Would a Chinese Cut-Off of North Korea Bring It Down?


This is a re-posting of something I wrote for the Lowy Institute here. Basically, I was trying to think of what might either bring North Korea down, or otherwise force it to change substantially. Usually at this point, people say something like, a war, or an internal revolt. But a war would be so disastrous, that it is worth looking at other possibilities. And an internal popular revolt seems really unlikely. In 71 years, North Korea has never had one.

In the movies, like Avatar, the people rise up and overthrow their oppressors. In reality, authoritarian regimes almost always collapse when the regime’s internal groups turn on each other. Regime splits, possibly catalyzed by popular protest, can force dictatorships to change or even collapse. In Egypt in 2011, the regime split after Mubarak failed to quell the revolt with his thugs and then flirted with using the army. They brass balked, and Mubarak began to lose internal support.

But if there won’t be popular revolt in North Korea, how to set the regime’s factions against one another? Well, how about going after their cash? The military and police who keep the Kim regime afloat pay a pretty high price for that. They are globally isolated, hated by the countrymen, and will be remembered in Korean history as thugs. What is the compensation? The great lifestyle of the gangster racket Pyongyang runs – the HDTVs, booze, women, foreign cars, and so on. All of that depends on a) foreign cash, and b) a foreign pipeline. China is required for both. Shut that gate, and the pie of foreign goodies suddenly starts to dry up. That might get them them tearing at each other.

The full essay follows the jump:

One of the great career mistakes a North Korea analyst can make is to predict Pyongyang’s downfall, or worse, attach an actual date to that event. The DPRK (Democratic People’s Republic of Korea) manages to survive no matter how much the world throws at it, no matter how many times we on the outside confidently predict it will fall. And it sure looks like it should fall. It violates almost every expectation we have about successful, or at least stable, states in the contemporary era. Indeed, we often label it a failed state, which suggests that instability or break-down are imminent or likely.

North Korea is just Supposed to Collapse…or Something

But one does not often see a credible pathway – i.e., one without huge changes in current circumstances – laid out for that implosion. Instead, I often find at conferences or in regional journalism a vague, almost teleological, sense that North Korea’s time is up, that it will naturally crumble, subject to ‘historical forces’ or something. The South Korean government is particularly prone to this sort of nebulous-but-confident speculation. Its presidents ritualistically suggest unification will happen soon. Lee Myung-Bak wanted a ‘unification tax’ for this imminent event, while Park Geun-Hye spoke of it as a soon-coming ‘bonanza.’ The South Korea left likes to speculate – even more fantastically – about a Korean federation paralleling relations in ‘greater China’ or even the EU. I have seen lots powerpoints over the years on what to do with the North Korean military or its nuclear weapons after unification and so on, but surprising few credible scenarios of how to actually get from here to there.

So rather than predict a date for North Korea collapse, I want instead to lay out a (hopefully more credible) pathway to change, if not collapse – a Chinese cut-off of North Korea igniting regime elite divisions as Pyongyang factions fight over a declining budgetary pie. There are other obvious possibilities: A war could break out – probably accidentally, as a result of a North Korean provocation gone too far, and igniting a tit-for-tit spiral that escalates. North Korea would lose that war. Andrei Lankov has suggested that the ongoing flow of information into North Korea could ultimately create generational change. The young of today, exposed to world, will inherit North Korea’s institutions tomorrow and slowly change them. Or perhaps, North Koreans will themselves rise, as Eastern Europeans did in 1989 and Arabs in 2010. All these scenarios involve huge changes, whereas mine tries to deal with the DPRK as it is now.

How to Catalyze Regime Splits?

Rather than looking for a black-swan event like implosion or collapse, far more likely is the possibility of regime splits at the top leading to some sort of mild, perhaps rolling, political change. Comparative political science often argues that authoritarian states are prone to change when divisions arise among elites. Often popular revolts catalyze these divisions. But North Korea has never had a popular protest in its history, and there is precious little evidence of a civil society. So what other mechanisms might set the DPRK’s elites against each other? As it is basically a gangster state, how about their money and goodies?

