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November 2010
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How Do We Get There From Here? Finding a Middle Ground that isn’t Ground Zero
Filed under: Politics and Economics
Posted by: site admin @ 7:29 pm

Author’s Note:
This essay was originally written in the summer of 2009. With the recent shelling of Yeonpyeong by the North Koreans, it seemed appropriate to post it now.

“We will never again take part in such talks and will not be bound by any agreement
reached at the talks.”
– North Korean response to UN sanctions following its March 2009 missile launches, referring to the Six Party Talks[1].

The Six Party Talks, a creation of the United States
in 2003[2] in response to North Korea’s desire for bilateral negotiations regarding security and denuclearization on
the Korean peninsula appear to be in shambles. Instead of tete-a-tete, recent interactions have been tit for tat, with
Secretary of State Clinton referring to the North Koreans as “unruly children”,
to which they responded calling her a “primary schoolgirl[3][SH1].
As far as the North Koreans are concerned, the talks are “over” and “dead” – or
so they say[4].

The US and North Korea appear to be playing a
game of nuclear chicken. While their actions appear rational on the surface,
given their stated interests, a pathway that eliminates the incentive and
justification for nuclear threats and, instead, creates positive incentives in
the North Korean population is available. All it requires is creating an
American mentality in individual North Koreans[SH2].

            Background Interests[5]

The Korean War stopped in 1953 when the US, China and North Korea
signed an armistice agreement, ending hostilities with the peninsula divided at
the 38th parallel[6].
However, South Korea
refused to sign, leaving the Koreas
technically at war[7].
Subsequently, the ROK[8]/US
Mutual Security Agreement placed 50,000 US troops permanently on South
Korean soil[9]. 

North Korea

North Korea was founded from the
Soviet controlled portion of the Korean peninsula following the Soviet Union’s rejection of a plebiscite on a unification
government after WWII[10].Kim Il-sung was declared Prime Minister and
later consolidated power partially through the creation of a personality cult
so intense it disturbed even his Soviet benefactors[11].  While the Korean Worker’s Party (KWP)[12] claims
to be progressive, North Korea is much more akin to a Confucian monarchy than a
modern state[13].
North Korea’s policy of Juche (“self-reliance”) initially resulted in an
economy second only to Japan’s, but the oil price shock of 1974 combined with
over investment in the minerals industry (to create foreign exchange) and
military (spending that foreign exchange) slowed economic growth[14]. By the 1980’s, industrial output was declining[15].  North Korean trade with the West (principally
Japan) peaked in 1974, and then collapsed after North Korea defaulted on its
debts[16]. Hard
currency requirements from Russia in 1991 and China in 1992 put additional
pressure on the DPRK[17].
Subsequent floods and droughts further exacerbated domestic problems[18].

South Korea

South Korea was formed from the UN
sponsored plebiscite rejected by the Soviet Union
after WWII. While native Koreans, having chafed under Japanese rule for four
decades, had planned on recreating a united Korea based on democratic
principles, the ignorance and lack of interest in Korea displayed by American
occupation forces combined with US concerns over the leftist leanings of most
of the post WWII Korean leaders led to a US rejection of indigenous formation
of a Korean government and, instead, the installation of Syngman Rhee, a Korean
exile who had resided in the US for decades[19].
This resulted in a US backed succession of authoritarian governments, with the
first stable democratically elected government coming to power in 1987[20].  While democracy was slow in coming, South Korea’s
liberal economy resulted in rapid economic growth.

United States

The United States’ significant involvement in
Korea began with the General Sherman Incident in 1866 when an attempt at
establishing a trade treaty with the Korean government failed[21].  Further attempts in 1871 also resulted in
Although trade treaties were established by 1882, the next significant
involvement did not occur until after WWII[23]. Korea, having
been occupied by Japan
in 1910 at the end of the Russo-Japanese War, was still a Japanese colony when
WWII ended[24]. As head of the military occupation of Japan, the US was forced
to do something about Japan’s
former colony[25].
Fearful of a Communist takeover of Korea, the US installed a
favored regime in the South and came to its aid during the Korean (Civil) War[26]. The
establishment of the ROK/US Mutual Security Agreement created strong military
and, consequently, economic ties between the two countries[27]. These
economic ties have continued to expand since WWII. In addition to economic ties with South Korea, the US also has strong economic ties with Japan that also evolved out of the post WWII occupation.


