The North Korean regime has adjusted to international sanctions by shifting that economic pain away from cities to the countryside, new Stanford research using satellite night lights data shows.

U.S. policy toward North Korea has been based on the expectation that economic sanctions could deter North Korea from developing nuclear weapons or change the behavior of the regime, according to Yong Suk Lee, a Stanford economist at the Freeman Spogli Institute for International Studies.

Since 1950, both the United States and the global community have adopted a series of economic sanctions against North Korea. The latest came in 2013 when the United Nations approved restrictions on banking, travel and trade in response to North Korea's underground nuclear test and threat to launch nuclear strikes against the United States and South Korea.

In a working paper, Lee examined how North Korea's Communist rulers have adapted to the increasingly tougher sanctions through the years.

"North Korea is one of many autocratic regimes that refuse to yield to sanctions, and its isolation and hereditary dictatorship make it a particularly good example to study the impact of economic sanctions in autocratic regimes," said Lee, the SK Center Fellow and a faculty member of the Korea Program at Stanford's Walter H. Shorenstein Asia-Pacific Research Center.

North Korea is one of the poorest countries in the world, Lee noted. Its leaders follow an economic model based on a centrally planned economy and self-imposed isolation from the rest of the world.

Satellite data

Lee's research was based on nighttime views of lights from data collected by the U.S. Defense Meteorological Satellite Program. The researcher created "average luminosity" measures of lights across North Korea based on a 1-mile-by-1-mile grid for the years 1992 through 2010. Light usage was examined for brightness on one-minute intervals.

To predict the impact of sanctions on economic activity in North Korea, Lee used a formula that transformed the luminosity measures into GDP measures. For example, a 10 percent change in the satellite lights is associated with about a 3 percent change in GDP.

According to Lee, satellite data is of greatest utility in assessing the economies of cities and regions in the developing world. In a country like North Korea, a large part of economic activity happens during the evening and night and involves light. For example, lights at night are generated by peoples' consumption of goods and services as well as transportation. And some production activities happen during the evening hours.

"Economists have found that how bright night lights are can predict national and sub-national GDP quite well, especially in countries where GDP data is not reliable," he said.

Lee found that economic sanctions decreased luminosity in the hinterlands, but increased luminosity in urban areas, especially toward the centers. As for whether additional sanctions affected luminosity, he found they increased the urban-rural luminosity gap by about 1 percent. When he examined the more central urban areas, the gap increased by about 2.6 percent.

"The results suggest that the dictatorship countered the effects of sanctions by reallocating resources to the urban areas," Lee said. One could surmise that the economic sanctions do not affect the country's leadership much, he said.

The hinterlands responded to declining economic fortunes by relying more on trade with China near those border areas, Lee added. In fact, the sanctions generated more North Korean migration to China and reliance on Chinese merchants and goods. North Korea's border with China is relatively porous as opposed to its heavily militarized border with South Korea.

'Increasing inequality'

The upshot, Lee said, is that sanctions that fail to change the behavior of an autocratic regime may eventually increase urban-rural inequality.

"Sanctions will likely be inefficient as long as North Korea can maintain powerful centralized control and oppress any discontent that arises due to increasing inequality," he said.

Lee added that sanctions will most likely not deter North Korea's nuclear weapons activities. They have not done so yet, and at this point, North Korea's leaders view sanctions as inconveniences, but not regime-threatening. Plus, even the harshest sanctions would be unlikely to stem the flow of all goods, energy and money into North Korea. Not all countries would go along with draconian trade restrictions that hurt the poorest people the hardest, he said.

"Even if sanctions were imposed to full capacity, the marginalized population would suffer the most," said Lee, adding that he was actually surprised about his project's findings.

"One can always hypothesize a story but to actually find such effect in the data was quite exciting. Frankly, I pursued this project expecting that I wouldn't find any impact of sanctions on lights," he said.

Clifton Parker is a writer for the Stanford News Service.

Two weeks ago, North Korea surprised the world by sending three of its top leaders to the South to attend the closing ceremony of the 17th Asian Games in Incheon. The visit occurred in the midst of growing speculation that North Korea's young leader, Kim Jong Un, was seriously ill, or even that he had been removed from power. That dramatic and unprecedented visit gave renewed hope for improved inter-Korean relations, which have been frozen since the sinking of a South Korean vessel in 2010.

