I was writing a market commentary the other day and wanted to write about North Korea being a cockroach of a country, but seeing how the audience was going to be institutional investors, I thought better of it. But realistically, I'm not sure what would be better description of the country. Like a cockroach, North Korea's constantly making a general nuisance of itself (shelling other countries and kidnapping their citizens), eating your food (constantly blackmailing others to provide food aid), crapping all over the place (3 nuclear tests, selling drugs and nuclear technology to other countries, etc), and running away when a much bigger enemy comes along...plus it may survive a nuclear war...them and Twinkies.
I actually have higher hope for Kim Jong Un's regime, but not for the same reasons as most governments. Many regimes and/or businesses last generations...the first one builds it, the second one perpetuates it, and the third one brings it all crashing down. This is because the third generation doesn't understand the philosophy underpinning the original regime in the first place. Kim Jong Un nor his generals were around during the Korean War, so they don't really understand what the nation was about as they didn't go through the experience. Whereas Kim Jong Il, the father, still believed in the revolutionary zeal, the new regime is just a corrupt kleptocracy. Kim Jong Un's wife seems to have a craving for designer handbags (just like how Imelda Marcos of the Philippines used to have 2000 pairs of shoes in her wardrobe). There are Porsches wandering around the streets of Pyongyang when the country's doesn't even have enough fuel for farm tractors (one in four North Korean children has stunted growth from malnutrition). Most staggering of all, at least for me, is that a good public sector job in North Korea pays about 3,000 won a month. With the black market exchange rate of 8,000 won to the dollar, that's a monthly salary of about 40 cents! Yet there are swanky bars and coffee shops in the country which are frequented by people in uniforms and coming in chaffeur-driven cars. It reminds me of the end of George Orwell's Animal Farm..."all animals are equal, but some animals are more equal than others". It's pretty obvious that these people don't follow the country's founder's, Kim Il Sung, ideals of solidarity of the proletariat.
The only way to ward off resentment and unrest is to create a foreign enemy to rally the people...cue the United States, always an easy bad guy to blame. Hence North Korea's constant war footing and development of a cult around the leadership...it's not so much that they need to worry about a foreign invasion, they just have to pretend to their citizens that there is the threat of one. The past aggressions are probably needed to create some war footage to show the local population...just like how Americans felt comforted that they were winning the war in Iraq and Afghanistan from footage of smart bombs hitting targets.
But then why does North Korea need nuclear weapons and what's the cause for the latest round of aggression? The two questions go hand in hand. The main issue is that North Korea does not produce enough to sustain itself, and China, on which North Korea almost solely relies for sustainance, voted for UN proposed financial sanctions for the first time early this year. Such sanctions would hit the elite of North Korea the worst, and since it is the elite which has backed the regime, Kim Jong Un as a young ruler trying to assert his authority has to do something which will give the elite confidence that he will fight for them. Kim Jong Un can deliver for his constituents either through the goodwill of other countries (in short supply these days) or through blackmail (hence the need to develop nuclear weapons).
The need to develop nuclear weapons is a real one, as North Korea as a conventional threat isn't much to speak of, despite its 1.1m person strong army. The media definitely blows this out of proportion without understanding the circumstances. Three-fourths of its forces are stationed within 60 miles of the DMZ, the demilitarized zone which separates it from South Korea. While that may seem belligerent, it's because North Korea doesn't have enough fuel to get those troops to the border in case of war if those troops were located elsewhere. The military doesn't have enough fuel to get to the southern part of South Korea, much less fight a war. And the logistics of supplying them would be using farm animals, not trucks. In 1950, it took UN forces two months to sweep across the entire Korean Peninsula, and they would have completely wiped out North Korea if the Chinese had not invaded. That's the result with North Korea receiving military aid from both the Soviet Union and China. Now that it's isolated and the US's modern weaponry, it's hard to imagine the North Korean army not collapsing within a few days. Having worked at an American defence contractor before, I can tell you that the amount of shock and awe the US military can deliver on a conventional army is pretty overwhelming and impressive. The North Korean troops will not know what's hit them.
Regardless of how delusional the North Koreans are, it's tough to imagine them not understanding this outcome, especially with Kim Jong Un having lived in the West. So they need nuclear weapons to pose a threat. Again, it's tough to see them actually using nuclear weapons offensively when the result would be their own obliteration. But what they can do is use it as a defence. They can shell South Korea without much repercussions, as the US/South Korea wouldn't want to start a nuclear war. So the US and South Korea are more likely to cave in to their demands. This is really what the North Koreans want...that the US and South Korea "surrender" to North Korea's demands, at least for the North Korean people's own consumption. A face-saving way out and some aid will buy them off like it always does.
