Review of Clinton's Asia Trip

One of the more interesting features of Clinton's diplomacy is the lack of the typical diplomatic candor the world has come to expect from the State Department. She spoke very bluntly about the possibility of a succession crisis in North Korea. Typically eulogizing about a dictator is supposed to come after his fall. Many observers have commented that such comments put North Korea in a difficult position to save face.

However, I don't think those comments were for the North Korean leadership, but for the South Korean public. Clinton made her trip to Seoul in order to shore up Washington-Seoul relations. She will allow her minions (Stephen Bosworth, particularly) to figure out the future of Washington-Pyongyang relations.

Clinton's comments were a subtle message to The 2MB administration (Lee-Myung-Bak for those less frequent Korea observers), or more importantly, to those questions whether Lee and Obama would get along. Where the nuclear issue has been the main focus, Clinton tipped her hat to the fact that South Korean's need to be realistic about the future of North Korea.

Writing several days before Clinton's arrival, Lee Byong-chul, a senior fellow at a nonpartisan policy advisory body based in Seoul, commented in the Korea Times that, "Obama needs to tell Kim Jong-il, 67, to forget India and focus on the threat from within over power succession."

B.C. Lee probably imagined a less direct message, the message should have been clear to the Korean populace: the Obama administration backs President Lee's sensible approach to North Korea. Such a conclusion is even more clear with the loud squeal that came from the ultra-left Hankyoreh newspaper. If being more realistic about North Korean issues is important, then the October 4 Declaration or June 15th Joint Statement (in unification-speak meaning unconditional flow of money to North Korea) mean very little to the new administration.

Things that won't survive the crash...

David Rothkopf outlines "20 things that won't survive the crash" on Foreign Policy magazine's website. I thought I would add a few more. So lets start with ...

21. The Krona and Whalers

After the collapse of the Icelandic banking industry (and subsequent collapse of their governing coalition), there is talk about possibly ditching the Krona and using the Euro. But with joining the EU comes a ban on whaling, so time is running out for those who like to eat "Moby Dick on a stick."

22. The Weak Korean Won

Though the won is currently trading at an 11-year low, fears about Korea's banking system and economy seemed unfounded. The banks hold over 25 billion in dollar- and yen-denominated debt that matures by the end of 2009. However, Korea also hold over 200-billion in foreign-exchange reserves AND has a direct line to the US treasury for more in case of a 'real crisis'. Exports are weak due to the slow down in the US and Japan but the cheap won should raise them in the mid-term. And as US and Japanese products are relatively more expensive, Korea should not have to worry as much about domestic demand. This is the perfect time for Korea to cement trade deals with the US and the EU. Foreign traders and investors seemed to be spooked about all investments in Asia right now, but Korea should be the least of their worries. It won't be long until the currency is bid up relative to the sagging US dollar.