Dear members of the Korean Studies community,

I trust that all of you have had a great summer and are now ready for the beginning of a new academic year. I welcome all of you back to campus and to another exciting year for the Korean Studies Program (KSP) at Stanford University.

First of all, I welcome the new members to our program this year. Philip Yun and John Feffer are our inaugural Pantech Fellows and will conduct research related to Korea, both North and South. Both Philip and John have distinguished careers and will be great assets to all of us at KSP. Philip has held high-level positions at the State Department and worked closely with former Secretary of Defense, Dr. William Perry, in addition to practicing law in both Korea and the U.S. John is an accomplished writer and editor, and his most recent publication is North Korea/South Korea: U.S. Policy at a Time of Crisis. I would also like to welcome Jasmin Ha, who will serve as our new Program Coordinator and assistant to me. She worked previously at The Korea Society in New York City and brings to us both her experience and vision for Korean studies at Stanford. Soyoung Kwon, a North Korean expert, will also be staying at APARC as a Shorenstein Fellow for the coming year.

Hong Kal and Chiho Sawada, post-doctoral research fellows, will remain with us for another year. Hong has accepted a tenure-track assistant professorship at York University, but will not start her appointment until the 2005-06 year. Rakhi Patel, our student assistant, will continue to work part-time to assist Jasmin and myself.

We will resume our popular luncheon seminars on October 15 with a presentation by Eric Larson of the Rand Corporation on his project on South Korean attitudes towards the United States. There will also be numerous other exciting events and programs on Korea-related issues throughout the coming year. Please visit our website for more detailed and continuously updated information.

KSP is also now home to the Journal of Korean Studies for which Chiho and I serve as associate editor and co-editor, respectively, of the journal. In addition, we have been engaged in a number of exciting projects. I have just finished my overdue book on Korean ethnic nationalism and am currently working with Kyu Sup Hahn, a doctoral student in Communications, on a project on U.S. media coverage of Korea and South Korean media coverage of the U.S. from 1992-2004. We will also continue on-going projects such as "Globalization in Korea" and "Historical Injustice, Reconciliation, and Cooperation." I appreciate the assistance of the many students and researchers who have been working with me on these projects over the years.

This year we will do an international search to fill the William Perry Chair in contemporary Korea. This is an extremely important appointment for the Korean Studies Program at Stanford, and you will have the opportunity to meet candidates throughout the year.

Thanks again for your continued support of the Korean Studies Program at Stanford. I look forward to seeing you at the various KSP events and programs throughout the year.

Cordially,

Gi-Wook Shin,

Director

Neither the Bush nor the Kerry campaign has chosen to make U.S. policy toward North Korea a central part of its election platform -- and for good reason. Both sides recognize that it may no longer be possible to peacefully resolve the dispute over that country's nuclear-weapons development, and a debate over whether to wage another controversial war would hardly appeal to the electorate.

The fundamental problem is that North Korea believes it needs a sizable nuclear arsenal. Politically, such an asset would transform the country into a regional power whose views on international issues must always be taken seriously. Militarily, the possession of a large number of atomic weapons would bolster North Korea's security by discouraging intimidation of the sort Washington employed in 1994, when it forced President Kim Jong Il to shut down his plutonium-based arms program.

Most compelling, however, is Pyongyang's financial situation. The North Korean economy is so dysfunctional that it cannot reliably generate enough wealth to sustain the state. Kim and his colleagues have dabbled in reform, but they apparently realize that the degree of liberalization necessary to produce strong GDP growth would coincidentally release a wave of popular animosity sufficient to wash the government away. Thus, the safest course of action is to leave the economy unreconstructed while securing a constant stream of foreign aid.

Since Pyongyang needs leverage to obtain this support, it is determined to amass a big nuclear force. The international community would then have no means of persuading North Korea to abandon its weaponry short of risking catastrophic war and would consequently be reduced to bribing the Kim government not to use its new capabilities.

Moreover, if the flow of aid were interrupted, Pyongyang could garner the foreign exchange it requires by selling its new technology, fissile materials or even a few of its bombs.

What this implies is that despite its rhetoric to the contrary, North Korea does not really want to trade its nuclear program for economic assistance and a security guarantee. Pyongyang would plainly prefer to embark on diplomatic talks with nuclear weapons in hand. This is why it cheated on the 1994 agreement by enriching uranium and why it resumed reprocessing plutonium in early 2003. But to realize his strategic aspirations, Kim must still prevent the United States, China, Japan and South Korea from forming a coalition that imposes crippling sanctions before his armament effort has reached fruition.

