Crime and economic instability: the real security threat from North Korea and what to do about it

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This essay examines the domestic and international causation of the socioeconomic transformation that has taken place in the DPRK since the 1990s. In the process the essay demonstrates how the DPRK socio-economy has become an enabling environment for crossborder illicit economic activity. The argument is that there is little evidence that the DPRK government fully comprehends the potential problems for its own society from the lack of regulation of market transactions and therefore not much likelihood that it is currently able or willing to prevent spillover of the numerous grey areas of North Korean marketization into the socio-economies of its neighbours. What is therefore needed is positive interaction by foreign economic interlocutors, including governments and international institutions. A policy of 'intelligent intervention' that combines closely monitored but relatively substantial economic interaction integrally linked to a programme of market institution-building in the DPRK, along with a policy of military deterrence, could best contribute to preventing the growth of economic and political instability in Northeast Asia.