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Weapons of Mass Destruction (WMD)

Tracking Number:  218309

Title:  "Korea on Brink of Change, but Danger from North Still Real."

Statement by US Korea forces commander General Robert Riscassi in testimony before the Senate Armed Services Committee. (920305)

Date:  19920305

*EPF403 03/05/92 *


(Text: Riscassi testimony before Senate panel) (6410)

Washington -- The Korean peninsula is on the brink of major change, with political, economic and diplomatic trends heavily favoring the Republic of Korea (ROK), according to General Robert W. Riscassi, commander of U.S. forces in Korea. Only the military balance remains unfavorable, he said.

Testifying before the Senate Armed Service Committee March 4, Riscassi said that even while diplomatic and economic dynamics are setting the pace of change, the risk of conflict is still quite real.

"As internal and external pressures continue to mount, there is a possibility that North Korea may lash out," he said. "Moreover, North Korea is on the verge of changing national leaders for the first time in nearly half a century. We cannot with confidence predict the stability of the process or its outcome; nor can we anticipate the policies the north may adopt when it is complete. More ominously, North Korea has yet to take convincing steps to allay fears concerning its nuclear program."

Following is the text of Riscassi's testimony, as prepared for delivery: (begin text) Mister Chairman, members of the committee, I welcome this opportunity to share with you some thoughts on recent events on the Korean peninsula and the continuing relevance of United States Forces in Korea.

INTRODUCTION The past year has been the most eventful year in relations between the two halves of Korea since the end of the Korean War. No matter what the outcome of ongoing initiatives, we have reached a pivotal point in the struggle between north and south. Korea is on the brink of enormous change. Powerful inhibitors remain in place, but change will come.

Yet, as we emerge from the cold war, it is critical that we not underestimate persisting regional tensions. Northeast Asia remains a divided region, full of emotional scars and distrust. Our military presence in Korea remains an irreplaceable investment, both for resolving the potentially volatile struggle within a divided Korea, and for sustaining peace and stability in one of the world's most dynamic and powerful regions.

I believe that all of you understand the importance of our role in Korea, but there are two questions which we need to address today. First, given the changes in the world and on the Korean peninsula, is the continued presence of U.S. forces in today's numbers still justified? Second, are the costs associated with the security of Korea, and Northeast Asia, equitably distributed?

CHANGING GEOPOLITICAL ENVIRONMENT Since the end of the Korean War, the ROK and U.S. have adhered to a multi- dimensional strategy. This strategy focused on creating a strong deterrent to shield political and economic development in the south, on the assumption that a strong economy and democratic institutions would overpower the weaknesses inherent in the Stalinist state to the north. From the start, we sought to create and sustain conditions that would decide the struggle through political, diplomatic and economic power, rather than through the dynamics of military force.

The roots of this strategy finally bore fruit in the later half of the past decade. After thirty years of back-breaking labor, a period that earned the South Korean people the sobriquet of the hardest working nation on earth, the ROK fully emerged from the ashes of the Korean War. The 1980's were pivotal both in the maturation of democracy and full-blown economic expansion within the ROK. The 1987 transition of power between Presidents Chun and Roh was decided in free elections, and democratic reform has continued at a steady, uncompromised pace ever since. Throughout the eighties, double digit increases in annual GNPs were repeated again and again. South Korean conglomerates expanded into global businesses with markets and partnerships around the world. The ROK became globally competitive in textiles, steel, shipbuilding, automobiles, petrochemicals, and electronics. In 1991, the per capita gross national product of the ROK rose to $6,250. It is estimated that by the end of this century the ROK will double its current wealth.

On the diplomatic front, President Roh fostered a policy known as Nordpolitik. Through this policy, the ROK has sought to exploit the opportunities emanating from the end of the cold war and develop close relations with those nations with influence on North Korea. Designed not to isolate the north, the ROK wooed those states that had previously been aligned with North Korea in an effort to alter their partisan attitude toward the peninsular struggle.

