Report on the Workshop on Scenarios for the Future of US-North Korean Relations

Scenarios for the Future of US-North Korean Relations
Engagement, Containment, or Rollback?

This report is based on two workshops held at the Nautilus Institute over three days in May and June, 2002. These workshops brought together a group of experts to explore the uncertainties that North Korea faces and to begin a dialogue about effective strategies for United States engagement with North Korea.

The future of North Korea is particularly uncertain today given the following key issues:

· Shortly after the September 11 attack on the United States, US President George W. Bush labeled the nation as part of the “axis of evil.” North Korea remains on the State Department list as a sponsor of terrorism.

· Increasing skepticism among US officials that North Korea will fulfill its obligations under the Agreed Framework led President Bush to refuse to certify that North Korea is under compliance of the agreement.

· Relations between North and South Korea remain on-again, off-again. The recent naval clash in the Yellow Sea threatened to derail efforts at engagement, but following North Korea’s expression of regret, talks are set to resume on family reunions and economic cooperation.

· A planned visit to Pyongyang by US Assistant Secretary of State James Kelly was canceled after the naval clash, but has now been revived following a meeting between US Secretary of State Colin Powell and DPRK Foreign Minister Paek Nam Sun at the ASEAN Regional Forum. The date and agenda have not been set, however.

· NK-Japan Red Cross talks resulted in an agreement by North Korea to “investigate” the status of Japanese that were allegedly abducted by NK agents. North Korea also agreed to expel four Japanese Red Army members who hijacked a plane to North Korea in the 1970s. Public opinion in Japan remains hostile to North Korea, however, especially following the sinking of a suspected NK spy ship.

At the same time, the future of North Korea is becoming increasingly important to the United States and other powers, not only because North Korea remains an impoverished nation, badly in need of humanitarian aid, but also for the following key reasons:

· US relations with North Korea are intimately tied with US relations with China, which are critical for global security.

· The US-DPRK Agreed Framework has global security and environmental implications throughout Asia and the rest of the world, as its failure could promote transfer of weapons of mass destruction to other nations or terrorist groups.

· It is highly unlikely that there will be peaceful unification on the Korea Peninsula without dramatic intervention by global players.

The Nautilus Institute has pursued cooperative engagement as an approach to addressing concerns in North Korea. It has supported several energy-related projects that provide assistance, knowledge, and hope for the nation – in an effort to raise the standard of living and encourage transparency and openness. As a part of the scenario process, we will explore whether a cooperative engagement approach will remain robust given multiple uncertainties.

Working with a group of experts on North Korea, we designed four scenarios that highlight the key questions about the future of North Korea. These are meant to assist us in thinking about possibilities for the future, rather than to predict precisely what will happen.

Gridlock is a dangerous world--a tension-filled nuclear powderkeg. The world moves toward a renewed Cold War situation as great powers eye each other warily and smaller countries seek shelter in alliances and weapons of mass destruction. As US–North Korean relations crumble in this scenario, North Korea grows closer to China while the US-South Korean alliance is strengthened. To enhance the US position in Asia even more, the United States and Japanese militaries become more aligned to the point that the United States shares nuclear forces with Japan. These relationships set off a domino affect of nuclear proliferation in the region. At the same time, North Korea's control of its population slips as thousands of satellite phones enter the country, giving locals the ability to communicate with the outside world. By most accounts, North Korea is on the brink of a massive bust, bringing forth the specter of a failed state with nuclear weapons

A new leader emerges in North Korea. In this scenario, the global war on terrorism escalates to such a point that the United States pulls some of its troops from South Korea, leaving South Korea more vulnerable. The long-predicted Japanese financial collapse causes havoc in Asian and global markets, and nearly shuts off trade between the United States and Asia. South Korea is hit hard, as its GNP, which was formerly highly dependent on Japan, plummets virtually overnight. In an effort to restore its economy, support its manufacturing base, and open to the Asian continent, South Korea invests in large-scale infrastructure projects in North Korea. This opens the door for improved relations on the peninsula in the long-term, and to a South Korean tilt toward China as its alliance with the United States falls apart. North Korea endures.

This scenario begins with Bush declaring the Agreed Framework to be breached and gaining support to cut-off food supplies in North Korea. With a Democratic Congress and a second-term Republican President in the United States, US foreign policy has taken a turn toward greater multilateralism and a more cooperative attitude toward China. As the scenario progresses, North Korea implodes in rebellion and even more devastating famine, eventually bringing Chinese-led peacekeeping troops to the country. The boundaries between North and South Korea crumble, and reunified Korea is rebuilt with economic aid from the United States and other countries. Indeed, this is a scenario of destruction and revival, where far-sighted leaders work together to build a peaceful new peninsula out of the ashes of a collapsed North Korean regime.

