This Week: Pakistani Elections, Guatemalan Trials, North Korean Banking, and Chinese Hacking.

Hello, and welcome to the Dispatch for May 6 - 12!

North Korea

The Bank of China, a state-owned bank that is the second largest in China, closed the account of North Korea’s Foreign Trade Bank this week as required by recent sanctions on that country. On Tuesday, North Korea moved two medium range missiles off “launch-ready” status, easing fears of another pending missile test.

The bank’s move is inconvenient for the DPRK, but there are other institutions they can still do business with, even within China. The real significance is diplomatic: the bank is state-owned, which means the shutdown is a political decision. China is finally exerting real pressure on North Korea, which has, under Kim Jong-Un, spurned China on multiple occasions recently. NightWatch noted a bit ago that China had not exported any oil at all to North Korea in February; that, combined with the banking decision suggests China has decided to remind the Kim regime of its status and obligations. Whether or not it works remains to be seen - the recent bellicosity from the regime suggests internal politics are at play, but relocating the two missiles is a positive sign. Nobody expects the situation on the Korean peninsula to be resolved anytime soon, so seeing some indication of outside limits placed on the North’s range of action might be the best we get for now.

China

The Pentagon directly accused the Chinese government of hacking American military and commercial networks in its annual report to Congress. China refuted the claims, as it has refuted previous accusations over cyberattacks.

This is the first time the US Government has openly accused the Chinese government of hacking US computers. Chinese hackers have been increasingly aggressive in the last few years, and while private investigations have pointed to the Chinese government, US officials have not commented on the record until now. I doubt the US will take any serious action to retaliate - despite all the recent rhetoric about cyber-warfare, nobody’s going to jeopardize US-China relations over this sort of low-level espionage. Still, I’d expect these accusations to get louder, and I’d expect to start seeing trade action against China until it gets its act together. Already, several Chinese telecom companies are effectively blocked from US government contracts, and I suspect the administration will try to make the Chinese hacking program more costly and much more public going forward.

Pakistan

After a week of violence, including the kidnapping of the son of the former Prime Minister and a spate of bombings on election day, Pakistanis went to the polls on Sunday. The Pakistan Muslim League (PML-N) party looks to have won a handy majority, though the final results are not yet in. The party is headed by former Prime Minister Nawaz Sharif, who was deposed by the military in 1999.

If Sharif and the PML-N form a government, it will be the first time power has peacefully changed hands in Pakistan in the 40 years since the current constitution was drafted. The head of the military has stated the military will not intervene, and so far that seems to be the case. The cloud of violence over the election, though, is deeply troubling; many candidates were not able to campaign for fear of attack by the Pakistani Taliban. While the military’s absence from politics is generally laudable, this does seem like one area they could provide some value.

Guatemala

After a long and complicated trial, a Guatemalan court sentenced General Efraín Ríos Montt, the former dictator of Guatemala, to 80 years in prison for committing genocide and crimes against humanity over the Guatemalan military’s attempts to exterminate the Maya Ixil Indians during the early 1980s. Montt is the first former head of state to be put on trial for genocide by a national tribunal.

Montt ducked an earlier indictment attempt in 2007 by getting elected to parliament. His term ended in early 2012, and he was arrested shortly thereafter. Previous attempts to bring charges have been blocked by prosecutors and judges loyal to the general, and this trial was nearly scuttled as well. I’m glad to see justice done in Guatemala.

Syria

A brief note on Syria: I discussed the allegations of sarin use in the last dispatch, and I mentioned that they were still just that, allegations. Since then, the rhetoric and the intelligence have gone in opposite directions: much of the intelligence community agrees there’s no real evidence of sarin use, while the political rhetoric is moving increasingly towards intervention in Syria. While I’ve endorsed arming the opposition in the past, I want to reiterate: As of now, there is no real evidence the Assad regime has used sarin gas. The Obama administration’s “red line” has not been crossed, and suggestions to the contrary are inaccurate.

Thanks for joining me, and my best for the week ahead!

Eric