Posts Tagged ‘north korea’

North Korea’s Economy is a Disaster, but the Family Business is Thriving

October 10th, 2010 Comments off

The whole world, including the DPRK’s sole foreign friend, China, knows that North Korea is an economic catastrophe, and has been for decades. Compared to its brethren in South Korea, the so-called DPRK has about a 20th  of the per capita GDP, and can only export Scud missiles and heroin (the latter through its misnamed “diplomatic” missions abroad). However, in the surreal scientific Marxist paradise that North Korea claims to be, the genes of the “Great Leader” Kim-il Sung  are the most perfect in the universe. Thus, the lifeless corpse of Kim-il Sung remains president of the DPRK forever, while his son Kim Jong-il now runs the country.

Now that Kim Jong-il is in bad health, a successor must be prepared. Once again, scientific Marxism has determined that the best qualified candidate is none other than a member of this same august family. He is Kim Jong-un, the 27 year old son of Kim Jong-il. He has no political experience and no military experience, yet  that has not prevented him from being appointed a four-star general in the North Korean Army, and given senior political responsibilities. Very soon, the propaganda campaign will begin, “proving” that Kim Jong-un is, like his father and grandfather before him, an unmatched genius, obviously the most qualified North Korean to run the dilapidated nation.

In the last few days in the DPRK’s capital, Pyongyang, Yang Hyong Sop, one of the top officials in the country’s ruling communist party, told the Associated Press that, “our people are honored to be led by the great president Kim Il-sung and the great general, Kim Jong-il. Now we also have the honor of being led by General Kim Jong-un.” A statement to the foreign press from a senior Party figure along those lines is the surest sign yet that Kim Jong-un is being set on the fast track to follow in his father’s and grandfather’s shoes as the unchallenged dictator of the impoverished but nuclear-armed rogue state.

As nation builders, the Kim dynasty is a train wreck. But as the managers of a very lucrative family business, they are obviously brilliant. Maybe there is something after all to their title, “Great Leader.”

Punishing Policymakers For Economic Disasters, North Korea Style

March 24th, 2010 Comments off

In our enlightened Western, capitalist, free enterprise democratic world, we have a most liberal and benign way of punishing those responsible for massive systemic financial and economic malfeasance. We bail them out, at taxpayers expense, and allow the captains of failed institutions to reward themselves for their miscalculations and greed with massive bonuses, while the public at large is “rewarded” with massive  sovereign indebtedness and unemployment.

On the other hand, the Stalinist anachronism that is North Korea has a somewhat  different approach to those held accountable for economic disasters: the firing squad. So it was that Pak Nam-ki, chief for planned economy for the DPRK’s ruling party, met his end amid a hail of bullets. Supposedly, he was shot for being a stooge of an imperialist dog of a bourgeois counterrevolutionary. The truth, however, is much more interesting.

The ruling communist monarch of North Korea, Kim Jong-il , son of the nation’s founder and officially infallible, decided on a major currency reform. The reform was a disaster, leading to a steep rise in price inflation and the wiping out of the meagre savings of most North Korean families. Someone had to pay for this outcome, however the nation‘s ruler, Kim Jong-il , being the “great leader” and therefore incapable of mistakes, could not be blamed. According to press reports, the unfortunate  Pak Nam-ki was selected as the sacrificial scapegoat, and was shot.

While North Korea is clearly an extreme case, should the global economy deteriorate in the manner I expect, it is highly probable that ruling elites in the Western world will also look for scapegoats to satisfy public anger, as opposed to bailing out Wall Street in perpetuity.

North Korea Weighs Nuclear Option as Solution to its Economic Crisis

May 28th, 2009 Comments off
North Korea’s underground detonation of a nuclear device on May 25 has rattled the global community. It seems every so often that the regime in Pyongyang engages in provocative behavior, so as to bind world attention. “We are unpredictable and dangerous, so world, you better pay attention to us,” appears to be the radioactive clarion call being uttered from North Korea. In the past, these unorthodox tactics on the part of the “Democratic People’s Republic of Korea,” or DPRK, have been employed as an effective means of blackmail. In the wake of the DPRK’s first nuclear test, in October 2006, then U.S. President George W. Bush agreed to American concessions to North Korea that seemed inconceivable based on his prior rhetoric. Many of these concessions involved economic support for the ailing North Korean economy, especially with regard to the supply of energy and foodstuffs.
The latest nuclear escapade by North Korea is being interpreted as continuity with its longstanding policy of using its possession of weapons of mass destruction as a means to creatively employ economic blackmail. However, the North Korean political economy is so dysfunctional, I think there may be a much more radical calculation emanating from Pyongyang.

