North Korea's leader Kim Jong Un, centre, applauds after the launch of an ICBM in the northwest of the country. AP
North Korea's leader Kim Jong Un, centre, applauds after the launch of an ICBM in the northwest of the country. AP

Why China, not the US, must take the lead over the North Korea crisis



Amateur neocons are demanding that Donald Trump stare Kim Jong-un down in the hope that the North Korean leader blinks first in the high stakes nuclear game. But what if Mr Kim doesn’t? What if he refuses verifiable denuclearisation? Would the US really launch a strike on North Korea? Who assumes responsibility for a conflict that would, in US defense secretary Jim Mattis’s stark warning, be “catastrophic”?

Last month, Mr Mattis, a distinguished retired army general, told American congressmen that if it came to war with North Korea, the US and its allies would eventually prevail, but at a terrible cost. "It will be a war more serious in terms of human suffering than anything we've seen since 1953."

No sane person can contemplate such a horrific possibility without hoping for an alternative. Like a porcupine, the North Korean regime is shaking its quills and bristling to ward off external threats. Like an elephant, Mr Trump’s America is lumbering into the stand-off, insisting on respect and compliance commensurate with its strength and size. This is an unequal fight,​ but the weaker party has the advantage.

No one but the neocons believes that Mr Trump should dare Mr Kim to do his worst. In the most casual and cynical argument for war possible, the historian Niall Ferguson recently advanced the following bromides: “Is military action risky? That’s a stupid question. Military action is always risky, and Mattis is right to warn that a new Korean War would be highly destructive. The right question is whether or not the risk of inaction would be greater.”

The greatest risk of inaction would be that North Korea will get to the point it can fit nuclear warheads on its missiles. That is hardly surprising. According to Jeffrey Lewis, director of the East Asia Nonproliferation Program at the Middlebury Institute of International Studies, “the North Koreans are fairly good at this, and why shouldn’t they be? Nuclear-armed missiles are a 1950s-era technology.”

Anyway, nuclear-armed missiles will make the regime invulnerable, except possibly to the forces of inevitable change over time. These would include people power, market forces, and/or active Chinese displeasure.

While it is hardly desirable that a ruthless, paranoid, undemocratic and unaccountable leader acquire nuclear capability, a solution does not lie with the US. In fact, the best way forward is for the US to get out of the way and allow China to manage the situation. Funnily, this is exactly the strategy that Mr Trump had suggested years before he ran for office. As a private citizen, he argued that the North Korean affair was for China to handle.

As US president, he should heed his own advice. In his new book A World in Disarray, Richard Haass, president of the New York-based Council on Foreign Relations, makes the exact same case. It is time, he says, for the West to acknowledge the South China Sea is China's theatre. North Korea is China's responsibility and it can manage it however it wants. It can keep it in a state of frozen bellicosity as a hedge against US-ally South Korea. Or groom a more pliable replacement for Mr Kim and delicately achieve change of a sort in Pyongyang. Or it can allow the Korean peninsula to re-unify, though that is not an option Beijing seems prepared to countenance now or in the foreseeable future.

By giving China agency, chances are that war will be averted because Mr Kim is unlikely to embark on a suicide mission without reason. As lead manager of the situation, China is unlikely to provoke its belligerent ally. If the risk of inaction is an imperfect peace, that is an unbeatable deal.

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The Melbourne Mercer Global Pension Index

The Melbourne Mercer Global Pension Index

Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.

The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.

“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.

“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”

Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.

Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.

“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.