North Korean Economy Watch

Yonhap
Byun Duk-kun
10/31/2007

A U.S. Navy destroyer helped a North Korean cargo ship escape a hijacking by pirates off the coast of Somalia on Tuesday, an incident which may bode well for the growing detente between the two nations, as sentiments remain upbeat over ongoing talks on the North’s denuclearization.

Officials here noted the incident will work positively in efforts to denuclearize the communist North, as it came just one day before the chief nuclear negotiators of the U.S. and North Korea were to meet for discussions on denuclearization, normalization of ties between the former Cold War foes and other issues.

It was early Tuesday when the USS James E. Williams, operating near Somalia, received a request from the International Maritime Bureau to investigate a North Korea-flagged ship reportedly hijacked by pirates.

The U.S. destroyer reacted with little hesitation, dispatching a helicopter to investigate the reported hijacking and then sailing at full speed to arrive at the site at midday to lend assistance, the U.S. Navy said in a press release.

The 22 crew members of the North Korean freighter eventually regained control of the ship after a firefight with the pirates, while the Williams demanded by radio that the pirates give up their weapons.

Two pirates were reportedly killed in the deadly gunfight, while five others were captured in the tense standoff.

After the hijacking situation was resolved, three injured crew members of the North Korean ship who may have received relatively serious wounds were brought onboard the U.S. destroyer for medical treatment, and were then sent back to their ship in stable condition, a message sent by the U.S. Navy to Yonhap News Agency said. It said the injuries sustained by the three merchant sailors were not life-threatening.

Besides giving first aid, the U.S. warship did not receive any further requests for assistance from the North Korean vessel, the message said.

Washington tried not to brag, saying piracy was a “scourge” in Somalia’s waters and that U.S. vessels were available to intercede when necessary.

“When we get a distress call, we help,” Lydia Robertson, commander of the U.S. Fifth Fleet, was quoted as saying by the AP.

South Korean officials agreed, saying the U.S. would have acted the same way had the incident taken place a year ago. They, however, noted the U.S. would not have acted so swiftly or as willingly had the incident happened before Feb. 13, when Pyongyang agreed to shut down and later disable its key nuclear facilities.

“Piracy is a crime that does not choose its victims by their nationality,” a ministry official said, asking that he remain unidentified.

“The U.S. and NATO forces have long operated missions in the (Somali) area to intercept pirates, so I don’t think the U.S. would have acted any differently had the incident happened a year ago,” said the official, whose job mainly deals with U.S. affairs.

Other officials said the incident demonstrates the changed mood between the former enemies as multilateral talks aimed at denuclearizing the communist North maintain an upbeat mood.

Washington and Pyongyang have held two rounds of working-level talks this year under a six-nation accord signed in February, which binds North Korea to shut down and disable its key nuclear facilities and declare all its nuclear programs.

In return, the communist nation will receive 1 million tons of heavy fuel oil or equivalent assistance, as well as other political benefits such as its removal from the U.S. list of terrorism sponsoring states and the normalization of its diplomatic relations with the U.S. and Japan.

North Korea has already shut down all its key nuclear facilities at Yongbyon and promised earlier this month to disable the Yongbyon complex and submit a full list of its nuclear programs by the end of the year.

Christopher Hill, the top U.S. envoy in six-way talks on ending North Korea’s nuclear ambition, was expected to hold bilateral talks with his North Korean counterpart Kim Kye-gwan in Beijing later Wednesday to discuss various issues including the normalization of ties between their nations, according to officials here.

“The incident will have a positive impact as a result of the efforts by both the U.S. and North Korea to normalize their diplomatic ties,” a ministry official said, asking to remain anonymous.

North Korea has yet to officially acknowledge the U.S. assistance in regaining the freedom of its vessel and treating the ship’s wounded North Korean crew members.

Crew wins deadly pirate battle off Somalia
CNN
10/30/2007

The crew members of a North Korean freighter regained control of their ship from pirates who hijacked the vessel off Somalia, but not without a deadly fight, the U.S. Navy reported Tuesday.

When the battle aboard the Dai Hong Dan was over, two pirates were dead and five were captured, the Navy said.

