Books on North Korea
Update No: 051 - (25/07/07)
The welcome progress in June (after earlier delays) on the North Korean
nuclear issue continued into July. International Atomic Energy Agency (IAEA)
inspectors, expelled in 2002, returned to verify the closure of the Yongbyon
nuclear site. The Six Party Talks (6PT) resumed in Beijing, and proceeded
amicably. Yet they set no precise timelines for the next phase in this lengthy
process, which may well throw up further difficulties. Quite separately, a major
investment by an Egyptian firm in Pyongyang's most modern cement works is a
straw in the wind, raising hopes that other companies may now judge it safe to
invest in North Korea and begin the long overdue task of economic
The IAEA returns
As its website records, the IAEA has a long and tortuous history with North
Korea. The Yongbyon site aroused suspicion ever since the 1980s, and the early
1990s saw many a game of cat and mouse. Under the 1994 US-DPRK Agreed Framework
(AF), the agency monitored the shutdown of Yongbyon's 5 megawatt reactor and
other facilities - only to be expelled at end-2002 as a fresh crisis blew up
(see Background). With Yongbyon back in operation, generating spent fuel for
reprocessing into plutonium, four years later in October 2006 Kim Jong-il was in
a position to test a small nuclear device - and he did.
In that sense resealing Yongbyon now is to lock the stable door when the horse
has bolted already. North Korea's surprising cooperativeness may reflect this.
Not only has this site done its job in making North Korea a nuclear power, but
Yongbyon is ancient (1950s) graphite-moderated technology, similar to the UK's
Windscale. Now in poor condition, its closure - this time, crucially, with
disabling and dismantling set to follow - may be no great loss; especially if,
as the US suspects, Pyongyang also has a separate covert nuclear programme based
on a different technique, using highly enriched uranium (HEU).
A cordial 6PT
Even as IAEA inspectors confirmed the shutdown of Yongbyon's reactor on July
18 and four further facilities a day later, the six-party talks - both Koreas,
the US, China, Japan and Russia - resumed in Beijing after a four month hiatus
due to the Banco Delta Asia (BDA) affair (see Background). The atmosphere was
cordial, with the two principals - Christopher Hill, the US assistant secretary
of state for East Asia, and DPRK vice foreign minister Kim Kye-gwan - meeting
bilaterally several times, including over lunch.
Yet the meeting ended with no joint statement, much less the tight timelines
that were so notable a feature of the 6PT agreement on February 13 (F13) - but
which in the event slipped owing to the BDA affair. It was agreed that five
working groups (WGs) created under F13, which have only met once so far, would
convene again in August, followed by another 6PT round in September. Hill still
professed optimism that the next stage - disabling Yongbyon, i.e. going beyond
merely closing it - could be done this year.
The 3D problem
Further progress, as ever, depends on North Korea's attitude. Several
potential problems may arise, which can be summed up as the three Ds: disable,
dismantle, and declare.
The first two refer to Yongbyon. As in the usefully ambiguous phrase devised for
IRA weapons to avoid any hint of surrender in the Northern Ireland peace
process, the goal is for Yongbyon to be 'put beyond use' so it can never be
switched on again, as fatefully it was in 2002. Hence this time Yongbyon's
present, second closure is just a first step, with its disablement and eventual
dismantlement as further stages yet to follow.
This raises two questions: what concrete actions are to count, especially as
disablement; and what North Korea will get in return. The first question is in
part a technical one for experts, as Chris Hill admitted. But like the second it
also has a political dimension, with scope for Pyongyang to prevaricate if so
minded. At the very least, as the BDA imbroglio demonstrated, North Korea may
not budge an inch at any given stage unless and until its demands at that point
are fully met. Similarly, not till 6,200 tons of heavy fuel oil (HFO) physically
arrived - the first batch of 50,000 tons due under F13 - did Yongbyon actually
close. The DPRK speaks of 'action for action', but in practice it likes others
to move first.
For the next dismantlement phase F13 commits a further 950,000 tons, making a
million in all. But with North Korea's ageing facilities only able to absorb
50,000 tons per month, the US hopes Pyongyang will agree to substitute other
forms of aid - otherwise deliveries could drag on into 2009. That will need
discussing, as will the precise modalities of what each side will do at each
stage: how much disabling for how much HFO or other goodies.
Working groups have much to do
All this guarantees plenty of work for the 5 WGs. Their remits are
denuclearization of the peninsula; normalization of North Korea's ties with the
US and with Japan; economic and energy cooperation (aid, really) ; and a peace
and security mechanism for northeast Asia. Quite how this will work in practice
is unclear, since the modalities of the next phase will entail tight
coordination between at least two WGs: those on denuclearization and aid.
The two WGs on diplomatic normalization have contrasting prospects. Washington,
in its new pro-engagment mood and despite mutterings from Republican hawks, may
move quite quickly towards removing North Korea from the State Department's list
of nations regarded as sponsors of terrorism, as well as lifting the provisions
of the Trading With the Enemy Act (TWEA) which has banned most bilateral trade
for over half a century.
A standoff with Japan?
