Changing North Korea: Give business a chance

By Andrew Salmon

The female peace activists who crossed from the placid dictatorship of North Korea into the raucous democracy of South Korea on Sunday walked into a storm of controversy, for opinion on their undertaking is deeply divided. Are these women harbingers of reconciliation? Or are they "useful fools" for the Kim regime?

Setting politics aside, what struck me was that a group of individuals ― individuals! ― had taken it upon themselves to kick-start a peace and reconciliation process on this peninsula.

And let's be frank. Those whose professional responsibility it is to solve the Korean problem ― the countless officials, diplomats and politicians who work for powerful, well-funded bureaucracies on three continents ― have failed, utterly, totally and dismally.

Seventy years after the peninsula's division, 68 years after the creation of two Korean states and 62 years after the end of the Korean War, there is no peace process, no reconciliation process, no reunification process underway whatsoever. Nothing!

The failure of the professionals in the fields of politics and diplomacy leaves a bitter, tragic and risk-laden vacuum at the heart of Northeast Asia. Which leads me to ask: Might other actors prove more effective in opening North Korea's doors, leading that nation out of isolation and into the international community?

Perhaps. I argue that now is the time to disentangle politics from economics and give business ― specifically, South Korean, Japanese and U.S. business ― a chance.

On these pages two weeks ago, I noted how deeply China is economically engaging with North Korea. Ironically, while North Korea turns capitalist, it is Beijing which is supporting the trend, while ostensibly capitalist Japan, South Korea and the U.S. stand idly by.

But while Beijing is her foremost economic partner, Pyongyang seeks to diversify. And the time is right for other nations to engage.

North Korea's polity is deep frozen, but its economy is transforming radically, driven by an unprecedented bottom-up engine: The markets that now operate nationwide have dragged the country from centrally planned economy to market-centricism. This positive, from-below change is now being belatedly mirrored at the top, with the regime establishing special economic zones nationwide and incentivizing farmers, factory workers and managers.

North Korea's GDP is growing. It is actively courting foreign investment. So why not give them what they want and ― for once! ― work with, not against Pyongyang? And what do we have to fear? The economic playing field is one on which Seoul, Washington and Tokyo possesses gigantic advantages over Pyongyang.

Business engagement could build communications channels, partners and leverage inside the nation. By trading and investing, we would buttress the growth of North Korea's nascent market economy, and encourage the regime in its promising reforms. And an upgrade of Pyongyang's legitimate income sources would render unnecessary their illicit activities ― the most nightmarish of which is a potential export of fissile materials

Speaking broadly, I suggest that supporting the ongoing, home-grown economic evolution is a better policy than hoping for a distant (and so-far unrealized) political revolution ― particularly given the heart-stopping strategic risks the latter would incur.

The current economic changes are certainly influencing society. How far they are influencing Pyongyang's polity, I cannot say. And I am not suggesting that economic enrichment could bring regime change. But it might.

Generally, economic growth precedes political liberalization, a pattern seen in countries like Taiwan, Chile and of course, South Korea. Moreover, China's economic growth has led to greater social openness, if not democracy, and their enrichment and increased global engagement has been positive for the Chinese people.

This latter trend is not lost on North Koreans. A Pyongyang official-turned-businessman in Dandong told me that the market-focused changes North Korea was making were a natural process ― like those undertaken by China and Russia.

Of course, significant economic engagement with Pyongyang would require colossal recalibrations in thinking and policies internationally, and would demand changes to regulations and sanctions. It also begs two questions.

First: Has it not been tried before, with the "Sunshine Policy?"

Yes, but I would argue that "sunshine" rays were limited to investment in specific, fenced- in zones. Today, there are wider opportunities for investment ― as well as for outsourced manufacturing and trade. Moreover, the capitalist-leaning economy of today's North Korean is far better equipped to embrace international business than it was a decade prior.

Second: Would a more prosperous Pyongyang not channel its riches into its military and repressive mechanisms?

That risk certainly exists, but the benefits ― greater engagement with international persons, institutions and norms ― could, in the long term, obviate the risks.

Yet the best argument for engaging economically and assisting North Korea's enrichment is the simplest: A country with nothing to lose is more dangerous than one with everything to gain.

Andrew Salmon is a Seoul-based reporter and author. Reach him at andrewcsalmon@yahoo.co.uk.