The strategic situation on the Korean Peninsula has continued to worsen over the past several years. To produce material for more nuclear devices, Pyongyang has proceeded with a large-scale uranium enrichment program. The International Atomic Energy Agency recently expressed concern that North Korea may also have reactivated its plutonium production facilities, another means of making fissile material for nuclear bombs. Meanwhile, having rocketed its first satellite into orbit in December 2012, the North is busily developing longer-range missiles to target not only the South but also Japan and the United States.

Unfortunately, there is no initiative on the horizon likely to change this dangerous trajectory. The United States was willing to negotiate with Pyongyang when there was a chance of preventing it from developing nuclear weapons. With that goal now deemed unachievable, Washington is instead intent on containing the threat through increased sanctions and counterproliferation efforts, missile defense, and heightened defense cooperation, with South Korea and Japan. U.S. engagement with North Korea, much less negotiation, is off the table and likely to stay that way.

China's buffer     

Earlier hopes that China would prove to be a deus ex machina have also foundered. While Beijing does not want Pyongyang to have nuclear weapons, it has always been more concerned about preventing instability in the North that might spill across their shared border. More recently, deepening suspicions among Beijing's leaders about U.S. strategic intentions have made North Korea even more important to China as a strategic buffer. China remains by far Pyongyang's most important foreign supporter, as reflected in the burgeoning trade across their border.

That leaves South Korea as the only country that could play a larger and more positive role in tackling the North Korea problem. South Korea is no longer a "shrimp among whales," as it used to think of itself, but a major "middle power." Strategically, Seoul is increasingly important not only to Washington but also to Beijing.

South Korea, however, has been a house divided when it comes to how to deal with the North. Conservative administrations, fearing that a North Korean nuclear arsenal would change the long-term balance of power on the peninsula, have made the North's denuclearization a condition for virtually all engagement with it. Progressive governments, on the other hand, have glossed over the nuclear issue, believing that increased contact will eventually promote change for the better in Pyongyang. The result has been South Korean policies that, whether from the left or the right, have proved unsustainable and ineffective.

"Tailored engagement"     

Based on a yearlong study, my colleagues and I have called for more active South Korean leadership to ameliorate the situation on the Korean Peninsula. We call the concept "tailored engagement." It is based on the conviction that engagement is only one means of dealing with North Korea, but an essential one, and it must be carefully "tailored" or fitted to changing political and security realities on and around the peninsula. It eschews an "appeasement" approach to Pyongyang as well as the notion that inter-Korean engagement under the current circumstances would be tantamount to accepting the North's misbehavior, especially its nuclear weapons program.

Such engagement would not immediately change the nuclear situation, but, if carefully considered and implemented, it need not encourage Pyongyang in that regard, either. Meanwhile, it could help to reduce bilateral tensions, improve the lives of ordinary North Koreans and bring the two societies closer together. It could reduce the risk of conflict now while fostering inter-Korean reconciliation and effecting positive change in the North.

South Koreans must first, however, develop a broader domestic consensus in areas and in ways that do not undermine the international effort to press Pyongyang to give up nuclear weapons. That is possible because many forms of engagement are in fact largely irrelevant to the nuclear program. For example, South Korea could provide much more humanitarian assistance to ordinary North Koreans; it could also engage in more educational and cultural programs, including sports exchanges. Concrete offers of expanded economic exchanges and support for the development of the North's infrastructure could become part of an incentive package in renewed six-party talks on ending the North's nuclear program.

Speculation about the state of Kim Jong Un's health and the North Korean leaders' visit to the South underline the fact that North Korean politics and society are experiencing great flux. For the outside world, this creates uncertainty, but also offers the possibility of positive change. Tailored engagement can at least test, and perhaps also influence, a changing North Korea.

Even a carefully "tailored" engagement strategy is no panacea. It is only one tool for dealing with the North -- military deterrence, counterproliferation and human rights efforts are among the others that are essential -- but why not try all available means when the situation is so worrisome? Japan should support such an approach because its interests, too, are threatened by the increasingly precarious situation on the peninsula.

This article was originally carried by Nikkei Asian Review on Oct. 16 and reposted with permission.

The 40-day disappearance from public view of North Korea's young leader Kim Jong Un and his sudden reappearance on Monday, walking with a cane but otherwise apparently well, made headlines around the world. International media ran countless reports that Kim was either seriously ill or had even been deposed. Why was this such a big story, and why did so many get it wrong?