Currently North Korea’s most significant
trading partner and the neighbor with the longest land and sea borders, China’s role in
began with the establishment of the Provisional Government of the Republic of Korea in exile in Shanghai in 1919[28].
That role expanded rapidly when China
entered the Korean (Civil) War in October 1950[29],
which Mao saw as necessary to protect the progress of Communism in Asia[30].
is also the recipient of a large number of North Korean economic and political


As the descendant of the USSR, the
initial sponsor of North
Korea and Kim Il-sung, Russia has had
continuous political and economic ties with the country since its inception[32]. These
have waxed and waned as North
Korea has moved closer to China. With the
breakup of the Soviet Union and the installation of hard currency trade, trade
dropped dramatically but has rebounded as initially promised supplies of fuel
oil from South Korea and the US (in exchange for the destruction of the
Yongbyon nuclear plant) have fallen short[33]. North Korea
currently pays for most of its foreign trade with Russia by supplying free labor,
much of which is used in the Russian Far East timber and logging industry[34]. Russia shares
an 18 Km border with North
Korea along the Tumen river[35].


Besides security and economic concerns common
to the region, Japan
has an additional interest in resolving the status of a number of Japanese
citizens kidnapped by North Korean intelligence[36]. While
the numbers are small – North
Korea admits to 13 – this has become a huge
emotional and political issue. Pyongyang
would like to improve ties with Tokyo
(hence the admission) but is seen as prevaricating on the details of this issue[37]. This,
combined with recent missile and nuclear tests, has created severe distrust on
the part of the Japanese population, making any retreat from the kidnapping
status issue effectively impossible for Japanese politicians.

The Games

The Basic Game – Peace and Safety

The basic game revolves around a desire for
economic and political stability on the part of all the regimes in the Six
Party Talks. The North Korean political establishment, in order to stay in
power, must contend with a struggling economy. According to the Bank of Korea,
in 2008 the per capita Gross National Income (GNI)
of North Korea
was 5.5% of that of South
Korea[38].  While North Korea has made some moves
towards a market economy, these have been limited - some say this is due to
fears of a concomitant desire for political liberalization[39].  They have used military sales as a way to
prop up the economy, currently around $20B US GDP[40], and
obtain foreign exchange[41].
 However, official trade is now so low
(less than 10% of the economy), that the impact of this foreign exchange is
probably only felt by the elite[42]. The
primary reason is that North Korea simply has little, except raw materials and
weapons, that others want to buy[43].

In addition to economic and short term
political stability, South Korea is also interested in potential reunification.
Because many families still remain split across the DMZ, there is interest at
both the familial and national level in this possibility. The early part of the
decade was marked by a thaw in relations with the North, with increases in
investment and family exchanges[44].  There has not been complete trust due to the
aggressive posture of the Northern regime and the South continues to maintain a
strong US presence as a defense. The May 2009 nuclear tests finally pushed the
South to join Proliferation Security Initiative[45], which
the North described as “an act of war”[46]. In
addition, South Korea must be concerned about the potential of millions of
refugees flooding across the border in the event of political collapse.

Japan, of course, has strong interests in repatriation
of kidnapped Japanese citizens as well as general regional stability and
economics. In addition, there are strong concerns about DPRK political
stability and potential missile attacks. North Korea’s nuclear ambitions
have resulted in Japan
rethinking its defensive only military posture. This has even included talk of
examining the need for a nuclear deterrent, though official policy discounts
that idea[47].

China and Russia have
strong economic interests due to their trade with the DPRK. They also have
refugee concerns – particularly China,
which, as of 2005, had between 10,000 and 300,000 DPRK refugees[48].
In addition, China
and Russia
have developed strong economic ties with both Japan and South Korea,
with Russia
supplying most of the energy for the region and China being the investment
destination for many Japanese and South Korean companies, making anything that
would impact those relationships of concern.

While the US has negligible economic
interaction with the DPRK[49], it has
strong economic ties to the entire region. 
Disruptions in trade with Japan, China, or South Korea
would have an immediate impact on the US economy.

Changes in the balance of power are a stated
concern to the US
and China,
with Russia
likely interested as well. China
is deeply concerned about changes in the nuclear balance in the region in light
of recent talk in Japan
about the need for a nuclear deterrent[50].
The US
has both specific defensive interests of its own, due to DPRK missile and
nuclear technology, as well as global concerns due to North Korean exports of
military (particularly nuclear) technology. 
and Russia
likely share these global concerns as well since terrorist organizations could
just as easily strike at their interests.

