The 2018 Winter Olympics in South Korea takes place amid heightened geopolitical uncertainties on the peninsula, despite the games bringing about a thawing in relations between Seoul and North Korea. This presents complicated economic and security risks for visitors and foreign businesses.
The 2018 Winter Olympic Games take place between 9 and 25 February in South Korea’s north-eastern county of Pyeongchang in Gangwon province. The organisers are anticipating that it will be the largest Winter Olympics in history, with more than 90 countries sending around 6,000 athletes and officials to take part. The games take place amid heightened geopolitical uncertainties, despite signs of rapprochement on the peninsula. This presents complicated economic and security risks for visitors and foreign businesses.
Security concerns had loomed large over the games amid growing geopolitical hostility on the Korean Peninsula. As a result, France and the U.S. were among a number of countries which threatened to withdraw from the event if Seoul could not guarantee athletes’ safety. But in January, during the first official talks between the two Koreas in two years, agreement was reached allowing North Korea to take part in the games.
North and South Korean athletes marched under a unified flag at the 2018 Winter Olympics opening ceremony, and a joint women’s ice hockey team is competing. South Korean president Moon Jae-in met with Kim Yo-jong, the sister of North Korean leader Kim Jong-un, her appearance at the games the first time a member of the Kim ruling family has visited the South since the Korean War, which ended in 1953.
This report evaluates the threat North Korea poses to foreign visitors and businesses during the games.
Seoul technically remains at war with its northern neighbour, after an armistice ended the Korean War. While bilateral relations have always been fraught, they had rapidly deteriorated over the past year in the light of a tougher U.S. approach towards the North.
U.S. president Donald Trump’s bellicose rhetoric towards North Korea contributed to further destabilisation of the regional security environment, while his repeated exhortations for China to ‘get tough’ against the North appeared to have had little impact.
A Washington-led campaign to further isolate Pyongyang from the global trading system has been unsuccessful. International media reports revealed that more than 40 countries continue to be non-compliant.
Furthermore, these harsh measures have failed to rein in North Korea’s missile and nuclear testing. Last year, North Korea claimed to have successfully tested two intercontinental ballistic missiles (ICBMs) and an advanced hydrogen bomb. If true, these bring the country ever closer to becoming the world’s ninth nuclear weapon state.
North Korean threats
Allan & Associates continues to assess that the likelihood of an inter-Korean war is a high impact, low-probability event in the six-month outlook. The primary concern for North Korea is regime survival, as seen in its pursuit of nuclear weapons – typically a defensive approach. Therefore, it will likely seek to avoid any major armed conflict for as long as possible, reflected in its willingness to hold high-level talks with South Korea a month before the Winter Olympics.
The primary concern for North Korea is regime survival, as seen in its pursuit of nuclear weapons – typically a defensive approach.
The more likely threat, however, is that the U.S. will undertake unilateral military action against Pyongyang. According to the Wall Street Journal and the Telegraph, Washington is contemplating a ‘limited strike’ on North Korean targets to decimate its nuclear and missile programmes, but short of an all-out war. Pyongyang is likely to regard such moves as an act of war.
In the 1988 Summer Olympics held in Seoul, the U.S. Central Intelligence Agency (CIA) cited North Korean terrorism as a major threat to the games. Its concern was understandable, given that the country had historically demonstrated its capability to engineer large-scale attacks. In November 1987, North Korean agents targeted Korean Air Flight 858 in an explosives attack which killed more than 100 people.
Today, similar international concerns about North Korean state-backed covert attacks remain, albeit to a lesser degree. The likelihood of North Korea launching a large-scale, direct attack against the games is however lessened by Pyongyang signalling its willingness to participate in the games.
Nevertheless, a significant security incident at the Winter Olympics could still be a valuable opportunity for the North to demonstrate its capabilities on an international stage, particularly if the attack can be conducted in such a way as to sow confusion as to whether the North was actually responsible. In this case, athletes and individuals from the U.S. or its closest regional allies, such as Japan, are likely to be the most vulnerable.
There is a high likelihood that North Korean groups could launch a major cyber-attack against the Winter Olympics. The state is linked to a hacking campaign from 22 December 2017 against a wide range of commercial and government entities involved in the games, such as airports, recruiting agencies and ski resorts hosting the competitions. This is despite the South Korean authorities claiming in September 2017 that they had earmarked an additional KRW1.3 billion (USD1.2 million) for cyber-security.
The aim of that North Korean operation appeared to be early stage reconnaissance, suggesting that further disruptive attacks are plausible.
Allan & Associates assesses that the biggest threat that North Korea poses to the Winter Olympics is likely to be in cyberspace. Its agents could engineer high-level attacks to either undermine or discredit the South Korean authorities, with targets ranging from local government offices to critical infrastructure. The aim of such an attack will be to disrupt the high-visibility event, but without (as is usually the case with cyber-attacks) leaving definitive proof that the North was responsible.
Low-level attacks are also plausible and are likely to be motivated by criminal intent to steal financial or personal information from visitors attending the Winter Olympics. Targets in this case could range from payment systems to individual devices. Domestic and international financial institutions and banks are particularly at risk.
There is also the risk of cyber-espionage for foreign businesses, as major sponsor corporations will use the Winter Olympics as a platform for corporate hospitality and deal-making. North Korea runs a wide-reaching spy network inside South Korea, and foreign visitors should therefore assume that North Korean operatives are capable of infiltrating hotels and venues at the games to gain access to foreign representatives.
Allan & Associates advises organisations with plans to send representatives to the Winter Olympics to factor in the possibility that the relationship between North Korea and the West could rapidly deteriorate during the games. They should also prepare contingency plans, including a full-scale evacuation plan in which staff should head southwards towards the coastal city of Busan, instead of the capital Seoul, which is likely to come under heavy artillery fire in the unlikely event of an all-out conflict.