The United Nations Security Council appears close to passing a new set of comprehensive sanctions against North Korea in response to the latter’s nuclear and missile tests earlier this year. With the crucial support of China, the proposed sanctions represent a significant extension of existing sanctions. They include mandatory inspections of cargo shipments entering and leaving North Korea, the prohibition of sales of all conventional weapons to the country – including small arms – and a ban on North Korean exports of coal, iron ore, gold and other mineral products if they can be linked to the DPRK’s weapons programs, plus a ban on sales of jet fuel to the country.
As the U.S. Ambassador to the United Nations Samantha Power has argued, the sanctions will “break new ground and represent the strongest set of sanctions imposed by the Security Council in more than two decades.”
If China cooperates in the full implementation of the proposed sanctions, they are likely to have a devastating impact on the North Korean economy
Serious questions can be raised, however, as to whether these new sanctions will be able to induce the Pyongyang government to abandon its nuclear weapons program without imposing significant hardship on the North Korean population. If China cooperates in the full implementation of the proposed sanctions, they are likely to have a devastating impact on the North Korean economy. Bilateral trade between China and North Korea has risen sharply over the past decade to $6.54 billion in 2013, amounting to around 77 percent of North Korea’s total external trade.
As with China’s trade elsewhere with the developing world, minerals have formed a significant part of this growing trade. In 2013, for example, exports of coal accounted for 47 percent and iron ore 10 percent of total exports to China. Though trade in these minerals has declined somewhat over the past couple of years due to China’s economic slowdown, mineral resource remain a key North Korean export. The sanctions mandate a ban on mineral exports if they can be linked to Pyongyang’s weapons program, yet as recent discussions in South Korea surrounding the closing of the Kaesong Industrial Complex suggest, it is unclear what level of proof should or even could be obtained to show how the Pyongyang government is utilizing the proceeds from foreign trade.
The strict application of sanctions on the export of North Korean minerals would have a significant impact on the country’s ability to earn foreign exchange and thereby on the country’s ability to import. Given the fact that North Korea depends to a significant degree upon Chinese imports for the bulk of its basic consumer goods and daily necessities, Power’s claim that the sanctions are not aimed at the North Korean people is wishful thinking at best. Indeed, her implicit reference to the fact that the proposed sanctions will be the strongest since those imposed against Saddam Hussein’s Iraq in the 1990s can’t but help bring to mind both the human consequences of those sanctions, as well as the fact that it was ultimately not the effectiveness of the sanctions that finally toppled the Saddam regime but the 2003 U.S. invasion.
Though they remain a favored tool of foreign policy, international sanctions have in general an extremely poor track record of achieving their stated objectives. South Africa is often cited as a successful instance of the role of multilateral sanctions in bringing about political transition, but the absence of any domestic opposition in North Korea means that parallels with the South African case are non-existent. The historical record of sanctions suggests that they more often than not encourage a “rally round the flag” effect that serves to strengthen rather than weaken the legitimacy of the targeted regime. Sanctions allow leaders to claim with a certain degree of credibility that economic hardship is a result of external aggression rather than failed domestic policies.
The questionable record of sanctions in achieving their stated objectives is even worse in cases in which the targeted government is highly authoritarian and pursuing a policy which it deems as essential to its national survival. In the case of North Korea, the famine of the 1990s demonstrated that even the most severe levels of deprivation do not necessarily translate into political instability. As such, there is little evidence to suggest that an economic blockade against North Korea would succeed in forcing Pyongyang to abandon its nuclear weapons program, at least not without first producing widespread human hardship.
A MARKET FOR CHANGE
In the North Korean context, China’s active enforcement of the proposed sanctions would also serve to undermine the ongoing processes of grassroots marketization, a process that more than any other has served in recent years to undermine the once all-pervasive reach of the North Korean state. As has been well-documented, following the famine of the 1990s the breakdown of the Public Distribution System led to the spontaneous emergence of consumer markets across the country. Such markets have become the primary source of everyday goods for the majority of the population and have encouraged the emergence of a nascent class of entrepreneurs known as donju, a class with parallels to the rise of the getihu individual traders in China during the 1980s.