Three wounded crew members from the cargo ship were being treated aboard the guided-missile destroyer USS James E. Williams.

The captured pirates were being held aboard the North Korean vessel, the Navy said.

The bandits had seized the ship’s bridge, while the crew kept control of the steering gear and engines, the Navy said.

The Koreans moved against the attackers after the Williams — responding to reports of the hijacking — ordered the pirates to give up their weapons, according to the Navy.

When the crew members stormed the bridge, the deadly battle began. After the crew regained control, Navy sailors boarded the Dai Hong Dan to help with the injured.

North Korea and the United States have no diplomatic relations.

The incident took place about 70 miles northeast of the Somali capital, Mogadishu, the Navy said.

It is the second incident of piracy reported in recent days. A second U.S. Navy destroyer was searching waters off Somalia for pirates who hijacked a Japanese-owned ship, military officials said.

Over the weekend, gunmen aboard two skiffs hijacked the Panamanian-flagged Golden Nori off the Socotra archipelago near the Horn of Africa, said Andrew Mwangura, a spokesman for the Kenyan-based Seafarers’ Assistance Program.

The guided-missile destroyer USS Arleigh Burke has been pursuing the pirates after entering Somali waters with the permission of the troubled transitional government in Mogadishu, U.S. officials said Monday. In recent years, warships have stayed outside the 12-mile limit when chasing pirates.

Two military officials familiar with the details confirmed the ongoing operation.

The Navy’s pursuit of the pirates began Sunday night when the Golden Nori radioed for help. The Burke’s sister ship, the USS Porter, opened fire and sank the pirate skiffs tied to the Golden Nori’s stern before the Burke took over shadowing the hijacked vessel.

When the shots were fired, it was not known the ship was filled with highly flammable benzene. U.S. military officials indicate there is a great deal of concern about the cargo because it is so sensitive.

Benzene, which U.S. authorities have declared a known human carcinogen, is used as a solvent and to make plastics and synthetic fabrics.

Four other ships in the region remain in pirate hands, the Navy said.

U.S. and NATO warships have been patrolling off the Horn of Africa for years in an effort to crack down on piracy off Somalia, where a U.N.-backed transitional government is struggling to restore order after 15 years of near-anarchy.

On Monday, the head of the transitional government resigned as his administration — backed by Ethiopian troops — battled insurgents from the Islamic movement that seized control of Mogadishu in 2006.

Hospital officials reported 30 dead in three days of clashes on the city’s south side.

In June, the ship USS Carter Hall fired warning shots in an attempt to stop a hijacked Danish cargo ship off Somalia, but the American vessel turned away when the pirated ship entered Somali waters.

In May, a U.S. Navy advisory warned merchant ships to stay at least 200 miles off the Somali coast. But the U.S. Maritime Administration said pirates sometimes issue false distress calls to lure ships closer to shore.

The pirates often are armed with automatic rifles and shoulder-fired rockets, according to a recent warning from the agency.

“To date, vessels that increase speed and take evasive maneuvers avoid boarding, while those that slow down are boarded, taken to the Somali coastline and released after successful ransom payment, often after protracted negotiations of as much as 11 weeks,” the warning advised.

The agency issued a new warning to sailors in the Gulf of Aden, between Somalia and Yemen, after Sunday’s hijacking.

Yonhap
10/28/2007

GS Caltex Co., South Korea’s second-biggest oil refiner, said Sunday it is set to supply 21,000 tons of heavy oil to North Korea as part of a nuclear disarmament agreement.

The oil shipment will be sent later Sunday via the port of Yeosu, a port city about 455 kilometers south of Seoul, to arrive at the North Korean ports of Songlim and Sunbong.

GS Caltex and European oil trading company Vitol have recently won a tender issued by the U.S. Agency for International Development to supply a combined 50,000 tons of heavy oil to the North as part of the disarmament-for-aid deal.

I was doing some research this weekend for a paper I am writing, when I stumbled on the following stories from KCNA.  It seems that although President Clinton never made it to the DPRK before his term in office ended, his brother Roger Clinton (aka “US pop singer”) did.

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U.S. pop singer Roger Clinton and his party arrive
KCNA
12/2/1999

Pop singer Roger Clinton, brother of the U.S. president, and his party arrived here today to visit the DPRK on the invitation of the Korean Asia-Pacific Peace Committee. 

