The are workable options to avoid war on the Korean peninsula, but it will require compromise on all sides

Summary

There is a solution to the North Korean problem, but it does require China, the US and North and South Korea to compromise. There may be a real basis for a settlement, but one no-one wants to contemplate it, least of all the Americans.

The dilemma Is this:

  • the Chinese have consistently said they have two major concerns on the Korean peninsula:
    • that if there were to be a united Korea, they would have US troops on their border, something they will never countenance; and
    • that if there was a collapse of the North Korean regime, there would be a flood of refugees into Northern China, which they would feel obliged to not only manage, but also finance.
  • The Americans increasingly seem to feel holding-on to Korea is part of their DNA in spite of the fact it seems to be leading to a nuclear exchange in North Asia which will have catastrophic consequences for the whole world. This is made doubly dangerous as we seem to have psychologically unstable leaders in the White House and the Kremlin who, for separate reasons, appear to believe this situation is to their benefit.

Any solution though involves compromise on all sides, something that has been sadly lacking until now. So what might the compnents of a settlement look like?

  1. The US offers withdrawal of all its troops from South Korea in exchange for joint security guarantees from China and the US.
  2. In return, China cuts off ALL trade to North Korea, and forces Kim Jong-un to resign and flee to a third country, with the US and China guaranteeing Kim and the major players of his regime immunity from prosecution, a safe passage and financial support indefinitely.
  3. Korea holds free and fair elections under the supervision of the UN for the whole of the Korean peninsula.
  4. The UN puts into the Korean peninsula a peace keeping force of 250,000 troops to guarantee security while this process is taking place, but excludes troops from North and South Korean, US, China, and Japan. This could be paid for by Korea, Japan, the US, China, and ASEAN, plus a small special levy on all UN nations as avoiding nuclear war benefits all nations.
  5. Both south and north Korean troops would be disarmed in the lead up to the elections. Thereafter, the united Korean armed forces would be pledged under their new constitution to be a pacifist force not unlike the current Japanese armed forces.

There are clearly a number of implications to this, most of which are canvassed below…



 

There are workable options for Korea to avoid war, but it requires compromise on all sides including the US

By

Michael J. Liley

 

In September 2017, the world appears closer to a nuclear exchange than at any time since the end of the Second World War. The apex of this tension is the rogue state North Korea which also happens to have developed nuclear weapons and is rapidly moving towards acquiring the means to deliver them across oceans.

This situation has turned out to be an early test for the new Trump Administration in the US. Unfortunately for world peace, Trump, and North Korean Leader, Kim Jong-un seem to have similar narcissistic personalities, with both behaving unpredictably and prone to taking things personally. This, of course, makes the situation much more unpredictable than if it had been between more “normal” personalities. Although this is a very dangerous situation, I would like to suggest that with creative thinking and goodwill on all sides, there is a potential solution.

China and the US will be the key to any solution, and both have a great deal to lose should we all end up in war. Donald Trump is not afraid to tell anyone who will listen that he is a master deal maker. Here, with North Korea, there may be the biggest deal he could ever make, but his understanding of world affairs is seemingly so naïve, and he doesn’t seem to listen to his senior diplomats, especially since he has emasculated the State Department for ideological reasons. He more than ever needs them but does not seem to have much faith in them, while at the same time growing the military budget by tens of billions annually.

Meanwhile, China appears to be taking a back seat, feigning cooperation with the US, but in reality, doing very little to restrain North Korea. The cutting off of the North’s trade in coal (the North’s biggest export earner) with China early in April 2017  together with recent additional sanctions, may be a sign of things to come, but there needs to all embracing actions which will starve the North Koreans out. China is still a long way from that.

China and the US will be the key to any solution, and both have a great deal to lose should we all end up in war. Donald Trump is not afraid to tell anyone who will listen that he is a master deal maker. Here, with North Korea, there may be the biggest deal he could ever make in his life, but his understanding of world affairs is so naïve, his decision making is very erratic and unpredictable which only serves to destabilize the situation. The fact that he has emasculated the State department does not help at a time when he needs their expert advice more than ever.

