If sanctions against a target regime can be thought of as antibiotics, then North Korea has largely become drug-resistant. Indeed, North Korea is exhibiting “superbug” traits, increasingly impervious to sanctions, according to John Park.
Park is the director of the Korea Working Group at the Harvard Kennedy School. He spoke on January 14 at a meeting of the Boston Committee on Foreign Relations.
Every nuclear test by North Korea has been followed by a round of additional sanctions, Park said. Yet, despite these constraints the North Koreans have made rapid progress in developing their missile and nuclear capabilities.
Park’s research is based on interviews with elite North Korean state trading company officials, a small group within the approximately 30,000 North Korean defectors living in South Korea. Embedded in the Chinese marketplace, these individuals excelled at procuring the components that led to the rapid development of North Korea’s missile and nuclear capabilities.
These procurement agents bought the critical components from China-based Western and Asian companies that were producing goods at the same level of advanced technology as in their home markets. As a result, the North Korean regime was not obtaining outdated technology, but the “good stuff,” Park said.
How the North Korean-Chinese commercial partnership operated
Here’s how it worked: North Korean businesspeople embedded in China paid a Chinese company a commission. That company went, for example, to a German company to purchase dual-use industrial equipment. The Chinese company would outsource shipping to a local logistics company, which would deliver the goods to North Korea. Leveraging diplomatic credentials, North Korean procurement agents were able to operate openly in China.
These procurement agents also enjoyed deal-financing arrangements with Chinese middleman who would directly make initial payments for goods on behalf of a North Korean client for an additional fee. The client would make full payment to the Chinese middleman upon delivery of the procured item.
“What was so striking about such activity was its normalcy,” Park said.
“Any ex-patriate business person doing deals in China would follow the same practices,” he said.
Sanctions are designed to make it risky to do business with a banned entity, Park said, which is why Iranian business partners were scared off by U.S.-led sanctions prior to the 2015 nuclear deal with Iran. In the case of China, middlemen linked to corrupt Party officials offered unique opportunities for North Korean clients. For elevated commission fees, these middlemen offered to do specialized procurement activities. Rather than being scared off, the application of additional sanctions created business opportunities where the Chinese middlemen were able to monetize the increased risk by charging higher commission fees.
The headline story was not that the North Koreans were engaged in illicit procurement – they had been doing that for decades. The breakthrough was the way in which they procured banned components via more capable Chinese middlemen.
Globalization and the huge volume of trade through ports such as Hong Kong also made it virtually impossible to search every container. Many of the components are small and easily hidden among the sheer volume of benign and legal goods, Park said.
The game changer that essentially made wide-scale procurement activities via middlemen in the Chinese marketplace possible was a set of agreements – under the headings of economic development, tourism and education – that Chinese and North Korean leaders signed in October 2009. The message to Chinese companies and business people was that under Chinese law “it’s legal to do business with North Koreans.” When pressed to implement sanctions, Chinese leaders would point out that the commercial activity in question was merely “economic development activity.” This was significant because a key clause in UN Security Council Resolutions emphasized that UN member states were not prohibited from engaging in economic development and humanitarian activities with North Korea. In practice, the clause was a legal loophole regularly cited by the Chinese.
In 1992, South Korea’s Northern Policy saw the new Asian economic tiger use its newly developed wealth and stature to broker strategic deals with China and the then Soviet Union. In return for trade credits, both countries severed their patron relationships with North Korea, which dramatically isolated it almost overnight. During this period, North Korea began “cranking out” plutonium at its Yongbyon Nuclear Complex, Park said. Isolated and crippled, North Korea appeared to embark on its nuclear gamble.
In the second half of the 1990s there were famines and natural disasters, which some analysts assert basically turned North Korea into a failed state. This is when China’s overtures to North Korea to restore ties began to gain traction as more Chinese foreign assistance flowed into North Korea.
With the scale of this foreign assistance largely overlooked in the West, North Korea defied predictions that it would collapse.
On July 28, North Korea crossed an important threshold when it tested an intercontinental ballistic missile (ICBM) that was estimated to be able to reach Chicago – or possibly to the East Coast, if one takes into account the Earth’s rotation, Park said.
On November 28, North Korea conducted a test of a more potent ICBM, the Hwasong-15. It reached an altitude that meant it could reach anywhere in the U.S. if the trajectory is flattened out, Park said.
These development activities have ramped up under the rule of Kim Jong Un. His father, Kim Jong Il, conducted 16 ballistic missile tests over a 17-year period, including two nuclear detonations. In six years, Kim Jong Un has conducted 85 ballistic missile tests, including four nuclear tests, Park said. The one on September 3, which measured 6.3 on the Richter scale, was a “monster,” Park said.
Implications for U.S. policy
In recent years, the North Koreans have been very consistent in announcing their testing goals in advance, Park said, which now includes an atmospheric nuclear test.
Park cautioned that even a successful atmospheric test would only be a demonstration of a prototype. Many technical experts believe that North Korea would still need to mass produce 200 or so nuclear-armed ICBMs to develop a viable minimal nuclear deterrent for self-defense. North Korea would then have to operationalize and deploy this nuclear arsenal.
“So we do have time for diplomacy to work,” Park said.
National security leaders are divided at the moment. One group thinks North Korea’s development activities are geared towards self-defense and a prelude to negotiations. The other group asserts that North Korea now constitutes a clear and present danger to the continental United States – and that we can’t allow a 33-year old dictator to keep the Amercian homeland hostage. This group believes we need to “take care of the threat now rather than later when it’ll be much worse,” Park said.
Among senior U.S. administration officials, North Korea has replaced terrorism as the biggest threat to the U.S., according to Park.
Park said he fears that the reasoning for military action on North Korea is similar to the run-up to the 2003 invasion of Iraq.
“The U.S. and North Korea are like two trains racing toward each other,” Park said. ”To those on the outside, we don’t appreciate how fast those trains are traveling.”