Just Let North Korea Collapse: WSJ Column

by Robert Koehler on December 29, 2009

in North Korea

In the WSJ, the AEI’s Daniel Blumenthal and Leslie Forgach argue that the Obama administration should forget talks with North Korea and just let the country collapse:

With protests that forced a policy change, a sanctions regime that has so far deprived Kim of at least $18 million, and uncertainty about the Dear Leader’s succession plan, it may well be that this time around Kim is truly running out of money and possibly control.

Rather than bail him out, Washington should let Kim fall. It’s the best chance the U.S. has of achieving its twofold objectives: denuclearization in North Korea and the eventual unification of the peninsula. After all, the Kim clique has made it clear after decades of negotiations that no amount of aid will suffice to induce them to end their nuclear program. The relatively conciliatory response to Special Envoy Stephen Bosworth’s mission earlier this month—the North Koreans declared that “differences” have been “narrowed”—was a classic North Korean negotiating ploy, not an eleventh-hour acceptance of a nuclear-free world.

Some might argue that a desperate Kim may really make a deal this time—and Pyongyang certainly needs the bailout it is sure to receive during a new round of talks. But history suggests a dying regime is far less likely to make lasting concessions. Successful disarmament has occurred in places like the Ukraine and South Africa only after a new regime one looking for assistance and legitimacy, came to power.

I’m all for ignoring North Korea and letting them stew in their own mess. Where do I sign on?

Nobody ever won money betting on a North Korean collapse, but I will say this — things haven’t looked too good for Pyongyang. There was the currency reform debacle. There’s South Korean president Lee Myung-bak really putting the screws to the North (less than 5% of the inter-Korean “cooperation” fund spent in 2009? I love it!). Now H1N1A is reportedly wreaking havoc on the country (not a surprise, really), and markets are being closed:

Yang Mun-su, professor of the University of North Korean Studies, served as a session participant and referred to other social trends in North Korea. He referenced North Korea’s recent “150 Day Battle,” “100 Day Battle,” currency reform and crackdown on markets. Professor Yang said that from a policy perspective, the logic of politics has dominated economic rationality and the mood of economic reform has been in retreat this year. He also said, “Increasing numbers of residents who are starving in North Korea have engaged in new behavior such as committing crimes such as stealing.” He added, “This is a significant new phenomenon related to regime stability.” Yang also said that in a situation in which the system of distribution is not functioning properly, a crackdown on illegal markets does not lead to their eradication but rather to their proliferation. Yang said, “This widening of illegal markets would give the wealth class greater space to exercise their privileges and could widen the gap between the rich and poor.”

It looks like it’s going to be a cold winter. But hey, who knows? Maybe North Korea’s fine art exports could pull the starving nation out of crisis.

UPDATE: It seems last week, Chosun Ilbo columnist Kim Dae-joong was saying much the same thing:

It’s expected that the North will suffer a crisis next year more serious than its 1997-98 famine. If the grassroots market is disrupted while this happens, experts say, the North would suffer large-scale starvation in the lean season next year. In addition, North Koreans are not what they used to be a decade ago. They apparently watch South Korea dramas and are well aware what South Koreans’ life is like. “The currency reform has perhaps touched the detonator of the grassroots economy,” said a North Korean defector.

Some appeasers point to North Korea’s imminent return to the six-party talks. But that only means turning back the clock to an endless meaningless round of agreements and backtracking that achieve no palpable results. The regime seems to realize that it is hitting a cul-de-sac. In working for a breakthrough with the U.S. at a time when U.S. President Barack Obama faces pressure to produce results in the North Korean issue, Kim also needs support from the south Korean president.

In the circumstances, North Korea’s nuclear arms and the people’s rights are in danger of being forgotten. It looks as though the North’s return to the six-party talks, bilateral talks with the U.S., a peace treaty and moderation are becoming ends in themselves. There is no explaining the irony that the U.S., China and even South Korea seem inclined to help the North Korean regime at the very time when it is facing its biggest crisis.

{ 24 comments… read them below or add one }

1 Granfalloon December 29, 2009 at 3:40 pm

Unconvincing.
I’m still not convinced that collapse is imminent. The North Korean government has weathered some awfully tough times: seems to me they set things up precisely to maintain power in tough times. North Koreans forced to eat their own children for sustenance didn’t bring about a revolt. At this point, I would think prosperity would be more of a de-stabilizer than misery.
And even if a Kim-regime collapse is right around the corner, what will doing nothing accomplish other than giving China a head start on making inroads?