David Straub, a Korea expert at Stanford University's Shorenstein Asia-Pacific Research Center who formerly served as the State Department’s Korean affairs director, was one observer who consistently challenged that media narrative. In the following interview, he offers his analysis of both the North Korean situation and the way it was misinterpreted by a majority of the media.

Why didn’t you give credence to the reports that Kim Jong Un was seriously ill or had lost out in a power struggle?

I've been following North Korea professionally on and off since 1978. Looking at similar incidents, I've grown wary of poorly sourced reports about North Korea, and especially speculation, even when it comes from so-called “experts.” Because North Korea is a black box, mostly closed to outside view, almost anyone can get away with claiming that he or she is an expert. There are also many governments, groups and individuals that have axes to grind. Ignorance, wishful thinking and even disinformation are all too common when reporting on North Korea.

What was the evidence that led you to believe that Kim Jong Un wasn’t seriously ill, much less deposed?

There were only a few facts that we actually knew to be true during his absence. His last public appearance was on Sept. 3. In July and August, there was video of Kim Jong Un walking with a pronounced limp. Later in Sept., North Korean media reported that he was suffering an uncomfortable physical condition. Kim is now quite overweight, and there are also photographs of him wearing platform shoes. Therefore, the most likely explanation for his disappearance from public view was that he was receiving treatment for whatever caused the limp, and that he needed to stay off his feet until he was better. At age 31, it was unlikely that he was suffering from a more serious ailment. Moreover, just like his grandfather and father, Kim has previously dropped out of public view for many weeks at a time.

What about the reports that Kim was deposed?

There were zero credible sources that Kim had been deposed or that his leadership position had even been challenged. And, a great deal of speculation existed about the Oct. 4 visit of three top North Korean officials to South Korea, who attended the closing ceremony of the Asian Games there. But if there had actually been trouble in Pyongyang, the last thing one would have expected is for those officials to visit South Korea in such a manner. Meanwhile, one North Korean defector has been arguing for a long time that Kim has only been a figurehead and that real power in North Korea is wielded by officials in his party. The issue of just how much power Kim actually holds is an important one. The answer remains unclear to observers outside North Korea, and is a different issue from the stories about Kim's health and whether he had been overthrown.

Why did Kim suddenly reemerge?

The short answer is probably that his physical condition had improved enough. The photographs that North Korea media published on Monday show him walking with a cane but otherwise apparently in good health and in good spirits, and leading some of the same North Korean officials who recently visited South Korea, speculated by the media to be the ones who encouraged a coup.

Do you think that North Korea felt the need to show that Kim was still in charge after the media attention?

That too is speculation, but it is quite plausible. It is likely that Kim wanted to show not only the international community, but even more so, his own people that his physical condition is not serious. Ordinary North Koreans were of course not able to access international reports about Kim, but they knew that he was not appearing in their national media and presumably were wondering how he was.

But isn't it a problem for Kim to be seen in a weakened physical condition?

Kim's power and legitimacy in North Korea derive from the fact that his grandfather Kim Il Sung was the country's first leader, not from his physical condition or personal qualities. It’s no longer taboo in North Korea to show the top leader suffering from ailments. In fact, Kim's father Kim Jong Il was shown repeatedly looking extremely unwell after his stroke in 2008. Similarly, Kim Jong Un himself had already been shown in July and August on North Korean television suffering from the limp. In both cases, the North Korean media characterized the two Kims as hardworking leaders even when they were unwell. Moreover, as Yonsei University Professor John Delury has pointed out, actually showing Kim using a cane may be intentional because it makes him look a bit older and more mature.

What are we to make of the attention on Kim’s absence over the past several weeks?

I think it would be valuable if the international media would begin to apply better standards for its reporting on North Korea. North Korea poses important challenges to the international community, and citizens need to be informed about what's actually happening there, not what people imagine or those with ulterior motives would have us believe.

There is another, even more basic lesson to be drawn from this episode. With the rise of the Internet, information and misinformation have proliferated about North Korea, along with the ability to store and recall all of that information quickly. In addition, in popular imagination, the end of the Cold War transformed North Korea from an adjunct of the Soviet Union to an entity in itself, one that is both abhorrent and ridiculous. The result has been an exponential increase in the number of people throughout the world producing, circulating and consuming any information even remotely plausible about North Korea, and the established media in turn report on what those people are saying.