The North Koreans political establishment
publicly perceives external threats from the US[51].  As such, their interests are in reducing that
threat. However, they also know that their military technology is the only
significant bargaining chip they have to extract economic aid from the West[52].  With a need to deliver economically, they get
multiple benefits from the ongoing development of nukes and missiles – they can
create nationalist pride (particularly at their ability to stand up the US), improve
their ability to earn foreign exchange, and create increasingly valuable
bargaining chips to extract concessions from the West.

The US, ROK,
and Russia
have incentive to participate in order to stave off nuclear war and/ or
societal collapse in the DPRK.  While
they have this incentive, they also feel constrained to avoid a one-sided
negotiation. The US,
in particular, doesn’t want to be seen as simply giving in to DPRK demands – it
demands a quid pro quo[53].  The October 1994 Agreed Framework was based
on this principle, where the DPRK would verifiably dismantle their nuclear
facilities in exchange for 2 new light water reactors and 50K tons of fuel oil
annually from the US and ROK until those new reactors were completed[54]. The
quid pro quo broke down over US concerns over the DPRK’s continued uranium
enrichment program[55] and the
fuel oil shipments were interrupted (to be replaced by imports from Russia). Now,
the US
wants to hold the DPRK to those original commitments before any more movement
occurs. In the mean time, the UN has authorized interruptions to the DPRK’s
export of weapons and military technology[56].

Meta Game #1 – DPRK Succession

It is unclear if DPRK fear of US attack is
real or merely an attempt to distract the population from the inability of the
political establishment to deliver economically.  It is clear that the DPRK is undergoing its
second leadership transition. Kim Jong-il apparently suffered a stroke in 2008[57]
and was recently diagnosed with pancreatic cancer[58].
Recent instructions to DPRK embassy staff indicate that his third son Kim Jong-un
may be the chosen successor, but that transition is still underway[59].
During this transition, no one in the current establishment will want to be seen
as soft on the enemy[60].
As part of this transition, continued nuclear weapons development and missile
testing may simply be for domestic consumption – done as a way to create
“street cred” for the newly appointed leader[61].
If this is the case, then there will be no resolution because resolution isn’t
the current goal of the DPRK establishment.

It should be noted that, given prior famines
in North Korea, the population may not be as easily distracted as the elite
would like to believe. While Kim Jong-il tries to portray Bill Clinton’s recent
trip to Pyongyang as a diplomatic coup[62], the
explosive growth in local markets and trading (and the subsequent regulatory
balancing act the central government is trying to pull off) probably indicate
that the population is more focused on bread and butter issues than politics[63]. Unless
the government can deliver on these basic issues through jobs or some other
distribution of wealth, they are likely to see an erosion of power from the
bottom up as the people hold to the form of government economic regulation
while denying its substance[64].  On top, control may also evaporate if
significant factions reject Kim Jong-il’s attempt to solidify his dynasty.
Already some succession moves have failed with the announcement and then withdrawal
of a promotion for one of his sons, along with a cabinet shakeup earlier this
year[65]. While
it isn’t clear whether the average North Korean will directly challenge the
party apparatus, breakdown in control at the top will likely embolden the person
on the street to ignore more of the economic strictures the KWP has tried to
institute. It isn’t clear how long this would need to go on before reaching a
tipping point against party control but the DPRK political elite would do well
to learn the lesson of Rumania - Nicolae Ceausescu went from dictator to dead
man in the space of one week in 1989 as the pro-democracy movement swept thru
the Warsaw Pact[66].

Meta Game #2 – US Multilateralism

The US may also be playing a meta-game.
While the US
does perceive the DPRK as destabilizing, the US insistence on the involvement of
and South Korea
when the DPRK wanted bilateral talks may reveal an additional interest. While
the inclusion of South Korea
is obvious, and Japan not surprising because of the US military presence there, the
inclusion of Russia
and China
is telling. Pragmatically, the US
recognizes them as the original and current sponsors of the DPRK and thus more
likely to have influence over an eventual outcome. 

