Let’s start with an introduction of yourself and your work on North Korea and Korean reunification. What is your approach to North Korea and why did you decide to write this book?
Iverson: I’ve lived in Korea for more than eight years. I’m a family man, a husband and father. My wife is also a PhD—a Polish theoretical physicist—and our adolescent son’s first language is Korean—of three languages he speaks fluently. We’ve gone native in Korea… in this safe and friendly culture. We have some dear friends.
Professionally… I’m a gadfly – I question authority, the status quo. After analyzing the reasons for a history of status quo policy failures it becomes possible to learn from mistakes and seek more productive alternatives. My approach to denuclearizing North Korea and ending this humanitarian tragedy is based on a strategy that has never been tried before—and that’s good.
My interest in the Korean problem came to me rather suddenly once I realized political control could be bought in North Korea and this whole damn problem could end without military conflict. I became convinced that Korea could be reunited and Kim’s nuclear threat could be over within a few short months if either statesmen or successful businessmen would lead the way. I have spent six years designing a pragmatic and plausible unification model. Now it is up to others to take it over and get this done.
I’m tired of hearing our status quo experts say there are no good options in Korea. They just haven’t explored all the options. If policymaking and diplomacy were run like a business the people who have been working on North Korea policy would have been fired long ago. Attempts at coercion, containment, isolation, accommodation, and partial engagement have all led to frustration. Yet every current strategic suggestion for dealing with the Kim regime proposes a reincarnation of one of these failed policies. This qualifies as the definition of institutional insanity: proposing the same policies over and over again expecting different results.
In the grand scheme of things there are only punishments and rewards, but as every parent or superior knows, it’s their particular form and application that bestows legitimate authority and credible power. A strong military response to eliminate a threat to US security might seem reasonable at this point, but there are alternatives that can be less dangerous and more effective. I think personalized incentives might be the answer.
What are the incentives you refer to?
Iverson: After president Obama’s Leap Year Deal failed in 2012 the US demanded North Korea make legitimate concessions to denuclearize before talks could begin, but the Kim regime made it clear it will never do that, and so we shrugged our shoulders, continued with our war games off its coast, and that was the end of it… stalemate. Strategic patience merely kicked the can down the road, allowing Pyongyang to reach the brink of possessing a nuclear-tipped ICBM capable of killing hundreds-of-thousands of American citizens. The recent ICBM test should surprise no one. What were we thinking?
This is where we are today, and why the USS Carl Vinson and the USS Ronald Reagan Carrier Strike Groups were dispatched to Korean waters and the South Korea navy has deployed ship-to-surface missiles. Eventually this strategic saber rattling and bellicose brinkmanship may lead to real consequences.
This increasingly negative and aggressive trajectory of relations can only turn positive and constructive through some form of engagement and the application of tangible incentives. Unfortunately for the Kim regime, the incentives I have in mind will force them from power, reunify Korea, denuclearize the region, and bring ubiquitous economic and security benefits to concerned nations. If the incentives I have prescribed were applied, the Kim regime would have no choice but to acquiesce… but with dignity and sufficient personal and financial security. For those who have not read my new book, Stop North Korea!, I have described in detail how an incentive-based culture and economic approach could be the answer to the North Korea problem. I hope people who can make a difference will read it, talk about it, and act on it.
In the book you ask readers to think of North Korea as a company with great potential, which has been under-performing, but its board of directors stubbornly refuse to leave and make room for someone who might run the company more successfully. To overcome this problem of leadership transition you propose that North Korea can be bought, that external investors should buy this “company” and give its “board of directors” (North Korean elites) a substantial severance so a new board can step in, bring new capital, and restart the engines. Could you expand on this notion? How can anyone bring this option to the table in 2017, under a Trump presidency and with mounting tensions in US foreign policy, and who could negotiate a deal of this magnitude?