The success of Nordpolitik has been heartening. Once Eastern Europe was freed from Soviet shackles, the majority of its states formalized relations with the ROK and ended their military support to North Korea. In 1990, the USSR also established formal relations with the ROK. At the same time, the Soviets restructured their economic relations with North Korea, putting an end to postwar subsidization policies, and insisting that future trade be based on hard currency. The republics of the Commonwealth of Independent States have built upon this foundation and relations between the ROK and the former Soviet states continue to progress. Even relations with the PRC have warmed considerably. Trade between the ROK and the PRC has expanded rapidly, to a level of over three billion dollars in 1991, and the Chinese and South Koreans have exchanged trade missions. Thus, the diplomatic conditions affecting the balance on the peninsula have altered substantially.

In stark contrast, North Korea remains in the impoverishing isolation imposed by the world's most authoritarian regime. Kim Il Sung, the longest ruling communist leader of the postwar era, remains in control. Over the past decade and more, Kim has been preparing the way for the eventual transfer of power to his son, Kim Jong Il. When the process is complete, North Korea will become communism's first instance of dynastic despotism.

I do not believe the transition could occur at a more difficult time for Kim or his son. North Korea's challenges today are greater than at any time since the Korean War. After more than thirty years of virtually continuous, albeit unimpressive economic growth, the north's economy is faltering. Hampered historically by neglect of its light industries, ideologically driven micro-management, foreign debt, and lack of foreign exchange, its economy is beset with problems. Last year, North Korea experienced negative growth. The failure of North Korea's post war diplomacy contributed to this decline. Although Kim based his leadership on the theme of Juche, or national self reliance, the great degree to which his nation was dependent economically on the Soviet Union and PRC is becoming increasingly evident. Shortages have begun to appear in food, fuel, hard currency and technology.

With the dissolution of the Warsaw Pact, the fall of communism in the Soviet Union, and the PRC's need to focus its energies inward, North Korea's economic survival is imperiled. Lacking a consumer oriented manufacturing base, and isolated by its fractured and antagonistic relations with the western world, North Korea has little possibility of a self-generated recovery.

These conditions set the milieu for the past year's events. In 1990, North and South Korea began a series of north-south talks at the prime ministerial level focused on establishing a direct dialogue between the two states. The first four meetings had no substantive result, but were significant as the highest level negotiations to occur between the two nations. In January 1991, North Korea suspended the talks in protest against the annual Team Spirit field exercise.

While talks were suspended, the ROK announced its intention to apply for separate membership in the United Nations. With the end of cold war and the warming of relations between the ROK and the USSR and PRC, the path was cleared for acceptance by the U.N. Security Council. On 28 May, after unsuccessfully attempting to convince the PRC to block the south's bid, North Korea announced that it also would apply for membership. In September, both Koreas entered the United Nations as separate states. In August, the north returned to the north-south bargaining table and a series of unprecedented agreements have followed.

The most destabilizing issue affecting security on the peninsula, and the region at large, has been the growing suspicion that North Korea is on the verge of developing a nuclear weapon. A group of facilities, some of which are operational and others of which remain under construction, are located at Yongbyon, about 50 miles north or Pyongyang. They include nuclear reactors and reprocessing and test facilities which clearly fit the profile of a nuclear weapons development program. Estimates are that continued progress could result in a nuclear device as early as next year.

Over the past year, this suspicion and the projected timetables captured the attention of the international community at large, and the Republic of Korea especially. Even prior to the saga of Iraq's nuclear program, the world was acutely aware of the risks of nuclear weapons in the hands of aggressive dictators, and pressure against North Korea was developing. Although North Korea signed the Nonproliferation Treaty (NPT) in 1985, it had refused to sign the contingent IAEA accord. The north insisted that the following conditions be met prior to signing: the withdrawal of U.S. nuclear weapons from the ROK; the establishment of a nuclear free zone in Korea; and, the removal of the U.S. nuclear umbrella over the ROK. The international community and the IAEA refused to accept any preconditions and continued to insist that North Korea abide with the NPT and accept inspections under the IAEA.

