July 17, 2018

How the North Korean Economy Should—and Shouldn’t—be Used in Negotiations

By Dr. Patrick M. Cronin and Benjamin Katzeff Silberstein

To date, assistance for North Korea’s economy has not factored into negotiations between the United States, South Korea and North Korea in any real or meaningful way. South Korea’s President Moon Jae-in handed Kim Jong Un a USB stick with grandiose plans for infrastructure investments at their first summit on April 27, and South Korean companies are looking into how they can best reap the benefits if tensions continue to de-escalate. Trump administration officials, as well as the president himself, have suggested that American companies could come to North Korea en masse if relations between the countries improve, meeting stern rebuke from North Korea’s Rodong Sinmun and government officials. Despite these overtures, little concrete information has emerged about how the US and South Korea plan to leverage Kim’s commitment to economic growth in current negotiations.

At this early stage, this omission may be natural. Going forward, however, it is crucial that the United States, South Korea and the other countries involved in the process not only use wise economic policies, but also coordinate amongst themselves for a consistent, coherent approach that encourages North Korean economic development.

The country’s economy already figures implicitly in nuclear negotiations, since removing sanctions is frequently cited as a carrot for North Korean concessions on denuclearization. Sanctions relief, however, is too narrow of a focus. Kim Jong Un has suggested several times that he is serious about developing North Korea’s economy beyond its dismal state, where it was even before sanctions stifled most of its foreign trade. The international community should leverage Kim’s ambitions and offer assistance for economic development, and direct such assistance to spur North Korea’s shift toward a more market-based economic system. Most aid, if it comes at all, will likely be provided by China and South Korea. The US too, however, has signaled its willingness to provide North Korea with economic assistance in the event of a deal on the nuclear issue.


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