top of page

Imbalance of Payments

It’s not up to debate that 2017 has been a year full of tension and uncertainty in terms of international relations, especially considering how the foreign policy statements of the United States are being revealed to us through Twitter:

North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works! — Donald J. Trump (@realDonaldTrump) 3 January 2018

The infamous tweet that lead to such fire and fury from news outlets is actually a bit more than a childish tantrum. Under Kim Jong-un, North Korea’s Supreme Leader since 2011, more than 80 missile tests have been carried out, and although North Korea was always considered to be a threat to international security, the strength and success of their tests have been rapidly increasing.

The reason why that’s surprising is mostly due to the fact that most of the current sanctions against North Korea are a result of their first nuclear weapons tests in 2006, and these sanctions are one of the strictest in the world right now. As a member of the United Nations, admitted simultaneously with South Korea in 1991, North Korea has been the subject of much debate in the UN’s Security Council. Following the first test, the formation of the UN Security Council Sanctions Committee on North Korea was the first step in attempting to hinder North Korea’s economic development.

What better way is there to stop someone from doing something you don’t want them to? Just grab them by the money.

The sanctions in 2006 were only for military supplies and luxury goods. In 2009, after the second nuclear test, the sanctions were expanded and strengthened, but did not leave the military scope. This still didn’t seem to scare North Korea off though, as in 2013 they conducted their third nuclear test. The UN was quick to respond with sanctions on money transfers to the Democratic People’s Republic, and yet North Korea followed three years later with a fourth test. This time the UN decided not to hold back and commodity sanctions were implemented on coal and rare earth metals such as gold and titanium.

You would think North Korea would give in and stop at this point. The geographical conditions of the region are simply not sufficient for efficient agricultural practices, which leads to external dependencies on food. Although the planned economy has taken this into consideration, and has attempted to achieve self-sufficiency in terms of staple foods, North Korea fails to feed its citizens adequately. With a history of famines and volatile crop output, the government could have sustained the needs of its population through imports from neighbouring countries such as South Korea, Japan, or especially China. With stricter sanctions, North Korea surely would agree to UN’s terms and try to alleviate the severity of the sanctions, right..?

Apparently not! Continued efforts in launching missiles and more nuclear tests forced UN to ban the exports of coal, seafood, iron, and lead. The sanctions even went on to prevent any more North Korean labourers from working in foreign countries. Even China, who has been North Korea’s biggest trade partner and political supporter since 1961, had to bend to the knee and stop coal imports from North Korea. With Chinese-American relations seeing improvements through 2017, North Korea has been very vocal in their sudden distrust towards China.

Unfortunately, even with international cooperation against them, North Korea’s cunning ways make it a bit difficult for the UN to impose these sanctions successfully. Regardless of the bans on seafood exports, a yet-to-be-released UN report details how the country has been able to overcome these sanctions. Even more interestingly, North Korea has been helping Mozambique with a joint programme on refurbishing military equipment and providing training. The combined valuation of these illegal transactions have been estimated at 200 million USD for the period from January until September 2017. Although the number seems minuscule at first sight, consider that the export revenues of North Korea have been estimated at 4 billion USD for 2012. The UN is certainly going to be imposing more sanctions in 2018, but North Korea’s resilience makes it obvious that the solution doesn’t lie at trade restrictions anymore.

It has been two months since the last test, which broke records for North Korea in terms of both range and altitude. Experts estimated that even when fitted with an actual nuclear warhead that would make the missile heavier, it would still be capable of reaching most of the continental US. The big question we cannot answer now is when the next launch is, and what, if not sanctions, can stop it?


bottom of page