They were greeted at the airport by Ri Jong Hyok, vice chairman of the Korean Asia-Pacific Peace Committee, and Song Sok Hwan, vice-Minister of Culture.

U.S. pop singer Roger Clinton and his party enjoy concert
KCNA
12/4/2007

U.S. pop singer Roger Clinton and his party enjoyed a concert staged by the state symphony orchestra at the Moranbong Theatre Friday.

Among the audience were Ri Jong Hyok, vice-chairman of the Korean Asia-Pacific Peace Committee, Song Sok Hwan, vice-Minister of Culture, officials concerned and working people in the city.

The artistes of the state symphony orchestra staged the orchestral pieces “Arirang,” “Dear Home In My Native Place,” “Nostalgia,” “Bumper Harvest Has Visited Chongsan Field,” a piano concerto “Korea Is One,” and so on. 

U.S. pop singer Roger Clinton and his party visit Mangyongdae
KCNA
12/5/1999

U.S. pop singer Roger Clinton and his party visited Mangyongdae on December 3. 

They looked round historical relics with deep interest, hearing an explanation about how the President Kim Il Sung was born and spent his childhood there. 

They posed for a souvenir photo in front of the old home at Mangyongdae. 

They also visited the Tower of the Juche Idea, King Tangun’s Mausoleum and Pyongyang metro on the same day and the Mangyongdae Schoolchildren’s Palace on Saturday.

Kim Yong Sun meets pop singer Roger Clinton
KCNA
12/5/1999

Kim Yong Sun, chairman of the Korean Asia-Pacific Peace Committee, Saturday met and had a talk with U.S. pop singer Roger Clinton on a visit to the DPRK.

Present there was Ri Jong Hyok, vice-chairman of the Korean Asia-Pacific Peace Committee.

U.S. pop singer Roger Clinton performs in Pyongyang
KCNA
12/6/2007

A performance was given by U.S. pop singer Roger Clinton at the Ponghwa Art Theatre yesterday.

It was seen by Kim Yong Sun, chairman of the Korean Asia-Pacific Peace Committee, Ri Jong Hyok, vice-chairman of the committee, Mun Jae Chol, acting chairman of the Korean Society for Cultural Relations with Foreign Countries, Song Sok Hwan, vice-Minister of Culture, and artistes and Pyongyangites.

Roger Clinton and his party and Korean artistes took part in the performance.

Roger Clinton presented solo pieces and his party song, dance and male and female solos.

Korean artistes staged female concert, soprano, solo and dance and other pieces.

The performance ended with a chorus “Our Wish Is Reunification.”

Kim Yong Nam meets Roger Clinton
KCNA
12/7/1999

Kim Yong Nam, President of the presidium of the Supreme People’s Assembly of the DPRK, met and had a talk with U.S. pop singer Roger Clinton and his party at the Mansudae Assembly Hall today.

Present there was Ri Jong Hyok, vice-chairman of the Korean Asia-Pacific Peace Committee.

Roger Clinton said that it was an honor for him to visit Korea, expressing the belief that the visit would contribute to the improvement of the relations between the two countries.

Gift to Kim Jong Il from Roger Clinton
KCNA
12/7/2007

General Secretary Kim Jong Il received a gift from U.S. pop singer Roger Clinton on a visit to Korea. 

He handed it to Kim Yong Sun, chairman of the Korean Asia-Pacific Peace Committee.  

Roger Clinton and his party feted
KCNA
12/7/2007

The Korean Asia-Pacific Peace Committee (KAPPC) gave a reception for U.S. pop-singer Roger Clinton and his party on a visit to the DPRK at the Mokran House on Monday evening.

Present there were chairman Kim Yong Sun and vice-chairman Ri Jong Hyok of the KAPPC, vice-Minister of Culture Song Sok Hwan and other officials concerned.

Vice-chairman Ri Jong Hyok in his speech said Roger Clinton has staged music and conducted social activities, adding that he is well known among the pop-music circles for presenting many lively and optimistic songs in different countries and regions of the world.

