Books, 1984), pp. 225–33; Chung-in Moon, ‘The Political Economy of Defence Industrialization in South Korea’ (Journal of East Asian Affairs, Vol. 5, No. 2, 1991), pp. 438–65. Gary R. Saxonhouse, ‘The US, Japan, and Korea’ in Gerald A. Curtis and Sungjoo Han, eds., The United States–South Korean Alliance (Lexington: Heath, 1983), p. 178. Ha-Joon Chang, ‘The Political Economy of Industrial Policy in Korea’ (Cambridge Journal of Economics, Vol. 17, No. 2, 1993), pp. 131–57. Man-Won Chi, The Korean Armed Forces: Where Should It Go (in Korean, Seoul: Kimyoungsa, 1991), pp. 150–1, 292–4. Wolgan Mahl [Discourse: A Monthly Journal], April 1994, pp. 45–50. Sisa Journal [Weekly News Magazine], 20 April 1995, pp. 17–24. For further details of the US pressure to buy more US-made weapons, cf. The Hankook Ilbo, 4 and 5 February 1994; The Hankyoreh, 3 February 1994; The Washington Post, 25 March 1994; The Dong-A Ilbo, 27 September 1994. In-Taek Hyun, Defence Expenditures of Korea (in Korean, Seoul: Hanwool, 1991), pp. 94–100. Myong-Gil Kang, ‘Defence Spending of Korea: Search for Balance and Policy Direction’ in Jong-Chun Baek and Min-Yong Lee, eds., Korean National Defence Today: Defence Expenditures in the Age of Multi-Dimensional Security (in Korean, Seoul: MND, 1994), p. 252. Kwanhee Hong, ‘Defence Burden and Economic Performances: Evidence from South Korea’ (PhD dissertation, University of Georgia, 1990). For an approach to understanding national/state power not decoupled from legitimacy, see, Robert Jackman, Power without Force: The Political Capacity of Nation-States (Ann Arbor: University of Michigan Press, 1993), pp. 95–121; Buzan, op. cit., pp. 36–69. For a more libertarian version, see Carla Pasquinelli, ‘Power without the State’ (Telos, No. 68, 1986), pp. 79–92. See, for further detail, Chapter 2, Section 4. Korea Statistical Yearbook, various issues. Vittorio Corbo and Sang-Woo Nam, ‘Korea’s Macroeconomic Prospects and Policy Issues for the Next Decade’ (World Development, Vol. 16, 1988), p. 43.

210 Notes and references 112 Even ‘mainstream’ economists, in addition to the recent ’political economy’ approaches in political science and sociology, agree on the developmentalist state thesis. Paul W. Kuznets, Korean Economic Development: An Interpretive Model (Westport, CT: Praeger, 1994), pp. 103–31. Cf. Chang, op. cit., pp. 131–57. 113 Dae-Hwan Kim, ‘Korean War and Capitalism of Korea’ in Ho-Chul Sonn et al., The Korean War and Structural Changes of North–South Korean Societies (in Korean, Seoul: IFES, Kyungnam University, 1991), pp. 71–94. 114 Kuznets, op. cit., p. 120. 115 A.K. Sen, Levels of Poverty: Policy and Change, Working Paper No. 401 (Washington, D.C.: World Bank, 1980), p. 15; Hyug Baeg Im, ‘The Rise of Bureaucratic Authoritarianism in South Korea’ (World Politics, Vol. 39, No. 2, 1987), pp. 250–1. 116 Kuznets, op. cit., p. 118. 117 For an alternative measurement of investment and savings, see, Kim and Roemer, op. cit., pp. 48–59. 118 For English publications, in addition to numerous books in Korean, in which the rapid economic growth in South Korea is criticised, see: Chang Soo Kim, ‘Marginalization, Development and the Korean Workers’ Movement’ (Ampo: Japan–Asia Quarterly Review, Vol. 9, No. 3, 1977), pp. 20–39; Gavan McCormack, ‘The South Korean Economy: GNP versus the People’ in McCormack and Selden, op. cit., pp. 91–111; Martin Hart-Landsberg, ‘South Korea: The ‘Miracle’ Rejected’ (Critical Sociology, Vol. 15, No. 3, 1988), pp. 29–51; Eberstadt, op. cit., pp. 25–38. 119 It decreased to under 23.5 and 24.3 per cent respectively in 1996 and 1997, indicating heavy borrowing from abroad, which led to the foreign currency crisis in late 1997. Since 1994, gross investment has exceeded gross domestic savings (38.8 per cent of the GNP vs. 34.8 per cent in 1996). Monthly Bulletin, April 1998, p. 72. 120 Im, op. cit., pp. 231–57. 121 Yet the propaganda machine in Seoul exploited Kim’s rhetorical speech in Beijing to the maximum: ‘If revolution takes place in South Korea, we as one and the same nation, will not just look at it with folded arms but will strongly support the South Korean people.’ Quoted in Walter Easey and Gavan McCormack, ‘South Korean Society: The Deepening Nightmare’ in McCormack and Selden, op. cit., p. 84. 122 Ibid., p. 83. However, the US Embassy in Seoul, Secretary of State Kissinger, Secretary of Defence Schlessinger and others repeated in 1975 that there was little, if any, likelihood of an attack from the North. Nevertheless, the ROK government organised the Civil Defence Corps in 1975. Massive rallies were held on many occasions in the second half of the 1970s, especially when underground tunnels dug by the North Koreans in the DMZ were discovered. The tunnels, reflecting the KPA light infantry tactics in the early 1970s, were of limited military value – they could not penetrate into the South’s forward defence line (the FEBA-Alpha) – but were highly valuable for propaganda purposes in Seoul. 123 Chun declared in his inaugural address on 31 March 1981: ‘there is no substitute for national security; it is fundamental to national survival’. US Senate, Committee on Foreign Relations, US Presidential Delegations to the Inauguration of the President of

