Business World, 1 April 2018


It’s an Easter miracle! Kim Jong Un’s visit to President Xi Jin Ping and Kim’s pledge to “de-nuclearize” was an Easter treat. It lifted somewhat the gathering anxiety over a nuclear confrontation in the Korean Peninsula.

Since inheriting power in 2011, Kim had successfully painted himself as a “mad man” ready to plunge the world into a nuclear Armageddon. An erratic dictator in control over a growing nuclear arsenal and a delivery system that could make Seoul and Tokyo into a “Hiroshima and Nagasaki” reprise, inspires dread. To the Americans, a nuclear delivery system which nibbles at the outer edge of America is particularly alarming.

Kim reminds many of Adolf Hitler.

Advised in 1945 by close confidant and Air Marshall Hermann Goering to negotiate a truce with the rampaging allied forces, he replied, “We will never surrender. We may go down but we will bring much of the world down with us.” Hitler, by now raving mad, was determined that German super race would be honored by extinction than by survival under the yoke of a new Versailles Treaty. His massive gamble on the V-2 missile, the super submarine, U-977, and the Uranprojekt (Uranium bomb project) had run out of time. But had the war protracted a year longer, it would have ended in an inconclusive stalemate as at Panmunjom. We do not know what’s in Kim’s head. Why or how this pivot towards compromise came about is a mystery. Did the squeeze play initiated by President Donald Trump hit home hard? Perhaps, the Chinese felt that further provocation of the equally unpredictable Trump was risking too much.

One thing stands out: that the de-nuclearization pledge was made to President Xi, the one person in the world who can hurt Kim, gives it credibility. If things go as hoped and prayed for, Kim Jong Un will confer with President Moon of South Korea in Panmunjom and will meet with President Trump in May. And if de-nuclearization and a semblance of a lasting peace ensues, Kim will be the early favorite for the Time Magazine “Man of the Year” award and for the Nobel Peace Prize!

Is Kim a madman or a genius? If a madman with only random flashes of sanity, he will soon enough revert to the Orwellian strategy of continued nuclear build-up, of confrontation and the absolute loyalty of his deprived subjects. We’ll be back to square one with only a fading memory of hope.

But he may also play the genius card. One may reasonably assume that Kim has by now a nuclear arsenal of Hiroshima-type bombs. His “de-nuclearization” will mean only a cessation of effort to add to that arsenal, not to empty it. He can vie for the status granted by the world to Israel, a dead certain nuclear bomb possessor but which, unlike the Kims, it neither admits nor denies. Charles de Gaulle’s force de frappe (deterrent) nuclear logic in the Post WWII era enjoys widespread assent.

What will the genius Kim demand in return? He will likely ask Trump for the de-Americanization (no American bases and no joint military exercises) of the Korean Peninsula. That will address North Korea’s valid fear of imperialist takeover. Since this somewhat unburdens the American taxpayers as the world’s policeman, Trump, who did after all sound the call for South Korea and Japan to pay more for the American umbrella, may bite. Likewise, South Korea today, unlike the South Korea of the 1950s when most all of the heavy industries in the Peninsula were in the North, can fend off any war-like overtures by a de-nuclearized North Korea.

Kim will then delight the South Koreans with an irrefusable offer: convert the Panmunjom “standoff” into a “peace treaty” in return for de-Americanization. Further, Kim may demand from South Korea and Japan a mini-Marshall Plan for a string of industrial and export enclaves and the requisite transport infrastructure. This will be music to the ear of the South Koreans.

As a guarantee, the South Koreans will want to draw in Chinese investments which Kim cannot afford to treat shoddily. Kim will demand absolute control of the labor contracts for social control. Kim does not have to re-invent the wheel; Deng Xiaoping as model beckons.

If he manages to swing this historic deal, he will be adjudged a genius in history. It takes genius to convince the world that he was “mad” so that the world will find fair bargain in any demand in lieu of a nuclear madness. There is precedent to this in diplomacy and Game Theory. The Gang of Four Theorem in Game theory says that to attain stable cooperation, two things are required: first, each must convince the other that he has a live bomb that could blow the other away; and (2) each must convince the other that one is a bit “mad” — that is, willing to pull the pin even if in the process he is blown away himself. Then “peace” will be maintained by “mutually assured destruction” (MAD) as Daniel Ellsberg of the Pentagon Papers fame put it. This, many claim, kept the Cold War era confrontation “Cold” instead of “Hot.”

Why should Filipinos care? For us it’s a threat.

If North Korea opens up, it will be the next vacuum cleaner of direct foreign investment in East Asia in the coming decade. Think of current vacuum cleaner, Vietnam, only vastly larger. North Korea will be an export platform Eden: low wages, industrious and motivated work force, no labor unions. The Build, Build, Build party of President Duterte will get the dregs of the FDI flow. Again another country that, in our rear view mirror today, will, in no time, have the Philippines in its rear view mirror.

If, that is, Kim plays the genius card. And, if the Philippines keeps getting itself mired in the mudflats of thoroughly futile political projects.