In the aftermath of Iraq, it became clear that an IAEA inspection regime was not a sufficient assurance of NPT compliance, and regional pressures on North Korea evolved into two separate tracks. The international community continued to press North Korea to sign the IAEA agreement and accept inspections of its nuclear facilities. At the same time, the ROK government introduced the notion of a bilateral agreement covering the two Koreas that would include a separate inspection regime. Central to the Korean track was an agreement to ban reprocessing of spent fuel. While the two tracks were linked by intent, the negotiations were separate.

Following President Bush's September 1991 announcement to withdraw all naval and land-based forward deployed tactical nuclear systems, the way was cleared for the South Korean government to pursue a dramatically fresh approach toward North Korea. Later in November, President Roh publicly announced the denuclearization of the ROK, and invited North Korea to reciprocate by signing a denuclearization pledge governing the entire peninsula.

The north responded initially by terming President Roh's claim of denuclearization as spurious and refusing to accept the offer. At a subsequent north-south meeting, the ROK Prime Minister reiterated President Roh's pledge and invited North Korea to join in a bilateral agreement for denuclearization. At the next meeting, North Korea insisted that any such pledge would rely on two conditions. First, that the north be allowed to inspect facilities and military bases in the south to ensure the withdrawal of U.S. nuclear weapons, and second, that the peninsula be made a nuclear free zone, with the U.S. nuclear umbrella publicly detached.

The north also maintained its historical insistence, reiterated throughout the north-south talks, that any bilateral security agreement should be preceded by the signing of a nonaggression pact between the two Koreas. The ROK, in turn, restated its historical position that the two Koreas must conclude an agreement that would permit family visitation and communications and economic exchange between the two states, as well as establish confidence building measures to reduce military tensions.

Finally, in a dramatic meeting on 13 December 1991, the two nations signed a 25 point "Agreement on Reconciliation, Nonaggression, and Exchanges and Cooperation", contingent on the understanding that North Korea would sign and implement a bilateral denuclearization agreement. On 31 December 1991, the representatives of the north and south agreed to a six point "Joint Declaration on Denuclearization of the Korean Peninsula".

Included in the nonaggression and exchange pact is a declaration of intent not to attack or subvert one another and the establishment of several confidence building measures, to include a military hotline and bilateral committees to manage military tensions. The nuclear agreement includes the following provisions: both Koreas agree to neither test, manufacture, produce, receive, possess, store, deploy nor use nuclear weapons. An additional codicil stipulates that neither nation will possess nuclear reprocessing or uranium enrichment facilities. Further, a bilateral inspection regime will be constructed between the two Koreas, including the right to perform challenge inspections of suspect nuclear facilities and military bases. The denuclearization pact is now in effect, but there still is no agreement on the structure or timing of the accompanying inspection program.

Against the backdrop of the preceding forty-five years, these are momentous events. Unfortunately, they do not resolve the security problems on the peninsula. Of immediate concern, although North Korea finally signed the IAEA agreement on 30 January 1992, it has yet to ratify the agreement, nor has it agreed to inspections under the bilateral pact between the two Koreas.

Continued stalling heightens the suspicion that the north is attempting to reprocess and stockpile enough plutonium to create a weapon before inspections are permitted. Alternately, there is concern it may be in the process of moving critical equipment and material to a more clandestine location or locations.

The ROK, with U.S. support, has been extraordinarily forthcoming and flexible in its approach toward the north. In an effort to sustain forward movement, the ROK and U.S. agreed to cancel Team Spirit 92. Continued North Korean intransigence, however, could well reverse the progress made to date.

On the other hand, there is evidence the north is feeling the pressure of its failing economy and it is cautiously implementing a number of initiatives. Last October, Kim Il Sung visited Beijing and asked the Chinese to increase economic aid to compensate for the sudden loss of Soviet assistance. Reportedly, the Chinese leaders rejected the request, noted that China has its own problems, and encouraged Kim to adapt the same style of economic reforms that China is undertaking.

