Blame North Korea's Horrible Economy on North Korea, Not Sanctions
March 1, 2021 Topic: North Korea Economy Region: Asia Blog Brand: Korea Watch Tags: North KoreaSanctionsPovertyCommunismEconomics

Blame North Korea's Horrible Economy on North Korea, Not Sanctions

Pyongyang continues to choose a system that keeps most North Koreans in poverty.

As the administration of new American President Joseph Biden takes shape, one enduring issue of debate is the growing U.S. use of sanctions in foreign policy. Peter Beinart has helpfully brought up this issue, and others have noted how the previous administration of President Donald Trump particularly ramped up the use of sanctions. As critics have rightly pointed out, sanctions are attractive to U.S. politicians because they seem ‘tough,’ while not actually committing U.S. military personnel to anything dangerous.

In the post-Iraq War era, hawkish Republicans particularly are in a tight spot. No one wants more ‘stupid wars,’ but the party’s nationalist and belligerent instincts (whether Jacksonian or neoconservative) remain. The result of this dilemma is to sanction, and criticism of this impulse, including the sanctioning of North Korea, has grown in response.

While much of this pushback in the Middle East has merit, there is an argument for sanctions on North Korea, or at least trading away those sanctions for counter-concessions from the North instead of just giving them up. This article will pushback on common criticisms of North Korean sanctions; its follow-up will argue for them.

The main critique of sanctions against North Korea—indeed, against sanctions generally—is that they are responsible for the immiseration of the country’s population. It is indeed correct that in an absolute sense, restricting inputs into North Korea (and in tandem, restricting its ability to export to generate foreign exchange to import further) constrains North Korean GDP growth and therefore lowers its GDP per capita. But this is rather narrow reading of the country’s troubles.

The regime’s policy choices are obviously far more responsible for the population’s problems. The government, which is to say the elite around supreme leader Kim Jong-un in the capital Pyongyang, have made many policy decisions since the 1960s which have badly retarded human development in the country.

The regime, not outsiders, chooses to under-invest in healthcare and infrastructure, leading to popular vulnerability to events like the coronavirus. Moreover, it leads to electricity rationing and unclean water, and the loss of harvest yields to decay because storage facilities and transportation are so poor. The regime chooses to spend something like 20 to 40% of GDP on the military. Similarly, it is the Kims who choose to build enormous propaganda sites all over the country, spending scarce foreign exchange importing marble for statues, for example. These are obviously resources which could be redistributed to the population, and they vastly outweigh the scale of foreign inputs.

It is also the regime which routinely rejects foreign aid, because it finds it insulting or condescending to the ‘dignity’ of the state, or because the aid comes with conditions attached. But the conditions reflect a hard lesson learned: if the world simply give North Korea food or medical aid, the regime and its military take it for itself. This, ironically, makes global problems worse, as conditions-free aid becomes a subsidy to the Kims. Hence, the international community often tries to attach monitors to aid, to insure its distribution to the needy. The regime then rejects that.

And finally, it is the regime which has set-up a general domestic political economy that is, for lack of better word, urban predation on the countryside. This urban-rural asymmetry, so vividly illustrated in those famous pictures of North Korea at night, is not somehow predestined or a result of sanctions. The regime chooses to ignore its rural poverty.

It is only the case that sanctions drive poverty in North Korea if we accept the rather bizarre contention that the North Korea state is not responsible for the care of its own people. This is, of course, absurd. Foreigners are not the first provider of resources and assistance in one’s own country; the state is. This is especially ironic in North Korea, which calls itself a ‘people’s republic’ (the “Democratic People’s Republic of Korea”).

It is indeed true that we on the outside care more about the North Korean poor than the regime itself does. This is one of the many grotesque ironies of dealing with North Korea. The regime uses its weakest against us, trading ruthlessly on our morality. But that barbarism does imply that outsiders are immiserating that population. North Korea was doing that long before the sanctions on its nuclear program intensified in the last fifteen years. The famine of the late 1990s pre-dated the nuclear sanctions by a decade and resulted in 10% of the population starving to death. Yet no one blames Russia, whose cessations of Soviet-era subsidies badly hurt the North Korea economy at the time, for those deaths. Nor should they.

Next, sanctions against North Korea incorporate those widespread moral concerns for basic needs and human development. There are carve-outs and loopholes, and there has been a long and vigorous debate about “smart sanctions”—how to target the regime without hurting the population. There is wide consensus that the international community should do its best to help the vulnerable in the North, and that it does and should care more for them than the Kims do. It is, of course, the Kims who do their best to obstruct this effort. The Kims push-off the burden of sanctions onto the population, both because they are callously immoral and do not care, and because they know we care and therefore that sanctions are a useful wedge issue for them against us.

Finally, it is not even clear that relieving sanctions, which would unleash North Korea’s economy to interact with the world more normally, would help the population that much. We cannot say for sure, of course, but it is hardly a stretch to suggest that the gains of post-sanctions GDP growth would mostly accrue to the top. As Josh Stanton points out, the last time we gave North Korea unfettered access to the global economy, they went on a weapons-buying spree.

None of this is to argue that South Korea, Western, and Japanese policy toward North Korea should be dogmatic on sanctions. Critics are right that the North will probably not give up its strategic weapons for sanctions relief, but it may give up other things, such as improvements on human rights, re-posturing of the North Korean army away from the inter-Korean border, or nuclear monitoring. Policymakers should be willing to bargain for these things, and sanctions are a possible trade.

Robert E. Kelly is a professor of international relations in the Department of Political Science and Diplomacy at Pusan National University. 

Image: Reuters.