How Biden can offer Kim Jong-un a package for North Korean denuclearisation he can’t refuse

The pandemic, coupled with sanctions, has forced Kim into a dire situation, which offers a rare chance for a breakthrough
Biden must cooperate with other six-party talk members to craft a deal that speaks to the cost-benefit calculation of economic development in exchange for denuclearisation

Chan Young Bang

Published: 1:15am, 1 Feb 2021

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The Biden administration has a genuine opportunity to achieve a landmark foreign policy agreement and establish permanent peace and stability on the Korean peninsula – by negotiating for complete, verifiable and irreversible dismantlement of North Korea’s nuclear programme, within the framework of six-party talks with South Korea, China, Russia and Japan.

Escalating sanctions, applied in 2017, and the coronavirus pandemic have compounded North Korea’s economic calamity and forced leader Kim Jong-un into a dire situation, which has opened a rare window for a breakthrough.

North Korea’s economic bottleneck has intensified: back in August, its 2020 growth rate was projected to be minus 8.5 per cent, the worst contraction on record. Since 2017, exports have plummeted around 90 per cent, and it has incurred trade deficits of more than US$2 billion annually, which has led to the crippling depletion of its foreign currency reserves.

The economy will contract even further, given North Korea’s inability to procure strategic industrial raw materials and the paralysis of government operations due to a lack of adequate internal revenue. Drought and natural disasters throughout 2019, plus an inefficient agricultural system, have culminated in a disastrous 780,000-tonne grain shortage, with daily food rations dropping to 300 grams per person.

Kim’s rare admission that the five-year economic plan has failed to achieve its goals “in almost all areas to a great extent”, on January 5, the first day of the Eighth Congress of the Workers’ Party of Korea, underscores the alarming situation.

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North Korea: Kim Jong-un admits failures in economic plan as he kicks off party congress

Given the severe economic contraction, coupled with a food shortage and trade deficits, the current economic crisis is worse than during the “arduous march” of 1995-1998 when millions of people died of starvation.

Based on a cost-benefit calculation optimised for the continuation of the regime, Kim must have reached the conclusion that North Korea has a better chance of economic development and survival without nuclear weapons.

In his 2019 New Year address, Kim revealed his aspiration to usher in economic development and become a vibrant emerging country by moving away from the byungjin line of parallel military and economic development: he referred to economic growth 39 times, while only mentioning the nuclear programme once, to say that no further testing or development was needed.

US President Joe Biden can accomplish the monumental feat of denuclearisation by understanding why previous policies have failed and then offering Kim a viable exit strategy. The failure of earlier US policies stems from the underlying lack of understanding of the true nature of the North Korean nuclear weapons programme.

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North Korea’s new ‘monster’ intercontinental ballistic missiles on show at military parade

The programme is perceived to be directly linked to the regime’s survival, as it is a critical component of the Juche (self-reliance) ideology in the Kim Jong-un era and serves as the main source of the chairman’s domestic legitimacy.

To offer North Korea a tangible chance of survival, the US must accept that, despite its preponderance of economic and military might, it wields no direct influence in pushing Pyongyang to the negotiating table. Instead, the US must secure the active participation and unyielding commitment of all four of the remaining members of the six-party talks to effectively use all the sticks and carrots at hand.

Biden administration plans ‘full review’ of North Korea approach

Such a feat will require a policy consistent with the strategic interests and concerns of all stakeholders, namely that sanctions will not be used to incite regime change, denuclearisation will be accompanied by sustained peace and mutual prosperity on the Korean peninsula, and that North Korea will remain a buffer zone between US-backed South Korea and the Sino-Russian border.

To achieve the US’ overriding policy objective, Biden, together with the other four stakeholders, must offer Kim a package deal he can’t refuse – simultaneously making nuclear weapons prohibitively costly to maintain while proffering the country a distinctly better chance of survival through economic modernisation and development.

The basis of this deal must speak to the fundamental cost-benefit calculation that if North Korea is to genuinely relinquish its nuclear ambitions, something more beneficial must be offered in exchange.

North Korean leader Kim Jong-un visits fields in Kimhwa county, Kangwon province, in an undated picture released by North Korea’s official Korean Central News Agency on October 2, 2020. The country is grappling with severe food shortages. Photo: KCNA via KNS/AFP

The package deal should consist of two broad components. The first segment would encompass security guarantees from the stakeholder nations – peace treaties with South Korea and the US, and the reconfirmation of defence agreements with China and Russia – and North Korea’s normalisation and acceptance into the international community.

The second component would be an economic development fund financed by the stakeholder nations, which is optimally calibrated to induce market-oriented reforms. According to my calculations, US$300 billion over 10 years would be sufficient to drive North Korea’s economic development.

To further persuade China and Russia, at the successful conclusion of the 10-year package deal, the US should withdraw all ground troops from the Korean peninsula.

Modernisation, though, will need more than a mere transactional agreement; it will require the genuine transformation of North Korea into market socialism, radically revising the ruling ideology of Juche, which has been used to fortify the legitimacy of Kim Jong-un’s reign.

The byungjin line must be abandoned to introduce market reforms and legalise private business entities, transferring the means of production into the hands of private entrepreneurs and enabling foreign investment in the development of private enterprise and infrastructure.

A vendor in a shop in a newly constructed residential complex after its opening ceremony in Pyongyang, North Korea, on April 13, 2017. Photo: Reuters

The rate of economic growth – at least over 10 per cent annually for a minimum of a decade – would enable North Korea to sustain and justify denuclearisation by mitigating the destabilising effects of economic opening.

A package deal, jointly ensuring the survival of Kim’s regime and denuclearisation, would fulfil the strategic interests of all stakeholder nations. This proposal is the last option for a peaceful way forward, and it remains the single best, most realistic, win-win scenario.

I urge Biden to remedy the mistakes of preceding US administrations by using this blueprint to achieve denuclearisation and the long-awaited “bright future” for North Korea.

Dr Chan Young Bang is president of KIMEP University, principal investigator at the DPRK Strategic Research Centre, and a former economic adviser to the former president of Kazakhstan Nursultan Nazarbayev