Notes and references 211 the ROK, Report (Washington, DC: GPO, 1981), p. 11. 124 The Korea Herald, 2 August 1984. 125 Bruce Cumings, ‘The Abortive Abertura: South Korea in the Light of Latin American Experience’ (New Left Review, No. 112, 1989), p. 31. The South Korean government definitely preferred official and commercial loans to direct investment, to which it was almost hostile, in its mobilisation of foreign capital. Cf. Anne O. Krueger, The Developmental Role of the Foreign Sector and Aid: Studies in the Modernization of the ROK, 1945–1975 (Cambridge, MA: Harvard University Press, 1979); Jeff Frieden, ‘Third World Indebted Industrialization: International Finance and State Capitalism in Mexico, Brazil, Algeria and South Korea’ (International Organization, Vol. 35, No. 3, 1981), pp. 407–31. 126 The ‘Korea lobby’ in Japan that was responsible for the normalisation of diplomatic relations with South Korea included ‘the fifteen top capitalists in Japan who financed the key factional bosses in the Liberal Democratic Party’. Kwan Bong Kim, The Korea–Japan Treaty Crisis and the Instability of the Korean Political System (New York: Praeger, 1971), p. 88. 127 Americans feared that ‘the high proportion of tenancy in Korea. . . would provide a fertile field for Communism’. C. Clyde Mitchell, Land Reform in Asia: A Case Study, National Planning Association, Pamphlet No. 78 (np, 1952), p. 7. 128 Cumings, op. cit., pp. 10-11; Nak-chung Paik, ‘South Korea: Unification and the Democratic Struggle’ (New Left Review, No. 197, 1993), pp. 67–84. Yet Professor Paik tends to overemphasise the political/unification issue in his discussion of the state autonomy, paying less attention to the state–capital relationship. 129 Cf. Edward A. Olsen, ‘The Arms Race on the Korean Peninsula’ (Asian Survey, Vol. 26, No. 8, 1986), pp. 851–67. 130 The Dong-A Ilbo, 17 December 1990; The Hankyoreh, 12, 13, and 17 August 1991; The Hankuk Ilbo, 14 May 1994. 131 Rodney P. Katz, ‘National Security’ in Andreas Matles Savada, ed., South Korea: A Country Study (Washington, DC: GPO, for Federal Research Division, Library of Congress, 1992), p. 304. 132 Defence White Paper 1988 (in Korean), p. 174. The heavily rounded figures for the Yulgok projects in 1981 and 1982 (750 and 850 billion won respectively) imply a high probability of maldistribution. 133 MND, Questions and Answers of the Nation’s Defence Expenditures (in Korean, Seoul: MND, 1994), pp. 63–8; Defence White Paper 1994–1995 [in Korean], pp. 210–11. Yet as late as 1992, Kim Dae Jung, the arch enemy of the military and the conservatives – he had proposed a more populist economic policy in his first presidential campaign against Park in 1971 and had been sentenced to death by the military junta in 1980 – went so far as to promise full support for the defence budget request in his bid for the presidency. The Dong-A Ilbo, 2 October, 1992. 134 Bruce M. Russett, ‘Defence Expenditures and National Well-Being’ (American Political Science Review, Vol. 76, No. 4, 1982), pp. 767–77. Cf. Alan Wolfe, The Rise and Fall of the Soviet Threat (Washington, DC: Institute for Public Policy, 1979). 135 South Korea also benefited economically from its free-rider position in the world economy, which the US allowed. Shin, op. cit., p. 164.

