Pursue Sanctions that Work
by Charles Lemos, Mon May 25, 2009 at 10:06:23 PM EDT
David Sanger writes in today's New York Times that when it comes to responding to North Korea's nuclear test, the Obama Administration has few options. There are, however, sanctions that have worked in the past that can and should be revisited.
In 2005, for example, the US Treasury Department acted against a small bank based in Macau that held North Korean assets and personal assets of Kim Jong-il. Marcus Noland, who has done extensive economic and political research on North Korea for the East-West Center, found that this one measure "tanked the black-market value of North Korea's currency, disrupted legitimate commerce and reportedly necessitated a scaling back of festivities associated with the Dear Leader's birthday." Bereft of hard currency, Pyongyang opted to return to the negotiating table and soon made concessions including signing agreements shutting down the Yongbyon nuclear facilities and permitting the return of international inspectors. Despite heading a regime of the proletariat, the Kim family has expensive tastes. Freezing the regime's overseas bank assets and hitting the expense accounts of Kim family will get their attention.
Japan too can act decisively. In 2005, Japan cracked down on gambling enterprises controlled by North Koreans that sent remittances back to the North. Last year, Japan loosened these sanctions in the wake of an agreement with the DPRK whereby the North Koreans pledged to investigate abductions of Japanese citizens to North Korea in the 1970s. At least 13 Japanese citizens were abducted. North Koreans control the pachinko gaming centers and it is estimated that this earns the DPRK revenue of approximately $100 million of dollars annually. It is time for Japan to tighten these economic sanctions again.
North Korea is critically dependent on the outside world for three things: oil, food and essential medicines. Restricting the trade of he latter two would effect the already marginal existence of the beleaguered North Korean people but cutting off North Korea's fuel supplies has worked in the past. The problem is that North Korea gets most of its fuel from China so for this sanction to work it is up to the Chinese. Still China did stopped oil deliveries once before back in 2003. Deprived of fuel, Pyongyang quickly returned to the negotiating table.
Another avenue for reigning in North Korea is in the realm of trade financing. North Korean remains significantly dependent on aid to finance imports, principally from South Korea and China. Here there are complex issues involved stemming from China's desire to prop up a client state and South Korea not let its kin starve nor allow China to "colonize" its once and future other half but the imperative of the moment should be to impress upon both the Chinese and South Koreans to curb all non-essential trade with the DPRK.
Furthermore, North Korea has earned substantial revenue from the sale of missiles, and missile components and technology to countries like Syria, Iran, Egypt, the United Arab Emirates, Vietnam and Pakistan. It is widely believed that the sale of missiles is the financial source for the country's nuclear program. It needs to made clear to these countries that relations with the United States if they aid and abet the DPRK's nuclear program. The threat from the DPRK is not that will lob a nuclear weapon over the DMZ or across the Sea of Japan but rather that the cash-strapped regime will sell nuclear material and nuclear technology. It's time we made the buyers beware that shopping at the North Korean nuclear arcade brings consequences.
Sanctions have worked in the past. They can work again but the other part of this equation is that we are acquiescing to the long-term survival of the DPRK. For too long neo-conservatives such George Bolton have balked at this trade-off and they have done everything to undermine this strategy. A sudden collapse of the DPRK benefits no one and it remains unrealistic to believe that a revolution from within is at hand. For now, it seems we are stuck with the hermit rogue state. It is in all our interests however to curb its penchant for the proliferation of nuclear technologies.
Sources and Additional Information
Take Away Their Mercedes by Marcus Noland.
Follow the Money: North Korea's External Resources and Constraints by Stephan Haggard and Marcus Noland.
Korea's Obama Test Editorial in the Wall Street Journal.
Not related to the content of this post but for history buffs, this animated time map of Korea is pretty cool.