As Hazel Smith has argued in her recent book, this process of marketization occurred with the cooperation of local party officials, and has as such, has led to the relative relaxation of authoritarian rule in everyday life as market incentives have overtaken penalties as a means of maintaining social order. This marketization has indeed been underpinned by the cross-border flow of goods from China. In addition, the increased cultural interaction resulting from this burgeoning Sino-North Korean trade has led to the dissemination of ideas, and sources of information, thereby breaking the ideological monopoly of state-mandated Juche socialism.
… sanctions run the risk of impeding or reversing this process of marketization and creation of new economic subjects while failing to have any impact on North Korea’s nuclear program
If fully enforced, the comprehensive sanctions that the UN Security Council looks set to pass may significantly reduce North Korea’s foreign exchange earnings and its imports, thereby disrupt the supply from China of the goods, including so-called “luxury goods” that have underpinned marketization in recent years. It should also be noted that marketization does not simply involve “private” traders operating in marketplaces but a broader array of actors such as trading companies who in cooperation with individual investors have in recent years increasingly adapted to the rules of market-based operations. As such, sanctions run the risk of impeding or reversing this process of marketization and creation of new economic subjects while failing to have any impact on North Korea’s nuclear program.
In reality, however, there are serious questions as to how far China is likely to implement this new round of sanctions. As past experience shows, China’s agreement to UN Security Council resolutions does not mean that the stipulated measures will be carried out. In addition to longstanding concerns surrounding the possibilities of a refugee crisis caused by a potential North Korean collapse, China’s economically backward northeastern border regions have in recent years seen deepening trade and investment relations with North Korea. While the bulk of this exchange is market-based, provincial and local governments have also made major investments in cross-border infrastructure.
It is also highly doubtful whether the Chinese authorities have the capacity to inspect all cargo shipments coming in and out of North Korea, and much of the cross-border flow of goods utilizes informal methods of trade settlement and take advantage of the lax inspections at Chinese customs. As such, analysts frequently err in making the mistaken assumption that China is a unitary actor when in fact the country’s North Korean policy is mediated through a variety of bureaucratic and institutional actors both in Beijing and in the regional governments. Often these actors have their own interests and priorities when it comes to North Korea policy.
Given that the new sanctions almost entirely rely on China’s willingness and ability to implement them, there is therefore good reason to be skeptical as to their efficacy. It also appears that China has successfully demanded the inclusion of a clause stating that certain measures can be relaxed if they are deemed likely to lead to “human suffering,” thus giving China a great deal of discretion as to how far they should be implemented.
Rather than a target of criticism, China’s existing strategy of engagement might instead be viewed as a more effective strategy of facilitating positive socio-economic and perhaps, eventually, political change within North Korea. As with sanctions, economic engagement alone is unlikely in the short term to persuade Pyongyang to abandon its nuclear program. Furthermore, North Korea’s full integration into what is one of the most dynamic regions of the world economy will depend to a great extent on coming to agreement with the United States and its allies. A key problem here is that sanctions against North Korea are aimed not just at changing Pyongyang’s behavior but also at sending a powerful message to other aspiring nuclear powers as to the negative consequences of pursuing such a course of action.
Nonetheless, if the failure of sanctions is fully recognized, there may arguably be scope for a more limited agreement with the major powers of the region that involves a negotiated halt to the development of a weapons system capable of delivering a nuclear warhead through the meeting of some of North Korea’s security concerns, including for example a peace treaty to replace the Korean War armistice. At the very least, the policy of sanctions and containment should be abandoned, not least because sanctions threaten to undermine the very dynamic of social change in North Korea which the U.S. and its allies would presumably want to encourage.
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