Ten years ago, this newspaper — marking half a century since the Korean War began — profiled Seoul’s then-ambassador in Washington, Yang Sung-chul. It was a time of great optimism on the Korean Peninsula.

PHOTO: USIA / U.S. DEPARTMENT OF DEFENSE

North Korea’s dictator, Kim Jong Il, described by U.N. forces withdraw from Pyongyang and cross the 38th parallel, which, after the surrender of Japan in 1945, was established as the boundary between the two Koreas by American administrators. Five years later on June 25, 1950, North Korean forces crossed the parallel and invaded South Korea, sparking the Korean War.

With the presidents of North and South Korea cheerfully toasting each other in Pyongyang, and emotional family reunions and joint-venture border factories dominating the news, it was only fitting that our cover headline read “Melting 50 Years of Ice.”

A decade later, on the 60th anniversary of the Korean War this month, not only has the ice not melted, but North-South relations appear to have gone into a deep freeze.

What eventually happens in North Korea — considered the most closed society on Earth — has major consequences for its immediate neighbors in Asia, as well as the United States. One of only a handful of communist countries left in the world, North Korea has the planet’s worst human rights record, is actively pursuing a nuclear weapons program, and has just been accused of the worst military provocation against Seoul since the Korean War.

Oh, and its “dear leader” isn’t getting any younger.

North Korea’s dictator, Kim Jong Il, described by the Associated Press as “shriveled and worn” during a rare visit to China in early May, has clearly had serious health problems in recent years. Widely believed to have suffered a stroke in 2008, he’s also reportedly undergoing kidney dialysis every two weeks as a result of years of heavy drinking, according to South Korean experts — all of which fuels ever-present rumors of whom Kim is grooming to take his spot.

Meanwhile, the six-nation talks over the North’s nuclear program are barely breathing, with Pyongyang boycotting negotiations until it gets a peace treaty with the United States to formally end the 1950-53 Korean War — the latest in a litany of demands that have thwarted any diplomatic movement on the issue.

Kim also rules a country in desperate economic straits. Late last year, his communist regime attempted a “currency reform” that destabilized food markets and wiped out the savings of millions of ordinary North Koreans. The currency revaluation was so badly bungled that authorities in Pyongyang were forced, for the first time in the regime’s history, to apologize to the public in the face of widespread criticism and resistance.

And in the latest high-stakes drama, the South Korean Navy vessel Cheonan sank in the Yellow Sea in March just south of the disputed maritime border between the two Koreas, after an explosion in the ship’s stern ripped it in half, killing 46 sailors. South Korean investigators have publicly accused Pyongyang of torpedoing its warship, marking the bloodiest confrontation since the bombing of a South Korean airliner in 1987.

In fact, 60 years after the Korean War, the two sides remain as far apart as ever — and nobody’s talking about any rapprochement now. But most people aren’t talking about resuming a war either — since neither country, nor the world for that matter, has any appetite for an all-out fight that would destabilize the region.

“The word’s out — even in North Korea — that they did it,” said Bruce E. Bechtol Jr., a military expert with the U.S. Marine Corps Command and Staff College, about the Cheonan sinking. “But for South Korea to respond militarily would look mean-spirited. The prudent act they’ll take is through the [United Nations] Security Council, and perhaps some very stringent economic conditions.”

And that’s exactly the approach South Korea is taking. President Lee Myung-bak has announced that Seoul would sever all trade and most investment in the totalitarian country, shut down its sea lanes for North Korean merchant ships, and resume “psychological warfare” propaganda broadcasts at the border after a six-year hiatus. South Korea and the United States are also planning joint naval exercises off the Korean Peninsula in a show of strength and to reestablish Seoul’s conventional military deterrence on the peninsula by taking the strongest measures it can, short of military action.

“Fellow citizens, we have always tolerated North Korea’s brutality, time and again. We did so because we have always had a genuine longing for peace on the Korean Peninsula,” Lee said. “But now things are different. North Korea will pay a price corresponding to its provocative acts.”

In addition, South Korea will now try to muster international support at the U.N. Security Council to punish the North.