The title of mujige (Korean for "rainbow") was chosen because of the symbolic meaning of rainbows in both Western and Eastern culture. In the West, rainbows symbolize hope and redemption. In the East, rainbows are seen as bridges, and are a sign of friendship. This scenario is one of redemption and reconciliation between long-time enemies. The scenario begins with strained relations between North Korea and the United States causing a collapse of the Agreed Framework. Diplomatic talks between the two nations, though, lead the US to support economic reform and diplomatic normalization in exchange for verification of past nuclear activity. As the United States supports World Bank loans to North Korea, China and Japan facilitate discussions between North and South Korea and the development of Special Economic Zones throughout North Korea. With cheap labor from North Korea becoming increasingly attractive to South Korean businesses, the barriers between the two Koreas starts to fall. As the North Korean people are touched by economic opportunities, new challenges emerge with petty crime, counterfiting, and labor issues mounting in this newly developing economy.

We then used these scenarios to wind-tunnel three possible approaches for US policy toward North Korea--rollback, militant containment, and cooperative engagement. Each of these postures is a hybrid which contains all three policies, but only one is pre-eminent.

· In all four scenarios, rollback failed, as the United States could not afford the risks of escalation, particularly given the uncertainty of the Chinese response. In one scenario, Phoenix, the ends of rollback were achieved as North Korea collapses, although through a combination of containment of North Korea and engagement of China.

· Containment had mixed success, preventing war in two scenarios, while failing to do so in the other two.

· In all four scenarios, cooperative engagement plays a positive role in terms of non-proliferation and stability, or at least mitigates the negative aspects of the scenario. Moreover, in none of the scenarios did cooperative engagement result in greater vulnerability for the United States.

The results of this exercise therefore suggest the need for strengthened efforts at cooperative engagement in the Korean Peninsula. These efforts should be carried out with a combination of government, non-government, and corporate support, and will require the participation of individuals and institutions from the United States, South Korea, China, Japan, and elsewhere. The multi-layered, complex problems of North Korea can only be solved with creativity, patience, and perseverance.

The always on-again, off-again US engagement of North Korea [1] has been mostly “off” in recent months, particularly in the wake of the September 11 terrorist attacks. Although North Korea was not implicated in the attacks themselves, its listing by the State Department as a sponsor of terrorism and its reputation as a proliferator of weapons of mass destruction have left it on the wrong side of the Bush administration’s global war on terrorism, as President Bush signaled when he included North Korea as part of an “axis of evil” in his State of the Union address.

Current Situation regarding US - North Korea Relations

One of the key questions regarding the US-North Korea relationship is the future of the Agreed Framework, under which the Korean Peninsula Development Organization (KEDO) is building two 1-megawatt light water reactors (LWR) in North Korea. The LWR project has come under criticism since its inception as expensive, impractical, and a reward for bad behavior. Some critics have charged that, rather than putting an end to the North Korean nuclear program, the Agreed Framework will make it easier for North Korea to build nuclear weapons, by providing it with more plutonium and buying time for it to continue clandestine nuclear activities[2].

One of the provisions of the Agreed Framework states that after a significant portion of the LWR construction has been completed, but before the key nuclear components are delivered, North Korea must come into full compliance with IAEA safeguards, including giving a complete accounting of its past nuclear activities. Critics have argued that it would take three years for the IAEA to conduct a thorough forensic analysis of past North Korean nuclear activities, although cooperation from North Korea could shorten this time considerably. As the “significant portion” benchmark is currently scheduled for 2005, some observers believe that North Korea must allow the inspectors to begin their work within this year to keep the agreement on track. For this reason, the Bush Administration decided to not certify that North Korea is under compliance with the agreement, as required under an Act of Congress. They then exercised a provision in the Act allowing them to waive the certification on national security grounds, allowing the provision of heavy fuel oil to continue. One senior US official was quoted anonymously as warning that, should North Korea not allow the inspectors in by the end of the year, the US may consider the agreement to have been breached.

In April, South Korean President Kim Dae Jung sent his closest advisor, Lim Dong Won, to North Korea to try to break the deadlock. The results were positive, at least for the short run. North Korea agreed to hold another round of family reunions; to convene a meeting of the North-South Economic Cooperation Committee; to restart Red Cross talks with Japan on alleged kidnappings and food aid; and to allow US Special Envoy Jack Pritchard to visit Pyongyang. Whether this renewed dialogue will yield any concrete results remains to be seen, however. In particular, with new elections scheduled for December in South Korea, the future of South Korean engagement of North Korea is unclear. The impacts of the June 29th naval combat between the two Koreas will also damage the short term prospects for inter-Korean cooperation.

Nautilus Institute

Since 1993, the Nautilus Institute has been pursuing cooperative engagement projects with North Korea in an attempt to help lessen tensions on the Korean Peninsula and promote dialogue among the major players involved. These projects include:

· The Northeast Asian Peace and Security Network (NAPSNet) [http:www//nautilus.org/napsnet/dr/index.html], which provides daily news summaries and analysis of the major issues affecting peace in the region. NAPSNet is the only outside source of news accessible in Pyongyang.

