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North Korea Gets a Crash Course in Capitalism


A delegation of 12 DPRK officials visits the US amid speculation the last Stalinist state may be open to economic reform.

Some, more hawkish Korea-watchers brush aside track-two diplomacy as a rube's game being played with a staunchly anti-American entity that already knows far more about the outside world than it lets on.

However, there aren't many other options in this increasingly unstable era, as a North Korean power handoff from Kim Jong Il to his son, Kim Jong Eun, is said to be in the offing.

Professor John W. Lewis of the Center for International Security and Cooperation at Stanford, who has been involved in track-two negotiations with North Korea since 1986, told the Stanford News Service, "They would definitely prefer to have these talks and meetings with American officials. But since American officials won't talk to them, we're the only game in town. We have this weird access."

A wholesale transformation of the North Korean political-economy would surely reap unprecedented benefits for the world at large. Of course, it would also benefit tremendously the foreign business concerns that manage to be first to market.

In this instance, Susan Shirk's deep connections in Washington certainly bear mentioning. Shirk is a Senior Director at the Albright Stonebridge Group, a "global strategy firm that helps corporations, associations and non-profit organizations around the world meet their core objectives in a highly competitive, complex and ever-changing marketplace," which happens to be led by former National Security Advisor Samuel R. Berger, former Senator Warren B. Rudman, and former Secretary of State Madeleine Albright -- the first American official ever to visit North Korea.

The company "address[es] challenges for clients in any country, and work[s] with them to develop and implement winning strategies for long-term growth and success" – something that dovetails nicely with the goals of Albright Capital Management, an "emerging markets investment firm" of which Albright Stonebridge is "a significant shareholder" and "strategic partner", "leveraging collective networks and skills to enhance each firm's ability to serve as a trusted advisor in the emerging markets."

The kind of access someone like Madeleine Albright provides cannot be understated.

"We see a lot of potential in emerging markets for economic growth," Jelle Beenen, a portfolio manager at Dutch investment firm PGGM, told Bloomberg in 2007. "The reason that investing there is always a problem is there are issues like fraud and political instability, so that's why there's value in political-risk management and the involvement of Secretary Albright is a valuable one."

Could the "DPRK 12" be sending a signal that the North "is finally getting serious about introducing more market-based economic reforms?" JoonAng Ilbo asks. "Has the reformist message that China, its closest ally, has been hammering home for years finally gotten across? Or is the envoys' mission just a conciliatory gesture to try to woo food aid from the U.S. amid a deepening food crisis?"

The short answer is, no one knows.

David Straub, a former Senior Foreign Service Officer who spent 30 years focused on Northeast Asian affairs declined a request for comment, but in a recent paper, asserted that, "The fact of the matter is that no one, not even in Pyongyang, really knows what is going to happen there. I believe there could be dramatic change in the regime in North Korea even as you are reading this, but I also believe it is possible that the regime could last many decades more."

Henry Rowen, Co-director of Stanford's Program on Regions of Innovation and Entrepreneurship, Director emeritus of the Shorenstein Asia-Pacific Research Center, and a Senior Fellow at the Hoover Institution who gave a presentation to the North Koreans, said in an email that he knew "very little about the group and its mission," though he added a caveat that, "My hunch is that it was less significant than you suggest."

Most optimistic of all seems to be Dr. Siegfried Hecker, former director of Los Alamos National Laboratory (1986–97) and current co-director of Stanford's Center for International Security and Cooperation.

Hecker, who has been granted access to North Korea's Yongbyon nuclear complex, told an audience about an experience he had during a recent visit to Pyongyang.

As Hecker entered a subway station in the capital city, he encountered a young man "wearing a backwards baseball cap with a Nike (NKE) swoosh."

"When he gets to be 21 years old, they're gonna have a hard time keeping him down on the farm," Hecker said.

"Where there is 'swoosh,' there is hope."

Lasting through April 15, 100% of the donations made to The Ruby Peck Foundation for Children's Education will be channeled to the children of Japan as they attempt to find their footing following this natural disaster; and to kick off this drive, we'll pledge $5000 to get it started. Please do what you can, as it will add up, and thanks.
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