Economic sanctions are the foreign policy instrument of choice against many of the world’s dictators. But the resilience of the Kim regime and China’s unwillingness to support a complete economic boycott have made them ineffective in North Korea.
Do economic sanctions cause governments to change their political behavior or even lead to regime change? This has been a controversial topic of discussion among economists and political scientists for decades. Examples from the recent past have added new fuel to this debate. In the case of Iran, many in the West are of the opinion that the oil embargo and the subsequent enforcement of import and export restrictions led Tehran to negotiate its nuclear program. The sanctions against Russia, Syria and North Korea, however, are considered to be ineffective.
As demonstrated by current research, major state or economic actors in third-party countries contribute to the failure of those sanctions by undermining them. In the case of North Korea, which has the world on edge with its nuclear and missile testing, studies indicate that not even the most vigorous enforcement of the existing sanctions regime could rein in North Korea.
Bryan R. Early of the University of Albany in New York State argues that major powers like Russia or China can cancel out sanction initiatives by the United States or the EU through strategic or ideological maneuvers. According to Early's research, 45 percent of all states around the world have undermined U.S. sanctions in the past, among them Japan and Germany. In studying the statistics, Early noted that economic sanctions that have been in effect for over 13 years are hardly ever effective, i.e. they come to nothing. For this reason, he advocates more drastic measures: half-hearted, broad-based sanctions lead to stalemate situations, since the sanctioned party can simply adjust to the new circumstances. Instead, Early proposes the rigorous implementation of a few targeted sanctions that have a rapid effect and cannot be undermined.
Tough Chinese sanctions would hurt the most
North Korea is currently a difficult test case for the effectiveness of sanctions. Political economist and Northeast Asia expert Stephan Haggard of the University of California explains China’s central role. As the most important ally of the regime in Pyongyang, Beijing has prevented the enforcement of tough multilateral UN sanctions for years. China's continued oil supplies have weakened international sanctions aimed at North Korea's military and transport industries. This is why the U.S., South Korea and Japan have for years sought greater Chinese involvement in the design, implementation and monitoring of sanctions. For example, they request that China support secondary sanctions against companies that continue to cooperate with North Korea.
North Korea, one of the world’s most isolated countries, could indeed be vulnerable to consistent sanction measures from its neighbor China. According to Haggard's estimates, bilateral trade with China accounts for nearly 90 percent of North Korea's total foreign trade. Based on estimates from Chinese customs, bilateral trade increased by 37 percent in the first quarter of 2017, compared to the previous year.
This dependency also explains why U.S. President Donald Trump has urged the Chinese government to drastically increase the pressure on North Korea. In the People's Republic of China, prominent scientists and policy advisors have recently increased their demands for a tougher approach to an unpredictable North Korea. In fact, Beijing is initiating new economic sanctions: at the end of February, China's government ordered the stop of all coal imports from North Korea. This means the loss of a major source of foreign revenue. Last year, it sold an average value of 100 million USD worth of coal to China per month.
For a while now, a more consistent implementation of sanction resolutions of the UN Security Council has been observed on the Chinese side. Further sanctions against North Korea by China are conceivable, including a temporary oil embargo, trade bans or a crackdown on financial transactions that violate existing sanction rules. In return, China expects U.S. restraint in trade and security conflicts between Beijing and Washington, as well as concessions to North Korea's security needs.
North Korea’s remarkable resilience
The fact that North Korea has proven so resilient to bilateral and multilateral sanctions is also related to national characteristics such as the relative resilience of the local economy and the apparently extreme endurance of the population. Experiments with family plots, private small businesses and exchange markets in the rural economy have contributed to the stabilization of the food supply in North Korea – albeit at a low level). It is a sad truth that North Koreans have adjusted to strict rationing and even hunger after decades of isolation. Also, the leadership and military have extremely effective tools to discipline and mobilize the population.
Haggard assumes that tougher sanctions will never bring Kim Jong-un to the negotiation table. Instead of sanction relief, Kim prefers concrete material supplies, because he can control their distribution in the country. Kim will not abandon his aggressive nuclear and missile policy, since North Korea's nuclear potential serves as an effective pressure tactic and threat – as well as guarantee of survival – for the ruling system.
The complete, uncompromising economic boycott of North Korea that many Western researchers are calling for is not in China's interest: despite the tensions with Pyongyang, Beijing wants to avoid the collapse of the regime. China fears that a reunified Korea could position American troops directly on the Chinese border and push millions of refugees into China. As a result, no matter how much Trump or others increase pressure on China in the North Korea issue, Beijing will not accept disruptive regime-toppling sanctions.
A German version of this text was first published in Frankfurter Allgemeine Sonntagszeitung on May 21, 2017.