Analysis: N.Korea remains defiant over nuclear arsenal
By Jong-Heon Lee
UPI Correspondent
Published February 10, 2006


SEOUL -- A year ago, North Korea stunned the world by declaring itself a nuclear power, posing a major challenge to U.S.-led efforts to curb proliferation of weapons of mass destruction.

North Korea's nuclear capability has yet to be scientifically verified, and the country is not known to have ever tested the nuclear weapons it claims to have developed.


But Pyongyang's Feb. 10 declaration of nuclear possession has fueled security concerns on the Korean peninsula and northeast Asia where the United States deploys more than 70,000 troops.

Surprised by the nuclear declaration, the United States, South Korea and other neighboring countries have consistently urged North Korea to give up its nuclear weapons drive in return for political and economic benefits.

But the communist country remains defiant, vowing to keep its nuclear arsenal as a "self-defensive" measure against a possible strike from the United States.

Hope was running high hope for the resolution of the nuclear crisis when a six-point statement was reached on Sept. 19, in which Pyongyang agreed to abandon its existing nuclear weapons in return for a U.S.-led pledge to provide light-water reactors.

The hope, however, was largely dashed in the wake of U.S. punitive measures against the North's alleged financial illegalities in November, which triggered Pyongyang's furious response and boycott of the six-nation talks aimed at resolving the nuclear standoff in a diplomatic manner.

In the face of growing pressures over its illicit activities such as counterfeiting and money-laundering, North Korea has recently stepped back from its earlier hard-line position by promising to join international efforts to fight money-laundering.

But chances seem slim for an early resumption of the nuclear talks as the United States vows to deal with the financial crimes separately from the nuclear issue. Even if North Korea returns to the talks, the prospects for a solution appear dim as long as Pyongyang sticks to nuclear programs, citing "hostile" U.S. policy, according to analysts.

On Thursday night, North Korea issued a statement denying U.S. allegations that the country has engaged in counterfeiting and money-laundering.

In the statement, North Korea's Foreign Ministry also vowed to join an international fight against money-laundering, a move seemingly designed to cope with mounting U.S.-led pressures on its alleged financial illegalities.

It was the first time the North has publicly promised to cooperate with international efforts to crack down on such financial illegalities.

"The DPRK (North Korea) will, as ever, actively join the international action against money-laundering," a Foreign Ministry spokesman said in the statement reported by the North's official central news agency.

"The DPRK has perfect legal and institutional mechanisms to combat such illegal acts as counterfeiting notes and money-laundering, and any illegal acts would make the perpetrators liable to severe punishment," it said.

But the statement reiterated the North's earlier position that it will not return to the nuclear talks until the United States lifts its financial sanctions to show the dropping of its "hostile" policy towards the North.

"The DPRK, which has long-survived U.S. sanctions, attaches so much importance to the lifting of the financial sanctions because it is a touchstone indicating whether Washington is willing to switch policy," it said.

"Clear is the U.S. aim. That is to label the DPRK an 'illegal state,' tarnish its prestige and image, isolate and blockade it internationally and thus force it to abandon its nuclear program first," the statement said. "The point at issue is the U.S. attitude."

The statement comes after South Korea and Japan have joined U.S. financial sanctions on North Korea. All three of the South Korean banks involved in correspondent banking deals with Banco Delta Asia cut off business transactions last week with the Macau-based bank which was accused by the U.S. Treasury Department of laundering money for North Korea.

In a departure from Seoul's earlier soft position, Ambassador to Washington Lee Tae-sik said last week South Korea would not tolerate the North's financial crimes. "As far as these illicit activities by North Korea are concerned, there is no compromise position on our side," Lee told a group of business leaders in Washington.

South Korean officials and analysts are increasingly skeptical about the resumption of nuclear talks before late March. They rule out a breakthrough in the nuclear standoff before a resolution of the sanction issue.

http://www.wpherald.com/storyview.php?Stor...10-010559-4155r

Korea in Crisis: Left and right gird for decisive election
By SEKAI NIPPO
Published February 10, 2006


TOKYO -- This is the fifteenth in an extended series of articles by a team of Sekai Nippo reporters on the crises that face North and South Korea and the prospects for a unified Korea.

Today's is the final installment on South Korea. Tomorrow, the series shifts its focus to North Korea.


