How to make Kaesong a safety valve for sanctions and a(nother) test of engagement

Fifteen years after the opening of Kaesong and more than twelve years after the approval of UNSCR 1718, Seoul has finally gotten around to reading the resolution that Kaesong violated for a decade. As I’ve harped on during that entire period, paragraph 8(d) required Seoul to “ensure” that its bulk dollar transfers to Pyongyang, which it deceptively called “wages,” were not diverted for nukes, missiles, or luxury goods. No matter how obnoxiously I would present that question to the South Korean government, it answered with incriminating silence, until now:

A senior official at South Korea’s foreign ministry has raised the need to find a way to prevent any flow of “bulk cash” into North Korea for the resumption of the inter-Korean industrial complex and tours to a mountain resort in the communist state.

The official pointed to international sanctions, including a ban on lump sum cash payments that could be channeled into the North’s nuclear program, as a key hurdle to restarting stalled inter-Korean cooperation projects. [Yonhap]

A critical point that Yonhap’s story doesn’t explain is the process for the approval that Seoul is now seeking. There are actually two sets of sanctions that might apply. First, Seoul needs the approval of the UN Security Council’s 1718 Committee, which operates by consensus. In UN-speak, that means that every country’s representative must support the exemption approval. The U.S., as a country that’s represented on the Committee, can veto it.

Second, if Seoul wants to continue to operate at Kaesong in dollars, it will need a license from the Treasury Department. It should not get one, because Kaesong will continue to set back the causes of peace and reform as long as it pours fungible dollars into Pyongyang’s bank accounts. To simultaneously subsidize and sanction the same target is the very definition of incoherence.

“(In my personal opinion), to enable the resumption of the Kaesong complex, we need to find a way to prevent the supply of bulk cash (to the North) so that we can get an exemption from (U.N. Security Council) sanctions,” the official told reporters on condition of anonymity Thursday.

“It is evident that (restarting the complex and tours) is Chairman Kim’s priority, but it is not an easy task given the current framework of the sanctions regime. … There will be difficulties ahead in the process of securing an exemption from the sanctions,” the official added.

Speculation has emerged that the two Koreas might seek a creative way to bypass sanctions, such as paying the wages of North Korean workers at the Kaesong complex in kind.

Well. If only someone had thought of that before. After all, Seoul always sold Kaesong as a laboratory for people-to-people engagement, reform, and helping the North Korean people improve their lives. It did done none of those things. It was also a hostage crisis waiting to happen and almost certainly a source of revenue for nukes and missiles, but bygones, right? Let’s see if we can, for the first time in a quarter of a century, merge the goals of sanctions and engagement to test Pyongyang’s readiness to accept real change. 

I’m dubious, but at worst, Pyongyang’s rejection would answer a fascinating thought experiment. So, for that matter, would Seoul’s.

We’ve never known how much of their salary the workers actually get. Hell, the South Korean managers never knew how much they got. Seoul should stop lying to us about paying them $70 or $90-a-month wages when we both know they’re probably getting about two. I can think of exactly one way to ensure that the workers get their wages. Pull the family census register of every worker, take an electronic thumbprint from every member of every worker’s household, and build them an all-you-can-eat buffet. Pile it with ssoondae, ohjing-o bokumbap, ttokpokki, kimbap, paechu kimchee and—oh, I don’t know—glatt kosher daeji-kalbi. Don’t forget the banana milk for the kids. Watch them waddle home, and smile. For once, I’ll be smiling with you. For once, I’ll be cheering you on.

Also, why not give the workers a few coupons they can spend at the Kaesong exchange where they can buy clothing, a few consumer goods, solar chargers, and honey butter chips? (For extra fun and to keep the coupons off the black market, print Song Hye-gyo’s face on them, because engagement!) I promise not to complain if a few of those goods end up for sale in the markets.