I wrote a write-up about the possibilities for dealing with a nuclear North Korea, and I think it's pretty good. Check it out.
North Korea is probably the part of Bush's 'Axis of Evil' about which people know the least. North Korea is a Stalinist state in East Asia. It was established as a Communist republic in 1948 following the removal of Japanese occupation forces. The country was split along the 38th parallel between the United States of America and the Soviet Union. The States got the South, which became a Western-orientated democracy, and Kim Il Sung founded the Democratic People's Republic of Korea in the North, with Stalin's support.
Of course, leaving a divided Korean peninsula was surely going to cause problems. Unfortunately, neither the U.S. or the USSR wanted the strategic area to succumb to the other's ideology, and the only agreement that could be reached was to partition the country. Hence the Korean problem was born of Cold War politics.
The Korean War was launched by the North when their founder and ruler, Kim Il Sung (by now the head of a powerful personality cult and ruler for life), decided the only way he could unify the peninsula under Communist rule was by military force. And at the time, things looked good for him - the North had a bigger, better-trained armed force, and the backing of the Communist Chinese Army. Of course, the Korean War was anything but a success for Kim Il Sung and his Communist allies (although he touted it as such, claiming a great victory for having forced the "great superpower" of the United States to "surrender"). The attempt to unify the peninsula under Communist rule was a failure.
North Korea is, in fact, demonstrably a large failure. The lack of foreign investment has had a catastrophic effect on its development - its GDP for 2001 was estimated to be $21.8 billion, compared to South Korea's $865 billion. South Korea's per capita GDP is seventeen times that of its wayward neighbour. South Korea is one of the Asian Tigers, with 45% of the world's shipbuilding industry. North Korea received $300 million in food aid last year.
North Korea's time seems to be running out. The current ruler and son of the country's founder, Kim Jong Il, maintains a military force of about a million men, on which it spends a quarter of its national income. As is eloquently noted above, these are just about the only people in North Korea who eat (along with the political elite, who number about 200,000, and the cause of much popular resentment).
After the worldwide collapse of Communism, North Korea was isolated. Most of its former allies defected to the South, keen to move ahead in the new Western-centralised world. There is now little need for any country to pay attention to the Democratic People's Republic of Korea. Apart from their nuclear weapons.
A 1994 Framework Agreement supposedly froze the North Korean nuclear program and mothballed their reactors (some intelligence analysts think North Korea had developed a bomb prior to this time). In return, the U.S. provided oil and built two safer reactors. However, the shipments of U.S. oil, as well as those from Japan and the South, stopped in November of 2002 when North Korea unveiled it had started a new, secret nuclear program in the late 1990s. Why did it start? As a bargaining chip.
Kim Jong Il cannot be comforted as he surveys the world - it looks dangerous. It would not be hard for any of its regional partners to intervene and liberate the Korean people - not much is stopping them, apart from the proximity of the South's capital, Seoul, to the 38th parallel. It houses a quarter of the country's population, and even though an Allied attack on North Korea would no doubt be successful, it would come at the cost of the destruction of Seoul. This is too large a burden to bear.
Washington's reaction to North Korea's announcement about its new nuclear program has been measured, and one mainly of indifference. One thing seems to be for sure - if North Korea is going to try and intimidate the United States into delivering based on its nuclear program, it will likely meet with failure. North Korea is in negotiations with its neighbours, but they are hardly in thrall to its desires - the relations with all of its neighbours have been marred by various events. Washington has said it will not stand in the way of Japan or South Korea developing nuclear arms to counter the North's (the two Koreas signed a treaty to keep the peninsula non-nuclear; however, the North's actions mean we can now consider this void.)
Before this revelation, the United States had been applying significant diplomatic pressure on North Korea to change its stance on a number of issues, mainly related to human rights, in return for economic and diplomatic aid. Attempts were being made to "normalize" relations. Maybe, it was hoped, we could bring North Korea into the fold of decent humanity. In return, they might stop funding terrorists and exporting missiles. Now, it seems that a policy of containment and isolation is the way to go. If their nuclear program bears fruit (indeed, if it has already), we could face a new, mini-Cold War on the Korean peninsula.