When North Korea’s Foreign Income Runs Dry, the State Will Crumble

North Korean Bomb Ten Times Stronger than Bomb Used on Hiroshima

On September 3, North Korea detonated a 160-kiloton nuclear payload, intimidating the world with a nuclear warhead 10 times the strength of the Hiroshima atomic bomb.

In April, I wrote that, according to information I had received from inside sources, North Korea would test a miniaturized 100-kiloton-class bomb on April 15, in commemoration of the 105th anniversary of Kim Il-Sung’s birth. I myself thought that the test would only be in the 10-kiloton range, and that 100 kilotons was much too large. However, the actual test—held in September, not April—proved my sources correct.

After my April column, I heard the following, more detailed information:

A nuclear test had been scheduled for the end of April. It would have used a miniaturized warhead of the 100-kiloton class, a strength never tested before. A success would have marked the completion of the miniaturization. But when China was informed of the test just days before the scheduled date, North Korea was threatened with having the border with China closed. Kim Jong-Un’s sister Kim Yo-Jong advised Kim Jong-Un that China was aiming to overthrow the regime, so the test was postponed.

On May 12th, a news report on South Korean broadcaster TBS confirmed that North Korea had informed China of an upcoming nuclear test, and that it had been postponed after China had warned that a test would force them to close their border with North Korea.

New Sanctions Amid Worsening DPRK Relations with China

The nuclear test on September 3 represents Kim Jong-Un’s recognition that relations with China have worsened. To that end, it should be noted that Russia sent the North congratulations on their National Foundation Day on September 9, while China sent nothing.

After the September 3 test, the United States introduced an additional sanctions plan to the UN Security Council, calling for a ban on the exports of oil and gas to North Korea, a ban on the import of North Korean clothing, and a ban on employing North Koreans as overseas workers, among other measures.

Many observers have claimed that the sanctions on North Korea up until now have been ineffective. In response, I have argued that if the foreign black money in Room 39 of the Worker’s Party building—which has funded nuclear missile development, the luxurious lifestyle of the Kim family, and the support of the regime in general—were to dry up, then Kim Jong-Un would give up the fight.

From that perspective, sanctions have been effective since the first Abe cabinet, which instituted the “severe measures” against the Japanese North Korean association Chongryon which continue today. Because of the Abe administration’s hard line against North Korea, a source of funding for the North that reached $1.8 billion annually at its peak has been eliminated.

Next, the conservative Korean prime ministers Lee Myung-Bak and Park Guen-Hye ended their support for the North Korean government. As a result, the more than $7 billion of aid that had been issued since the days of Kim Dae-Jung also disappeared.

New Sanctions Targeting DPRK War Machine—Kim Jong-un’s “Blitzkrieg” Response

The sanctions implemented this past August extinguished the Room 39 fund. Up until this year, Security Council sanctions had no impact on the Room 39 fund, but the August sanctions prohibited the exports of three categories of goods: (1) mineral resources such as coal, (2) iron and iron ore, and (3) marine products.

According to the Korea Trade Promotion Corporation, in 2016, North Korea had $2.8 billion in exports and $3.7 billion in imports, a $900 million deficit. Breaking down the export income into its categories, (1) covers $1.2 billion, while (2) and (3) are $200 million each for a total of $1.6 billion, or 60% of total exports. The blow to North Korea from eliminating these sources of income will be great.

After the new round of sanctions in August, sources tell me that Kim ordered his regime to “proceed with the nuclear tests and missile launches. We must put complete military pressure on the United States and force them to the negotiation table.” This was Kim’s Blitzkrieg. The reason for the rush is that if the Room 39 funds run out, then the regime will not last much longer.

The new sanctions regime affects $2.3 billion, including a 700-million-dollar embargo on clothing. When the sanctions are added together, North Korea will lose over 80% of its exports, and $500 million in annual income from its overseas workers. Hence, the North Korean Ministry of Foreign Affairs threatened that if the sanctions were adopted, “the world will see how we take powerful, continuous action and punish America.”

North Korea is Out of Cards to Play

The North’s dictatorship must be wavering in the face of this lack of foreign cash. Just as it has been pressed into a corner economically, it has also played all its trump cards in the form of ICBM and nuclear tests, and now must face off in negotiations against a different kind of trump: America’s own Trump administration.

President Trump would obviously want to avoid going down in history as the president who allowed nuclear missiles to reach the American continent. If enforcing economic sanctions on the North is not enough to get Kim Jong-Un to drop his nuclear missile program, then Trump will probably proceed with military action, namely a “targeted operation” to remove Kim Jong-Un. The dictator compromises only when he realizes that his own life is at risk. Only at the brink of war will North Korea be brought to negotiate (although they will continue to lie even at the negotiating table).

While Japan is walking in lockstep with America and applying full pressure to Korea, the final negotiations must include a resolution to the abduction issue with the full return of all abductees. The time for decision is now. On September 17, the People’s Assembly for Rescuing the Abduction Victims will be held in Tokyo. In the midst of the nuclear chaos, we intend to broadcast our firm commitment to save all the abductees.

For decades, North Korea has used the state-level policy of abduction to terrorize Japan and many other countries in Asia and around the world. The abduction issue predates the nuclear crisis, and the nuclear crisis, in turn, cannot be understood without recalling the North’s long-running program of state terror by means of kidnapping and forced labor.

As the North Korean dictatorship becomes increasingly desperate—willing even to risk nuclear world war for the sake of its own survival—it will try to reclaim the initiative by acting more and more recklessly.

However, the latest round of sanctions virtually guarantee that the North’s days are numbered. We must counter North Korea’s brinksmanship with firm statesmanship, assessing the situation soberly and using every means available to dismantle the Kim regime’s reign of terror in East Asia piece by piece, bringing all of his hostages home in the process.

Tsutomu Nishioka is a professor at the Institute of Moralogy and the director of Historical Research Office at the Institute of Moralogy. He is also a visiting professor at Reitaku University. He serves as a chairman of the National Association for the Rescue of Japanese Kidnapped by North Korea (NARKN).