· The US-North Korea Village Windpower Pilot Project [http:www//nautilus.org/dprkrenew/index.html], which constructed seven wind turbines and a water-lifting windmill in Unhari village on the North Korean west coast. This project has also brought three delegations of North Korean engineers to study tours of the US, and conducted the first rural household energy use survey in North Korea.

[http://www.nautilus.org/energy/eaef/futures.html], which brings together leading energy specialists from throughout Northeast Asia to analyze the current policies and possible future paths for energy policies of each individual country and the region as a whole.

[http://www.nautilus.org/energy/grid/gridindex.html], which is examining the potential for connecting the electric power grids of the countries in the region. Such a connection could provide a solution to the inability of the North Korean power grid to safely support operation of the two KEDO light-water reactors.

These projects have all been premised on the idea that cooperative engagement is a necessary basis for promoting peace and reconciliation on the Korean Peninsula. Events, however, could arguably move in a direction that render this approach ineffectual. Therefore, it is necessary to test, or "wind-tunnel," various strategies to see whether they remain viable despite the uncertainties of the future.

Scenarios Methodology

To test the viability of cooperative engagement strategies, the Nautilus Institute uses scenario methodology. Scenario planning is a non-predictive means of examining a variety of possible futures for the issues that one is interested in. Once a number of scenarios are developed, they are examined to determine which strategies are robust among all different futures. In this way, one can avoid being thrown off course by sudden, unanticipated shocks.

In order to examine whether a continued policy of NGO-level cooperative engagement with North Korea is viable, the Nautilus Institute convened a workshop on Future Scenarios for US-North Korea relations at the Institute’s offices in Berkeley on April 30 and May 1, 2002. The workshop examined the focal question “What will North Korea’s relations with the United States look like in 2012?” This was followed by a second workshop on June 24 to test strategies using these scenarios.

Experts from the San Francisco Bay Area and Washington DC alongside Nautilus staff members participated in this workshop. To ensure that a variety of perspectives were represented, participants were drawn from government, academia, research institutions, and the private sector. Some had long experience working on Korean issues. Others were relative newcomers to Korea. All offered great depth of insight in one or more areas that informed the richness of the two scenarios. The full list of participants is provided in Attachment 2. We thank them all for their dedication over the events. We also thank the HKH and Ford Foundations for their financial support for the use of scenarios methods to reduce global insecurity.

North Korea remains the "black hole" of Northeast Asia. Its continuing isolation, famine, and economic collapse not only constitute a humanitarian crisis, but act as a barrier to improving cooperation and engagement in Northeast Asia on a number of fronts--political, economic, military, security, and energy. The continued hostility and tension on the Korean Peninsula essentially render South Korea an island and perpetuate Cold War divisions that have all but dissipated in other parts of the world. If the key to security is not simply preventing war, but building peace, true peace in Northeast Asia will remain impossible unless and until the question of Korean division is addressed.

In this workshop, we focused on US-North Korea relations as the primary lever for change on the Korean Peninsula. The United States holds the key to North Korean engagement with the outside world. South Korea, Japan, China, international financial institutions, and the European Union all have important roles to play in promoting reconstruction and development in North Korea, but it is unlikely that any of these groups will bear the burden without US acquiescence or support. US troop presence and overall security strategy in the region are both affected by and determinant of the peace and security situation on the Korean Peninsula.

The scenarios offer several insights for promoting a peaceful resolution on the Korean Peninsula.

In all of the scenarios, the outcome of the Agreed Framework played a crucial role in determining how events unfolded. In one scenario, the successful implementation of the agreement paved the way for North Korean opening and cooperation. In others, the breakdown of the agreement led to conflict. This suggests that the Agreed Framework is a fragile policy instrument, but at the same time remains the primary underpinning of US engagement of North Korea. While it may need fixing or replacement with a more viable alternative, abandoning the Agreed Framework will make peaceful resolution impossible.

In all scenarios, the state of US relations with China was a key factor. When the US and China cooperate, the possibility for a peaceful solution increases. When the US and China are in conflict, peace on the Korean Peninsula becomes very difficult. This suggests that anyone interested in promoting peace on the Korean Peninsula should actively engage China whenever possible.

Only one of the scenarios resulted in Korean reunification within 10 years, and that took place only following the violent implosion of North Korea. This suggests that the policy of eschewing reunification issues while concentrating on reconciliation is robust. Cooperation with North Korea should be based on the assumption of the continued existence of North Korea for an indefinite period of time, and not be focused on the "endgame" of Korean reunification.

A scenario is a tool for ordering one's perceptions about alternative future environments in which today's decisions might play out. In practice, scenarios resemble a set of stories built around carefully constructed plots. Stories can express multiple perspectives on complex events and give multiple meaning to these events.

Good scenarios are plausible and surprising. Despite its story-like qualities, scenario planning follows systematic and recognizable phases. The process is highly interactive, intense, and imaginative. Scenarios are powerful planning tools precisely because the future is unpredictable. Unlike traditional forecasting or market research, scenarios present alternative images instead of extrapolating current trends from the present.

