Unexpected Result from Economic Sanctions against North Korea

Transcription

1 Unexpected Result from Economic Sanctions against North Korea : The Impact on Relationship between North Korea and China Presenter : Joo Young Park (GMU SPP) May. 2nd

2 Contents Background of Study Related Study Framework Study Objective Research Question Research Approach and Methodology Findings Conclusion Implications Reference

3 Background of Study North Korea s military provocations 2006 ; 1 st test missile and nuclear test 2009 ; 2 nd test missile and nuclear test April ; 3 rd test missile but failed Stalemates of Six-party talks

4 Related Study Framework How to stop Moderate: Food Support Economic Reform Hardline: Economic Sanction Study Scope Impact to Int l relationship North Korea vs.us US, Japan, South Korea vs. China, North Korea Policy toward North Korea Sanction is correct? Relationship between North Korea and China

5 Study Objective This study reviews the effectiveness of current policy toward North Korea: political economy sanctions to constrain North Korea s military provocation, and its result on the relationship between North Korea and China.

6 Research Question Have economic sanctions been effective to control the issues of North Korea s nuclear weapons? What was the political and economic result of economic sanctions to North Korea?

7 Research Approach & Method Comprehensive literature review Time-serious analysis of historical events Quantitative data analysis - Economic index trend review - Empirical trade data analysis

8 Provoca tion Sanction Result Motivation of North Korea s provocation North Korean issue proves that the core factor of North Korean nuclear issue is rather the economic situation than the political motivation. Year GDP (billion USD) GDP growth rates (%) GNI (billion USD) (Source: UN, unstats.un.org/) Heavy Flood Failure of economic reform

9 Provoca tion Sanction Result Structure of North Korea s provocation North Korea Internal Political Crisis Military Provocation North Korea Economic Deterioration Economic Sanctions UN US Japan South Korea

10 Provocat ion Sanction Result Economic Sanctions to North Korea Ruediger, Frank. (2006). The Political Economy of Sanctions against North Korea. Asian Perspective, Vol. 30, No.3, 5~36. To ensure peace on Korean peninsula, to prevent the proliferation of nuclear material and weapons, the U.S led economic sanctions to North Korean have been repeated with cooperation with China, Japan and South Korea. However, the result of sanctions was not successful. Stephan, Haggard & Marcus, Noland. (2009). Sanctioning North Korea: The Political Economy of Denuclearization and Proliferation. Washington DC: Peterson Institute for International Economics There is clear evidence that North Korea moderated its missile proliferation during periods when rapprochement with the U.S. Without any interest or incentive to induce North Korean s participation, it has been no progress.

11 Provocat ion Sanction Result Economic Sanctions to North Korea North Korean Trade, ($ in million) (Source : KOTRA)

12 Provocat ion Sanction Result Economic Sanctions to North Korea North Korea s Trade with its Major Trading Partners, 1990~2008 (Source : KOTRA)

13 Provocat ion Sanction Result Economic Sanctions to North Korea China s trade with North Korea, ($ in million) (Source : General Administration of Customs, People s Republic of China)

14 Provocat ion Sanction Result Economic Sanctions to North Korea South Korea s trade with North Korea, ($ in million) (Source : S. Korean Unification Ministry)

15 North Korea s direction of trade: top ten trading partners [North Korean Imports] 2004 percent 2005 percent 2006 percent 2007 percent 1 China 26.6 China 31.7 China 32.8 China South Korea 14.6 South Korea 21.0 South Korea 22.1 South Korea Thailand 8.0 Algeria 8.1 Algeria 9.3 Algeria Russia 6.9 Thailand 6.6 Thailand 6.0 Thailand Algeria 6.8 Russia 6.6 Russia 5.1 South Africa Brazil 6.2 Congo 2.6 Congo 2.9 Congo India 4.5 India 2.3 India 2.6 Brazil Netherlands 4.4 Singapore 2.2 South Africa 2.3 Russia Japan 3.0 Brazil 2.1 Brazil 1.9 India Congo 2.6 Japan 1.8 Singapore 1.6 Saudi Arabia 1.6 [North Korean Exports] 2004 percent 2005 percent 2006 percent 2007 percent 1 China 41.2 China 32.2 South Korea 30.0 South Korea South Korea 18.2 South Korea 21.9 China 27.0 China Japan 11.5 Japan 8.4 Thailand 8.5 Venezuela Thailand 6.4 Thailand 8.0 Brazil 4.8 Brazil Brazil 4.5 Brazil 4.2 Japan 4.5 India Qatar 2.4 India 2.6 Greece 4.5 Myanmar Myanmar 1.9 Saudi Arabia 2.1 India 4.2 Netherlands France 1.9 Myanmar 2.0 Myanmar 2.2 Thailand Germany 1.6 Germany 2.0 Saudi Arabia 1.6 Russia Nigeria 1.2 France 1.9 Paraguay 1.3 Saudi Arabia 1.4 (Source : KOTRA) Provocat ion Sanction Result

