The Limits of Incentive-Based Diplomacy.

Once again, Kim Jong-il is testing the resolve of the international community. The latest North Korean nuclear provocation - an underground detonation yesterday - is the biggest trial of the Obama administration's foreign policy and of China's newfound global status to date.

The stakes are high not only because Pyongyang's provocations undermine security in northeast Asia, but also because a critical issue facing the US is nuclear proliferation to Iran. Should North Korea acquire the status of a nuclear-weapons state, any effort to prevent the nuclearization of Iran would lose validity. Additionally the prospect of a nuclear Iran could unravel U.S. Middle East policy, threatening the survival of Israel as well as the security of Egypt, Saudi Arabia and the Persian Gulf oil-exporting states. For China, the stakes in North Korea are no less important. It has banked its credibility on restraining Pyongyang through the diplomatic process of the six-party talks on Kim’s nuclear program.

The Kim family dynasty's determination to secure its survival through the acquisition of nuclear weapons not only threatens South Korea, but also may provoke Japan (the only country that suffered an atomic bombing) to weaponize its advanced nuclear technology. Yet Kim has success doing what he has been doing in the past – winning foreign aid to stave off his people's hunger and provoking diplomatic apoplexy to feed his megalomania.

A unscrupulous dictator, Kim bankrolls his state by counterfeiting U.S. currency and the export of narcotics. He has no fuel for his factories and no foodstuff to feed his people yet finds the time to kidnap teenagers from the beaches of Japan. He goes through the motions of building nuclear reactors, then wins subsidized oil shipments from the outside world in return for suspending construction. With thousands of land-based missiles pointed at South Korea and 1.2 million soldiers under arms, Kim has long had the West over a barrel.

The response to the removal of North Korea from the U.S. list of countries supporting terrorism has been for Kim to renew his campaign of nuclear blackmail. He has no fear of the UN Security Council, whose resolutions he has defied on multiple occasions in the past five years.

With yesterday’s events broadcast through the global airways, North Korea created critical mass. No doubt a nuclear arms race in northeast Asia would undermine the U.S.-Japan security treaty and inflame a fear of Japanese militarism in the rest of Asia, especially in China, where bitter memories of Japan's aggression simmer just below the surface. It’s pretty safe to say that a scramble to acquire a nuclear stockpile in any region of the world is not what the international community is hoping for.

The only way to restrain Kim from his course is the joint and explicit cooperation of the rest of the participants in the six-party talks, led by China and the United States and supported by Russia, Japan and South Korea. China's swift condemnation of this week's nuclear test by North Korea signals that its patience is at an end.

In the coming days, we will see whether the international community can rise to the challenge. The limits of incentive-based diplomacy have been reached. The world must now tolerate imposing painful sanctions on Pyongyang. The price of inaction is too high. The risk of a war that would once again devastate the Korean Peninsula has deterred any military option. So it would seem that only close co-ordination between China and the United States to devise sanctions (such as a total energy embargo on a state that has no domestic source of oil) might constrain the continued operation of the North Korean regime without firing a shot. However it could also provoke a suicidal attack on South Korea or Japan from a power-crazed and desperate neighbour.

Kim threatens the world with the push of a button out of weakness, not strength. The world may ultimately be forced into an uncomfortable and uncharacteristic game of brinkmanship, because clearly it seems the international community is running out of options.