North Korean Economy Watch

For the last several years there has been intense debate among “North Korea watchers” over whether the DPRK was enriching uranium.  Strong cases were made on both sides of the debate, but if we are to believe the North Koreans, the debate is over.  According to the Associated Press:

After repudiating negotiations on dismantling its plutonium-based nuclear program, North Korea admitted this month to having an even more worrying way to make bombs.

Following nearly seven years of adamant denials, North Korea announced it can enrich uranium - a simpler method of building nuclear weapons than reprocessing plutonium. Uranium can be enriched in relatively inconspicuous factories that can better evade spy-satellite detection, and uranium bombs may work without test explosions.

The admission - made in a threatening response to a June 12 U.N. Security Council resolution punishing Pyongyang for an underground plutonium bomb test last month - poses a new challenge to the U.S., China, South Korea, Russia and Japan as they seek to stem the reclusive country’s atomic ambitions.

Read more here:
Uranium gives NKorea second way to make bombs
Associated Press (via the Washington Post)
Kwang-tae Kim
6/28/2009

North Korea Uncovered version 18 is available.  This Google Earth overlay maps North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, railroad, energy infrastructure, politics, sports venues, military establishments, religious facilities, leisure destinations, and national parks.

This project has now been downloaded over 140,000 times since launching in April 2007 and received much media attention last month following a Wall Street Journal article highlighting the work.

Note: Kimchaek City is now in high resolution for the first time.  Information on this city is pretty scarce.  Contributions welcome.

Additions to this version include: New image overlays in Nampo (infrastructure update), Haeju (infrastructure update, apricot trees), Kanggye (infrastructure update, wood processing factory), Kimchaek (infrastructure update). Also, river dredges (h/t Christopher Del Riesgo), the Handure Plain, Musudan update, Nuclear Test Site revamp (h/t Ogle Earth), The International School of Berne (Kim Jong un school), Ongjin Shallow Sea Farms, Monument to  “Horizon of the Handure Plain”, Unhung Youth Power Station, Hwangnyong Fortress Wall, Kim Ung so House, Tomb of Kim Ung so, Chungnyol Shrine, Onchon Public Library, Onchon Public bathhouse, Anbyon Youth Power Stations.

UPDATE: In response to the resolution, the DPRK has made some serious threats.  According to the Telegraph:

A commentary in the North’s state-run Rodong Sinmun newspaper claimed the US had 1,000 nuclear weapons in South Korea ready to strike. 

Meanwhile, the Tongbil Sinbo newspaper said that North Korea is “completely within the range of US nuclear attack and the Korean peninsula is becoming an area where the chances of nuclear war are the highest in the world.” 

Over the weekend, North Korea angrily responded to fresh United Nations sanctions by threatening to build as many nuclear weapons as possible. 

Until now, it said, it had only reprocessed one-third of its spent fuel rods into weapons-grade plutonium. Analysts believe the rogue state could end up with enough plutonium to make eight to nine bombs. 

The rogue state also claimed to have a uranium-enrichment programme, the first time it has admitted to one. The claim is alarming, said Professor Yang Moo-Jin, of Seoul’s University of North Korean Studies. 

“The North has abundant natural uranium of good quality, which, if combined with technology and facilities, would result in a great nuclear arsenal,” he said.  

UPDATE:  The United Naitons Security Council (UNSC) has passed a new resolution in response to the DPRK’s second nuclear test.  Althought the text of the resolution has been posted to the UNSC web page (here), below are the economically significant excerpts (taken from Reuters).  The resolution…

1. Calls upon all States to inspect, in accordance with their national authorities and legislation, and consistent with international law, all cargo to and from the DPRK, in their territory, including seaports and airports, if the State concerned has information that provides reasonable grounds to believe the cargo contains items the supply, sale, transfer, or export of which is prohibited;

2. Calls upon all Member States to inspect vessels, with the consent of the flag State, on the high seas, if they have information that provides reasonable grounds to believe that the cargo of such vessels contains items the supply, sale, transfer, or export of which is prohibited;

3. Calls upon all States to cooperate with inspections pursuant to paragraphs 11 and 12, and, if the flag State does not consent to inspection on the high seas, decides that the flag State shall direct the vessel to proceed to an appropriate and convenient port for the required inspection by the local authorities pursuant to paragraph 11;