212 Notes and references

Chapter 7 1

2

However, the gross domestic savings began to fall short of the gross investment since 1993 to such an extent that the former was 34.8 per cent of the GNP (private saving was reduced to 23.6 per cent), while the latter, 38.8 per cent in 1996. BOK, Monthly Bulletin, April 1998 (in Korean), p. 72. The overinvestment led to a heavy borrowing especially in the private sector and the consequent ‘IMF crisis’. Taik-young Hamm, ‘Toward the North-South Korean Integration in the Age of Globalisation: Economic Integration and Confederation’ (National Strategy, Vol. 4 No. 1, in Korean, 1998), pp. 49–72.

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Index

absolutism 30–1 accumulation 33, 155–6; see also capital, private savings ACDA 128; estimates of DPRK defence expenditure 52, 58, 59, 60–1, 102 agent-structure problem 13–16 ‘Agreed Framework’, US–DPRK, (1994) 88 Agreement on Reconciliation, Nonaggression, Exchanges and Cooperation (1991) 90 aid maximisation policy 150–1; see also military aid air defence systems 53–5, 69, 70 air superiority 54–5 AirLand Battle doctrine 40–1, 84, 89 alienated politics 35 Allison, G.T. 21 allocation of resources 24, 26–8, 32–3 Anderson, P. 30 Ardant, G. 25 armament 8–9, 12–37; capital-intensive approach 42; concepts of state action 13–16; demonstration-oriented approach 43; external factors of 4–5, 12, 14–16, 115–17, 118; Gramscian perspective 29–36; hardware-oriented approach 42; hypotheses 36–7; state and armament in perspective 29–36; internal factors 4–5, 12, 14–16, 118, 160–1; labour-intensive approach 42; number-oriented approach 43; organisation-intensive approach 42–3; state power, resources and 6–8, 23–9, 164–5; technology-oriented approach 42 ‘arming the entire people’ doctrine 137–46 armoured division equivalent (ADE) 44, 45

arms control 162 arms buildups 7, 62–89; conventional arms race in 1970s 79–82; DPRK nuclear option in 1990s 86–9; Korean conflict 1966–69 74–9; Korean War period 62–7; DPRK’s ‘self-reliant defence’ 71–4; postwar buildups 67–71; ROK superiority in 1980s 82–5 arms race 2, 3, 4–5, 6, 163–4; applicability to Koreas 115–17; conventional arms race in 1970s 79–82; asymmetric arms race 117 autocorrelation 17 autonomy of the military 28, 149–51 autonomy of the state 29, 33–6; conjunctural autonomy 34–6; relative autonomy 34, 157; structural autonomy 34; systemic autonomy 34 ‘axes of August’ (1976) 81 Bak Gum-Cheol 143 Bak Seong-Cheol 81, 142 balance of power 15 Banister, J. 126 Bank of Korea 120, 128–9 bean counts 43–51, 98; equivalence problems 43 Blue House raid 77–8 Border Constabulary Brigade 146 bureaucratic-organisational (B-O) model 2–3, 4–5, 21, 116–17, 163–4; ROK 147–8; see also incrementalism bureaucratic politics 21 Bush, G. 51 business cycle 4–5, 27–8, 152, 163–4 Byolori Conference 72 capital: state and 30–1, 34–6; state power in DPRK 139–42; transition of ROK to

