Kim Jong Il, reputedly a fan of Hollywood pictures, is like the rest of us guys: He likes to see stuff get blown up. North Korea’s “Dear Leader” just has better toys, like real nukes and missiles.
Kim likes to celebrate the Fourth of July, too. Three years ago he exploded his country’s first nuclear device to mark America’s Independence Day. There is a good chance he’ll fire one of his oversized roman candles in our direction sometime this holiday weekend, if leaked intelligence reports can be believed.
North Korea’s economy is a wreck. It is unable to feed its people without massive and recurring international charity. Seen from satellites at night, the nation is literally a black hole, surrounded by the lights of prospering cities in China, South Korea and Japan. The regime subsists on the proceeds of weapons sales, counterfeiting and diplomatic extortion, in which the North’s second-rate missiles and thus-far unimpressive atomic devices are its only bargaining chips.
Similarly bankrupt Communist regimes collapsed 20 years ago in Romania and Albania. Yet the North Korean regime survived and has managed to develop steadily more dangerous capabilities since the country’s founding strongman, Kim Il-sung, died in 1994.
How?
The short answer is that none of the powers that could undermine this dreadful regime has found sufficient motivation to do it.
China is the North’s main sponsor. Kim and his associates could not last very long without fuel, food and equipment that passes through, or is provided by, China. Although China is displeased by Kim’s recent saber rattling, and particularly his decision to conduct a second nuclear test earlier this year, the Chinese show no sign of wanting that regime to go away.
If North Korea were folded into its prosperous, democratic doppelganger in the South, China would have a thriving U.S.-allied nation on its doorstep. Disaffected Chinese would have a land border across which to flee, undermining China’s pretense that a dynamic economy justifies an authoritarian self-perpetuating ruling clique. China enjoys a reasonably good trading relationship with South Korea even as it shelters the blustery North. Bringing South Korea’s boundaries up to the Yalu River could create tensions that might undermine that relationship, which would be bad for Chinese business.
Russia, which also shares a land border and a good relationship with North Korea, likewise has reasons to like things as they are. North Korea’s East Coast is close to important Russian naval facilities in the Far East, as well as to disputed territory that Stalin seized from Japan in the closing days of World War II. Removing North Korea as a problem would enable the U.S. and Japan to more freely challenge Russian interests in the northwestern Pacific.
Even South Korea has, at least until now, been reluctant to see Kim go. When the Berlin Wall fell, West Germany’s powerful economy staggered under the strain of absorbing the underdeveloped East, which nevertheless was light years ahead of where North Korea stands today. The South Koreans have blanched at the prospect of taking responsibility for the millions of destitute Northerners—nearly all of them unfamiliar with how a modern economy functions—who would suddenly be thrust into Seoul’s lap if Kim’s regime collapsed.
Only Japan and the United States seem eager for North Korea to disappear. The Japanese loathe the North’s history of kidnapping citizens off Japan’s own beaches to serve as language tutors. They also do not appreciate it when the North fires its rockets across Japanese territory, especially since those rockets have a record of falling from the sky at random times.
The United States maintains more than 28,000 troops in South Korea to defend against a potential Northern breach of the cease-fire that suspended, but did not end, the Korean Conflict in 1953. The U.S. is not eager to be drawn into another Asian war but has no choice other than to shield Japan and South Korea beneath the American military umbrella. The official U.S. policy is that it does not intend to try to change the North Korean regime. The unspoken addendum is, “unless the North gives us a really good reason.”
So the U.S., South Korea, China, Japan and Russia have for years promised North Korea large economic benefits if it agrees to dismantle its nuclear program. At times the North has agreed just long enough to collect the next aid installment, before reverting to its usual aggressive behavior.
Kim is putting his friends and his adversaries alike in a tight spot. A newly Communist China sent the Red Army to defend Kim’s father in the 1950s, but Beijing certainly does not relish renewed conflict with the U.S., which today owes China around $1 trillion. War not only would risk wiping out that wealth; it also would destroy China’s lucrative trade relationships around the world. Likewise, the Russians may benefit from the troubles North Korea causes the U.S. and Japan, but it does not seem to be in Russia’s interest to actually fight for the North. Russia will work behind the scenes to strengthen Kim just enough to make the cost of toppling him greater than the U.S. is willing to pay. The Chinese will do likewise.