Successful scenarios begin and end with clarifying the decisions and actions the participants must make if they are to successfully deal with an uncertain future. One common misconception of scenarios is that they are prescient, path dependent predictions of the future. On the contrary, scenarios are used to order our thoughts amid uncertainty, build common ground among differing perspectives, and think rationally about our options - but they should never divert attention away from the decision itself.

Participants were broken into two teams and asked to develop a set of “critical uncertainties”—issues whose outcome is both undetermined and vital for the development of US-NK relations over the next ten years.

Two groups of participants began by creating a list of top 40-50 forces that they believe will influence the future of US-NK relations in 2012

. They were requested to consider specifically the role of the four great powers in the region; social, political, economic and military factors; and positive, negative, or simply neutral forces (the complete list generated is shown in Attachment 1). The groups were then asked to sort their driving forces into those forces that were predictable and those that were highly uncertain. The latter highly uncertain forces were then “voted” into the most potent categories. Facilitators then distilled this array into nine issues that were judged by the group as likely to generate the greatest uncertainty and drive events on the Peninsula. Table 1 presents this short list.

1. NK political, economic, social and cultural dimensions; food shortages; political transition.

2. NK military strategy.

3. NK-SK relationship.

4. Agreed Framework: nuclear weapons transparency issues, future of KEDO, LWR construction project etc.

5. Two US presidential elections.

6. Global war on terrorism.

7. Geopolitical developments affecting the Korean Peninsula.

8. US foreign policy.

To examine how these uncertainties might develop over the next ten years, two uncertainties were chosen and plotted on two axes to create four separate quadrants. One axis was whether relations between North and South Korea would move in the direction of cooperation and rapprochement or towards conflict. This axis explored various elements of the relationship between North and South Korea including political, military, and economic relations. The other was whether the international situation surrounding the Korean Peninsula will be one of cooperation or confrontation. This axis explored how various nations including the US, China, Japan, and others relate with each other, as they affect the Korean Peninsula. These two driving uncertainties became the ‘scaffolding’ around which the analysts worked in small groups to create four scenario stories [see Figure 1]:

Each story was framed by one of the four possible paired combinations of the two critical uncertainties. The group was then divided into four groups of four, with each group assigned to develop one scenario. Each group named their scenario and then prepared a succinct presentation showing how their scenario came about and sought to convince others that their imagined world is plausible, important, and internally consistent. They created 10 headlines that encapsulated the key events and decision points in each scenario narrative. They were asked to return to their scenarios to ensure that their narratives reflected the political, economic, social and strategic-security interests of each great power (including the European Union). Each group then attempted to incorporate answers to the following key questions in their scenario:

What are the biggest political, economic, social, and military challenges for the US government?

What are the biggest political, economic, social and military opportunities?

What is the state of Korean Re-unification?

What is the status of North Korea’s economic recovery?

What is the overall economic and security situation in Northeast Asia?

The result was four distinct scenarios that describe the full array of uncertainties that will affect the future evolution of US-NK relations.

Gridlock is a dangerous world--a tension-filled nuclear powderkeg. The world moves toward a renewed Cold War situation as great powers eye each other warily and smaller countries seek shelter in alliances and weapons of mass destruction. As US – NK relations crumble, North Korea grows closer to China while the US-SK alliance is strengthened. To enhance the US position in Asia even more, the United States and Japanese militaries become more aligned – which is how some people think Japan gained nuclear capacity. This sets off a domino affect of nuclear proliferation in the region. At the same time, NK control of its population is slipping as thousands of satellite phones enter the country, giving locals the ability to communicate with the outside world. By most accounts, North Korea is on the brink of a massive bust, bringing forth the specter of a failed state with nuclear weapons. The primary US strategy in this scenario is containment via nuclear deterrence.

The downward spiral begins in 2003, when Taiwan declares its independence, and the US 7^th fleet moves into the Straits to prevent a Chinese military response. Checked in its main arena of concern, an angry China decides to open a second front by encouraging a more belligerent stance by North Korea. With widespread fear of war gripping the American public, George W. Bush easily wins re-election in 2004 in a campaign that emphasizes hawkish views on foreign policy, carrying even such bastions of liberalism as Marin County. Bolstered by assurances of Chinese support, North Korea refuses to allow IAEA inspectors to examine its suspect facilities, and the United States declares in 2005 that the Agreed Framework is officially dead. North Korea immediately withdraws from the NPT, and the Conference on Disarmament dissolves amid angry shouting between the US and Chinese delegates.