Driving wedges between the other regional powers is not as difficult as it might seem. Paradoxically, perhaps, the United States is the only relevant country that views the achievement by North Korea of significant nuclear status as absolutely unacceptable.

Tokyo and Seoul are worried about that eventuality but conversely fear the geopolitical instability and refugee crisis that would ensue if economic or military pressure caused the Kim regime to collapse. Beijing shares these immediate concerns and additionally worries about the longer-term possibility that a united Korean Peninsula might incline toward the United States.

Only by alleviating these anxieties can the U.S. government unite East Asia against North Korea.

Washington, however, is constrained by its own internal rift. On the one hand are those doves who want to exchange aid and a security arrangement for the termination of North Korea's nuclear projects, on the other are the hawks who oppose all diplomatic contact with the Kim government. The conflict between these two camps has paralyzed Bush administration policy, leaving Pyongyang more or less free to proceed with its nuclear gambit.

If the doves err in overestimating Pyongyang's flexibility, the hawks are guilty of the more serious mistake of thinking that a refusal to negotiate with mendacious states is an actual diplomatic strategy.

In fact, the talks advocated by the doves are an essential step toward the application of coercive force. It is only by offering reasonable deals, and having the Kim government reject them, that Washington can demonstrate to Beijing, Tokyo and Seoul that Pyongyang cannot be bought off with money and a verbal guarantee of its security. This recognition, in turn, is critical both to building a coalition against North Korea and, alternatively, to reducing the political costs of unilateral U.S. military action.

The better course has therefore always been to negotiate earnestly with Pyongyang in the hope that it would accede to a peace agreement while knowing that its failure to do so would facilitate the adoption of more assertive measures, if necessary, at a later date.

Yet rather than taking every opportunity to interact with Kim's representatives, the Bush administration has limited its diplomacy to desultory exchanges at multilateral conferences and only put forward a detailed settlement proposal in June. Pyongyang has exploited the opening created by this stubbornness fairly effectively. It has capitalized on anti-American sentiment in South Korea by persuading Seoul to cooperate economically and militarily while also prevailing upon Tokyo to resume large-scale food aid and seek an early exchange of ambassadors.

In the occasional six-party talks with delegations from China, Japan, Russia, South Korea and the United States, Pyongyang's objective has been to stall for time. Its diplomats have postponed specific meetings many times; then behaved so egregiously that the other participants were relieved when the North Koreans consented merely to engage in future negotiations. Those too, however, would soon be rescheduled.

Washington has inadvertently abetted these tactics through thoughtless insults -- canceling, for instance, informal exchanges between U.S. and North Korean officials at the last minute -- which Pyongyang could then cite as proof that the United States was not acting in good faith.

North Korea has also benefited from the awkward developments that inevitably arise when sensitive dialogues are delayed. Seoul's recent declaration that it had reprocessed a small volume of nuclear material is one such event; Pyongyang may use that admission to complicate the next round of six-party discussions. Thus the Kim government buys more time for its nuclear technicians to continue their work.

It is true that North Korea has committed some blunders over the past two years, but it has played its cards more adroitly than the United States. The members of a potential coalition are largely going their own way now, and the odds that those countries will unite behind any U.S. strategy, peaceful or otherwise, have diminished considerably.

So, unless the winner of the November election acts quickly and with better judgment than Washington has so far, the United States may soon be forced to choose between launching military strikes without foreign support and letting Kim attain the nuclear status he desires.

ROBERT MADSEN is a fellow at the Asia-Pacific Research Center, Stanford Institute for International Studies. He wrote this article for Perspective.

After an intensive selection process, the Asia-Pacific Research Center (APARC), Stanford Institute for International Studies at Stanford University has selected the first class of its APARC Fellowships for pre-doctoral scholars. Kaoru Shimizu and Joo-Youn Jung will be in residence during the 2004-2005 academic year. They will be named Takahashi Fellows in honor of Takahashi family whose generous gift made this fellowship possible.

Kaoru (Kay) Shimizu is a Ph.D. candidate in the department of political science. Her dissertation topic is "The Political Dynamics of Capitalism: Barriers to Reform in Japan and China" in which she adopts a political economy approach to compare the causes and resolution of non-performing loans in China and Japan.