Although the United States strongly backs Seoul in its efforts, with Secretary of State Hillary Clinton saying that the North’s “belligerence” cannot go “unanswered by the international community,” it remains to be seen if China — the North’s lifeline — will agree to harsh economic retribution or take a more cautious approach.

In addition to seeking U.N. economic sanctions, Seoul has a few other unilateral economic penalties at its disposal. “There’s nothing that says South Korea has to continue maintaining the Kaesong industrial complex,” Bechtol pointed out. “That makes a lot of money for the elite, and it would be a pinprick on South Korea — but would have a major effect on the North Koreans.”

But even closure of the joint industrial park is fraught with risk because it could strand 1,000 South Korean workers in the North Korean town. Indeed, most experts agree that the options are limited, both for Seoul and Washington.

Under Lee’s conservative administration, South Korea had already slashed most of the aid that was sent to the North under the “sunshine policy” of Lee’s liberal predecessors. As for Washington, an already-preoccupied White House has few good policy options in its arsenal. In the face of widespread criticism, the Bush administration removed North Korea from the State Department’s list of terrorist-supporting nations in an effort to lure it back to the negotiating table and renounce weapons of mass destruction. But the effort failed, and putting a country back on that list is much harder than taking it off because there has to be direct evidence that a government was involved in acts of terrorism.

The other problem, experts say, is that the Obama administration had hoped to engage China on a host of other pressing concerns, such as U.N. sanctions on Iran for its nuclear program and getting Beijing to consider a currency appreciation for its undervalued yuan. Now all those issues have taken a backseat to North Korea, overshadowing a wide-ranging visit to Beijing by a delegation of 200 American officials, led by Clinton, for the annual meeting of the U.S.-China Strategic and Economic Dialogue in late May.

“Such a move comes at a delicate time as the Obama administration’s many months of efforts to get China and Russia on board for another round of sanctions against Iran are starting to pay off,” said John Park, director of the Korea Working Group at the U.S. Institute of Peace (USIP).

Park added though that the administration has no choice but to craft a strong response so that the North doesn’t take the lack of international action as an invitation for further aggression.

“While few observers take North Korea’s threat of an all-out war seriously, many experts are concerned that the sinking of the Cheonan may be indicative of a North Korea that is emboldened by its perception of itself as a nuclear power that can now carry out limited strikes without fear of large-scale retaliation,” he said. “Should North Korea conduct another attack, the international community’s view of it may decisively shift from a weak state with chronic food shortages and a decrepit economy to a clear and present danger to peace and security.”

That puts the United States in a quandary. “[Its response] has to be strong enough to deter but not too strong to start a war,” Victor Cha, a former Bush administration official now at Georgetown University, told the Washington Post. “It has to be just right.”

“I don’t think the Obama administration wants a war in Korea on its hands. They don’t want tensions to get worse, so they’re discouraging South Korea from overreacting,” Selig Harrison, director of the Asia program at the Center for International Policy, told The Washington Diplomat.

The United States is also hamstrung by the recognition that North Korea poses a tremendous regional threat because of its nuclear program, and the six-party talks, however faltering, may be the only way to curb that threat. But many analysts say the Cheonan incident has torpedoed hopes to salvage the moribund nuclear talks, although Harrison — a noted North Korea expert who’s been to the hermit nation 11 times — says the fundamental stumbling block is that the United States never adjusted to changes in Pyongyang’s policy toward the negotiations.

“We used to negotiate on the basis that we expected concessions on the nuclear issue before we’d agree to normalized relations,” he said. “Now they’re no longer prepared to do that. They say they want normalization first” — a condition that’s next to impossible in light of this latest confrontation.

In the meantime, Harrison warned, North Korea isn’t as stable as it used to be “because of the currency revaluation which was very poorly handled, and which affected about 30,000 people in the elite who had been permitted to have economic freedom. This is a very clumsy effort by the hardliners in North Korea to stop economic liberalization.” Kim Kwang-Jin, a former North Korean official who defected to the South several years ago, is today a visiting fellow with the Washington-based Committee for Human Rights in North Korea. A former top official at the Northeast Asia Bank and Korea National Insurance Corp. — both controlled by the regime — he’s believed to be the first English-proficient defector ever to escape from North Korea.

