Reunifying Korea, One Shot at at Time!

You may remember that several years ago, a liquor distributor in the United States tried to introduce North Korean soju into the U.S. market. That effort failed long before President Obama reimposed trade sanctions on North Korea, partially because of the importer’s legal troubles, but probably also because the stuff supposedly tasted awful.

Apparently, North Korean consumers share that assessment, because the same brand of South Korean soju that once kept me fully occupied as a prosecutor and defense counsel is a hit on the North Korean black market:

A source in Onsong reported July 6th that the South Korean Cham-isul (trans: True Dew) brand of soju has appeared in North Korean markets and has been an instant hit with local consumers. Reports of South Korean made noodles or choco pies on sale in North Korean markets are well established but this is the first news that South Korean soju has also become available. Cham-isul soju has been sold there since May.

“North Koreans have a tremendous curiosity about South Korean soju,” the source went on, “and everyone wants to get hold of a bottle and give it a try. It’s on sale for 3,000\. That’s around ten times the cost of North Korean soju.” At an exchange rate of 1SK\ to 3NK\, each bottle is the equivalent of 1,000SK\. [….]

“The Cham-isul soju available in the markets has been brought across the border by traders and smugglers. North Korean consumers are getting more and more used to South Korean goods, from electrical goods to food products,” concluded the source. [Open News]

Anyone who has ever been to Korea knows that soju is powerful stuff. Authoritative historical archives tell us that as recently as 1959, sailors were known to swill it until they hallucinated winking, doe-eyed island beauties and ran their ships aground:

Maybe I’m making too much of trivialities like soju, ramyon noodles, and ChocoPies, but I like the way our two soju stories illustrate the right way and the wrong way to “engage” with North Korea. When engagement is negotiated by diplomats, Kim Jong Il dictates the terms so that he earns hard currency to buy God-only-knows-what, and keep all but a few hand-picked, loyal North Koreans shielded from the outside world. It’s enough to make you think the North Koreans have better diplomats than we do. This story shows us a much more effective way — using the market to reach North Korea’s people instead of trying to negotiate our way through its government.

Take engagement away from the diplomats and leave it to the marketplace — which really means the North Korean people themselves — and wondrous things happen. Not only do people drink better liquor, but people, goods, services, money, and culture cross borders; state-imposed isolation melts away; the truth enters forbidden places; and repressed societies and economies start to awaken. You can even detect a people’s latent and subversive yearning for reunification expressed, something that Kim Jong Il seems desperate to extinguish:

One such North Hamkyung Province source reported on the 13th, “National Security Agency people responsible for the jangmadang [markets] and members of the Worker’s and Peasant’s Red Guard appear every day to examine all goods such as clothes and daily necessities one by one, insisting that they are “˜rooting out capitalist elements.’ All the products labeled “˜South Korea’ are confiscated without compensation. “Even (fake South Korean) products made in China are taken away if they have South Chosun words on them,” the source went on. “Shampoo, toothpaste and other daily necessities are all targets.

Since the start of the 2000s, South Korean products have been entering North Korea thanks to smugglers and traders, and have sold well in the jangmadang at above average prices thanks in large part to their high quality. Smugglers also prefer South Korean products to those made in China because they are more profitable, making them willing to risk punishment to bring such products in. [….]

The North Korean authorities have tended to call this a “˜capitalist wind’ and often range their official crackdowns against it, but this has hitherto only drawn interest toward the forbidden fruit. What is more, the security service agents and soldiers who are supposed to be cracking down on it are prepared to accept bribes to turn a blind eye, and in many cases have shown sympathy for the activities of traders and smugglers.[Daily NK]

In the markets, the hungry can find all sorts of nourishment, including the physical kind. Markets were probably a major factor in ending the Great Famine as North Koreans learned new ways to get food that the state would not provide. They showed such potential to ameliorate North Korea’s perennial food crisis that today, up to 80% of North Koreans depend on them for their food supply. It’s telling that North Korea managed to survive the regime’s 2005 closure of most of the World Food Program’s operations there without mass famine, but has suffered a more significant deterioration in its food crisis since the regime began trying to shut down the country’s markets in mid-2009. This peaked with the Great Confiscation in December, which devastated the rising market economy that was bringing food and other goods from outside the country. North Korea’s domestic food production last year wasn’t worse than in previous years, but the markets — and the traders who fill them — have recovered unevenly from this regime-made disaster, with markets in the border regions recovering faster than those in the interior. The regime hasn’t quit trying to crack down, but can’t fill the void in the food supply, so every time its crackdowns cause hunger and discontent, it’s forced to back off.

Those whose position is most fragile complain the most, the source went on, saying that such people point out, “The state cannot produce and it cannot give the people distribution, so why are they even stopping us from surviving? Some people have even said wryly, “˜So, this is the strong and prosperous state’.

According to the Yangkang Province source, “One woman selling bathroom goods started having many people looking for South Chosun products around, and then immediately an NSA agent confiscated everything. Passing traders got pretty angry when they saw that, saying, “˜It’s not a case of waiting for the strong and prosperous state, it is a case of waiting for the day when those guys will die.'” [Daily NK]

If the regime can fill the void, it cracks down on markets. One relief group — which purports to feed the North Korean people without going through the regime — even suggests that’s why the regime is asking for aid now. That’s another argument against giving food aid unless we’re sure we can keep the regime from stealing it. At times, I have to wonder if the regime is constitutionally opposed to just buying food, even when doing so would seem to be in its interest (though so might keeping people hungry). Although it’s not clear that this rising people’s economy is closely linked to the official economy, the official economy has suffered, too, though probably for different reasons. One observer recently calculated that it has contracted by a stunning 18% since 2007. Part of this is probably due to the loss of South Korean aid money, but sanctions probably also played some role.

In short, markets can change North Korea in ways that state-to-state engagement policies like Sunshine couldn’t. They’re not changing North Korea because the state is willing to accept reform or openness, but because the state has largely lost its capacity to control it. If so, then the way to change North Korea isn’t to provide its regime economic support, it’s to do whatever we can to sap its capacity to control its borders. One way to do this is to facilitate cross-border trade by assisting, training, and equipping journalists, defectors, dissidents, and plain-old smugglers, but another way runs completely against the failed conventional wisdom about engagement. If the regime is desperate to close its borders and crack down on markets, then it follows that the more limited the regime’s resources, the more difficulty it will have cracking down on markets and the faster North Korean society will change. So if targeted sanctions deprive the regime of money to spend on border guards, police, customs officers, and cell phone trackers, they could be a greater agent of social change and economic development than economic cooperation with Kim Jong Il’s regime. That’s admittedly an unconventional view of engagement, but for all the time, money and lives that have been sacrificed for this conventional approach, where is the evidence that it has changed North Korea for the better?