North Korean Economy Watch

Asia Times
Andrei Lankov
6/5/2007

It is clear that the current Western approach to dealing with North Korea is not working. Some people in Washington obviously still believe that financial or other sanctions will push the North Korean regime to the corner and press Pyongyang into relinquishing its nuclear program. But this is very unlikely.

First, neither China nor Russia is willing to participate in the sanctions regime wholeheartedly. Neither country is happy about a nuclear North Korea, but they see its collapse as an even greater evil. However, without their participation, no sanctions regime can succeed. More important, South Korea, still technically an ally of the United States, is even less willing to drive Pyongyang to the corner. And finally, even if sanctions have some effect, the only palpable results will be more dead farmers. The regime survived far greater challenges a decade ago when it had no backers whatsoever.

So what can be done? In the short run, not much. Like it or not, Pyongyang will remain nuclear. There might be some compromises, such as freezing existing nuclear facilities, but in general there is no way to press North Korean leaders into abandoning their nuclear weapons.

This is not good news, since it means that the threat will remain. Earlier experience has clearly demonstrated that every time North Korean leaders run into trouble, they use blackmail tactics, and they usually work. In all probability, there will be more provocations in the future. Since Pyongyang’s leaders believe (perhaps with good reason) that Chinese-style economic reforms might bring about the collapse of their regime, they have not the slightest inclination to start reforming themselves.

This leaves them with few options other a policy aimed at extracting aid from the outside world, and regular blackmail is one of the usual tools of this approach. Thus the threat persists unless the regime or, at least, its nature is changed, but how can this goal be achieved if pressure from outside is so patently inefficient? The answer is pressure from within, by nurturing pro-democracy and pro-reform forces within North Korean society (and also pro-reform thoughts within the brains of individuals).

Of all assorted “rogue regimes”, North Korea is probably most vulnerable to this soft approach. On one hand, unlike the bosses of the assorted fundamentalist regimes, North Korea’s leaders have never claimed that their followers will be rewarded in the afterlife; they do not talk, for example, about the pleasures of otherworldly sex with 72 virgins.

Their claim to legitimacy is based on their alleged ability to deliver better lives to Koreans here and now, and Pyongyang’s rulers have failed in this regard in the most spectacular way. The existence of another Korea makes the use of nationalistic slogans somewhat problematic as well.

North Korea’s leaders cannot really say, “We have to be poor to protect our independence from those encroaching foreigners,” since the existence of the dirty-rich South vividly demonstrates that under a reasonably rational government, Koreans can be both rich and independent (and also free).

This leaves Pyongyang with no choice but to seal the borders as tight as no other communist regime has ever done before, on assumption that the common folk should not know that they live a complete lie. This self-imposed information isolation is the major condition for the regime’s survival, and breaking such a wall of ignorance should be seen as the major target for any long-term efforts directed at bringing change to North Korea.

The power of soft measures is often underestimated, not least because such policies are cheap, slow and not as spectacular as commando raids or even economic embargoes. However, their efficiency is remarkable.

In this regard, it makes sense to remember a story from the relatively recent past. In 1958, an academic-exchange agreement was signed between the Soviet Union and the United States. Back then the diehard enemies of the Soviet system were not exactly happy about this step, which, they insisted, was yet another sign of shameful appeasement.

They said this agreement would merely provide the Soviets with another opportunity to send spies to steal US secrets. Alternatively, the skeptics insisted, the Soviets would send diehard ideologues who would use their US experience as a tool in the propaganda war. And, the critics continued, this would be done on American taxpayers’ money.

The first group of exchange students was small and included, as skeptics feared, exactly the people they did not want to welcome on to US soil. There were merely four Soviet students who were selected by Moscow to enter Columbia University for one year of studies in 1958. One of them, as we know now, was a promising KGB operative whose job was indeed to spy on the Americans. He was good at his job and later made a brilliant career in Soviet foreign intelligence.

His fellow student was a young but promising veteran of the then-still-recent World War II. After studies in the US, he moved to the Communist Party central bureaucracy, where in a decade he became the first deputy head of the propaganda department – in essence, a second in command among Soviet professional ideologues.

Well, skeptics seemed to have been proved right – until the 1980s, that is. The KGB operative’s name was Oleg Kalugin, and he was to become the first KGB officer openly to challenge the organization from within. His fellow student, Alexandr Yakovlev, a Communist Party Central Committee secretary, became the closest associate of Mikhail Gorbachev and made a remarkable contribution to the collapse of the communist regime in Moscow (some people even insist that it was Yakovlev rather than Gorbachev himself who could be described as the real architect of perestroika.)

Eventually, both men said it was their experiences in the United States that changed the way they saw the world, even if they were prudent enough to keep their mouths shut and say what they were expected to say. So two of the four carefully selected Soviet students of 1958 eventually became the top leaders of perestroika.