Noting that Roger Clinton and his party gave a successful performance in Pyongyang, he hoped that they would find their stay in Korea pleasant and joyful.

Roger Clinton in his speech expressed thanks to General Secretary Kim Jong Il and the KAPPC and the Korean people for providing him with an opportunity to visit the DPRK and give a performance.

He said the performance tour this time offered an important occasion, adding that all of them should make positive efforts for peace in the future, too.

An art performance was given during the reception.

Roger Clinton interviewed by KCNA
KCNA
12/9/2007

American pop singer Roger Clinton was interviewed by KCNA at Pyongyang Airport before his departure from here Wednesday.

Giving his impressions of Pyongyang, he said it looked very positive and very much peaceful.

He continued:

From the artistic viewpoint, the talented Koreans that I saw here can perform any art of the world. They are as talented people as I have ever seen. But more specific is that children here are the most talented children that I have ever seen.

They performed music and dance, just general art work.

Really, the children are brilliant.

If there is something that I like to say to the Koreans freely, one must claim, I’ll be back.

I promise to convey all of my feelings, all of my lessons and all the information I have got from brave people to our people and to my brother.

At earlier press interviews he said that he was proud of having performed in Pyongyang, and this was great generosity that the Korean people and the government granted to him.

He thanked Marshal Kim Jong Il for the generosity.

He hoped that his visit would be helpful to the improvement of the U.S.-DPRK relations.

Roger Clinton and his party leave
KCNA
12/8/2007

U.S. pop singer Roger Clinton and his party left today after concluding their Korean visit at the invitation of the Korean Asia-Pacific Peace Committee (KAPPC).

They were seen off at the airport by Ri Jong Hyok, vice-chairman of the KAPPC, and Song Sok Hwan, vice-Minister of Culture.

Before their departure, they hosted a reception at Pyongyang Koryo Hotel Tuesday evening in connection with their Korea visit.

Korea Times
Yoon Won-sup
10/11/2007

The United States is considering setting up a representative office in Pyongyang as a diplomatic mission, according to a report Wednesday.

Radio Free Asia said the United States will set up a diplomatic mission in Pyongyang, and its form would most likely be a representative office, not a liaison office or an embassy.

The U.S.-based media quoted a source as saying that the U.S. government and Congress are discussing the level of a diplomatic mission in Pyongyang, which will depend on progress in North Korea’s dismantlement of its nuclear weapons program.

Washington reportedly plans to remove North Korea off its list of terror-sponsoring states this year after North Korea disables its nuclear facilities and declares all its nuclear weapons programs. After the removal, the United States will likely begin the process of normalizing relations with North Korea, according to the report.

Experts showed optimism on the moves to normalize relations with North Korea.

A U.S. official who worked on the creation of a diplomatic mission in Pyongyang in 1994 told the radio station that it would be good for Washington to have representation in North Korea in order to understand it.

The official stressed that the absence of a mission may lead the United States to make policy based on wrong information.

However, the experts agreed that the prerequisite for the diplomatic mission was the denuclearization of North Korea.

“It is not so meaningful a debate to discuss whether to set up a representative- or embassy-level mission in Pyongyang because there will be a U.S. Embassy in the end,” a senior Korean government official said. “But the more important thing is that North Korea moves toward denuclearization for this to be realized.”

The United States promised to establish full diplomatic relations with North Korea, depending on North Korea’s actions toward denuclearization on the Oct. 3 agreement reached at six-party talks involving the two Koreas, the United States, China, Russia and Japan.

U.S.-North Korea relations have recently been improving. In early September, Christopher Hill, the top U.S. negotiator to the talks, had a successful meeting with his North Korean counterpart Kim Kye-gwan in Geneva on the normalization of relations.

Joong Ang Daily
10/8/2007

Representatives of the New York Philharmonic were set to arrive over the weekend in North Korea to discuss the possibility of a history-making performance in the communist nation.

Philharmonic President Zarin Mehta and public relations director Eric Latzky said they planned to explore venues and other arrangements for a potential February concert in Pyongyang.

“It’s a country that none of us have ever dreamed of going to. The next three or four days are going to be very eye-opening for us,” Mehta said by telephone Thursday from Beijing.

