North Korea - AP
South Korean soldiers practicing martial arts at an air force base. Photo by AP
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South Korea is an especially interesting stop for Israeli tourists nowadays. While Israel's leadership chants with near-religious fervor that it will not live with an Iranian nuclear bomb, the South Koreans have managed to exist for several years under the ominous nuclear shadow of their neighbor to the north.

Pyongyang's regime is apparently more dangerous and crazed than that of Tehran's. But unlike Israel, South Korea had no choice but to accommodate itself to this situation.

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Even if the South Koreans (and more to the point, the West) had in the past a chance to eliminate the threat of nuclear capability above the 38th parallel, this opportunity was lost due to the hesitation and caution that characterized the responses of the Clinton and Bush administrations.

Pyongyang's well thought-out moves - ever-increasing provocation, contradictory messages about willingness to engage in negotiations, and a sprint to obtain nuclear capability and to demonstrate it in nuclear tests - left Washington helpless.

The ayatollahs in Tehran closely followed North Korea's moves. Collaboration between the two states involves the transfer of nuclear know-how, along with surface-to-surface long range missiles and solidarity with the tottering Syrian dictator Bashar Assad.

As former Mossad head Meir Dagan said several times, Iran is a diligent student of North Korea. It observed how the international community held back while Kim Jong-il armed himself with nuclear capability. Iran concluded that under the right circumstances, it could do the same. In the coming years, Tehran is likely to try to adopt this Pyongyang model.

Gradual rapprochement

At the brand new, empty Doransan train station, on the south side of the demilitarized zone between the two Koreas, there is a large, English-language billboard reading: "Not the last station from the South, but the first station toward the North."

This message comes up frequently in discussions in South Korea: Declarations are made, perhaps as lip service, in favor of a future union between the two Koreas, which were separated after World War II. The new entity would be the Republic of Korea, with the peninsula united under one flag.

That day seems far away. It is hard to gauge how important such unity would be in the eyes of average citizens in South Korea, even though some of our hosts mention relatives in the north with whom they are able only to maintain indirect, tenuous connections. The accommodating attitude toward the north, which was characterized over the last decade by the establishment of train stations and the disbursement of care-packages to Pyongyang, disappeared when governments changed in Seoul three years ago, and when the north's nuclear capability ratcheted up tensions.

Asked about current attitudes toward the future of the Koreas, a commander of a South Korean air force base declared: "Should the government order us to do so, we'll know how to attack the north, nuclear weapons notwithstanding."

In actual fact, it appears that the two sides are taking careful steps toward a gradual rapprochement. This seemed particularly true last week, as South Korea marked a year anniversary of the most recent flare-up, when, without warning, the north bombed an island belonging to the south, killing two soldiers and injuring dozens more.

Triggers and tigers

Conditions in South Korea are extremely different to those in the oppressive north, where hunger and political imprisonment, or worse, are normal phenomena. Evidence abounds in South Korea of its huge economic leap forward during the past two decades. In a brief visit of just a few days, one can see the country's flourishing entrepreneurial spirit. The premium it places on ingenuity, dedication to work and the individual appears to be regarded as something that is part of a larger collective ethos.

South Korea is one of the four so-called Asian tigers whose economies have soared in past years, alongside Taiwan, Singapore and Hong Kong. In contrast to Western powers, the tigers were not seriously hurt by the global economic downturn of 2008.

South Korea today claims a strong place in the second tier of world economic power, quite an accomplishment for a state without any natural resources that had a languishing economy just two decades ago. South Koreans are immensely proud of their information technology industry, as well as the country's giants like Samsung and Hyundai.

All this growth has happened with a hostile and sometimes crazed neighbor who now lords the bomb over them. Would Israel trade places with South Korea - an economic powerhouse living with the constant threat that everything could evaporate with the push of a button from a backward neighbor? The question is reminiscent of the subtitle of the classic black comedy about nuclear threats "Dr. Strangelove or: "How I Learned to Stop Worrying and Love the Bomb."

The relatively similar character of the antagonistic regimes which threaten them creates, in some measure, a sense of shared destiny between South Korea and Israel. This solidarity is enhanced by South Korean appreciation of Judaism (a Korean translation of the Talmud can be found in private homes in Seoul ), and by that country's attraction to the know-how and technology of Israel's defense industry.

Recent years have witnessed a trend of rising collaboration between the two; in 2010, Israel's military exports to South Korea were $280 million. The trade included items such as radar devices and sophisticated airplane components; in the future, this trade might include anti-missile technology systems.

The South Koreans are closely monitoring Israel's progress in the development of short and long-range anti-missile systems such as Iron Dome, and the Arrow.

Up in the air

This trade relationship has in past months been blemished by a mounting crisis about who will win the contract to supply the Israel Air Force with its next training plane. South Korea has entered a bid for this deal, whose value is estimated as $1 billion; an Italian plane is also in the running.

