Dance, Little Piggy! (Kim Jong Il Unplugged, Part 14)

Most observers had speculated, since at least 1994 or so, that North Korea has the capacity to create a crude nuclear weapon. That appears to be exactly what they demonstrated recently, meaning that the only real news was our need to recalibrate Kim Jong Il’s brass-to-brains ratio. I didn’t guess whether he’d actually go through with it, but I did believe that he’d try to time it just before the U.S. election if he did. I also guessed that if he did, it would create big problems for those who would adhere to the idea of supporting this noxious regime, and ultimately, for the regime itself. The results we see today are a more focused version of the absurd and tragic story of North Korea since the mid-1990’s, when the North’s people experienced their lowest depths of misery, and when the policies of neighboring nations did so much to prolong it.

Of South Korea’s part in this, I have written extensively of the costs: the nearly complete destruction of its alliance with the United States, the cultivation of long-term enmity among North Koreans they chose not to welcome, and possibly, a contest with China over control of the North. The old expression just doesn’t do this one justice; a thousand words could not capture the metaphorical splendor of the head of South Korea’s ruling party dancing for the North Koreans’ amusement just days after their nuclear test provoked an international crisis.

The dancing buffoon is Kim Geun-Tae, and what I wouldn’t give for video of this. Kim heard that Secretary of State Condoleezza Rice was coming to coordinate South Korea’s compliance with Resolution 1718, which is designed to deny the regime funds to build more nukes and missiles. Denials notwithstanding, she was probably there to exert some pressure, too. It seems reasonable enough for Ms. Rice to ask the South Koreans to be sure they’re not funding the very weapons American taxpayers spend billions of dollars each year to defend South Korea from.

As it happens, suspicions are that South Korea is doing exactly that. Two of the main pipelines of hard currency running into Kim Jong Il’s coffers start at the Bank of Korea — the government-subsidized Kumgang tourism project, and the Kaesong Slave Labor Industrial Park. The North Koreans aren’t known for their financial transparency, but the best evidence we’re likely to get under the circumstances suggests the reason for America’s concerns.

In an October 2000 conference paper, Marcus Noland of the Washington-based Institute for International Economics asserted that money owed by South Korea’s Hyundai company to the North Korean government had gone “into the Macau bank account of ‘Bureau 39’.” The payments were for permission to operate tourist trips to Mt. Kumgang in the North. An official at Hyundai Asan, which organizes the tours, says only that royalties are paid to North Korea through Korea Exchange Bank’s branches in unspecified third countries.

The Congressional Research Service–which provides United States congressmen with background briefings–reported on March 5 last year that “the U.S. military command and the Central Intelligence Agency reportedly believe that North Korea is using for military purposes the large cash payments, over $400 million since 1998, that the Hyundai Corporation has to pay for the right to operate [the] tourist project.”

Noland, an expert on Korean affairs, asserted in his paper that this income was used for “regime maintenance,” or to strengthen the government and its armed forces. Bankers and Western security officials believe this is also the case with money earned from the operations in Europe and the Middle East.

The South Korean response to this is more of the same unilateralist(!) “don’t ask, don’t tell” approach we saw Lee Jong-Seok take after Resolution 1695. This is particularly dishonest in the case of 1718, which leaves no room for that; it requires governments and businesses to “ensure” that they aren’t subsidizing the North’s WMD programs. Whoever picked Lim Dong Won‘s son to defend this warped interpretation on PBS’s News Hour may claim one cup of the coffee of his choice coffee on demand, although it might have been too uncomfortable for Ray Suarez to actually mention that the elder Lim was convicted of being the bagman who illegally sent hundreds of millions of dollars to Kim Jong Il, leading up to the 2000 summit and Kim Dae Jung’s Nobel Prize. Lim Wonhyuk is with Brookings. Watch his head explode when Professor Lee Sung-Yoon of Harvard’s Korea Institute explains precisely what 1718 requires of South Korea:

I don’t know whether he’s read the resolution itself, but it doesn’t say it’s a general economic embargo on North Korea, but rather it aims at materials associated with weapons of mass destruction programs.

Besides, unless you make cash payments zero, whether, you know, North Korea sells fish or tourist pay entrance fees and Kumgang and so on, unless you make cash payments zero — money’s fungible, Ray, so there’s no way around this.