He and Latzky said they were embarking on the discussions with United States government support. A State Department official was accompanying the Philharmonic representatives on the trip.

“In as much as this is something that both sides are interested in exploring, we will do what we can to facilitate it,” said State Department spokesman Sean McCormack.

Relations between the United States and North Korea have been tense for years. President George W. Bush once branded the country part of an “axis of evil” along with Iran and Iraq under Saddam Hussein.

But after North Korea tested a nuclear bomb last October, the U.S. softened its policy to facilitate progress on the North’s disarmament.

This week, the North pledged arms talks with Washington and other regional powers to disable its main nuclear facilities and declare all its programs by the year’s end.

Latzky said orchestra representatives had spoken with U.S. Assistant Secretary of State Christopher Hill last month about the potential concert, and he was “very encouraging,” The New York Times reported Friday.

North Korea’s Ministry of Culture sent the renowned orchestra an invitation in August.

The Philharmonic has played in South Korea, as well as in other parts of Asia.

Associated Press (Via the New York Times)
10/3/2007

North Korea will provide a complete list of its nuclear programs and disable its facilities at its main reactor complex by Dec. 31, actions that will be overseen by a U.S.-led team, the six nations involved in disarmament talks said Wednesday.

Chinese Vice Foreign Minister Wu Dawei said that as part of the agreement, Washington will lead an expert group to Pyongyang ”within the next two weeks to prepare for disablement” and will fund those initial activities.

”The disablement of the five megawatt experimental reactor at Yongbyon, the reprocessing plant at Yongbyon and the nuclear fuel rod fabrication facility at Yongbyon will be completed by 31 December 2007,” said Wu, who read the statement from the six nations to reporters, but did not take any questions.

The Bush administration welcomed the agreement, calling it significant progress.

”These second-phase actions effectively end the DPRK’s production of plutonium — a major step towards the goal of achieving the verifiable denuclearization of the Korean Peninsula,” said Gordon Johndroe, spokesman for the White House’s National Security Council.

The complex at Yongbyon has been at the center of North Korea’s nuclear weapons programs for decades and is believed to have produced the nuclear device Pyongyang detonated a year ago to prove its long-suspected nuclear capability.

Since then, Pyongyang rejoined the six-nation disarmament negotiations that involve the United States, China, Japan, Russia and South Korea as well as North Korea. Under a broad agreement reached in February, North Korea pledged to disable its nuclear programs in return for 1 million tons of heavy fuel oil or other assistance.

Wednesday’s statement outlines the next steps in the February deal. Although negotiators tentatively agreed on the statement Sunday after four days of talks, it was forwarded to their capitals for approval, leading to a delay in its public release.

The statement also said the U.S. and North Korea will ”increase bilateral exchanges and enhance mutual trust” but did not set a specific timetable for when Washington will remove Pyongyang from a list of countries that sponsor terrorism — a key North Korean demand. Arrangements will be made in future meetings between the two on normalizing their relations, the statement said.

In addition, the statement reiterated the five other countries’ commitment to deliver the fuel oil and other energy and economic assistance as spelled out in the February deal.

Shortly after Wednesday’s deal was announced, however, Japan said it would not provide aid to North Korea or lift its economic sanctions against the country because of a dispute over North Korea’s past abductions of Japanese citizens.

”There will be no immediate action from Japan. We will wait to see what North Korea does next,” Foreign Minister Masahiko Komura said. ”Japan’s policy remains unchanged. We will consider aid once we see progress on the abductions issue.”

Tokyo wants Pyongyang to account for its abduction of Japanese nationals in the 1970s and 1980s — a main sticking point for the two countries, which have no diplomatic ties.

Institute for Far Eastern Studies
NK Brief No. 07-10-2-1

DPRK-U.S. RELATIONS
North Korean and U.S. officials kicked off the month of September with meetings held in Geneva on the 1st~2nd. The bilateral talks focused on how to implement the February 13 agreement. After two days of talks, U.S. Assistant Secretary of State Christopher Hill stated he is “convinced” the North will disable nuclear programs by year’s end, a timeline offered by the DPRK negotiators. North Korean press reported that the DPRK would be removed from the U.S. terrorism roster and sanctions imposed under the Trading with the Enemy Act would be lifted in return.

