“Hard Target: Sanctions, Inducements, and the Case of North Korea” by Stephan Haggard and Marcus Noland

North Korea

Stephan Haggard’s and Marcus Noland’s first joint venture was the 2007 Famine in North Korea: Markets, Aid, and Reform, the best overview of the hunger that led to the death in slow motion death of a million people in the mid- to late-90s. Hard Target does a similar authoritative analysis of the last quarter-century’s attempts to shepherd Pyongyang—with carrot and stick—away from prickly hostility into the warm embrace of the global economic and political order. Their conclusion is neither sanctions nor inducements work, even if the latter have proved marginally more successful than the former.

The reasons for failure are twofold. First, the nature of the regime as a tight family-and-friends operation cuts the leadership off from both the direct impact of sanctions and benefits. Despite Washington’s worst endeavours, the regime has proved resilient, not only able to maintain the living standards of the two million people who matter and form its base in Pyongyang, but over the last decade sharply enhancing them to a level where its people have “never had it so good”.

Second, the coalition of the willing assembled at Washington’s behest was never prepared to sing from the same hymn book let alone hymn sheet. The Six Party Talks were the forum where China, the US, Japan, South Korea and Russia were meant to gang up on the North. The reality was the quintet had no common objectives save a general and, even in that, varied enthusiasm for denuclearization of the peninsula. The five lacked coordination and commitment while the vagaries of the electoral cycle for three meant that they were never simultaneously in favor of wielding carrots or offering sticks.

 

Hard Target Sanctions: Inducements, and the Case of North Korea, Stephan Haggard, Marcus Noland (Stanford University Press, May 2017)
Hard Target
Sanctions: Inducements, and the Case of North Korea
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Stephan Haggard, Marcus Noland (Stanford University Press, May 2017)

For Pyongyang, experience showed tomorrow’s promises for today’s pain was a bad buy. They learnt this from the start of the process in 1994 when Washington and Pyongyang’s Agreed Framework was a deal to countertrade diplomatic recognition, two Light Water Nuclear Reactors and the interim delivery of Heavy Fuel Oil for the abandonment of its nuclear ambitions—initially seeded by the North’s perception of Moscow’s craven retreat in the Cuban Missile crisis. It subsequently turned out that Washington was convinced the North would be the next communist domino to fall as the Soviet Empire completed its collapse and anyway, if by perchance it didn’t, the US Congress would never authorize the delivery of the nuclear components and fuel.

The subsequent unfolding saga of the Six Party Talks are traced in forensic detail almost as if the other five failed to spot that Pyongyang had slunk off to focus on the new leader’s “Byungjin Line” endorsed by the Party in 2013 calling for the simultaneous pursuit of economic development and nuclear weapons. It worked. The economy has grown—despite sanctions—with a 4% spurt last year, while Pyongyang is far closer than anyone in Washington expected to marrying a miniaturized nuclear weapon and an ICBM with the range to hit the US mainland.

On the way to its conclusion, Hard Target demolishes myths and breaks new ground. Outside of Pyongyang, particularly in the North Eastern “rust belt”, urban Koreans remain hungry. Food supplies are sparse and precarious to the extent that that between one in six and one in seven children are stunted and brain-damaged. Ronald Reagan here is proved wrong in claimed “A hungry child knows no politics.” Certainly, it’s not the case in North Korea, as Haggard and Nolan demonstrate as the world has implicitly—it goes by the name “donor fatigue”— or explicitly linked needed humanitarian assistance to political concessions.

Equally, while they do not totally absolve Pyongyang of the well-worn claims of hidden funding generated by activities such as counterfeiting $100 bills and cigarettes, plus drug dealing, they put them in context. They’re all peanuts. The Western average drugs baron wouldn’t find it worth his while to get out of bed.

 

As for new ground, the pair throw light on why Pyongyang’s continued search for Foreign Direct Investment in its growing variety of Special Economic Zones (SEZs) is so unsuccessful. Their enclave strategy could work and benefit conservatives in Pyongyang by slowing any wider transformatory impact on society. Sanctions act as one severe deterrent, but so does predatory behaviour in the provinces. The Kaesong Industrial Complex— closed by former South Korean President Park Guen-hye last year—was to a degree immune with its Government-to-Government umbrella, but in Rason, the SEZ abutting the Chinese and Russian border, “unofficial taxes” threaten to undermine profitability. The escape is either by being very small or limiting your activities to trading and processing on commission.

Nevertheless, Rason will be a crucial test for Beijing’s tougher line on Pyongyang. Jilin Province is core to China’s long “Revitalise the North” campaign and yet has integrated regional production networks deep into Rason. Will the center, post the Party Congress, continue to force the Province to cut off its nose to spite its face or turn a blind eye?

 

Hard Target is a dense read, packed as it is with statistics and tables to underpin its points. Washington, under both the current and previous Administration, has had a policy built on a foundation of wishful thinking. The danger is, that once this is clear, where they go next.

There are profound choices ahead. Haggard and Noland would seem to argue for a comprehensive settlement between Washington and Pyongyang that over a generation and more, step by step, action by action freezes nuclear weapons and long-range missile testing, and subsequently halts and removes Pyongyang’s ability to produce more weapons grade plutonium in exchange for solid security guarantees and a serious package of humanitarian and development aid. Now the second element of the “Byungjin Line” is in place Pyongyang just might be willing to give trust a chance. It will be a difficult tightrope to walk, but all the other options are worse.


Glyn Ford is a former Euro-MP and author of North Korea on the Brink.