Iverson: Now that’s a big compound question. I’ll answer the second part first. My mother made sure I had a liberal education. During the 2016 presidential campaign I mostly opposed Trump on domestic matters, but soon had to admit that he was taking a practical approach to international affairs, and connecting them to local sentiments. I predicted the electorate would respond to this and more than nine months before he was elected I told an audience of self-satisfied liberal political scientists in Seoul to prepare for the unexpected.
Not only was I convinced Trump would win, but I also concluded during the writing of this book that he would be more likely than Hillary to think outside the box and to implement the proposals I laid out. Irrespective of his scruples, Trump is a high-flying businessman who understands how to negotiate big deals with hard power using capital incentives and coercive strength. The art of the deal is really mostly the science of leverage.
But in the end it might not matter who was elected president in the US or South Korea. With the progressive nuclear threat, the moment of truth was going to come before 2020 anyway, and under extreme pressure my buyout idea would sound more plausible and appealing to any leader seeking an alternative to military action.
Say more about your notion of buying out North Korea.
Iverson: Well, the idea rests on a similar premise to the $50 billion Mofaz Fund proposed by a former Israeli general and statesman to buy out Palestine and empower moderate Arabs. Preposterous? I think not. Historically geopolitics plays out more zero-sum, while economics is usually more positive-sum. If anything it is absurd to think we can solve modern political disputes better with force than with capital investment. Ambassador Blackwill and Jennifer Harris argue this point in their brilliant new book, War By Other Means.
Over the course of the twenty-first century the modernization of foreign policy will involve a greater emphasis on geoeconomic statecraft and smart power economic solutions. There will simply be no other reasonable choice than this natural evolution… as conventional and asymmetric weapons become more lethal and ubiquitous. Most policymakers still think sanctions and punishment first, and have yet to enter into this new positive paradigm.
It took a long time to convince parents to refrain from spanking their children except under exceptional conditions. But such parental restraint seems to have become standard family policy today in progressive households. However, the threat of North Korea’s nuclear-tipped ICBM’s may be one such exceptional condition.
But force usually results in temporary compliance and creates unresolved anger; this resentment may resurface in destructive ways. Some haunting cultural memories linger for generations, like the brutality of indiscriminate carpet-bombing of North Korean cities by the US in the 1950s. North Korean leaders play up the fact that the US dropped more bombs in Korea than during the entire War in the Pacific, and killed nearly to a quarter of the civilian population. These were not smart bombs.
And now with the US rehearsing an invasion just off its coast… it is no wonder the Kim regime is seeking a nuclear deterrent. The trajectory of this dispute is leading to military action. But I think there is a way out… a way to create peace, and this is why I wrote Stop North Korea! I have a new policy idea.
My insight is that in order to denuclearize North Korea we must create insurmountable culture-wide economic incentives for reunification. This would peacefully remove the Kim regime from power. And the only way to do this is through the institution of a Reunification Investment Fund. After an original story about my idea was published in NK News the global media picked up this proposal, but falsely reported that it would take a $175 billion investment to denuclearize Korea. CNBC even reported my plan would replace Kim with other North Korean elites.
If one were to read my plan carefully one would see that it would probably take $4 billion of private investment per year—promised over seven years—to payoff North Korean military and political elites… and another $15 billion—again, over seven years—to personally incentivize the government bureaucracy and the impoverished population in Pyongyang to take action. I think a $30 billion fund, sitting idle in escrow, but ready to payout, might be enough to unify and denuclearize North Korea in a matter of months. Word of mouth spreads quickly. It wouldn’t take long for everyone inside North Korea to hear about this offer. And soon everyone will be talking about how to depose the Kim regime and join with the South.
Could we summarize your plan for somebody who has little knowledge of the situation on the Korean Peninsula, somebody who is not familiar with its intricacies? What would the benefits be for each part of the North Korea population?
Iverson: Sure. This is a gigantic bribe: if elites force Kim to acquiesce, we give them money. The average annual income in North Korea is about $1,000; it is over $30,000 in the democratic South. Enough said… it is this relative poverty that gives my reunification plan a chance. Even elites are impoverished by international standards. There are 200,000 millionaires in South Korea, but only a few hundred in the North. My plan would create 11,000 instant millionaires, and begin a long process of peace and reconciliation.
