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Prospects for International Relations in 2005
THE INSTITUTE OF FOREIGN AFFAIRS
AND NATIONAL SECURITY
ABSTRACT
Phasing Into US-Centered Global Order
Reelections and power transitions have reshaped domestic political
landscapes in key major powers such as the United States, China, Japan,
and the European Union (EU) over the past year. The respective
governments have strengthened or rebuilt their power bases as a result,
leading to stronger self-centered tendencies and growing demands for
higher economic benefits. In 2005, major powers will be locked in patently
contradictory relationships of cooperation and rivalry over key
international issues, ushering in an “adjustment phase” in which the post–
September 11 US-centered, unilateral global order takes on new
characteristics. Major powers will remain united in the US-led
international counterterrorism and counterproliferation campaign. However,
the Iranian nuclear program, the establishment of a democratic government
in Iraq, Middle East peace in a post-Arafat era, and economic and trade
issues will trigger more intense rivalry and friction among key players on
the global scene, for these are prime issues through which each country can
augment its influence and interests. The launch of a second-term Bush
administration will effect a “stylistic” change to the diplomatic tactics
employed during the first four years of Bush’s tenure: Washington will
now seek closer consultations with allies on key international issues.
At the regional level, 2005 will be a landmark year for the Middle East.
The outcome of the Iraqi general elections in January and the new
Palestinian leadership after Arafat’s death may bring cataclysmic
transformation to the region’s political terrain. A change in the Middle East order is likely to have far-reaching implications for the overall global order
and stability. To recapitulate, the Middle East stands at a crossroads
between finding a framework for a peace settlement and lapsing into a
vicious cycle of worsening conflict and terrorism, and the Iraqi general
elections in January and Arafat’s successor hold the key to the fate of the
region. Whatever the outcome, it will be felt immediately and deeply in
every part of the world.
Meanwhile, parties to the Nuclear Nonproliferation Treaty (NPT) will
gather for the seventh time in a quinquennial review conference in the first
half of 2005. Although the meeting will breathe new life into the
international discourse on nuclear nonproliferation, the protracted
difficulties of the Iranian and North Korean nuclear conundrums will place
more serious hurdles in the way of the NPT-centered “nuclear
nonproliferation regime.”
In December 2004, the UN High-level Panel released a report with
recommendations for countering international security threats and
reforming the UN system. The report could have the effect of transforming
the international political topography should the international community
be moved to an earnest discussion on the reform recommendations, one of
which includes the enlargement of the UN Security Council (UNSC), and
settle on an action plan. The main bone of contention concerning UNSC
reform is the expansion of the pool of permanent members. A seat on the
UNSC oftentimes translates into an increased say as well as an enhanced
status within the UN and in the international community; for this reason, Japan, Germany, Brazil, and a handful of other countries that have eyed permanent membership of the Security Council will engage in a fierce competition.
Economically, the world’s advanced and developing blocs will
experience differential growth in 2005. Advanced countries will undergo economic downturns; Brazil, Russia, India, and China, a group of nations that has come be known as the BRICs, will record the world’s highest growth rates. International oil prices look set to remain high for the time being owing to a combination of factors: political instability in Middle Eastern oil-producing countries, primarily tensions in Iraq, and the rush of speculative funds into the international oil market. America’s widening current-account deficits may possibly lead to an additional devaluation of the dollar. The prospects for an early conclusion of the Doha Development
Agenda (DDA) process, or global multilateral trade negotiations, remain uncertain. Thus, bilateral free trade agreements (FTA) will proliferate, and regionalism is highly likely to govern the global trade order.
Emergence of New US-China-Japan Triangle Amid Multilayered
Regional Cooperation
The prolongation of the North Korean nuclear issue since 2002 will serve as the litmus test that determines the stability of the security order in Northeast Asia, and the countries concerned will make concerted efforts to launch diplomacy of intervention vis-à-vis North Korea in 2005 within the existing framework of the six-party talks. For the six countries to sketch a solution to the nuclear problem and devise concrete follow-on steps at the next six-party talks, an audacious determination is called for on the part of the Pyongyang regime—a decision that is premised on a complete dismantlement of its nuclear program. Depending on its nature, Pyongyang’s verdict just may mark a critical watershed in the North Korean nuclear issue.
In the meantime, Northeast Asian countries will continue to espouse a system of regional cooperation in counterterrorism and counterproliferation as part of the global campaign organized in the aftermath of September 11 to combat terrorism and curb weapons of mass destruction (WMD) proliferation. Nevertheless, nationalism has recently taken root as a key source of inter-state conflict in Northeast Asia, and this trend will further intensify in 2005. Buoyed by economic dynamism and deepening economic interdependence in the region following the end of the Cold War, Northeast Asia is on the track to becoming one of the world’s central strategic pillars. Major powers’ nationalism-driven competition to expand their spheres of influence, however, is quickly surfacing as a destabilizing factor in the region.
The US-China-Japan relationship is another dilemma that has lent a distinct shade to the Northeast Asian situation since September 11, 2001:
the US-China cooperation in counterterrorism and counterproliferation continues while the US-Japan alliance solidifies. While Washington enjoys
cooperation-oriented bilateralism with Beijing and Tokyo, confrontationoriented bilateralism has sprouted between Japan and China, the two neighbors that have harbored deepening mutual distrust over the other’s expansion of influence in the region. The duality of the trilateral ties will be made even plainer in 2005. It also signals the advent of a US-ChinaJapan triangle that is fundamentally different from the preexisting model.
