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Professor Stephan Haggard has pointed to some key differences between the South Korean and Chinese policies of economic engagement with North Korea, part of a new debate with Dr. Daniel Pinkston of the International Crisis Group.
Referring to the current Chinese approach as one of “deep sunshine,” Haggard, citing some early findings from his latest research with Marcus Noland of the Peterson Institute, revealed to The Daily NK that the Chinese government does not back Chinese enterprises in their dealings with North Korea in the same way as South Korea has been doing.
Instead, he explained, “(The Chinese government) tells them it is commercial business: you guys either make money or don’t make money.”
“The enterprises don’t believe they can count on China to support or subsidize their activities, and, interestingly, most of them don’t believe that the Chinese will even help them settle disputes,” he added.
Seoul, on the other hand, is guilty of trying to make it profitable for businesses to deal with North Korea, something that ought to be North Korea’s job.
“That’s the irony,” Haggard noted. “South Korea, the capitalist country, is the one trying to make it profitable for South Korean firms to do business in North Korea, while the Chinese are saying, ‘You guys are on your own!’”
“I think this is part of the problem; why Kaesong gets taken hostage, why Geumgang gets taken hostage. South Korea thinks it has leverage over North Korea with Kaesong and Geumgang, but it turns out that North Korea has leverage over South Korea because South Korea is worried about these firms, whether they are going to go out of business, and who is going to pay,” he pointed out.
However, although they expressed a preference for the Chinese approach, both Haggard and Pinkston also voiced concerns as to whether the Chinese strategy will actually prove capable of impacting the lives of ordinary North Koreans.
“If you look at the types of external transactions North Korea makes, there is no competition, while access rights, protection and everything else is determined by political connections, and the things Pyongyang will authorize are things where Pyongyang controls the rents, things like mining rights,” Pinkston pointed out, cautioning, “They are not empowering North Korean firms or engaging in the kind of things that would create economic efficiencies and be helpful to North Korea as a whole.”
Offering suggestions as to how the international community might get real access to ordinary North Koreans, meanwhile, Haggard suggested that NGOs and commercial firms alike could be liberated to engage with North Korea as they see fit.
“Not these MoU’s and inter-Korean cooperation agreements; just tell them; ‘If you want to go, go. It’s up to you.’ Let them do what they want, because some of what they are doing may support this kind of activity. I’m not saying I support it, but we have to think about it hard,” Haggard hypothesized.
Pinkston agreed, noting, “If you can change the relationship between the Party and the people, and how the Party just controls every aspect of everyone’s life, then you weaken that tie and I think it is more likely that you will begin to see change.”
