March 23, 2007

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The North Korea riddle

This site has many clever readers. So I have a puzzle that needs explaining: why is North Korea so fixated over the US$25 million sitting in a Macanese bank? I understand that on principle they want their money back etc., but the Yanks have basically said they can have it and are working through the motions. So why did the Norks walk out of the latest nuclear talks, embarassing themselves and more importantly China too? Is the place that desperate for foreign exchange that US$25 million makes all the difference? Is it a trust issue? Or is it simply pretext?

Outside of the obvious observation that the Norks are not rational, any other explanations?

posted by Simon on 03.23.07 at 02:24 PM in the Koreas category.


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I think they just want an excuse to keep their nukes and not go through with the deal. They'll say the US didn't go through with it's part of the bargain and continue to put out the propaganda.

posted by: Peter Pan on 03.23.07 at 04:57 PM [permalink]

Yes, the North Koreans are not rational.

They always agree to something, or say something and then change their minds the next day.

I think they should get their money back, but give it to them in North Korean currency. That will screw them!

posted by: joel on 03.23.07 at 08:50 PM [permalink]

$25 million buys a lot of cigars, champagne and whatever else Kim Jung Il likes to do in his spare time...

Isn't it true that the richest people are also the stingiest?

posted by: dezza on 03.24.07 at 01:18 AM [permalink]

It's because the US Treasury didn't admit they lied about the money laundering. It's because the US Treasury didn't lift the sanctions prohibiting banks that do business with the North Koreans from doing business in the US.

It's not just the US$25 million. It's the fact that there are hard core neo-cons in the Bush Administration, who want to see any and all diplomacy fail.

I've written on this several times, but go read Arms Control Wonk on this very issue from 9 days ago.

posted by: Tom - Daai Tou Laam on 03.26.07 at 08:46 AM [permalink]

Thanks for the link, Tom. One of the news reports today says the issue is that Bank of China in Beijing doesn't want to receive the money as they fear the consequences for their bank if they accept the funds. That makes sense.

What doesn't make sense is why the Norks can't deal with things in parallel, rather than running out of last week's meeting on nukes for the sake of a small amount of money (for a country).

posted by: Simon on 03.26.07 at 01:48 PM [permalink]

It isn't the money. The US Treasury released the money (with strings), but they continued the prohibitory sanctions on any bank doing business with the North Koreans. These were supposed to be dropped as part of the 6 Party deal with Chris Hill, but the US Treasury stabbed the US State in the back on this one.

Think of trying to do legitimate international business with no access to an internationally connected bank. It's an attempt by US neo-cons for regime change via economic isolation based on trumped up charges of money laundering (unless you believe Ernst and Young are Nork flunkies).

They stabbed State and Chris Hill in the back because the 6 party deal would end this effort at regime change and leave the neo-cons with Iraq as their foreign policy trophy for their 6 years of total control of the US government and provide fodder for those that favour negotiation and diplomacy to end nuclear proliferation disputes. (see also US neo-con theorists like Bill Kristol banging the drum of war over diplomacy to deal with Iran.)

posted by: Tom - Daai Tou Laam on 03.26.07 at 04:11 PM [permalink]

Over at China Matters they've got a similar take to you, Tom, with a pretty extensive summary of the BDA issue.

There's an obvious answer: China (the country) stand in the middle - they transfer $25mm to NK and get the money out of the BDA account. Think of it as diplomatic laundering.

posted by: Simon on 03.26.07 at 06:16 PM [permalink]

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