The US-China-Japan triangle played the role of a balancer in Sino-Japan relations during the Clinton era: the United States maintained the status quo of its alliance with Japan while defining its relations with China as a strategic partnership. Conversely, the Bush administration has bolstered the US-Japan alliance while maintaining cooperation with China on counterterrorism and counterproliferation with a view to countering global security threats in the short term and gearing up for a Chinese strategic challenge over the middle to long term.
Accelerated Reshuffling of North Korea’s Power Structure
Zooming in on the Korean peninsula, North Korea has reshuffled the regime’s power structure rather hurriedly in recent years. In 2004 alone, it replaced 10 Cabinet officials in managerial positions and appointed a large number of up-and-coming technocrats in their 30s and 40s to bureau directorships. The wave of fresh recruitments points to the likely birth of a new lineup in the core class of elites surrounding Kim Jong-il in 2005 targeted at consolidating his personal rule. An abrupt generational change and the reorganization of the power lineup in the North Korean government are thought to be closely linked to the enigma surrounding the country’s successor issue, and Kim Jong-il’s inner circles will move briskly to ensure a smooth transition of power.
On the economic front, Pyongyang has decisively executed sweeping reforms in the name of the “July 1 economic management reform measures,” the crux of which included foreign exchange rates and prices geared to realistic levels, extensive wage increases, and greater autonomy to businesses. More recently, North Korea has reinforced accountability in corporate management by promoting market-oriented self-financing and deregulation. It has also done away with egalitarian distribution and instead introduced a new incentive system based on the principle “distribute only what one has earned,” hence boosting the morale of the North Korean working class. There is a possibility that the North will scale back some of its reform measures in 2005 in an attempt to regulate the speed of the flurry of reforms and mollify a populace that is growing increasingly disenchanted. However, Pyongyang will have no option but to maintain the basic policy line of pursuing market-inclined changes.
Societally, a rise in social problems will likely push North Korea to tighten the grip on its populace. A combination of internal and external factors will give way to grim side effects such as irregularities, corruption, and defections: overseas, North Korea’s nuclear program will intensify its ongoing discord with the international community; at home, the masses will remain as vulnerable as ever to unrelenting economic difficulties, a sudden string of economic reforms, and Pyongyang’s overdrive to acquire hard foreign currency. The North Korean government will attempt to stem mounting societal problems by stepping up ideological education through mobilized mass activities and the mass media, and through social organizations.
Revisiting the North Korean nuclear predicament, any hope that Pyongyang may have nursed for bilateral talks with the United States vanished almost instantaneously with President Bush’s reelection. The second-term Bush administration is expected to conduct a “carrot-andstick” strategy to resolve the nuclear issue, and only when Pyongyang proclaims a willingness to scrap its nuclear program will Washington employ a “bold approach.”
North Korea’s return to the nuclear negotiating table will run parallel to endeavors to maximize opportunities for direct bilateral talks with the United States. By accentuating Washington’s rescindment of hostile policy as fundamental to the solution of the nuclear problem and reiterating the position that US security assurances are imperative for regime stability, Pyongyang will attempt to build a consensus that North Korea–US bilateral talks are not optional but essential.
Opening a New Chapter in North Korean Nuclear Issue and
South-North Relations
The two Koreas are on the threshold of greeting the most momentous turning point in their relationship since the dawn of the Cold War. South Korea’s Participatory Government has consistently implemented policies of consolidating the basis for a peace system on the Korean peninsula. One example is Seoul’s ambition to broaden economic cooperation with North Korea, as evidenced by its recent construction of the Kaesong Industrial Zone. The year 2005 is thus highly likely to provide a milestone for the two Koreas to induce qualitative changes in their relationship and to embark on a road to coprosperity within a framework of peaceful coexistence. The reelected Bush administration’s Korean peninsula policy and North Korea’s strategic choices concerning the nuclear quagmire are the two main variables that will shape the future of the Korean peninsula’s security. Still mired in postwar reconstruction in Iraq, the United States will wish to settle the North Korean nuclear issue via the six-party talks.
Should the six nations’ diplomatic efforts yield a smooth bargaining process which begins with North Korea’s dismantlement of the nuclear program and ends with the international community’s corresponding measures, the Seoul government’s tenet of engagement toward North Korea will gain further credence. It may be possible that South Korea, bearing these prospects in mind, will dispatch a working-level official as a special envoy to the North in 2005 for an early resolution of the nuclear issue and for the establishment of a framework for South-North exchange and cooperation and coexistence and coprosperity in Northeast Asia. A special envoy should be able to exchange in-depth opinions with the North Koreans on ways to advance inter-Korean relations and surmount the nuclear dilemma.
A second inter-Korean summit is not on the agenda of concrete discussion between Seoul and Pyongyang at the moment. Seoul must view a second South-North summit from every angle possible before pushing forward with it. It should, for one, be linked to progress in the North Korean nuclear issue; it should also be preceded by the resumption of inter-Korean government-level talks. The effect of a second summit will redouble only when such a summit is backed up by public consensus and anteceded by sufficient fine-tuning with the United States, South Korea’s ally.
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