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Update No: 066 - (31/10/08)

North Korea: Delisted at last
Another month, another twist in the North Korean nuclear saga. As of end-September, Kim Jong-il - or whoever is in charge in Pyongyang at the moment - appeared headed down a path of nuclear defiance: expelling International Atomic Energy Agency (IAEA) inspectors from the Yongbyon reactor site, and threatening to reopen this in protest at the US refusal to take the DPRK off the State Department's list of countries regarded as supporting terrorism. North Korea had expected such delisting as the quid pro quo for its declaration of nuclear facilities, delivered on June 26; but Washington unexpectedly insisted that a verification protocol must be agreed before this would take effect. It looked like stalemate, or worse.

Enter Chris Hill. The tireless assistant secretary of state for East Asia, and as such the lead US negotiator in the Six Party Talks (6PT), visited Pyongyang on October 1-3 (as well as other regional capitals) for crisis talks with his DPRK equivalent, vice foreign minister Kim Kye-gwan. Usually loquacious and a gift to the press, Hill was uncharacteristically silent for a week after his return, suggesting that whatever deal he had brought back from Pyongyang was not unanimously acceptable in Washington, or indeed elsewhere (read on).

Delisted, at last
And then, in an unusual weekend announcement and press conference on Saturday October 11th, North Korea was finally taken off the terrorist list. Neither President George W Bush nor (interestingly) Hill was present, but the State Department insisted that it had gained robust and significant new North Korean pledges on verification. The main ones are that:

1. All six parties may participate in verification activities, including experts from non-nuclear states. The IAEA too will have an important consultative and support role.

2. Experts will have access to all declared facilities, and undeclared sites by mutual consent. Scientific procedures, including sampling and forensic activities, were also agreed upon.

3. All measures in the verification protocol, and in the monitoring mechanism already agreed, will apply not only to North Korea's admitted plutonium-based programme but also to any uranium enrichment and proliferation activities (both of which Pyongyang denies).

4. These understandings are codified in a bilateral document, which will form the basis for a formal verification protocol to be finalized and adopted by all six parties "in the near future".

Tokyo frets
Not everyone was happy. John Bolton, Bush's ex-ambassador to the UN and a stout hawk on North Korea (and much else), characteristically denounced the deal. Others too worried about the "mutual consent" clause. Previously the US had sought the right to mount 'challenge' inspections at any place or time: something few states undefeated in war could accept, let alone one as secretive as North Korea. Yet now, anything beyond Yongbyon - the DPRK's only know nuclear site, which it has clearly decided to sacrifice; it is old, and has done its job - will remain off limits unless North Korea agrees: a prospect comparable to that of flight by pigs.

The most vocal and pained objections were all the more striking since they came from the leading US ally in the region, whose cultural norms tend famously to understatement and a stiff upper lip. In rare public dissent and strong language, Japan called the delisting "very disappointing" and "extremely regrettable." A telephone call two days earlier between US secretary of state Condoleezza Rice and Japan's foreign minister, Hirofumi Nakasone, was reportedly fierce: a shouting match, by some accounts. Japan's wrath is twofold. A country within range of DPRK missiles and WMD, it was wary of a weakened agreement. But above all, Tokyo opposed delisting while North Korea's abduction of Japanese in the 1970s and 1980s remains unresolved. Yet this stance isolates Japan in the 6PT, and Washington had made it clear that it would not let this single issue derail nuclear progress. Even so, it will be for the next US administration to weigh whether the outside chance of clinching a deal with a rogue state like North Korea was really worth damaging both public and elite opinion in a core ally. Many Japanese now wonder aloud if they can trust America to defend them.

Meanwhile back at Yongbyon, North Korea has kept its part of the bargain so far. The IAEA is back on site, and disabling work has resumed. How far this will go, and when a plenary 6PT meeting will next be held, remain to be seen.

Seoul smarts
Other 6PT participants welcomed the delisting, some more fulsomely than others. In Seoul, reactions were mixed. Three leading conservative dailies, normally supportive of President Lee Myung-bak, criticised the US for yielding too much. But Lee's government hailed the deal, saying it hopes now to expand inter-Korean contacts; something which, in a break with the sunshine policy of the past decade, it had indeed linked to the North's denuclearisation.

Yet it takes two to tango. For now, back in Washington's good books, Kim Jong-il has other partners and will let Lee stew in his own juice. Northern media continue to insult the South's president almost daily. On October 16 - the same dies horribilis when both the (ROK) Won and the Kospi fell by over 9% - Rodong Sinmun, daily paper of the North's ruling Workers' Party of Korea (WPK), iced the cake of gloom in Seoul by threatening to sever all ties with the South. In fact the North is unlikely to jeopardize the money it earns from the Kaesong industrial complex; although on October 26 Southern SMEs with operations in Kaesong warned that their business was being jeopardized by civic groups launching anti-North leaflets by balloon across the Demilitarised Zone (DMZ). The other big crossborder project, the Mount Kumgang tourist resort, remains inactive, with all visits suspended ever since the North's fatal shooting of a Southern tourist there in July. 

