North Korea sanctions may have to be creative

Scott Tong Jul 5, 2006

KAI RYSSDAL: The missile everybody’s worried about is called the Taepodong II. It’s the one that can reach some US territory. And in all honesty it can’t even fly very well. Fell into the ocean 42 seconds after launch yesterday.

But that didn’t do much to calm Japan. That country’s already within range of North Korean missiles. So the Japanese ambassador to the U.N. was the first to talk about new economic sanctions today. Japan mentioned cutting off shipping access. And American officials pushed for a “strong signal” of displeasure from the U.N. Security Council. That’s in quotes. Tough diplomatic talk. But as the Security Council meets, we wondered, what’re you going to take from North Korea that they don’t already NOT have?

Here’s Marketplace’s Scott Tong from Washington.

SCOTT TONG: What economy does North Korea have to sanction? Well, there is a bit of commercial fishing, plus farming and minerals. There’s talk of punishing these sectors at the U.N. Still, key members there aren’t so sure.

Joel Wit is with the Center for Strategic and International Studies.

JOEL WIT: China, Russia and others are afraid that if sanctions are indeed effective, it could cause North Korea to collapse. The political, economic, humanitarian dislocations that would occur would be enormous.

But would sanctions pressure the regime’s elite? Asia security expert David Asher just left the Bush administration. He says leader Kim Jong Il and company run a significant underground economy. He calls North Korea a Sopranos state.

DAVID ASHER: Chinese gangsters have set up a large number of factories to produce counterfeit cigarettes in North Korea. Also, there’s a lot of Chinese criminal activity involving drug trafficking in North Korea.

Asher says Pyongyang has another, quote, “export”: WMD. It sells missile technology to Iran, Syria and Venezuela, all awash in petrodollars. He says the missile test was Kim’s attempt to show off his product line.

ASHER: If you’re Kim Jong Il, you’re thinking ka-ching, ka-ching — There’s gonna be significant benefits to this. Rather than being focused on the costs, Kim is probably thinking of this as a money-making opportunity and a way to garner greater global influence.

But at least one lever against North Korea is already working, says Asher: Washington is cutting off banks that process the regime’s illegal transactions.

In Washington, I’m Scott Tong for Marketplace.

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