In addition, however, the US may have
recognized that involving these two nations provided a context to improve
diplomatic relations with both of them at a time when those relations were
deteriorating.  The Six Party Talks began
in 2003[67],
shortly after the Russian crackdown on Yukos, its largest privately held oil
company. Western concerns about this and other actions subsequently led to a
strained relationship between Putin and George Bush.  By involving Russia in the Six Party Talks, it
elevated Russia
on the world stage in a way that Russians, and Putin himself, had seen as their
rightful place.

Similarly, the involvement of China may have
had similar overtones. The US China relationship has grown increasingly complex
as China
has become the low cost supplier to the world. 
With China
providing the low end manufacturing capability for many industries and the
foreign exchange to purchase now over $2T in US Treasuries, the economies of China and the US are tightly
interlocked. In addition, as the two largest Pacific military powers, the US and China must work
together on many regional security issues. Prior to the Six Party Talks, the
Bush Administration had been criticizing the PRC for its human rights record on
everything from Tiananmen Square to Tibet.  While this has not stopped, the Six Party
Talks provide an additional way for China and the US to mature
their relationship so that individual disagreements do not interrupt overall
relationships. And, as with Russia,
the explicit recognition of the value of China in these talks feeds Chinese
national pride in seeing their country take what they believe to be its
rightful place on the world stage.

Beyond this, the Six Party Talks provide a
unique forum for illustrating future US involvement in the Asia Pacific
arena. This approach, in sharp contrast to the perceived “go it alone” approach
in Iraq,
is inclusive and respectful of relevant parties. As such, it helps dissolve ill
will by eliminating perceptions of US arrogance – which has particular
value in Asian Muslim countries such as Indonesia, Malaysia and
the Philippines.
By eliminating a potential foundation for anti American sentiment, the US makes it
harder for Islamic terrorist organizations to find a strong foothold in that

Comparing the Games to Objectives

At first glance, the DPRK and US stances in
these various games seem appropriate given their objectives: Nuclear strength can
be an effective deterrent protecting the DPRK regime and US insistence
on a quid pro quo seems necessary to avoid creating undesirable precedent.
However, the evidence indicates that these stances have not resulted in
resolution – and the status quo is certainly not satisfactory to the US. A more
nuanced look indicates that both stances really aren’t as good as they seem.

While the DPRK regime is interested most of
all in self preservation and, by extension, improved economics, they don’t seem
to realize that despite US
rhetoric, democratization really isn’t that important to the US government.
While it may have been the mantra of the Neo-Conservatives during the Bush II
history shows that the US government easily tolerated non democratic friendly
governments during the Cold War and still does where significant economic
interests would be disrupted by regime change (ex: Saudi Arabia).  Further, the US has been involved in the
destruction of democratic regimes when it perceived them as unfavorable (ex: Cuba, 1952[69]; Iran, 1953[70];
Guatamala, 1954[71];
1963?[72];Chile, 1973[73], Honduras, 2009?[74]).
Because of this, the DPRK really needn’t spend itself into an economic corner
on weapons[75].
The US
has no incentive to interact with, much less attack, North Korea if it isn’t a military
threat. Instead, they should take a lesson from the USSR, which collapsed in 1991
because military spending had bankrupted the economy[76].

On the flip side, the US position of
isolation and economic sanctions until the DPRK caves on its nuclear ambitions
is also counter-productive.  While the US is rightly
concerned about nukes in the hands of madmen, there seems to be a failure to
understand the lesson of suicide bombers – those with nothing to lose are much
more likely to attempt to take down the enemy even at the risk of
self-immolation. This amounts to the classic game of Chicken – except one of
the drivers doesn’t mind dying. In the DPRK scenario, if continued sanctions
create a population so poor that it sees nuclear ambition, even at the risk of
Armageddon, as a no lose gamble, then the US has clearly failed.

Can this be Resolved?

                All is
not lost, however. There is a possible resolution if the key objectives of the
basic game are properly analyzed. There is the objective of North Korean
economics, particularly energy sufficiency. In addition, North Korea
also cares about security, national sovereignty and “face”. Current and future
security are the primary objectives to the US - current security in the North
Pacific specifically around North
Korea; future security as it relates to how
others may act to threaten US security interests. The other parties also care
about regional security, economic impact and the threat of social collapse and
refugees. The lynch pins are energy and security in North Korea. Signals from the DPRK indicate
they want to tie economic measures to any settlement. While energy and security
must be addressed, economics are an
inherent part of any security arrangement because economic collapse in a
proto-nuclear state would create obvious security concerns. The October 1994
Agreement was to replace Yongbyon with light water reactors and fuel oil until
those reactors were operational[77].  The DPRK publicly views this as a need for
energy. The US
views this as an excuse for continued nuclearization. The underlying worry here
is that any reactor still uses nuclear fuel and thus still creates some
uneasiness about potential diversion for nuclear weapons, though negotiations
included transfer of spent fuel to Russia to prevent diversion[78].

