Black Coal, Black Boxes and Sanctions

Sanctions are a very controversial element in the international community approach to the “North Korea problem.”
On the one hand, sanctions may be one of the most effective tools
available to influence the behavior of the Kim Jong Eun regime. Yet sanctions, even those imposed on a targeted basis,
run the risk of inflicting unintended consequences on innocent
bystanders: to wit, the country’s 20m+ ordinary citizens.

Given this context, it is problematic that
in many cases it is not known with any degree of certainty whether
a specific sanction is effective at all, much less what impact it could be having beyond its original

This matter is wrapped up in a second
issue; the nature of researching North Korea itself. For decades, North Korea was described as a “black box;” a “hermit
kingdom” of which only a “rare glimpse” may be possible.
 Systematic economic,
social and political research of the country, and the multiple sanctions
regimes under which it exists, was widely regarded as impossible.

Yet this has not been true for a decade, and the public perception is finally catching up. An adjunct lecturer with the Harvard Kennedy School and researcher with MIT, John Park is one contemporary academic striving to understand North Korea through rigorous, exacting
investigation, just as one would any other state or polity. Through a mixture of targeted
defector interviews and detailed investigation of the actions of Chinese public and private
entities, Park is seeking to establish the true impact of targeted sanctions on North Korean state trading entities, and how they respond to the changing commercial
environment that such targeted sanctions bring about.

On August 13th, Park spoke about
the early stages of his research at a seminar hosted by the Asan Institute for Policy
Studies in Seoul. A few days later, Daily NK caught up with him to find out
about his latest project and more.

Daily NK (DNK): During the seminar at the
Asan Institute for Policy Studies in Seoul last week, you suggested that
financial sanctions on North Korea might produce serious unintended
consequences that need to be examined in more detail. For the record, we would like
to clarify your view of such sanctions.

Dr. John Park (JP): My view is that sanctions
can be effective, but if a government or any group of governments over-relies
on one policy tool, any policy tool, there will be unintended negative
consequences. Given this reality, we need to look in depth at how existing
sanctions are applied, particularly at the secondary effects, and then try to
generate policy recommendations to preserve the effectiveness of sanctions

This is where I look to the analogy of antibiotics.
Because of the over-prescription of antibiotics for illnesses that run contrary
to how antibiotics should be used, organisms develop immunity to them. In order
to minimize that possibility, not only with target regimes like North Korea but
other countries as well, I think there has to be more careful analysis of how
sanctions are applied and can be made part of a broader basket of policies, not
just the core of a singular approach.

DNK: You say that currently the policy toolkit
contains three elements: the use of force, cyber means, and sanctions. It seems
that sanctions are the least bad option of these, which may well be why they
are over-relied upon. If there is nothing else in the tool kit, what can be

JP: If you zero in on specific targets you can
see the nuances of each one. In the case of North Korea, there has been no
consideration of the revenue streams that the regime generates from trading in coal.
Of course we should concern ourselves with unintended consequences for general
populations, and that reduces the likelihood of sanctioning the coal industry. However,
rather than sanctioning outright, you can try to raise the bar on the coal
trade so that it’s not an unfettered activity that the North Korean regime can
engage in at will. There are opportunities to increase the pressure that way.

DNK: Could you envision for me some way that the international
community could address the coal trade?

JP: First we need to understand who buys
it, where it goes, how it’s consumed, all of those things: in other words, tracing
and mapping the activity. Given that it is an external activity, there will be opportunities
to fashion policy tools to address it.

The goal is to put the onus on those who
sell and those who buy to verify how the coal was mined, to make sure it
follows international standards, international regulations. So it is a
departure from sanctions per se; it
is a case of making sure that countries live up to their obligations. These
types of measures are pre-existing; what is needed it to figure out how to
raise awareness of them, and put into clear relief what kind of model can be applied
in a specific situation. This particularly applies to actions that involve
interaction with the rest of the world.  

DNK: You were commended at the Asan Institute event
for the rigor of your research. How are you achieving that rigor? It is not

JP: I think the first order of business is to
try to understand how commercial activities are done by North Korean state trading
companies and their private Chinese counterparts. I think that when it comes to
a structured analysis, the first and largest piece has to be a mapping exercise
and a very thorough analysis of the stages of getting a business deal done. Do not
look at overall China-North Korea trade statistics; instead, look specifically
at how the actors go about the business of trying to maximize their profits and
manage their cost structures.

I think there has to be a high bar when it
comes to North Korea research: one must first understand the mechanisms on a
standalone basis, and then go on to look at particular phenomena overall.

DNK: How have you established the mechanisms in this

JP: It’s a challenge but the pieces are out
there. There are two sources of information that are critical. One group is North
Korean defectors. However, of the 26,000 defectors in South Korea, only a very
small number has experience working in North Korean state trading companies. Therefore, the first thing is to research as many of this minority group as possible, as
comprehensively as possible, because there is a need to be thorough with this
unique sub-group.

The second piece of the puzzle is to
identify private and public Chinese companies that have been involved in
separate transactions, and through this research to piece together the two
sides of the coin. That constitutes a credible starting point.

Overall, the traditional view of North
Korea as a black box, which has been cited for an inability to do
rigorous projects and in some cases as an insurmountable obstacle, is dead. Now
we have new developments and new pieces out there, so the challenge is to develop
a framework to capture as many of the building blocks as possible. It is
something of a new period and will continue to evolve.

Going forward we will have more of the
pieces, and so the necessity now is to recognize and deliberate upon the most
effective ways to capture those pieces as part of developing a deeper understanding,
rather than hastily jumping to any conclusions or quickly generating prescriptions.