4. Decides that Member States shall prohibit the provision by their nationals or from their territory of bunkering services, such as provision of fuel or supplies, or other servicing of vessels, to DPRK vessels if they have information that provides reasonable grounds to believe they are carrying items the supply, sale, transfer, or export of which is prohibited … unless provision of such services is necessary for humanitarian purposes;

5. Calls upon Member States … to prevent the provision of financial services … that could contribute to the DPRK’s nuclear-related, ballistic missile-related, or other weapons of mass destruction-related programs or activities;

6. Calls upon all Member States and international financial and credit institutions not to enter into new commitments for grants, financial assistance, or concessional loans to the DPRK, except for humanitarian and developmental purposes;

7. Calls upon all Member States not to provide public financial support for trade with the DPRK … where such financial support could contribute to the DPRK’s nuclear-related or ballistic missile-related or other WMD-related programs or activities;

In the Washington Post, Marcus Noland asserts that this sanctions plan is “clever”. Instead of a “crime and punishment” approach to North Korea, he said, the proposed sanctions are “basically defensive,” relying on interdiction of ships and global financial restrictions. He also went on to say, “The North Koreans will be down to whatever China gives them and whatever they can get from their subterranean customers in the Middle East.”

The Washington Post also states:

But there is little chance that these tougher sanctions will limit the ability of Kim Jong Il’s government to profit from more conventional overseas trade, said Lim Eul-chul, a researcher who specializes in North Korean trade for the Seoul-based Institute for Far Eastern Studies.

“The sanctions will not have much effect on what North Korea trades with China,” he said.

North Korea consistently fails to grow enough food to feed its 23 million people, and its state-controlled economy is moribund, but it does have mineral resources that are coveted by many industrialized countries.

The estimated value of its reserves — including coal, iron ore, zinc, uranium and the world’s largest known deposit of magnesite, which is essential for making lightweight metal for airplanes and electronics — is more than $2 trillion, according to the Korea Chamber of Commerce and Industry.

The manufacturing boom in neighboring China has dovetailed with North Korea’s acute need for hard currency and has accelerated Chinese access to the North’s resources, according to Lim, Chinese mining experts and South Korean government officials. There is, however, a significant new wrinkle in the North’s trade with China, Lim said. “The military is taking control of export sales,” he said, citing informants inside North Korea.

Other branches of the North Korean government, such as the Workers’ Party and the cabinet, have been forced to relinquish their interest in these sales to the military, Lim said. The military has grabbed greater control of export revenue, he said, as it has provoked the outside world with missile launches and the nuclear test.

Based on the recent growth of North Korean-Chinese trade, Lim said he does not believe that China wants to “take any strong measures to crush the North Korean economy.”

An article in the New York Times expresses sckepticism that these new sanctions will deter North Korea’s nuclear ambitions:

This time, in addition to financial sanctions, the proposed Security Council resolution calls for a tighter arms embargo, possible interdiction of North Korean vessels. But most analysts say that none of the threats are large enough to stop a regime that sees nuclear weapons as the key to its survival, and that has endured decades of economic sanctions and hardships, including even starvation, rather than capitulate to outside pressure.

“These are people who didn’t flinch even when 2 million of their own people died of hunger,” said Lee Ji-sue, a North Korea specialist at Myongji University.

And that is assuming that the sanctions are fully enforced. While many of these same measures have been included in previous U.N. resolutions, nations like China and Russia were reluctant to enforce them to avoid antagonizing the North.

Critics and proponents alike agree that the linchpin in making any sanctions work is China, North Korea’s primary aid and trade partner. China shares an 850-mile border with North Korea, and its $2 billion annual trade with the North accounts for over 40 percent of Pyongyang’s entire external trade, according to South Korean government estimates. North Korea’s trade with China expanded by 23 percent just last year, the South Korean government said.

Both United States and South Korean officials fear that although Beijing was disappointed by the North’s continued tests, it remains reluctant to push too hard. They say China fears causing a collapse by the Pyongyang regime that could flood it with refugees and create a newly unified, pro-American Korea on its border.

Finally, The Economist weighs in with some critical analysis:

It is hard to envision that the new sanctions will bring North Korea back to the negotiating table. With few exceptions, previous rounds of economic sanctions have had little impact. In the present case, unanimity was achieved at the price of watering down the provisions that require other countries to search North Korean vessels. The final compromise—that North Korean ships are required to undergo searches but cannot be forced to do so—is hardly a recipe for effective enforcement.

