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Issue #1787      July 26, 2017

Taking Issue – Rob Gowland

What’s really behind the US interest in Korea?

It is an elementary rule when examining the foreign policy decisions of capitalist governments to “follow the money”, in other words, who profits from the decision? The US and its imperialist allies, including the Australian government, have made a huge song and dance – have, in fact, waged a propaganda war – against tiny North Korea’s efforts to defend itself against the USA’s constant threats of aggression. Why? Because the US is actually scared of North Korea (more properly called the DPRK – the Democratic People’s Republic of Korea)? No, of course not.

The DPRK have large amounts of rare earth metals which are used in the making of high-technology products.

The US maintains a huge military presence in South Korea (including nuclear weapons in far greater numbers than the North possesses). This preparation for fighting a new war on the Korean Peninsula does not sit well with the population of South Korea, who are only too aware of the utter destruction inflicted on the country by the last US attempt to eradicate Communism from the region.

Claims that these nuclear forces and the recently installed US anti-ballistic-missile systems are for the “defence” of South Korea are derisively rejected as yet more propaganda, which they are. All of the DPRK’s actions are concerned with warning the US that it will defend itself if the US tries to attack it again.

So why is the US persisting in its hostile economic and diplomatic campaign against this small country in the top half of the Korean Peninsula? Partly it is because they got beaten to a standstill the last time they tried to eliminate a socialist regime from Korea which moreover shares a border with both Russia and China. That defeat must still rankle with the upper echelons of the US military.

Partly they are persisting because the US strategy of maintaining global paranoia about a supposed “Communist threat” or a “Russo-Chinese threat” (or both) requires the existence of convenient “hot spots” that the bourgeois media and obliging politicians can point to in their efforts to sustain this paranoia (without which their bloated military budgets would be laughed into oblivion).

However, capitalist governments, conscious that they are but the tools of powerful corporations, also have another and decidedly more important factor to take into consideration: that is, how much money will it make and for whom? How does that apply in the case of the DPRK?

Steve Mollman, in Quartz, earlier this month reminded his readers that “North Korea is sitting on trillions of dollars of untapped wealth, and its neighbours want it”. He writes: “Below the nation’s mostly mountainous surface are vast mineral reserves, including iron, gold, magnesite, zinc, copper, limestone, molybdenum, graphite, and more – all told about 200 kinds of minerals. Also present are large amounts of rare earth metals”. The latter of course are used today to make smartphones and other high-tech products.

“According to one estimate from a South Korean state-owned mining company, [the DPRK’s mineral reserves] are worth over US$6 trillion. Another from a South Korean research institute puts the amount closer to US$10 trillion.”

That US corporations covet those trillions goes without saying. At the same time they (or their government) are determined to prevent the people of the DPRK from exploiting their country’s mineral stocks themselves. The economic and diplomatic blockade they have maintained against the DPRK has successfully inhibited development of mining in the country.

However, despite the difficulties the DPRK endures, mining – which has been a priority industry since the 1970s – did slowly develop until the beginning of the 1990s and now makes up about 14 percent of the DPRK’s economy. However, Mollman notes that mining production has declined since then: “The nation lacks the equipment, expertise, and even basic infrastructure to properly tap into the jackpot that waits in the ground.”

In April, Lloyd R Vasey, a senior adviser at the US Centre for Strategic and International Studies, noted that: “There is a shortage of mining equipment and North Korea is unable to purchase new equipment due to its dire economic situation, the energy shortage and the age and generally poor condition of the power grid.”

After the DPRK conducted its first nuclear test in 2006, in response to US threats, the US used its clout at the UN to secure sanctions against it. However, says Mollman, “last September, South Korea’s state-run Korea Development Institute said that the mineral trade between North Korea and China remains a ‘cash cow’ for Pyongyang despite UN sanctions, and that it accounted for 54 percent of the North’s total trade volume to China in the first half of 2016.”

A 2014 report on the DPRK’s mining sector by the United States Geological Survey noted that “The mining sector in North Korea is not directly subject to international economic sanctions and is, therefore, the only legal, lucrative source of investment trade available to the country.” According to Mollman, “in 2015 China imported US$73 million in iron ore from North Korea, and US$680,000 worth of zinc in the first quarter of [2016].” The ever-alert US consequently shifted its economic attack – and the focus of its UN lobbying – to the DPRK’S underground resources. In March, 2016 they got a resolution through the UN banning the export from the DPRK of gold, vanadium, titanium, and rare earth metals. Not satisfied, in November 2016, they got another resolution through the UN capping the DPRK’s coal exports and banning shipments of nickel, copper, zinc, and silver.

Not surprisingly, faced with this kind of economic warfare, the DPRK authorities have resorted to a variety of “sanction-busting” stratagems to enable it to continue to export its products. According to Mollman, “earlier this year a group of UN experts concluded that North Korea, despite sanctions, continues to export banned minerals.” [Shock horror.]

He adds: “They determined, as well, that North Korea uses another mineral – gold – along with cash to ‘entirely circumvent the formal financial sector’.” That sounds like they have resorted to the tried and true capitalist practice called bribery and bribery has been a staple of capitalist business methods since ... well, since capitalism began.

In 2015 China imported about US$1 billion worth of coal from the DPRK, about 40% of all the country’s exports, but in line with the climate targets agreed in Paris, China has now begun restricting coal imports from its neighbour. In the first quarter of this year, China’s imports of coal from the DPRK fell by 51.6%. Nevertheless, China’s overall trade with the DPRK actually increased 37.4% in the first quarter of this year compared to the same period last year. “Its imports of iron ore from North Korea”, says Mollman, “shot up 270% in January and February from a year ago.”

About five years ago China spent some US$10 billion on an infrastructure project near the DPRK border, primarily to give it easier access to the large iron ore deposits in the DPRK’s Musan County, right by the border. And Russia, which also shares a (smaller) border with the DPRK, in 2014 developed plans to overhaul North Korea’s rail network in exchange for access to the country’s mineral resources. That particular plan is still being worked on.

Also, anxious not to miss out on this financial bonanza is the USA’s ostensible side-kick, South Korea (ROK, Republic of Korea). In May this year, the ROK’s Ministry of Land, Infrastructure and Transport invited companies to submit bids on possible infrastructure projects in the DPRK, especially ones regarding the mining sector. The inducement the Ministry offered was that the available mineral resources would enable the bidders to make a profit even after they had covered the expense of repairing the North’s decrepit infrastructure, including the aging railway line.

But however much the corporations of the ROK might covet the mineral wealth of the DPRK, it will not come by conquest but by peaceful reunification. And the people of the DPRK are not likely to just hand it over to ROK capitalists. The latter, of course, are looking at the example of the reunification of Germany, where the Socialist property of the GDR was handed over to German corporations without resistance.

This time, however, the circumstances are different and the fate that befell the GDR is unlikely to be repeated ever again. Just don’t be fooled by US-originated stories that they are trying to “rein in a madman”. As always, they have their eye on a prize.

Next article – Lost in exile

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