A link to an index of articles previously published in this series is at the bottom of this page. (Editor's note)

The presidential election of December 2007 is expected to be a major watershed for South Korea, whose politics and society are now heavily dominated by a leftist segment of the population that is pro-North Korea.

A victory by a candidate inheriting the legacy of current President Roh Moo-hyun would mean the country would continue to move closer to North Korea. A victory by a conservative candidate could mean the direction may be reversed. A presidential election that can have such a fundamental effect on the direction of the country is unprecedented in South Korea.

Election day is still almost two years away, but a number of candidates are already beginning to emerge.

Possible hopefuls from the ruling leftist Uri Party include former Unification Minister Chung Dong Young, former Health and Welfare Minister Kim Keun Tae and Prime Minister Lee Hae Chan. In addition,

In addition, ruling party member Yoo Shi Min, who was recently named to the position of Minister of Health and Welfare, appears to have President Roh's strong backing and has emerged as a potential presidential hopeful.

From the main opposition and conservative Grand National Party, the hopefuls include Park Keun Hae, the daughter of former President Park Chung Hee, who remains widely popular, and Lee Myung Bak, the Mayor of Seoul and a former member of the National Assembly.

Among these, Prime Minister Lee is thought to be the candidate most favored by North Korea. Lee was jailed in 1974 for his alleged involvement in an incident described at the time as an attempt to overthrow the South Korean government of President Park Chung Hee. The Truth Commission of the National Intelligence Service recently determined that the incident was a set up by the government.

What is certain is that Lee has played a central role in South Korea's leftist movement ever since then.

When Kim Yong Nam, president of North Korea's Supreme People's Assembly, met Lee in July 2005 during the Asian African summit in Indonesia, he commented appreciatively, "We are fully aware of the activities you have been engaged in until now."

Kim Keun Tae was jailed during the early 1970s for conspiring to foment civil strife. He later led a grass-root progressive movement in the 1980s. He is suspected of having direct links to North Korea.

Chung Dong Young, is a former news anchor on national television, and was an active leader in the anti-government student movement during the time of former President Park. He was arrested in 1974 for his activities.

Conservatives fear that if one these three men, or a different candidate with a similar background, becomes the next president, South Korean society's shift to the left could accelerate.

Conservatives were defeated in the last two presidential elections, in 2002 and 1997. This time, their backs are against the wall and they will wage an all out struggle. The primary issue for conservatives will be to unite behind a single candidate so that their vote is not split.

---

See an index with links to all installments in this series published to date: blog.wpherald.com/wphblog/?p=123

This article was translated from Japanese and edited by World Peace Herald. For the original text, please visit www.worldtimes.co.jp

North Korea Remains Defiant Over Nukes
http://www.spacewar.com/reports/North_Kore...Over_Nukes.html

Seoul, SKorea (UPI) Feb 10, 2006 - A year ago, North Korea stunned the world by declaring itself a nuclear power, posing a major challenge to U.S.-led efforts to curb proliferation of weapons of mass destruction.

- North Korea Warns Seoul Of Nuclear War Over WMD Interception Drills
http://www.spacewar.com/reports/North_Kore...ion_Drills.html

Korea in Crisis: Is N.Korea becoming a Chinese colony?
By SEKAI NIPPO
Published February 11, 2006


TOKYO -- This is the sixteenth in an extended series of articles by a team of Sekai Nippo reporters on the crises that face North and South Korea and the prospects for a unified Korea. Today's is the final installment on South Korea. A link to an index of articles previously published in this series is at the bottom of this page. (Editor's note)

"China is turning North Korea into its colony."


This was the surprising message of a symposium sponsored by the Japan Foundation in December 2005. It was an occasion to hear an interim report on a project by the Tokyo Foundation to investigate economic activity involving the northeastern part of China and the eastern part of North Korea.

"Something extraordinary is happening between Yanbian Korean Autonomous Prefecture [in China's Jilin Province] and North Korea," Yukio Hanabusa, a researcher with the Economic Research Institute for North East Asia who headed the project, said as he began his presentation to the symposium.

China has obtained long term rights to significant amounts of North Korea's underground natural resources and access to its ports in exchange for a large volume of goods now flowing from China into North Korea, Hanabusa claimed.

