The Korean Missile Crisis is not 1962 Redux, although both include the potential for devastating nuclear conflict. The Cuban Missile Crisis arose unexpectedly, when we discovered that the Russians were moving their weapons into Cuba, a country we had attempted to invade. While Nikita Khrushchev did say that he would bury us, he lacked the specificity of Kim Jong-un. The crisis was resolved quickly, in only thirteen days.
By contrast, the situation in the Korean Peninsula has been building for decades and involves more than two major powers. In the attached bulletin, I challenge the idea that sanctions will work, or that China will be the solution to the crisis. Cited are articles in the Chinese press and written in China, as well as experts eminently worth reading, such as Walter Russell Mead and Stephen Haggard.
We are still living with the vestiges of decisions made in the aftermath of World War II. Korea, like Germany, was divided in 1945 by the US and the then Soviet Union. Its economy is just 1% of the size of Japan’s, but it spends 25% of its GDP on defense. Should worse-case scenarios unfold, its impact on the world economy could be enormous.
As always, your comments are most welcome.
With all best wishes,
Lyric Hughes Hale
David Hale Global Economics, Inc.