Nomura: More ‘Bad Behavior’ from N. Korea Possible before G20 Summit

According to Yonhap:

North Korea could take more provocative acts before the November summit of the Group of 20 nations in South Korea if history is any indication, a Japanese investment bank said on June 4.

Nomura International warned that North Korea may display more “bad behavior” similar to the March sinking of South Korea’s 1,200-ton corvette Cheonan, of which North Korea stands accused.

“Experts are wondering whether North Korea’s bad behavior… may be no coincidence,” said Alastair Newton and Kwon Young-sun, two Nomura economists, explaining that North Korea has done similar acts when South Korea hosted global events.

North Korean agents bombed a Korean Air jet in mid-air 10 months before the 1988 Seoul Olympics, killing all 115 passengers and crew members on board, while naval ships of the two Koreas clashed in the Yellow Sea in 2002, the year South Korea co-hosted the World Cup event with Japan.

“Especially given the domestic stresses and strains from which North Korea appears to be suffering at present, we should be braced for the possibility of more of the same — and, possibly, worse — for some time to come,” the economists said in a 40-page report titled “North Korea: Through a Glass Darkly.”

The economists expected that tensions on the Korean Peninsula will ease somewhat shortly, but were skeptical whether there will be practical progress in the global efforts to denuclearize the secretive regime.

“If the six-party talks resume — and we believe they may as China in particular looks to keep Pyongyang in check without risking regime collapse — we are doubtful that North Korea will be prepared to make or deliver on meaningful concessions in response to the demands of the international community,” the report said.

Nomura said it sees a low probability of North Korea’s imminent collapse, especially in the run-up to Kim Jong-il’s succession and the 100th anniversary of the birth of Kim Il-sung, the leader’s father and the founder of the regime, in 2012.

At the same time, the bank doubted the political status quo in Pyongyang is sustainable for more than a short period.

While placing a relatively low probability on the reunification of the two Koreas in the foreseeable future, the Nomura report said the cost of the reunification will be heavy and burdensome.

In order to reduce the possible costs, the Nomura economists suggested of adopting “less ambitious and more realistic” methods — such as the “one country, two systems” model used by China and Hong Kong.

You can download the Nomura report here (PDF).

Additional reports and statistics on the DPRK economy can be found here.

Congressional Research Service (CRS) reports can be found here.

Other unrelated studies can be found on this post as well.


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