For over a year, Japan has engaged in talks with North Korea concerning normalization of relations, but has made clear that normalization, and subsequent economic benefit, is contingent on North Korean actions to relieve the nuclear proliferation concerns of Japan and the rest of the international community. Specifically, Japan has told North Korea that it must implement an IAEA safeguards agreement and also forgo reprocessing of spent nuclear fuel, before Japan will normalize relations. At present, Japan-DPRK relations are stalemated.

The ROK has also offered economic support to North Korea, and some trade has already occurred. Most recently, the chairmen of Hyundai and Daewoo visited Pyongyang and negotiated joint ventures with the North Korean government. North Korea also announced its intention to participate in the UNDP assisted Tumen River Project, which is designed to open a free market zone in the Tumen River estuary, that would include North Korea, Russia, the ROK, the PRC and Mongolia.

Although there are a number of reports of significant food and energy shortages in the north, it is not clear how severe these economic problems are at this stage. Apparently the problems have not become sufficiently threatening to domestic stability to compel the north to open its nuclear facilities to inspection. The nuclear issue is a litmus test that will prove or disprove whether the north is prepared for fundamental change, or simply engaging in subterfuge to fend off escalating pressures.

If North Korea is suspected of continuing its nuclear development, then the progress achieved over the past year will retrench and economic isolation will increase. At the same time, the ROK and U.S. recognize that we have entered a new phase in the Korean struggle, one which will rely far more on diplomatic and economic measures, yet still conducted under the umbrella of a strong defense.

MILITARY BALANCE ON THE PENINSULA Throughout the eighties, while the ROK bounded forward politically and economically, North Korea focused on the growth, forward positioning and restructuring of its armed forces, a process begun in the late seventies. Notwithstanding its remarkably small capital base, North Korea exploited the significant economies of scale in military hardware which characterized the communist economies of the cold war. For a fraction of the comparable costs to free world nations, North Korea was able to complete a large-scale growth, restructuring, and repositioning of its armed forces.

The core philosophy guiding the north's program appears to have been the transformation of its armed forces into a highly mobile, extremely lethal, offensive force. The ultimate objective was to create a ground-based attack force, supported by air, special operations and sea arms, capable of unleashing a rapidly paced offensive operation on extremely short notice. Its armed forces were designed to create an early rupture of the combined defenses and follow up on this breakthrough with powerful exploitation forces.

The outlines of this intent are evident in the nature and composition of North Korean active force changes. During the early and mid-eighties, they created four mechanized corps and an armor corps from existing mechanized and tank units. Two of these mechanized corps and elements of the armor corps provide a highly mobile tactical exploitation force capable of exploiting penetrations in the forward defense. The remaining two mechanized corps and the rest of the armor corps have been designed to pass through the defenses north of Seoul and carry the offensive momentum throughout the depth of the ROK. To maintain an unrelenting, violent tempo of operations, North Korean doctrine emphasizes a feeder system which streamlines and distributes a constant flow of follow-on forces toward the front. The feeder system also offers the flexibility to concentrate forces in selected sectors, with minimal notice, to attempt to achieve decisive force ratios.

In addition, North Korea's highly trained special operations forces were enlarged and received additional equipment to assist in infiltration and rear area operations. The approximately 80,000 special operations forces are designed to infiltrate behind ROK defenses, to target airfields, seaports and supply lines, and to disrupt and undermine forward defenses to assist in achieving an early breakthrough.

Accompanying these reorganizations, North Korea continued to reposition its ground forces so that over 65 percent of its active forces are within 100 km of the DMZ. These forces are arrayed unequivocally for attack; their disposition and arrangement bear none of the telltale signs of a defensive intent. The purpose of this extreme forward deployment is to limit warning of attack available to the defense.