Recent growth in trade and investment between China and North Korea is extraordinary. According to material from South Korea's Korea Trade-Investment Promotion Agency (KOTRA) and other agencies, the total value of China's investment in North Korea in 2004 was $50 million, or 50 times what it was in 2000.

The volume of trade between China and North Korea for 2004 was $1.385 billion, or about double the trade between North and South Korea for the same year. North Korea's trade with China is 42 percent of its total trade with all countries. More than 20 Chinese companies now have invested in North Korea.

When Chinese President Hu Jintao visited North Korea last October, he agreed to provide the impoverished country $2 billion in economic assistance.

South Korean experts point out that China's investment in North Korea accelerated following its investment of $24 million in 2003 to build the Dae An Friendship Glass Factory. Currently, China's capital investment in North Korea's mining sector includes the iron ore mine at Musan, the Hyesan Youth Copper Mine, Manpo zinc mine, Hoi Ryoung gold mine and Ryong Deung coal mine.

The Musan iron ore mine, located near the China-North Korean border, is particularly noteworthy, because it is known as the largest mine in Northeast Asia, with estimated coal reserves of 3 billion tons. In its peak, its annual production of iron ore reached 7 million tons. By 2005, however, production had plummeted to 1.5 million tons.

Current plans are to increase the production to 10 million tons in 2006.

The development of the Musan iron mine is being carried out in conjunction with a "modernization of railroads in North Korea's North Hamgyong Province, improvement of the rail line and primary roads into Musan and a modernization of the port of Cheong Jin and a steel mill at Keumchek," Hanabusa said.

Hanabusa also reported that China has secured 50-year rights to develop and using roads and ports in the Rajin-Sonbong Special Economic Zone in northeastern North Korea. The project includes plans to development main roads in the zone, modernize Rajin's port, and construct an industrial park and warehouses.

In particular, China's access to Rajin Port appears linked to Beijing's "Northeast Region Development Policy." The port is expected to serve as a way station to ship agricultural products from China's Jilin and Heilongjiang Provinces to China's central and southern regions, including Tianjin and Shanghai, Hanabusa said.

Once the development of the special economic zone is completed, "this area is going to be an area managed jointly by China and North Korea," Hanabusa said.

"In other words, it will become territory leased to China by North Korea," Hanabusa said.

China would finally regain the exit to the Japan Sea that it lost at the end of the 19th century.

"North Korean economy has been incorporated in China's 'North East Asia economic sphere'," Hanabusa said.
"China and North Korea are becoming one integrated entity."

The analysis of South Korean experts is that China wants to prevent North Korea from falling under the economic influence of the United States and Japan. Instead, it wants to expand its own influence in North Korea in the economic area in anticipation of possible future developments, including the eventual resolution of North Korea's nuclear development and the establishment of peace on the Korean peninsula.

China's influence in North Korea is not limited to economic area. Cell phones are becoming indispensable to North Koreans engaged in the trade with China. They use telephones connected to the networks of Chinese telecommunications companies that transmit their radio waves across the border and into North Korea's border areas along the Tumen and Yalu Rivers.

The speed and scale of China's advancement into North Korea are without parallel, and North Korea's colonization by China is steadily progressing.

---

See an index with links to all installments in this series published to date: blog.wpherald.com/wphblog/?p=123

This article was translated from Japanese and edited by World Peace Herald. For the original text, please visit www.worldtimes.co.jp

- North Korea Clarifies Stance On Talks With Japan
http://www.spacewar.com/reports/North_Kore...With_Japan.html

Pyongyang, NKorea (XNA) Feb 13, 2006 - The Democratic People's Republic of Korea (DPRK) on Thursday clarified its stance on the DPRK-Japan inter-governmental talks for normalization of ties, calling on Japan to make up for its war past and conduct economic cooperation with the DPRK.

- China's Economic Support Of NKorea Undermines US-led Sanctions
http://www.spacewar.com/reports/Chinas_Eco..._Sanctions.html

N. Korea: Nuclear Talks Unlikely to Resume
(Associated Press)

Monday, February 13
A North Korean official said Monday it was unlikely that international talks on the country's nuclear weapons program will resume soon because of Washington's refusal to lift financial restrictions on businesses connected to the North.

