North Korea, dangerous but broke

Kim Byung-yeon

The author is a professor of economics and head of the Institute for Future Strategy at Seoul National University.

Global efforts to denuclearize North Korea are in doubt. In a recent article titled “North Korea has already won,” the Financial Times quoted security experts who claimed that the U.S. and allies must admit to their defeat in the campaign to persuade North Korea to abandon its nuclear weapons. Some assert that South Korea must concentrate on avoiding a military clash with North Korea by accepting its status as a nuclear power. Since the working-level talks with the U.S. in Stockholm in October 2019, North Korea has not engaged in any dialogue. In September, it has legislated a pre-emptive use of nuclear weapons. The country recently fired a barrage of shells and missiles of all ranges.

If you only look at what the North wants to show to the rest of the world, North Korea policy fails. Instead, we must see through what its leader Kim Jong-un wants to hide. Pyongyang is moving strategically for the goal of winning international recognition as a nuclear weapons state. It is busy flaunting its muscle, or diverse types of nuclear weapons, while hiding its inner weaknesses, or economic failures, to pressure South Korea and the U.S. to give up denuclearization campaign and instead strike a nuclear arms reduction deal in return for removal of sanctions.

The opportunity cost of nuclear development on the economy would be over 1 trillion won ($724 million) annually. The North Korean economy is projected to have grown 2 to 3 percent annually through 2016, before international sanctions were imposed. From 2017, the economy is presumed to have contracted 3 to 4 percent a year. When assuming its gross national income at 20 trillion won in the mid-2010s, about 5 percent, or 1 trillion won, would have been lost by nuclear development. The future is bleaker. As long as the state is under sanctions, the economy cannot get out of the slump. Without surrendering nuclear weapons, sanctions won’t be lifted and no foreign country would wish to invest in the country.

No dictators triumphed over the economy. After taking power through the Bolshevik Revolution in 1917, Vladimir Lenin immediately put into action its extreme socialist theories. He did away with currencies and markets, nationalized industries, and centralized the economy. He withdrew his policies four years later when manufacturing output fell 70 percent. Lenin reintroduced the currency and market systems and allowed private ownership of land and small enterprises. He scrapped much of the centralized plans.

Mao Zedong had to surrender his chairmanship when his Great Leap Forward initiative to turn China from an agrarian country to an industrialized one led to massive starvation and deaths of more than 25 million.

The Korean Central News Agency, North Korea’s state mouthpiece, said Kim Jong-un guided a successful test-firing of an advanced ICBM on March 24. [YONHAP]

After ascending to the throne from the unexpected death of his father, Kim Jong-un cannot wield power as charismatic revolutionaries like Lenin and Mao. Kim would have been in a rush to show his capability through fast achievements to ensure his lengthy rule. For him, nuclear weapons are more like a debt than an asset.

His offensives are not deemed that menacing either. Some could think North Korea has triumphed with the advances in missiles and nuclear weapons. But military power is relative. Though North Korea has become stronger, South Korea’s conventional military power also has strengthened. The greater the North’s threat, the stronger the U.S. extended deterrence. War hinges on resources. North Korea’s economy is just 1 percent of South Korea’s. Expensive nuclear development would have widened the gap.

The chain missile launches represent the desperation of Kim as he runs out of time. If he had been that confident of victory, he needed not provoke. The North’s economy is presumed to have gone back to 1995 levels at the beginning of the Arduous March. As it peaked between 1997 and 1998, two to three years from now is a critical period for Kim. He could be forced to choose between nuclear weapons and the economy.

We must not overreact to North Korea in a panicky manner. Its belligerence was expected. We just wasted a few years, naively believing that Kim Jong-un would easily give up nuclear weapons. We must raise our vigilance and our military deterrence while keeping cool. Creating a crisis-like ambience and fissures in the South Korea-U.S. alliance are what North Korea wants.

Thinking North Korea has won the game is not just misleading but dangerous. If such an argument gains ground, Kim would believe his tactics have succeeded and ratchet up the level of military provocations. We must not be awed by the fireworks he has demonstrated, but build an insightful strategy based on what he is hiding.

Translation by the Korea JoongAng Daily staff.