Index 239 capital-intensive state 152–60, 164–5, 166 Capital Garrison Command 149 capital-intensive state 144–60 capital strike 31 Carter, J. 80, 82, 82–3, 89 Cha Ji-Cheol 156 Chae Byong-Dok 64 Chang, Myon (John M.) 149 China: military aid to DPRK 69–70, 80, 93, 98, 113, 117; DPRK relations with 71– 2,73; People’s Liberation Army (PLA) 64–5, 69, 70; ROK relations with 86 Choe Hyon 23, 142, 144 Choe Kwang 22–3, 87, 142, 144 Choe Min-Cheol 144 Choe Yong-Kon 142 Choi Kyong-Rok 149 Chong Il-Kwon 64 Chun Doo-Hwan 82–3, 85, 151, 152, 155, 156–7 CIS/Russia 86; see also Soviet Union civil society 7, 15–16, 29, 164 Clark, M. 65 class relations 30–1, 34–5 Clausewitz, C. von 48, 50 Clinton, W. 88 Clough, R.N. 4, 85 coercion 7–8, 164–5; armament and state power 28–9, 32, 36; ROK 152–60 coercion-intensive state 144–60 Collins, L. 65 combat capability coefficient (CCC) 44, 45, 55–6 combat effectiveness values (CEV) 49 ‘combat power’, projected 115 ‘combined regular and irregular warfare’ doctrine 76, 145 commando/guerrilla operations 76–9 conscription 108 consent 7–8, 32; coercion and 164–5; ROK 152–60 conventional arms race 79–82 Cordesman, A. 50 corporate interests 26–7, 32–3 C3 I 42, 48, 49, 54, 56 Cusack, T.R. 27 decision-making approach 20–1 defence budget cut see defence expenditures defence burden 4, 160, 164–5; comparison of two Koreas 129–37; DPRK 138–9,

140–1; ROK 153, 154, 159–60 Defence Call-Ups 135, 148 defence expenditures (DE) 4, 17, 26, 163; comparison of DPRK and ROK 51–7; data and measurement 57–61; DE/GNP ratio see defence burden; DPRK 9–10, 51–7, 58–61, 72, 91–104; hidden spending 51–2, 58, 93, 99–101; personnel expenses 57, 103–4, 108, 109; problems of DPRK data 2–3, 58– 61; ROK 57–8, 61, 91–2, 94, 147–8 defence surtax 23, 80, 156, 158 Defence White Paper 40, 91, 95 democracy 166 Democratic People’s Republic of Korea (DPRK) 11, 22–3, 162–6 passim ; armed workers to working soldiers 137–46; defence burden 129–37, 138– 9, 140–1; defence expenditures 9–10, 51–7, 58–61, 72, 91–104; estimated GNP 10, 119–29; history of military buildup 9, 62–89 passim; malnutrition 130–2; military capabilities compared with ROK 39–57 passim ; military stock compared with ROK 104–15; Ministry of People’s Armed Forces (MPAF) 145; nuclear option in 1990s 86–9; official DE data 2–3, 58–61, 92–9; ‘self-reliant defence’ 71–4, 144, 163 developmental state 153–5 disarmament 162 division equivalent firepower (DEF) 44 DMZ 39, 40, 77, 81 domination: system of 30–1 Dupuy, T. 49 dynamic combat analyses 50–1 Eastern Europe 86 Eberstadt, N. 126, 150 economic cooperation 166 economic growth 25; DPRK 73–4, 86, 140–2; ROK 153–5 Economic Planning Board (EPB) 152 education and training 49 Eitan, R. 49 elite theory 13, 27 equipment, military 42–3, 98, 116; bean counts 43–51; cost-effectiveness 52–5; depreciation 113–15, 121–2; high-tech weaponry 42, 46, 53–4; history of military buildup 70, 74, 75, 76, 81, 83–5; low tech weaponry 42, 46; quality of weapons 45–8

