North Korea’s en­try into the AIIB im­plau­si­ble, but still also de­sir­able

The China Post - - COMMENTARY -

North Korea this week down­played South Korea’s re­cent de­ci­sion to join a China-led fi­nan­cial in­sti­tu­tion as a trade-off for the de­ploy­ment of an ad­vanced U.S. mis­sile de­fence sys­tem on its soil. Urim­in­zokkiri, the North’s pro­pa­ganda web­site, claimed the U.S. was strength­en­ing its push to send a Ter­mi­nal High Altitude Area De­fence bat­tery to the penin­sula in re­turn for let­ting the South be­come a founder mem­ber of the Asian In­fra­struc­ture In­vest­ment Bank.

Seoul seems to have left some room for Py­ongyang to make this ar­gu­ment by fail­ing to take the ini­tia­tive in deal­ing with the two sep­a­rate is­sues at an early stage. Still, it is too hasty to de­fine the THAAD de­ploy­ment as a quid pro quo for the AIIB en­try.

Seoul’s an­nounce­ment of its de­ci­sion to join the AIIB came well af­ter the UK de­fied the U.S. to de­clare its in­ten­tion to par­tic­i­pate in the China-ini­ti­ated or­ga­ni­za­tion, fol­lowed by a string of other West­ern coun­tries. If South Korea opts to al­low the U.S. to deploy the THAAD sys­tem here, the move should not be viewed as a trade-off for get­ting closer to China eco­nom­i­cally but as a sovereign act to counter North Korea‘s in­creas­ing nu­clear and mis­sile threats.

The North might feel more bit­ter about the South’s planned en­try into the AIIB as its own at­tempt to join the in­sti­tu­tion was bluntly re­buffed by Bei­jing. A se­nior North Korean of­fi­cial re­port­edly ap­proached the pre­sump­tive in­au­gu­ral pres­i­dent of the AIIB, Jin Liqun, prob­a­bly in Bei­jing in Fe­bru­ary, only to be turned down.

This out­right snub re­sulted from Py­ongyang’s fail­ure to present a “far more de­tailed break­down” of its econ­omy and fi­nances, ac­cord­ing to a re­port by the Lon­don-based Emerg­ing Mar­kets. The re­jec­tion came as a shock to North Korea, which re­mains en­tirely ab­sent from the global mul­ti­lat­eral fi­nan­cial ar­range­ments, as it seems to have re­garded its membership of the China-led body as a re­al­is­tic am­bi­tion, the re­port said, quot­ing uniden­ti­fied sources. How­ever, out­siders might not be sur­prised with Bei­jing’s dis­missal of its im­pov­er­ished neigh­bor’s ap­pli­ca­tion. Amid lin­ger­ing con­cerns par­tic­u­larly from the U.S. about the trans­parency and ef­fi­ciency of the new devel­op­ment bank, China cer­tainly found it im­pos­si­ble to ac­cept the North into the in­sti­tu­tion with­out se­cur­ing spe­cific data on its eco­nomic and fi­nan­cial sit­u­a­tion.

From a stand­point of lay­ing the ground for the even­tual re­uni­fi­ca­tion of the penin­sula, it would still be de­sir­able for the North to be­come an AIIB mem­ber much later. Its membership might help in­duce the iso­lated regime to em­bark on re­forms and open­ness. The South might be less bur­dened with fund­ing projects to rebuild the North’s crum­bling in­fra­struc­ture.

It is un­likely, how­ever, that Py­ongyang will be ready and able to dis­close cred­i­ble in­for­ma­tion on its econ­omy and fi­nances to a sat­is­fac­tory ex­tent in the fore­see­able fu­ture. The bar­ri­ers to its AIIB en­try might re­main too high for its os­si­fied sys­tem for a long time. It is still hoped that the hu­mil­i­at­ing ex­pe­ri­ence of be­ing spurned by its only ma­jor sup­porter might make the North feel the need to im­prove its tat­tered econ­omy and fi­nances.

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