He agrees that the regime’s attempts at currency reform had disastrous results for the vast majority of North Korea’s 24 million inhabitants. “The government literally confiscated all the cash from the people and changed the exchange rate from 100 old North Korean won to one new won. That means they left only 1 percent of cash in circulation. Their idea was to revive the centrally planned economy again, but it resulted in failure and hyperinflation. Prices shot up, markets closed down, and the use of foreign currency was banned.”

PHOTO: F. KAZUKAITIS / U.S. NAVY

U.S. Col. James Murray Jr. and Col. Chang Chun San of the North Korean Communist Army initial maps showing the north and south boundaries of the demarcation zone during ceasefire talks in 1951. Despite the signing of an armistice in 1953, the two Koreas technically remain at war since no peace treaty has ever been signed.

Kim adds that widespread famine and starvation — which claimed an estimated 3 million lives in the 1990s — are unlikely to return to North Korea. “The reason is that the people have already gone through 15 years of surviving and relying on private transactions and trading,” he said. “In the 1990s, a lot of people died because they couldn’t adjust themselves to the market and were not bold enough to jump into private transactions.”

Both Kim and military expert Bechtol spoke at an April 28 seminar in Washington — titled “Hope for the North Korean People?” — sponsored by the American Enterprise Institute.

Kim, who handled accounts worth hundreds of millions of dollars for the North Korean regime, defected in 2003 via Singapore with his wife and son. He explained that North Korea actually has two economies, a “people’s economy run by the Cabinet and organized by the National Planning Commission, and another economy created by Kim Jong Il, under his control, focused on foreign trade and raising slush funds for himself.”

He says this so-called “royal economy” handles more than 200 times as much foreign currency as does the people’s economy. That’s why, he asserts, “U.S. sanctions targeting North Korea would be very effective. It would directly hurt Kim Jong Il’s regime, rather than the North Korean people, as long as financial sanctions and international efforts are focused on stopping insurance scams, counterfeiting, and the sale of weapons of mass destruction and military technology.”

Yet the United States, along with other nations such as Japan, have already had stringent sanctions in place for years. Meanwhile, the United Nations has been steadily ratcheting up penalties as well, and now South Korea has completely choked off assistance and trade to the impoverished North.

To that end, many experts say the key to pressuring Pyongyang lies in implementing existing sanctions and stepping up enforcement to intercept North Korean arms shipments and stem the flow of illicit funds that keep Kim’s government alive — a tactic that has yielded some success recently on the high seas.

Harrison though argues that sanctions have also had the unintended effect of bolstering China’s regional influence — while diminishing that of the West. “Lee Myung-bak’s policies, in short, reinforced by those of the United States, are driving the North into the arms of China and steadily strengthening Beijing’s strategic posture in Northeast Asia at the expense of long-term U.S. and South Korean interests,” he recently wrote.

By the same token though, that reliance has put China in a difficult spot now as it navigates a response to the Cheonan uproar. “China has always tried to avoid making choices between North and South Korea, but an incident like this doesn’t allow that,” said Cha of Georgetown University.

Clinton — noting that Beijing supported additional sanctions against North Korea after it tested a nuclear device last year — says the “Chinese recognize the gravity of the situation we face.”

But China also recognizes the inherent danger posed by the collapse of Kim’s regime, fearing a flood of refugees pouring in across its border and fomenting an instability that Beijing hopes to avoid at all costs.

For this reason, Scott Snyder, adjunct senior fellow for Korea studies at the Council on Foreign Relations, predicts the Chinese will be wary of fueling tensions with a strong U.N. reaction, citing the argument that an international condemnation could lead to “all-out war.”

“North Korea is still smarting from the Council Presidential Statement in April 2008 condemning its missile launch. China well knows that the immediate response to last year’s U.N. condemnation of North Korea was additional escalation, including a second North Korean nuclear test,” he said. “The United States and South Korea together must make the case to China that North Korea’s actions are detrimental to China’s own interests in regional stability. The Security Council debate will test China’s willingness to give North Korea carte blanche to pursue low-level provocations with impunity.”

