Noland on DPRK trade sanctions

Marcus Noland, co author of The North Korean Famine and Senior Fellow at the Peterson Institute of International Economics, wrote a short policy piece in the Asia Pacific Bulletin calling for more effective sanctions on North Korea to deter Pyongyang’s belligerence:

Regrettably, toothless trade restrictions have provided inadequate to deter Pyongyang ex ante, and the world is now faced with dealing with the situation ex post.  Willingness to impose a comprehensive set of sanctions–trade, aid, travel, energy assistance, and finance–might reign in reckless North Kean behavior before another provocation fundamentally destabilizes the situation in Northeast Asia. (Noland, 2009)

The Asia Pacific Bulletin article draws from a thorough empirical study Noland conducted on the (non) impact of UN sanctions on North Korea’s trade. “The (Non-) Impact of UN Sanctions on North Korea” can be downloaded here.  Here is the abstract:

Before North Korea conducted an underground nuclear test on October 9, 2006, it was widely believed that such an event would have cataclysmic diplomatic ramifications in Asia. Based on a visual inspection of the data and statistical models, this study finds that, although the UN Security Council imposed economic sanctions against the export of heavy arms and luxury goods to North Korea within one week of Pyongyang’s nuclear test, the imposition of these sanctions has had no perceptible effect on North Korea’s trade with the country’s two largest partners, China and South Korea.
policy implications:

1. North Korea appears to have calculated correctly that the direct penalties to its foreign trade for establishing itself as a nuclear power would be modest (or, alternatively, Pyongyang put such a high value on demonstrating the country’s nuclear capability that it outweighed the downside risks, however large). Presumably this experience will condition the reactions of North Korean policymakers in the future—making deterrence with respect to this issue and other sources of conflict more difficult.

2. Despite pre-test diplomatic warnings not to test, the post-test behavior of public and private sector actors in China and South Korea has been accepting of North Korea’s nuclear status. Thus if such warnings are to be heeded in the future, they must embody credible threats of penalty, be much more enthusiastically implemented, and be more broadly targeted.

Though I have tremendous respect for Dr. Noland’s work, I am fairly skeptical about the ability of economic santions to change the DPRK’s policies or behavior.  Carrots and sticks are essential tools for any diplomatic negotiation, but China, the DPRK’s strongest political ally and largest trading partner is simply not interested in implementing rigid economic restrictions vis a vis North Korea (for many rational reasons).  Given the uncanny ability of the North Korean elite to remain in power despite severe economic problems, I am afraid that any achievable sanctions regime would only make life more difficult for “ordinary” North Koreans with little possibility of delivering changes at the top.


One Response to “Noland on DPRK trade sanctions”

  1. Cordelia says:

    I agree with you that sanctions seem to achieve very little other than make life even tougher for ordinary people (medicins are not available).

    The elite will still be able to get their hands on the essentials, and it seems there is still plenty of goods coming in from China and some via Russia.

    The Japanese decided separately to stop exports to the DPRK.

    Despite sanctions the satellite launch took place.
    Seems to me that sanctions are inefficient.