Alternative Energy

However, reactors are not the only option to
provide for North Korea.
Recent advances in alternative energy technology provide a plethora of choices[79]. Because
North Korea
does not have a modern infrastructure[80], the
cost effectiveness of these approaches can be measured as part of the total
cost of creating alternative infrastructures rather than simply the incremental
cost of adding to an existing infrastructure. In the West, such calculations
make it difficult for alternative energy to be cost competitive.  The advantage of using the DPRK as an
alternative energy test bed is that it not only meets real energy needs, it
enables companies to scale production so that it will be cost competitive in
more modern markets.

Most importantly, it also side steps the
security and legal problems involved in transfers of nuclear technology[81].  Current legal restrictions literally require
an Act of Congress which can be (and has been) scuttled by only a handful of hawkish
Representatives or Senators. Alternative technologies carry no such restriction
and don’t generate security concerns either.

In addition to addressing the fundamental
need for energy, this approach is the first step in addressing broader economic
concerns.  Replacing economic sanctions
with investment in and trade with the DPRK can further resolve economic
concerns while also contributing positively to improved security. 

Wealth as both Carrot and Stick

One of the underlying problems is differences
in attitudes towards the continued existence of the current DPRK regime. US
hawks favor regime change, seeing it as the only real solution to the security
problem, while the Chinese and South Koreans, as well as others in the US, are
concerned about the resulting refugee problem. It does not appear that either
side recognizes the value of economic self interest.  Simply making North Koreas wealthier can solve
the security problem. Here’s how:

Economic sanctions are based on the premise
that by stripping away a society’s economic security, the people will
eventually rise up against the regime. These rarely work[82].  Instead, they let undesirable regimes blame
the sanctions for all their problems. 
They can even create a population with so little to lose that it will
easily embark on a suicidal path. When you back a dog in a corner it will fight
everything it sees.

If, instead, you make a population wealthy, self
preservation takes a different form. People have an inherent tendency to value
what they have and protect it as a result. This makes individuals much more
risk averse. We see this now on the Korean peninsula. Seoul is less than 30 miles from the DMZ and
is within easy reach of DPRK artillery. The impact is obvious – the South
Koreans are very concerned about security. 
If individual North Koreans were equally wealthy, they would have
similar concerns and those concerns would limit the belligerence of DPRK

Multilateral Coordination

The US has obvious concerns about appearing
to cave in to nuclear blackmail. China and Russia have no
such concern since there is no appearance that they are directly threatened.
Therefore, China
and Russia
could provide initial investment, both in alternative energy as well as other
economic development[83]. In
addition, if they can be seen as convincing the US to drop bans on companies
doing business with the DPRK, they would not only look good on the world stage,
but the US would also have a way to gracefully back down, without directly
capitulating to the DPRK. Further, these developments should start near the
South Korean, Chinese and Russian borders. Besides being the most easily
accessible to cross border trade, these areas are within easy range of
conventional weapons from those countries. This creates a dual carrot and stick
approach – the creation of wealth in the DPRK and the simultaneous creation of
fear of losing that wealth.


In addition, the US should formalize diplomatic
relations with the DPRK and sponsor student exchanges. Beyond this, the US need not –
and should not – do anything as a nation. No attempts at exporting democracy;
No foreign aid beyond humanitarian relief; No loan guarantees for investment; No
posturing – nothing.  Since the US has
effectively normalized relations through the Six Party Talks, it makes sense to
formalize them.  This gives North Korea one
of their objectives without creating bad precedent.  There is already a North Korean ambassador to
the UN on US
soil. Adding one in Washington,
while significant to North
Korea, can be seen as insignificant on the
world stage. By limiting US
direct engagement to diplomats, the US does not cave to nuclear

Further, limiting US engagement to solely the
diplomatic level while dropping economic sanctions on those who would do
business with North Korea frees businesses (including US ones) to engage on
their own.  North Korea is rapidly becoming one
of the last bastions of cheap labor in the world, even compared to China. Because
of this, raw economics can drive investment, just as it has done in the rest of
Asia. The North Koreans need only look at US investment
in Vietnam
or Indian investment in Pakistan
for a lesson on how cross border investment creates both peace and stability.