There is no obvious way that North Korea could be stopped by military force. At the moment, North Korea is showing off its military hardware, including nuclear weapons. The North Korean leader, Kim Jong-un, is exhibiting these capabilities to deter the West (and China) from taking any meaningful action to curb his recklessness. Yet the North Koreans are more and more prepared to be provocative, which ranges from military parades and test-firing various rockets, and threatening to fire off nuclear warheads to the west coast of the US, and recently even to Australia.

Most military experts keep reassuring us that Pyongyang does not currently have the capabilities to carry out such threats, although this is changing rapidly and Kim is increasingly sourcing his rockets from rogue suppliers in the Ukraine. However, it is true that these same military experts gave the same reassurances before the initial Korean nuclear tests, and then the first firings of their intercontinental ballistic missiles. The US is using every means it can to sabotage the development of these capabilities particularly by hacking their systems, seemingly with some success. But if nothing is done to destroy this developing capability, Pyongyang will eventually acquire the means to destroy the US (and Australia).

For the first time since the invention of the Atomic bomb, a nuclear exchange seems like a real possibility. Clearly, this is something that neither China nor the US, together with their Allies, can tolerate. Meaningful action is needed and needed urgently.

This situation is very dangerous, both in the short and long term. The World is watching, and if the North Koreans are seen to be getting away with thumbing their noses with impunity at the great powers, this is a very serious and dangerous position for all of us to be in. The implication from this is that any little tin pot regime which acquires nuclear weapons in the future will think they suddenly will have equal status to the established nuclear powers, and then who knows what might happen? Further, if nothing is done by the US and China, it will give every crazed dictator a reason to go after the nuclear option because they will then think they will be propped up (unintentionally) by the great powers. It is urgent that China and the US act in unison on this for everyone’s sake.

China and US face several options. First, bomb North Korean nuclear, artillery and rocket sites. There is no guarantee this would be successful and it would almost certainly provoke retaliation against South Korea and possibly Japan. Although the Allies have estimated they could destroy the North Korean arsenal within a couple of hours, they also believe over this period it would allow North Korea to launch artillery attacks on Seoul (the capital of South Korea and just over 50 km from the North’s border and so well within artillery range) with a population of some 10 million people. It is estimated that over this two-hour period, there would be upwards of 200,000 fatalities in Seoul alone, let alone the rest of the country.

Secondly, China and US could invade North Korea. This would make the invasion of Iraq look like a Sunday afternoon picnic, with heavy casualties on both sides, with no guarantee it would avoid a nuclear exchange.

Thirdly, special forces could assassinate Kim Jong-un much in the same way as they assassinated Osama Bin Laden in anticipation that this would lead to a people’s uprising. Most experts though appear to believe that this would more likely lead to one of his hard line Generals taking over, which may lead to an even more unstable situation.

Fourthly, China and the US could sponsor a UN resolution banning trade with North Korea for all member states and impose sanctions on all third parties (like Chinese Banks) who violate the ban. Although this would eventually lead to the regime’s collapse, it would take some time, and there is no guarantee in the meantime that the North Korean government would not set off military strikes in retaliation.

In reality, there is probably going to need to be a combination of all of these options, but the one thing they cannot do is sit on their hands and hope the problem will go away. it is urgent that the US use diplomacy to get China on board, and jointly formulate a plan. What sort of deal could result?

In 2017, China is involved with 95 percent of North Korean international trade. China could force the collapse of the North Korean regime by closing their borders and jointly penalise, with the US, any other country (or organisation) which supports them in any way. This would lead to the regime’s collapse within days. They then would need to negotiate a settlement probably including a safe passage for all the major leaders of the regime to a third country with guarantees about their immunity from prosecution. This assumes though that a desperate regime would not take military action in the meantime, but there are no risk-free options in this situation.

The settlement could lead to a militarily neutral Korean peninsula which includes the withdrawal of all foreign troops (US and Chinese), the withdrawal of the THAAD missiles from South Korea, and neither China nor the US would any longer provide nuclear guarantees. Within 12 – 24 months, there would be free and fair elections for the whole of the Korean Peninsula, overseen by perhaps a neutral entity like the European Union. In return, the united Korea would have to undertake to adopt a pacifist constitution, not unlike the Japanese one adopted after World War 2, with security guarantees from both the US and China. The new Korea would be allowed armed forces but only to be used in self-defence, just as the Japanese are able to do today.