Last year, the United States slapped restrictions on a Macau bank, saying it had helped North Korea distribute counterfeit U.S. currency and engage in other illicit activities. Washington also imposed sanctions on eight North Korean companies it said were fronts for proliferating weapons of mass destruction.

The most recent round of the nuclear talks - involving China, Japan, Russia, the United States and two Koreas - was held in November and failed to make any progress on implementing a September agreement in which the North pledged to abandon its nuclear program in exchange for aid and security guarantees.

No date has been set for the talks to reconvene.

- SKorea Considering Buying US Patriot PAC-3 missiles
http://www.spacewar.com/reports/SKorea_Con...3_Missiles.html

Washington DC (UPI) Feb 14, 2006 - South Korea is exploring the possibility of buying U.S. Patriot PAC-3 missiles to help defend against the massive short-range ballistic missile capability of North Korea.

http://www.wpherald.com/storyview.php?Stor...15-020415-3825r

Korea in Crisis: The politics and economics of North Korean hunger
By SEKAI NIPPO
Published February 15, 2006


TOKYO -- This is the nineteenth in an extended series of articles by a team of Sekai Nippo reporters on the crises that face North and South Korea and the prospects for a unified Korea. A link to an index of articles previously published in this series is at the bottom of this page. (Editor's note)

North Korea has suffered chronic food shortages since the mid-1990s. Last year, a bumper harvest raised hopes that the shortages would be alleviated. The expected easing of the food shortages have not occurred, however.


The Food and Agriculture Organization of the United Nations (FAO) forecast in October 2005 that North Korea's grain production for the year would mark an increase of 400,000 tons over the previous year. This would make it the best harvest in ten years.

The FAO came to this conclusion based on an analysis of precipitation during the harvest season, satellite photos, on-site reports, the amount of fertilizer and seeds available, and the way in which farm labor was allocated. As for the reasons for the dramatic increase in production, the FAO study listed efforts that began in the spring to increase food production, fertilizer aid from South Korea and optimum climate conditions.

Shortly after that, the World Food Program (WFP) confirmed that North Korean authorities had increased food rations for its citizens by substantial margins, doubling the rations in some cases.

Experts say, however, that the bumper harvest was not enough to resolve the long-term shortage of food in North Korea.

"The demand for food in North Korea is 6.45 million tons, but the level of supply remains at 4.8 million tons, creating a shortfall of 1.65 million tons," South Korea's intelligence agency reported last year.

Even if reports of a larger than normal harvest were true, "the increase was at most a matter of 200,000 to 300,000 tons over the 2004 level of 4.31 tons," a South Korean government official said.

In terms of annual per capita grain production, North Korea's output is still only about 160 kilograms (352 lbs.), which is below international standards by a significant margin.

In addition, assistance from the international community to make up for the short fall has decreased due in part to the standoff over North Korea's nuclear weapons production.

The decreased international assistance led the WFP last year to announce a two-month suspension of minimum rationing to 3.8 million people, who were the most needy recipients in North Korea. The agency issued an urgent appeal for resumption of international assistance.

Even more serious are structural issues that prevent large portions of domestically harvested grain and international foods aid from reaching the general public.

"The authorities take away much of the harvest, so even a bumper crop would do little to help most North Korean citizens," said Kim Kwang-chul, the father of a family that became the focus of international attention in 2000 when they sought asylum at the Japanese Consulate in Shenyang, China.

One North Korean who defected to South Korea in 2004 and currently lives in the suburbs of Seoul remembers an incident when a U.N. agency distributed beef directly to North Korean citizens.

"It was originally promised that 1 kg (2.2 lbs) of beef would be given to each person, but the authorities unilaterally reduced the amount to 300 grams (about 10 1/2 ounces)," the defector said.

"As soon as the television camera finished recording the distribution ceremony, all of that 300 gram of beef was taken back by the authorities," he said.

"I felt then that this was the kind of false propaganda North Korea used in order to deceive foreign countries."

The Korea Institute for National Unification, a think tank affiliated with the South Korean government, revealed in September 2005 that the North Korean military suffered some 15,000 desertions in 2001 and 2002, due primarily to food shortages.

Normally, the military would be expected to receive high priority in food distribution, but the shortage of food in the ranks is confirmed by the testimony of a number of defectors.