240 Index Evans, P. 34 exchange rate 101, 122–6, 127 expenditures, defence see defence expenditures experience of war 63–4 export promotion development strategy 150 extraction of resources 24–6, 31–2, 164–5; DPRK extractive capacity 137–9; ROK extractive capacity 153–9; tax plus profit 7, 31, 152, 159–60, 164 fatigue factor 16, 17–18, 22 feudalism 30–1 fighter aircraft 53 Force Improvement Plans (FIPs) 80, 83–4, 116, 147, 148, 158 Force Modernisation Plan 79–80 force multipliers 45–50 force ratios 135–7 foreign policy decision-making 21, 23–4 ‘Four Military Doctrines’ 71, 73, 142 Gapsan faction 142, 143 Gates, R. 88 Glenn, J. 82 Gorbachev, M.S. 51 Gramsci, A. 7, 29, 36, 164 grievance factor 16, 22 gross national product (GNP): comparison of DPRK and ROK 129–32; DE/GNP ratio see defence burden; estimating for DPRK 10, 119–29; ROK 168 gross value of social product (GVSP) 121 ground troops 69, 80 Guam Doctrine 79 Ha, Young-Sun 4, 57–8 Hamm, Taik-young 22, 57–8, 102, 128 Han, Sungjoo 81 Hayes, P. 4 Hegel 19, 20 Hintze, O. 13, 14, 30 historical bloc 7, 164 Hoh Bong-Hak 23, 142, 143, 144 Hoh Seok-Seon 143 Holbrooke, R. 82 Homeland Defence Reserve Forces (HDRF) 78, 79, 116 human resources 42–3; see also manpower Hwang, Eui-Gak 120, 122, 128 Hyonri Campaign 66 Hyun, In-Taek 4

IDF 49 IISS 58-9 import substitution military industrialisation 141–2, 151 incrementalism 5, 26, 147 interest representation 32–3, 36 Iran–Iraq war 41 issue area 24 Ivry, D. 49 Jackman, R.W. 25 Jaebols 28, 35, 151, 166 Japan 73, 87, 150, 157 Jeong Byong-Kap 144 Joint Communique (1972) 81, 90 Joint Declaration on the Denuclearisation of the Korean Peninsula 90 Juche 71, 134 Katzenstein, P. 33 KCIA 52, 58, 61, 101–3, 149 KIDA 48, 55 Kim, Byong-Lo Philo 120, 128 Kim Chang-Bong 22–3, 142, 144 Kim Chang-Dok 144 Kim Dae Jung 83, 157 Kim Do-Man 143 Kim Hong-Il 64 Kim Ihl 93 Kim Il Sung 22, 78, 81, 85, 87, 145, 156; defence budget cut 98; and generals 142, 143, 144; ‘self-reliant defence’ 71, 72–4, 144 Kim Jae Kyu 82, 156 Kim Jeong-tae 77–8 Kim Jong Il 87, 146 Kim Jong-Pil 149 Kim Kwang-Hyop 72, 142, 144 Kim Sok-Won 64 Kim Young-Sam 157 Kissinger, H. 79 Koh Hyok 143 Korea Development Institute 158 Korean Peninsula Energy Development Organisation (KEDO) 116 Korean People’s Army (KPA) 63; VIII Special Purposes Corps 79; Gyododae 70; 124th Army Unit 77–8; Reconnaissance Bureau 76–9; see also Democratic People’s Republic of Korea Korean Volunteer Army (KVA) 63, 70, 142 Korean War 41, 62–7, 90, 126

Index 241 Korean Workers’ Party (KWP) 22–3, 71, 142–4; Central Committee 22, Liaisen Department 23, 143; Politburo 22–3, 142–4 Krasner, S.D. 20 Kugler, J. 24, 25, 43 Kuklev, V. 51 Kurth, J.R. 27 Kwangbok Youth Festival facilities 146 Lanchester linear square law 50 Lee Hoo-Rak 81 Lee Hyo-Soon 143 Lee Jong-Koo 88 Lee, Kyong-Hun 57–8 Lee, Pong S. 120–1 Lee, Young-Hee 3–4 Lee Young-Ho 142, 144 legitimacy 28–9, 32, 36, 164–5 Lentner, H.H. 20 levels of analysis 14, 15–16 MacArthur, D. 65 Machiavelli, N. 19–20 Machtpolitik 13, 20 main battle tanks (MBTs) 46–8, 53 manpower: arms race 115–16; comparison of DPRK and ROK 24, 63, 97–8; DPRK 39, 86, 87, 145–6; expansion during Korean War 65–6; expansion of ROK during 1980s 84; personnel expenses 57, 103–4, 108, 109; postwar buildups 67–8, 69; reduction in ROK 148–9; relative expense index 135–7 Marxism 13, 15; anarchist critique 13; Weber on 13, 14 material product system (MPS) 121 material resources 42–3; see also equipment Mearscheimer, J. 50 Meinecke, F. 19–20 Meisel, J.H. 27 militarism 27, 29, 32, 35 military aid 117; China’s to DPRK 69–70, 80, 93, 98, 113, 117; and defence burden 132–4; exclusion from defence budget 99–101; maximisation policy 150–1; Soviet Union’s to DPRK 69–70, 81, 85, 86, 98, 113, 117; US’s to ROK 23, 55, 67–9, 70–1, 79–80, 94, 113, 117, 134, 147, 159–60, 169–70 military balance 9–10, 90–117; dynamics 104–15; external factors 115–17