Meanwhile, up in Pyongyang, Kim is having fun making things go boom! Happy Fourth of July, everyone.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
Kim Jong Il, reputedly a fan of Hollywood pictures, is like the rest of us guys: He likes to see stuff get blown up. North Korea’s “Dear Leader” just has better toys, like real nukes and missiles.
Kim likes to celebrate the Fourth of July, too. Three years ago he exploded his country’s first nuclear device to mark America’s Independence Day. There is a good chance he’ll fire one of his oversized roman candles in our direction sometime this holiday weekend, if leaked intelligence reports can be believed.
North Korea’s economy is a wreck. It is unable to feed its people without massive and recurring international charity. Seen from satellites at night, the nation is literally a black hole, surrounded by the lights of prospering cities in China, South Korea and Japan. The regime subsists on the proceeds of weapons sales, counterfeiting and diplomatic extortion, in which the North’s second-rate missiles and thus-far unimpressive atomic devices are its only bargaining chips.
Similarly bankrupt Communist regimes collapsed 20 years ago in Romania and Albania. Yet the North Korean regime survived and has managed to develop steadily more dangerous capabilities since the country’s founding strongman, Kim Il-sung, died in 1994.
How?
The short answer is that none of the powers that could undermine this dreadful regime has found sufficient motivation to do it.
China is the North’s main sponsor. Kim and his associates could not last very long without fuel, food and equipment that passes through, or is provided by, China. Although China is displeased by Kim’s recent saber rattling, and particularly his decision to conduct a second nuclear test earlier this year, the Chinese show no sign of wanting that regime to go away.
If North Korea were folded into its prosperous, democratic doppelganger in the South, China would have a thriving U.S.-allied nation on its doorstep. Disaffected Chinese would have a land border across which to flee, undermining China’s pretense that a dynamic economy justifies an authoritarian self-perpetuating ruling clique. China enjoys a reasonably good trading relationship with South Korea even as it shelters the blustery North. Bringing South Korea’s boundaries up to the Yalu River could create tensions that might undermine that relationship, which would be bad for Chinese business.
Russia, which also shares a land border and a good relationship with North Korea, likewise has reasons to like things as they are. North Korea’s East Coast is close to important Russian naval facilities in the Far East, as well as to disputed territory that Stalin seized from Japan in the closing days of World War II. Removing North Korea as a problem would enable the U.S. and Japan to more freely challenge Russian interests in the northwestern Pacific.
Even South Korea has, at least until now, been reluctant to see Kim go. When the Berlin Wall fell, West Germany’s powerful economy staggered under the strain of absorbing the underdeveloped East, which nevertheless was light years ahead of where North Korea stands today. The South Koreans have blanched at the prospect of taking responsibility for the millions of destitute Northerners—nearly all of them unfamiliar with how a modern economy functions—who would suddenly be thrust into Seoul’s lap if Kim’s regime collapsed.
Only Japan and the United States seem eager for North Korea to disappear. The Japanese loathe the North’s history of kidnapping citizens off Japan’s own beaches to serve as language tutors. They also do not appreciate it when the North fires its rockets across Japanese territory, especially since those rockets have a record of falling from the sky at random times.
The United States maintains more than 28,000 troops in South Korea to defend against a potential Northern breach of the cease-fire that suspended, but did not end, the Korean Conflict in 1953. The U.S. is not eager to be drawn into another Asian war but has no choice other than to shield Japan and South Korea beneath the American military umbrella. The official U.S. policy is that it does not intend to try to change the North Korean regime. The unspoken addendum is, “unless the North gives us a really good reason.”
So the U.S., South Korea, China, Japan and Russia have for years promised North Korea large economic benefits if it agrees to dismantle its nuclear program. At times the North has agreed just long enough to collect the next aid installment, before reverting to its usual aggressive behavior.
Kim is putting his friends and his adversaries alike in a tight spot. A newly Communist China sent the Red Army to defend Kim’s father in the 1950s, but Beijing certainly does not relish renewed conflict with the U.S., which today owes China around $1 trillion. War not only would risk wiping out that wealth; it also would destroy China’s lucrative trade relationships around the world. Likewise, the Russians may benefit from the troubles North Korea causes the U.S. and Japan, but it does not seem to be in Russia’s interest to actually fight for the North. Russia will work behind the scenes to strengthen Kim just enough to make the cost of toppling him greater than the U.S. is willing to pay. The Chinese will do likewise.
Meanwhile, up in Pyongyang, Kim is having fun making things go boom! Happy Fourth of July, everyone.
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