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Flares fired by Israeli troops illuminate the sky over Gaza on Nov. 5. (AFP/Yonhap)

The year 2023 is drawing to a close. It was a year of deep recession, but most of all, it was a year of war, a rare phenomenon in modern history. In addition to Russia’s invasion of Ukraine, we saw the occupation of Nagorno-Karabakh by Azerbaijan and the de facto ethnic cleansing of its Armenian population, Hamas’ attack on Israel and Israel’s subsequent bombing and invasion of Gaza, which has led to more than 10,000 civilian deaths in the ensuing days.

When we also add the coup in Niger, the civil war in Sudan, and other conflicts in Africa to the mix, “the year of war” is indeed the most fitting title for 2023. What has made humanity plunge headfirst into such a killing frenzy?

There’s one obvious answer to the question of why countries go to war: the national economy.

Especially in times of panic, economic crisis, or recession, increased demand sparked by war offsets the tendency for profit margins to decline. On Wall Street, the notion that “Hamas has created additional demand” can be heard on every floor of every office, and Israel’s war is good news for American defense contractors and the financial industry that invests in them. In contrast to the global recession, Russia, which generated a huge amount of additional demand with its invasion of Ukraine, is expected to grow its economy by 2.8% this year.

But are the US and Russia the only ones making a buck on bloodshed? South Korea’s defense exports are expected to reach US$20 billion in 2023, up from US$7.2 billion in 2021. Some of South Korea’s capital is also reaping many benefits thanks to this year of war.

Along with boosting the profit margins of capital, wars also serve to establish an informal hierarchy among nations. Throughout modern history, the decline of established hegemonic systems has been accompanied by large-scale shifts, usually in the form of wars involving major powers about once every 30 to 50 years, that have upended the standing power order.

For example, the Napoleonic Wars (1803-1815) resulted in a bipolar power structure centered on Britain and Russia, but the Crimean War (1853-1856) downgraded Russia’s status and allowed Britain to dominate. After winning the Franco-Prussian War (1870-1871), a unified Germany emerged as a challenger to the British hegemony, but it was defeated in World War I (1914-1918), and British hegemony was succeeded by its ally, the United States.

World War II (1939-1945) resulted in a US-Soviet balance of power, but the end of the Cold War (1989-1991) meant the demotion of Russia, just like what happened after the Crimean War, and the dominance of the US.

The series of new wars that began in 2022 are signifying the challenge of several major non-Western powers, such as China, Russia, and Iran, to US hegemony. Depending on the ultimate outcome of this challenge, the mid-to-late 2020s will see a new order among major powers that will last for another 30 to 50 years.

The current reshaping of the world order is directly connected with peace on the Korean Peninsula. The geoeconomic and geopolitical situation on the Korean Peninsula is a microcosm of the situation around the world.

Just as the Soviet Union was defeated by the US in the Cold War, North Korea has also been trounced in its economic rivalry with South Korea.

But the scale of North Korea’s defeat is much greater. While the US’ nominal economy is 14 times larger than Russia’s, South Korea’s economy is a whopping 55 times larger than North Korea’s.

And just as Russia under Putin has staked everything on the development of its arms industry, North Korea since the 1990s has also sought to make up for its economic weakness by prioritizing the development of its military sector.

North Korea’s gross domestic product per capita at purchasing power parity (around US$1,700) may be lower than such countries as Zimbabwe, Togo and Mali, but it has still managed to acquire intercontinental ballistic missiles (ICBMs), joining the likes of the US, China, the UK, France, Russia, India and Israel. With its recently unveiled Hwasong-18 ICBM, North Korea has gained the capability, at least in theory, of launching a strike on New York or Washington, DC.

In other words, the Korean Peninsula today occupies an extremely unbalanced geoeconomic and geopolitical terrain.

Facing each other across the Demilitarized Zone (DMZ) are a semi-sovereign rich country and the world’s poorest military power. South Korea is a wealthy country that’s unable to fully exercise its sovereignty under the domineering influence of the US, while North Korea is impoverished while still possessing full sovereignty and an advanced arsenal of strategic weapons.

This fundamentally precarious arrangement could be further undermined at any time by an external shock. The most likely source of such a shock are the “four powers” positioned around the Korean Peninsula. Of the four, the US, China and Russia are involved in wars and conflicts that are directly or indirectly connected with the shakeup of the world order, which means that the Korean Peninsula could be seriously affected if something goes wrong.

If, for example, the US and China’s row over Taiwan took on the character of an armed confrontation or outright conflict and if South Korea got involved under pressure from the US, China could decide to stop curbing North Korea’s behavior toward the South.

Just as Hamas’ attack on Israel has distracted the US, making it much easier for Russia to prosecute its invasion of Ukraine, North Korea taking forceful action against South Korea in the middle of conflict between the US and China over Taiwan would scatter American resources, potentially working in China’s favor.

As far as South Korea is concerned, any military action on the Korean Peninsula would represent a worst-case scenario.

If South Korea is to prevent that worst-case scenario from becoming a reality, it must adopt balanced diplomacy that puts the highest priority on peace. The most important thing is resuming economic cooperation and exchange with North Korea. When there are economic interests at stake, armed conflict is less likely to occur.

Furthermore, South Korea needs to stop being totally subservient to the US’ every whim in its relations with China and Russia. Unconditional obedience to the US is the road to perdition in the present-day era of war and a changing world order.

Please direct questions or comments to [english@hani.co.kr]