As in the past, China—and Russia, to a lesser extent—may have supported the new sanctions primarily to send North Korea a message of unified international condemnation. But North Korea will hardly infer from the passage of a murkily worded, patchily enforced resolution that it has exhausted its ability to wring concessions from its neighbours and exploit their differences. Moreover, even if the new measures are consistently enforced, it’s not clear that punishments designed to put economic and diplomatic pressure on North Korea will change the regime’s behaviour. North Korea is already one of the most isolated and desperately poor countries in the world.

Divergent interests
A lasting solution to the North Korea problem will require more than just agreeing a common approach and collectively enforcing sanctions. The main problem is not just North Korea’s unpredictability, which is, after all, predictable. It is that there are also major differences between the various interested powers in terms of how they assess the threat and what they view as the optimal outcome.

Although China’s influence over North Korea is often overstated, China alone has the economic leverage to force the regime back to the bargaining table. China’s dilemma, however, is that there may be a fine line between the amount of pressure sufficient to force the stubborn regime to make concessions and the amount that would precipitate its collapse. The fall of the current regime would almost certainly result in a massive humanitarian crisis (more accurately, China would suddenly bear the brunt of the crisis already wracking its chronically famine-stricken neighbour). For China (and Russia) the collapse of North Korea would also be a big strategic setback. The bonds of communist solidarity may have faded since Mao Zedong sent hundreds of thousands of soldiers to fight US-led UN forces during the Korean war—but North Korea remains a buffer state, the loss of which could result in a united, US-allied Korean peninsula. 

Read the full articles below:
Key excerpts from U.N. North Korea resolution
Reuters
Claudia Parsons
6/12/2009

Value of N. Korea Sanctions Disputed
Washington Post
Blaine Harden
6/12/2009

Will sanctions ever work on North Korea?
New York Times
Martin Fackler and Choe Sang-hun
6/12/2009

Punishing North Korea
The Economist
6/17/2009

ORIGINAL POST: The DPRK has historically faced few substantive repercussions from its missile and nuclear tests due to roles that Russia and China occupy both in the UN Security Council and in their status as North Korea’s neighbors, trading partners, and investors. Russia is developing the DPRK’s Rason Port and seeks to build a natural gas pipeline through the DPRK to South Korea.  China is the DPRK’s largest trading partner. And of course, hundreds (maybe thousands?) of  North Koreans work in both China and Russia to earn foreign currency for their government.

So how have China and Russia responded to the most recent nuclear test and missile launches? China has issued some tough language condeming the test and supposedly canceled some cultural exchanges, and  Russian President Medviev has also expressed concern in the

Western business media:

We have always had good relations with the North Korean leadership. But what has happened raises great alarm and concern. I have had quite a number of telephone talks with the Prime Minister of Japan and the President of South Korea. We need to think about some measures to deter those programs that are being conducted. We hope the North Korean leadership will get back to the negotiating table, because there is no other solution to this problem. The world is so tiny—as we see from the economic problems common to all of us. But indeed, WMD development or [nuclear] proliferation is a danger that is even higher than that. I’m prepared to discuss this matter in more detail during our meeting with President Obama in Moscow in early July. And we’re going to discuss this in other forums also.

As the UN Security Council debates a resolution in response to the DPRK’s recent nuclear test and missile launches, China appears to be the DPRK’s strongest partner.  According to the New York Times:

Negotiations over toughening sanctions against North Korea in the wake of its underground nuclear test last month have stalled over the issue of inspecting cargo ships on the high seas, according to two Security Council diplomats. China has yet to sign off on the idea that North Korean vessels could be stopped and searched, the diplomats said. Ambassadors from the five permanent members of the Security Council — the United States, Russia, China, Britain and France — plus Japan and South Korea, locked in intensive bargaining sessions all week, have agreed on other issues, including widening an arms embargo and financial restrictions, the diplomats said. North Korea has declared cargo inspections an act of war.

So it looks like Russia is “ok” with searching the DPRK’s cargo ships?  That is surprising.