Just as the reorganization and redeployment of its forces signal the nature of its attack plans, the north's modernization programs evidence the doctrine that will guide employment. The largest proportional expansion was in the addition of mobile artillery systems, creating a total artillery force of over 5,400 self-propelled tubes, 3,000 towed artillery pieces and 2,400 multiple rocket launchers. This creates a 2.3 to 1 advantage in artillery systems over South Korea, and shows North Korea's capability to concentrate and employ artillery in massive, unrelenting barrages to smash defenses and create a breakthrough. A force of over 4,000 infantry fighting vehicles was created, lending speed and mobility, and permitting infantry forces to keep pace with armored forces. At the same time, over 1,000 additional tanks were introduced, creating a total armored force of around 3,500 tanks.

The result of these modernization programs is an impressive increase in the speed, pace, and lethality of North Korean ground operations. A ground attack would be supported by over 670 naval vessels, including a mix of diesel submarines, 'mini' submarines, fast attack patrol boats, and new infiltration and amphibious vessels. Supporting air operations will employ over 1,400 aircraft of mixed types, to include 748 jet fighters of various vintages and capabilities.

The total strength of North Korea's military forces is over 6,000,000 personnel. Just over a million are in the active forces, while 5 million are reserves. These numbers are enormous for any nation. In the case of North Korea, ranking 40th in population with just over 23 million citizens, they make it the most militarized state per capita on earth. Other comparative rankings include; the fifth largest army; the sixth largest air force; the sixth largest submarine force; tenth largest tank force; fourth largest artillery force; and, the second or third largest special operations force. Efforts are underway to create stockpiles in excess of 60 days of supply. The total annual costs of sustaining and improving this force has been between 20-25 percent of the nation's GNP...a remarkable investment for a nation of such limited resources.

The overall effect of the north's programs on the military balance between North and South Korea has been detrimental. Avoiding any discussion of specific areas of strength or weakness, North Korea today enjoys superiority in a number of critical battlefield functions, if U.S. forces are excluded from the balance. The following table illustrates the static disparities:

North Korea ROK Tanks 1.9 1.0

ed Personnel Carriers 2.3 1.0 Field Artillery 1.8 1.0

ple Rocket Launchers 21.0 1.0

Aircraft Artillery 14.0 1.0

rs 82.0 0

ighters 1.5 1.0

port Aircraft 7.5 1.0

t Helicopters 1.0 1.0

k Submarines 24.0 1.0

oyers 0 10.0

le Attack Boats 3.5 1.0

bious Craft 5.7 1.0

e Infantry Divisions 1.4 1.0

ed Brigades 3.3 1.1 While the quantitative imbalance is apparent, there are other measures that are more difficult to penetrate. North Korea has prioritized its force structure above, and at the expense of optempo, so some force elements are not presently at peak readiness. Employing its vast armed forces in a limited notice attack would be a difficult undertaking for even the most highly trained military force, so we assume some current level of degradation. Prior to an offensive, however, we would expect enhanced training activity to improve their prospects of success. Also, a number of North Korea's military systems are based on old technologies, updated with product improvement programs, but still limited in capability due to vintage. Yet, by and large, most of its critical righting systems are still highly effective on the battlefield, and some key systems are very modern.

Factoring these considerations into the overall balance, the forward presence of United States ground and air forces remains vital to counterbalancing North Korean strength. Our judgments must be based on capabilities rather than predictions of intent. Training shortfalls, for example, can disappear rather quickly. North Korea's overall advantage is sufficiently robust that degradations due to training and technology limitations would have to be quite severe to outweigh its composite advantages over the ROK.

In the final analysis, successful deterrence rests on the counterbalance provided by U.S. forces. Any possibilities that North Korea might be tempted to employ its comparative force advantages are inhibited by the presence of U.S. ground and air forces.

These factors all weigh in considering the size and configuration or U.S. forward deployed forces. The primary strength of North Korean forces, and its greatest overall advantages, lies in its ground forces. Because of this, I believe that the continued presence of an American division and a numbered air force remain crucial elements of forward presence. Were conflict to occur, large U.S. ground, air and sea reinforcements would be required, so it is imperative that we retain the capability, in theater, to accept and support an augmentation flow. Moreover, there are some functions, such as strategic and operational intelligence, which rely heavily on U.S. advanced technologies. As a result of these requirements it is also essential that the U.S. maintain its participation and selected leadership within the framework of coalition headquarters.