In the interim, a UN administration would be set up to run the country and to supervise elections.  An international military and police force would be assembled to keep order but would specifically exclude US, Chinese, and Japanese personnel, and a UN appointed Administrator would run North Korea in the meantime. Once elections were held, and a constitution approved by the people, it would be up to the new Korean Government to define the way forward.

In this, the new united Korea could learn much from the German unification process in 1989-1990. For starters, they should avoid much of the huge reconstruction costs the Germans suffered by basically allowing the market, in large part, to finance it. In the German case, they allowed parity between the Deutsch mark and the East mark virtually straight away when at the time of unification the market value of the East mark was a between a half and a third the value of the West German currency. This meant that there was very little incentive for western companies to invest in East Germany, so much of the huge cost of reconstruction was born by the West German taxpayers which constrained growth of the unified German state for more than a decade. This cost far more than it need have, and left no permanent incentive for the market to move to the east to help reconstruction.

The best way for a united Korea to handle this would be by having a federation with two currencies. This would give a huge incentive for South Korean, Japanese, European, US and Chinese companies to move operations to the north as it would be much lower cost to operate than almost any other country in Asia, North America or Europe. This would rapidly allow the north to grow and develop until the exchange rates eventually come together, maybe over a 40-50 year period. This would be highly advantageous for South Korea also as it would allow them to have a low-cost economy from which they could run their considerable manufacturing capabilities with a population which speaks the same language, in the same cultural milieu, and which would increasingly operate under the same laws. The subsequent additional taxes generated by an increasingly prosperous North would largely support the building of the significant infrastructure which would need to be constructed to get the population out of poverty and into productive work.

This would be highly advantageous for South Korea also as it would allow them to have a low-cost economy on their doorstep. From here they could run their considerable manufacturing capabilities with a population which speaks the same language, in the same cultural milieu, and which would increasingly operate under the same laws. The subsequent additional taxes generated by an increasingly prosperous North would largely support the building of the significant infrastructure to get the population out of poverty and into productive work. It would also mean substantially reduced spending on defence on both sides of the border, the savings of which could be channeled into further economic development.

It is said there are two major things that worry China about Korean unification. First, a failed state on its border with accompanying refugee problems, starvation and death. China thinks it would be obliged to pick up the tab for fixing this which would be a major cost to its treasury for very little benefit. Secondly, it does not want a successful democratic state on its borders occupied by US troops and hostile to its interests.

This solution addresses both of these issues by disarming Korea, having all foreign troops withdrawn, getting the new state to renounce an aggressive armed state and nuclear guarantees, and provides an orderly transition. Just like Germany. It would create a new prosperous state with prospects of high growth for many years to come, and for which China will no doubt be its major trading partner. It would also provide stability – the thing China values above all else. In other words a much better solution for both China and the rest of the world.

A unified Korean state would be brilliantly positioned to become the new Asian economic super-tiger and a potentially politically stable one at that.

Now that would really be to China’s advantage.

 

mjlwritings@gmail.com

Skype: mliley

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The Miracle Economy that is South Australia 2040

 

In 2015, the South Australian Premier of the day, Jay Weatherall, conducted a Royal Commission into Nuclear energy. He did this in spite of the huge opposition to anything to do with the nuclear industry throughout his Australian Labor Party, and widely in the bureaucracy as well as some parts of industry. The findings of the Royal Commission were to be an historic turning point for both South Australia and Australia itself, and turned around the historic under achievement of the SA economy compared to most of the rest of Australia.

The Royal Commission was a brave move by the South Australian Labor Premier, as his party had been implacably opposed to both nuclear power, and acceptance of nuclear waste. But at the time, SA found itself caught in the middle of inaction on climate change by conservative forces, particularly the Liberal Party under Malcolm Turnbull, then in power in Canberra and SA’s desperate need for reliable sources of power. This was not helped in late 2016, when there was a state-wide blackout due to a convergence of unprecedented phenomena happening all at once: freak storms, the breakdown of a gas fired power station, and a breakdown of supply from the national grid. In other words, an unprecedented set of circumstances, but one nevertheless which need to be addressed urgently.

The conservatives’ response to this was to cynically blame the SA government’s “obsessive” commitment to alternative energy, pointing out that this would not happen if they relied on coal. Given that no financial institution globally was financing coal fired stations in the foreseeable future without government guarantees, Weatherall needed quickly to find a short term political fix this problem. But in the long term there was no alternative but to fundamentally “change the game”.