This reunification fund promises North Korean elites enough incentive money to compel them to make Kim Jong-un an offer he cannot refuse. This may result in a Palace Revolution led by ultra-elites—who would receive $20-30 million each if Kim acquiesced—or a coup d’état sponsored by well-compensated military elites—all generals are promised at least a million dollars. Or it could lead to mass insurrection or peaceful acquiesce. Each of these scenarios is of course preferred over military confrontation.
We have an international humanitarian responsibility to end Kim’s reign. Besides the nuclear threat, the UN estimates two million children are chronically malnourished and the regime holds more than 80,000 political prisoners in a Stalin-like gulag system.
The reason this Reunification Investment Fund was quoted at $175 billion is because I direct $125 billion—more than 2/3’s of the money—go directly to the impoverished masses over seven years, more than doubling average household incomes per year. This capital would come from public sources and is money that must be spent on development anyway… and it is best it enter the economy through individuals—motivating both reunification and bankrolling economic demand at the grassroots.
And for the masses, promises of stable food prices, modern medical and dental care for their children, job freedom, reliable water and electricity, improved infrastructure, and thousands of dollars in a personal bank account, will create a new world of optimism. If Kim does not acquiesce willingly, we may anticipate mass disappointment will lead to collective action.
This economic model uses the power of incentivizing an entire culture to produce elite political transformation to reunite Korea. It is based on sound principles of social science and would succeed if funded.
So where will the money for Kim Jong-un and his family come from? If not individual governments, who has that kind of wealth?
Iverson: Kim Jong-un and his family will receive no money. But I recommend Kim be allowed to keep a portion of the money he is reported to have squirreled away. I think even now Kim Jong-un might reasonably be recast as a young figurehead leader, not directly responsible for the purges ordered by the old hierarchy of the entrenched Party bureaucracy. This gives Kim a plausible free pass and safe exit from power, without international retribution.
The $4 billion per year for seven years that is necessary to payoff North Korean elites must come from private sources. I would expect a consortium of Korean chaebols, international corporations, and private individuals can raise this kind of capital. This might be all the money needed to spark reunification. But you can read about the details of a larger payout in the book.
Now, considering that the numbers in your plan seem to make sense, who in your opinion would be the best negotiator to strike a deal on these terms with the North Korean government? Who do you see, today, as willing and able to take this plan to the North Koreans?
Iverson: Good question. If not Donald Trump, then Bill Clinton with Jimmy Carter, if he is still alive. Of course, with South Korean president Moon Jae-in, and perhaps a chaebol boss. In traditional societies women made the peace—perhaps Michelle Obama, or a combination of enlightened billionaires and the media. I don’t know who might surface to champion this cause, but once the money is on the table, this peace plan can be signed and sealed quickly.
Coming to South Korea’s role in all this, we have seen the recent victory of Moon Jae-in, who is a left-leaning politician who could possibly support more dialogue with the North. What do you think would be the implications for the participation of South Korea into this plan? Does it matter what South Korea thinks?
Iverson: A wise and cooperative South Korean president could be a big help. This is Moon Jae-in’s chance to win a Nobel Peace Prize. But he needs the courage to really lead his people out of the darkness.
This brings us to a section of the book that is particularly fascinating. You explore the relationship between China and North Korea and the concept of ‘hostile surrogates’. In your view, China is propping up countries like North Korea to keep the US busy with a different range of problems, and to divert the eyes of the US from what is really going on in Asia. This is in contrast with a depiction of North Korea in the media, as a crazy place, run by an infantile dictator, which constantly tests the patience of its Chinese Patron. What’s your take on that?
Iverson: Yes, there is this standard ‘infantilization’ of Kim Jong-un in the media. He’s depicted as a screaming toddler, rattling a nuclear missile to protest unfair treatment or just to get his way… and to me, this is a dangerous underestimation of Kim. But the real danger is in taking president Xi and China at its word. The media has completely missed the real story.
