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The recent death of North Korea’s Kim Jung II has triggered an intense level of global political and economic speculation.(2) Andrew Chappell, head of European, African, and Middle Eastern fixed-income trading and sales at Exotix, explains that the recent death has opened “unlimited option trade with enormous potential gains.”(3) It is logical that in an era of globalisation and an increase of community democracy,(4) the Democratic People’s Republic of North Korea (DPRK) will have to leave its state of petulant isolation and be forced to access the international global economy in order to avoid an economy and regime collapse.(5)
However, what does this mean for Africa? Africa (and the international community) can only speculate the political outcomes and prepare for investments, until the leadership position is officially filled. This article aims to discuss the tentative North Korean political situation with its Asian Neighbours, as well as the possibilities for future economic development. It will be argued that this may be an opening for African countries to increase their foreign direct investment (FDI) opportunities, as they may be more favourable suitors for North Korea.
An Asian squabble over North Korea
Asian relations with North Korea, at present, are even more strained from a political and economic dimension. This is important to discuss because the strain may cause the DPRK to seek favourable relations elsewhere. One of the immediate concerns is that negotiations regarding North Korea’s nuclear programme have been ceased during the transition period. This programme has been under great scrutiny as North Korea, who has not hidden their nuclear ambitions, has been suspected to develop nuclear weapons in the past years.(6) And while the DPRK has declared that the policies will not change, the West is anxious to avoid a disastrous Pyongyang Winter.(7) However, the scrutiny over the nuclear capabilities has not been the DPRKs only qualms with the international community. Their poor economic planning, experiences with natural disasters, difficulty in modernising the agricultural system, and general economic plight has dilapidated the North Korean economy to the extent that an estimated two million citizens have died from disease and famine.(8) Whilst North Korea continues to benefit from aid agencies, it has prioritised military programmes. The Government has subsequently neglected civilians, which has culminated in mass human rights abuses.(9)
This belligerence and neglect has drawn the attention of its neighbours in South Korea, who have been lobbying for reunification of the two countries.(10) For North Korea, reunification would entail an increase in the standard of living and a sustainable economic recovery for the region.(11) However, this reunification is highly unlikely because the two countries experience reciprocated hostility and North Korea is adamant in the survival of the current leadership dynasty.(12) Although North Korea has received considerable aversion from many Asian and Western critics for its personality cult and its consequences, its Chinese neighbours have not ostracised the DPRK.(13) In return, the close and long-term diplomatic relations have benefitted China(14) by contributing to North Korea’s imports and exports by a combined 80%.(15) While China benefits from trade relations and the status quo of the DPRK, it is adamant to prevent state or regime disintegration because the possible refugee influx at China’s North Korea border will place immense pressure on economic, social, and political proponents.(16) China, therefore, has considerable influence over North Korea’s small economy, which prohibits North Korea from developing other trade partners and its export and production capabilities of manufacturing, machinery, chemical products, and natural gases.(17)
Thus, as the West looks to North Korea’s Asian neighbours, such as China or South Korea, the question is what should their “actions be to promote peace and stability in the region.”(18) North Korea’s reaction has been stubborn, emphasising that there will not be any foreign policy changes.(19) And as North Korea is treated as the international system’s “perennial petulant child,”(20) discontent and obstinacies may continue to grow with arguing parties. Although the scrutiny of the DPRK has been long-standing, the recent death of Kim and the transition into new leadership may give rise to the development of new relationships and, therefore, many investors should begin to court North Korea.(21)
Africa’s economic and political potential as a desirable suitor
Many observed Kim’s death with a sense of relief;(22) however, it is observed that this event has presented both North Korea and its suitors with a unique opportunity during its transition period to climb out of its dire economic situation.(23) As Kim’s son, Kim Jong Un, is expected to continue the dynastic dictatorial rule,(24) North Korea may seek new ‘friends.’ The DPRK is not isolated from the majority of Africa. In fact, it may be considered that African countries have a lot in common with North Korea. For example, Africa is not “entirely peaceful or democratic.”(25) This political similarity denotes that similar regime cases are likely not to be intrusive in the others’ domestic affairs, in comparison to China, South Korea, and the West. Therefore, this acceptance places less pressure on North Korea and thus makes way for friendly or cordial relations.