In April, 2017, he announced his short to medium solution. SA would invest in a large back up battery facility costing over $100m, which was largely inspired by the Tesla electric entrepreneur Elon Musk. In addition the government would build a gas fired power-station as a backup for the sort of extraordinary circumstances experienced in 2017.

But in September 2017, Weatherall announced the fundamental game changer which was destined to not only change Australia’s energy landscape, but also much of the rest of the world. He began his address:

“Ladies and gentlemen, it is my great pleasure today to outline an exciting future for our great state of South Australia. Ever since we elected Don Dunstan as premier in the 1970s, South Australia has had fair claim to being Australia’s most progressive state. After the Dunstan era, there followed further progressive reforms: land rights, an indigenous governor, decriminalising homosexuality and of course big, brave festivals.  

“Maintaining the trend, SA also became a heartland for political experiments — Steele Hall’s Liberal Movement, the Australia Party and the Australian Democrats. These days, it has been South Australian Labor in the Senate, with the support of independent thinkers such as Nick Xenophon who saved Australia from the ravages of the extreme right wing ideologues of the Abbott Government.

“We now want to match these progressive instincts with an equally progressive and visionary economic future for SA, one which will take us into a new era of economic prosperity which is not reliant on the boom industries of the past – the motor industry, consumer manufacturing and fossil fuel fired energy generation.

“Now opportunity beckons. There is a chance to embrace technological change the same way we embraced social change and create Australia’s first ultra-modern, sustainable economy. In short, we want to turn South Australia over the next twenty- five years into the greenest, most technically advanced environmental economy in the world. We have the infrastructure, the resources, the skills and the money to get it done. And we will. The surplus we generate from our nuclear activities, will be ploughed back into investments which will transform the economy from top to bottom to ensure our vision is reached”.

Weatherall’s speech coincided with the launch of the SA government’s policy prescriptions as a result of the recommendations from the Royal Commission into the Nuclear industry, and it is fair to say the vision staggered Australia and much of the world.

The vision, as subsequently outlined by Weatherall’s staff, came in a number of components:

  1. South Australia will commit to being THE greenest, most advanced and sustainable state in the world –economically, financially and environmentally;
  2. central to that future will be a clean, efficient, technologically advanced and extremely valuable nuclear industry. This will be broken into several parts:
  3. South Australia will be made the centre of the world nuclear industry by providing a ‘close loop’ industry, i.e. rather than selling its uranium oxide to the rest of the world, it will rent it to them, and have the waste returned to South Australia for storage and eventual use as additional fuel in new generation nuclear reactors. Just by this alone the Royal Commission estimated this will generate for the State an additional surplus over the next ten years of $60 billion;
  4. SA will commit to spend some of that surplus to support the creation of a new generation nuclear industry, and construct under licence a generation 4 reactor from one of several suppliers under open tender such as GE Hitachi with its PRISM reactor, Rosatom with its BN reactor, and possibly from new innovative players such as Terrestrial The Mission of SANC will be to:
  5. license the building of a fast breeder reactor which will produce electricity from spent fuel rods sourced from the clients of Australian uranium exporters and eventually from nuclear fuel stockpiles from around the world. SANC will be responsible for the running of this process, and the accumulation of revenue, until the technology is mature, at which time SANC will sell it to the highest bidder provided its operational headquarters remains in SA, but substantial royalties will still flow to the government;
  6. be responsible for the export of uranium and the return of the waste from around the world, and the development of the storage facilities in South Australia;

iii.      oversee the enforcement of strict standards agreed globally for the movement of uranium oxide and waste around the world to and from Australia;

  1. provide technical advice to the federal government to ensure compliance to global standards; and
  2. provide the management and running of the generation 4 reactor and the distribution of the electricity to South Australia and elsewhere in Australia and offshore

The generation 4 fast breeder reactors had been a dream of the nuclear industry for decades, but no one has had the cash, the socio-political and geological environment nor the political will to make it happen. The Royal Commission though, after extensive global examination of the issue, came to the view that given the right commitment, skills and finance it would be possible for it to not only work but for it to be ready within ten years: and so it proved to be.