Kim Jong Il promptly boards a train to Beijing for a “Friendship Summit” with Chinese President Jiang Zemin. Photographs of the two allies shaking hands in Tiananmen Square as they announce a renewed military alliance make the front page of newspapers worldwide. Washington begins to squeeze China in multilateral institutions, until Beijing finally walks out of the Doha round in 2006. "Buy American" and "Buy Chinese" signs sprout like crabgrass in the two countries as both sides impose high tariffs on each other's products. The following year, North Korea conducts a missile test that lands offshore of Kobe, leading to widespread panic and anti-Korean riots in Japan. Within months, the Japanese government carries out a nuclear test and declares itself a nuclear power. Europeans push for sanctions against Japan, but US refusal to go along causes a domino affect of withdrawals from the Non-Proliferation Treaty, culminating with US Secretary of State John Bolton's announcement that the treaty is "no longer relevant to the current situation." Summit diplomacy produces yet another shock, as Japanese Prime Minister Ichiro Ozawa stands proudly next to President Bush in the Rose Garden while they announce the integration of their nuclear forces.

Panicked at being left behind by its ally and threatened by its former overlord, South Korea in 2008 announces that it has produced a home-grown nuclear weapons capability. Donald Rumsfeld angrily denies rumors of US involvement in the SK nuclear program, but welcomes SK forces into the US nuclear alliance. New technology introduced by Exxon-Mobil in 2009 reveals an abundance of offshore oil reserves in the Pacific, leading to an orgy of land-grabbing as Japan seizes Sakhalin, China takes the Spratlys, and South Korea places a missile launcher on Tokdo. In 2010, an explosion rocks the Youngwong reactors in South Korea, leading to a deadly radioactive cloud covering large parts of Japan and sparking massive protests. In 2011, NK soldiers returning from joint military excises with China in Southeast Asia bring a rapidly spreading AIDS epidemic that North Korea's dilapidated health system is powerless to deal with, and the government’s control over the population diminishes like that of European principalities during the Great Plague. In 2012, SK newspapers report that North Koreans have gained access to thousands of smuggled satellite phone-linked tiny PDA’s and to the internet via cell phones that connect with network nodes in South Korea and China, which is posing a tremendous challenge for the secretive, nuclear-armed NK government. Many analysts fear that China will soon step in to either prop up the current NK regime or replace it with a more viable, Beijing-oriented group.

A new leader emerges in North Korea. The global war on terrorism has escalated to such a point that the United States has pulled some of its troops from South Korea, leaving South Korea more vulnerable than before. The long-predicted Japanese financial collapse causes havoc in Asian and global markets, and nearly shuts off trade between the United States and Asia. South Korea is hit hard, as its GNP, which was formerly highly dependent on Japan, plummets virtually overnight. In an effort to restore its economy, South Korea invests in large-scale infrastructure projects in North Korea, to support its manufacturing base and open to the Asian continent. This opens the door for improved relations on the peninsula in the long-term, and to a South Korean tilt toward China as its alliance with the United States falls apart. US strategy in this scenario contains elements of rollback, as the United States tries to back up its policy with force, usually with unwanted results.

The world is shocked in 2003 when a new "Great Leader III", a member of the Kim family, makes the dramatic announcement that Great Leader II, Kim Jong Il, was already dead. Rumors are that he expired in a train wreck on his way to Russia in 2001. Not wishing to suffer his predecessor's fate, GL3 promptly boards an Aeroflot flight to Moscow, returning with an agreement to export labor to the Russian Far East and exchange NK raw materials such as gold and magnesium for Russian oil. Seeing an opportunity, SK companies invest heavily in refurbishing NK mines and railways, reaping large profits as a result.

Hopes for renewed prosperity in Northeast Asia are dashed, however, when on January 2, 2004, the Japanese stock market reopens after the holiday only to suffer a crash of proportions that the world had not seen since 1929. By the time the New York Stock Exchange opens, chaos has already overtaken world markets. With the combination of global security threats related to the US war on terrorism and economic threats, there’s a massive closing-in, as the United States raises trade walls, greatly reducing trade between Asia and the United States. "Made in China" disappears from store shelves as US trade with China plunges. US Commerce Secretary Newt Gingrich tells the WTO that "the US will no longer tolerate dumping of cheap goods onto its markets by the Red Chinese." Unable to rely on the depressed Japanese market, SK money is poured into North Korea in an effort to seek economic gain and military security, and to pave the groundwork toward reunification. SK conglomerates focus on self-serving infrastructure projects such as building power plants to provide electricity to their industrial outlets.

In 2005, the United States expands the war on terrorism into central Asia, pushing more Islamic militants to take refuge in Western China. An unknown entity attacks the natural gas pipeline between Russia and China--China places the blame squarely on Washington. SK banks, which had invested heavily in the pipeline, take the hardest hit, and labor unions take to the streets as GNP drops 20% in South Korea.