Sponsoring student exchanges has several
values: 1) It creates a forum for cross cultural understanding; 2) It
introduces North Koreans to capitalism; and 3) It increases the intellectual capital
of the students themselves.  The value of
the first is well known. The value of the other two is in their viral nature –
once exposed, these students will return to North Korea as internal ambassadors
for a way of life that will improve their lives and the lives of those around
them while simultaneously subverting any interest in negatively impacting a
system that will ultimately benefit them.


It should be noted that this approach does
not address the issue of North Korean nuclear weapons. Given the DPRK’s failure
to honor previous commitments in this area, some may wonder if they can be
trusted to fulfill future agreements. There is no need for that trust because
there is no need for an agreement on nukes, at least not with the US.  Removing the reason for the nukes is a sufficient,
albeit slow way, to eliminate them. As the DPRK becomes wealthier, the downside
risk of nuclear destabilization to the DPRK itself will create stronger and
stronger disincentives for continued investment. It may be that the Chinese and
Russians will condition their investments on limiting or eliminating North
Korean nuclear weapons – this would be understandable and psychologically
easier for the DPRK to implement because of the lack of prior direct conflict.

Will They Buy In?

Such a pathway requires buy in from all
sides, primarily the DPRK and the US.  The buy in for the DPRK is simple – by
controlling outside investment, the DPRK government has the ability to favor
loyalists with economic benefits. While internal markets can’t easily be
stopped, external investment requires coordination with the political
establishment. In addition, these external investments also benefit the state
by providing access to hard currency[84].  The North has already created several Special Economic
Zones based on the Chinese model[85], the
most ambitious being Kaesong, from which it earned US$33.5M last year in taxes
alone[86].  Kaesong has 38,000 North Korean jobs which,
including dependents, may directly support as many as 150,000 people[87]. Kaesong
was initially co-sponsored by the ROK as part of its Sunshine Policy, but the
current ROK government is linking progress on security issues to continued
economic investment[88].

this perspective, it appears the North has already bought in. The only question
remaining is whether or not they will stay the course[89][SH4] .
In March, the North temporarily shut border crossings and halted telecom links
during joint ROK – US military exercises[90]. This
threatened to shut down Kaesong which, while it would impact the South Korean
businesses established there, would likely have a larger negative impact on the
North simply because the North’s economy is 1/18th the size of the
South’s. Since this appears to have been done solely for political reasons, it
isn’t clear that the KWP understands or cares about the economic impact of its

The US faces issues on security, human
rights and working conditions in the DPRK[91]. While
it is possible for the Administration to simply stop enforcing some of the
current embargoes on North Korea[92], until commercial
interests are sure there will be no retaliation from the US government, they
may be hesitant to invest.  However, this
concern largely affects only multinationals – regional companies would be
beyond the reach of US
retaliation. And assurances through the Six Party governments could be used to
alleviate any lingering concerns.

The primary problem the US faces is principle
vs. pragmatism – but this is something that a new Administration may be able to
finesse[SH5] .
Obama’s pragmatism mantra[93] could
serve him well here, allowing his Administration to take some credit for
improving security and the environment while also changing the way we deal with
dictators. And because most of what needs to be done can be done simply by
choosing not to act on existing sanctions regimes, he has little risk of being
stymied by a recalcitrant Congress.


Does it matter that the DPRK has nukes? Sure.
Are we going to convince them to get rid of them? Probably not immediately –
because it’s all they have. Does it matter what form of government controls Korea? Not
really, as long as it provides for the needs of the population and doesn’t
disturb its neighbors. Government structures are not magical, despite what the
Neocons might think. They are a framework that must rest on and take advantage
of the cultural context they are in. We need only look at many “democracies”
around the world that have form without freedom to see that the key is the
underlying culture.  Creating wealth in
the country independent of the political establishment creates a lot of
internal incentive for peace and stability. When a population can rise above
the necessities of life and start to think about the future, they begin to
think about politics.  And the first
thing they think is “Don’t screw this good thing up.” A political framework
that supports capitalism and free thinking appropriate to the culture will
evolve over time if that context is there.

