A/O Global Intelligence Weekly: A Breakthrough In North Korea?

Yes, ladies and gentlemen -- it is a breakthrough that can only be termed as historic.

Earlier this week, the Trump administration announced the possiblity of a breakthrough in North Korea. This announcement came after a united Korean Olympic team represented the entire peninsula for the first time since 1948 (the teams had previously only marched together in the opening ceremonies of the Olympics symbolically in 2000 and 2004).

The Center for Strategic and International Studies gives a halfhearted "not yet" to cries that we have indeed witnessed a breakthrough, urging policy makers to consider that US-ROK (Republic of Korea) joint military exercises are still on schedule to occur in April. North Korea still appears committed strategically to the principle of economic and nuclear development, and while outside observers might reasonably assert that North Korea's nuclear belligerency has produced a desired outcome -- bilateral talks with the United States -- that perception simply is not undergirded by reality.

Trump's negotiation style is famous in New York, but on the diplomatic front it is rather new to those used to the caution of the Clinton-Obama era. Not quite a "cowboy diplomacy" approach, Trump has been very careful to show his face cards one at a time to the North Korean government. With talks of a "bloody nose" knockout punch of North Korea's capacity to project nuclear force followed up by whirlwind diplomacy in Seoul and Tokyo, the Trump administration has been equally careful to make sure the proper messages are being communicated to China.

For instance, Trump's announcement of 25% tarrifs on steel -- though it synchronizes with his "America First" temperament -- has one target in particular: China. Economic pressure on China is the very sort of conservative internationalism that American Opportunity and Free Congress Foundation have been emphasizing for over a decade, and while it may mean some very real improvements in the lives of steel and aluminum workers in Kentucky and Pennsylvania, to the North Koreans it translates into a very simple message -- the United States is perfectly willing to put all economic options on the table, even at the cost of trade agreements with communist China.

Thus North Korea finds itself in a bind, neither able to pursue an independent course of juche without substantial subsidies from China and the West, nor able to confidently hold the Pacific Rim hostage through a course of belligerency. What remains for Kim Jong-un and the North Korean government are two options: start talking and give diplomats the latitude required to hammer out an agreement for survival, or stop talking and allow events to take their place.

Make no mistake, the resolve of the Trump administration should not be misinterpreted by the North Korean regime. American alliances and security guarentees will be kept, and though military resolution is by no means an option policy makers should want to keep within reach, the willingness to exhaust economic and diplomatic solutions as severe as 25% tariffs should be an early indicator as to how far the United States is prepared to end the destabilizing effects of the security crisis on the Korean Penninsula.

One option that is an old but untested idea? The Japan-Korea Undersea Tunnel (or Korean-Japan Undersea Tunnel) is a decade-old idea that is not as logistically far-fetched as one might think. Only 80 miles separates the Japanese economy from the South Korean economy from a reliable rail/road transport system, one that would turn both nations into an economic powerhouse capable of charting a course that could rival Chinese power in East Asia. Links to Chinese and Russian economic zones all run through one location -- North Korea.

The cost of this project has been estimated to be $100bn, a price tag far cheaper than American adventures in Iraq. The economic benefits to the region are estimated to be $275 billion per year -- a compelling number no matter how one looks at it, though not compelling enough for historic greivances and regional rivalries to see its ulimate wisdom just yet.

Should this link between the Japanese mainland and the Korean Penninsula ever come to fruition -- and the idea, though Herculean, would be a feasible engineering marvel -- it would be an economic paperweight that would open the sluices of the Japanese economy into any future peace settlement, offering North Korea even brighter chances to develop their nation and allowing the chance to reform their economy so as to prevent a market collapse within their socialist model.

This idea of a highway system between Japan and Korea is one of many ideas to help increase the economic prospects on the penninsula. If the North Korean government truly has realists within the government, there are far more opportunities than pitfalls in discussions about reunification.

More after the jump. . .

South Africa has had a rather turbulent month as former President Jacob Zuma resigned his position of leadership in favor of Cyril Ramaphosa, an ANC stalwart who seems to be charting a course more familiar to those who have witnessed Zimbabwe's land reform practices in the 1990s and 2000s.

In short, the ruling ANC has determined that land reform -- mass transfers of lands from ostensibly white Afrikaner farmers to unemployed black Zulu or Shona -- will become a top priority for the new government, a decision that is further compounded by water shortages due to land management and a growing civilian population that has found economic prosperity in post-Apartheid South Africa elusive at best.

Of course, the history of South Africa has involved the mass appropriation of arable farmland into the hands of white European settlers, made possible by a 1913 law that took tribal lands without compensation. Ramaphosa in turn is merely rectifying a historical grievance, taking without compensation land that was malappropriated in the first place. Unlike South Africa, Zimbabwe pursued a policy of "willing buyer, willing seller" in the 1980s before the collapse of the Lancaster House agreement that ended the Rhodesian Bush War (or the Second Chimurenga), moving over to first demanding a majority stake in all farms, then finally towards land confiscation in Zimbabwe.

The end result was horrific for the Zimbabwean economy. Once the breadbasket of southern Africa, Zimbabwe became synonymous with economic dysfunction and rampant inflation. It was only after Mugabe's forcible removal in 2017 that the Zimbabwean economy began to see the first green shoots of improvement -- first by stabilizing the currency, then by swiftly ending land confiscations among the remaining farmers.

Zimbabwe offers a cautionary tale to South Africa's black majority. Far from improving the lives of Zimbabweans, over 1 million Zimbabweans fled to South Africa because of the economic disaster created by internal fissures and external pressures betting against the ZANU-PF government... a bet that drove Mugabe into the arms of the Chinese and North Korean governments. Already, South African business interests -- mostly white owned -- intend on waging a campaign to scare away foreign investors, an equally ruinous condition.

Ramaphosa may be served better with a proposal to share income from agricultural farms -- whether that is a path to an employee stock-owned company owned by those who work the farms themselves (ESOPs) or more practically, the introduction of a basic minimum income that, while not a panacea, would at least serve as a starting point to get South Africans of all backgrounds invested in the idea of economic growth and opportunity.

As it stands today, not every South African feels invested in the future, specifically because they have no stake in the status quo. South Africa's economy has the promise to expand opportunity to the poorest of the poor without reverting to the racial divisions that had plagued the country's founding and existence. It took one special man -- Nelson Mandela -- and a nation willing to believe in the promise of economic opportunity to change what could have been a civil war. That spirit of opportunity and unity should be pursued, not rejected, if South Africa is not to repeat Zimbabwe's mistakes.

Some news and articles we recommend for information and discussion purposes, none of which necessarily represent the position of A/O:

As always, American Opportunity is always looking for new resources and topics we can address in detail. Please feel free to stay in contact!

Sincerely,

Jim Gilmore

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