How will the death of Kim Jong-il affect us?

Kim Jong-Il’s death was announced by state television in Pyongyang on the 19th of December. The Supreme Leader of the Democratic People's Republic of Korea and Supreme Commander of the world’s fourth largest standing army was one of the last stalwarts of the Cold War era, who clung on to power with the tenacity of a bear, ruling rather consistently with fear at home coupled with fear abroad.

Following the death of an almost-globally condemned leader, one might assume that we’re all a little bit safer. Are we?

The death of the ‘beloved Dear Leader’ has caused some fear amongst North Korean observers of a power struggle, and considering the DPRK’s status as one of the world’s most deranged (most likely to provide nuclear weapons to terrorists) nuclear powers (in competition with Pakistan), a power struggle could have catastrophic results for the rest of the world. The DPRK is known to have supplied nuclear proliferation know-how to Iran, along with 19 Russian-designed missiles capable of carrying nuclear munitions.

That being said, Kim Jong-Il had made plans for the eventuality, and in 2010 had appointed his third son, Kim Jong Un his successor, also handing him several high-ranking posts. The news coming out of North Korea also does seem to point to support from all quarters for the new leader, but news coming out of the DPRK has always been limited to official news. The one-dimensionality of the news is probably a good sign where stability is concerned, seeing as it shows that the North Korean state apparatus is still firmly in control. A pity though, for observers hoping for national revolution a la the Arab Spring.

Asian markets, fearing instability on the Korean peninsula, sank rapidly. The South Korean Kospi Index dropped 4.1% but later recovered to trade 3.4% lower. Japan’s Nikkei 225, Hong Kong’s Hang Seng and Shanghai’s Composite Index also lost a couple of percentage points.
The geopolitical reality is that there is essentially a power-transition in an unstable country, and that does not make investors abound with confidence. Worries are the most acute in South Korea and Japan, two countries that have often gone toe-to-toe with the DPRK over a number of issues.

More on this issue as it develops.