Finally, the forward presence of our military forces permits extensive and continuous joint and combined training. The value of this training is inestimable. It targets a key vulnerability of the North Korean forces, and ensures that in the event of a contingency, ROK/U.S. forces would be prepared to set the conditions of battle. Unlike Operation Desert Storm, where coalition forces had six months to organize and train, a North Korean attack would provide at most several days of warning and preparation. This places a premium on combined training, which is a habitual focus of our forward deployed forces and participation in combined headquarters.

These units and military functions are the baseline force. Some manpower reductions may be possible while still protecting these capabilities. But future reductions must be bounded by the need to protect a ground and air combat presence, reinforcement capabilities and selected functions which are critical to readiness.

The Base Force articulated by the CJCS fully supports theater requirements. In conjunction with forward deployed forces the U.S. has a rapid and robust augmentation force available for deployment in the event of a crisis. However, a major concern remains the sufficiency of strategic lift to deploy forces in a timely manner. Although strategic mobility was sufficient to meet the requirements of Operation Desert Storm, the Korean theater faces the prospects of limited notice and the urgency of sudden North Korean offensive operations. Continued support for expanded and rapid strategic lift is essential.

U.S./ROK DEFENSE POSTURE Closing the north-south imbalance is the highest priority program for the Combined Forces Command. It is a priority goal of the South Korean government, one that is broadly supported by the people. While progress has been and continues to be made, there are multiple considerations that effect this effort. First, improvements must be applied across the full spectrum of military forces -- ground, air and sea. Full self sufficiency implies a self defense capability in each dimension of warfare. The full cost of achieving multi-dimensional self sufficiency is extremely large. The result is the requirement for a measured build-up and adherence to agreed priorities that reduce risks across the dimensions of warfare.

Second, the pace and extent of progress is limited by the resources available. Although the Gross National Product of the Republic of Korea is ten times the size of North Korea's, it is still only around $300 billion. The past year's defense budget was about 4 percent of the GNP, or approximately $10.8 billion. Although this represents a 13 percent increase over the previous year's defense budget, less than half is available for defense improvements. The rest is required for personnel, training, maintenance and other programs.

In the past two years, the ROK has agreed to purchase 120 F-16C fighters, 8 P-3 Orion ASW aircraft, and 81 UH-60L Blackhawks, and it is in the process of completing delivery of 90 AH-IS Cobra helicopters. The total price of these systems alone is over eight billion dollars. In addition to other force improvement programs, such as the K-1 tank, the 155 mm howitzer, and construction of submarines and surface frigates, the majority of which are accomplished through indigenous production, the ROK is committed to a broad and ambitious upgrade program.

The requirement to protect inter operability among combined forces and ROK willingness to continue spending over 80 percent of its foreign military procurements in the American marketplace carry the hidden burden of slowing the increase in military systems. This is due mainly to the high costs per copy associated with American produced military systems. If the ROK were to widen its procurements to include Eastern European and CIS fighting systems, the asymmetry in numbers of systems would disappear in only a few years. However, this would significantly degrade inter operability between combined forces, probably result in ill feeling in the United States, and harness the ROK armed forces to less capable systems. Ultimately, it is a tradeoff of quality versus numbers. I believe the factors of price and time argue for the approach we are taking.

We have committed to a longer term program which exploits the technological differential between U.S.-produced and North Korean- or Warsaw Pact-produced systems. This methodology is being applied to selected war fighting systems which are deemed to have a decisive impact within the overall balance of forces. At the same time, other procurements will compromise on technological impact, where costs and effectiveness are balanced appropriately. The ultimate objective will be a significant technological advantage in certain critical battlefield functions, and comparative parity in other functions.