Gas, or hot air?
Yet still Lee does not get it. End-September (after New Nations went to press last month) found him in Moscow, where on September 29 he agreed with Russia's president Dmitry Medvedev to link the inter-Korean and trans-Siberian railways, and build a gas pipeline from Russia to South Korea via North Korea. Both are good ideas, which as Lee said would help South Korea cut its logistics costs. The gas project - only a memorandum of understanding (MOU), at this stage, between Kogas (the world's largest gas importer) and Gazprom - envisages Seoul importing gas worth $3 billion annually over 30 years, starting in 2015.

There is just one small problem. It is not South Korea which has a border with Russia. Lee airily told reporters that the benefits, especially from the pipeline, will be too attractive for North Korea to ignore. This suggests, alas, that he neither knows his history, nor has he yet learnt the lessons of the failure of his approach to the North thus far.

The pipeline idea goes back two decades. The first to push for this was the late Chung Ju-yung, founder of the Hyundai conglomerate, on his pioneering first visit to North Korea in 1989. Yet not even the formidable Chung, well-connected in all three capitals, could make this happen. In those days South Korea too had cold feet - but basically the North Koreans were not interested, even in a project which could have earned them a handsome rent as well as providing badly needed energy, all at little cost or risk to their system.

Will it be different now? Kim Jong-il's regime may be in dire economic straits but it still has its pride. Pyongyang's brusque rejection of Lee's patronizing Vision 3000 plan - his offer to raise average Northern annual income per head to $3,000 - should have told him how not to handle the North. It is the same technocratic arrogance that has seen his popularity plummet at home, too. Lee knows what is best for everyone, and expects them just to tag along. But politics does not work like that anywhere, least of all with prickly North Korea: not a regime that follows anyone, meekly or otherwise, nor much given to picking the sensible business option. At this writing the North had yet to comment on Lee's gas idea, so we shall see.

Slow train
As for the railway, tracks are already being laid. On October 4 work began on a $200 million project to upgrade the 54 km rail link from Russia to Rajin: an ice-free port in the DPRK's northeast, which since 1991 has been one half of the Rason special economic zone together with the adjacent town of Sonbong. Rason has shown few signs of life hitherto; its biggest investment is a Hong Kong-owned casino, targeted at Chinese punters, who however were banned for many months after a local official blew a lot of government cash at the tables.

The new Russo-North Korean joint railway venture will also include a new container port at Rajin, built with an eye to South Korean cargo. As ever the Russian side waxed lyrical about eventual onward crossborder rail links to Seoul and Busan too. Pointedly not echoing this, North Korea's new railways minister Jon Kil-su said that he hoped the first trains will run in time for the centenary of North Korea's founding leader Kim Il-sung in 2012. (Typically of North Korea, this was the first mention of Jon's promotion; it was not announced as such. A career transport official, he replaces Kim Yong-sam who had held the post since 1998.)

This is Moscow's first big investment for 20 years in the DPRK, whose $8 billion in unpaid debts to the old USSR remain a disincentive. Wheels turn slowly in Pyongyang; negotiations over a mere 30 miles of track took seven years. With the North's wider rail infrastructure falling to pieces - modernizing it will cost at least $2 billion - no one should expect to catch a fast train from Seoul to Scotland any time soon. Physically, the journey is already feasible; but politically, despite all the excitement in Seoul last year over the relinking of cross border railways (with much rhetoric about healing the nation's severed arteries), in practice North Korea was markedly reluctant to let the new lines actually be used - even to please the more sympathetic former Roh Moo-hyun administration, much less the hated Lee Myung-bak.

A visit to Moscow in mid-October by North Korea's foreign minister, Park Ui-chun, may herald a broader revival of economic as well as political ties. Although Vladimir Putin, who has met Kim Jong-il three times, does not share the political hostility of his predecessors Gorbachev and Yeltsin to a Stalinist neighbour, lack of progress on those massive Soviet-era debts has hitherto blocked fresh economic projects. A Russian spokesman said that "special attention will be paid to bilateral trade." The former USSR was for decades North Korea's chief trade partner, but this shrank to almost nothing in the post-Soviet era. Last year's total was a modest $160 million, with DPRK imports comprising almost 80% ($134 million).