It came as a surprise to many, then, that the North Korean government last year requested the termination of the United Nations' humanitarian food aid, and a transition to development-based assistance, so as to avoid intensified external monitoring of its food distribution.

As a result, food distribution by U.N. agencies came to a full stop in January. Observers speculate that North Korea would rather rely on food aid from China and South Korea, countries that are not so stringent about monitoring how food is distributed after it enters North Korea.

North Korea is entering a long-term battle with food shortage, and deepening its reliance on China and South Korea. A fundamental solution to the problem appears to be a long way off.

---

See an index with links to all installments in this series published to date: blog.wpherald.com/wphblog/?p=123

This article was translated from Japanese and edited by World Peace Herald. For the original text, please visit www.worldtimes.co.jp

http://www.wpherald.com/storyview.php?Stor...16-033011-1109r

Korea in Crisis: North Korea's dynastic succession struggles
By SEKAI NIPPO
Published February 16, 2006


TOKYO -- This is the twentieth in an extended series of articles by a team of Sekai Nippo reporters on the crises that face North and South Korea and the prospects for a unified Korea. A link to an index of articles previously published in this series is at the bottom of this page. (Editor's note)

One way to detect change in North Korea is to see whose photographs hang in positions of honor on the walls of offices and homes. Until recently, only two people were honored in this way, former President Kim Il Sung and his son and successor Kim Jong Il.


In September 2005, the photograph of a third person was found hanging on the wall of an office of the (North) Korean Workers' Party Central Committee.

It is said that Kim Jong Chol in 2004 was given the position of deputy chief of organization department. Among the sons of Kim Jong Il, he is considered to be the best prospect to succeed his father as leader of the country.

The change in September attracted the attention of North Korean watchers, because it happened around the time of Kim Jong Chol's birthday. Reports have also surfaced that the young Kim had offered flowers at the end of 2005 to a statue of Kim Jong Sook, his grandmother and mother of Kim Jong Il, as a sign of loyalty to his father.

If these reports are true, the effort to groom Kim Jong Chol as the next leader of North Korea may be well underway. He would be the third generation in North Korea's dynastic succession.

North Korea watchers note parallels to the effort that began in 1971 to prepare Kim Jong Il as his father's successor.

At the time, the prevailing view among Workers' Party leaders was that Kim was Jong Il was too young and would require much more time before he could be designated as Kim Il Sung's heir.

Then Prime Minister Kim Il Sung declared in his speech, "the new generation nurtured after the liberation has to emerge as the leaders of the revolution," implying the emergence of Kim Jong Il as his successor. Three years later, in February 1974, Kim Jong Il became a member of the politburo and officially launched his career path to succeed his father as leader of the country.

Kim Jong Chol is now 24 years old, while Kim Jong Il made his political debut at age 33. Still, it is conceivable that his father Kim Jong Il already has decided to launch young Kim Jong Chol on the path to succession.

At the end of 2005, a report circulated that Kim Jong Il had instructed party and army leaders not to talk about succession, and warned that a plan to extend North Korea's dynastic succession to three generations could become a target of ridicule.

"This report was plausible," Chung Sung Chang of South Korea's Sejong Institute said, "but it would not necessarily meant that Kim Jong Il had terminated the preparation for succession."

Chung cited three indications that North Korea is preparing for succession. First, he pointed out that army units have been promoting the personality cult of Ko Young Hee, the wife of Kim Jong Il, since the summer of 2002. Second is the termination of public activities by Chang Sung Taek, the number two figure in North Korea's hierarchy and younger brother-in-law of Kim Jong Il, and the purge of Chang's aides. Third is the resumption of activities by the Three Great Revolution Teams, which had been terminated at the end of 1995.

Ko became the object of a personality cult after the death -- believed to have been in 2002 -- of Song Hye Rim, the mother of Kim Jong Il's eldest son Kim Jong Nam. One example of this cult appeared in material published by the (North) Korean People's Army Publications Office, which referred to Ko as "respected mother who assists our dear Supreme Commander (Kim Jong Il) in the closest position and loyally serves him."

Ko gave birth to two sons, Kim Jong Chol in 1981 and Kim Jone Un in 1983. She died in May 2004. The fact that her aides were not purged following her death indicated to North Korea watchers that the two sons she had pushed as possible successors to their father continued to be considered viable candidates.

