Nothing Says “Democratic Peoples’ Republic” Like a New S-Class

A recent report claims that even as North Korea was preparing missile and nuclear tests, China helped North Korea flout a U.N. Security Council Resolution for which it voted and which it has promised to implement in good faith.  UNSCR 1718, in effect since October 2006, bans the export of luxury goods to North Korea.  It has since been reinforced by UNSCR 1874:

North Korean leader Kim Jong Il doled out foreign-made cars to senior intelligence officials to ensure their loyalty to his youngest son when he put the 26-year-old in charge of the country’s powerful spy agency, a report said Wednesday.

This report comes by way of the Donga Ilbo, quoting unnamed sources, so take it for what it’s worth.  The Donga hasn’t posted an English version of the story yet.

Five luxury cars, each worth some $80,000, were given as gifts to the officials, it said. The paper did not say which cars were given, but Kim has long been known to favor Mercedes and French wine as gifts to ensure his inner circle’s loyalty.  [AP, Jae Soon Chang]

So obviously, the world’s purest, most egalitarian socialist paradise has ended poverty, hunger, and mass starvation once and for all.  Just to add some perspective, about 30% of North Koreans live hand-to-mouth, our best estimate of its per capita income is just over $900 a year, and Kim Jong Il personally owns 200 S-Class Sedans.

Clearly, Kim Jong Il has money to burn these days.  Any guesses on where it could have come from, if not China?  China has also helped Kim Jong Il find ways to spend it, since rice and infant formula appear not to have occurred to the planners in Pyongyang:

Meanwhile, the U.N. resolution left the definition of luxury goods and the implementation of the embargo up to individual countries, enabling Russia to exclude watches under $2,000 and fur coats under $10,000. China–North Korea’s largest trade partner–declined to even publish a list of embargoed goods, and it appears that Chinese luxury exports to the North actually increased. Such goodies matter greatly to Kim, who uses handouts, ranging from Mercedes sedans to Hennessy cognac, to buy political loyalty.  [Marcus Noland, Newsweek]

Whatever pressure we’ve put on the Chinese not to undermine these sanctions, it obviously hasn’t been enough.  We’ll know that the Obama Administration is serious about this if we start to read more leaked reports about the disparity between what China says and what it does.

Related:   Senator Brownback calls for Treasury to target North Korea with money laundering sanctions, something that now seems like a real possibility.