TOKYO -- U.S. and South Korean experts agreed during a panel discussion in Tokyo on Friday that economic sanctions were successfully putting pressure on North Korean dictator Kim Jong Un, but their opinions diverged on whether the sanctions should be relaxed as an incentive for dialogue.
Economic cooperation gives "incentives for North Korea to give up nuclear weapons," said Kim Byung-yeon, professor at Seoul National University. He estimated that the North Korean economy would shrink by more than 5% this year due to an embargo on the shipment of its coal, iron ore and marine products, effectively cutting the country's exports by 90%.
Kim acknowledged, however, that the probability of Kim Jong Un giving up his nuclear weapons was "very low," saying that the North Korean leader's policy, if the environment allowed it, was "to keep nuclear weapons and economic development."
He also noted that there was no precedent of a dictator deciding to change his regime without outside pressure, and that it was possible to bring about "forced reform."
"At some point, when he is pushed into the corner by markets and foreign trade, he may realize he can survive by giving up half of his power," Kim said. At such a moment, "we have to engage North Korea more actively."
Macus Noland, executive vice president of the Peterson Institute for International Economics, was skeptical about the idea of engagement with Pyongyang.
"My concern, unlike Prof. Kim, is that the process of engagement may not actually transform North Korea, but simply make it richer and in doing so generate more resources for weapons systems," he said.
"Achieving a complete verifiable denuclearization, the likelihood of that happening is approximately zero," Noland predicted. "That said, it might be possible to substantially constrain North Korea's nuclear program in a way to get a commitment to non-proliferation beyond the Korean Peninsula."
The biggest obstacle to changing North Korea's course of action is its political regime.
Kim noted that economic reforms in former communist countries typically happened after a major political change, such as the emergence of reformer Den Xiaoping after China's Cultural Revolution, or the Doi Moi economic reforms in Vietnam in the 1980s.
With no sign of Kim's power weakening, there is little likelihood of North Korea following the Chinese or Vietnamese path of economic reform, he argued.
Lee Suk, senior director at the Korea Development Institute, noted that the black market now made up much of North Korea's economic activity, as the formal economy had largely collapsed under sanctions.
Such activity is tolerated but not totally legalized.
The question now is whether private-sector economic activity will spread and bring about change to the nation's economic system. Noland voiced hope that the market economy would empower citizens and bring about change from below.
But Seoul National University's Kim pointed out that the dictator's priority was regime survival and that Kim Jong Un was more likely to use economic assistance to strengthen his control, which could lead to "a revival of the socialist economic system."
The three experts were gathered in Japan to discuss the upcoming issue of the Asian Economic Policy Review, a biannual academic journal. The main topic for the next issue is the current status and future outlook of the North Korean economy.