Aside from inspecting cargo ships, the US is pushing for the UNSC resolution to restrict the DPRK from the global financial system (a la Banco Delta Asia).  According to the Washington Post:

State Department spokesman P.J. Crowley confirmed yesterday that the United States was considering targeting North Korea’s access to financial markets. A draft of the resolution urges U.N. member states to cut loans, financial assistance and grants to North Korea and its suppliers for programs linked to its military program. The draft also expands an asset freeze and travel ban.

The Bush administration applied similar financial pressure in 2005, infuriating Pyongyang. Crowley noted that, during a tour of Asian capitals this week, Deputy Secretary of State James B. Steinberg was accompanied by Treasury Undersecretary Stuart A. Levey, the architect of the Bush-era sanctions.

“Obviously, Stuart Levey’s presence on this team would indicate that we’re . . . looking at other ways that we can bilaterally put pressure on North Korea to return to the negotiating process,” Crowley said.

Additionally, the Obama administration has signaled that it might take the advice of John Bolton, former President Bush’s UN ambassador.  According to the Washington Post:

The United States will consider reinstating North Korea to a list of state sponsors of terrorism, Secretary of State Hillary Rodham Clinton said in an interview broadcast yesterday as the Obama administration looks for ways to ratchet up pressure on Pyongyang after recent nuclear and missile tests.

 ”We’re going to look at it,” Clinton said on ABC’s “This Week” when asked about a letter last week from Republican senators demanding that North Korea be put back on the list. “There’s a process for it. Obviously we would want to see recent evidence of their support for international terrorism.” 

Secretary of State Clinton’s comment “we would want to see more evidence of their support for international terrorism” refers to a legal requirement for any nation to be added to the list.

Here is the press release on the nuclear test by the US Director of National Intelligence.

Read more here:
Medvedev’s Strong Words for North Korea
Business Week
Maria Bartiromo
6/3/2009

Talks on North Korea Sanctions Stall Over Inspections
New York Times
Neil MacFarquhar
6/5/2009

U.S. Pushes U.N. Draft on N. Korea
Washington Post
Colum Lynch and Glenn Kessler
6/6/2009

U.S. to Weigh Returning North Korea to Terror List
Washington Post
Peter Finn
6/8/2009

U.S. Weighs Intercepting North Korean Shipments
New York Times
David E. Sanger
7/7/2009

The Congressional Research Service (CRS) is one of the primary sources of information for policy makers in the US Congress.  They have recently published three updated reports on the DPRK:

US Assistance to North Korea (PDF)
Mark Manyin and Mary Beth Nikitin 
May 20, 2009

North Korea’s Nuclear Weapons (PDF)
Mary Beth Nikitin 
May 5, 2009

North Korea’s Nuclear Weapons Development and Diplomacy (PDF)
Larry A Nikesch
May 4, 2009

You may download these papers to your computer or print them out, but they are worth being familiar with. 

Other Congressional Service Reports on the DPRK can be found here.

According to Bloomberg:

China suspended government exchanges with North Korea after Kim Jong-Il’s regime last week tested a nuclear device and fired short-range missiles, Yonhap News said.

China has halted plans to send officials to North Korea and won’t accept visits from Kim’s government either, the Korean- language news agency said today, citing unidentified diplomatic sources in Beijing.

China’s foreign ministry has said the country “resolutely opposes” North Korea’s nuclear test. China on May 25 agreed with the U.S., Japan and Russia to work toward a United Nations Security Council resolution censuring North Korea. The U.S. and Japan want the statement to call for cutting the communist country’s global financial ties, UN diplomats said.

This is slightly more significant than the “tough talk” Beijing is dishing out to the DPRK in the Chinese press. According to Voice of America:

China’s state-run media these days are running stories bluntly criticizing North Korea.  

Tuesday’s English edition of the Global Timesnewspaper quotes Chinese North Korea analyst, Zhang Lianggui, as saying the catastrophe of a mishandled North Korean nuclear test is “an unprecedented threat” to China.

Monday, the paper quoted Tsinghua University professor Sun Zhe as saying North Korea’s nuclear test has apparently spoiled the traditional bonds between the two countries, saying Pyongyang no longer follows Beijing.

 And according to Reuters:

The top item on the Chinese website of Beijing’s embassy in Pyongyang is a condemnation of North Korea’s nuclear test.

