The way to make North Korea back down

Threats of American military action are empty bluster, but money talks

After Sunday's nuclear test, the most powerful yet, and two successful intercontinental missile tests in July, North Korea can credibly threaten to nuke a major US city and kill millions of Americans. To date, the Trump administration, frustrated by its misplaced hopes of Chinese cooperation to restrain Pyongyang, has been reduced to empty bluster, while others, including a senior official in the previous administration, are resigned to living with a nuclear-armed regime on the Korean peninsula.

But a nuclear North Korea is unlike a nuclear China or Russia. During the Cold War, neither Beijing nor Moscow faced an existential threat in the form of an alternate Chinese or Russian state. Pyongyang, on the other hand, has had to live with a far more prosperous and legitimate Korean state across its southern border.

This internal dynamic of the Korean peninsula compels Pyongyang to continue to threaten war and perfect its weapons of mass destruction. The regime's logic is that the more advanced its nuclear capability, the less likely the United States will be to defend South Korea at the risk of sacrificing millions of American lives at home.

Hence, for Pyongyang, menacing the US is a non-negotiable means of isolating and exercising dominance over Seoul. This is how the regime of Mr Kim Jong Un seeks to ensure its long-term survival.

This latest nuclear blast, during the Labour Day weekend in the US, shows that Pyongyang is less interested in reaping concessions from the international community than in sticking to its playbook of strategic provocations. It seeks maximum political impact by conducting carefully timed weapons tests. The pattern of Washington's tepid response to these affronts has been to apply incremental sanctions to get Pyongyang to back off a bit and then to defuse tension.

Pyongyang's provocations, which have been followed by disingenuous talks about denuclearisation, have often also won generous blandishments from its adversaries, including at least US$10 billion (S$13.5 billion) from Seoul and US$1.3 billion from Washington over the past 20 years or so. With good reason, Pyongyang sees itself as wielding both a carrot and a stick. Even now, despite solid US support for the South, North Korea is able to pressure Seoul into selective censorship.

Whether Pyongyang can induce Washington to abandon Seoul or embrace a nuclear North Korea, the security of the rich, risk-averse South will be increasingly compromised either way. The only non-military means of forestalling this ominous trajectory of events is for the US to enforce both American and United Nations sanctions against the North Korean regime and its enablers, the foremost of which remains China.

Thanks to the strength of the US dollar, Washington has the means to create severe financial hardship for Pyongyang. For far too long, the US has shied away from shutting off the Kim regime's sources of money, let alone sanctioning its Chinese partners. This has been out of concern that Pyongyang might escalate its aggression or that Beijing would adopt retaliatory economic measures. These fears are unfounded: North Korea escalates tension according to its own timetable, while China shows restraint in the face of legitimate financial measures.

There is therefore a compelling case to isolate Pyongyang economically. This would include levying hefty fines on the Chinese banks that, unwittingly or not, launder money for Pyongyang and facilitate dollar transactions on behalf of North Korean entities. A useful ripple effect from such action can be expected. In the past, China's biggest financial institutions have voluntarily ceased transfers with banks, both North Korean and Chinese, that have been designated by the US as involved in money laundering.

In June, the US identified the Bank of Dandong as a money-laundering concern. Deprived of plausible deniability, Beijing has neither protested vociferously nor retaliated. The same was true when the US charged four Chinese nationals affiliated with the Dandong Hongxiang Industrial Development Co last year with money laundering; Beijing responded by arresting the head of the company and several other executives.

The test for President Donald Trump will be to refrain from any impulse to relax sanctions when faced with the next major provocation from Pyongyang. And it will come. North Korea sees itself as a revolutionary state that cannot live as the permanently inferior Korean nation.

Since the Kim regime is governed by the need to dominate South Korea by threatening the region with nuclear annihilation, its willingness to use its lethal powers will only grow unless it is confronted by the spectre of bankruptcy and the consequent destabilisation of its rule. While reassuring its allies South Korea and Japan of the US' steadfast commitment to their defence, the Trump administration should also persuade Seoul and Tokyo not to fall for the same trap of settling for an illusory peace in the face of Pyongyang's intimidation.

Rather than issuing empty threats or blaming others, the Trump administration should work on becoming a credible financial threat to the Kim regime. Only then will the US be in a position to negotiate from a position of strength, an entirely feasible feat that has nevertheless eluded every administration to date. Only then will the Trump administration have offset the futility of US diplomacy over the past quarter-century by the kind of resolute action that will save lives.


• The writer is an assistant professor of Korean studies at the Fletcher School of Law and Diplomacy, Tufts University.

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A version of this article appeared in the print edition of The Straits Times on September 07, 2017, with the headline The way to make North Korea back down. Subscribe