With the U.S. tied up in Iraq, and the general opinion being against the White Houses ill-conceived policies hopefully the message will be clear that there is no great Axis of Evil in existence.

South Korea continues to grow in the quality of its deployment of robotics in manufacturing and is well positioned in a global economy to be a powerhouse. However, it does have a number of issues to deal with, not in the least the fact that there is a very human element to being a part of a larger “nation divided” with many families having being split since the 1950’s.  Additionally, the South Korean government does need to improve its relationships with its own people. It shouldn’t take a video being posted on the Internet of a distressed wife calling an indifferent bureaucrat for help to get the government to do something (see The Economist Jan 13^th article for more information) after her husband was kidnapped by people from North Korea.

I made the statement that North Korea effectively is a tin-pot dictatorship and country that can be well contained and managed.  I stated that China holds the key to keeping Korea in check, and frankly it finally looks like Japan is also stepping up to do its piece in the effort of containing through cash-flow restriction. Much of the cash the keeps Kim Jong Il’s bankrupt regime in business stems from the 600,000 ethnic Koreans in Japan. Japanese authorities have watched helplessly as the cash flowing from pachinko parlors has gushed off-shore.

This will finally stop as the Japanese government moved to block the transfer of funds to North Korea. Restricting cash flow through better proof of identity on suspicious transactions and modifying to ATM machines to not accept large cash deposits.

In addition Japan has banned North Korean vessels from its ports and tightened export controls. Koreans wishing to travel to North Korea as no longer able to use ferry’s and must fly to China and then from China to North Korea greatly increasing the cost of doing so.

Going back to my original point of the human toll we must feel for the North Koreans who are living under a proud and dictator intent on bankrupting his country. One can easily see that the effect of shutting down this flow of money hurts the general population as well as the dictatorship. However, for now the model of careful restriction of their cash flow is the best containment strategy until the day comes (which is inevitable) that North and South Korea can be united again.

The remaining concern (which is very valid) is that North Korea may try to sell technology from its fledgling nuclear program to raise money. The threat of this technology getting into the hands of Islamic extremists is much greater concern than North Korea using this technology itself.