Tag: Stephen Haggard

How many people over the years have claimed that sanctions against North Korea won’t work?  Sanctions against North Korea work if everyone enforces them.  Now that the North Koreans are back to negotiate what we will see next is whether the ROK and the US will relieve the Kim regime of the economic pressure they are facing with some kind of nuclear agreement:

The economic pinch is almost certainly why Kim Jong Un is suddenly so eager to talk to the outside world, traveling to Beijing in March and then crossing the demilitarized zone to meet Moon.

“Why would he be doing this unless he was being constrained by sanctions,” said Stephan Haggard, professor of Korea-Pacific studies at the University of California at San Diego and a close monitor of sanctions. “I think he’s sweating.”  (….)

But analysts generally agree that the sanctions must be inflicting serious pain on North Korea, a desperately poor country with a highly inefficient economy.  (….)

The sanctions are probably putting a chill through both these economies. That has to be a huge concern for Kim, who once declared that North Korean people “would never have to tighten their belts again.”

“If I were Kim, I’d be much more worried about textile workers out of work, milling around doing nothing, than I would be about an American attack,” said William Brown, a former intelligence analyst focused on North Korea who now teaches at Georgetown University. Citing the kind of discontent that brought down communist regimes in Eastern Europe, he said, “The real dangers to the regime are internal.”

But Moon could pursue very little economic engagement without sanctions relief.

Not only has the U.N. Security Council imposed waves of sanctions on North Korea, but South Korea imposed its own direct punishment following two deadly North Korean attacks on South Korea in 2010.

Those measures are still in place, and conservative politicians are urging Moon to leave them there. Even if Moon overturned his predecessor’s order to close the Kaesong industrial park, an inter-Korean factory complex on the northern side of the border, transferring money or equipment to it would be almost impossible in the current sanctions environment.  [Washington Post]

This all goes back to why the Moon administration is buttering up Trump with promises of a Nobel Peace Prize by getting on the peace train and believing that North Korea is really going to denuclearize this time.

It would be interesting to know if the recent defection of a North Korean diplomat also included the confiscation of regime funds:

Defection by North Korean diplomats who have access to foreign currency holdings would make it harder for North Korea to bring in money from abroad which can eventually hasten the communist regime’s collapse in the event of a financial crisis, a renowned U.S. scholar said Monday.

The analysis by Stephen Haggard, professor at the University of California San Diego, reflects the speculation of growing instability in North Korea, as seen by recent defections of North Korean overseas workers who had played a part in repatriating hard currency to the cash-strapped regime.

Last week, the South Korean government confirmed that a London-based senior North Korean diplomat defected to the South with his family, which can be viewed as another sign of cracks in the North’s ability to keep its key people in check.

Seoul did not confirm whether the diplomat, Thae Yong-ho, brought foreign currency with him, but news reports said his escape may have dealt a blow to North Korea’s overseas earnings because he reportedly may have had knowledge of the foreign exchange operations of the Kim Jong-un regime in Europe.

In April, a group of 13 North Korean employees working at a North Korean state-run restaurant in China defected to South Korea en mass, spawning speculations that the sanctions-squeezed North Korean elite were feeling the pinch of United Nations’ sanctions on the communist country and opting to bolt.

“Historically, I’ve never thought of the collapse of North Korea in terms of political collapse, but I believe in the scenario … with respect to the possibility of financial crisis,” the professor said in a seminar arranged by the East Asia Foundation in Seoul.

North Korea’s thinning foreign currency income, caused by UN-imposed trade bans and the shutdown of its inter-Korean Kaesong Industrial Complex, left the country vulnerable to the possibility of a “sudden” financial crisis that can lead to a subsequent regime collapse, he said.  [Yonhap]

You can read more at the link, but as Mr. Haggard points out in the article as long as China continues to not impose UN sanctions on North Korea the Kim regime will likely continue to survive.