Despite threats, risks temper Korea war tensions

TOKYO (AP) — As tensions rise on the Korean Peninsula, one thing remains certain: All sides have good reason to avoid an all-out war. The last one, six decades ago, killed an estimated 4 million people.

North Korea's leaders know that war would be suicidal. In the long run, they cannot expect to defeat the United States and successfully overrun South Korea. War would be horrific for the other side as well. South Korea could suffer staggering casualties. The U.S. would face a destabilized major ally, possible but unlikely nuclear or chemical weapons attacks on its forward-positioned bases, and dramatically increased tensions with North Korea's neighbor and Korean War ally, China.

Here's a look at the precarious balance of power that has kept the Korean Peninsula so close to conflict since the three-year war ended in 1953, and some of the strategic calculus behind why, despite the shrill rhetoric and seemingly reckless saber-rattling, leaders on both sides of the Demilitarized Zone have carefully avoided going back over the brink.

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THE SEA OF FIRE

Even without nuclear weapons, North Korea has an ace in the hole. Most experts believe its claims to have enough conventional firepower from its artillery units to devastate the greater Seoul area, South Korea's bustling capital of 24 million. Such an attack would cause severe casualties — often estimated in the hundreds of thousands — in a very short period of time.

Many of these artillery batteries are already in place, dug in and very effectively camouflaged, which means that U.S. and South Korean forces cannot count on being able to take them out before they strike. Experts believe about 60 percent of North Korea's military assets are positioned relatively close to the Demilitarized Zone separating the countries.

North Korea's most threatening weapons are its 170 mm Koksan artillery guns, which are 14 meters long and can shoot conventional mortar ammunition 40 kilometers (25 miles). That's not quite enough to reach Seoul, which is 50 kilometers (30 miles) from the DMZ. But if they use rocket-assisted projectiles, the range increases to about 60 kilometers (37 miles). Chemical weapons fired from these guns could cause even greater mayhem.

North Korea experts Victor Cha and David Kang posted on the website of Foreign Policy magazine late last month that the North can fire 500,000 rounds of artillery on Seoul in the first hour of a conflict.

Even so, not everyone believes North Korea could make good on its "sea of fire" threats. Security expert Roger Cavazos, a former U.S. Army officer, wrote in a report for the Nautilus Institute last year that, among other things, North Korea's big guns have a high rate of firing duds, pose more of a threat to Seoul's less populated outer suburbs, and would be vulnerable to counterattack as soon as they start firing and reveal their location.

"North Korea occasionally threatens to "turn Seoul into a Sea of Fire," he wrote. "But can North Korea really do this? ... The short answer is they can't; but they can kill many tens of thousands of people, start a larger war and cause a tremendous amount of damage before ultimately losing their regime."

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FIRST STRIKES, PRE-EMPTIVE STRIKES

This is what both sides say concerns them the most.

North Korea says it is developing nuclear weapons and long-range missiles as a deterrent to keep the United States or South Korea from attacking it first. The reasoning is that Washington will not launch a pre-emptive strike if North Korea has a good chance of getting off an immediate — and devastating — response of its own.

Along with its artillery aimed at Seoul and other targets in South Korea, North Korea is developing the capacity to deploy missiles that are mobile, thus easier to move or hide. North Korea already has Rodong missiles that have — on paper at least — a range of about 1,300 kilometers (800 miles), enough to reach several U.S. military bases in Japan. Along with 28,000 troops in South Korea, the U.S. has 50,000 troops based in Japan.

North Korea is not believed to be capable of making a nuclear weapon small enough to fit on a long-range missile capable of hitting the United States. But physicist David Albright, president of the Institute for Science and International Security, believes it may be capable of mounting nuclear warheads on Rodongs. In any case, Pyongyang is continuing to pursue advancements, apparently out of the belief that it needs nuclear-tipped missiles capable of reaching the U.S. to have a credible deterrent.

