On March 26, South Korean warship, Cheonan, exploded near the Northern Limit Line with North Korea, complicating the political situation in the peninsula. This disaster occurred just before the 60th anniversary of the Korean War in June 2010. While experts consider North Korea as a possible perpetrator of the attack, it is looking less and less likely that the economically troubled country actually caused the disaster.
Three currently suspected causes of the explosion on the warship include a torpedo used by a North Korean submarine, defects within Cheonan itself and a possible collision with a North Korean mine from the Korean War or an unknown object. No matter what really caused the disaster, it surely poses questions about the South’s ability to prevent such a large military loss, as Cheonan is known to have sailed this area multiple times before. The aftermath was too shocking for the South—Cheonan was split into two parts, and out of the 104 people on the warship, 46 are still missing.
North and South Korea entered into an armistice, effectively halting violent activities since 1953. However, complications have persisted between the two countries. The recent incident in March recalls the 1987 North Korean attack on a South Korean passenger airplane that killed all 115 passengers. As of now, doubts remain about a possible North Korean involvement in the Cheonan catastrophe, especially since North Korea disavowed the armistice in May 2009.
However, North Korea may, in fact, have more domestic issues to deal with rather than preempting a costly attack that would likely place the country in a more complicated position in talks about its nuclear arms program. In December 2009, in an apparent move to combat inflation, its government decided to revalue its currency, the won, by requiring citizens to change 1000 won notes to ten won bills for a maximum of 100,000 old wons (equivalent of about $40 at the time). Immediately, the won, which already traded at 3500 wons per dollar on the black market, depreciated 96 percent against the dollar, according to Bloomberg.
Realizing its mistake, the North Korean government raised the limit to 150,000 wons in cash and 500,000 wons in bank notes. In March 2010, Yonhap, a leading South Korean news agency, reported that the North has executed Pak Nam-gi, Director of the Planning and Finance Department, the one seemingly responsible for the disastrous currency change. However, this does not solve the problem at hand. Food prices soared, plunging North Korea into unprecedented economic hardship. Currently, for many North Koreans, the Los Angeles Times reported, an egg costs a full week’s salary. The reason for this unexpected inflation is that traders and suppliers face insurmountable difficulty acquiring enough cash for their activities.
As the North’s agenda requires more focus on domestic policy than ever (its leader Kim Jong Il is to visit China possibly for economic assistance), South Korea will probably have trouble finding the cause and an explanation behind the Cheonan catastrophe. The next Six-Party talk, with the possible participation of North Korea, which has historically focused on not only security and nuclear disarmament but also complex economic actions, will surely further complicate the situation in the Korean peninsula.
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