Archive for November, 2002

The Nautilus Institute primer on the DPRK

Tuesday, November 26th, 2002

Here is the main page

The Nautilus Institute has created the DPRK Briefing Book to enrich debate and rectify the deficiencies in public knowledge. Our goal is that the DPRK Briefing Book becomes your reference of choice on the security dilemmas posed by North Korea and its relations with the United States. The DPRK Briefing Book is part of the Nautilus Institute’s “US-DPRK Next Steps: Avoiding Nuclear Proliferation and Nuclear War in Korea” project.

The completed DPRK Briefing Book will cover approximately two-dozen “Policy Areas,” each containing issue briefs, critical analyses from diverse perspectives, and key reference materials, some of which are available as PDFs. (To view the PDFs, you will need to download and install the free Adobe Acrobat Reader). We will post additional Policy Areas over the coming months. If you would like to be notified as they are completed, please sign up for NAPSnet, if you haven’t already.

The Nautilus Institute seeks a diversity of views and opinions on controversial topics in order to identify common ground. Views expressed in the Briefing Book are those of the authors and do not necessarily reflect the official policy or position of the Nautilus Institute. The information contained in these pages may be downloaded, reproduced and redistributed as long as it has not been altered and is properly attributed. Permission to use Nautilus Institute materials for publications may be attained by contacting us.

Here are sections of interest:

About DPRK, Agriculture, China, Economy, Energy, Transition


DPRK goes euro, Part 1

Monday, November 25th, 2002

According to the BBC:

North Korean authorities have told all holders of US dollar accounts in the country that they must change them into euro accounts by the end of this month. Reports in China’s state media say the new regulations have already been applied to North Koreans who hold dollars in cash. Foreign residents in the capital Pyongyang now say they have been informed by North Korean officials that starting from the end of this month all accounts and transactions currently in dollars must be conducted in euros. They say that suppliers based in China sending goods to North Korea have been given the same instruction. 

Interesting factoid from the article: The $US has been the most widely used currency in the DPRK–not just for international transactions–but in shops and markets within the country.  An unnamed academic claimed that because of this and the fact that most of the DPRK’s neighbors use the dollar, the “euroization” is not likely to succeed.  Speculation: I am not sure how this is supposed to “punish” the US in any real economic way.  The amount of seigniorage the US government collects due to citizens of the DPRK holding greenbacks can’t be that big.    

Putting on my “public choice” hat, this plan could also be a way of combating black market transactions, in which case, an argument with the US is just a nice excuse to mix things up.

From earlier in the day:
Sample notes nd coins have been displayed outside Pyongyang’s Korean Trade Bank


Pakistan denies N Korea nuclear deal

Sunday, November 24th, 2002


Pakistan says there is “no truth whatsoever” in a US newspaper report that says it has been co-operating with North Korea on nuclear weapons technology.

The New York Times said on Saturday that North Korea had given Pakistan missile parts to enable its nuclear arsenal to reach “every strategic site in India”.

Pakistan, the paper said, had given North Korea designs for machinery and gas centrifuges that could be used to make highly enriched uranium for the country’s nuclear weapons programme.

Pakistan Government spokesman, Major-General Rashid Qureshi dismissed the report: “I do not know where the New York Times gets its information from,” he told Reuters news agency.

“I am convinced they [the New York Times] need to update their intelligence gathering system.”


The New York Times estimated that nuclear arms cooperation between Pakistan and North Korea could “put at risk South Korea, Japan and 100,000 American troops in north-east Asia”.

It says the two countries began sharing military technology as early as 1993 when the Pakistani Prime Minister at the time, Benazir Bhutto, visited Pyongyang.

And it quotes unnamed US officials as saying that Pakistan has continued its “murky” relationship with North Korea even after Pakistan sided with the United States in its war against terrorism last year.
Nuclear ambitions

The North Koreans were reported to have acknowledged in October that they had a secret uranium enrichment project for making nuclear weapons. Last week the US intelligence agency, the CIA, released a report saying that North Korea was building a plant that could produce enough uranium for two or more nuclear weapons a year.

The New York Times says the US Government “has never publicly discussed the role of Pakistan in supplying that effort”.

It quoted American and South Korean officials as saying that the US administration regards Pakistan’s role “so critical” in its war against Osama bin Laden’s al-Qaeda network that it has chosen to remain quiet on Pakistan’s role in nuclear proliferation.


Korea Trade Bank in Dandong

Thursday, November 21st, 2002

According to the Chosun Ilbo (2002-11-21):

It has been learned that North Korea recently opened a branch office of the (North) Korea Trade Bank in Dandong, China across the border from Sinuiju, a step tied with the designation of Sinuiju as a special administrative region. The only bank in the North specialized in foreign currency and responsible for exchange rates, the Korea Trade Bank opened its Dandong branch in October under the a judgment that promotion of economic cooperation with Dandong is a prerequisite to success for the Sinuiju capitalism experiment, said South Korean government officials.