That, and a recent blast of blunt criticism of North Korea in China’s state-run press, suggest the rancor that officials feel toward their communist neighbor — anger likely to bring Beijing behind a U.N. resolution condemning the May 25 test and threatening fresh sanctions.

North Korea’s second nuclear test took place 85 km (53 miles) from China’s border, and the tremors from the blast forced many schools on the Chinese side to evacuate, wrote Zhang Lianggui, a prominent Chinese expert on the North.

He warned of catastrophe if Pyongyang mishandles a nuclear test.

“Future generations of the Korean people will have no place of their own, and China’s reviving northeast will burst like a bubble,” Zhang wrote in the Global Times, a popular tabloid, on Tuesday.

“This is an unprecedented threat that China has never faced in its thousands of years.”

The web page of the PRC embassy in Pyongyang is here.  I do not see any of this language on their page.  The top line states “DPRK top leader inspects industrial, farm facilities” and the main story says “Year of China-DPRK friendship aims at enhancing bilateral ties.”  Additionally, in the section devoted to Chinese media on the DPRK, the last story was posted on July 4, 2007.

Read the full story here:
China Suspends North Korea Exchanges, Yonhap Reports
Bloomberg
Kyung Bok Cho and Dune Lawrence
5/31/2009

China Withholds Talk Tough Toward North Korea 
VOA News
6/2/2009

China anger with North Korea echoes in the press
Reuters
6/2/2009

According to Forbes:

The upbeat U.S. consumer confidence figures as well as Japan’s improving trade data wiped out worries over North Korea’s recent belligerance, boosting Asian shares across the board on Wednesday.

Tokyo shares opened higher after the U.S. Conference Board said overnight that the U.S. consumer confidence index surged to 54.9 in May from 40.8 in April, the biggest monthly jump since April 2003, and better than the market consensus of 42.3.

The benchmark Nikkei 225 was up 1.5% to 9,446.80 after the midday break. Investors placed buy orders after Japan’s exports showed modest signs of recovery in April.

Read the full article here
Asian Markets Up on US Confidence
Forbes
Vivian Wai-yin Kwok
5/27/2009

North Korea Uncovered v.16
Download it here

The most recent version of North Korea Uncovered (North Korea Google Earth) has been published.  Since being launched, this project has been continuously expanded and to date has been downloaded over 32,000 times. 

Pictured to the left is a statue of Laurent Kabila of the Democratic Republic of Congo.  This statue, as well as many others identified in this version of the project, was built by the North Koreans. According to a visitor:

From the neck down, the Kabila monument looks strangely like Kim Jong Il: baggy uniform, creased pants, the raised arm, a little book in his left hand. From the neck up, the statue is the thick, grim bald mug of Laurent Kabila (his son Joseph is the current president). “The body was made in North Korea,” explains my driver Felix. In other words, the body is Kim Jong Il’s, but with a fat, scowling Kabila head simply welded on.

This is particularly interesting because there are no known pictures of a Kim Jong il statue.  The only KJI statue that is reported to exist is in front of the National Security Agency in Pyongyang.  If a Kim Jong il statue does in fact exist, it might look something like this.

Thanks again to the anonymous contributors, readers, and fans of this project for your helpful advice and location information. This project would not be successful without your contributions.

Version 16 contains the following additions: Rakwon Machine Complex, Sinuiju Cosmetics Factory, Manpo Restaurant, Worker’s Party No. 3 Building (including Central Committee and Guidance Dept.), Pukchang Aluminum Factory, Pusan-ri Aluminum Factory, Pukchung Machine Complex, Mirim Block Factory, Pyongyang General Textile Factory, Chonnae Cement Factory, Pyongsu Rx Joint Venture, Tongbong Cooperative Farm, Chusang Cooperative Farm, Hoeryong Essential Foodstuff Factory, Kim Ki-song Hoeryong First Middle School , Mirim War University, electricity grid expansion, Tonghae Satellite Launching Ground (TSLG)” is also known as the “Musudan-ri Launching Station,” rebuilt electricity grid, Kumchang-ri suspected underground nuclear site, Wangjaesan Grand Monument, Phothae Revolutionary Site, Naedong Revolutionary Site, Kunja Revolutionary Site, Junggang Revolutionary Site, Phophyong Revolutionary Site, Samdung Revolutionary Site, Phyongsan Granite Mine, Songjin Iron and Steel Complex (Kimchaek), Swedish, German and British embassy building, Taehongdan Potato Processing Factory, Pyongyang Muyseum of Film and Theatrical Arts, Overseas Monuments built by DPRK: Rice Museum (Muzium Padi) in Malaysia, Statue de Patrice Lumumba (Kinshasa, DR Congo), National Heroes Acre (Windhoek, Namibia), Derg Monument (Addis Ababa, Ethiopia), National Heroes Acre (Harare, Zimbabwe), New State House (Windhoek, Namibia), Three Dikgosi (Chiefs) Monument (Gaborone, Botswana), 1st of May Square Statue of Agostinho Neto (Luanda, Angola), Momunment Heroinas Angolas (Luanda, Angola), Monument to the Martyrs of Kifangondo Battle (Luanda, Angola), Place de l’étoile rouge, (Porto Novo, Benin), Statue of King Béhanzin (Abomey, Benin), Monument to the African Renaissance (Dakar, Senegal), Monument to Laurent Kabila [pictured above] (Kinshasa, DR Congo). 