In 2006, a chemical-biological cocktail is delivered to Yongsan base in Seoul via an aircraft hijacked from Beijing International Airport. 100,000 Koreans and 2,000 GI’s are killed, and the US denounces the lack of security in the Beijing airport. SK GNP drops another 20%, unemployment rises 40%, and crime and violence rule the streets of Seoul. The US blames the attack on North Korea and tries to impose sanctions in the UN Security Council, but China vetoes the proposals. In retaliation, the US seizes an NK merchant export ship, accusing it of transporting WMD materials. An NK Foreign Ministry spokesman denounces the move as "a reckless attempt by the US imperialists to stifle our nation," and calls off scheduled IAEA inspections. IAEA Director Hans Blix issues a warning that North Korea cannot be considered a member in good standing of the NPT. President Bush invites Taiwan President Chen to Washington, where the two sign an agreement to extend Theatre Missile Defense to Taiwan. The New York Times describes China's missile buildup in Fujian Province as "ominous."

Declaring an impasse on the nuclear issue in 2008, the US bombs the KEDO LWRs and NK missile sites. An angry SK President Roh Moo-hyun denounces US "arrogance" and sends a crew of SK engineers to help repair the bombed reactor and connect it to the SK power grid over the DMZ. White House spokesman Ari Fleischer says that the US will "continue to honor its security commitment to South Korea," but most analysts agree that the relationship is in trouble. CNN in 2009 broadcasts scenes of SK students dancing in the streets at news of North Korea's successful missile test over Japan. In 2010, amid a deepening world recession, a radical Islamic junta takes power in Jakarta as Indonesian government forces are routed by separatists in Aceh, Irian Jaya, Bali, and other provinces. The junta begins to arm a group of Islamic pirates--dubbed by George Will the "neo-Barbaryans" to link them with the 19th century Islamic pirates of the Barbary Coast--who shut down the Malacca Straits, putting Japan's energy supply in a virtual straitjacket. The Jakarta junta begins running guns to Muslim guerrillas in the Southern Philippines. Helpless to crush the rebellion, President Arroyo turns to the US for help, and Secretary of Defense Donald Rumsfeld announces that the US will redeploy the 2^nd Infantry Division from SK. With the US having now alienated its last supporter in South Korea, the military, President Roh announces the cancellation of the F-X fighter project, prompting laid off Boeing workers to vandalize Korean grocery stores throughout Washington State. Roh announces that all remaining US troops should leave the country within three months, and that he was nationalizing US military property in South Korea; Washington recalls its Ambassador from Seoul in protest. With the Taiwanese economy already reeling under the weight of years of pressure, China begins to enforce a "no-go zone" in the Taiwan Straits, cutting off any shipping to the island. The "Arirang Spirit" joint N-S military exercises in 2011 spawn anti-Korean riots throughout Japan. In response, the two Koreas begin seizing Japanese fishing vessels in the East Sea, while students in Seoul and Pyongyang burn maps that contain the words "Sea of Japan." After a joint N-S naval patrol sinks a Japanese Marine Self-Defense Forces patrol vessel, oil tanker sea-lanes in the Tsushima Straits are shut down. A Chinese Foreign Ministry spokesman denounces US 7^th fleet maneuvers off Taiwan as "blatant interference with China's internal affairs," to which the US retorts, "We are simply protecting a sovereign, democratic nation against the aggressive designs of a Communist dictatorship." In 2012, a US Congressional investigation reveals that the ICBM tested a few months earlier by South Korea was developed using blueprints that the US sold to South Korea in 1975 and jet engine technology transferred by Lockheed Corporation in the same year. Given the growing military closeness between the two Koreas and China, fears of technology transfer are widespread.

This scenario begins with Bush declaring the Agreed Framework to be breached and gaining support to cut off food supplies to North Korea. With a Democratic Congress and a second-term Republican President in the United States, US foreign policy though, has taken a turn toward greater multilateralism and a more cooperative attitude toward China. As the scenario progresses, North Korea implodes in rebellion and even more devastating famine, eventually bringing Chinese-led peacekeeping troops to the country. The boundaries between North and South Korea crumble, and reunified Korea is rebuilt with economic aid from the United States and other countries. Indeed, this is a scenario of destruction and revival, where far-sighted statespersons work together to build a peaceful new peninsula out of the ashes of a collapsed North Korean regime. US policy in this scenario is one of containment, but in a multilateral context.

In this scenario, a shift in the US political landscape and Dick Cheney's health problems lead George W. Bush to name Colin Powell as his running mate in the 2004 election. When the results of this election return a Democratic Congress and a second-term Republican President, US foreign policy takes a turn toward greater multilateralism and a more cooperative attitude toward China, supported by corporate interests who donated large sums to both Democratic and Republican campaigns.

Despite this growing Sino-American rapprochement, hardliners in the North Korean military refuse to allow IAEA inspectors to examine suspect activity in North Korea. This escalates conflict between the United States and North Korea, leading President Bush to declare that the Agreed Framework has been officially breached and that "all options are being considered in response." Hoping to avoid a conflagration, Chinese President Hu Jintao makes an emergency trip to Washington and prevails on Bush to refrain from military action. As part of the deal, Hu agrees that China will not veto sanctions on North Korea introduced in the UN Security Council and will step up efforts to halt NK missile exports. In 2007, reports of food aid diversion from the people of North Korea to the military lead to a suspension of all food aid to North Korea. This isolates North Korea even more, with its Ambassador to the UN Li Gun angrily denouncing the UN as a "sycophantic tool of the American imperialists" and withdrawing the delegation.