The United States rejects the North's claim that such a deterrent is necessary, saying it does not intend to launch pre-emptive strikes against North Korea. At the same time, Washington has made it clear that it could.

During ongoing Foal Eagle military maneuvers in South Korea, two U.S. B-2 strategic stealth bombers, flying from their base in Missouri, conducted a mock bombing run on a South Korean range. The B-2 is capable of carrying nuclear weapons, precision bombs that could take out specific targets such as North Korean government buildings, and massive conventional bombs designed to penetrate deep into the ground to destroy North Korean tunnels and dug-in military positions. One big problem, however, is determining where the targets are.

Amid heightened tensions over North Korea's nuclear weapons program in 1994, President Bill Clinton reportedly considered a pre-emptive strike, but decided the risks were too high.

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CHINA'S DILEMMA

Without China, North Korea wouldn't exist. The Chinese fought alongside the North Koreans in the Korean War and have propped up Pyongyang with economic aid ever since.

Beijing has grown frustrated with Pyongyang, especially over its nuclear program. China and the U.S. worked together in drafting a U.N. resolution punishing the North for its Feb. 12 nuclear test.

But China still has valid reasons not to want the regime to suddenly collapse.

War in Korea would likely spark a massive exodus of North Korean civilians along its porous 1,300-kilometer (800-mile) border, which in turn could lead to a humanitarian crisis or unrest that the Chinese government would have to deal with. The fall of North Korea could pave the way for the United States to establish military bases closer to Chinese territory, or the creation of a unified Korea over which Beijing might have less influence.

China, the world's second-largest economy, also has significant trade with South Korea and the United States. Turmoil on the Korean Peninsula would harm the economies of all three countries.

Patrick Cronin, an Asia expert at the Center for a New American Security and a senior State Department official during the George W. Bush administration, said Beijing is helping set up back-channel negotiations with North Korea to ease the tensions. But he warned that the U.S. isn't likely to win China over as a reliable partner against North Korea beyond the current flare-up.

"There are limits to how far China and the U.S. have coincidental interests with regard to North Korea," he said.

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Analysis: Experts see risks from Canada's fixation on balanced budget

By Louise Egan

OTTAWA (Reuters) - The government's steely determination to balance Canada's budget by 2015 could brake an economy that is already showing signs of strain, as Ottawa seeks to rebuild a reputation for prudence that made it the envy of the industrialized world.

The 2013-14 federal budget, due later this month, is set to reinforce the government's message that the deficit will be eliminated by 2015, an election year, and it will include what Finance Minister Jim Flaherty called "more sacrifices" from various ministries in the form of spending cuts.

But not everyone agrees that the tough fiscal targets make economic sense, given that Canada just recorded the weakest two quarters of economic growth since the 2008-09 recession.

"I don't think there are any economists that are particularly concerned about the deficit at this point," said David Macdonald, a senior economist at the Canadian Centre for Policy Alternatives (CCPA), an Ottawa-based think tank.

The Parliamentary budget officer, which provides independent analysis of the nation's finances, estimates spending cuts will shave about 0.6 percent from GDP this year, 0.9 percent next year and 1 percent or more in 2015 and beyond.

"This is like the minister standing up and saying: 'my plan for the economy is to cut growth by a third.' That's something no minister would ever say but that's in fact what is happening," said Macdonald.

Canada, once dismissed as a high-debt basket case, spent years between 1994 and 1997 taming its federal budget deficit, and winning a global reputation as prudent fiscal managers with a top-tier rating.

But the Conservative government allowed the surplus to turn to deficit as the recession hit, adding big spending programs to previously announced tax cuts to stimulate the economy.

Ministers now say its time to turn that pattern round again.

"If you don't set targets like that based on your original processes, you'll never reach a target," Tony Clement, the minister who oversees departmental spending, said in an interview with Reuters on Monday.

Asked if the government was perhaps trying to balance the books too soon, he replied: "We've shown fiscal probity that is all too rare with advanced, industrialized economies, so I think we are the poster child in the G7 and the G20 ... that other countries would do well to emulate."