By 2025, the consortium charged with developing the reactor had not only had a pilot plant operating for 12 months, but was in the process of constructing a full-blown plant. This meant that via this new plant, it was possible to recycle nuclear waste from spent fuel rods with only 5% waste, and even that was then capable of recycling and so it too eventually ended up as fuel. South Australia was therefore in a position to deliver its promise of providing the world with a “close loop” nuclear industry, and the world came flocking to its door.

Between the time when South Australia started the closed loop policy in 2018, and the time the pilot generation 4 pilot reactor was commissioned in 2022, South Australia had earned over $40 billion in fees from those countries needing immediate resolution to managing used nuclear fuel. And all SA then did was to begin the process of turning it into green electricity, which eventually no only fed into Australia’s national energy grid supplying over 50% of national demand, but Australia became a major exporter of electricity once the power link was established across the Timor Sea to Indonesia and beyond to South East Asia.

As a direct result of the announcement of the SA government’s change of policy, and its commitment to a closed loop nuclear cycle, BHP Billiton announced it had decided to reopen for development the Roxby Downs mineral site in Northern South Australia– the biggest single deposit of uranium oxide and copper in the world, as well as numerous other minerals. This had been shelved in 2013 in view of the falling commodity prices and the uncertain future of the nuclear power industry. In the words of BHP: “South Australia changes everything”. From 2018 to 2030, BHP spent $10 billion developing the mine, but estimated over the 50 year life of the mine will make over $100 million dollars from it. It rapidly became SA’s biggest export earner, until the nuclear industry and its associated power generation and recycling overtook it in the early 2030’s.

Once the nuclear waste earnings started coming in in late 2017, SA rapidly began to commit to “greening” its economy. SA had long had a number of natural advantages, both from natural resources and its perceived redundant manufacturing and technology base. Weatherall now set about turning them into real economic opportunities.

First there was Elon Musk’s  Tesla electric car, his SpaceX – the most successful private provider of space travel, and his SolarCity – the US’s most successful solar energy company. Musk was a perfect fit for South Australia: redundant car factories, an operational space station in Wimmera Rocket Range, and the world’s second highest penetration of solar panels per household (after Queensland). Further, it had abundant sunlight both in winter and summer.

In 2018, in a joint news conference between Weatherall and Musk it was announced that:

  1. South Australia would hand over for nothing all the redundant car plants in South Australia to Tesla. Further, the government would provide $1billion dollars to adapt those plants for production of the Tesla Model S, X and the coming 3 provided these factories became the supply hub in the Asia Pacific region;
  2. Tesla would commit to developing and manufacturing an electric “peoples’” car which would be provided for every one at a fraction the cost of taxis, and ordered from the net and in the street. They would be all driverless;
  3. South Australia would progressively over 5 years make their major arterial roads into electric roads i.e. roads which are configured to charge electric cars as they drive along the roads which were in use in Europe in 2016 on a pilot basis, and have been increasingly charging buses as they drive along freeways. By 2025, most major roads in SA were electrified. The energy for these roads were provided by SolarCity with solar cells dotted along their fringes together with Tesla battery packs, as well as from the nuclear power stations. In the words of Musk: “it is a world first, but an incredibly exciting first”;
  4. SpaceX set up a manufacturing and development centre at Woomera for their state of the art rockets, but the actual launch pads were located in the Gulf of Carpentaria owing to the need for launch pads to be closer to the equator. By 2030, there were more rocket launches from the Cape than in North America owing to the insatiable demand from Asia and the lowest cost provider status of SpaceX.

South Australia had traditionally a vibrant Agribusiness sector, mostly centred on seafood of various kinds, world famous wines, and strong sheep, cattle and crops of various kinds. In 2017, for the first time in half a century Agribusiness passed the mining industry as Australia’s biggest export earner, and was seen to have as much potential as extractive industries because of the need to support the world’s growing population in the face of climate change and rapidly more variable weather.

SA is a very large state – it is twice the size of France for instance, and has always been constrained in its agribusiness growth by its lack of water. The nuclear opportunity opened up possibilities here too. With Nuclear desalination plants already in operation in Japan and Europe, and operating at a fraction of the cost of fossil fuel driven ones – even solar ones – nuclear energy seemed an obvious direction to pursue secure water for what was going to be a very fast growing population.