With Japan, by contrast, relations could hardly be worse. The Bush
administration's shift to engaging Pyongyang has left Japan isolated as the last
hardliner in the 6PT. Strangely fixated on the issue of long-past abductions -
dreadful, to be sure; but one would imagine Kim Jong-il's missiles posed a more
immediate threat - Tokyo is piling on the pressure. Since last year it has
banned most trade with North Korea, going well beyond sanctions imposed by the
UN Security Council (UNSC) last July and October after North Korea's long-range
missile and nuclear tests, respectively. It is now preparing to seize the
palatial headquarters of Chongryon - the organization of pro-North Koreans in
Japan, so a kind of de facto DPRK embassy - over debt defaults by Chongryon-affiliated
Naturally Kim Jong-il is not amused. North Korea has queried Japan's right even
to take part in the 6PT. On July 21, as he left Beijing for Pyongyang, Kim
Kye-gwan warned of "catastrophe" if Japan carries on like this. Yet
conceivably Tokyo might change its tune. As of late July there seemed a fair
chance that the ruling Liberal Democratic Party (LDP) may lose upper house
elections due on July 29. In that case Shinzo Abe, the floundering prime
minister who has played up the abduction issue and other nationalist causes,
might be forced from office. Any successor, one would hope, will review Japan's
DPRK policy, which at present seems based more on emotion than any conception of
long-term, future-oriented national interest. Otherwise the fear is that
Pyongyang may play Japan as its next BDA, refusing to return to the 6PT unless
Tokyo either withdraws or backs down.
They still want LWRs
In another calculated parting shot to the press at Beijing airport, Kim
Kye-gwan reiterated the DPRK's longstanding demand to receive light water
reactors (LWRs) as a reward for eventual full nuclear dismantlement. In the 1994
AF the US committed to build two such in return for Yongbyon's closure, and set
up the Korea Peninsula Energy Development Organization (KEDO) consortium, funded
mainly by South Korea and Japan. From 2003 the second North Korea nuclear crisis
sounded KEDO's death-knell; its LWRs languish part-built at Kumho on the DPRK's
east coast. F13 is silent on LWRs, but an earlier 6PT joint statement in
September 2005 did agree (at Pyongyang's insistence) to discuss them "at an
appropriate time". Yet the US is on record as opposing any supply of new
LWRs, so here again there could be conflict - depending how far, or soon, the
DPRK pushes this.
"Over the mountains are mountains", says a Korean proverb. With Mt.
Disablement to be scaled first before the final Everest of Mt. Dismantlement,
the LWR issue will probably be postponed for now. So may the climactic $64,000
question of asking Kim Jong-il to declare, much less give up, his nuclear
weapons. Which brings us to the third and final D.
Nothing to declare?
F13 commits North Korea to provide "a complete declaration of all
nuclear programmes …including plutonium extracted from used fuel rods."
That raises at least two problems, one being whether this includes itemizing
nuclear weapons at this stage. Kim Kye-gwan was studiedly enigmatic on this
point after the latest 6PT, riposting to journalists: "What do you
think?" Almost certainly this will be left until a much later stage.
Less easy to duck will be the highly enriched uranium (HEU) crux. It was US
suspicions - based on revelations by Pakistan's rogue nuclear entrepreneur, Dr A
Q Khan - that North Korea was violating the AF with a second, covert nuclear
programme based on HEU which led to confrontation in 2002 and the present crisis
since. Pyongyang denies pursuing HEU, much less having once confessed it as
Washington claims. Yet the US has since admitted that it does not know how far
along this activity had progressed.
Given the will, all this can be finessed. North Korea could declare some
components, like tubes for centrifuges, without owning up to HEU as such. When
Hill made his surprise first visit to Pyongyang in June, it was rumoured that
the US might even offer quietly to buy off the HEU programme. But if Pyongyang
decides to brazen it out and deny it all, the 6PT could be in trouble again.
Concrete faith, from Cairo
As so often the nuclear issue dominated the news, but at least one other key
development must be mentioned. On July 16 Orascom Construction Industries (OCI)
- a major global building firm, controlled by Egypt's leading business family,
with reported revenues for 2006 of $2.8 billion - announced a $115 million
investment to acquire 50% of Sangwon Cement from the state-owned Pyongyang
Myongdang Trading Corporation. Sangwon is both North Korea's most modern cement
plant, and the closest to the capital.
OCI will invest in the form of a capital increase, upgrading Sangwon's capacity
(which it has long operated below) from 2.5 to 3 million tons per year. The
facilities acquired also include limestone and gypsum quarries, a coal mine and
a hydroelectric power station. Germany's KHD, which built the plant in the 1980s
for $140 million - cash, in view of the DPRK's default record - is among three
bidders now to rehabilitate it for OCI.
OCI is also exploring opportunities in the mining and power sectors, as well as
a potential economic trade zone in northern North Korea. At Sangwon it claims to
have negotiated a Western-style shareholders' agreement, with governance and
technical control assurances - and even permission to bring in personnel from
the US if necessary.
All this would be normal elsewhere in the world, but in North Korea it is a
breakthrough. This may be the first confirmed, substantial, transparent, wholly
commercial investment ever in the DPRK by a world-class firm with no ulterior
geopolitical axe to grind - as is the case for Chinese and South Korean firms.
Evidently, Orascom regards business and political conditions in North Korea as
now ripe for market entry for a major joint venture. One can but hope they are
right, and that where Egypt leads others will follow.