Joo-Youn Jung is a Ph.D. candidate in the department of political science. In her dissertation she will be examining how and why the powerful bureaucratic states of China, South Korea, and Japan have changed in response to the powerful forces of financial crisis, non-performing loans, and banking reform and what impact these changes have had on efforts to implement urgently needed policy changes.

APARC looks forward to their joining us in the fall.

After an intensive selection process, the Korean Studies Program (KSP) at the Asia-Pacific Research Center (APARC), Stanford Institute for International Studies at Stanford University has selected the first class of its Pantech Fellowships for Mid-Career Professionals. Philip W. Yun and John Feffer will be in residence during the 2004-2005 academic year and collaborate with the faculty and fellows at KSP and APARC. The fellowship was made possible by generous gift from Pantech Group.

Philip Yun received his law degree from Columbia University and was a Fulbright Scholar at the Yonsei University Graduate School of International Studies. Yun has had a remarkable career working both in the private and the public sector. While holding high-level positions at the U.S. Department of State, Yun worked closely with the Secretary of Defense, Dr. William Perry, to develop broad expertise on international negotiations, strategic planning and problem solving. He has practiced law both in Korea and in the U.S., worked in private equity investment, and provided comments and opinions for the media on North Korean issues. While in residence, he will work on developing an outline of a comprehensive roadmap that will lead to a secure and prosperous Northeast Asia that would include North Korea.

John Feffer is an accomplished writer and editor who has written on numerous topics such as the politics of food, Asia, Eastern Europe, Russia, foreign policy, economics, and nationalism. As a frequent traveler to North Korea (and to South Korea), he has a rare knowledge of and balanced perspective toward North Korea. His most recent publication is "North Korea/South Korea: U.S. Policy at a Time of Crisis". He is a former associate editor of World Policy Journal and has worked for the American Friends Service Committee, most recently as an international affairs representative in East Asia. He serves on the advisory committees of the think tank Foreign Policy in Focus and the Alliance of Scholars Concerned about Korea. While in residence, he will concentrate on examining food policy on the Korean peninsula.

KSP and APARC look forward to their joining us in the fall.

San Francisco -- Offshoring is just one of many global forces impacting job creation and destruction in the Bay Area and cannot be viewed in isolation from the key trends enabling it, such as globalization, technology-driven improvements in productivity and business disintermediation. Efforts to prevent offshoring will not be successful and are likely to come at considerable economic cost, according to a new study released today.

Sponsored by Joint Venture: Silicon Valley Network, the Bay Area Economic Forum and the Stanford Project on Regions of Innovation and Entrepreneurship (SPRIE), with research and project support from global management consulting firm A.T. Kearney, the study analyzed global trends, regional capabilities and the Bay Area job market.

Findings from the study, the first regionally focused on the Bay Area, were based on 120 interviews, analysis of 9,000 job listings and other primary and secondary research.

The Bay Area already has more experience with globalization and offshoring than other parts of the U.S., the study reports. Bay Area manufacturers earn almost 60 percent of their revenues in overseas markets. Analysis done as part of the study revealed 94 percent of companies in the semiconductor and semiconductor equipment manufacturing and software clusters - two driving sectors in the Bay Area in terms of employment and payroll contribution - are already using offshore resources.

This does not mean all jobs are going offshore. The study also found one-in-four job postings for large companies in those sectors during April 2004 was for positions in the Bay Area.

"The research makes clear that global trends will force continued creation and destruction of jobs in the Bay Area. These trends can't be reversed. Policies and investment should be directed toward helping the region strengthen its core capabilities to compete effectively on a national and global basis" said Sean Randolph, President & CEO of the Bay Area Economic Forum.

The study calls for policymakers to maintain strong support for basic research, invest in education to ensure a competitive local workforce and to address vulnerabilities in the regional business environment including housing, transportation and business regulations that hinder local job creation. Business leaders need to support transition programs and consider investment in local employee development to meet their future job needs.

The study found the Bay Area is losing ground to other regions in the U.S. and overseas in three competitive capabilities: mass production, back-office (transactional) operations and product and process enhancement. The competitive erosion in the latter is new. It appears that the Bay Area is rapidly losing out to other regions in occupations associated with engineering focused on cost reduction, fine-tuning processes and expanding product features. These engineering jobs, along with manufacturing and administration-related occupations, are expected to decline as the skills required for those functions are sourced more cost effectively in other regions of the United States and abroad.