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2 jefferyhodges December 29, 2009 at 3:56 pm

One difference this time is that the North Korean people will blame the Kim Jong-il regime for ruining their very life-source, the market, through the currency change recently imposed as a ‘reform’ to ‘improve’ life.

I also imagine that much of the elite at lower levels have become heavily dependent upon bribes ultimately supplied by the market and won’t happily give up their special source of income.

Moreover, with Kim Jong-il frail and a 27-year-old next in line, the regime may have little remaining legitimacy.

Looks like interesting times to me . . .

Jeffery Hodges

* * *

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3 judge judy December 29, 2009 at 4:24 pm

In addition, North Koreans are not what they used to be a decade ago. They apparently watch South Korea dramas and are well aware what South Koreans’ life is like.

and this idea is at least a decade old.

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4 Acropolis7 December 29, 2009 at 5:58 pm

And yet this time, they realize their Atheism is false. They would rather be well fed by false-seudo true religionists infromation about the outside well , than malnourished and dying finally reverandt aethiest/kimisunglist without. I have to give applause to the Christians, and not because it is after their pagan/Christian holiday. They really know how to send their saints into battle. The Christians will be the ones to topple the north Korean regime ultimately. Just like the soviet atheist bloc. When humans have too much religion they reject it. When not enough they embrace it. God bles humanity.

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5 WangKon936 December 29, 2009 at 6:00 pm

A7,

Catholicism and Pope John Paul II, did more than his fair share in helping to collapse the Iron Curtain.

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6 Acropolis7 December 29, 2009 at 6:11 pm

Wang, I’m an anti-Catholic. Yet I agree with you in some terms.

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7 Acropolis7 December 29, 2009 at 6:17 pm

Anti-Romanism I should clarify. I do not believe in angels painted by man nor God/Jesus Christ painted by man. If it was up to me I would destroy and burn any image of Jesus. I’m a Protestant… I would like to see all the Catherdrals of Mary burned to the ground along with Christ’s pagan imagery,…. oops Sorry.

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8 Acropolis7 December 29, 2009 at 6:19 pm

BTW, True Protestansts don’t believe in sacred imagery.

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9 Acropolis7 December 29, 2009 at 6:44 pm

But Wang you are right. I know it is unpopular on the internet to NOT bash Catholicsim/and or (pagan) Christiean faith, I don’t care. You are right. Without the Christian faith Rome and the whole entire western civilization would be dead. PERIOD. Byzantium would not have succeeded against the Islamic rise and Judaism would always be running back to Ethiopia securing the infamous Ark of the covenant as it does today. BTW, as I said earlier we all better hope that the Judaic ark does not exist…

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10 Acropolis7 December 29, 2009 at 6:44 pm

Ok I fail

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11 gangpehmoderniste December 29, 2009 at 8:31 pm

Question: if the dear leader (intentional lower case) regime collapse, are South, China, Japan, America, Australia etc. ready for the influx of refugees ?

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12 gangpehmoderniste December 29, 2009 at 8:35 pm

i still have to see a society tasting some capitalism and consumerism for the first time goin’ religious, whatever the role of John Paul in the fall of communism, Poland went secular, materialistic and decadent as soon as the wall came down

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13 maotai December 29, 2009 at 9:01 pm

China will prop up the NK regime unless she gets assurances on how the issues of NK refugees and US forces in a united Korea are dealt with.

I don’t think that the SK government keen on handling an influx of NK refugees either.

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14 eunsung December 29, 2009 at 11:39 pm

“There is no explaining the irony that the U.S., China and even South Korea seem inclined to help the North Korean regime at the very time when it is facing its biggest crisis.”

I disagree; the irony is easy to explain.

North Korea has made itself into a “poison pill”, which will destabilize the region and damage national economies if it collapses. For this reason, it is in the interest of neighboring countries to prop NK up.

Normally, aid would buy the donating countries some influence, because the donor could stop their aid at any time. But in North Korea’s case, the aid is an obligation, consistent with the donor’s national interest, regardless of NK behavior. This is why China has very little actual influence over NK, despite its massive aid program there.

In fact, you might say that North Korea has an incentive to make its situation seem as dire as possible to the outside world, in order to extort the most money from neighboring governments.

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15 thekorean December 30, 2009 at 1:13 am

The ill-effects of the currency reform have been vastly overstated by those who do not understand how North Korean economy works. Read Joo Seong-Ha on it. Link

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16 Robin Hedge December 30, 2009 at 2:39 am

That’s very interesting and will take me a little time to read (vocabulary…). Interestingly I saw in DailyNK that the DPRK has officially banned use of foreign currencies — yuan, USD. If the new regulation is enforced it will help shut down private enterprise, though I don’t know how much local authorities are enforcing the laws and imagine that may vary. Rice prices in nearby China are up 20% even for high quality grains; the lowest grade of rice is already sold out in Dandong across from Sinjuiju, apparently from North Korea purchases, more than half of it smuggled. Rice is now only legally sold in official provisions stores. There was a very bad harvest.