Lee then whips a copy of the resolution out of his pocket , reads the relevant text, and displays Lim’s severed manhood on national television :

… Chapter 8 Article D of the resolution … “demands on the member states to prevent the transfer of funds, financial assets, and economic resources that can go into the making of weapons of mass destruction and nuclear weapons.”

….

[W]ith this U.N. Security Council Resolution 1718, now South Korea has to prove to the world, not only to the United States but to the United Nations, that its cash transfer to North Korea does not go toward the building of weapons of mass destruction. The burden of proof now is on South Korea. While to this point South Korea has been maintaining, there’s no proof that our money given to North Korea is diverted toward the building of nuclear weapons and weapons of mass destruction, so the situation has changed.

[Actually, Lee wrote in a few days later to clarify that he didn’t actually have a copy in his possession, which means the man has a near-photographic memory on top of everything else.] Professor Lee, who kindly forwarded the link to the transcript, is someone worth watching. He has authored some of the clearest, hardest-hitting prose I’ve seen on North Korea, anywhere (here, here, and here). Although Lee isn’t a native English speaker, his writing puts mine to shame.

Well, you know, to use a proverbial analogy of sticks and carrots, etymologically speaking, you know, this is a carrot dangling before the donkey. It’s an unattainable phantom carrot.

I think in the case of the North Korean nuclear issue, it’s really North Korea that has been dangling before the international community this carrot, the possibility of dismantling its program and reaping rewards over the years.

Empirically speaking, we are at this point, not because of the Bush administration or the Clinton administration, but because of North Korea’s relentless pursuit of weapons of mass destruction and nuclear weapons over the years. This did not happen overnight.

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The reports are in conflict as to whether Rice’s visit was successful. The New York Times conveniently places both versions within easy graffing distance of each other:

The government of South Korea told Secretary of State Condoleezza Rice on Thursday that it had no intention of pulling out of an industrial zone and a tourist resort in North Korea, even though the operations put hard currency into the pocket of its government.

During a news conference with Ms. Rice, the South Korean foreign minister, Ban Ki-moon, said he had explained “the positive aspects” of the industrial park at Kaesong and described how the tourism zone around Mount Kumgang was “a very symbolic project” for reconciliation between the Koreas.

At the end of a dinner here on Thursday that united Ms. Rice with her South Korean and Japanese counterparts, a senior State Department official, speaking on the customary condition of anonymity when traveling with the secretary, said the South Korean government had said it would review its support for the industrial and tourist projects — in particular the subsidies for the Mount Kumgang zone.

“We never expected them to announce steps today,” the official said.

And why wouldn’t the South Koreans be at least as accomodating to their friends as they were willing to be for their enemies?

The senior State Department official said after the dinner that the South Koreans had said they would “have a full program in place” to carry out the resolution in about three weeks, and would not want to announce new steps while Ms. Rice was in town for fear of appearing to bow to American pressure.

They bow to none (but dance for some).

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In one of the Sung Yoon Lee pieces I linked above, Lee claimed that the missile tests had left South Korea more isolated than anyone. Well, I’d objectively say that the North is still the most isolated, but his broader point about the South’s isolation holds up. Look, for example, at what China has been doing. Will China really clamp down on or topple Kim Jong Il? I really, really doubt it. But is it exerting pressure to bring him to heel? The preponderance of the available evidence says that it is, although that evidence isn’t conclusive.

* Exhibit A: its vote for 1695.

* Exhibit B: the Bank of China’s blocking of North Korean accounts, probably under 311 pressure.

* Exhibit C: its vote for 1718.

* Exhibit D: Chinese banks, probably also under the cloud of U.S. Treasury actions, have stopped financial transfers to North Korea.

Today, we have a new and interesting development (thanks to a reader for forwarding).

* Exhibit E, via the Yomiuri Shimbun: “Sources in China said Beijing also reduced the flow of crude oil to North Korea. Without the oil, daily life and industry will be paralyzed, and Pyongyang’s efforts at intimidation will be undermined.” Another report from the Yomiuri quotes a cross-border oil trader in the border city of Dandong: “The volume of transport has declined for a long time. The trip is now made only occasionally–once every three to five days.”

While I read this with a degree of skepticism, I don’t consider it implausible. Trust, but verify.