(Hat tip to Michael Madden) This morning the US House Permanent Select Committee on Intelligence published the testimony of Dennis Blair,  Director of National Intelligence.  Below is the section on North Korea:

North Korea’s Nuclear Ambitions
In addition to a possible India-Pakistan conflict, Pyongyang’s nuclear ambitions and proliferation behavior threaten to destabilize East Asia. The North’s October 2006 nuclear test is consistent with our longstanding assessment that it had produced a nuclear device. Prior to the test, we assessed that North Korea produced enough plutonium for at least a half dozen nuclear weapons. The IC continues to assess North Korea has pursued a uranium enrichment capability in the past. Some in the Intelligence Community have increasing concerns that North Korea has an ongoing covert uranium enrichment program.

Pyongyang probably views its nuclear weapons as being more for deterrence, international prestige, and coercive diplomacy than for warfighting and would consider using nuclear weapons only under certain narrow circumstances. We also assess Pyongyang probably would not attempt to use nuclear weapons against US forces or territory unless it perceived the regime to be on the verge of military defeat and risked an irretrievable loss of control. Progress was made, albeit painstakingly, last year in Six Party Talks; the DPRK has shut down three core facilities at Yongbyon and has completed eight of the eleven disablement steps. However, much work remains. At the latest round of talks held in December in Beijing, the DPRK refused to agree to a Six Party verification protocol needed to verify the completeness and correctness of its nuclear declaration. Since then, Pyongyang has issued hardline statements suggesting further challenges to denuclearization.

On the proliferation side, North Korea has sold ballistic missiles and associated materials to several Middle Eastern countries, including Iran, and, in our assessment, assisted Syria with the construction of a nuclear reactor. We remain concerned North Korea could again export nuclear technology. In the October 3 Second Phase Actions agreement, the DPRK reaffirmed its commitment not to transfer nuclear materials, technology, or know-how. We assess Pyongyang is less likely to risk selling nuclear weapons or weapons-quantities of fissile material than nuclear technology or less sensitive equipment to other countries or non-state actors, in part because it needs its limited fissile material for its own deterrent. Pyongyang probably also perceives that it would risk a regime-ending military confrontation with the United States if the nuclear material was used by another country or group in a nuclear strike or terrorist attacks and the United States could trace the material back to North Korea. It is possible, however, that the North might find a nuclear weapons or fissile material transfer more appealing if its own stockpile grows larger and/or it faces an extreme economic crisis where the potentially huge revenue from such a sale could help the country survive.

We assess that poor economic conditions are fueling systemic vulnerability within North Korea. Public statements by the regime emphasize the need for adequate food supplies. A relatively good fall harvest in 2008, combined with the delivery of substantial US food aid—500,000 tons of grain have been promised and about one-third of this has been delivered—probably will prevent deterioration in the food security situation during the next few months. However, we assess North Korea is still failing to come to grips with the economic downturn that began in the early 1990s and that prospects for economic recovery remain slight. In addition to food, shortages in fertilizer and energy continue to plague the economy. Investment spending appears is negligible, trade remains weak, and we see little progress toward economic reforms. Pyongyang has long been in default on a relatively large foreign debt and we assess that badly needed foreign investment will not take place unless the North comes to terms with its international creditors and conforms to internationally accepted trade and financial norms, badly needed foreign investment will not take place.

