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Saturday, May 27, 2006

Honey or Vinegar?

What's the best way to bring about change in North Korea, overwhelm it with capitalism or isolate it from the global marketplace? Here's a small part of a much longer discussion of how North Korea is using front companies outside of the country to raise funds, and the response of the U.S. and other countries to this activity:

North Korea's creepy-crawly capitalism, by Bertil Lintner, ATimes.com: North Korean capitalism is thriving - just not inside North Korea. Pyongyang has steadily established a string of legitimate and less legitimate front companies across East and Southeast Asia, aimed at earning the cash-strapped government badly needed hard currency. And, by all indications, business is booming. ... While China is welcoming, North Korean companies have gotten a rise out of Japan and the United States, which contend that Pyongyang uses these concerns sometimes to procure raw materials and dual-use technologies clandestinely to support its missile and nuclear-weapons programs...

The US action [against Delta Asia bank for its dealings with North Korea] raised important questions about the nature of North Korean capitalism, and underscored the dilemma the world faces from a cash-starved, nuclear-armed Pyongyang. Washington, no doubt, realizes that more international trade and economic development is essential for Pyongyang to move forward and evolve into a responsible regional player. ... South Korea, in particular, has long advocated economic engagement with North Korea, arguing that unless the North is urged and helped to develop and strengthen its economy, both the South and the North would likely collapse upon reunification...

Others argue that the flow of more hard currency into Pyongyang's coffers only serves to delay the inevitable collapse of one of the world's most atavistic regimes, thus prolonging the extreme suffering of the North Korean people. There is little or nothing to suggest that the money that ... front companies are earning in the region is being employed for social development at home or spent on basic necessities, such as ... food...

Whatever the case, North Korea is likely to find new ways to continue its commercial drive across the region ... The US may try to tighten the screws on North Korea's expanding global businesses, but there are always others - Russia, China and Thailand - who are more than willing to do business with an enterprising Pyongyang.

    Posted by on Saturday, May 27, 2006 at 12:09 AM in Economics, Policy, Politics | Permalink  TrackBack (0)  Comments (3)

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