By Roy C. Smith
Last week’s 1-day US – North Korea summit ended with a joint
statement promising "mutual
confidence building" to "promote the denuclearization of the Korean
Peninsula." President Trump and Supreme Leader Kim Jong Un also made commitments
to build a "lasting a stable peace regime on the Korean Peninsula," to
work toward denuclearization and to recover POW/MIA remains from the 1950s. Though
the statement was vague, expectations soared that North Korea would stand down
its nuclear weapons and the US would withdraw sanctions and assist in
developing North Korea’s economy.
Evan Osnos, a China
expert for The New Yorker who visited
North Korea recently, suggests the unexpected change of heart by Kim Jong Un to
be the result of the increasing amounts of foreign information leaking into
North Korea through social and other media that show how so very badly off the country
is relative to its neighbors. After 70 years of a “socialist paradise,” North
Korea’s GDP per capita, stagnant for years, is only $583 -- China’s is $8,123
and South Korea’s $27,538. By this measure, North Korea is the poorest country
in the world by a significant amount. Knowing this to be so, Osnos says, makes
Kim’s regime vulnerable to upheaval from within, despite its harsh rule with
200,000 political prisoners. So, after seven years as chief of state, maybe Kim
figures it is better to use North Korea’s newly achieved nuclear deterrent to bargain
for relief from sanctions to get some economic development before it’s too
late.
The event brings
to mind another momentously staged announcement, one in December 2014, when the
US and Cuba agreed to normalize relations. Raul Castro replaced his brother as
Supreme Leader in 2006, and he knew very well that the Cuban economy was
crumbling, it had run out of credit with other socialist nations, and its main
benefactor, Venezuela, was on its last legs. Something had to be done, so Raul
liberalized some things -- permitting sales of personal property and real
estate and freeing up local markets to small time entrepreneurs. But the only
way out, Raul also seemed to know, was to restore relations with the hated US,
in the hope that economic fallout would be enough to get the economy out of the
no-growth slump it was in. But this was a big step and carried many risks. Raul
took five years to think about it before commencing pre-announcement
negotiations.
I was in Cuba a
couple of weeks after the 2014 announcement and there was no doubt that the
excitement it generated was considerable. All the Cubans one could see were
talking about how much better things would become when the US trade “blockade”
was lifted and incoming foreign investment would create a new world of enhanced
economic activity. In March of 2016, the
US embassy was reopened and President Obama visited to celebrate the event.
Since then, not
much else has happened on the normalization front. GDP growth shot up to 4.4%
in 2015, because of a spike in tourism and increased expectations. But nothing
else was reformed in the economic sector, no large-scale investments by
multi-national corporations, no banking reform, and no effort to upgrade the
agricultural sector so as to avoid having to import 70% of Cuba’s food. Growth
rates plummeted to -0.9% in 2016, then rebounded a bit to 1.5% in 2017. Cuba’s
GDP per capita is $7,600, much higher than North Korea’s but still less than
China’s. Raul recently retired, though no one doubts he still runs things from
his rocking chair.
Raul distrusts
everything American, especially its big businesses that flourished in Cuba
during the Batista regime that the Castros overthrew in 1959. Once in power, the Castros’ forced fed the
Cubans with their version of a socialist paradise, aided by 30 years of
economic aid from the USSR. The Soviets played the Cuban nuclear deterrent card
in 1963 – installing missiles that nearly led to a US invasion or nuclear
exchange – from which they backed off. However,
without the support of the USSR, which imploded in 1991, Cuba experienced a
very difficult, near-starvation, decade, only to be bailed out again by another
socialist paradise, Venezuela. Then, as
Venezuela’s economy collapsed, Cuba had to look to other options to stay
intact. If Raul did nothing, rising economic discontent might lead to the end
of Cuban “Socialismo” after his death. If he patched things up with the US, the
economy might rekindle and the regime could survive.
The Castros have
long since ceased to be any kind of threat to the US, but their rule, like the
North Koreans, is a testimony to the ability of an authoritarian police state to
stay in power indefinitely, despite dreadful economic results. But it seems
than both Raul Castro and Kim Jong Un saw handwriting on the wall – do nothing
and our economies finally do crash and political change may be next. Do
something with the US, and we can buy some time: sanctions may be reduced, and foreign
money may be attracted to a less confrontational future.
Like the Castros,
the Kims are a cautious family business unlikely to open up more than a little.
Perhaps a little can go a long way if it makes local street market
entrepreneurs happy. But, really big changes usually take a new guy to pull
them off. Deng Xiaoping engineered China’s 180-degree turnaround strategy
skillfully, but only after Mao Zedong, who launched the disastrous Red Guards
to rekindle revolutionary ardor, had died and Deng had gained power.
In Korea, post-summit
meetings continue to see what might be done. Mr. Pompeo has said that he and
Mr. Trump expect nuclear disarmament to be achieved by the end of the
president’s first term, but sanctions will remain until it happens. Some
observers who know, say disarmament is a process that will take a decade or
more. Some who know North Korea say the
thirty-year effort to secure nuclear weapons and missiles was only to be able
to deter threats from the US, its longstanding enemy-in-chief. Maybe Kim will give up some stuff, as his
father did in previous negotiations with the Clinton administration, but never
all of it and not quickly without sanctions relief. Really big changes by North
Korea seem hard to imagine.
In Cuba, a really
big change didn’t happen with normalization because Raul didn’t want it to. For
him, opening up Cuba’s economy to global investment entailed too big a risk of capitalism
getting into the country and creating a surge of money and market forces that
might overwhelm government policies, information and controls. What Raul did
want was a repeal of the US trade embargo with Cuba. Mr. Obama may have been
ready for this, but the Republican-controlled US Congress was not. To repeal
the trade embargo will require restoration of human rights and property seized
by the Castro government. Nevertheless,
some normalization is better than none. The US and the Cubans can wait for
Raul, now 87, to pass on and then maybe somebody new will appear to make the
really big changes Cuba needs and the US would welcome.
But Mr. Kim, in
his thirties, isn’t about to pass on. If
the deal with Mr. Trump proves too risky, he probably figures he can back away
as before. But, he may be in a tighter spot than he thinks. The Americans may not be willing to trade
unless they get everything they want, and Mr. Trump has promised to achieve
disarmament one way or another. Both Trump and the Kim are dealing in a vast
area of mutual misunderstanding and distrust, but with high expectations for
political success. Still, there is no
need to rush -- North Korea’s nuclear threat to the US, never great or imminent
to begin with, is “on hold.”
A Cuban type of
slow-go in North Korea could be what both sides need. A few signs of good
faith, lots of talks off stage, visits by diplomats, more aid and encouragement
from South Korea and Japan, and who knows, maybe in time something better than
the status quo ante will emerge.
