February 2018

1During his much-publicized Asian tour, Donald Trump was offered an imperial welcome by China’s Xi Jinping, according to a protocol that Yang Jiechi – “Beijing’s Kissinger” – could only describe as “State visit +”. As kids, and diplomats, know very well, gifts, and especially spectacular ones, always come with strings attached. This State visit was indeed supposed to give Trump the opportunity to exchange views with Xi Jinping on a variety of touchy subjects, one of them being the North Korean nuclear issue on which Beijing and Washington are at odds. Whereas the United States’ Korean peninsula strategy still remains blurry and lacks coherence, the Trump administration seems convinced that economic sanctions still are relevant and effective in order to denuclearize the Democratic People’s Republic of Korea (DPRK, North Korea). With the US having limited or even non-existent trade relations with Pyongyang, Washington has been focusing its diplomatic efforts towards China to coerce Beijing into severing cross-border trade and business that, according to the US, fuel Kim Jong-un’s nuclear quest.

2On paper, this strategy does make sense : by preventing the DPRK from trading with the outside world and by limiting its export revenues, economic sanctions could possibly kill two birds with one stone ; first, they could dry up financial flows that fuel North Korea’s nuclear program. Second, by pressuring the North Korean economy, economic measures could help convincing the Pyongyang leadership that it is in its own interest to put an end to the nuclear program. This strategy might even appear all the more relevant given the Iranian precedent, but it overlooks crucial and unique characteristics of the DPRK and its nuclear program. That being said, this sanctions-based “coercive diplomacy” seems to have had a very limited impact, and might even be considered counter-productive, as the spectacular 29 November ballistic missile test-fire suggests.

3The effect of economic measures on North Korea’s production of wealth and its political structures is extremely hard to assess given the opaqueness of the country for foreign watchers. Pyongyang no longer publishes economic statistics on a regular basis since the 1960s and foreign trade data accessible by foreigners mostly is “mirror data” provided by the DPRK’s foreign partners. We are thus able to know that since the 2000’s, North Korea’s external trade has known a dramatic rise (from $ 2.4 to $ 10 billion in 2014), as did inward Foreign Direct Investment, albeit on a less spectacular scale : from $ 1 to $ 2 billion on the same period. However, North Korea’s most important trade partners, namely China, Russia and, to a lesser extent, South and South-east Asian countries, can hardly be considered as models of transparency. The DPRK, which defaulted on its external debt in 1975 and hasn’t been able to access international credit ever since, still is able to finance an important and structural commercial deficit with China, most probably by clandestinely exporting various goods, sanctioned or not (from seafood to missiles). Statistical data available to researchers and policymakers thus lacks reliability, making quite difficult to assess the impact of economic sanctions. Russia, North Korea’s second largest trade partner, is suspected by some scholars to dissimulate part of its trade with the DPRK by running it through complex networks of Chinese front companies. In such an opaque context, given Pyongyang’s expertise in the circumventing of economic sanctions, one can hardly be surprised to see that the Bank of (South) Korea estimates the DPRK’s GDP growth rate at no less than 3,9 %, even though UN sanctions have become much harsher after the March 2016 resolution. Indeed, since then, two-thirds of North Korean exports have been partially of totally forbidden (from coal to seafood), in addition to the import of several strategic resources, including oil.

4Although it is quite hard to understand how the North Korean economy keeps running despite long-lasting and always harsher measures, most experts agree that China plays a significant role in the DPRK’s relative economic success. Beijing indeed is by far North Korea’s first trade partner, even though it is quite difficult to know Pyongyang’s actual degree of dependence on China, given the opacity describe above. Beijing seems reluctant to punish Pyongyang in a way that could destabilize its neighbour, the two socialist brethren having an extremely ambiguous relationship (relative ideological proximity but fierce nationalism on both sides) : slowing down the economic momentum or disturbing the internal political balance of the DPRK could jeopardize the border’s stability or even, worst case scenario, trigger an “unification by absorption” to the benefit a Seoul, a close American ally. What’s more, China has little incentive to become tougher on the DPRK, as sanctions and economic isolation gradually turned North Korea into a captive market for China, as well as a cheap supplier of raw materials with limited or no alternative trade partners. China has been looking, for more than a decade, to further strengthen its economic reform in the three Chinese northeastern provinces known collectively as dongbei, whose economy still is dominated by State-owned companies. In this context, providing economic opportunities to the private sector has become an important mission for local authorities. Besides, Beijing considers that it is not a player to the current nuclear crisis, which opposes Pyongyang to Washington, a position that cannot be considered as surprising given Washington’s inability to seduce Chinese diplomacy into a change of strategy.

5But if economic sanctions are doomed to fail, it is first and foremost due to the very nature as well as the objectives of the North Korean nuclear program : Kim Jong-un’s nuclear quest not only aim at guaranteeing the isolated State’s security but also protecting North Korean sovereignty. The issue of the political sovereignty of the DPRK constitutes the main pillar on which North Korean ideological discourses and policies are build, ever since the end of the Japanese colonization. The nuclear program, as well as the emphasis put on the economic development of the country, is only one specific element of the North’s long-lasting effort for national liberation aimed at sanctuarizing the country against foreign interferences and “hostile forces”. In addition, it remains a powerful mean to foster internal political and ideological cohesion as, by mastering nuclear dissuasion, Kim Jong-un is achieving a long-standing of his father and grand-father, that is preventing the country from foreign aggression and influence. When Washington tries to use economic sanctions to coerce Pyongyang into denuclearization, it quite the contrary justifies Pyongyang’s anxiety and feeds its need to achieve nuclear sanctuarization. Obviously, threatening Kim Jong-un of “totally destroying North Korea” at the UN General Assembly does nothing but reinforce this paradigm.

6Of course, the latest ballistic and nuclear tests (respectively November and September 2017) have not yet revealed all of their secrets, but the least that can be said is that Kim Jong-un seems to have won his bet. Although the North Korean nuclear dissuasion might not be completely credible and ready, Pyongyang is progressing too fast to give any chance to coerced denuclearization. “Coercitive diplomacy” has failed, military options all have potentially nightmarish outcomes, and one can hardly see what Washington might have to offer against a test freeze, not to mention a full denuclearization. More bluntly, North Korea has won. For the time being, the best way to defuse tensions and security pressure (and thus the raison d’être of the nuclear program) is to implement a yet unseen strategy from Washington (as well as other Western powers, including France, the only European Union member – along with Estonia – no to have diplomatic relations with North Korea) : finding a modus vivendi with the DPRK, a de facto nuclear power and potentially emerging country.