SERI KPSI Reports
SERI's quarterly survey on Korean Peninsula security
The SERI Korean Peninsula Security Index (KPSI) was developed by the Samsung Economic Research Institute (SERI) in 2005 for an objective assessment of the security situations on the Korean peninsula on a quarterly basis. Forty experts in the Republic of Korea, US, China, Japan and Russia were surveyed on the economic and security status of the Korean peninsula and the results were quantified to produce the index using a baseline of 50 (above 50 is positive; below is negative).
The death of North Korean leader Kim Jong-Il in December 2011 led to sharp declines in the first KPSI survey of 2012. The first-quarter Composite Current Index was 45.18 and the Composite Outlook Index for the second quarter was 46.00. In the previous quarter, the indices were 53.37 and 52.61, respectively.
The current index level is similar to the second quarter of 2009 (45.33), shortly after North Korea's second nuclear test. On a nominal basis, the ramifications of the death of Kim Jong-Il were on a par with the nuclear test. The indices for North Korea's political stability and socio-economic stability that were in the 50 range before his death sank to the 30 range, reflecting worries about the third-generation succession in Pyongyang. Although most of the surveyed experts acknowledged inherent uncertainties surrounding Kim Jong-Un, they predicted he would assume power smoothly in the wake of his father's death.
Other contributors to the pullback in the Composite Current Index were South Korea's socio-political stability and economic stability indices. Both have been stuck in negative territory since the third quarter of 2011. In particular, South Korea's socio-political stability index sank to 37.23, the lowest since 2008, when three months of candlelit vigils against US beef imports stymied the government and plunged the index to 32.86.
In contrast to the declines, the North Korea-China relations index rose to 69.68 from 65.48 in the fourth quarter of 2011, taking a step closer to 70.00 posted when Kim Jong-Il's visit to China in May of 2011 brought the two nations much closer. In addition, the surveyed experts believe North Korea-China relations will strengthen further to stabilize the North Korean regime in a post-Kim Jong-Il era. Meanwhile, uncertainty hangs over South Korea-US relations: it shrank to 57.45 in the first quarter after hitting an all-time high of 77.38 bolstered by the South Korea-US summit talks in October, 2011. Although it remains in positive territory, worries about the opposition parties' election campaign pledge to renegotiate or scrap the Korea-US trade agreement free (KORUS FTA) if elected appeared to have an effect.
Noteworthy is that military tension between South Korea and North Korea index fell to 39.36 after having hovering in the 40 range since the second quarter of 2011, when the impact of artillery shelling of Yeonpyeong Island dissipated. The experts also worried about the possibility of tension buildup between the two Koreas in non-military areas. North Korea is skeptical of inter-Korean contact: it has already rejected the South Korean government's offer to hold Red Cross working-level talks. Thus, if an atmosphere of dialogue is created among stakeholders in the Korean peninsula to address the North Korean issue such as the resumption of the six-party talks, efforts to stabilize the Korean peninsula become even more important.For full text (31 pages), click the PDF icon on top.