The officials saw the step as indicating Pyongyang’s will to develop the Sinuiju SAR despite the detention of Yang Bin, the first administrative officer of the SAR. The Korea Trade Bank is empowered to conclude agreements with foreign financial institutions under accords reached between governments involved. The bank’s recent opening of its branch office in Dandong, accordingly, indicates that China, which originally opposed to the Sinuiju SAR, is in favor of it now.

The Korea Trade Bank’s Dandong branch is expected to handle not only inducement of foreign investments into the Sinuiju SAR, but also North Korean corporations’ exports to China via Dandong, observed the officials.

The article used as a source for this post has since been removed from the Choson Ilbo web page.


North Korea admits nuclear arsenal

Sunday, November 17th, 2002


North Korea has said for the first time that it has nuclear weapons.

A commentary broadcast on state radio said North Korea had developed “powerful military counter-measures, including nuclear weapons” to cope with what it called mounting nuclear threats from the United States.

Last month, Washington announced that North Korea had admitted to having a programme for producing highly-enriched uranium – a key ingredient in nuclear weapons.

But this is the first time the communist state has made such an acknowledgement.

A foreign ministry statement in October said only that the country was “entitled” to have nuclear weapons.

President George Bush has repeatedly called on Pyongyang to eliminate its nuclear programme, saying it is the only way the country can have a viable future.

The BBC’s Charles Scanlon says state media often contains hostile rhetoric and it is not clear how literally the broadcast – which was not attributed – is meant to be taken.

He says for years North Korea has tried to keep the world guessing about its nuclear capabilities.

Pyongyang’s demands

Sunday’s broadcast accused Washington of “slandering and injuring” North Korea.

America’s “reckless manoeuvres”, it said, were threatening the country’s right to existence and sovereignty.

“Under these circumstances we cannot sit idle with our arms folded,” the radio said.

It also repeated Pyongyang’s demands that the US must sign a non-aggression pact, insisting it was the only way to resolve the nuclear issue.

The timing of the broadcast fits in with a pattern of North Korean “confession”, according to Michael Yahuda, professor of International Relations at the London School of Economics and Political Science.

He told BBC News Online, it appeared they wanted to clear the way for talks.

“The US is threatening and, by responding, Pyongyang is sending out a message: ‘We have nuclear weapons as well, so lets find a way to negotiation’,” he said.

Aid stopped

The US defence secretary, Donald Rumsfeld, said last month that North Korea might have one or two nuclear weapons.

Earlier this week, the US, South Korea, the European Union and Japan agreed to halt fuel aid to North Korea until Pyongyang moved to dismantle the programme.

Under a 1994 accord, North Korea agreed to freeze its nuclear programme in return for 500,000 tonnes of fuel oil a year in aid.

But Washington considers that Pyongyang nullified the 1994 pact when it reportedly admitted to a US envoy that it was trying to build nuclear weapons.


No more oil aid for N Korea

Friday, November 15th, 2002


South Korea has pressed North Korea to scrap its suspected nuclear programme, welcoming a decision by the US and its allies to stop deliveries of oil to its impoverished neighbour.

Diplomats from South Korea, the US, the European Union and Japan agreed that a 42,000 tonne shipment of fuel, currently on its way to North Korea, should be the last.

The US had called for the aid to be stopped, unless the Communist regime dismantled its alleged nuclear weapons programme.

South Korea and Japan had both argued for continuing the fuel shipments over the winter, and analysts say they faced several weeks of pressure from the US over the issue.

But on Friday South Korea said it was “quite united” with its allies and “pleased” with the decision to cut off supplies.

“I hope this message will be heard by North Korea,” a senior government official told reporters.

The South Korea Deputy Foreign Minister Lee Tae-shik said the government would continue to holds talks with Pyongyang.


The fuel decision was announced as the allies met in New York as part of the Korean Peninsula Energy Development Organisation (Kedo), which administers a 1994 accord designed to limit North Korea’s nuclear ambitions.

Under the plan, North Korea agreed to freeze its nuclear programme in return for 500,000 tonnes of fuel oil a year in aid.

Washington considers that Pyongyang nullified the 1994 pact, after confessing to a US envoy last month that it was trying to build nuclear weapons with enriched uranium.

“Future (oil) shipments will depend on North Korea’s concrete and credible actions to dismantle completely its highly enriched uranium programme,” said the Kedo statement.

North Korea says it will only scrap its nuclear programme if the US signs a non-aggression treaty.

Both South Korea and Japan have expressed doubts that stopping oil deliveries would persuade North Korea to terminate its nuclear weapons programme.

They fear it would instead lead to a revival of an earlier, plutonium-based nuclear programme.


Kaesong Industrial Park Deal Signed

Saturday, November 2nd, 2002

A deal between the ROK and DPRK governments should allow construction to begin next month in Kaesong (Just north of the DMZ and former capital city).

The DPRK has designated the area as a Special Economic Zone (SEZ), giving companies a free hand there.

A little more here…