The current South Korean and US strategy is to slowly isolate North Korea in hopes of pushing it back toward the bargaining table. Sanctions have steadily increased; this year has seen the heaviest UN sanctions yet, plus the targeting of Kim Jong Un personally by the United States. This has probably slowed the nuclear and missile programs, but North Korea’s behavior this year is arguably its worst since 2010. South Korea closed the Kaesong Industrial Complex, depriving North Korea of 100 million legal USD per annuam. And Seoul is now seeking to peel away North Korea’s ‘third-worldist’ friends, like Cuba and Namibia. This should make it harder for North Korea to evade sanctions and engage in the gangsterism that has provided cash to the regime for decades. All this should help. Its slowly shrinks North Korea’s room for maneuver, and it wisely pursues low-hanging fruit first. Cutting off subsidies, thickening sanctions, isolating North Korea step-by-step from its few remaining friends slowly backs it into a corner, where it survives almost exclusively on Chinese forbearance.

A Chinese Cut-Off

It is now widely understood that North Korea is greatly dependent on China. China accounts for roughly 90% of North Korean trade. Its banks hide the regime’s slush funds. Informal cross-border networks help feed North Koreans where the state no longer can. It is the pathway over which elite luxuries like alcohol, HDTVs, and jet-skis travel to the Pyongyang ‘court economy.’ The closure of Kaesong, roll-up of other allies, and tough new sanctions on North Korean shipping increasingly leave China as North Korea’s last major pipeline to the world economy.

A Chinese cut-off would therefore be disastrous. It would dramatically reduce resources flowing into the country, especially the luxury goods which underwrite the governing bargain between the Kim family and the military. In the mid-1990s, Kim Jong Un’s father promised the military extraordinary access to politics and the budget, in exchange, most analysts believe, for not overthrowing Kimist rule after the end of the Cold War. This was known as the ‘military first policy’ (son-gun), but it is better understood as a gangsterish bargain: the Korean People’s Army (KPA) will not overthrow the Kims so long as they provide the goodies to the brass. Those benefits include living in Pyongyang in nice apartments with proper electricity, water, and so on; foreign luxury items like HDTVs, liquor, films, and automobiles; a blind eye to corruption and personal debauchery; limited access to the outside world for elite families and their money.

Critically, this ‘songun bargain’ (my term) requires an outside pipeline. These luxuries are not substitutable domestically, no matter how hard the regime squeezes its population. Should the booze, jet-skis, clandestine shopping trips to Beijing, and so on be caught off, what are the benefits to the KPA standing by the Kims? The costs are clear and enormous – senior regime figures are marked men globally, individually subject to the whims of the Kim clan, cannot travel easily, will likely be lynched or executed should North Korea fall, and so on. Why carry these costs if the luxury benefits are not there?

Further, all sorts other standard, but scarcely substitutable, goods, such as hydrocarbons and machine parts, would dry up if China took sanctions more seriously. Fuel shortages already inhibit KPA training, for example. Factories would shut down.

In short, if the Chinese seriously shut the gate, there would eventually be a contracting budgetary and foreign goods pie in the court economy at the top, which could set elites against each other over what was left – which parts of the security apparatus got whatever gasoline was left, which generals got the remaining top-shelf liquor or HDTVs. This would not happen immediately; there would be a ‘pipeline effect’ of several years, perhaps a decade. Extant reserves would cover initial losses; China would probably not seal off North Korea completely, even if it were offered a withdrawal of US forces from South Korea in exchange; North Korea would likely return to serious gangsterism in order to find funds; and the regime would first crack down even harder on its own people to find resources for the court economy. But eventually the shortages – particularly in nonsubstitutable foreign niche goods (Kim Jong Un’s favorite cigarettes, for example) – would feed through to the top. As resources shrank, it is easy to imagine a gangster regime – already built on predating its own people and the international community – falling into mafiosi gangland-style infighting over what was left.

Keep Flattering China, South Korea

If there will be no popular uprising to push North Korean elites toward fracture, maybe depriving them of the luxuries, which are the only benefit they accrue from the whole awful system, will. North Korea cannot survive on its own. It has always required a foreign patron; the only time it did not have one, it fell into a man-made famine. Worse, the regime’s ideology is a preposterous quasi-theological monarchism which its elites almost certainly know is bunk. The military-first policy and well-known indulgence of the North Korean elite strongly suggest their cynicism. We also know that North Korea reacted sharply to the US pursuit of its illicit holdings at Banco Delta.

Exploiting this weakness for foreign cash and luxuries will, as ever, require Chinese cooperation on sanctions, plus a long-term effort to convince China that North Korea is greater threat to it than a unified Korea. This re-evaluation may be underway, and South Korea should keep flattering away with China, however humiliating it may be. The road to Pyongyang still runs through Beijing.

One thought on “Would a Chinese Cut-Off of North Korea Bring It Down?

  1. Pingback: [VIDEO] North Korea TV Show Mocks Obama | pundit from another planet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s