The renewed penny-pinching push comes as consumers have hit a debt wall, businesses are too scared to invest and exports have yet to recover their pre-crisis levels due to weak global demand. The Bank of Canada has made it clear it will not cut interest rates to stimulate the economy, leaving fiscal policy as the only other tool to boost growth.

Yet one business leader who has met several times with finance officials in pre-budget consultations said he was hearing that the minister won't bend on the 2015 target.

Flaherty has blamed a price discount on Canadian oil for a "significant" hit to federal revenues and said he would have to compensate by focusing "like a laser" on spending and closing some tax loopholes.

The main opposition party, the New Democrats, accuses Prime Minister Stephen Harper of trying to please his small-government, conservative base and make fiscal room to offer new goodies the next time they go to the polls in October 2015.

"Austerity can be a job killer and a growth killer," said NDP legislator Peggy Nash.

In the May 2011 election, Harper promised a tax cut for families with children by allowing the higher earner to split some of his or her income with a spouse, and a higher ceiling on tax-free savings accounts, costly measures that will take effect only after the budget is balanced.

Ottawa expects the 2012-13 federal budget deficit to be C$26 billion, or about 1.5 percent of gross domestic product, falling to C$13.5 billion in 2013-14.

That is trivial compared to the U.S. or U.K. deficits of about 5 and 7 percent of GDP, respectively, although Canada's numbers are less flattering when provincial government debt is included.

Even if the government increased spending substantially and ran a deficit next year twice the amount forecast, as proposed by Macdonald and his colleagues, the debt-to-GDP would decline to 31 percent in 2015-16 from the current 33 percent.

Canada would still have the best debt position in the Group of Seven advanced economies.

Chief economists from Canada's largest commercial banks said last week that bond markets and rating agencies don't mind if the fiscal gap is closed in 2015 or a couple of years later.

"Given the fact that a lot of the provinces are moving into pretty serious restraint, it would probably be unwise for the federal government to step on the brake further than they already have," said Doug Porter, chief economist at Bank of Montreal.

But even as the federal government pushes ahead with plans to cut spending, cities are hoping for extra cash for infrastructure like roads, bridges and public buildings, arguing that Ottawa should take advantage of current low interest rates.

"We've been very encouraged and are hopeful with regards to the outcomes on budget day," said Karen Leibovici, president of the Federation of Canadian Municipalities (FCM), which lobbies on behalf of cities.

The FCM is seeking an additional C$2.75 billion in infrastructure spending, which would bring it in line with investment seen in the 1980s and 1990s in percentage of GDP.

Flaherty says will be revealed on budget day, the date of which is likely to be announced in the coming days.

(Additional reporting by Euan Rocha and Janet Guttsman in Toronto; Editing by Diane Craft)

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Security risks, frayed relations dog US, Afghans

KABUL, Afghanistan (AP) — A series of security problems and fractured relations with Afghan leaders plagued Defense Secretary Chuck Hagel's first trip here as Pentagon chief, including the Afghan president's accusations that the U.S. and the Taliban are working in concert to show that violence in the country will worsen if most coalition troops leave.

The top U.S. commander in Afghanistan, Gen. Joseph Dunford, quickly rejected the charges President Hamid Karzai made Sunday as "categorically false." But the accusations were just the latest in a series of disputes that have frayed relations between the two nations as the U.S. works to wind down the war and turn the country's security over to the Afghans.

Speaking to reporters shortly after Karzai made the comments, Dunford said the Afghan leader has never expressed such views to him but said it was understandable that tensions would arise as the coalition balances the need to complete its mission with the Afghans' move to exercise more sovereignty.

"We have fought too hard over the past 12 years, we have shed too much blood over the past 12 years, we have done too much to help the Afghan security forces grow over the last 12 years to ever think that violence or instability would be to our advantage," said Dunford.