China’s economic support for North Korea has increased four-fold since 2006, after North Korea exploded its first nuke. Beijing now purchases 90 percent of North Korea’s commercial exports, provides over a billion dollars in aid, 80 percent of its consumer goods, 90 percent of its energy, $100 million in UN banned luxury items, and enough food to feed over a million people each year. Profits from trade and aid with China directly and indirectly fund more than three-quarters of North Korea’s $6 billion military budget. So essentially, despite what Xi says, Beijing is paying for Kim’s nuclear program. I don’t understand how the media has missed this.
supports North Korea for security reasons. After establishing Pakistan as a nuclear power on one flank, China prefers a surrogate ally with nuclear muscle on its other flank. This relationship would dissolve if the Kim regime’s nuclear threat to the United States were unacceptable to China’s larger geostrategic objectives. This logic has escaped analysts who fail to identify the silent surrogate role Pyongyang plays in promoting Communist China’s historical anti-imperialist anti-Western foreign policy through the indirect transfer of technical knowledge and advanced weaponry to the Greater Middle East—especially to Iran and Syria.
There is abundant evidence for all of this. That is why I somewhat cynically argue that Beijing would surely withhold support if Pyongyang started selling weapons to Xinjiang rebels or to the Dali Lama. However, if Washington awakens from its strategic slumber and challenges China, Beijing may soon see no alternative and reluctantly back away from North Korea. How Beijing can do this while saving face is explained in my book.
And this is why sanctions have not worked so far and are unlikely to work in the future?
Iverson: Exactly. Justin Hastings new book, A Most Enterprising Country, documents this very well.
What’s the UN’s role?
Iverson: The UN may help ameliorate some pain and suffering, but it does not keep the country alive; China does… and will continue to until it is forced to pay a price.
Now, if things change with China and its relationship to North Korea…. what would happen in case of a sudden regime collapse and in the absence of a reunification plan?
Iverson: There is a map in my book showing how Beijing could claim a large portion of what is now North Korean territory, say, drawing a line from Anju in the west to Hamhung in the east. They might initially claim this resource rich territory as a buffer zone, and then, in time, annex it. China can do this because it has the strongest army in Asia and the US will never again fight China on the ground. Indeed, China might even sequester this land after a US surgical strike if it thought it could control regime replacement in Pyongyang and sooth international public opinion.
Let’s get now to some of the points in your book that may raise more than a few eyebrows. The moral substantiation of your plan may seem weak to those who believe that North Korea is the ultimate incarnation of an evil polity, much akin to Nazi Germany. How would you morally justify making a deal with North Korea?
Iverson: This isn’t Let’s Make a Deal, it’s let’s peacefully remove the Kim regime using cultural and economic incentives. To some this payment plan may seem unethical or even immoral, but most of the elites who will benefit are merely innocent inheritors of their fathers’ ill-begotten estate. They were not complicit in its original acquisition or in the malevolence that followed. We don’t punish the descendants of slaveholders or the children of thieves and murderers. This payment would largely amount to a bailout for the misdeeds of their ancestors—without moral hazard. The new North Korean elite is composed of good and bad people, like the elite in all nations.
Young South Koreans seem more detached from reunification issues than their parents. What is your take on this?
Iverson: I dealt with this question in my previous book. South Koreans are demotivated when it comes to unification because politicians, public intellectuals, and the media have not presented the entire picture. North Korea has enormously valuable natural resources—valued at $6-10 trillion US dollars—and according to a Goldman Sachs study there are intrinsic development synergies that would propel the GNP of a united Korea past France, Germany, and Japan in just one generation. Korean scholars and the media have not popularized all the facts. A unified Korea will be much richer.
Well, I hope this happens. I’d like to thank you for your time and for your efforts to resolve this Korean crisis. Thank You. Thank you very much.
Iverson: No, thank you for your intelligent questions and sincere concerns. I appreciate that you have read my book and can envision along with me the possibilities for a peaceful solution. Thank You.