There is no reason to believe that measures that worked in the Soviet case would be less effective in North Korea. Academic exchanges are especially important, since the policy toward North Korea should pursue two different but interconnected purposes. The first is to promote transformation of the regime or perhaps even to bring down one of the world’s most murderous dictatorships. However, it is also time to start thinking about what will happen next, after Kim Jong-il and his cohorts vanish from the scene.

The post-Kim reconstruction of North Korean will be painful, expensive and probably lengthy. Right now North Korea is some 20 times a poor as the South, and the gap in education between two countries is yawning. With the exception of a handful of military engineers, a typical North Korean technician has never used a computer.

North Korean economists learn a grossly simplified version of 1950s Soviet official economics, and North Korean doctors have never heard about even the most common drugs used elsewhere. This means that in the case of a regime collapse, the North Koreans would be merely cheap labor for the South Korean conglomerates – a situation bound to produce tensions and hostility between the two societies. A North Korean who in 20 years’ time will look for a decent job should be made employable, and the best way to ensure this is to start thinking about his or her education right now.

Academic exchanges with North Korea would have dual or even triple purposes. First, they would bring explosive information into the country, hastening domestic changes (probably, but not necessary, changes of a revolutionary nature). Second, they would assist North Korean economic development, thus beginning to bridge the gap between the two Koreas even while the North was still under Kim Jong-il’s regime. Third, they would contribute to more efficient and less painful reconstruction of post-Kim North Korea.

Of course, all these scholarship programs should be paid for by the recipient countries. North Koreans have no money for such exchanges (and to paraphrase a remark by North Korea expert Aidan Foster-Carter, North Korean leaders are people who never do anything as vulgar as paying). But all three targets are clearly in the interest of the world community, and anyway the monies involved would be quite small.

North Korea’s leaders are no fools. They understand that such exchanges are dangerous, and they do not want future Korean Yakovlevs and Kalugins to emerge. Back in 1959-60 they even decided to recall their students from the Soviet Union and other countries of the Communist Bloc and did not send their young people to study anywhere but in Mao Zedong’s China until the late 1970s. In other words, for two decades Pyongyang’s leaders believed that those countries were way too liberal as an environment for their students.

However, they also understand that without exchanges they cannot survive in the longer run. Even now, Pyongyang is doing its best to increase exchanges with China, sending numerous students there.

Another important factor is endemic corruption. There is no doubt that nearly all students who will go overseas will be scions of the Pyongyang aristocrats, the hereditary elite that has been ruling the country for decades. A high-level official might understand that sending a young North Korean overseas is potentially dangerous. But if the person in question is likely to be his nephew, he will probably choose to forget about the ideological threats.

Of course, no sane North Korean leader would ever agree to send students to the US or to South Korea. However, there are many countries that are far more acceptable for them. The Australian National University a few years ago had a course for North Korean postgraduate students who studied modern economics and financial management. Australia or Canada or New Zealand might be good places for such programs.

While English-language education is preferable, since English is the language of international communication in East Asia, there is a place for European countries as well, especially smaller ones, whose names do not sound too offensive to the Pyongyang bureaucrats – such as Switzerland or Hungary or Austria.

Such programs should be sponsored by those countries whose stakes are the highest, such as the US, Japan and South Korea, but smaller and more distant countries also should consider sponsoring such an undertaking. This is not a waste of money, nor even a good-looking humanitarian gesture for its own sake. As history has shown many times, former students tend to be sympathetic to the country where they once studied, and they normally keep some connections there.

North Korea has great potential, and when things start moving, those graduates are likely to be catapulted to high places, since people with modern education are so few in North Korea. This means countries that consider small investments in scholarships for North Koreans will eventually get large benefits through important connections and sympathies that their business people, engineers and scholars will find in some important offices of post-Kim North Korea.

Scholarships for North Korean students are not the only form of academic exchanges. North Korean scientists and scholars should be invited to Western universities, and books and digital materials should be donated to major North Korean libraries in large numbers. Of course, only selected people with special clearances are allowed to read non-technical Western publications in North Korea, but they are exactly the people who will matter when things start moving.

It is well known that students and academics who come back from longtime overseas trips are routinely submitted to rigorous ideological retraining upon their return to North Korea. But does it help? Unlikely. If anything, heavy doses of obviously nonsensical propaganda make a great contrast with what they have learned and seen, thus putting North Korean society in an even less favorable light.

Of course, they will not say anything improper when they come back home, but they will see that there are other ways of life, they will see how impoverished, bleak and hyper-controlled their lives are, and they will think how to change this. Sooner or later, these people will become a catalyst for transformation – and their skills will help to ease the pains of the post-Kim revival of North Korea.