Dunford's comments came, however, soon after U.S. officials cancelled a news conference with Hagel and Karzai because of a security threat — just a day after a suicide bomber on a bicycle struck outside the Afghan Defense Ministry, killing nine Afghan civilians and wounding 14 others. Hagel heard the explosion from the safe location where he was meeting with Afghan officials but was never in danger.

The security problems compounded a series of flare-ups in recent weeks, including a dispute that has stalled the transfer of a U.S. prison to Afghan authority as well as Karzai's order to expel U.S. special operations forces out of Wardak province, which lies just outside the capital, because of allegations that Afghans working with the commandos were involved in abusive behavior.

Hagel met with Karzai Sunday night and said that he discussed all the key issues with the president. He also rejected any suggestions that the U.S. is in collusion with the Taliban. Speaking to reporters traveling with him, Hagel declined to detail his conversation with Karzai but said, " I think he understands where we are and where we've been, and hopefully where we're going together"

Hagel said he's known Karzai since shortly after the invasion in late 2001, adding that such extended relationships can often be beneficial, especially when dealing with complicated issues.

The U.S. and Afghan leaders are in the midst of negotiations over the long-term presence of American forces in Afghanistan beyond the end of 2014, when all combat troops are scheduled to leave.

U.S. officials would not provide details on the security concerns that led to cancelling the news conference. They spoke on condition of anonymity because they weren't authorized to discuss the matter publicly. But Pentagon press secretary George Little said the cancellation was not due to Karzai's earlier comments about the U.S. and the Taliban.

During a nationally televised speech, Karzai said two suicide bombings that killed 19 people on Saturday — the one outside the Afghan Defense Ministry and the other near a police checkpoint in eastern Khost province — show the insurgent group is conducting attacks to help show that international forces will still be needed to keep the peace after their current combat mission ends in 2014.

"The explosions in Kabul and Khost yesterday showed that they are at the service of America and at the service of this phrase: 2014. They are trying to frighten us into thinking that if the foreigners are not in Afghanistan, we would be facing these sorts of incidents," he said during the speech about the state of Afghan women.

Karzai is known for making incendiary comments in his public speeches. And Dunford on Sunday said that some of the recent disputes between the U.S.-led coalition and Afghan leaders "strike at the heart of sovereignty" and could be more political in nature. He said Karzai may be doing what he needs to do to communicate with the Afghan people and their political leaders outside the government.

That argument also resonated with Hagel, a former Republican senator from Nebraska. "I was once a politician so I can understand the kind of pressures that especially leaders of countries are always under," Hagel said. "I would hope that, again, we can move forward, and I have confidence we will and deal with these issues."

Dunford also rejected the suggestion that the recent friction reflects erosion in the U.S. relationship with Afghanistan.

"We do not have a broken relationship, we do not have a lack of trust," said Dunford, adding that none of the political dust-ups have bled over into his dealings with his Afghan security force counterparts. He said efforts to train and advise the Afghan security forces have continued and that plans for them to be in the lead for security across the country later this summer are on track.

Dunford would not detail why the scheduled transfer of the Parwan Detention Center was delayed again and called it a difference in perspective. But he made clear that the U.S. believes it must retain the power to insure that detainees who are deemed to be security threats remain in custody.

Currently, there is an Afghan administrator of the prison, which is located about an hour outside the capital, but the Americans have veto power over the release of detainees. The prisoners held under American authority do not have the right to a trial because the U.S. considers them detainees held as part of an ongoing conflict.

Regarding the move to expel the special operations forces, Dunford said he spoke to Karzai about the issue on Saturday and told him the U.S. is working on a plan to transition security in the Wardak region to Afghan forces. He would not directly say whether the commandos will stay in Wardak when the deadline to leave comes on Monday. But he said Karzai knows they are working on the plan and has not yet issued a directive to the force.

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Associated Press writers Heidi Vogt and Rahim Faiez contributed to this report.

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Follow Lolita C. Baldor on Twitter: http://twitter.com/lbaldor

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