InternationalEconomics: U.S Takes Aim at North Korea’s Remaining Financial Links
Internationaleconomics: US takes aim at North Korea’s remaining financial links
Brunnnstrom(2015) says that the U.S Government is aiming to impose more economicsanctions against the North Korean government, its governmentofficials, and any individuals who may be supporting its brutal anddangerous regime. According to Allen (2011), economic sanctions aredomestic penalties, which are applied unilaterally by a singlenation, or by an assembly of countries, against another country orgroup of countries. The aim of economic sanction is to harm theeconomic development of another country through the effects of tradebarriers or such. The diagram below shows countries that have beenvictims of regime sanctioning.
Figure1: Global sanction regimes. (Source: cfc.org).
Fora while, the United States government, alongside many other WesternCountries, has imposed economic sanctions against North Korea, withthe aim of enforcing political change in the country. The latesteconomic sanctions against the country have been aimed at cripplingits intelligence services, blocking access off the US financialsystem by the government officials and force the government to changeits governance policies. The latest economic sanctions against thecountry were due to the country’s cyber-attacks against SonyPictures, an American entertainment company.
TheU.S administration is targeting a number of financial institutionswhich are still doing business with North Korea supporting itfinancially. The strategy that the United States government wants touse is cutting off the country’s access to hard currency. Accordingto Askari (2003), the U.S financial system is one of the criticalfunctions of the country’s economy. Given that America is thelargest economy in the world, its financial system has a globalimpact. One of the features of the U.S financial system is creditprovision. According to Allen (2011), credit fuels economic activityby enabling businesses to invest in the cash they have at hand andcash that is out of reach. By blocking off the supports of the harshNorth Korean regime from accessing and utilizing their financialsystem, the government is in a position of weakening theiradversaries and forcing them to come to terms with their demands.
Thearticle raises an issue regarding the country’s money launderingtendencies. According to reports, North Korea’s remaining ties withthe United States is through China. With this, North Korea has beenable to support its tiny and struggling economy with moneymakingfrauds, including counterfeiting of $100 bills. The issue of moneylaundering has shaped news and trends in contemporary economics.Askari (2003) says that money laundering gained fame after the eventsof 9/11. Since then, the American Government has been keen on keepingvigil on the movement of money, which is suspected to be utilizingillegal activities such as economic crimes and terrorism. NorthKorea’s illegal money is obtained from making fake $100 bills.After such an activity, Allen (2011) says that money launderingoccurs through banks and other Non-Bank financial institutions suchas real estate companies. The practice of money laundering is mostlikely to occur countries that have flawed financial institutions andpoor legal frameworks to detect and prevent the crime. Given that theNorth Korea government is the one that is being directly accused ofmoney laundering, keeping an eye on their financial institutions andlegal framework is almost impossible.
Thearticle highlights the issue of economic ties between countries,especially the United States, China and North Korea. According toAskari (2003, international economic cooperation between socialist,capitalist and communist political systems is based on dependence,equality and mutual advantage amongst these nations. This is why theUnited States, a capitalist economy, has ties with other economicsystems in the world, such as China, a communist country, and Russia,a socialist country. Allen (2011) says that the ever-growingscientist technology and dynamic technological revolution mean thatno country is able to produce with efficiency an entire range ofproducts without having economic ties with other nations. However,when there is a crash of interest between two countries, it isimpossible to continue maintaining economic ties. This is the reasonthe United States of America cut all its economic ties with NorthKorea. The United Government is thus pursuing all possible routes toensure that the North Korean government suffers economicrepercussions for its action against Sony Entertainment, and manyother economic, social and political crimes.
Allen,R.C, (2011) GlobalEconomic History: A Very Short Introduction. NewYork, NY: Oxford University Press.
Askari,H, (2003) Casestudies of US economic sanctions: The Chinese, Cuban, and Iranianexperience.Westport, Conn. [u.a]: Praeger.
Brunnstrom,D, (2015) “U.S Takes Aim at North Korea’s Remaining FinancialLinks,” Reuters.[Online]13 January 2015. Available at:<http://www.reuters.com/article/2015/01/13/us-northkorea-usa-idUSKBN0KM2AO20150113>Accessed [13 March 2015].
cfr.org.(2015) Whatare Economic Sanctions? [Online].Available at:<http://www.cfr.org/sanctions/economic-sanctions/p36259>Accessed [13 March 2015].