By Prof. Giancarlo Elia Valori

In 1980, on the eve of the final decline of the Soviet-style centralized economies, North Korea -officially called the Democratic People’s Republic of Korea -defaulted on almost all its foreign debt, except for Japan’s.

Currently, North Korea’s creditors are Russia (which, however, has reduced its exposure significantly), China, Hungary, the Czech Republic, and Iran. Furthermore, following the USSR’s collapse, China has replaced Russia as Korean’s top economic partner, with North Korean imports accounting for 57% of its total imports and exports to China accounting for 42% of its total exports.

Here lies the strategic core of the North Korean military-nuclear capacity: thanks to it, North Korea reaffirms its geopolitical power in spite of the very slow modernization of its economy. The nuclear missile program ensures the continuation of North Korea’s centralized economy and acts as a unifying factor for its society. Moreover, thanks to its nuclear program, North Korea manages a comparative autonomy from its geopolitical points of reference, namely China, Iran, the Russian Federation, and even South Korea. South Korea has an incomparably higher GDP but –if there is a sort of reunification between the two State entities, North Korea will take the lion’s share not only at strategic, but also at the economic and industrial level.

In my opinion, the very recent detonation of the hydrogen bomb in the Pungyye-ri site, and the resulting 5.1 magnitude earthquake must be seen in close connection with the recent “purges” within the North Korean Armed Forces. On May 13, 2015, the North Korean Defense Minister and Head of the Armed Forces, Hyon Yong Chol, was executed for “disloyalty” to the Supreme Leader, Kim Yong Un, who, in 2013, had also ordered the execution of his uncle, Jang Song-Thaek, the regime’s number two. According to the South Korean intelligence services, at least 15 senior officers were executed. The primary reason for these actions by Kim Jong Un is clear: to eliminate competitors who may replace him in power by reaching an agreement with China (which has condemned the detonation of this bomb of January 6), with the Russian Federation or even with Iran, with which North Korea maintains nuclear cooperation. 

The just-detonated bomb is the fourth North Korean test and the 2,055th nuclear device detonated in the world. So far, the North-Korean bombs have had an estimated power between 4 and 9 kilotons while, according to official sources, the last one has a power of 10 kilotons. Hence, it is likely not to be a real hydrogen bomb, but a mixed system combining traditional nuclear power and the technology of hydrogen isotopes. We can think of a weapon based on the fission of tritium, but we will know more about it only when the nucleotide fallout may be measured outside North Korea.

Furthermore, North Korea relies on military nuclear capacity to spare on its conventional Armed Forces, in a situation characterized by a military spending accounting for one third of its GDP.

North Korea’s nuclear capacity makes both Koreas’ war potential basically equivalent. This is the real card that North Korea can play for a reunification with South Korea almost on an equal footing.

Nevertheless there is probably a wider plan. North Korea could be a nuclear axis with Iran and China so as to counterbalance the Atlantic Alliance in the region immediately close to the Greater Middle East. It could even collaborate –in a territory not controllable by AIEA –to what I have already defined as “the external nuclear rearming” of the Shi’ite Republic of Iran.

If Saudi Arabia can unite the whole Shi’ite front, Iran can afford to equalize the strategic potential with Saudi Arabia by using its traditional links with Asian countries.

Hence also this North Korean bomb must be seen in the framework of the fight against the United States and its allies. Nevertheless it is worth noting, in particular, how tensions in the Persian Gulf re-establish new and old alliances quickly, with the only aim of regionalizing NATO and building a military Alliance between Central Asia, China seas, North Korea and, probably, other countries which are about to become members of the Shanghai Cooperation Organization, which is designed as a tool for curbing or, probably, disrupting the Atlantic Alliance. 

Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, theHebrew University of Jerusalem and the Yeshiva University in New York.

He currently chairs "La Centrale Finanziaria Generale Spa", he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and Khashoggi Holding’s advisor.

In 1992 he was appointed Officier de la Légion d'Honneur de la République Francaise, with this motivation: "A man who can see across borders to understand the world” and in 2002 he received the title of "Honorable" of the Académie des Sciences de l'Institut de France."