Korea: A chilly diplomatic climate

Cold weather and a potential frosty reception for President Bush as he arrives in South Korea

SEOUL, South Korea (CNN) -- Little more than a year ago, former U.S. Secretary of State Madeleine Albright shook hands with North Korean leader Kim Jong Il in Pyongyang.

It was amid the prospect of a dramatic breakthrough to bring decades of Cold War hostility on the Korean peninsula to an end.

However, as U.S. President George W. Bush visits South Korea this week, the diplomatic climate has become as chilly as the sub-zero temperatures he will encounter when visiting American troops on the Korean Demilitarized Zone.

The Bush administration's decision to single out North Korea, as a new focus for the U.S. war on terror, has frozen American dialogue with Pyongyang.

It has also unsettled U.S. allies in Japan and South Korea and raised the prospect of renewed confrontation on the divided and still volatile peninsula.

One concern, according to North Korea watchers, is that, based on past behavior, the regime in Pyongyang is at its most dangerous when it feels cornered or under threat.

'Moral leper'

AUDIO Sohn Jie-ah in Seoul reports on the arrival of President Bush 1.81MB / 2min.52sec WAV sound   VIDEO CNN's John King reports on President Bush's visit to Japan as he brushes aside criticism of his 'axis of evil' rhetoric against Iraq, Iran and North Korea. Play video (QuickTime, Real or Windows Media)   IN-DEPTH President Bush: East Asia Tour    ANALYSIS • Protests greet Bush in Seoul  • Presidential visits to Korean DMZ a ritual  • Bush set to discuss Taiwan, human rights

In 1994, the prospect of U.S. sanctions over North Korea's nuclear weapons program almost triggered a war. Conflict was only avoided when former U.S. President Jimmy Carter undertook a bold mission to Pyongyang and brokered a compromise.

In 1998, frustrated by what it saw as the Clinton administration's lack of seriousness about negotiating, North Korea tested a long-range ballistic missile.

The diplomatic contacts that defused this potential crisis helped pave the way for the historic summit meeting between North and South Korean leaders in June, 2000, and Mrs. Albright's visit to Pyongyang four months later.

With the U.S. now describing North Korea as part of an axis of evil, and President Bush personally disparaging Kim Jong Il, it is hard to see a diplomatic way forward in the near future.

North Korean media descriptions of Mr. Bush as a moral leper, and the U.S. as an empire of evil have only heightened the rhetorical battle.

A new free market

At the same time, overlooked amidst the headlines, analysts and aid workers with long experience in Pyongyang contend that years of economic decline and near famine conditions have spurred important changes in North Korean society.

The key shift has been the emergence of an informal but wide-ranging market economy, with the broken-down state food distribution system replaced by free markets in many parts of the country.

This has coincided with growing contact with the outside world, from aid workers to businessmen cautiously exploring international investment possibilities.

And it has generated increasing talk among North Koreans about the need for internal change in order for the country to survive.

For a system underpinned by the ideology of juche, or militant self-reliance, it has been a wrenching change.

A changed environment

For months, observers say, the leadership in Pyongyang has been consumed by a debate over whether, how far, and how fast, the country should open up to the rest of the world.

The strategy of the Clinton administration, and South Korea's President Kim Dae-jung, was to pursue dialogue with Pyongyang in the hope both of ending its nuclear and missile programs, and encouraging domestic reform.

The Bush administration insists it too wants to talk to North Korea. But the use of emotionally charged terms such as axis of evil may have fundamentally changed the diplomatic environment.

The American hope is that a North Korea impressed by U.S. resolve will be willing to make important concessions.

The danger, many analysts say, is that a North Korea that believes its very survival is at risk may become even more belligerent than before.