16 Provocat ion Sanction The North Korean Special Economic Zone Result (Source : L.Oros, 2011 )

17 Provocat ion Sanction Relationship North Korea and China Result Drew, Thompson, & Natalie Mathews. (2011). Six-Party Talks and China s Goldilocks Strategy: Getting North Korea Just right. Joint U.S. Korea Academic Studies, Vol.21, 179~194. The economic engagement with North Korea provides economic opportunities for Jilin and Liaoning province in Chinese Northeast area. Especially, as the sanctions of U.S, Japan and South Korea, North Korea s isolated resources and markets represent a unique opportunity for Chinese companies that enjoy the benefit of semiprivileged access and geographic proximity. Jae Cheol, Kim. (2006). The Political Economy of Chinese Investment in North Korea: A Preliminary Assessment. Asian Survey, Vol.46, No.6, 898~916 China-North Korean relations are being transformed from being ideology-motivated to interest-motivated.

18 Provocat ion Results of Economic Sanctions Sanction Result The economic sanction has happened that it has functioned to push North Korea into a closer economic relationship with China. There are two main motivations: 1) North Korea tried to rearrange its external economic relations to reduce any impact that traditional sanctions could have 2) the sanction to North Korea provided a great opportunity of economic development in northeast area of China In conclusion, the sanctions have shown limited effect to control the North Korean issue

19 Conclusion Have economic sanctions been effective to control the issues of North Korea s nuclear weapons? - U.S led economic sanctions have shown limited influence to control the North Korean issues What was the political and economic result of economic sanctions to North Korea? - The economic sanctions have functioned as an obstacle and pushed North Korea to stick to the relationship with China

20 Implication The future of East Asia should emphasizes the importance of security cooperation among China, Japan and the U.S. While the economic interactions are extensive among three nations, the security collaborations are limited today. China prefers to keep the status quo. China does not want to implosion or collapse of North Korea, but at the same time, China does not want to North Korean s provocation with nuclear weapon. Multilateral trading should be considered. Especially, through the trading with North Korea, South Korea could enhance the security and enjoy geographic merit as well.

21 Reference 1) Dongho, Jo. (2011). A strategy for the advancement of the North Korean Economy 2) Ralph, M. Wrobel. (2007). North Korean after) the Nuclear Crisis: the Future of the Economic Reforms. 3) William, B. Brown. (2011). Engaging and Transforming North Korea s Economy. 4) Stephan, Haggard & Marcus, Noland. (2009). Sanctioning North Korea: The Political Economy of Denuclearization and Proliferation. 5) Ruediger, Frank. (2006). The Political Economy of Sanctions against North Korea. 6) Drew, Thompson, & Natalie Mathews. (2011). Six-Party Talks and China s Goldilocks Strategy: Getting North Korea Just right. 7) Jae Cheol, Kim. (2006). The Political Economy of Chinese Investment in North Korea: A Preliminary Assessment. 8) Andray, Abrahamian. (2012). A Convergence of Interests: Prospects for Rason Special Economic Zone. 9) Doowon, Lee. (2011). Estimating the Potential size of Inter-Korean Economic Cooperation. 10) Andrew, L. Oros. (2011). Tomorrow s East Asia Today: Regional Security Cooperation for the 21 st century.

22 Reference (cont.) 11) Congressional research service. (2007). The North Korean Economy: Overview and Policy Analysis 12) The National Committee on North Korea (2007). NCNK Issue brief 13) Jaewoo Choo. (2008). Mirroring North Korea s growing economic dependence on China 14) Gary Stradiotto & Sujian Guo. (2007). Market Socialism in North Korea: A comparative perspective

23 Thank you! & Any Question? Unexpected Result from Economic Sanctions against North Korea North Korea, Economic sanctions, Relationship between North Korea and China, Economic reform of North Korea, Chinese investment to North Korea Contact Point : jpark24@gmu.edu