In 2021, the SA government announced the construction under the direction of the SANC of a  300-megawatt nuclear plant at Whyalla which would be required to drive a desalination facility with a capacity of 1 million cubic meters of potable water a day. That is enough water to support a population of between 3 or 4 million people. That same population would require between 4,000 and 6,000 megawatts of installed capacity to meet its electricity needs. Over time that facility not only supported SA’s very fast growing population, but enabled a range of new agribusiness industries to develop in the SA desert which would not have been possible otherwise

In addition, in 2017, Weatherall announced that he would invest $5 billion per annum into research in environmental technologies, funded from the nuclear royalties. The decisions about the funding allocations would be by an independent panel made up of a variety of the best environmental scientists in the world.  The only caveat was that the research and subsequent commercialization should be headquartered in South Australia. The result was that most major universities in the world opened campuses in South Australia and by 2040 SA per capita had more Phds than anywhere else in the western world. SA became the Australian hub of innovation and research for environmental industries, and the subsequent spin off companies remained head quartered in SA.

In April 2019, the new Federal Labor Government and Weatherall produced an even bigger shock than he did 18 months earlier. Surrounded by much of the new Federal Labor Cabinet: new PM Chris Evans; Penny Wong – Foreign Affairs; Tanya Plibersek – Treasurer; Richard Marles – Defence; and Anthony Albanese – Infrastructure. With them were the President of France, the Honorable Emmanuel Macron; and the Prime Minister of New Zealand, the right Honorable Bill English. Chris Evans started off:

“Today, ANZAC day, I am delighted to announce a major step forward in the modernisation of the Australian Economy which will make us, and especially South Australia, a pivotal player in Asia/Pacific region.

“Following our election mid last year we have been conducting a root and branch study of government expenditures and what opportunities exist for us to modernise and make our economy even more competitive. One of those opportunities is to help SA accelerate its transition to a clean green high tech economy. In doing so we recognised that SA’s ship- building capabilities together with its transition to a safe nuclear environment represented a very significant chance for our country.

“In 2015, the then LCP Government announced its intention to build up to 12 French designed ‘Shortfin Barracuda’. These French submarines are currently serving with the French navy as nuclear submarines and require expensive and extensive redesign to become diesel driven equivalents. Conventional power also considerably restricts its range.

“After extensive consultation with the French Government and the French builders, and strong support from our Department of Defence and the RAN, we have decided to build almost identical boats to their French equivalents including their nuclear power trains. In making this decision we believe this should be and will be above politics as it is so important to our future. I therefore thank the Leader of the Opposition for her provisional support which I received after I briefed her last night.

 Both parties, and the State Government, realise this is a big step but will be a major boost to SA transition to a nuclear future and provide us with leading edge capabilities in the Asia Pacific region. In recognition of the significance of this announcement to Australia and France, we welcome the French President the Honourable Emmanuel Macron to his first visit to Australia as President.

“My great friend and colleague, New Zealand’s PM Bill English, we also welcome. Bill is not only a great friend of Australia, he also leads the government of our greatest friend and ally, and fellow ANZAC partner, New Zealand. In doing so I would like to reveal that NZ has agreed not only to buy an additional two boats, but also take a 20% equity in the project. Over time we intend to make SA a nuclear hub in the Asia Pacific in partnership with our French partners, and intend to sell a number of additional boats to friendly allies around the Pacific rim. We estimate this could be as many as 20 boats over the life of the project. By going nuclear, there is no doubt we vastly improve the attractiveness of these boats to other buyers.

“I have to emphasise that none of this would have been possible without the visionary stance taken by the SA government in developing a “closed loop” nuclear economy, something I know our French partners are very very keen to capitalise on in the years ahead”.

To put it mildly, this caused a huge stir around the world, and certainly accelerated considerable additional interest in SA’s direction. It also played a critical role in helping SA successfully transform itself into the most prosperous economy in Australia such that today, in 2040, South Australia has the highest per capita income of all Australian states, is regarded as a model in sustainable development throughout the world, and has a population of over 5 million people, having overtaken WA and Queensland since 2020. Oh yes, and by 2040, in addition to the 12 submarines the RAN purchased, and the two for the  RNZN, so far there have been 21 sold to navies on the Pacific rim, and the Barracudas are regarded as amongst the most lethal weapons afloat and has caused many navies to play “catch up” when their power was realised. Nearly all of these boats use SA as a maintenance and technical base.