Another similarity is that Africa receives great criticism regarding the manner in which it conducts its political and economic affairs as, on occasions, it has been called the “hopeless economy.”(26) An example is noted of the criticism of an African pariah state, Eritrea; Christian Science Monitor likened Eritrea to North Korea in a 2009 article due to its belligerent attitude, its militant ways, and failing economy.(27) A third similarity is that several African countries also experience a great degree of economic plight and dependence on external aid,(28) as approximately 25% of African countries are dependent on aid.(29) Africa and North Korea face extreme difficulties dealing with international debt, and the constant concern remains that sustainability must be attained.(30)
Based on political and economic similarities and favourable diplomatic relations, it can be deduced that North Korea could view Africa (and relationships with African countries) positively. Therefore, Africa can be an amiable trading and investment partner to the DPRK. Africa has proven that it does not need to be an exclusive partner to either the West or East, and, therefore, it can “explore a whole range of possibilities of socio-economic, political, and cultural development.”(31) Although the African continent still faces periodic ethnic conflict, widespread corruption and substantial levels of income inequalities, it has an impressive potential for growth.(32) Trade has increased by 200% since 2000, economic planning is becoming increasingly long-term oriented, and Africa has a great appetite to acquire and apply new technology.(33) The international community is primarily interested in Africa because of its raw mineral wealth, which subsequently causes a new economic scramble to invest cheaply in African resources. This occurrence denotes that the international community may continue to marginalise Africa in the international economy because they are lacking in confidence and resources.(34) Therefore, it is recommended that Africa increase its investment capabilities.
Although the DPRK offers considerably less than its Asian counterparts and is considered technologically inferior because technology development has been retarded by the Government,(35) it may be positive for African investment as Africans have more products and services to offer the DPRK. Such an example is noted in North African countries such as Algeria and Egypt, each of which has a long-standing and fruitful investment in North Korea.
Egyptian-owned telecommunications company, Orascom Telecom Holding, launched a W-CDMA mobile service in Pyongyang in 2008. This venture, which is North Korea’s only 3G mobile network, continued to branch out to other North Korean cities, as well as small construction projects through Orascom Construction.(36) This investment contributed to a sizeable 34.2% of North Korea’s imports and great revenue for African developed conglomerate, Osracom. Kim’s meeting with Osracom Chairman, Naguib Sawiris, was a pleasant occasion as Osracom’s investment had been successful in Pyongyang.(37) This is a positive example of Kim’s approval, which could influence future investments, especially as Osracom is a company that plays a great role in North Korean telecommunications.
Other notable diplomatic relations in Africa, which are likely to develop, are with West African giant, Nigeria. A 2010 diplomatic visit to the Nasarawa province left both parties with cordial feelings, as Umaru Tanko Al-Maruka, Nasarawa State Government Official, said that Nigerian doors are open to North Korean investment. Ambassador John Haske replied that they are looking forward to improving technological and economic relations.(38)
Furthermore, North Korea’s efforts have contributed to African economic relations through architectural and construction ventures in Africa by constructing commemorative landmarks and other architectural structures in several African countries. The most renowned monument is the Senegalese African Renaissance monument in Dakar.(39) State-run construction company, Mansudae, has completed all of its international projects in Angola, the Democratic Republic of Congo (DRC), Equatorial Guinea, Namibia, and the Republic of Congo (RoC).(40) Each of these projects has contributed to North Korea’s foreign capital, amounting to approximately US$166.6 million, from 2002 to 2010.(41) The exclusive cooperation between Mansudae and Africa since 2002; denotes that Kim approved of the African and North Korean relationship and should therefore be built upon, as successor, Kim Jong Un, is speculated to maintain the dynastic rule.(42) Although the relationships with the above-mentioned African countries are not very close, there is a great possibility that these relationships may be developed in a similar economic fashion. By providing Africa with a semi-exclusive favourable relationship with North Korea, Africa could build a profitable economic relationship with another Asian state.