On September 7, Hill announced that North Korea had invited nuclear experts from the United States, Russia, and China to the DPRK in order to survey nuclear facilities and recommend dismantlement plans. The experts examined North Korean nuclear sites from September 11 to September 16.

On the same day, U.S. President Bush stated Washington would consider a peace treaty with North Korea in return for the North’s abandonment of nuclear arms.

On September 17 it was reported that North Korea had admitted that it had earlier procured materials needed to build uranium enrichment centrifuges. The admission regarded the import of 150 tons of hard aluminum pipes, enough for 2,600 centrifugal separators.

On September 20, the DPRK was removed from Washington’s list of countries producing illegal drugs. The North was added to the list in 2003.

On September 28, U.S. President Bush authorized 25 million USD worth of energy aid for North Korea. These funds could be used to provide the DPRK 50,000 metric tons of heavy fuel oil, equal to the amounts provided by China and South Korea as part of the February 13 agreement.

DPRK-JAPAN RELATIONS
Two days of talks between North Korean and Japanese diplomats began on September 5 in Mongolia, with both sides expressing confidence that there would be progress. Wartime compensation issues were discussed, although Japan continued to link normalization of relations with kidnapping issues.

Following the talks, North Korea stated that kidnapping issues were resolved with Japan, while Japan stated that both sides reiterated existing positions. On the same day, Japan rejected a DPRK request to allow North Korean ships to dock in Japan in order to pick up aid for flood victims.

On September 30, Chief Cabinet Secretary Nobutaka Machimura said Japanese economic sanctions on North Korea would be extended for another six months due to “basically no progress” on abduction issues.

DPRK-SYRIA ARMS COOPERATION
Reports began coming out of Israel in early September that reconnaissance flights over Syria had taken pictures of North Korean nuclear supplies and materials. Following Israeli air strikes, it was reported that Special Forces had entered Syria and confiscated material that appeared to be of DPRK origin. Conflicting reports stated that the facilities struck were missile storage facilities, rather than of a nuclear nature. North Korea has denied any nuclear cooperation with Syria.

DPRK-UAE RELATIONS
North Korea established ambassador-level diplomatic ties with the United Arab Emirates on September 18. A joint statement said the two countries aim to “enhance understanding and boost the links of friendship and cooperation between their two peoples.” Ties with such an oil-rich nation on friendly terms with Washington could be significant as the North moves to dismantle nuclear facilities.

ROK-DPRK ECONOMIC COOPERATION
It was reported on September 4 that stock prices of South Korean companies engaging in inter-Korean economic cooperation have shot up on news that the DPRK will dismantle nuclear programs. This includes not only those companies operating in the Kaesong Industrial Complex, but also firms involved in providing electricity and other projects planned in exchange for the North’s denuclearization.

On September 20 it was announced that the ROK government plans to request a 50 percent increase for inter-Korean cooperative projects in next year’s budget. The Ministry of Planning and Budget will request 822 million USD for cross-border projects, as well as 580 million USD for humanitarian assistance.

On September 27, it was reported that the ROK government was reviewing a proposal to jointly develop Nampo, Haeju, Najin, Sunbong, Wonsan, and Shinuiju. The North has requested development of heavy industries, while South Korea seeks cooperation on light industrial projects.

SIX-PARTY TALKS
The latest round of six-party talks opened in Beijing on September 27, with both the U.S. and DPRK negotiators promising progress. On September 30, talks were ended to allow delegates to return to their home countries to work on a ‘nuts and bolts’ joint statement. U.S. delegate Hill stated the delegates were close to agreeing on a definition of facilities, and that the proposed joint statement was very detailed. Before returning to Pyongyang, Kim Kye-gwan was quoted as saying that the North can report nuclear programs, but will not declare nuclear weapons by the end of the year. An ROK official stated that the North’s position was acceptable to Seoul. Negotiators are also thought to have agreed to begin removal of ten core devices from three nuclear facilities beginning in November. The joint statement is scheduled for release on October 2.

DPRK FLOODING
Acting UN Coordinator to the DPRK Jean-Pierre de Margerie stated on September 3, “The level of damage to infrastructure, to communications, to crops, to farmland and to households, is considerable,” but also pointed out, “The [DPRK] government has improved its level of cooperation by giving us unprecedented access to the field to conduct our assessments of the damage.”