Does Kim Jong-il want the IMF?
One key effect of delisting, in principle, is that the US will no longer automatically oppose any bid by North Korea to join, and be helped by, international financial institutions such as the World Bank and International Monetary Fund (IMF). Even so, swift progress is unlikely. Despite exploratory feelers over a number of years, Pyongyang has evinced no clear interest in joining any international financial institutions (IFI) - except for the Asian Development Bank (ADB), where a dominant Japan will remain cool. One reason for this reluctance may be that membership of the Bretton Woods duo would entail macroeconomic reorganisation and statistical openness, neither of which seems palatable to Pyongyang. In any case, as the State Department did not fail to emphasize, delisting still leaves several other bilateral and UN sanctions against North Korea in force. Even certified as clean of terrorism, Kim Jong-il's impoverished and recalcitrant regime holds few attractions for investors as yet.

North Korea holds its first census in 15 years
Given the continuing general paucity of numbers emanating from Pyongyang, it is rare good news that North Korea has just held its first national census for 15 years, on October 1-15. On September 28 the official Korean Central News Agency (KCNA) reported the impending event with enthusiasm - and in a rare interview with a section chief of the Central Statistics Bureau (CSB), Kim Kon-do.

KCNA noted that the CSB had piloted the census a year earlier in one township and county from each province. Its content includes "scores of indices including demographic index, educational level, working life and indices related with the sectors of the national economy". If published in full, this like its predecessor in 1993 will be a rare treasure trove of data on changes in North Korea's wider economy and society, as well as on population per se.

As of late September questionaires had already been distributed, using families as the unit. Kim Kon-do said that census taking officials would be "directly meeting and investigating every people (sic) under the unified command of the state." This massive task will involve "tens of thousands" of officials and supervisors, most presumably pulled off whatever their normal jobs are for the fortnight plus however long it takes to analyse the results, which are expected in 2009. Newspapers and radio (television was not mentioned) had been used to propagandise how important the census is, so that "now all the people are fully ready to take part in the census without exception for the eternal prosperity of the country and the nation with a high degree of political and patriotic consciousness."

The 1993 census was North Korea's first, perhaps because so tightly controlling a regime already had the data; enough, for instance, to classify the entire population in the 1960s into loyal, wavering and hostile classes, with a plethora of sub-groups. But since the famine of 1996-98, both society and economy, if not the polity, have become more fluid, with a surge in market activity and personal mobility. So for the first time North Korea, like other states, may actually need this new census to find out where its people are and what they are up to.

Whether all will be revealed remains to be seen. A leading expert, Nicholas Eberstadt of the American Enterprise Insitute (AEI), reckons that the earlier census omitted the 1m-strong Korean People's Army (KPA): a major lacuna, which also distorts labour force data as the KPA is active in construction and elsewhere. This time there could be embarrassing findings in areas such as health and education, both of which have worsened in the past decade. On the other hand, the government may obtain new data on the growth of markets which it can use for good or ill: be it to encourage or suppress them, or at any rate tax profits there from.

UN and Southern aid goes unmentioned
In typical Juche (self-reliance) style, KCNA said nothing about getting any help with this. In fact the census was a joint effort with the United Nations Population Fund (UNFPA), whose spokesman on September 20 further quantified the endeavour: 35,200 census takers and 7,500 supervisors. The Seoul daily Korea Times reported that, besides conducting training, UNFPA "has been inspecting regional-level education"; which may mean that many of the census-takers are local teachers and/or students. For the analysis stage, the Hong Kong press reported last year that five North Korean researchers received a month's training there. That does not sound many, or long.

KCNA was also silent on who paid the bills. Of the modest cost of $5.55 million - perhaps the census-takers are doing it for patriotism rather than money - $4 million, or 72%, came from South Korea's unification ministry (MOU). Back in January MOU claimed that Seoul will get the questionnaires and results of the census from UNFPA on a priority basis. It is hard to see North Korea being keen on that, given how bad inter-Korean ties have become.

On October 27 a UNFPA spokesman told Yonhap, South Korea's semi-official news agency, that the census went smoothly, and the questionnaires collected are now being reviewed for completeness and consistency. Omar Gharzeddine praised the commitment of government and citizens alike, "compared to that in some other countries." However, people appeared confused by unfamiliar terms like industry, occupation, and head of household. Regarding the last, "people tend to report as 'household head' the person who is registered as such in the civil register, even if the person has already left the household or will be away from home for an extended period of time …[so] enumerators were instructed [to] ask the person they are interviewing to identify the head of the household from among the current household members only." This is interesting, hinting at a new degree of de facto mobility. In theory North Koreans still need to get official permission to travel away from home.

Still ill?
Census enumerators no doubt did not venture into whichever palace currently contains the sickbed, or just conceivably the corpse, of the dear leader. There is still no confirmation of Kim Jong-il's state of health. Recent new official photographs of him out and about were as ever undated, with suspiciously green foliage suggesting high summer rather than autumn. Until and unless he unambiguously appears, the world will go on wondering, and worrying.

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