Is Electricity to North Korea Enough?

As the two Koreas, the U.S., China, Japan and Russia prepare for the first round of six-party talks in more than a year, there is reason to hope for progress on the core issue of denuclearizing North Korea. South Korea has recently offered to provide huge amounts of electricity if Pyongyang will give up its nuclear arsenal, now estimated by U.S. intelligence at roughly eight weapons. The U.S. has been less specific about incentives, but seems comfortable with the South Korean offer, and has promised security assurances to North Korea if it comes into compliance with the Nuclear Nonproliferation Treaty and similar agreements with the U.S. and South Korea. U.S. President George W. Bush has also made a point of voicing less hostility to the Kim Jong Il regime of late.

All that said, the odds are still against a breakthrough deal. North Korea’s problems go way beyond electricity; for a start, its economy is still only about half its 1980s size. That makes it doubtful that it will trade in its best bargaining chip—nuclear weapons—for a South Korean offer that, while generous and serious, nonetheless addresses only one aspect of the Stalinist state’s overall needs.

Moreover, Pyongyang probably doubts it would pay a large price for bargaining tough or even refusing in the end to denuclearize. So North Korea might agree to most of South Korea’s proposal but ask for a few more benefits, while also insisting on retaining its uranium-enrichment program (especially because Beijing and Seoul are not convinced by U.S. intelligence that North Korea even has such a project). After all, China and South Korea may not like North Korea’s nuclear arsenal but they seem to be getting used to living with it—and prefer it to instability or war on the peninsula. Since America’s military options are exceedingly limited—by the lack of any good targets to strike in North Korea, by overcommitment of U.S. forces in Iraq and Afghanistan, by Seoul’s unwillingness to participate in any war—North Korea probably does not fear an attack if negotiations fail again. Neither does it likely fear major economic repercussions. Tokyo might be prepared to consider new sanctions of its own, for example, on monetary remittances from North Koreans living in Japan, but China and South Korea probably would not.

Still missing from the basic approach to negotiations is any sense that the core problem here is the nature of the North Korean regime. To be sure, the Bush Administration would agree that Kim’s Stalinist government is the fundamental cause of the nuclear crisis. But Bush seems to entertain unrealistic ideas about replacing that regime, rather than more pragmatically trying to prod it into undertaking major structural change.

North Korea needs to move the way Vietnam and China have in the past quarter-century—gradually liberalizing their economies and even their politics, cutting back on military forces, improving human rights. All these things clearly can be done even within a communist system. If Pyongyang proves willing to do so, the international community can go well beyond electricity deals and security assurances, offering broader packages of development assistance from the other five participants in the six-party talks, the European Union and the World Bank, as well as lifting U.S. trade sanctions.

Of course, it will be hard to get Kim to undertake such reforms. The Romanian example undoubtedly weighs on him: Kim would certainly fear suffering the same bitter fate that Ceausescu experienced if he unleashes reforms he cannot control. That is why any effort to promote structural reform requires not just major carrots if Pyongyang cooperates, but sticks, particularly the credible threat of multilateral economic sanctions, if it does not. The status quo must be made unsustainable. Kim must be forced to choose cooperation or risk a confrontation that would impose an economic noose around his country’s neck. He must not be allowed to keep “muddling through,” in the words that Marcus Noland of the Institute for International Economics used a decade ago.

But on balance, even if the new South Korean negotiating proposal has its limitations, there is room for guarded optimism. Seoul’s electricity offer is indeed a big carrot. And Pyongyang should realize that if it keeps saying no to big incentives, even those countries that presently fear confrontation will have an increasingly hard time telling American hard-liners why they refuse to contemplate coercion against the North.