An increase in global attention to all things North Korea is important because it means North Korea can no longer hide itself from the international community. Already, this has contributed to the United Nation’s current consideration of legal action against the regime and its leaders over the human rights situation in the North. That is what North Korea’s leaders must have been worrying about over the past month as they watched the media reports—not Kim Jong Un’s bad leg.

Straub also spoke with Public Radio International (PRI) just before Kim’s reemergence, audio from “The World” radioshow is available on the PRI website.

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South Korean activists continue to send balloons into North Korea filled with leaflets that reportedly contain information that is critical of Kim Jong Un’s regime. The latest campaign coincided with the anniversary of the founding of the North’s ruling Worker’s Party. The Koreas exchanged gunfire over the incident in the first-ever North Korean attack after such a balloon launch.

“The possible benefits of sending such balloons into the North are far outweighed by giving North Korea a pretext to attack the South,” said David Straub, the associate of the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center (APARC), in an interview the Voice of America.

Straub’s commentary coincides with recommendations in “Tailored Engagement,” a policy report published in Sept. 2014 by Straub, Gi-Wook Shin, director of Shorenstein APARC and Joyce Lee, research associate for the Korea Program, which argues for increased engagement with the North through a series of precise steps taken on behalf of the South Korean government. Among those steps, the scholars recommend the South Korean government should not permit balloon launches.

The full article can be found on the Voice of America online, and the policy report can be found on the Shorenstein APARC website.

Gi-Wook Shin, director of the Walter H. Shorenstein Asia-Pacific Research Center,  and David Straub, associate director of the Korea Program, presented their new study "Tailored Engagement: Toward an Effective and Sustainable Inter-Korea Relations Policy" to a Washington, D.C. audience at the Brookings Institution on Sept. 29. The Voice of America wrote an article in Korean about the presentation, citing Shin saying, "Engagement is important and essential but it must be carefully tailored or fitted to changing political and security realities on and around the Peninsula." 

Stanford researchers have introduced a major new study on North Korea policy at a hearing at the South Korean National Assembly. Entitled “Tailored Engagement,” the report concludes that South Korea is the only country today that may be both willing and able to try a new approach toward the worsening North Korea problem.

“There is considerable urgency for Seoul to act,” according to the report released by the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center (APARC) in the Freeman Spogli Institute for International Studies, which comes in response to increasing tensions and heightened nationalism in Northeast Asia.

“Only the Republic of Korea has both the need and the potential influence to change this dangerous trajectory on the Korean Peninsula.”

Published by Gi-Wook Shin, the director of Shorenstein APARC; David Straub, the associate director of the Korea Program; and Joyce Lee, the research associate for the Korea Program, the report is the culmination of more than a year of intensive research activities at Stanford University, including three international conferences focused on Northeast Asia’s security and political situation.

During the past year, North Korea continued to develop nuclear weapons and North-South Korean relations worsened, while increasing U.S.-China strategic mistrust has made it less likely that those two countries can cooperate to change North Korea's behavior.

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“I was very impressed by the concern that the Korean Congressmen showed about the current situation on the Korean Peninsula and by their interest in our reasoning and recommendations,” Shin said. “Almost all of the Committee’s 18 members attended, and engaged in a lively exchange of views during the three-hour-long hearing.”

In their report, Shin, Straub and Lee propose a process that involves a series of increased exchanges with North Korea. This would be applied in a principled, systematic way, based largely on expanding a domestic consensus in South Korea that treats South Korean engagement of the North as necessary for improving the situation on the peninsula, not as incompatible with maintaining pressure on Pyongyang to abandon its pursuit of nuclear weapons.

The report lays out four main steps that South Korea can implement to reduce the risk of regional conflict, while also creating a foundation for peaceful unification with North Korea.

• Focus on the pursuit of mutual interests and benefits rather than on symbolism and appeals to national sentiment.
• Apply market principles and international standards in economic activities.
• Collaborate with other countries and third-party companies in both economic and people-to-people projects.
• Be pragmatic and flexible in pursuing engagement at both the state-to-state and grassroots levels in complementary ways. 
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South Korea is well suited to engage the North because of their shared history, and its status as a major middle-power status has also increased its sway with both China and the United States.