The twists and turns in this war for the training plane contract have been covered by Haaretz. Seoul officials believe the bidding war is a ruse, and that the Italians already have a lock on the contract for the plane. Still, Korea Aerospace Industries, which manufactures the T-50 training aircraft, recently invited eight Israeli journalists to visit the country.

The South Koreans appear to believe that this trip, which necessitated quite an investment on the part of the manufacturer, would improve their chances in the contest against the Italians, and would also send a signal to Israel's defense ministry that KAI is serious about the tender.

Seoul still seems to be groping for a way to conduct partially public negotiations for this training plane contract, and how to handle Israel's media, which has a freer voice than it does.

The hosts offered the visiting journalists a display of the T-50's capabilities at an air force base, along with a glimpse of the assembly line used in the plane's production; the visit also included tours of various plants, including a Hyundai factory and a steel concern.

The implicit message was to view this training-aircraft deal in separation within a wider context; South Korea, the visitors were encouraged to conclude, is an economic power, and the potential for trade with Israel goes well beyond this particular airplane.

Last month, Haaretz disclosed that Israel and Italy have signed a preliminary agreement stipulating that, should Israel decide to purchase the Italian M-346 training plane, the Italians will commit themselves to a series of other transactions with Israel's defense industry, worth about a billion dollars.

This is a government-to-government transaction whose scope goes well beyond that of the M-346 plane. Though the South Koreans talk about a training plane deal fraught with potential for expanded trade, they are not willing to commit to additional transactions, claiming that it is too early to do so.

Learning belatedly about the preliminary agreement with the Italians, the South Koreans suspected that Israel was playing dirty. The suspicions begot a rather angry legal correspondence between the two sides, and a series of visits between Tel Aviv and Seoul.

South Korean officials were worried about the personal friendship between Israeli Prime Minister Benjamin Netanyahu and his Italian counterpart Silvio Berlusconi, who has since stepped down, and by the demonstrative support (a rare phenomenon in Europe ) that Italy gives to Israel. The South Koreans suspected the contract was a done deal and they were being strung along as a sort of decoy, to give Israel bargaining leverage with the Italians.

Defense Ministry officials in Israel deny such allegations. The IAF experts' report on both training planes, say these officials, was positive. A decision in favor of one of the competitors is expected at the start of 2012, and the choice of the South Korean or Italian model will relate to the merits of the plane, and depend on the proposed deals' economic components, the officials explained.

Berlusconi and Netanyahu

Days before the Israeli journalist delegation reached their country, the South Koreans received two encouraging messages. The first was Berlusconi's resignation. With his friend leaving the stage, will Netanyahu feel any sense of commitment toward Italy's victory in the competition for the plane?

Italy's financial problems cast doubt on whether Rome will be able to keep their promises about the purchase of Israeli defense products.

Italy, unlike South Korea, does not face dire security threats. Equipping itself with Israeli security technology is not a high priority for Italy.

"The European market is steadily losing its value, from our standpoint," said one senior figure in Israel's defense industry, who is not connected to the dispute about the plane. "In years ahead, the Europeans will have less money to spend" for defense acquisitions.

The second event giving Seoul hope was the crash of an Italian training plane in Dubai. Two crew members, experienced pilots of experimental aircraft, managed to eject before the crash and survived. The accident occurred after relatively few flight hours, and it cast doubt about the viability of the Italian aircraft.

South Korea's air force flies more than 70 T-50 planes, and it has yet to experience an accident after 45,000 flight hours. The Italian competitor, in contrast, has manufactured only two defense planes. Korea today makes two planes a month, and KAI claims that it can easily increase the pace to five planes a month to meet an Israeli tender for 25-30 planes.

Still, Korea's planes have not been popular. Only Indonesia has bought any, and KAI has lost bids in Singapore and the Arab Emirates.

The Korean manufacturer is encouraged by Lockheed Martin's appearance in this contract bidding picture, though. KAI's T-50 model was partially developed by Lockheed and the American giant wants Israel to choose the plane, thereby giving the platform a boost.

Even though it faces allocation cuts enforced by the Pentagon, the U.S. Air Force is poised to purchase hundreds of training planes in the coming years. An Israeli purchase of the T-50 would help the Koreans have a chance of winning the American contract. With a deal this large, Lockheed could look to establish a joint plant with KAI on American soil.

The next two months of negotiation are likely to be critical. The South Koreans are supposed to submit to Israel a package of proposals for industrial cooperation, beyond the purchase of planes. Another delegation from Seoul will arrive in Israel in two weeks, and a senior Lockheed Martin official will also visit Israel.

For all the sides, this appears to be about more than just a business contract. There is an array of calculations here: security, fiscal, diplomatic and even cultural. Israel's decision on the matter will influence the future of its relations with South Korea, and possibly Italy as well.