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North Korea Defence and Security Report 2007

Published by: Business Monitor International

Published: Dec. 11, 2007 - 38 Pages


Table of Contents


Executive Summary
SWOT Analysis
North Korea Security SWOT
North Korea Defence Industry SWOT
Political Overview
External Political Outlook
Security Risk Analysis
BMI’s Security Ratings
Risk Ratings
Table: Regional Security Ratings
Table: State Terrorism Vulnerability Index
Regional Security: North And South-West Asia Q406
Overview
Inter-State Conflicts
Internal Conflicts
North Korea Conflict Risk
North Korea Terrorism Risk
North Korea Physical Safety Risk
Security Overview
Internal Security Situation
Insurgency
External Security Situation
North Korea - South Korea - US relations
North Korea-China Relations
Six-Party Talks
Japan
Military Structure & Defence Industry
Armed Forces
Regional Armed Forces (including conscripted) 2006
Weapons Of Mass Destruction
Chemical And Biological Weapons
Nuclear Weapons
Delivery Vehicles
Market Overview
Recent Changes
Arms Trade Overview
Imports
Exports
Industry Trends & Developments
Industry Forecast Scenario
Table: North Korea Defence Sector - Historical Data & Forecasts
Key Risks to BMI’s Forecast Scenario
Macroeconomic Forecast
Table: North Korea Macroeconomic Data & Forecasts
Competitive Landscape
BMI Forecast Modelling
How we generate our industry forecasts
Defence Industry
Sources


Abstract

In Q406 the North East Asia regional security situation deteriorated significantly as a result of North
Korea testing its Taepo Dong nuclear missiles. The UN Security Council adopted a resolution of
sanctions against North Korea, ranging from the request to North Korea to give up all weapons of mass
destruction and banning nations from exporting luxury goods and heavy weapons to North Korea. The
resolution recommended freezing all North Korea’s weapons-related funds, including the inspection of all
cargo to and from North Korea. The Japanese Maritime Self Defence Force (MSDF) provided transport
and logistical support to the US-led inspections of the cargo ships to and from North Korea in the Sea of
Japan. Neighbouring states, such as Japan and South Korea, defined the situation as an emergency.
North Korea is likely to remain under strong external pressure, particularly from the US. In Q406 North
Korea announced that it would participate in the Six Party Talks, which seek a diplomatic resolution to
the issue. Importantly, Japan has indicated that this is its preferred means of resolving the issue.
Previously Pyongyang had demanded that Washington lift financial sanctions before it would return to
the negotiating table, but US officials say these are entirely separate from the issue of nuclear
development and weapons development. It is not only the US that is interested in North Korea. China and
South Korea appear to be pulling North Korea in opposite directions, but their interests are similar. The
South is striving to maintain a degree of cordiality between North Korea and the West. China’s priority is
that the area remains stable in order to reduce the chances of the reunification of the Korean Peninsula -
something that the South is not in a hurry to achieve either.


In this vein, North Korea remains a difficult player in the region, and one that the US continues to be
fearful of. The US Defence Intelligence Agency confirmed its belief that North Korea had mastered the
technology for arming its missiles with nuclear warheads, confirmed by the testing of the Taepo Dong 2
missile. North Korea’s defence industry, whilst unsophisticated, is capable of producing military
equipment to sustain its outdated armed forces, and to maintain a healthy illicit arms trade. Its extensive,
if not advanced, defence industry provides it with a self-reliance that can rival most other states’ defence
sectors. Should North Korea ever come in out of the cold and its arms trade move from the illicit to the
lawful, it could boast a very profitable defence industry.


The testing of the missiles and the response from the international community does not appear to have
ruffled North Korea. Pyongyang is content to exist behind the relative safety of its armed forces, which
number over 1mn troops, and the threat from its ballistic missile systems. However, the testing of the
missiles has destabilised the region, with South Korea and Japan requesting significant increases in their
respective 2007 defence budgets and both countries announcing plans to purchase PAC-3 missiles.




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