No longer a “shrimp among whales,” South Korea has transformed since democratization, leaving that modest proverb behind and gaining an influential role in the region.

Now the country has an opportunity to begin to bridge the gap with North Korea, but first, it must create an internal structure that supports engagement.

In implementation

The North Korea problem is complex and wrapped in a varied history of engagement efforts by South Korea and other countries. Lessons of success and failure from past administrations provide important insight, the report says.

“The main impediment to South Korea’s assuming a greater international leadership role on the Korean question is not a lack of national power,” the report states, “but a lack of domestic political consensus about how to deal with North Korea and the consequent inconsistency in ROK policy across administrations.”

The South Korean government changes executive leadership every five years, and with it, there has been great inconsistency between conservative and progressive policies. The current administration that assumed office in 2013, led by President Park Geun-hye, pursues a North Korea policy of trustpolitik, wherein the government aims to build trust through a step-by-step process.

According to the report, the tailored engagement approach can inform and build on President Park’s policy. Three main actions can be taken by South Korea’s administration to implement productive engagement, the report states:

• Reorganize the Korean government itself to facilitate a more coordinated formulation and implementation of North Korea policy.
• Achieve much more consensus within South Korea on how to deal with North Korea.
• Seek to win support of the major powers, especially the United States and China for its approach to North Korea.

Developing trust is essential to de-escalate tension between the Koreas. Without progress in confidence-building, the two countries can hardly collaborate on even straightforward projects, such as expanding the existing Kaesong Industrial Complex, a bi-lateral industrial park located just north of the North-South border.

Solving more basic issues and participating in joint initiatives can help pave the way toward inter-Korean reconciliation during President Park’s administration, and the next.

“Reconciliation and convergence would improve many aspects of the situation on the Korean Peninsula, including eventually facilitating North Korea’s abandonment of its nuclear weapons program and the achievement of unification,” the reports says.

Asia Economy Daily wrote an article (in the Korean language) about the research team's presentation. A version of this article was also carried as a news release by the Stanford News Service. NK News, a news oufit focused on North Korea-related news, also wrote an article (in the English language) and can be found on NKNews.org. The Voice of America covered the presentation by Shin and Straub at the Brookings Institution. The article, written in Korean, can be accessed on the Voice of America online.

Yves Russell, reviewing Shorenstein APARC's Divided Memories: History Textbooks and the Wars in Asia for the 2014/2 issue of China Perspectives, says that the volume "makes two major contributions to existing literature on the problem of history textbooks in East Asia" with its parallel excerpts from textbooks on eight controversial themes and its "inclusion of American textbooks" in the debate on historical memories in Asia. Russell continues to note that "one of the book's great strengths [is showing that] Japanese textbooks do not highlight patriotism, revisionism, or nationalism or seek to justify the war—rather the contrary." 

Divided Memories is just one of the outputs of a multi-year history project on the effects of historical memories on postwar reconciliation. Most recently released was Wartime History Issues in Asia: Pathways to Reconciliation Final Report, a summary report of a Track II dialogue on the continuing impact of wartime history issues.

David Straub, the associate director of the Korea Program at Shorenstein APARC, spoke with the Voice of America about the three American citizens being held as prisoners in North Korea. On 1 Sept. 2014, the detainees called for U.S. help in videotaped interviews released by the North Korean government.

“If I were still in the U.S. government, I would be reluctant to be a party to sending extremely senior Americans to pick up Americans who have been incarcerated. At what point can you continue to do that? At what point does this become a benefit to the North Koreans, allowing them at any point to blackmail the United States?” said Straub.

Straub was part of the 2009 diplomatic mission with former U.S. president Bill Clinton to free two American journalists.

Sponsored by the Korea Program and the Center for East Asian Studies, the Korean Studies Writing Prize recognizes and rewards outstanding examples of writing by Stanford students in an essay, term paper, or thesis produced during the current academic year in any discipline within the area of Korean studies, broadly defined. The competition is open to both undergraduate and graduate students.

Benjamin Lokshin, coterminal student in East Asian studies, has won the 3rd Annual Korean Studies Writing Prize with his paper titled "Speech levels in DPRK society." Benjamin completed his undergraduate degree at Stanford in linguistics, and will continue on this fall to complete his MA in East Asian Studies.