If North Korea becomes wealthier and
no longer has a civilian justification for nuclear power, the expense of
maintaining a nuclear threat will quickly be seen as a drag on the
economy.  Further, the DPRK elite will
quickly see that nuclear threats are counterproductive in an era where value is
not measured in land and materials, but in the intellectual capital of the
population. The simple conclusion is 1) there is no value in conquest because
that intellectual capital is not subject to forced expropriation and 2) people
under threat are less productive because they are distracted by the threat.

This might seem like a hard sell when it
appears that the DPRK gets everything and everyone else gets nothing.  Prior attempts at a quid pro quo have gone
back and forth as one agreement after another has been broken. However, we’re
not really asking the US
to “do” much other than get out of the way. The real work of investing could go
on through the other nations of the Six Party Talks.  While it’s possible that North Korea
would attempt to flaunt an agreement that appears to be one sided in their
favor, they may be wise enough to recognize that such behavior could easily
subvert the entire thing. If all the US is doing is stopping enforcement
of existing laws, it would be easy enough to restart that enforcement if
required for domestic political reasons. And it should be fairly easy to
communicate that to the North Koreans.

Further, playing the Basic Game this way also
allows the DPRK and the US to succeed at their Meta Games. Properly handled,
the resulting prosperity will, at least in the short term, help shore up Kim
Jong-il’s successor. And since this solution is inherently multilateral, the US
can succeed in repairing and creating stronger ties with China and Russia that
will be needed as we continue to work through the aftermath of the economic
tsunami of late 2008. 

Investment, dialogue and education will plant
an American mentality in the North Koreans involved.  It will give them the economic ability and
mental capacity to keep their leaders in check. And that’s all we really care



Republic of Korea, the official name of South Korea.

The ruling party in North Korea. There is little distinction between the party
apparatus and the actual government of North Korea.









; see also



Democratic People’s Republic of Korea, the official name of North Korea.

While the Bush Administration rhetoric included “Axis of Evil” and “We don’t negotiate
with evil” (see,
the Obama administration has the opportunity to take a different tack.


U.N. Security Council Resolution 1874 – see

. See also

Id. This article describes an
interesting game vendors play with government regulators attempting to enforce
price controls.

For a history of coup attempts and internal dissent, see


There are allegations of US
involvement though the sources I found didn’t seem of the highest credibility.
At best, there seems to have been no resistance to the coup by the US government.

A good source of both energy and energy efficiency ideas can be found at A historical perspective
can be found at
Other examples can be found at
; ;

As of 1999, North Korea
generated less than 30 billion kwh of electricity against a demand between
50-60 billion kwh. It also has a failing power grid. See
North Korea
relies primarily on trains, with few roads (due to lack of oil). It also has
limited telecom connections. See also 

discusses primarily Cuban trade sanctions but does address the issue generally
as well.

Some outside investment is already occurring in North Korea.  South Korea’s Sunshine Policy has resulted in
several industrial parks (see
). In addition, there are scattered international investors who see a long term
opportunity. See


The North Koreans may close Kaesong
as part of the current round of tensions (see
This could have huge ramifications.


The list is quite long . See
for details.

 [SH1][Clinton can’t catch a
break – as soon as she gets a little attention, her husband steps in and
essentially does her job for her] 

reason that this is really a “pathway” or something of a stepping stone is that
the program could start small almost as a pilot and expand to match levels of
North Korean follow-through and continued good behavior – i.e., the more they
do to unwind their nuclear program and the longer they stick to it, the more
support (or at least less U.S. restrictions on trade) – and of course the
program could contract again as needed to encourage better behavior on the part
of the North Koreans.] — I disagree. I don’t think this should been seen as
contingent on anything, considering everyone benefits, the US even more so if
North Korea is growing away from cooperative policies.

is a very interesting precedent and key piece to include, I think.  I tend to agree that North Korea would
support and follow this arrangement, but there still is the question of what
guarantees do they have in terms of protection from U.S. intervention if no
nuclear deterrent anymore?  Do they worry
about that?  I actually think you have
addressed by demonstrating how their real security interests are about internal
threats, not so much external invasion or less overt interference from the U.S.]

this mean timing is an issue – the pathway better get cranked up fast?]

and they can take (some) credit for at least tamping down the flames on this
fire, plus maybe even a little climate change / greening of the planet / test
tube for market-driven, multilateral-cooperation-supported green solutions,
etc. from a rather eloquent President would go far these days.]

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