North Korea’s Kim Jong-un is playing the investment world
Kim Jong-un’s sudden outreach to the world is more plot device than turning point. In other words, Kim is playing us
American author Bradley Martin wrote the book on North Korea—literally. His 2006 look at the inner workings of the Kim dynasty, all 912 pages of it, remains an unequalled primer on the most isolated regime.
For his Kim family follow-up, Martin chose a thriller, titled Nuclear Blues. Turning to fiction has a perverse logic. Political scientists, after all, have failed to explain, predict or translate what’s afoot in the Hermit Kingdom. The sprawling Central Intelligence Agency was just as shocked as investors in 2017 to find how much Kim’s nuclear programme leaped from theoretical to operational.
There are no experts as the untested thirty-something Kim faces off with an unproven 71-year-old US President.
When basketballer Dennis Rodman knows more about Kim than Donald Trump’s cabinet does, you might as well turn to a work of fiction.
Martin’s vivid read, centering on a journalist trying to get the real story in Pyongyang, has all the makings of a great Coen brothers film.
But then, so did Kim’s recent train diplomacy.
The arrival of his lumbering, armoured, dark-green monstrosity in Beijing seemed out of central casting for a Cold War Tom Clancy novel.
And, frankly, the press coverage of Kim’s tête-à-tête with China’s Xi Jinping was no less fanciful.
The basic storyline: Kim is morphing from pariah to statesman and proving it in China.
Next stop: a meeting with Trump, one being hyped as a Ronald Reagan-Mikhail Gorbachev redux.
The Kim’s sudden outreach to the world is more plot device than turning point. In other words, Kim is playing us.
It’s important, Martin says, to recall who Kim is.
“If, in fact, he’d been a secret reformer, Kim had time after his father’s 2011 death to show that,” Martin explains. “I’ve seen little evidence that he differs significantly from his father, who never could pull himself far from the policies instituted by his own father, the first-generation head of the dynasty, Kim Il Sung.”
The common thread between Martin’s 2006 book, “Under the Loving Care of the Fatherly Leader,” and his new novel is that the Kims aren’t all that unpredictable.
Kim Jong-un’s latest overture is but a piece of a pattern—not some Trump-induced panic in Pyongyang.
Kim’s father, Kim Jong Il, displayed it time and time again with Presidents Bill Clinton, George W. Bush and Barack Obama. When sanctions begin to bite, you open communications with the West. The playbook: exchange some soothing words, grab a few financial inducements, drag things out and then return to business as usual.
Odds are, Kim Jong-un is doing just that. His father’s flirtation with South Korea’s Roh Moo-hyun in 2007 is Exhibit A. It was a gloriously hopeful moment that quickly faded. Will President Moon Jae-in’s current attempt to ease tensions on the Korean peninsula pay off? The odds aren’t great.
Trump just named a National Security Adviser whose raison d’être is using war to exert America’s will.
While John Bolton hasn’t yet gotten that wish with Iran and North Korea, he did with the disastrous Iraq invasion.
Watching what happened to Saddam Hussein drove Pyongyang and Tehran to accelerate their nuclear-deterrence timelines. Ask Muammar al-Qaddafi how scrapping Libya’s nuclear programme worked out for him.
Kim now has a proven nuclear arsenal, his insurance policy, and he’ll never give it up.
Feeling secure, he’s reaching out—just as his father did. What makes this overture different, though, is the White House is inhabited by a leader Kim can play.
Caged by scandals, dogged by investigations and desperate for a diplomatic win—anything!—Trump agreed to meet with Kim.
No preconditions—just the “Art of the Deal” president and Kim in a room mugging for the cameras. What could go wrong?
Where to start? Shinzo Abe’s Japan worries Kim might drop enough compliments to get Trump to pull troops out of Okinawa (Abe is scrambling for a seat in the room to head off that risk). South Korea worries Trump might throw it under the bus. Also, definitions of “denuclearization” differ widely. China worries Trump, with Bolton screaming in his ear, might opt for military force anyway.
Kim’s trainspotting gambit in China was an intriguing plot twist—a reminder that Xi, a leader who will be around infinitely longer than Trump, is also calling the shots. It’s a plot line, though, that fits with strategies employed by his father and grandfather. Facebook and Twitter either weren’t around or dominant enough back then to hype the latest Kim overture as something unprecedented and epochal.
Investors should study their Kim dynasty history before getting bullish on the South Korean won or North Asian stocks. It’s grand that Moon and Kim will meet. It’s great that Trump is rethinking his “fire and fury” rhetoric and is open to talks. It’s wise Abe is trying to get in on the act. But the nuclear blues could return at any moment. Sadly, the Kim playbook suggests they will.
William Pesek, based in Tokyo, is a former columnist for Barron’s and Bloomberg and author of Japanization: What the World Can Learn from Japan’s Lost Decades.
Editor's Picks »
- Market optimism before 2019 general election: History may not repeat itself
- UltraTech Cement: No respite from cost pressures
- Mindtree sees strong revenues but client concentration remains high
- Bandhan Bank’s share defies gravity as growth story is intact
- Fund managers slashing allocations to equities in emerging markets, shows BAML survey