There are few countries on the planet that have economies as shattered as North Korea’s. Officially a Marxist-Communist state, its reality is in fact much different. Peculiar for a nation supposedly based on Marxism, North Korea is ruled by a family dynasty. The founder of North Korea, Kim Il-Sung, is worshipped as a God, and his lifeless corpse is constitutionally still the president-for-life of the DPRK. The son of Kim Il-Sung, Kim Jong-il, is the current ruler of North Korea and it is rumored that one of his sons is also being groomed for political succession. Like his father, Kim Jong-il is also deified, and referred to in every proclamation as “the Great Leader.” However, despite his exalted status, his people have endured repeated famines that have snuffed out the lives of millions, according to international relief organizations. Furthermore, with the demise of the Soviet Union and the termination of its subsidies to North Korea, the nation’s industrial infrastructure has essentially collapsed. Men still show up for work in the factories, but nothing is produced, for the most part, and the pay is a pittance. It is the women who actually run the economy of North Korea, largely through the black market. Though theoretically illegal, this otherwise draconian police state largely tolerates the female-dominated black market, estimated by some observers to represent 80% of the DPRK’s meager economic output. The women of North Korea are the breadwinners in that society, having rediscovered entrepreneurial skills and are engaged in craft production and trading goods smuggled into the DPRK from China.

Having a national economy largely based on the black market is actually in conformity with other aspects of North Korea’s unique political culture. Another example is how its communist-indoctrinated diplomats are expected to engage in profitable capitalism while posted abroad, so as not to bother Pyongyang with inconsequential and mundane matters, such as paying the rent on their embassies. For that reason, numerous North Korean diplomats have been expelled by their foreign hosts for engaging in activity “incompatible with their status.” That term usually means espionage; in the case of the DPRK, the diplomats were expelled for engaging in narcotics trafficking.

In this basket-case of an economy, North Korea has had only one export commodity that has consistently been a strong earner of foreign exchange; armaments. In the past, ballistic missiles have been a hot export commodity for the rulers in Pyongyang. However, many of North Korea’s traditional missile buyers, including Iran, now manufacture their own rockets. With demand for its medium range missiles potentially drying up, North Korea must look at new products that will stimulate demand. Long range ballistic missiles that can strike targets in the United States are one example of product diversification that may explain the DPRK’s recent test of a supposed satellite launch. However, the crown jewel in North Korea’s product portfolio is its nuclear weapons capability.

Though most analysts believe that the recent detonation of a nuclear device by North Korea was just its traditional blackmail-driven saber rattling, I think there may be a far more dangerous motive behind the atomic weapons test. North Korea’s first nuclear test in 2006 is widely viewed as being a dude. While the basic concept of creating a nuclear blast is relatively simple-bringing together a critical mass of fissile materials-the means of achieving full yield requires sophisticated physics and engineering. The small yield of the blast in 2006 revealed that the DPRK had not yet mastered the technique of “extending the generation,” meaning prolonging the natural onset of a nuclear explosion by a ten millionth of a second. What seems like an insignificant time factor makes all the difference between an explosion that is in the same category as a large conventional bomb, and a blast on par with the bomb that destroyed Hiroshima in 1945. Until the DPRK had demonstrated its ability to “extend the generation,” potential foreign buyers of nuclear weapons would have little faith in North Korean nuclear weapons technology.

The May 25 nuclear test by the DPRK was, by all accounts, successful. The Russians estimate that the device detonated by the DPRK had a yield of between 10 and 20 kilotons, on par with the bombs dropped on Hiroshima and Nagasaki. Potential customers, including both rogue nations and non-state actors such as Al-Qaeda, have now received a “product demonstration” that is convincing.

While my theory that North Korea’s recent actions are based on a policy decision to begin surreptitiously marketing nuclear weapons technology, and possibly fully assembled nuclear weapons to the highest bidder, may seem far-fetched, there are signs that key decision-makers in the U.S. national security establishment have adopted a similar viewpoint. Recently, the Department of Homeland Security has abandoned plans to place radiation detectors in most ports of entry to the United States. This decision was based on the conclusion that technology does not exists that would reliably detect a well-planned attempt to smuggle a nuclear weapon or its components into the United States. However, there is another area that the Department of Energy, in particular, is aggressively moving forward on. A new field has been invented, called “nuclear forensics.” It is based on the belief that a nuclear detonation is so unique, post-blast analysis can reveal the origin of the fissile materials that were used in the weapon. This seems to be the new deterrent doctrine; if a country such as North Korea sells a nuclear weapon to a terrorist organization that then used it to destroy an American city, the U.S. will be able to scientifically determine the point of origin of the nuclear device, and launch a retaliatory response against the offending nation.

As if the Global Economic Crisis was not enough to worry about, we now may be witnessing the emergence of nuclear proliferation as an export-based strategy for capital formation. It makes one hope that nuclear blackmail is all that North Korea is truly interested in.


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