Friday, May 29, 2009

America's Dirty North Korean Secret

There’s nothing new about Kim Jung Il setting off atomic bombs and launching missiles in order to attract attention.

The same thing happened in 2006.

At the heart of North Korea’s seemingly reckless behavior is a strong desire to assert an independent economic and geopolitical role for itself in North Asia.

Lips and teeth rhetoric notwithstanding, North Korea and China have never been that close.

Kim Il-sung was Stalin’s client. China fought against the United States on North Korea’s behalf in the Korean War, but still resents the fact that this exercise in socialist solidarity forced the Communists to abandon their planned invasion of Taiwan and the reunification of the country.

North Korea’s serious economic problems—and its desperate reliance on China’s good offices--began when the Soviet Union broke up and Moscow abandoned its traditional patronage of Pyongyang.

North Korea has never behaved like a loyal ally of China’s, let alone a client.

At one tense moment in their relations, Pyongyang even threatened to open air links with Taipei in retaliation for Beijing’s lack of cooperativeness.

In the minds of the North Koreans, I would suspect that they see their nation as, potentially, another South Korea.

Indeed, the material foundation for an economic miracle in North Korea is stronger than South Korea’s.

It might be said that North Korea’s economic avatar is China’s state-mediated growth, while South Korea relies on a resource-poor, globalized Japanese-style hypereconomy whose long-term sustainability is open to question.

Unlike South Korea, North Korea has abundant supplies of hydropower and coal energy.
The canard that North Korea is “dependent on China for most of its energy supplies” needs to be laid to rest periodically.

In 2006, I took a close look at the North Korean conundrum in a post entitled Intimate Enemies: Pyongyang, Beijing, and the Nuclear Factor.

It gives an idea of the risibly small import needs of North Korea, in contrast to the immense foreign food and energy inputs required to sustain the South Korean economy.

According to the Federation of American Scientists, North Korea has significant reserves of coal and hydropower and continues:

Oil accounts for about 6% of total North Korean primary energy consumption, and is largely limited to non-substitutable uses such as motor gasoline, diesel, and jet fuel. Oil is imported from China and the Soviet Union by pipeline, and from Iran by sea.

North Korea relies on coal for power generation, exports over $100 million of coal to China per annum, and even exports electric power to China on occasion, presumably when it is desperate for a quick shot of foreign exchange. Last year it imported about $286 million dollars worth of petroleum products from China, mostly crude.

In contrast, South Korea imports 70% of its grain and 97% of its energy needs—a combined tab of about $20 billion per year—to keep its economy humming.

The difference, of course, is that South Korea is integrated into the global capitalist economy and easily generates the hard currency needed for its imports. North Korea went the other way, allying with a socialist bloc that collapsed catastrophically in 1989 and now has to scramble to come up with the foreign exchange to finance its imports.

It is certainly true that North Korea is dependent on China for most of its petroleum needs.

China’s insistence on doling out diesel and other products only in return for hard currency has certainly contributed to the devastation of North Korea’s agriculture and industry.

Energy supply is undoubtedly a sore point in the already fraught relations between the two countries and I suspect China is squeamish about playing the petroleum card any more aggressively than it already has, lest it provoke a furious outburst from Pyongyang.

The partial energy blockage is, in one sense, counterproductive. It feeds the North Korean elite’s sense of grievance and provides it with a useful external scapegoat for its enormous troubles.

I think it would be worth considering that North Korea’s highly disciplined, militarized autocracy is nationalistic and patriotic does not consider itself a collection of criminal fiends guzzling imported cognac while dancing on the crumbling bones of its suffering citizens.

It considers itself a society that, if it was able to shed its pariah status and rejoin the family of nations as a PRC-style mixed socialist export-oriented economy (with an impoverished and ill-nourished workforce grateful for any wage above the starvation level), would probably thrive and have no problem importing the relatively insignificant energy inputs it needs to survive.

North Korea wants improved relations with the United States, and to engage in a controlled opening of its economy and society. In return, Pyongyang is offering itself to Washington as a counterweight to Beijing in North Asia.

The dirty secret of U.S.—North Korea relations is that the United States, unwilling to take positive measures that would prolong the survival of the Kim Jung Il regime, let alone midwife its return to respectability in the international community, has decided to let the situation fester—and the North Korean people rot in a misery that is probably eminently reversible.


bbot said...


Unknown said...

I work for an institute that's been working on North Korean energy issues for the last 15 years, and I can say you're grossly underestimating the degree of North Korea's energy shortage. It's true that it has large coal reserves, but much of the coal is of low quality, the mines are in poor shape, and the equipment for extracting and transporting the coal is not functioning due to lack of oil and spare parts. Similarly with the hydropower; the plants have been greatly damaged by siltation caused by flooding resulting from the massive deforestation in the country, and again they lack the ability to make replacement parts to fix the plants. Furthermore, what little electricity is generated is largely lost due to the deteriorating transmission grid (which we estimate is one serious cold spell away from complete collapse) and severely antiquated and inefficient end-use equipment. Furthermore, even if the coal and hydropower were functioning at full capacity, that would do nothing to help the transportation sector, which does require petroleum (and which needs to be functioning for the other sectors to be successful). I suggest you take a trip to North Korea and see for yourself the people walking long distances, the women offering packs of cigarettes in exchange for rides, and the frequent power outages. North Korea's energy sector cannot be revitalized without massive amounts of outside aid, and without it the country's industry cannot be developed.

North Korea is in an absolute energy shortage, and therefore citing the percentage of their energy generation that is oil dependent misses the point. To create a functioning economy they need to at least double their current energy supply; this is not a "relatively insignificant input."

Unknown said...

They have large quantities of high quality anthracite, to say that their coal is of low quality is wrong.

Unknown said...

Much of the anthracite is located in hard-to-reach areas, including under sea beds, and North Korea lacks the equipment to safely extract it. The brown coal is of very poor quality, as we know from having taken some back to the US for analysis.

Unknown said...

China is buying anthracite from DPRK. The anthracite has been analysed and validated as high quality.

Unknown said...

This well written article highlights why "neglect" won't work, and why Obama needs to engage directly.

Unknown said...

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