ESPIONAGE IN THE DPRK
Li Su-Gil, spokesman for the DPRK National Security Service, reported on September 5 that several foreigners had been arrested along with a number of DPRK citizens accused of spying for a foreign country; Specifically, for having “collected official documents and information on the DPRK’s important military facilities, and spread the idea of so-called democracy and freedom to the people.” The identities and nationalities of those arrested were not revealed.

Korea Herald
9/27/2007

North Korean leader Kim Jong-il would allow U.S. troops to be stationed on the Korean Peninsula even after the reunification of the two Koreas, former President Kim Dae-jung said.

During an address at the Korea Society forum in New York on Tuesday, Kim said the North Korean leader had agreed to the idea during their summit in 2000.

North Korea has repeatedly criticized the U.S. troop presence in South Korea and demanded its withdrawal. Some 29,000 U.S. troops are stationed on the peninsula as a deterrent against the North’s 1.17 million troops.

Korea Times
Jung Sung-ki
9/26/2007

(UPDATE: On Oct. 23, [2008] the State Department blacklisted two North Korean companies, Korea Mining Development Corp. and Korea Taesong Trading Co., for violating U.S. bans on the sale of equipment used in building missiles or other weapons of mass destruction to Iran and Syria. Citation: “North Korean Plane Was Grounded at U.S. Request “, Wall Street Journal, Jay Solomon, 11/1/2008 ) 

The U.S. State Department is expected to announce additional sanctions on North Korean entities connected to missile proliferation, Yonhap News reported Wednesday.

Some of the entities are believed to be linked to the Korea Mining Development Corporation (KOMID), which was designated in June 2005 in an executive order for supporting weapons of mass destruction proliferation, it said.

The measure would come at an awkward moment as envoys from six nations _ South and North Korea, the U.S., China, Russia and Japan _ gather in Beijing from Wednesday for a fresh round of negotiations aimed at disabling and eventually dismantling Pyongyang’s nuclear weapons and programs.

The U.S. Treasury had frozen some $25 million in North Korea-related money held in a Macau bank in late 2005, a punitive measure imposed as the six countries were signing an agreement toward denuclearization. That led to more than a year’s suspension in negotiations with the North.

The new round of six-party talks is already on shaky ground with suspicions that Pyongyang may have transferred nuclear-related material to Syria, prompting the unexplained Israeli air incursion into Syria earlier this month.

Tom Casey, a State Department spokesman, said Tuesday the new sanctions are related to missile technology transfers and downplayed possible negative repercussions on this week’s talks.

“The company that was sanctioned has been sanctioned previously for the same thing. So the net effect of this is really pretty minimal,” he said. “I don’t see…any reason why this should impact on the six-party talks.”

North Korea accused the United States of defending Israel’s recent airstrike against Syria, calling the strike a grave crime that undermines regional peace and stability.

The North’s main Rodong Sinmun newspaper said, “Israeli warplanes’ intrusion into the territorial airspace of Syria and bomb-dropping are an outright violation of Syria’s sovereignty and a grave crime that destroys regional peace and security,” according to Yonhap.

The North’s comments came days after high-level talks between North Korea and Syria. The two countries, which deny the allegation of a secret nuclear connection, did not provide details of Pyongyang talks.

Andrew Semmel, acting U.S. deputy assistant secretary of state for nuclear nonproliferation policy, said earlier this month that North Koreans were in Syria, and that Syria might have had contacts with “secret suppliers” to obtain nuclear equipment.

Semmel did not identify the suppliers. However, he said he could not exclude the possibility that a nuclear black-market network, run by the disgraced Pakistani nuclear scientist A.Q. Khan, might have been involved.

Semmel’s comments raised speculation that an alleged Sept. 6 Israeli incursion into Syrian airspace was a strike targeting a nuclear installation. U.S. officials have said Israeli warplanes struck a target. One U.S. military officer said the strike was aimed at weapons being shipped to Hezbollah militants in Lebanon.