“Of all the countries and players involved in the post-Cheonan investigation phase, China will likely face the biggest challenge as it seeks to maintain its balanced approach to the Korean Peninsula,” added Park of USIP. “China’s recent efforts to bring North Korea back to the six-party talks as a primary means to realize this Peninsula policy have been derailed by the Cheonan incident. It’s doubtful that China will be able to maintain a balanced approach to the Peninsula as South Korea pushes for measures that will condemn and punish North Korea for this attack. Calling for ‘calm and restraint,’ China appears to be seeking to buy time for cooler heads to prevail.”

In the meantime, what are the chances that the long-oppressed North Korean people will themselves revolt? On that front, Bechtol said that in addition to the South deciding to blare propaganda broadcasts over the border, he’s seen two interesting developments in the last 18 months that may help weaken Kim’s grip on power by using another potent weapon: information.

“Pamphlets are now being sent by cylinder-like balloons over the DMZ [demilitarized zone]. The balloons cross the border, pop, and pamphlets fall out. These pamphlets describe things such as Kim Jong Il’s health and the state of the economy, things for the North Korean audience that they may not already know. North Korea’s reaction to this in the past 18 months has been to crack down severely on those who get caught even reading these pamphlets. The punishment is immediate ‘re-education’ or going to a prison camp. If you are a one-man dictatorship, information is one of the most important things you have to control,” said Bechtol.

“Another thing that’s changed radically is cell phones,” he continued. “These cell phones have exploded in proliferation in the last 18 months, and is causing the government real problems. In fact, the first news about the disastrous currency reform came from a cell phone call from North Korea to a reporter in China — before the South Koreans even heard about it.”

Bechtol’s discussion at the American Enterprise Institute was followed by a 12-minute video prepared by the International Center on Nonviolent Conflict that examined civil resistance movements in such places as Chile, South Africa, Ukraine and Serbia — and made the interesting point that civil resistance is more than twice as likely to succeed as attempts at violent insurrection.

Yet the idea that some kind of civil uprising could take root in North Korea is seen by many observers as farfetched. Likewise, even if Kim Jong Il were to give up power or die, there’s no guarantee the system would collapse. In 2008, Cuba’s absolute ruler, Fidel Castro, turned the presidency over to his younger brother Ra?l after 49 years in power — and Cuba’s communist dictatorship remains as entrenched as ever.

The Center for International Policy’s Harrison told The Diplomat that predictions of North Korea’s demise in the event of Kim’s death are off base.

“The general impression that Kim Jong Il is an all-powerful dictator is incorrect,” argues the scholar and former Washington Post reporter, who began traveling to Pyongyang in 1972 and whose most recent visit was in January 2009. “The death of his father, Kim Il Sung, led to a basic change in the setup there, in which you don’t have one-man rule anymore, but instead a National Defense Commission. They need him as a link to the father’s memory, and he needs them, because he’s not charismatic like his father.”

Harrison added: “I don’t think that his death — which by the way doesn’t seem to be imminent at all — would change much. The armed forces would still be in charge, though maybe one of his sons might be a ceremonial figure.”

It’s understood that the leader’s third son, Kim Jong Un, has been chosen to carry on the dynasty. Paul B. Stares, a senior fellow at the Council on Foreign Relations and author of a recent report titled “Preparing for Sudden Change in North Korea,” predicts the transfer of power in Pyongyang will be “more or less seamless” and discounts the probability of either a power struggle or a failed succession that leads to North Korea’s demise in the near term.

“While we should not rule out other scenarios, there is growing evidence that a managed succession is under way in Pyongyang,” said Stares. “The succession process could still play out over many years, however, with much depending on the health of Kim Jong Il. There also is no guarantee that the chosen successor will actually become the supreme leader or last for very long.”

But as the Stares report points out, “All of this puts a premium on close attention to and knowledge of developments in North Korea. Unfortunately, Kim Jong Il’s government is perhaps the world’s most difficult to read or even see.”

About the Author

Larry Luxner is news editor of The Washington Diplomat. Anna Gawel is managing editor of The Washington Diplomat.