Pyongyang’s strategic posture is not helping its economy. Trade with Japan has fallen precipitously since the nuclear and missile tests of 2006, and, while commercial trade with South Korea rose in 2008, South Korean aid and tourism to the North declined due to increased North-South tensions.

Despite this poor economic performance and the many privations of the North Korean public, we see no organized opposition to Kim Jong Il’s rule and only occasional incidents of social disorder. Kim probably suffered a stroke in August that incapacitated him for several weeks, hindering his ability to operate as actively as he did before the stroke. However, his recent public activities suggest his health has improved significantly, and we assess he is making key decisions. The state’s control apparatus by all accounts remains strong, sustaining the dismal condition of human rights in North Korea.

Citation:
Annual Threat Assessment of the Intelligence Community for the House Permanent Select Committee on Intelligence
Dennis C. Blair, Director of National Intelligence
25 February 2009
HPSCI ATA FEB 2009–IC STATEMENT FOR THE RECORD
pp. 24-26 

The full report can be downloaded in PDF here.

UPDATE:  A reader points out in the comments that the DPRK is in fact looking to sell its remaining UNUSED fuel rods…so I made a fairly substantial mistake here.  My confusion on the subject seems to have come from my reading of the Joong Ang Ilbo’s coverage, but I take full responsibility for not paying close enough attention to the other stories.

Here is the specific quote: “The North asked us to focus on discussing how to handle the spent fuel rods as much as possible” (Joong Ang Ilbo)

The revised facts:

1. The DPRK has 14,800 fresh fuel rods—equivalent to just over 100 tons of uranium (RIA Novosti)
2. The materials are reportedly worth over US$10 million (Yonhap). 

ORIGINAL POST:
Hwang Joon-gook, a South Korean diplomat in charge of the denuclearization talks with Pyongyang, led a team of South Korean officials and civilian nuclear experts on a fact-finding mission to the DPRK  to decide whether to buy Pyongyang’s spent fuel rods.

The facts:
1. The DPRK has 14,800 spent fuel rods (Joong Ang Ilbo)
2. This is equivalent to just over 100 tons of uranium (RIA Novosti)
3. The materials are reportedly worth over US$10 million (Yonhap). 
4. The rods are apparently up to 15 years old (Yonhap).
5. The US alleges that the DPRK is enriching uranium as well.  Richardson has more information here.

Just last week, Selig Harrson reported that the DPRK told him “it has already weaponized the 30.8 kilograms (67.8 pounds) of plutonium listed in its formal declaration and that the weapons cannot be inspected.” This amount of plutonium could fuel four or five warheads.

According to NTI:

“Even if the D.P.R.K.-U.S. diplomatic relations become normalized, our status as a nuclear-armed state will never change as long as the U.S. nuclear threat to us remains, even to the slightest degree,” said the [DPRK’s] Foreign Ministry, which issued a similar message several days earlier.

For its own reasons, Russia does not consider the DPRK a nuclear power despite the fact that they have detonated a nuclear device—a fact that would raise eyebrows across the DPRK if reported by the local media. In fact, it was the Russians who supplied the DPRK with the Yongbyon reactors in the first place!

In support of Russia’s position, however, Yonhap offers the following:

North Korea detonated its first atomic device in 2006. The relatively small underground test had less than a kiloton in yield, below what is considered a successful nuclear test.

According to the AFP (via Singapore’s Straits Times):

The Apple Daily reported on Thursday that prosecutors had begun investigating claims that Chen might have pocketed 300 million Taiwan dollars of financial aid in 2004 and 2005 in exchange for North Korea handling the island’s nuclear wastes.

The daily, which did not name its sources, alleged the cash would be given to a high-ranking North Korean official through a contact who promised to help Taipei set up a ‘direct communication channel’ with Mr Kim Jong-Il’s regime.

However, Taiwan did not establish any form of contact with North Korea nor send its nuclear waste to the communist state after the foreign ministry paid the money, the report said.

Self-ruled Taiwan is formally recognised by only 23 countries and does not have diplomatic ties with North Korea.

It is plausible that the DPRK would be interested in this business.  In June 2008, Michael Rank informed us about the DPRK’s efforts to recycle toxic waste as well. 

Read the full story here:
Funds were for N.Korea
AFP via Straits Times
1/8/2009