With tensions in the Middle East greatly reduced following a 2008 pact establishing Palestinian statehood and providing Israel with security guarantees, NK missile sales are affectively ended, causing a sharp fall in North Korea’s primary source of foreign currency earnings. Reports filter out of the country of mass starvation even among the army in North Korea. In January 2009, NK refugees in China report rumors of the death of Kim Jong Il, which are finally confirmed when his eldest son, Kim Jong Nam, appears on NK television to announce his elevation to leadership. He is never seen publicly again. SK media quote intelligence officials as saying that Kim has been killed and that competing army factions are fighting for control of the country.

Refugees talk of localized populist rebellions, with farmers joining soldiers to conduct raids on food distribution centers. By August, with the refugee problem threatening to explode, China imposes martial law in Yanbian and arrests several SK missionaries, accusing them of being SK intelligent agents and of running guns into North Korea. As pressure grows in South Korea and within the US Congress for intervention in this increasingly desperate country, the United States and China hold a summit in January, 2010 and agree to take the matter to the UN Security Council. The UNSC authorizes the dispatch of an international peacekeeping force, led by China but also including Swedish, Irish, Malaysian, and Cambodian troops, to establish UNIANK, the United Nations Interim Administration for North Korea. While a few hard-line elements of the NK military take to the mountains in an attempt to carry out a guerilla resistance, most gladly lay down their arms and take up the proffered alms. Some North Koreans head toward the DMZ, begging for food from SK soldiers, who oblige as best they can. SK civilian groups come to the front to provide aid and succor, followed quickly by people seeking long-lost relatives. With all the activity and exchange on the DMZ, pretty soon it is impossible to separate the Northerners from the Southerners, and what's more, no one is trying.

A small group of NK elites who had been hiding among the crowds of food seekers now reveal themselves and call for an "all-Korean unity meeting" at Kaesong. After just three days, they emerge and announce the establishment of the new unified Korea with the capital at Kaesong, and call for international aid for the rehabilitation of the northern part of the country. In 2011, the International Conference on Korea is held in Tokyo, at which the US, China, Japan, Russia, and the EU agree to recognize the new Korean government and pledge US$20 billion in aid for Korean reconstruction. Japan and the US agree to provide the bulk of the capital, while Russia and China agree to open their markets to facilitate the enterprise. In 2012, China and Korea sign a $3 billion hydropower contract, despite protests from Korean and international environmentalists.

The title of mujige (Korean for "rainbow") was chosen because of the symbolic meaning of rainbows in both Western and Eastern culture. In the West, rainbows symbolize hope and redemption. In the East, rainbows are seen as bridges, and are a sign of friendship. This scenario is one of redemption and reconciliation between long-time enemies. The scenario begins with strained relations between North Korea and the United States causing a collapse of the Agreed Framework. Diplomatic talks between the two nations, though, lead the US to support economic reform and diplomatic normalization in exchange for verification of past nuclear activity. As the United States supports World Bank loans to North Korea, China and Japan facilitate discussions between North and South Korea and the development of Special Economic Zones throughout North Korea. With cheap labor from North Korea becoming increasingly attractive to SK businesses, the border between the two Koreas starts to fall. As the NK people are touched by economic opportunities, new challenges emerge with petty crime, counter-fitting, and labor issues mounting in this newly developing economy. US policy in this scenario strongly favors engagement.

The scenario starts with a decline in US-NK relations, as the Bush Administration continues to demonstrate antipathy towards the Agreed Framework. Throughout the remainder of the administration, the United States and North Korea fail to make progress in their relations, with occasional moves toward dialogue inevitably derailed in a flurry of heated rhetoric and accusations. As the US economy continues to stall, President Bush loses his re-election bid in 2004. Shortly afterward, Bush announces that North Korea has failed to comply with the Agreed Framework and that all heavy oil shipments would henceforth cease. Calling the move "a blatant betrayal," North Korea announces that it was retracting its suspension of withdrawal from the NPT and would officially leave the pact on February 1, 2005.

As the time for his inauguration draws near, President-Elect John Kerry convenes a meeting of his senior advisors and some of the country's leading Korean experts. Fearful of a military crisis in the first month of his administration, Kerry announces at his inauguration that he is willing to talk with North Korea to solve the differences over the nuclear program. He swiftly dispatches former President Bill Clinton as a special envoy to Pyongyang. Clinton returns with an agreement that North Korea will turn over the necessary documents to verify its past nuclear activities to the IAEA, while the United States will remove North Korea from the list of states sponsoring terrorism and begin the process of diplomatic normalization.

