Is Doing Business with North Korea Ethical?

The framework for this discussion can be found on this English article on the Radio Netherlands Worldwide website here: http://www.rnw.nl/english/article/doing-business-north-korea-ethical

Here is the Challenge when using the Human Rights “Lens”

When you add the human rights factor in as a lens through which all business and commerce must be viewed, you then find yourself in the peculiar position of losing on three critical counts: (1) having drastically narrowed your available market; (2) reducing your opportunities to assist those in the country or market where help is needed the most–like North Korea; and, (3) blocking your ability over time to influence the offending government and abate the abuses in question.

Regime stability, the rollback of human rights abuses, and the avoidance of an even more massive humanitarian crisis in the DPRK can never occur simply by folding one’s arms and saying, “No business where there are human rights violations”–that is a policy invitation to disaster. The potential humanitarian disaster North Korea faces is of an incomprehensible magnitude. (For more on the potential humanitarian crisis, see the discussion on this television show here: http://davidfday.com/2011/03/confrontation-in-the-koreasthe-private-sect… )

Paul Tjia’s work (a Netherlands consultant specializing in outsourcing work from European firms into North Korea)  in developing the private sector in North Korea is the foundation for peace and stability in that troubled country as well as in Northeast Asia. I for one, take my hat off to him, and encourage others to join him. He is building North Korea’s future and doing something that governments cannot–developing the private sector.

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The Negotiations Master—Kim Jong Il still has it

The Negotiations Master—Kim Jong Il still has it

By David Day

Over the past year, we have watched the Dear Leader’s private train slide into China on several occasions with educated speculation that he was paving the way for a baton hand-off in Pyongyang to Kim Jong Eun. There was a need, it was argued, for Beijing to bless the heir apparent. Some of these China visits included factory tours, fueling the speculation that the Kim Regime was preparing to “open up” and was ready now for some type of economic liberalization. These visits were followed by, more recently, announcements of large China-fueled infrastructure projects just inside the North Korean border.

Kim Jong Il’s current trip to Russia was not just to provide a change of scenery or demonstrate that there are places he can visit other than the PRC. Despite his age and frail health, the Dear Leader still retains his tactical genius. The Russian trip suggests the timing and the key trump card that Kim Jong Il may soon play—the Trans- Siberia/Korean pipeline.

Russia and South Korea have already entered into a MOU for a huge US$90 billion deal between Russia’s Gazprom and South Korea’s state-owned KoGas. The latter, the world’s largest single buyer of natural gas, will take 10 billion cubic meters annually for 30 years – via a pipeline to be built across North Korea. The sticking point in this enormous energy deal is, of course, North Korea. This week, North Korea also inked the same accord.

The tactical genius of Kim Jong Il is now beginning to surface.  2012 is a Presidential election year in South Korea and President Lee Myung-bak, an uncomfortable hard-liner for the North, is now on his way out. 2012 is also the magical, propagandized, “Mighty and Prosperous Nation” year (the 100th anniversary of the birth of the Great Leader, Kim Il Sung, the 70th birthday of the Dear Leader, Kim Jong Il, and the 30th birthday (give or take) of the heir apparent, “Brilliant Comrade,” Kim Jong Eun—the 100, 70, 30 numbers are significant in the North Korean culture).

There is one other piece to this puzzle and that is Japan. Fukushima and Japan’s nuclear domino shutdowns/decommissionings have left certain parts the country desperately short of energy. This Summer, Tokyo Electric has been able to manage as a result of drastic austerity measures. In the reasonably short term future, Japan will find it impossible to fill its resulting power gap with renewables. Natural gas and coal are the only practical alternatives, with the cleaner, natural gas being the preferred choice. Russian natural gas piped to Busan, South Korea is going to open up critical and easier access for Japan.

As for the tactical genius, Kim can balance China’s growing influence on North Korea with both Russian and South Korean financial influence in the form of a mixture of pipeline lease rent and energy which the North Korean grid sorely needs. A deal to move forward with a pipeline has the added bonus of fitting squarely with the needs of the Pyongyang “Mighty and Prosperous Nation” propaganda machine to have something significant to announce for 2012.

A key issue which Russia and South Korea will undoubtedly have to be concerned with is the pipeline “valve” question (see, the North Korean shutdown of the Mt. Geumgang resort as an example).

Perhaps the economics will force the valve to remain open, but they need to be prepared that Pyongyang will be maneuvering to retain control. Yet another flash of Kim Jong Il’s tactical genius is in the works.

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Pieces are being put into place for the Transistion of Power in North Korea

Pieces are being put into place for the Transistion of Power in  North Korea

June 29,  2010 by davidfday

Kim Jong Un

Kim Jong Un

North Korea’s Jang Song Thaek, Kim Jong Il’s brother-in-law , was recently promoted to vice-chairman of the powerful National Defense Commission. This is significant because the heir-apparent in North Korea, Kim Jong Un, is Jang’s nephew and, as a top North Korean military official, Jang provides a critical KPA military brass support network for Jong Un.  To stabilize the transistion of power from Kim Jong Il to his youngest son, Jong Un, it must be remembered that Jong Un has no military leadership experience; he does not have the “smoke of the revolution” about him, and will need the military support network provided by his uncle, Jang Song Thaek, if he is to carry any credible authority with the KPA.

The regime transistion of power is  extremely delicate for North Korea. The last transition in this feudal, Stalinist regime took place over a period of some 14 years. Kim Jong Il had years to nuture relationships and leadership credibility within Pyongyang circles as the mantle shifted from his father, Kim Il Sung.

As  the grandson of the revolution, Kim Jong Un does not have the luxury of  time given his father’s ailing health. The support of the senior KPA will be critical for him to assume and hold power. Uncle Jang’s appointment, then, is an important step in this transition.

See, also Blog article called, North Korea: “The Cheonan Was Bait for an Internal Propaganda Frenzy “ also located on this website.

 

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North Korea: “Juche and Kimilsungism Block Effectiveness of Any Sanctions Against North Korea ”

 

North Korea: “Juche and Kimilsungism Block Effectiveness of Any Sanctions Against North Korea “ May 27, 2010.

Pyongyang plays by a vastly different rulebook. Economic sanctions vis.a.vis the DPRK only serve as political pablum for constituencies in Seoul and in the U.S. The North Korean philosophy of Juche (originally created by North Korean academic Hwang Jang-Yop who later defected) as modified by Kim Jong Il into Kimilsungism will never permit Pyongyang to knuckle under to economic sanctions imposed by outsiders. If you thoroughly understood that philosophy you would know that economic sanctions are an exercise in futility. In fact, the Dear Leader just demonstrated for the world last year that the regime was all too ready, and did, in fact, shoot itself in the economic foot by completely shutting down the economic zone at Kaesong and trade with South Korea in the wake of its 2009 missile and nuclear tests.

The burden of economic sanctions will not scratch the elite ruling class in Pyongyang or the DPRK military—it will be borne by the North Korean people. They are the weakened, impoverished child that will have to take the brunt of any further economic spanking.

 

 

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