Reading The Reactions To North Korea

This week’s news of the death of Kim Jong Il told us little about what will happen next in North Korea, a hermetically sealed society that is more like a prison than a country. But the varied reactions to the news spoke volumes about the rest of the world.

Leaders of what I consider “normal” countries, which are more often described as “Western” or “democratic,” reacted to the news with guarded responses. They stressed the universal desire to avoid war, which could devastate the entire Korean peninsula, and social unrest, which would heap further misery on the 24 million unfortunate souls who inhabit the Democratic People’s Republic of Korea.

In contrast to the more neutral statements of “normal” Western countries, China, Russia and Cuba responded mournfully to the leader’s death. Too often, for commercial or political reasons or maybe out of simple politeness, America and its allies pretend that these countries are or at least are becoming like us. They are not. Certainly, the people who live in those places deserve sympathy and respect for persevering within political systems that promote the governing party’s retention of power, rather than their nations’ progress. We do not need to look upon these nations as enemies. Yet, at the same time, we should never fool ourselves into thinking of them as our friends. The leaderships in Beijing, Moscow and Havana deserve the same level of trust that we would extend to a telemarketer.

These are the sorts of governments that count North Korea as a friend. China is Pyongyang’s main source of material and financial support these days, and it is the only country that is known to have gotten any advance notice of Kim Jong Il’s death before Monday’s announcement. The Chinese foreign ministry thereupon declared that it was “distressed to learn of the unfortunate passing of the senior-most North Korean leader Kim Jong Il.” China expressed “deep grief” and described the deceased as both a “great leader” and a “close friend of the Chinese people.”

In case anyone has forgotten, Kim Jong Il inherited power from his father, North Korean founder Kim Il Sung, a Soviet protégé who launched the Korean War in 1950, fought the United States and its allies with the help of millions of Chinese troops, and then governed in a close alliance with both China and the Soviet Union (before the U.S.S.R. broke up) until his death in 1994. His son then took over and allowed millions of North Koreans to starve in repeated famines, while he himself lived in Middle East-style luxury and his military pursued nuclear arms amid crippling international sanctions.

He could not have done it without the lavish support of the Chinese, who, for reasons I have previously covered, found it more convenient to keep Kim’s despotic regime around than allow it to go under.

That “great leader” compliment in the Chinese statement caught my eye. In North Korea, founder Kim Il Sung is known as the Great Leader, while his son was called the Dear Leader. I don’t know whether it was deliberate or just a matter of translation, but, in English at least, it sounded as though Beijing sought to accord Kim Jong Il a postmortem status equal to that of his father in the pantheon of ruthless communist dictators. Keep this in mind the next time a Chinese dignitary visiting North America or Europe describes his nation as a modern, advanced society.

Russia’s response was more restrained but similarly tilted toward acceptance of the Pyongyang regime. Foreign Minister Sergei Lavrov was quoted by news agencies saying that Kim’s death will not affect “friendly ties” between the two countries. In Cuba, whose beaches are crowded this holiday season with sun-seeking tourists from Canada and the European Union, the State Council declared a three-day period of official mourning that ended yesterday.

The Castro-to-Castro regime in Havana may see some uncomfortable parallels with North Korea’s Kim dynasty, which reached its third generation with the official succession of Kim Jong Un, the roughly 28-year-old son of Kim Jong Il. But I doubt even the Castros genuinely admire anything about the despotic North. In contrast to Cuba, which has worked around a half-century of American sanctions by fostering ties with the rest of the world, the Kims have ham-handedly isolated themselves from virtually everyone.

America’s genuine friends share our interest in a stable, peaceful, non-nuclear Korean peninsula, one in which North Koreans could have at least a reasonable standard of living and some modest personal freedom. The fact that China, Russia and their allies do not share these goals tells us that these powers will never be our friends as long as their authoritarian governments hold sway. There is little we can do to change this, but that does not mean we should forget it.

North Korea provides many practical benefits for China. Its dependence on Beijing makes China the only foreign power with real leverage in Pyongyang. In turn, this makes us depend on China to help restrain North Korean nuclear and missile proliferation efforts, and this gives China power to extract concessions from us in other areas – potentially including China’s territorial claims in the seas around eastern Asia.

Keeping the Kims in control also may prevent a unified, democratic and prosperous Korea – one that is aligned with the United States – from bumping up against China’s own border. At least, it prevents a hoard of starving and desperate Koreans from seeking refuge in China. And it occupies American troops and attention that otherwise might be available to counter any future Chinese thrust to take control of Taiwan by force.

It is difficult to see exactly what Russia gets from North Korea other than a similar bulwark against refugees, though the Siberian region adjoining North Korea is not as attractive as China’s fast-growing cities. Vladimir Putin’s Kremlin seems stuck in a Cold War time warp, unable to see that Russia’s most promising course is to follow its former satellites into the camp of modern democratic states. The recent demonstrations against Russia’s unfair parliamentary elections may be a sign that Russia’s people are arriving at this conclusion faster than Putin and his comrades.

We will have to wait to see whether the latest Kim can actually take and hold power in Pyongyang. Regardless, until and unless something radical happens, at least we recognize what type of government we are dealing with in North Korea. Elsewhere, it is important for us to remember who our friends are. And, also, who they aren’t.

About Larry M. Elkin 534 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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