Unfortunately, this means that the situation keeps perpetuating. Really, the only way to stop this run-around is to get China to do something about it, effectively treating North Korean transgressions as extensions of Chinese policy. This would also have the positive effect of somewhat co-opting China's support of other notorious regimes, like Iran, Pakistan, Sudan, etc. China's leaders are pragmatic, if rather slow moving, and they'll change if they think it's in their interest. The trick is to push their buttons in a face-saving way.
I actually have higher hope for Kim Jong Un's regime, but not for the same reasons as most governments. Many regimes and/or businesses last generations...the first one builds it, the second one perpetuates it, and the third one brings it all crashing down. This is because the third generation doesn't understand the philosophy underpinning the original regime in the first place. Kim Jong Un nor his generals were around during the Korean War, so they don't really understand what the nation was about as they didn't go through the experience. Whereas Kim Jong Il, the father, still believed in the revolutionary zeal, the new regime is just a corrupt kleptocracy. Kim Jong Un's wife seems to have a craving for designer handbags (just like how Imelda Marcos of the Philippines used to have 2000 pairs of shoes in her wardrobe). There are Porsches wandering around the streets of Pyongyang when the country's doesn't even have enough fuel for farm tractors (one in four North Korean children has stunted growth from malnutrition). Most staggering of all, at least for me, is that a good public sector job in North Korea pays about 3,000 won a month. With the black market exchange rate of 8,000 won to the dollar, that's a monthly salary of about 40 cents! Yet there are swanky bars and coffee shops in the country which are frequented by people in uniforms and coming in chaffeur-driven cars. It reminds me of the end of George Orwell's Animal Farm..."all animals are equal, but some animals are more equal than others". It's pretty obvious that these people don't follow the country's founder's, Kim Il Sung, ideals of solidarity of the proletariat.
The only way to ward off resentment and unrest is to create a foreign enemy to rally the people...cue the United States, always an easy bad guy to blame. Hence North Korea's constant war footing and development of a cult around the leadership...it's not so much that they need to worry about a foreign invasion, they just have to pretend to their citizens that there is the threat of one. The past aggressions are probably needed to create some war footage to show the local population...just like how Americans felt comforted that they were winning the war in Iraq and Afghanistan from footage of smart bombs hitting targets.
But then why does North Korea need nuclear weapons and what's the cause for the latest round of aggression? The two questions go hand in hand. The main issue is that North Korea does not produce enough to sustain itself, and China, on which North Korea almost solely relies for sustainance, voted for UN proposed financial sanctions for the first time early this year. Such sanctions would hit the elite of North Korea the worst, and since it is the elite which has backed the regime, Kim Jong Un as a young ruler trying to assert his authority has to do something which will give the elite confidence that he will fight for them. Kim Jong Un can deliver for his constituents either through the goodwill of other countries (in short supply these days) or through blackmail (hence the need to develop nuclear weapons).
The need to develop nuclear weapons is a real one, as North Korea as a conventional threat isn't much to speak of, despite its 1.1m person strong army. The media definitely blows this out of proportion without understanding the circumstances. Three-fourths of its forces are stationed within 60 miles of the DMZ, the demilitarized zone which separates it from South Korea. While that may seem belligerent, it's because North Korea doesn't have enough fuel to get those troops to the border in case of war if those troops were located elsewhere. The military doesn't have enough fuel to get to the southern part of South Korea, much less fight a war. And the logistics of supplying them would be using farm animals, not trucks. In 1950, it took UN forces two months to sweep across the entire Korean Peninsula, and they would have completely wiped out North Korea if the Chinese had not invaded. That's the result with North Korea receiving military aid from both the Soviet Union and China. Now that it's isolated and the US's modern weaponry, it's hard to imagine the North Korean army not collapsing within a few days. Having worked at an American defence contractor before, I can tell you that the amount of shock and awe the US military can deliver on a conventional army is pretty overwhelming and impressive. The North Korean troops will not know what's hit them.
Regardless of how delusional the North Koreans are, it's tough to imagine them not understanding this outcome, especially with Kim Jong Un having lived in the West. So they need nuclear weapons to pose a threat. Again, it's tough to see them actually using nuclear weapons offensively when the result would be their own obliteration. But what they can do is use it as a defence. They can shell South Korea without much repercussions, as the US/South Korea wouldn't want to start a nuclear war. So the US and South Korea are more likely to cave in to their demands. This is really what the North Koreans want...that the US and South Korea "surrender" to North Korea's demands, at least for the North Korean people's own consumption. A face-saving way out and some aid will buy them off like it always does.
Unfortunately, this means that the situation keeps perpetuating. Really, the only way to stop this run-around is to get China to do something about it, effectively treating North Korean transgressions as extensions of Chinese policy. This would also have the positive effect of somewhat co-opting China's support of other notorious regimes, like Iran, Pakistan, Sudan, etc. China's leaders are pragmatic, if rather slow moving, and they'll change if they think it's in their interest. The trick is to push their buttons in a face-saving way.
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