Tackling security risks from North in 2024

Kim Byung-yeon
The author is a chair professor of economics at Seoul National University.

How will the North Korean risk spread out this year? Despite his bellicose rhetoric of taking control of the entire South Korean territory, North Korean leader Kim Jong-un won’t likely push nuclear brinkmanship to the extreme from the beginning of the year. He most likely believes the odds are favorable for North Korea, given international preoccupations with the U.S.-China conflict and the two wars in Ukraine and the Middle East. Kim also expects his country’s economic conditions to improve thanks to weapons exports to Russia and the renewed trade with China. For the time being, he would not likely attempt significant changes to the status quo.

Another factor is the U.S. presidential election in November. The North Korean leader would concentrate on advancing nuclear weapons to the level that a new U.S. administration cannot but recognize the North’s nuclear capabilities. If Donald Trump wins, Kim could be pinning his hope on another rendezvous with the U.S. president he had met twice.

As time passes, however, the danger from North Korea will grow. What Kim envisions nearly borders on a pipe dream. A weapons deal with Russia could offer some temporary relief to the defunct economy. But if Russia’s artillery shell production improves rapidly or the war subsides, Moscow won’t need to import shells from North Korea. Pyongyang may be able to put off a depletion in its foreign exchange reserves for some years thanks to the revenues from the weapons trade. But it won’t be able to avoid a currency crisis due to its chronic trade deficit. To avoid a national default, it would have to sharply cut back on imports, which in turn will deepen its economic woes.

The United States would hardly comply with the North’s wishes. Unless Pyongyang comes up with much better denuclearization terms, no U.S. president would proactively solve the North Korean nuclear conundrum. North Korea cannot get what it wants under the current circumstances. To add traction to negotiation with the U.S., Kim must come up with a wild card, as he cannot afford to dilly-dally in the face of the worsening economic condition.

The calm always precedes the storm. The current hiatus can’t last long. A provocation by North Korea could elevate to the international level through the involvement of China and Russia. Beijing and Moscow in the past prioritized the stability of the Korean Peninsula. But today’s Russia will focus on using a North Korean provocation to turn the tide in its war against Ukraine. Beijing also will carefully weigh between stability and the North’s provocation for its interest.

That suggests the possibility of a North-triggered military clash developing into a bigger one through the support or encouragement from Russia and China. The warlike tension we experienced in late 2017 could build up in the Korean Peninsula over the next couple of years.

Agitation can feed and spread panic. The North Korean risk at a time when international investors are more nervous about geopolitical risks than before can seriously damage our economy. The main Kospi tumbled 6 percent, and the Korean won dipped 3 percent against the U.S. dollar over the two weeks following the North’s test-firing of an ICBM capable of reaching the U.S. mainland. The Korean capital market rocked after Trump tweeted the warning that North Korea would be met with “fire and fury.” Given such ominous repercussions even when the global economy was strong, we must brace for bigger panic when the global economy shakes like it does today. The Korean capital markets were only normalized after the U.S. State and Defense secretaries ran their joint statement in major newspapers to promise diplomatic efforts and dialogue with North Korea. Can we expect such responsible actions from Moscow and Beijing?

The North Korean issue won’t go away until it is addressed. The fragility of the North Korean political and economic systems is the primary cause of its provocation. Global powers are masters in leveraging such weakness in their game of geopolitics. A strategy to maintain the status quo under such volatile circumstances cannot be the answer. The Yoon Suk Yeol government has succeeded in cementing ties with America and reinforcing U.S. deterrence. They are crucial for the security and peace in the peninsula. But deterrence alone cannot solve the deep-seated North Korean problem.

The former liberal administration ruined the chance of denuclearizing North Korea due to its obsession with rapprochement with the recalcitrant state. The conservative Yoon administration also can fail if it sticks with hard-line policy.

Translation by the Korea JoongAng Daily staff.