Why, You Ask, Does North Korea Need Another Bank?
It probably doesn’t have anything to do the reason cited in news reports about a “thaw” (as if) in relations with the South or the United States.
A body known as the Korea Taepung International Investment Group held its first board meeting to launch a state development bank, Pyongyang’s official Korean Central News Agency reported late Wednesday
The bank will finance state projects “after being equipped with advanced banking rules and system needed for transactions with international monetary organisations and commercial banks”, it said. [AFP]
My best guess that it’s because the sanctions are working, and North Korea has to do this to run the shell game. Remember, the Treasury Department issued multiple alerts against North Korean banks for proliferation and money laundering in 2009. Those alerts tend to scare away investors and depositors. North Korea’s strategy in 2010 may be to set up new banks as fast as the old ones lose their access to international capital.
The new bank is being set up under the auspices of Kim Jong Il and rumored de facto successor Jang Son Thaek, and its Vice Chairman will be one Pak Chol-su, a Chinese citizen of Korean ethnicity. We can always be sure that our friends the Chinese have been standing behind us when we find their fingerprints on the knife.
Another part of the North Korean strategy is probably to chip away at international support for UNSCR 1874, the international sanctions resolution approved just last May. Here, the North Koreans have had more success, especially concerning South Korea. Consider: after all the North Korean meddling with Kaesong, this wretched experiment limps on, unable to expand or export to become profitable, but prevented from collapsing outright by outdated political considerations. But we’re now eight months out from UNSCR 1874, and what if anything has South Korea done to account for where Kim Jong Il is spending the revenue he rakes in from Kaesong? I ask, because UNSCR’s 1718 and 1874 both require South Korea to “ensure” that Kim Jong Il isn’t spending his take for WMD development. But truthfully, South Korea really has no idea whether that’s the case. Those considerations are equally valid in how South Korea responds to the North’s increasingly desperate pleas to resume tours to Kaesong City and Mount Kumgang.
When UNSCR 1874 passed, I said that the resolution would be as good as its implementation. Showy arms seizures are no substitute for tight restrictions on the larger flow of money into this regime. If North Korea succeeds at slipping out of those restrictions by appealing to the divided interests of individual nations, we’ll soon be right back where we were a year after the passage of UNSCR 1718.