Submitted by Ian Armstrong via GlobalRiskInsights.com,

The recent failure of North Korea’s missile tests reaffirms the deficiencies of its ballistic and nuclear programs. Perversely, it also increases the risk of an imminent greater destabilizing behavior.

On April 15th, Pyongyang attempted and failed a test launch of a land-based ballistic missile that, if properly deployed, is capable of hitting a target 2,400 to 3,200 miles away.

One week later, leader Kim Jong Un conducted a second missile test via submarine. While the follow-up was more successful than the first (which exploded within seconds of lift-off), it only traveled for a mere 30 km — shy of the standard 300 km needed for a ballistic missile launch to be considered successful.

Outwardly, these two failures appear to demonstrate that Pyongyang’s ballistic missile and nuclear programs are still relatively unsophisticated and incomplete. These conclusions, however, are superficial. In reality, both launches have revealed the increasing capability and ambition of North Korea’s atomic efforts.

They have also — through their publicly lackluster outcomes — elevated the short-term risk of further sporadic, destabilizing military actions from the Kim regime, with damaging implications for international security and finance.

Hastened progress on DPRK nuclear program

The April 15th and April 23rd missile tests are a clear continuation of the increasingly frequent antagonistic efforts undertaken by North Korea, otherwise known as the Democratic People’s Republic of Korea (DPRK). As a result of various nuclear and missile technology tests conducted by the rogue regime earlier in 2016, Pyongyang’s nuclear capacity has been increasing at an accelerated rate.

Although both tests were, at least from a definitional standpoint, unsuccessful, they serve to compound this accelerated trend of technological progression — and therefore geopolitical instability.

First and foremost, North Korea gains a significant amount of technological know-how from missile tests regardless of the degree to which they succeed. The lessons learned from the April tests, in spite of their failures, will be applied to future missile iterations and ultimately hasten the pace at which the DPRK develops vehicles for delivering nuclear payloads. In short, the rate at which tests occur is a strong indicator for the speed of program development.

Furthermore, while both tests failed by large margins in achieving the full-flight of a non-tactical ballistic missile, to label the second attempt as a complete “failure” is a misnomer. For one, the launch represented clear improvement from North Korea’s previous submarine-launched missile test in December, which failed at ignition.

It also utilized a more energetic and sophisticated fuel source that was not previously recognized as a functioning component North Korea’s missile repertoire. In achieving at least 30 km of missile flight, the DPRK has thus demonstrated a faster than expected growth in WMD-related abilities.

Greater likelihood of provocations

On its own, North Korea’s growing missile capacity has thus far done little to stoke the kind of geopolitical tension that steadily contributes to volatility in financial markets. The one exception appears to be the short-term volatility that follows full-scale North Korean nuclear tests.

Prior to the April missile tests, South Korean intelligence agencies had already concluded that a fifth DPRK nuclear test would occur in 2016, specifically pointing to satellite imagery showing the resumption plutonium production and increased activity at known nuclear test zones.

Unfortunately, the fact that these two particular launches performed below the standards of successful ballistic missile tests increases the chance that another North Korean nuclear test is imminent within next 1-3 months. In May, Kim Jong Un will oversee the 7th Congress of the Workers’ Party of Korea, an extremely rare meeting of North Korea’s highest political body that last occurred in 1980.

North Korea tests

Timeline of Previous North Korean Nuclear Tests

At the Congress, it will be in the interest of the Kim regime to underscore his contributions to the progress of North Korea’s military, the core of which is its rogue nuclear program. As such, it is likely that Kim will utilize a powerful nuclear test to erase any notion of failure brought about by the lackluster tests in April.

North Korea’s nuclear tests may not have demonstrated the full-flight capacity that world powers have sought to prevent for decades, but they do impose a greater short-term risk of a nuclear test to compensate. Such a risk entails both heightened geopolitical tensions and brief financial volatility, particularly in the Japanese and South Korean markets, where the threat from North Korea is most acute.

Perhaps acknowledging the greater likelihood of a nuclear trial, North Korea offered world powers a diplomatic solution on Sunday: Cease U.S.-South Korea military exercises, and DPRK nuclear tests will halt. Knowing the hollowness of Pyongyang’s word, both countries declined. If diplomatic history is any indicator, there is little that world powers can or will do to prevent North Korea’s looming nuclear test.

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