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Pacific Perspective James R. Wills |
Options for handling
North Korea all come
with risks attachedDay by day, North Korea edges closer to economic collapse. As the communist country sinks deeper into financial ruin, it loses its bargaining power with the West. A combination of diplomacy and economic incentives is being used to tame the unruly problem.
Spending roughly one-third of its annual $20 billion gross domestic product on its military, North Korean government policies have fostered a dire life for many of its residents. Unemployment is rampant, inflation has spun out of control, and famines are common. The country depends on diplomatic extortion to raise cash and humanitarian aid to barely feed its people. Much of that aid is not reaching the most needy, but is misappropriated to party loyalists.
In exchange for aid, North Korea has in the past halted missile exports and allowed inspections of its nuclear facilities. Recently, it has ejected international weapons inspectors and in January withdrew from the Nuclear Non-Proliferation Treaty. North Korea is also believed by the CIA to have developed at least two nuclear devices and possess the capability to make hundreds.
A bipartisan delegation from the United States visited the North Korean capital Pyongyang in June and reported that it was certain of the country's possession of and plans to develop more nuclear weapons. A discussion with North Korean diplomats of the prospect of Washington's providing energy, food and economic aid in exchange for North Korea's scrapping its nuclear program brought an "overwhelmingly positive" reaction from the U.S. delegates. However, North Korea is not so willing to dismantle its nuclear programs since doing so would sharply reduce its bargaining power. Moreover, Washington does not like the idea of humanitarian aid being ransomed for North Korea's nuclear disarmament.
In addition, a decline in sources of income for North Korea increases the pressure for it to sell nuclear weapons. The United States is putting pressure on Japan to stop the flow of cash from its semi-criminal underworld to North Korea. Monies from Japan's Pachinko gaming industry have declined in recent years from an excess of $1 billion annually to as little as $100 million. Economists at one point estimated that Japan's 18,000 pachinko parlors were the single biggest source of "foreign" revenue for North Korea. Economists estimate that up to 30 percent of the pachinko industry is controlled by North Koreans living in Japan, who funnel portion of the profits back to their homeland. However, this amount is thought to have declined due to Japan's economic slump, growing disenchantment with the Communist regime and a reduction in loyalty among younger ethnic Koreans. More recently diplomatic pressure from the U.S. has focused on this funds flow. According to the Central bank of South Korea, the north's GDP is steadily contracting -- by 6.8 percent to just $21.8 billion in 1997, the last year for which the bank has an estimate.
What is clear is that as long as North Korea possesses its nuclear arsenal and capability, it holds a powerful tool for extortion as well as a defense against attack. Indeed, President George W. Bush would have little trouble finding weapons of mass destruction in Korea. (However, he would not find much oil.)
Several possible scenarios could arise from the crisis on the Korean peninsula: The first scenario and the most dramatic is the U.S. mounting a laser precision bombing run on North Korea's nuclear capability. This would be followed by a U.S. and South Korean invasion. This approach assumes the United States knows where North Korea's nuclear facilities are and can effectively destroy the threat. This "bombing and invasion" scenario has many problems. There would be many casualties on both sides. The South Koreans are not ready or willing to support an invasion of the North. The North may employ its nuclear weapons in an attack on Seoul or Tokyo in response to military action. In general, North Korea is a much more significant military power than Iraq, so a quick victory is not likely. This is a high cost strategy.
The second scenario involves the United States applying increasingly intense diplomatic pressure on North Korea, slowly cutting off its economic aid. This "economic tourniquet" option could result in the North Korean regime collapsing followed by a change of government. However, economic sanctions did not get the desired result in Iraq and they take the greatest toll on the weakest powers in this conflict, the poorest of North the Korea's women and children. North Korea could continue its nuclear program and potentially sell nuclear devices to America's enemies. Additionally, North Korea might retaliate by attacking South Korea.
The third scenario involves the United States leaving the Korean peninsula and turning to other issues. We might hope for a North Korean transformation that leads to peace on the peninsula. But, with limited scrutiny and observation from the West, North Korea may grow into a fierce nuclear power dealing in heavy arms trade. Terrorists could readily purchase North Korean-made nuclear weapons, increasing the probability of a nuclear terrorist attack on a U.S. city.
The North Korean political situation is very complex and almost any move can easily exacerbate the current situation. Once a country is a real nuclear threat it becomes a much higher stakes game. Imagine what would have happened if Saddam had a nuclear bomb at the start of the war in Iraq.
James R. Wills is interim dean of the University of Hawaii at Manoa College of Business Administration. Reach him at wills@cba.hawaii.edu.