The termination of Chang Sung Taek's activities and the purge of his aides signified that his group had been dropped from the succession race.

The Three Great Revolution Teams were an effort to parallel the effort that Kim Il Sung had used to form a foundation to promote his son Kim Jong Il's influence among the younger generation. It can be seen as a part of an effort to allow people in their 30s and 40s, referred to as the "third generation of the revolution" to increase their influence in the higher echelon of the power structure and lay the foundation to accept a young successor.

Kim Jong Nam, the eldest son of Kim Jong Il, is at a disadvantage, because of his 2001 arrest in Japan for attempting to enter the country illegally. He was later deported.

Jong Nam also suffers from a lack of legitimacy, because his mother's marriage to Kim Jong Il was opposed by Kim Il Sung, who still occupies a god-like stature in North Korea.

Many North Korea watchers have eyed Kim Jong Chol as most likely successor since 2004. However, the successor's identity is officially a closely held secret in North Korea. There is always the possibility that the successor can be derailed by opposition forces if his identity is made public prematurely before preparation is completed.

Publicizing the successor at this time while the economy is in bankruptcy can aggravate the public discontent. For these reasons, some observers speculate that Kim Jong Il himself is having difficulty in choosing the best time for the official announcement.

The international situation surrounding North Korea and the domestic situation are far more difficult now than they were 30 years ago, when Kim Jong Il began his journey through the official process for succession. Under the circumstances where the first generation of revolution controlled the party and military, it took twenty years for Kim Jong Il, with his lack of experience, to win the power struggle against his stepmother, solidify his status as successor and actually inherit power. Even if Kim Jong Chol who has been characterized as "sensitive and gentle man of common sense" is named as the successor, there will be many elements of uncertainty ahead of him.

---

See an index with links to all installments in this series published to date: blog.wpherald.com/wphblog/?p=123

This article was translated from Japanese and edited by World Peace Herald. For the original text, please visit www.worldtimes.co.jp

http://www.wpherald.com/storyview.php?Stor...23-030306-4522r

Korea in Crisis: Kim Dae Jung's dramatic shift
By SEKAI NIPPO
Published February 24, 2006


TOKYO -- This is the twenty-fifth in an extended series of articles by a team of Sekai Nippo reporters on the crises that face North and South Korea and the prospects for a unified Korea.

The first section of the series focused on South Korea and the next on North Korea. The current section focuses on the prospects for unification.


A link to an index of articles previously published in this series can be found at the bottom of this page. (Editor's note)

The unification policies of successive South Korean governments were essentially intended to counter North Korea's policy of unifying the peninsula by invading the South.

For example, the policy of the Syngman Rhee government (1948-1960) for "Unification by northward advance" was essentially reactive in nature. There was no unified national opinion or policy during the Rhee years other than to do the opposite of whatever North Korea proposed.

After Park Chung Hee came to power in a 1961 military coup, South Korea began taking more proactive positions on the unification issue.

Park put the Anti-Communist Law into force in 1961, and initiated the first 5-year plan in the following year. These actions were based on his government's basic policy not to attempt unification with the North until after the South had built a strong economy and an anti-communist social system.

This policy was known as "Construction first, Unification second. "Park stated his determination in his inaugural address to "confront communism and achieve unification of the homeland through the victory of democracy."

As a result, the Park government focused almost exclusively on domestic politics throughout the decade of the 1960s, and began taking steps toward unification only in the 1970s.

The South's change toward the North was also influenced by international events surrounding the peninsula.

In 1971, U.S. Secretary of State Henry Kissinger secretly visited China, a North Korean ally, and President Richard M. Nixon's visit to China followed soon after. In 1972, Nixon also visited the Soviet Union, another major North Korean ally. There was also the restoration of diplomatic relations between Japan and China.

The mood in the Northeast Asian region was one of a relaxation of tensions, with the major exception of relations between North and South Korea.

South Korea's first major approach to North Korea resulted in a costly blunder. In July 1972, Park sent Lee Hu Rak, the director of the Korea Central Intelligence Agency on a secret visit to Pyongyang. The visit produced a joint document known as the "7.4 Joint Declaration" (because it was signed on July 4, 1972).

