International pressure deepens N.K.’s isolation

By Korea Herald

Chinese banks shut N.K. accounts; Washington, Seoul remain unyielding

  • Published : May 9, 2013 - 19:53
  • Updated : May 9, 2013 - 19:53
Growing international unity against North Korea’s nuclear adventurism is putting the reclusive state into deeper isolation, which could doom any chances of economic reform and push it to explore arms trading and other illicit means for survival.

Already under a host of economic sanctions for its nuclear and missile tests, Pyongyang might not be seriously susceptible to additional pressure, but growing signs of its sole patron China losing patience could ring alarm bells for the North, observers said.

In line with the U.S.-led sanctions against the unpredictable regime, some Chinese banks have recently stopped financial transactions with several North Korean banks, further limiting the country’s sources of foreign currency.

The Bank of China has publicly closed the account of the Foreign Trade Bank, the North’s key foreign exchange bank. The China Construction Bank and Agricultural Bank of China have also reportedly stopped doing business with North Korean institutions.

These moves come as the fate of the inter-Korean industrial park in Gaeseong hangs in the balance following the withdrawal last week of all South Korean workers from what has been a stable source of hard currency for nearly a decade. Pyongyang had raked in more than $90 million each year.

Apparently to the dismay of the North Korean regime, Presidents Park Geun-hye and Barack Obama reaffirmed their stern positions against North Korean provocations during their summit Tuesday, while leaving dialogue opportunities open.

“The North may feel a sense of crisis as Chinese banks moved to close the account of its foreign exchange bank and others given that it relies heavily on China for trade and other exchanges,” said Ahn Chan-il, the director of the World North Korea Research Center.

“I believe considerably effective sanctions against the North have begun. Beijing’s feeling toward Pyongyang used to be a mixture of friendship, affection and sympathy, but that appears to have turned into some sort of coldness.”

The China-North Korea relationship has chilled in recent years as Pyongyang has grown uneasy about being pressured by Beijing amid an increasing recognition in China that the North’s provocative behavior is antithetical to China’s national interests.

Chang Yong-seok, senior researcher at the Institute for Peace and Unification Studies of Seoul National University, noted the deepening isolation could trigger concerns among the North’s technocrats engrossed in a reform drive to develop its economy.

Appointing Park Bong-ju, a symbol of economic reform, as prime minister, North Korean leader Kim Jong-un had been seen to be keen on shoring up the moribund economy.

“Internally, there may be concerns and controversy (over Pyongyang’s foreign policy direction) as the deepening isolation has put all plans for economic reform and expanded openness in disarray,” said Chang.

“From the perspective of technocrats including Park, what is happening now is totally ludicrous.”

But Kim Heung-kwang, the head of the activist group North Korean Intellectual Solidarity, pointed out that Pyongyang might not think too seriously about the isolation as the country has long survived through negative outside influences.

“The North has been trained to survive under extreme international isolation for so many years. Should it be able to resolve the food crisis, the North is quite durable to the outside pressure,” he said.

“It may remain silent for the time being while carefully watching outside developments as it seeks to take the initiative and get the upper hand in future possible negotiations with the U.S.”

As Beijing shows a subtle change in its approach toward its wayward ally, the North appears to be in search of other partners for economic cooperation. One of them is Iran, which is also under U.S.-led sanctions for its suspicious nuclear program.

Last month, the Islamic Republic’s Oil Minister Rostam Ghasemi said talks were underway between Tehran and Pyongyang on oil exports. Last September, the two countries, long suspected of cooperating on missile development, signed a scientific and technological cooperation agreement.

“The North appears to be trying to find another lifeline. It is moving to step up economic cooperation with Iran and could seek some arms sales overseas, which could be met with a strong backlash from Washington,” said Kim of the NKIS.

During the summit talks between Park and Obama, Obama stressed a Myanmar-style reform, urging the North to come forward to the international community as a responsible member.

“Pyongyang should take notice of events in countries like Burma, which, as it reforms, is seeing more trade and investment and diplomatic ties with the world including the U.S. and South Korea,” Obama said during a joint press conference.

Since the nominally civilian regime in Myanmar was launched in 2011, it has made much progress in its efforts toward reform and democratization, which the international community has welcomed by lifting some economic sanctions.

Some critics said the Myanmar case was unrealistic as it involved democratization and reform that could pose a threat to the survival of the dynastic, dictatorial regime.

Meanwhile, according to Japan’s Asahi Shimbun, Pyongyang asked Beijing to hire some of its workers from the suspended Gaeseong park to work in China. Beijing reportedly was not interested in bringing in more North Koreans, the report said.

By Song Sang-ho (