To convince North Korea to abandon its nuclear weapons program, American officials are considering whether to drag the country before the United Nations Security Council and impose economic sanctions. What kind of sanctions are we talking about? And what does North Korea stand to lose?
The answer to the second question, for Kim Jong-il at least, is very little. Sanctions are intended to cripple economies and shame political regimes, but it's tough to cripple an economy that's effectively crippled already, and it's tough to shame a regime the United States already tagged as a rogue point on an axis of evil.
Economically, North Korea is quite cut off from the rest of the world: It buys very little and sells even less. Primary exports include natural resources and light manufacturing products—crustaceans and mollusks are North Korea's fourth-biggest export, gramophone records its sixth. Last year, total exports came in at just over $1 billion. (For comparison's sake, the United States exports $723 billion per year; even tiny Liechtenstein manages to export $2.5 billion.) With no major industry to support, North Korea's main imports are food, energy, and medical necessities. North Korea is also a major recipient of international aid. In 2001, the country received $600 million in aid from countries like the United States and South Korea and significant (but unquantified) amounts of oil and food from China.
North Korea's other major source of income is arms sales to client nations like Iran and Pakistan. Many of the transactions are shadowy, but economists estimate that such sales help the country pull in an extra$100 million to $1 billion a year in currency and fuel, most ofwhich goes directly to the armed forces.
So, how would sanctions affect North Korea's economy? It depends what kind the U.N. chooses to impose. The Security Council rarely imposes sanctions without making exclusions for food and medical supplies, so it's likely the foreign aid would continue. That's not to say the North Korean people would get off scot-free—the U.N. could choose to restrict all of their exports, limiting the country's food supply, and they could also choose to restrict fuel imports. Beyond that, the U.N. might choose to freeze Kim Jong-il's assets abroad or to prevent air travel in and out of the country.
Stopping North Korea's arms trade is much trickier, since many of the nation's clients (especially in the Middle East) might be inclined to ignore U.N. sanctions altogether. To really halt the weapons trade, the U.N. would have to include a provision giving itself the right to stop and inspect North Korean ships as they ply arms in oceans all over the world, and enforcing that provision, if it got passed, would prove difficult.
More difficult still might be passing economic sanctions in the first place. Nine of the Security Council's 15 members must vote yes to approve any sanctions package, and none of the five permanent members can vote no. The key player in any vote would be permanent member China, and it's doubtful that the longtime North Korean ally would easily accede to a stringent sanctions program. That may be one reason why the Bush administration said Tuesday they are "willing to talk" to North Korea before pursuing sanctions. Kim Jong-il has yet to accept the offer.
Explainer thanks Victor Cha of Georgetown University; Chuck Downs, a consultant on North Korean security; Sean Murphy of George Washington University Law School; Marcus Noland of the Institute of International Economics; Kongdan Oh of the Brookings Institution; and Leon Sigal of the Social Science Research Council.