North Korean Economy Watch

Aiden Foster-Carter has written an long piece in the Asia Times on North Korea’s geopolitics.  It is a fairly long piece, so here is the punch line:

So there’s our winner. Its rivals’ missteps have helped, but Beijing has long played a skillful, patient game. Like Moscow, it irked the North by recognizing South Korea (in 1992), but unlike the abrupt Russians it worked hard to soothe sensitivities.

Eighteen years on, guess which power is the top trade partner of both Koreas? Now, there’s subtle hegemony for you. No prizes either for guessing who’s snapping up North Korea’s mines, and beginning the lengthy, costly process of modernizing its decrepit infrastructure.

Face it: who else has the motive, or the means? As all agree, China’s overriding worry about North Korea is not Kim’s nukes but fear of collapse, and the chaos this could cause on its own borders. Beijing’s consistent strategy is not to paint Kim into a corner, no matter what.

Knowing that, how did policymakers in Seoul or Washington delude themselves that China would hurry to join a chorus of condemnation over the Cheonan? No way. Beijing squirmed a bit, but the game was worth the candle. Let Washington and Seoul huff and puff. All that achieved was to push an ever-more isolated North Korea further into China’s orbit and influence.

Nothing is certain, especially about North Korea where forecasts (this writer’s not least) have a habit of turning out wrong. I expected North Korea to collapse long ago: guilty as charged, m’lud. I understimated this tough regime’s staying power, or the horrors it would impose on its people – including famine – to cling to power while refusing to see sense.

But this can’t go on forever. The old game of militant mendicancy is finally up. Kim Jong-il’s frail health, a delicate succession, and an empty treasury – United Nations sanctions have hit arms exports, and crime doesn’t pay like it used to – make defying the entire world just too risky.

North Korea needs a sugar daddy. There is only one candidate left standing, and one who fits the bill perfectly. It may not be a marriage made in heaven, mind you. Pyongyang will keep squawking, and even try the old game of playing off its interlocutors – as in its latest thaw with Seoul.

But at the end of the day Beijing is making an offer no one else can match, and which North Korea can’t refuse. It goes roughly like this: Okay, we’ll bail you out, we’ll guarantee your security, we’ll even stomach your weird monarchical tendencies – unless the kid turns out to be a complete klutz, in which case you know what to do. Jang Song-taek (brother-in-law to Kim Jong-il) knows the score.

You can count on us too not to shame you by spelling all this out and giving the game away. But yes, we do need something in return. Two things. First: markets. For goodness sake just leave them alone, nay let ’em rip – as we’ve been telling you to, ever since Deng Xiaoping.

Look where we are now, and where you are. We’ll do the heavy lifting of investment, so you have functioning factories and railways again. But you have to let it happen. No going back.

Second: no more trouble. We know it may take time for you to give up your footling pesky nukes. But we need an absolute guarantee of no more tests, or else. No other provocations, either. Our People’s Liberation Army will teach your Korean People’s Army how to adapt and how to make money. The new North Korea will be a good global citizen, trading like we do. The returns are good. It beats mugging any day.

And guess what? You’ll love it, all of you. You’ll prosper. No more worries. Your people will eat; your elite will make money. What’s not to like? Just stop all that shouting and marching; what a relief, eh? The rest of the cult can stay, if you must. All hail the young general Kim Jong-eun, finally fulfilling grandpa’s dream of peace and prosperity for all! (With a bit of help from his friends, but we’re modest.) You’ll love him. You really will.

This seems to me a plausible scenario for North Korea’s future. In fact, I struggle to imagine any other. Korean reunification? Maybe in the very long run – but right now, who wants it?

Not the North, whose elite know the fate of their East German counterparts after unification. Can we really expect them to put their faith in the tender mercies of Lee Myung-bak? Even under Kim Dae-jung or Roh Moo-hyun it would have been tricky. What place would there be for most of them, frankly, in a reunified peninsula? Not a privileged one, that’s for sure.

Ordinary North Koreans, too, have learned, from the trickle who have made it to Seoul, that South Korea is no land of milk and honey. True, they’d like a life, and to eat. But China, or a North Korea open to and learning from China, might look a better bet on that score.

Nor is the South enthusiastic, despite all the rhetoric. It would be embarrassing and galling to see the North become a Chinese satellite – yet perhaps also a huge relief. Let Beijing bear the brunt, the burden, and the costs of transforming the madhouse they have long sustained.

Further down the line, blood could prove thicker. By 2040 or so, a by then semi-transformed North Korea may tire of great Han chauvinism, slough off the Chinese yoke, and embrace the cousins south of the demilitarized zone (which would long ago have become more permeable). They’d be easier to absorb, too, now smoothed by a few decades of Chinese-style modernity.

Speculative, to be sure. But what other scenarios are there? And though from one viewpoint China has edged out rival powers as argued above, presumably to their chagrin, might some of them in truth be quietly relieved to be spared the responsibility? Let China take it on and deliver a new-style North Korea, vibrant and fit for a new century. It could last a long time, and spare the region and world much headache and risk. Does anyone have an alternative?

Aidan Foster-Carter is honorary senior research fellow in sociology and modern Korea at Leeds University, and a freelance consultant, writer and broadcaster on Korean affairs. A regular visitor to the peninsula, he has followed North Korea for over 40 years.

You can read the full article here:
How North Korea was lost – to China
Asia Times
Aidan Foster-Carter
9/16/2010

This entry was posted on Friday, September 17th, 2010 at 12:51 pm and is filed under China, Economic reform, General markets (FMR: Farmers Market). You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.