NK nukes and 'business logic'

By Lee Seong-hyon

Through social media, a Korean friend of mine working in China in the financial sector asked me about how the second DPRK-U.S. summit and the U.S.-China trade war, respectively, will unfold and what are the likely outcomes. He added that the financial market was acting "as if both the U.S.-China trade war and the DPRK-U.S. negotiation were already resolved."

The trade war between the world's two largest economies will undergo a cycle of "temporary compromise and deterioration," then compromise, and then again deterioration, while the overall Sino-U.S. relations will take a "downward trajectory," I said.

In the case of the second DPRK-U.S. summit, the "lesson learned" from the criticisms spurred by the Singapore summit last year will goad the two parties to yield a "modest but tangible outcome." President Trump will use it to declare the summit as "his victory" for the domestic audience. However, the Washington elite and the U.S. think tank community will roundly view the summit as "insufficient."

After articulating my predictions, I emphasized they were entirely "my personal views." I was on the up and up. My friend said "Got it!" and attached a smiling emoticon.

Though the North Korean nuclear issue and the financial market seem unrelated, I have been invited several times from those in the financial sector and business organizations to come to their meetings and share my views on the current geopolitical situation surrounding the Korean Peninsula. When I show up at these places, senior business executives mostly fill up the audience seats.

These business figures are busy people. And the reason they take time to attend a lecture on the international affairs lies in the fact that there are some correlations between the geopolitics of the North Korean nuclear issue and business.
For example, when North Korea conducted its first nuclear test in October 2006, the first thing a Beijing-based journalist from a U.S. economic newspaper did was to call security experts to inquire about the ramifications of the nuclear test. From the foreign investors' point of view, the Korean market always runs the perennial instability risk as a geopolitical "tinderbox."

The U.S. administration under Obama adopted the policy of "strategic patience" regarding North Korea; this was Washington's euphemism to indicate that it would not prioritize the North Korea issue.

Related to this, a former senior U.S. official told me: "We could have been more involved in the North Korea issue if North Korea had oil reserves." (Here, I introduce the comment anonymously as this was a "small chat" several years ago.)

In the end, whether it is the executives in the financial sector (a domain that seems irrelevant to the nuclear issue, but actually takes interest in the North Korean matter), or whether it is the U.S. government (that was supposed to pay attention to the North Korean issue but actually did not), all boils down to have some bearing with their economic "interests." In other words, one pays attention to the North Korean issue when it "pays off."

In this regard, it is worthy to note that Trump frequently mentions North Korea's "economic potential" when he speaks of the nuclear issue, unlike previous American presidents. It reflects the "vantage point" of Trump, a former businessman. He approaches the North Korean issue from an economic perspective.

North Korea's nuclear issue cannot be solved without drawing on robust U.S. interest and engagement of the U.S. government. This then also requires consideration of what concrete "benefits" the resolution of the nuclear issue would offer to the U.S.

A statement such as "the North Korean nuclear issue should be resolved for the sake of peace" may not be suffice to persuade Washington. Solving the North Korean nuclear quandary is imperative for the people of the peninsula, but may not be so for a country faraway, across the Pacific Ocean.

South Korea should be able to show how the U.S. policy investment in North Korea would benefit the U.S. in concrete terms. North Korea is well known for a number of natural resources. However, no systematic, reliable assessment of North Korea's natural resources has been done.

North Korea also has skilled labor with low costs. It was reported that Coca-Cola once "brainstormed" an idea to build a production plant in North Korea. It implies that many multilateral corporations have their eyes on the economic potential of North Korea, as Trump does.

South Korea should vigorously practice forming a partnership with U.S. entities, sharing knowledge and information, in envisioning a "post-nuclear" rebuilding of North Korean economy.

Of course, all these economic inducements to North Korea should go hand in hand with the speed of North Korea's denuclearization. Seoul and Washington, in turn, should show to North Korea how it can realize its huge economic potential when it denuclearizes.

Lee Seong-hyon (sunnybbsfs@gmail.com), Ph.D., is director of the Center for Chinese Studies at the Sejong Institute.