military capabilities 9, 38–61, 75, 163; bean counts and other numbers 43–51; data and measurement 57–61; defence expenditure 51–7; definition 41–2; investment 52, 56–7, 91–2; O&M plus investment 97–8, 104–15; organisational effectiveness 42–3, 48–51, 56–7; understanding 39–43 military capital stock 17, 55–6, 162; comparing 104–15; ROK 171 military-industrial complex (MIC) 2, 4–5, 26–7, 118, 151–2, 164 military Keynesianism 4–5, 27–8, 152, 163–4 Mitchell, T. 29–30 Moore, B. 32 Morgenthau, H.J. 15, 20 multicollinearity 17 national interest 5–6, 19–21 national power 20 national security 1, 12, 165 National Unification Board (NUB) 58, 61, 120, 128–9 net indirect tax 122 New Right 29 Nincic, M. 27 Nixon, R. 79, 81 Nixon Doctrine 79 non-productive services 121–2 North Korea see Democratic People’s Republic of Korea North Korean Interim People’s Committee (NKIPC) 63 North-South (Korean) Coordination Committee 81 NSPA 58, 61, 101–3 nuclear weapons 88–9 Oh Jin-Woo 23, 142, 144 operation and maintenance (O&M) 57, 103–4; plus investment 97–8, 104–15 OPLAN 5027 89 Organski, A.F.K. 24, 25, 43 Pak Hon-Young 142 Park Chung Hee 28, 75, 81, 148, 151; assassination 82, 156; coup 149; economic development 150, 155; and the US 78, 79–80; Vietnam War 150; Yushin regime 155–6 Park, Tong Whan 4, 22 partisan generals 142, 144

242 Index ‘people’s war’ 74 per capita GNP 128–9, 130, 131 pluralism 5–6, 14, 15 plutonium reprocessing plant 88 policy implications 165–6 political cost approach 32 political system 25, 29 population: DPRK 126, 127; ROK 168 Posen, B. 50 price superiority of military goods 99–101 private savings 155–6, 157, 159, 164–5 procurement 103–4 profit 7–8, 31, 164–5; see also private savings public sector 25 Pueblo, USS 78 purchasing power parity (PPP) 101, 122–6, 127 raison d’état 13–16; poverty of doctrine 16–23 Rand report 55–6, 103–4 rational actor model 15, 21 Reagan, R. 83, 92 realism 5–6, 14–16, 20 redistribution 33 reliability 38 Republic of Korea (ROK) 22–3, 162–6 passim, 168–71; Army (ROKA) 63–71, 75–6, 77; defence burden . 129–37, 153, 154, 159–60; defence expenditures 57–8, 61, 91–2, 94, 147–8; estimates of DPRK defence expenditures 2–3, 58, 92–8, 102; history of military buildups 9, 62–89 passim; industrialisation 124–5, 150, 151, 156; military capabilities compared with DPRK 39–57 passim; military stock compared with DPRK 104–15; Ministry of National Defence (MND) data 55–6, 58, 61; superiority in the 1980s 82–5 resources 10, 118–61; allocation 24, 26–8, 32–3; armament, state power and 6–8, 23–9, 164–5; defence burdens 129–37; estimating DPRK’s GNP 119–29; extraction see extraction of resources reunification 86, 166 Rhee, Sang-Woo 55 Rhee, Syngman 64, 67, 148, 149, 150 Richardson arms race model 5, 6, 16–23; see also arms race Ridgway, M. 65