The ROK sustains remarkably high levels of support for its own defense. A national draft system remains in place, supporting an active force of over 636,000 and a reserve of over 4 million. Last year, the ROK converted a number of reserve spaces to full time active spaces, representing an actual increase in active forces of around 13 percent. From a population of only 42 million, this is an extremely large commitment, ensuring that virtually every healthy male performs military service. Moreover, ROK defense spending annually represents about a third of its total national budget.

In the midst of these efforts, the defense relationship between our two nations continues to transition. The actions directed to be accomplished in the first phase of the Nunn-Warner process have been, or are scheduled to be completed by the end of 1992. USAF force reductions have been accomplished, and Army reductions are on course. An ROK general officer has been appointed as the Senior Member of the Military Armistice Commission. Preparations and study continue for the appointment of a ROK general officer as commander of the Ground Component Command of the Combined Forces Command, and the disestablishment of the Combined Field Army has been agreed by both nations and will be completed by the end of 1992.

Planning for the second phase of Nunn-Warner was nearly complete when President Bush and Secretary Cheney announced that any further force reductions scheduled for Phase 11 would be suspended at least until the North Korean nuclear issue was resolved.

An additional objective set forth in the Nunn-Warner report was the requirement to encourage the ROK to assume a greater share of the cost-sharing burden for the stationing of U.S. forces. Considerable progress has been made and a bilateral agreement has been reached that will direct the apportionment of local currency- based costs through 1995. Using the 1991 level as the baseline, the ROK agreed to annual increases each year, ramping up to a level of one third of all won-based cost by 1995, a figure we estimate to be about $900 million.

There is a natural inclination to compare cost-sharing responsibilities of the ROK with Japan's recent agreement to assume a greater share of the costs of U.S. Forces in Japan. Before making this comparison, it is important to note the significant circumstantial differences, the enormous difference in national wealth, and the vast gap between the respective national percentages of Gross National Product allocated to self defense.

As this chart conveys, the ROK GNP is less than one fifteenth of Japan's. Moreover, the ROK spends about 4 percent of its GNP on defense, whereas Japan spends less than one percent of its GNP on defense. Thus, in the broader balance of defense burden sharing, the ROK carries a far higher proportional burden than Japan.

Beyond this, it also is important to comprehend the difference in how we calculate the overall amounts of money contributed to forward stationing in the two nations. In Japan, the costs of U.S. facilities is handled through a rental arrangement with the Japanese government and rental and direct payment arrangements on U.S. facilities are included in the aggregate sum. In Korea, all U.S. facilities are provided rent free and therefore this cost is not included in the overall contribution. Economists would term this an opportunity cost, and it is variously estimated to be in excess of $1.8 billion. If it were included, the total percentage of forward stationing contributions. Absent U.S. personnel costs, would jump to over $2 billion, establishing that the ROK is paying almost 75 percent of forward stationing costs.

The ROK also provides other offsets which fall in the category of burden sharing. Among these is the KATUSA program, which provides over 5,200 Korean soldiers to supplement the troop strength of U.S. units. KATUSAs are handpicked soldiers who are assigned to and fully integrated within U.S. units. The ROK Army has also agreed to contribute a ROK heavy brigade to round out the 2nd Infantry Division. These contributions permit the U.S. to field fully operational, ready units, but with absolute economy in U.S. manpower requirements. In any consideration of the full measure of burden sharing, it is important to note that over 95 percent of the forces dedicated to the role of deterring a North Korean attack are ROK armed forces.

Beyond 1995, we expect the burden of forward stationing costs to decline steadily as a function of three initiatives. First will be the probable withdrawal of additional forces under the second phase of the Nunn-Warner initiative. Second, will be continued efforts to convince the ROK to accept a higher percentage of stationing costs. Third, there will be reduced requirements under the theater's base realignment and closure plan.