With US support, North Korea negotiates loans from the World Bank, IMF, and ADB for the refurbishment of its infrastructure. China and Japan begin sending developmental aid delegations to North Korea. NK leader Kim Jong Il opens the new inter-Korean railroad tie by taking a train from Pyongyang to Seoul for a summit meeting with SK President Roh Moo-hyun. At the press conference afterwards, the two announce that they would fully implement their commitments under the 1992 Non-Aggression Agreement and the Non-Nuclear Declaration of the same year, with mutual inspections and other confidence-building measures to prevent cheating. They also announce the creation of a Special Economic Zone in Kaesong, with Roh predicting that the SEZ would do for inter-Korean relations what Shenzhen did for the relationship between Mainland China and Hong Kong. Kim also agrees to accept the "continued temporary" stay of US Forces in South Korea in exchange for negative security assurances from Washington. Most analysts feel that Kim's decision was based on a desire to counter possible pressure from Japan, Russia, or China.

With the DMZ finally beginning to live up to its name as "demilitarized," food and other goods begin flowing across the border into North Korea. The average North Korean finds his lot in life improving dramatically, but still greatly behind that of his southern brethren. The NK elite, meanwhile, is cashing in on the new arrangement, contracting with SK firms to provide cheap labor for manufacturing. Allegations of corruption are widespread, and some NK party leaders are already billionaires from selling real estate north of the DMZ and running globally integrated trading, investment and financing corporations. Guest worker programs are running at an all-time high with more than two million North Koreans entering South Korea. The SK government has imposed stringent controls on the labor movement, which tries to block wage cutbacks due to the supply of cheap northern labor. American firms are also under fire at home from human rights groups due to their sweatshop operations in North Korea in joint ventures with SK chaebol.

2.7 Implications

Having developed the scenarios, we then went back and looked at how the key questions identified in Table 2 would play out in each of them.

The challenges for the United States in gridlock are similar to those at the height of the Cold War. The United States must handle the crises that arise with states like China and North Korea because of the ever-present danger that any military clash could escalate to a nuclear war. Economically, the US is shut off from the China market and must carefully manage trade relations with its allies. The scenario allows for greater military integration among US allies in Northeast Asia, possibly opening the way for the development of a NATO-like security structure in the region involving South Korea, Japan, the Philippines, Australia, and others. At the same time, the proliferation of nuclear weapons balances the burden-sharing of defense costs among the allies, reducing the cost to Washington of maintaining these alliances. Korean reunification remains an elusive goal; the possibility that an NK collapse will lead to absorption by the South remains open, but China is unlikely to tolerate a pro-US Korean government on its border, and is thus likely to intervene. North Korea's economic situation has worsened even further and is in a critical state. The overall situation in Northeast Asia is one of competing trade and military blocs.

In GL3, the US is grappling with military overextension and the collapse of its traditional alliance with South Korea. It must deal with random, sudden cataclysmic events, a global war on terrorism, and the ever-present possibility that the ongoing struggle with China over Taiwan will escalate to full-scale war. Many of the constraints on US action vis-à-vis China and North Korea have been lifted, as Washington no longer has to consult with Seoul on policy toward North Korea or defer to China's position on Taiwan. The two Koreas are increasingly integrated militarily, but it is a rocky marriage of convenience as neither side is willing to give up its position or ideology for the sake of political reunion. North Korea is beginning to improve economically due to the influx of SK investment. Overall, the economy of Northeast Asia is depressed, although many nations are resorting to military Keynsianism to try to revitalize their economies. Military tension is high between Japan and the two Koreas and between the United States and China.

In Phoenix, the United States must overcome domestic political pressure for stronger action against North Korea and embrace unilateralist principles to make its containment policy work. It also must work closely with China to prevent events from spiraling out of control. The main opportunity for Washington is the chance to push events in a direction that fits US interests, and to achieve a reunified Korea that is friendly to the United States. Korea ends up reunified at the end of this scenario. North Korea's economy has completely collapsed, but by the end of the scenario the international community is pouring in money to rehabilitate the country. Overall, by the end of the scenario, tensions in the region are greatly reduced and the economy is growing as aid and investment pours into Korea and the region becomes increasingly integrated.

In Rainbow, the biggest challenge for the United States is building domestic political consensus around engagement. Economically, the US may end up bearing much of the costs of aiding DPRK development. The US has an excellent opportunity to reduce the threat from North Korea through peaceful means and to reduce tensions with China. Korea is not yet reunified, but reconciliation has made major strides in bridging the differences between the two halves of the peninsula. North Korea is beginning to recover economically through foreign aid and investment. The overall situation in Northeast Asia is one of political cooperation and economic growth.

Current Situation regarding US - North Korea Relations

Nautilus Institute

Scenarios Methodology

1. NORTH KOREA FUTURES—US POLICY CHOICES FOR THE NEXT DECADE

2. THE SCENARIOS

2.1 Critical Uncertainties

2.2 The Scenarios Matrix

2.7 Implications