rivalry model 16–17 Roh Tae-Woo 86, 158 Rosenau, J.N. 24 Russett, B.M. 12, 29 Saigon, fall of 156 SAMs 46, 47, 53–5 savings, private 155–6, 157, 159, 164–5 Schmitter, P. 28 Security Cadres Training Centres 63 self-reliant defence 71–4, 144, 163 Seoul 40, 89, 166 showpiece projects 146 siege mentality 86–9 SIPRI 58–9 Snyder, J. 27, 32 Snyder, R.C. 23–4 socialism 73–4, 137 socialist state(s) 25, 31, 33, 35 Sok San 142, 144 South Korean see Republic of Korea Soviet Union 88; collapse 86; Korean Air passenger airliner shot down 85; military aid to DPRK 69–70, 81, 85, 86, 98, 113, 117; military expenditure 2–3, 51–2; organisational efficiency of the military 49; price effectiveness of Soviet weapons 52–5; quality of Soviet weapons 46–8; relationship with DPRK 71, 72 special operations 76–9 state: and armament 8–9, 12–37; autonomy see autonomy of the state; concepts of 13–16; DPRK 137–46; hegemony 28–9, 32, 36, 164–5; raison d’état doctrine 16–23; relational conception 29–30; ROK 146–60 state capacity 16, 32; see also state power state-centred concept 13–16 state classes 35 state power 36, 160; armament, resources and 6–8, 23–9, 164–5; coercion 36; dimensions 29–32; distributive power 33; DPRK 139–46; hegemony 28–9, 32, 36, 164–5; ROK 152–60; structural power 33; systemic power 33 statism 13–16 Stilwell, General 81 stockpiling 47 submission model 16–17 surprise 50 system vs state 13–16

Index 243 Tasca, H. 68 taxation 7–8, 31, 164–5; net indirect tax 122; ROK 153–5, 159, 168; tax effort 25, 153–5; turnover tax 121, 137 Taylor, M. 68 terrain 41 terrorism 85 TGE/GNP ratio 95–7, 129 Tilly, C. 13, 14, 15, 25, 30, 31 total extractive capacity see extraction of resources training 49 transaction revenue 121, 137 Treitschke, H. von 20 turnover tax 121, 137 unconventional operations 76–9 unemployment 28 unit cohesion 48 United States (US) 29, 33, 91–2, 157, 166; ACDA see ACDA; ‘Agreed Framework’ with DPRK 88; CIA 18, 51–2, 119, 128; DIA 52, 82; and DPRK nuclear option 88–9; estimates of DPRK defence expenditure 2, 3, 92, 101, 102; expansion of ROKA in Korean War 65, 67; Foreign Assistance Act 70–1; Foreign Military Sales (FMS) 55, 80, 84, 147; industries and arms buildups 151–2; KPA unconventional operations and 76–9; military aid to ROK 23, 55, 67–9, 70–1, 79–80, 94, 113, 117, 134, 147, 159–60, 169–70; reassessment of Korean military balance (1979) 81–2; Nixon Doctrine 79–80; organisational efficiency 49; price effectiveness of weapons 53–5; quality of weapons

45–8; reduction of ROKA 70–1; and ROK superiority in 1980s 82–5; show of force 81; and Soviet military expenditure 3, 51–2; troop withdrawals 6, 39–40, 80; USFK stock 55–6; Vietnam War 75–6, 150 utility 38 validity 38 Van Fleet, General 65 Vance, C. 78 Vietnam War 71, 73, 75–6, 80, 150 Wallerstein, I. 15 Waltz, K.N. 15 war game 50 weapons, quality of 45–8; see also equipment Weapons Effectiveness Index (WEI) 44, 48 Weber, M. 13, 14 Weighted Unit Value (WUV) 44 West Sea Lock-Gate 146 Wildavsky, A. 21 Wiles, P.J.D. 121 WMEAT 59, 60 Wolfe, A. 29 won, exchange rate of 101, 122–6, 127 Workers-Farmers Red Guards 70 working soldiers 137–46 ‘world system’ approach 15–16 Yanan faction 70, 142 Yeon, Ha-Chung 120 Yi Yi 147 Yoo Sung-Ryol 64 Yushin regime 155–6