The study also identified five competitive capabilities that investors and business leaders believe are key strengths of the Bay Area. In addition to three capabilities traditionally linked to the region (entrepreneurship/new business creation, research in advanced technologies and bringing new concepts to market), the analysis pointed to two other competitive capabilities not always in the spotlight:

• Cross-disciplinary research - coordinating and integrating advanced learning across industries and scientific disciplines.
• Global integrated management - managing and coordinating globally distributed business functions and networks.

Jobs aligned with these five regional strengths, such as high-level research, strategic marketing and global business and headquarter management activities, are expected to experience solid growth.

"The findings confirm that the region should continue to attract talent and foster innovation, start-up activity and job creation, as technology companies are launched and commercialized," said Russell Hancock, President and CEO of Joint Venture: Silicon Valley Network.

The Bay Area's strengths make the region a leader in job creation in early stages of the business lifecycle, but its weaknesses lead to job growth outside the region in the later stages. As a result, the study says, the Bay Area will continue to incubate and develop new businesses, a process that has historically been the core growth engine for the local job market.

"Companies founded in the Bay Area will typically maintain the majority of their workforce in the region until their first products or services gain market traction and key business processes stabilize," said John Ciacchella, Vice President with A.T. Kearney. "However, as these companies expand and mature, many of the new jobs that stay local will focus on management of expanding business operations that are outsourced, offshored and distributed to other regions."

The Bay Area also is well positioned in the industries likely to spawn new technology

start-ups, according to the study's job market analysis and interviews. Beyond its leading role in information technology, the Bay Area has the highest concentration of biotechnology firms in the country and more nanotechnology firms than all countries except Germany.

"How jobs in a region are affected by global trends depends on the competitiveness of the region's capabilities," said Marguerite Gong Hancock, Associate Director of SPRIE. "Despite a rise in the capabilities of other entrepreneurial regions globally, the Bay Area continues to lead in many of the capabilities considered most necessary for innovation and new business creation"

The study findings will be presented at a public event on Thursday, July 15, at Stanford University, where a panel of business and community leaders will discuss the report's findings and implications and take questions from the audience. The panel will be moderated by Paul Laudicina, managing director of A.T. Kearney's Global Business Policy Council, and includes:

• Edward Barnholt (Chairman, President & CEO, Agilent Technologies)
• William T. Coleman (Founder, Chairman & CEO, Cassatt Corporation, and Vice Chairman, Silicon Valley Manufacturing Group)
• Anula K. Jayasuriya (Venture Partner, ATP Capital LP)
• William F. Miller (Professor Emeritus, Stanford Graduate School of Business)
• The Honorable Joe Nation, California State Assembly

BAY AREA ECONOMIC FORUM
Bay Area Economic Forum (www.bayeconfor.org) is a public-private partnership of senior business, government, university, labor and community leaders, develops and implements projects that: support the vitality and competitiveness of the regional economy, and enhance the quality of life of the regions residents. Sponsored by the Bay Area Council a business organization of more than 250 CEOs and major employers, and the Association of Bay Area Governments, representing the region's 101 cities and nine counties, the Bay Area Economic Forum provides a shared platform for leaders to act on key issues affecting the regional economy.

JOINT VENTURE: SILICON VALLEY NETWORK
Joint Venture: Silicon Valley Network (www.jointventure.org) is a nonprofit organization that provides analysis and action on issues affecting the economy and quality of life in Silicon Valley. The organization brings together new and established leaders from business, labor, government, education, non-profits, and the broader community to build a sustainable region that is poised for competition in the global economy.

STANFORD PROJECT ON REGIONS OF INNOVATION AND ENTREPRENEURSHIP
The Stanford Project on Regions of Innovation and Entrepreneurship (http://sprie.stanford.edu), or SPRIE, is dedicated to the understanding and practice of the nexus of innovation and entrepreneurship in the leading regions around the world. Current research focuses on Silicon Valley and high technology regions in 6 countries in Asia: People's Republic of China, Taiwan, Japan, Korea, Singapore and India. SPRIE fulfills its mission through interdisciplinary and international collaborative research, seminars and conferences, publications and briefings for industry and government leaders.