Korea Times
Marcus Noland, Stephan Haggard
9/21/2007

Last summer North Korea conducted provocative missile and nuclear tests. Yet only four months later, Pyongyang signed on to a roadmap that included a return of international inspectors, a full declaration of contested nuclear activities, closing down existing facilities and ultimately disabling them.

American negotiator Christopher Hill predicted this last step could take place as early as the end of the year.

What are the North Koreans up to?

The cynical, some would say realistic, view in the United States _ advanced by departed Bush administration hawks such as John Bolton _ is that Kim Jong-il is raising false hopes.

The appearance of cooperation has several tactical advantages. Sanctions and ongoing uncertainty have had substantial economic costs. The February agreement was preceded by secret meetings in Berlin to resolve the Banco Delta Asia issue.

In return, the North Koreans closed their nuclear facilities, but they have not firmly committed to the difficult aspects of the agreement _ providing a full accounting of their programs, disabling their programs, and giving up actual stores of fissile material and weapons.

Cooperation also drives wedges between the U.S., South Korea and China. If North Korea appears to be making concessions, it is easier for South Korea and China to continue diplomatic and financial support.

Next month, President Roh Moo-hyun will travel to Pyongyang for a summit with Kim Jong-il. Expect him to come bearing gifts to cement his legacy as a peacemaker.

Other politicians in the presidential race have also offered extraordinarily ambitious and generous programs of support for the North as well.

Recent studies we have done on North Korea’s changing external economic relations are consistent with some of this cynical picture, but also suggest a sliver of hope for more substantial change.

To understand why, requires a brief tour of the miserable history of North Korea over the last two decades. Following the collapse of the Soviet Union, the North Korean economy went into a steep decline ending in full-blown famine.

By our estimates, as many as one million people _ five percent of the entire population _ perished in the mid-1990s. Out of the human ashes of this tragedy, however, the North Korean economy began to undergo a profound transformation.

As households and work units scrambled for food, they engaged in barter, trade and new economic activities.

The desperation of the famine also saw an upturn in illicit activities, from missile sales to drugs and the counterfeiting of U.S. currency. But trade and investment also started to flow across the Chinese border.

Chinese companies, small-scale traders and North Korean firms pursued business opportunities, from large-scale mining operations to the import of South Korean videos.

The regime was always hesitant about the emergence of the market. In July 2002, the government initiated economic policy changes that decriminalized some private activities. But reforms have taken a zig-zag path, always subject to reversal.

Sanctions and closer scrutiny have limited the country’s arms sales and illicit activities.
With these sources of revenue increasingly foreclosed, North Korea has two alternatives _ open the economy and increase normal commercial activities or cooperate primarily to obtain aid. In terms of internal change, these two options may actually push North Korea in opposite directions.

Consider the aid tack. Given the regime’s concerns about internal stability, aid could provide a lifeline, allowing the regime to sustain a modicum of current consumption while forgoing deeper reforms. Under this option, North Korea trades away its nuclear program for assistance precisely to maintain the political and economic status quo.

Alternatively, North Korea could use the resolution of diplomatic tensions to deepen the economic reform process.

The military has been engaged in commercial activities and could potentially benefit from such a course. But real reform will reshuffle power and influence within North Korea in ways that are unpredictable and risky.

So what can we expect from Pyongyang? The nuclear program is the regime’s one major asset and we should not expect them to bargain it away easily.

Rather we should expect prolonged and difficult negotiations as they try to extract tribute for their “Dear Leader.”

In the end, we may eliminate North Korea’s capacity for making additional nuclear weapons, but this will not necessarily be accompanied by economic or political reforms.

An important lesson learned elsewhere in the developing world is that aid is not a substitute for reform.

Ambitious schemes for infrastructure and other investment in North Korea will only generate large economic pay-offs if they are accompanied by genuine opening and a more aggressive embrace of the market.

The key issue, therefore, is how tightly South Korea will link its offer of aid to progress in the resolution of the nuclear issue. Properly conditioned, South Korean aid could be a powerful carrot in the nuclear negotiations, whether it ultimately encourages internal reforms or not.

But if the South Korean offers at the summit are large, unconditional and open-ended, they could permit the regime in Pyongyang to stall the nuclear negotiations while actually discouraging deeper reform.