While the death of Kim presents various possibilities for the international community, the West hopes for the possibility to end a nuclear stalemate and Asian neighbours’ squabble over who gets to be the keeper of North Korea. Existing favourable relations with Africa can be maintained and increased, as Africa should portray itself as a desirable diplomatic partner. Therefore, it is of great importance that Kim approved of African-North Korean relations, as it could and can serve as a stepping-stone for future African investment. The death of Kim promotes Africa by leaving behind cordial relations that can be built upon. Furthermore, the situation of North Korea’s economy pits it at a similar level to African developing countries, which currently have more to offer North Korea. The recent speculation trigger may suggest numerous suitors to North Korea; however, Pyongyang may hold African investors in warmer regards. Therefore, Africa should be (and remain) interested in courting North Korea, because the Asian country may be more likely to accept, and Africa may be viewed as an equal, as future trade and investment marginalisation may be prevented.
(1) Contact Arina Muresan through Consultancy Africa Intelligence’s Asia Dimension Unit (email@example.com).
(2) ‘North Korean Bonds? Now Could Be the Time’, The Wall Street Journal, 23 December 2011, http://online.wsj.com.
(6) ‘North Korea Profile’, BBC News, 1 January 2012, http://www.bbc.co.uk.
(7) ‘Kim Jong II: what next for North Korea’, BBC News, 19 December 2011, http://www.bbc.co.uk.
(10) ‘How to reunite Korea without going broke or creating chaos‘, Reuters, 20 December 2011, http://www.reuters.com.
(14) ‘What will China’s next move on North Korea be?’, Time Magazine, 24 November 2011, http://www.time.com.
(15) ‘North Korea’, CIA Factbook, 20 December 2011, https://www.cia.gov.
(22) ‘North Korea's Kim Jong Il's demise splits Zimbabwe‘, The Africa Report, 20 December 2011, http://www.theafricareport.com.
(24) ‘"Great successor" poised to take over North Korea’, Reuters, 28 December 2011, http://www.reuters.com.
(25) ‘Africa’s hopeful economies’, The Economist, 3 December 2011. http://www.economist.com.
(27) ‘Eritrea: Africa's version of North Korea?‘, The Christian Science Monitor, 10 November 2009, http://www.csmonitor.com.
(29) ‘A 2010 economic outlook: Promoting development after the economic recession’, Consultancy Africa Intelligence, 28 June 2010, http://www.consultancyafrica.com.
(31) ‘South Korea in Africa: Understanding South Korea’s interest in Africa (Part II)’, Consultancy Africa Intelligence (CAI), 18 July 2011, http://www.consultancyafrica.com.
(34) ‘The Marginalisation of Africa in World Trade’, International Food Policy Research Institute, http://www.ifpri.org.
(35) ‘In North Korea, the Internet is only for a few - Technology & Media - International Herald Tribune’, The New York Times, http://www.nytimes.com.
(36) ‘North Korea and Egypt: friends with benefits’, The Global Post, 8 February 2011, http://www.globalpost.com.
(37) ‘North Korea’s Kim Jong Il Meets Orascom Chairman in Pyongyang’, Bloomberg, 24 January 2011, http://www.bloomberg.com.
(38)‘Nigeria: 'Nasarawa Difficult to Develop', All Africa.com, 5 June 2011, http://allafrica.com.
(39) ‘Monuments to Freedom Aren't Free, but North Korea Builds Cheap Ones‘, The Wall Street Journal, 28 January 2010, http://online.wsj.com.
(40)‘Foreign currency earning construction in Africa’, Daily NK, 21 June 2010, http://www.dailynk.com.
Written by Rafeeat Aliyu (1)
Province Or State