Also, seems important in all this to keep the people and the regime firmly separated. I agree with Granfalloon that “prosperity would be more of a de-stabilizer than misery,” or at least a better one. I’ve said before btw that the currency confiscation and market shut-down might be a historical moment, but that doesn’t mean the regime will just roll over. Who is there to challenge them? Is five years or a decade of more poverty and even starvation going to help the people? Will it make their position against the regime stronger? Very difficult problem. The regime will get food. And the people? When has hunger led to a democratic revolution?

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17 Robin Hedge December 30, 2009 at 3:05 am

So I read that Joo Seong Ha article, I think…, but don’t really understand its argument. Joo just seems to ay that articles in Dong-a and Chosun Ilbo are wrong. thekorean, you help clarify?

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18 thekorean December 30, 2009 at 3:15 am

Basically the point is that the currency reform only affects a specific subset of the North Korean population, i.e. middle class that relies on trading. On the other hand, it actually helps the North Koreans who have a regular employment with a company of some sort. It does not affect the large-scale North Korean merchants, because they never traded in North Korean won at any rate. Nor does it affect the poor, who did not have any money anyway. In fact, the poor is set to receive free money, which makes them pretty happy. All this amounts to some amount of confusion, but hardly any meaningful destabilization.

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19 Robin Hedge December 30, 2009 at 5:31 am

I disagree, but I don’t really know what the real situation is like–it’s confusing. But the private sector become big enough to feed a lot of people, and many may have barely had any money, but when you shut the markets down and wipe out the merchants, there’s obviously a problem, especially when the state sector has not provided enough for years and there’s a bad harvest. A questions is, how much can people buy at state provisions stores? Inflation has been flaming higher, serious inflation. Raising people’s salaries here and there may have some redistributive effect but the currency itself can’t be trusted as a store of value, so why accept it? That just creates a feedback loop of higher prices, and if the regime responds by printing won. Maybe saying the merchants are a small minority is like saying that Lehman Brother’s is just one bank so it shouldn’t matter. But it does because everyone has come to count on each other. Where do you think the poorer people’s food comes from, the state? If the regime wanted to help the people they’d clearly have been better off by trying to kick-start the command economy first rather than just try to destroy the market economy. Now, they did put laws in place codifying some kinds of private ownership of lands, and a set of laws about imports, business standards and so on. These were announced during the chaotic period after the currency revaluation/confiscation when there were no prices for anything. Can you imagine that? No prices at all. So no buying or selling at all. Then prices skyrocket when you can buy something outside the official stores. Then they make a law banning ownership of foreign currency. Nice work. Doesn’t look good to me.

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20 Robin Hedge December 30, 2009 at 5:35 am

Excuse the non sequitur(s) in there; I’m distracted by other things…
Should have been “… if the regime responds by printing won they may add to inflation.” To continue, there will be three sources of inflation: falling production, lack of confidence in the currency, and possible monetary inflation/money printing.

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21 baduk December 30, 2009 at 8:12 am

NK is not going to come apart. Even if it did, China will put Kim Jongil’s son back in charge.

NK is very useful for China. As I wrote so many times, NK will shoot missles to Japan when it is told to do so by China.

This will happen within this coming decade.

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22 thekorean December 31, 2009 at 4:02 am

Robin,

when you shut the markets down and wipe out the merchants, there’s obviously a problem, especially when the state sector has not provided enough for years and there’s a bad harvest.

It is a mistake to think that currency reform will shut down the markets and wipe out the merchants. Again, the large-scale merchants — the wholesalers, if you will — are untouched by the reform. Also, much of North Korean day-to-day economy operates without any currency, with barters and rice often serving as an alternate to currency. This is much ado about nothing.

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23 Robin Hedge December 31, 2009 at 5:03 am

Well, “time will tell” as it’s said in Waiting for Godot… I certainly hope you’re right. At the very least the events do seem to be discrediting the regime in the public’s eyes. I still have a hard time thinking this is not a significant economic event, but again we’ll see, even if vaguely and through unverified reports.

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24 thekorean December 31, 2009 at 5:11 am

At the very least the events do seem to be discrediting the regime in the public’s eyes.

That, I definitely agree.

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