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The Upside of Giving In to North Korea’s Blackmail

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April 10 (Bloomberg) -- With its provocation-a-day strategy, North Korea has almost exhausted the news media’s capacity for stories about the “ratcheting up” of tensions on the Korean Peninsula.

Here’s some news from the North, though, that you may not have heard: In recent meetings, the ruling Korean Workers’ Party elected Pak Pong Ju, an economic reformer, to its Political Bureau, which steers political, policy and personnel decisions, and downgraded the role of the military by reducing its representation. Subsequently, Pak was made Cabinet premier. On April 5, even as North Korea warned foreign diplomats that it couldn’t guarantee their safety, the front page of Rodong Sinmun, the country’s newspaper of record, was dominated by headlines urging faster economic development. News outlets that rely on clandestine reports from inside North Korea suggest that preparing for war has given way to preparing for spring planting.

Of course, just because Kim Jong Un has no interest in starting a war doesn’t mean that he can’t stage some dangerous incident -- all designed to get the U.S. to talk to him. He wants that dialogue in order to seek relief from international sanctions, to acquire the aid that his country desperately needs and, not least, to secure his domestic political standing with a high-profile public-relations victory.

The first task of the U.S. is to respond to any actual military provocation in a firm but measured way. President Barack Obama has so far wisely resisted engaging in Kim’s war of words, and has appropriately reinforced U.S. military assets in the region.

Yet as some analysts have pointed out, the dominant military position of the U.S. is itself an unsettling factor on the Korean Peninsula. While the North’s artillery and rockets could inflict a horrific toll on the 10 million-plus South Koreans living in Seoul, the government in Pyongyang knows it would quickly lose any conventional conflict: The prospect of impending defeat could well encourage Kim to go nuclear. For that reason, the U.S. should persuade South Korea to refrain from further loose talk about retaliatory targeting of the North’s “command and control” facilities. Likewise, more publicly announced sorties over South Korea by U.S. B-2 bombers may be stirring, but they are not stabilizing.

Some proponents of a “get tough” approach with North Korea dream that isolating the regime will force its sudden collapse. They should be careful what they wish for. The inevitable humanitarian chaos of such an outcome would generate huge economic costs. Before reunification, West Germany was two to three times richer than the East. By contrast, South Koreans are somewhere between 15 and 40 times richer than their counterparts to the north. As one expert notes, estimates of the cost of reunification range from $200 billion to $5 trillion -- or almost five times South Korea’s gross domestic product.

Most South Koreans are in no hurry to pay that price. As for China and Russia, the prospect of a united, pro-U.S. Korea at their borders is far less appealing than some version of the status quo. Notwithstanding Chinese President Xi Jinping’s recent veiled warnings to Pyongyang, officials in Beijing (and Moscow) will do only the minimum necessary to keep the peace.

That minimum doesn’t necessarily include forcing North Korea to give up its nuclear program. As we have argued before, setting North Korea’s nuclear disarmament as a precondition for talks with the U.S. on a permanent peace treaty is a misguided and unrealistic strategy -- one that is doomed, at best, to stalemate. Kim has no incentive to give up the one thing that seemingly keeps the U.S. at bay. In fact, by fixating on dismantling the nuclear program, the U.S. has turned it into a point of leverage for the North. At this stage, the smarter strategy would be to pursue the “three noes” advocated by Siegfried Hecker, a former director of the Los Alamos National Laboratory who has visited the North many times: “no more bombs, no better bombs and no export.”

Fortunately, the North Koreans have created an opening for just such a tack in diplomacy. The decision at the country’s top political meetings to focus simultaneously on economic reform, especially exports and foreign investment, as well as a bigger nuclear program, amounts to what Korea-watcher Stephan Haggard of the University of California calls “fundamental illogic”: Foreign investors won’t put money into a country that is hurling nuclear threats and fighting sanctions.

The task ahead is to convince the North Koreans, whether through a revival of the six-party talks hosted by China or some other venue, that they can only realize their hopes for economic growth by putting their nukes back in the box. Economic opening and reform, in turn, will fuel the rising expectations that have historically undermined the most repressive regimes.

In the short term, this may mean giving in to the Kim family’s latest round of blackmail. Set against the hundreds of thousands of deaths that a conflict could bring, though, that seems like a small price to pay for the regime’s eventual, orderly demise.

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