North Korea Is an Economic Problem

It turns out that the North Korean missile confrontation is, in the first instance, an economic problem. China and the US agree that Pyongyang’s nuclear weapons program must be stopped.  Japan and South Korea concur.

The difficulty has to do with dismantling North Korea’s outsized nuclear industry without touching off an internal crisis.  Think back to the problems of German reunification – but much worse. That means lining up plenty of economic aid and international cooperation.

It also means everyone involved must accommodate themselves beforehand to a further degree of Chinese hegemony on the Korean peninsula.

That’s how I understood Henry Kissinger’s telegraphic essay in The Wall Street Journal Saturday, “How to Resolve the North Korea Crisis” (subscription required).

Say what you will about the bitter views routinely espoused by the editorial writers there, the WSJ op-ed page is still the emergency bulletin board of choice for THE American Establishment. (Remember the Nicholas Brady-Eugene Ludwig-Paul Volcker letter at the height of the Panic of 2008?)

Kissinger doesn’t say so, but the urgency of the current crisis derives, not from of any imminent military threat to the United States, but from the volatility of the American president. A former National Security Adviser and Secretary of State under Presidents Nixon and Ford, Kissinger does hint at Donald Trump’s ineptitude as a negotiator.

Heretofore the administration has urged China to press North Korea as a kind of sub-contractor to achieve American objectives.  The better – probably only feasible approach – is to merge the two efforts and develop a common position jointly pursued with the other countries involved.

China’s incentives in the matter are two-sided, according to Kissinger. It can’t abide nuclear proliferation in Asia.  If North Korean nukes were to become fully operational, South Korea, Japan and even Vietnam would have to develop weapons of their own, or risk nuclear blackmail. But neither does China dare risk chaos on its northeast border in the event of collapse nor permit the possibility of nuclear weapons in South Korea without forfeiting self-respect.   “China’s incentive to help implement denuclearization will be to impose comparable restraints on all of Korea,” Kissinger writes.

Moreover, since managing denuclearization requires sustained international aid and cooperation, the US and Chinese must agree on the aftermath, too: “specifically about North Korea’s political evolution and deployment restraints on its territory.” Such an understanding “should not alter existing alliance relationships,” Kissinger writes, meaning the US and South Korea.

South Korea and Japan must be involved in the process:  South Korea because it would be most directly affected by a diplomatic solution, Japan because it would suffer most from lack of one. It is one thing for the US and others countries to promise they wouldn’t “take advantage” of denuclearization, meaning, presumably, buy up assets in the North, Kissinger says, delicately.  “Seoul is certain to insist on a more formal and embracing concept.”  (Here is WSJ columnist Holman Jenkins Jr.’s colorful take on the prospects [subscription required]).

Though Kissinger doesn’t mention it, Russia, which shares an 11-mile border with North Korea, is also an interested party, if only for having voted earlier this month for a unanimous Security Council resolution imposing sanctions on Pyongyang. It is also reasonable to wonder  who, if anyone, financed North Korea’s build-up of nuclear capability, with money, know-how and key materials? Pyongyang’s program grew much more rapidly than had been forecast; Iran’s efforts seem to have procceded much more slowly. China is an unlikely suspect. What about Putin and Russia? What is given can also be taken away – it would seem small price to pay for a seat at the table.

So who should negotiate with whom?  About what? A joint statement by the US and China would begin the process, bringing home to Pyongyang its isolation, he wrote. The rest could proceed swiftly.  Get the details done first, without involving North Korea, says Kissinger. “Pyongyang could best be represented at a culminating international conference.”

What with all the saber-rattling, this is Trump’s first real crisis as president. The Robert Mueller investigation of his Russian dealings is still in an incipient stage.  Henry Kissinger speaks for a broad swathe of well-informed center-right and center-left opinion. Let’s see what happens next.

.                                               xxx

For those interested in plans to develop charter cities, economist Paul Romer’s proposal before he became chief economist of the World Bank, The Economist, has an update on the on-again-off-again project in Honduras.

And for those simply interested in a good time, read Nic Fildes’s wonderful front-page story in the Financial Times about Mr. Oozy Cats, formerly of Boston, apparently.