Relocation and consolidation of U.S. forces in Korea is on track in three areas: (1) eventual removal of all U.S. military headquarters out of Seoul, the cost of which will be borne by the ROK, (2) conversion of air force facilities to collocated operating base status; and, (3) closure of army facilities through activity consolidation and force reductions. USFK has placed five facilities into collocated operating base status, and by 1 April 1992, will close five army facilities, commensurate with force withdrawals. Additionally, the 2nd Infantry Division completed transfer of responsibility for its portion of the DMZ on 1 October 1991.

The theater has established a base realignment and closure office to coordinate and manage continuing efforts. Future reductions under the Nunn-Warner process will result in further base closings and realignment (the force cuts anticipated for the second phase have been suspended pending further progress on the North Korean nuclear issue). Fiscally, it makes good sense to align base closing with the force withdrawal scheme to avoid the costs of relocating units and facilities which will be withdrawn shortly afterward. The eventual endstate is to consolidate the U.S. presence into enclaves at Camps Red Cloud-Casey-Hovey, Osan-Camp Humphreys, and Taegu-Pusan. A central principle of the base closure strategy is to retain those bases which have the best facilities, making optimal use of past infrastructure investments.

Notwithstanding this strategy, I am concerned by the constrained funding available to sustain our theater base structure. While I understand the difficult fiscal environment, as well as the need to accrue further economies through increased cost sharing, these do not ameliorate our obligation to provide and maintain quality facilities for our personnel stationed overseas. We will continue to pursue savings, but I ask that the Congress sustain its support for maintaining our base structure.

CONCLUSION As the events of the past year have shown, Korea is on the brink of major change. Political, economic and diplomatic trends heavily favor the ROK. Only the military balance remains unfavorable.

The situation has grown far more complex in the past year. Diplomatic and economic dynamics are setting the pace of change. Nevertheless, the risk of conflict is still quite real. As internal and external pressures continue to mount, there is a possibility that North Korea may lash out. Moreover, North Korea is on the verge of changing national leaders for the first time in nearly half a century. We can not with confidence predict the stability of the process or its outcome; nor can we anticipate the policies the north may adopt when it is complete. More ominously, North Korea has yet to take convincing steps to allay fears concerning its nuclear program.

South Koreans await the events of the coming year with a mixture of fear and optimism. Their fears relate to Pyongyang's nuclear weapons program, the possibility of a premature pull-out of U.S. forces, and the regional instability that would follow a U.S. withdrawal. At the same time, many South Koreans have begun to speculate that unification could occur before the close of the century. The past year's events have spurred this optimism and encouraged the ROK government to take bold risks in search of a more permanent peace and perhaps some form of union. Yet, the ROK also comprehends the attendant risks. In close cooperation with the U.S., it is applying a very adroit, multi-dimensional strategy toward North Korea.

In the north there is still no sign of fundamental change. It remains in the grip of the most totalitarian system in the world, with policies and rhetoric that trace back half a century. But the situation on the peninsula cannot remain in status quo for much longer. The south will continue to prosper and grow as the north declines.

The past year's events can be interpreted as a hesitant and reluctant awakening by North Korea that it will have to change its policies if it is to survive. The world of 1992 is far less conducive to aggressive, xenophobic dictators than the polarized environment of the cold war. But is also clear that Pyongyang wants to block change as much as it can and that such change as has occurred is due to external pressure, rather than a decision to reform.

The situation in Korea would not have reached its present, more hopeful stage were it not for America's commitment to ROK security and the forward presence which gives it credibility. This commitment allows President Roh's government to approach the north with flexibility and confidence and is vital to continued progress. As long as both the ROK and North Korea believe that U.S. forces are absolutely committed, the south can confidently continue a flexible diplomatic approach. So long as we continue to ensure that North Korea does not have a viable military option, the likelihood of a peaceful outcome remains strong.

(end text) NNNN

File Identification:  03/05/92, EP-403
Product Name:  Wireless File
Product Code:  WF
Document Type:  TXT
Thematic Codes:  1EA; 2DE
Target Areas:  EA
PDQ Text Link:  218309
USIA Notes:  *92030503.EPF

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