North Korean marketization may lend hope for sanctions to work, if the U. S. and China can coordinate.
Although sanctions have appeared to fail in stopping Kim Jong-un’s nuclear adventure, the window for sanctions has not completely passed. The increasing number of North Koreans who accumulate wealth and became aware of the prosperity in China and South Korea give a ray of hope that sanctions can be used to make Kim to feel the pain, as intended. To let sanctions play out their power, U. S.-China mutual understanding and coordination on where to go next on sanctions will be critical.
In North Korea, marketization grew from the hardships of the 1990s. It has now reached a point that there is no turning back. Nowadays, North Koreans earn the bulk of their income from market activities, and purchase food and consumer goods in the market as well. The new rich, who benefit from an entrepreneur-bureaucrat symbiosis, are willing to live with current political arrangements and let Kim take credit for the improvement of living standards.
With marketization grows a sense of self-reliance in making a living without help from the state. If the sanctions were to succeed, the hope would be on the rising middle class to discredit the worthiness of sacrificing decade-long economic growth for pursuing nuclear deterrence.
The North Korean regime fears domestic discontent more than a pugnacious Trump. Attempts to curb market activities in late 2000s failed spectacularly, culminating in the currency reform effort in 2009, a fiasco that fueled widespread resentment. Since then, state-tolerated marketization flourished and brought with it outside information, reinforcing the decay of ideological control over the North Korean people.
Ultimately, energy capping and isolation from the international financial system will determine how far the marketization-released growth can go. If sanctions lead to stagnation or worse, consume what North Koreans have gained, the Kim regime will have to make strenuous efforts to justify the Byungjin policy of simultaneously pursuing economic development and nuclear capability. Surely, the pathway to force a bottom-up policy change remains unclear.
