February 12, 2014:

A South Korean official recently revealed that the government had spent over $4 million to develop a way to measure how close the North Korean government is to collapse. Called the North Korea Situation Index (NKSI) this is a calculation based on many bits of data used to measure stability in the north. The exact data measured was not revealed so as not to endanger methods and sources, which have to be protected so that the enemy does not gain an edge in avoiding the surveillance or actual measurement.

Such indexes have been around for a long time in financial markets and risk management operations. Even there the confidentiality of methods and sources remains a factor, since the more that is publically known about how an index works the easier it is for someone to manipulate it and thus deceive the user. In financial markets such manipulation can be used to make a lot of money (and not legally in some countries). In the risk management business the manipulation can result in more vulnerability to risk and that can be expensive in terms of money and sometimes lives as well.

The South Korean official said that the NKSI was calculated once a year. In the commercial world such indexes are calculated continually and it may well be that the NKSI is as well but the government does not want to admit it. Many details of how to deal with a North Korean collapse are kept secret.

Some things are not kept secret. For example it was recently revealed that Chinese officials regularly meet with South Korean officials to discuss how to handle a collapse in North Korea. This is another example of Chinese flexibility and pragmatism. China and South Korea may be at each other’s throats over who owns some uninhabited islands in offshore waters, but that does not interfere with growing trade and mutual concern over a North Korea collapse. North Korea is in effect another territorial dispute between the two countries. South Korea wants to unite Korea and if North Korea collapses the opportunity will be there. China does not want a united, democratic Korea on its border. Neither country wants to start World War III over the dispute so they will try to negotiate some sort of compromise. The U.S. has agreed to accept whatever decision South Korea makes, although America advises avoiding any actions that could lead to a major war.

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