The document included wording that Korea's unification was to be achieved "without the interference of external forces." This phrase has proven costly to South Korea, because it gave North Korea a pretext to justify its repeated demands that U.S. forces be withdrawn from the Korean peninsula.

At the same time, when news of Lee's visit became public in the South Korean press, it resulted in a wave of hope that unification was imminent. This quickly proved illusory.

In 1979 Park was assassinated by another KCIA director, and General Chun Doo Hwan eventually won out in the power struggle to succeed him. North Korea proposed in October 1980 that the two sides join in a loose form of federation to be called "Koryo Democratic Confederation." Chun's response was a "Proposal for the Harmonious and Democratic Unification of the Nation."

Chun's was South Korea's first-ever comprehensive unification proposal, and marked the first time that either side allowed for the possibility of mutual recognition of their contrasting political and social systems and for having each side propose a separate draft of a constitution for a unified Korea.

Subsequent unification proposals from South Korea vacillated in their degree of flexibility toward the North. These included President Roh Tae Woo's 1989 proposal called a "Korean National Community Unification Formula" that set out a three-stage unification process involving North-South dialogue and a North-South confederation finally leading to a unified democratic republic.

President Kim Young Sam on August 15, 1994, declared an end to the era of competition between North and South Korea over whose political and social was the better. Kim advocated the legitimacy of a unification plan based on a liberal democratic system.

Consistent in all these South Korean proposals was the assumption that the South, because it was vastly superior in economic strength, would eventually absorb the North.

The unification of Germany also pointed to the possibility for a scenario of absorption on the Korean peninsula.

An abrupt shift in this fundamental South Korean stance came with the administration of Kim Dae Jung (in office 1998-2003).

"The Kim Dae Jung government determined that North Korea feared unification by absorption and so was avoiding dialoguing with the South Korea," said Hoon Yong Seung, a chief researcher at Samsung Economic Institute. "Based on this judgment, the Kim government began to focus on building the foundations for peace," he said.

"Because [President Kim Dae Jung] went so far as to hold a North-South summit in Pyongyang, the mood for peaceful coexistence between the two sides was greatly energized, and this was passed on to the government of President Roh Moo Hyun," Hoon said.

This process shifted the focus from unification by absorption to unification by the Korean people's own initiative.

Kim Dae Jung during his presidency emphasized that the idea of one side absorbing the other was an "outmoded idea from the Cold War era." Since then, the Seoul government's concentration has been on "a unification that does not provoke the North."

"For its part, North Korea has not changed its unification strategy that advocates their 'Southward Advance,'" said Yoo Dong Yeol, a researcher at the Anti-North Korea Strategy Institute.

This is also the reason that South Korea's recent unification proposals that veer dramatically closer to North Korea's strategy are said to be contrary to the country's own history and tradition.

---

See an index with links to all installments in this series published to date: blog.wpherald.com/wphblog/?p=123

This article was translated from Japanese and edited by World Peace Herald. For the original text, please visit www.worldtimes.co.jp

- Pyongyang Criticized As North Meets South For Military Talks
http://www.spacewar.com/reports/Pyongyang_...tary_Talks.html

Seoul, Korea (AFP) Mar 03, 2006 - High-level military talks between North and South Korea resumed on Thursday as Seoul criticized Pyongyang for dragging its feet on reducing tension on the Korean peninsula.

Inter-Korean Military Talks Break Down Over Border Demand
http://www.spacewar.com/reports/Inter_Kore...der_Demand.html

Seoul, Korea (AFP) Mar 03, 2006 - High-level military talks between South and North Korea broke down Friday over the North's demand that the Cold War rivals draw a new border in disputed waters in the Yellow Sea. "There was no agreement," the chief South Korean delegate Major General Han Min-Koo said, adding both sides failed even to set a date for the next meeting.

http://www.atimes.com/atimes/Korea/HC07Dg03.html
Seoul and Washington closer to divorce
By Lee Kyo-kwan

SEOUL - South Korea and the US have drifted so far apart on North Korea policy there is now speculation the longtime partners are getting close to divorce.

Kurt Campbell, former US deputy assistant secretary of defense for Asia and the Pacific, reportedly likened the two to a king and queen who live separately but pretend to be happy before their subjects. The allies do not want to announce their divorce because it would have enormous consequences, he said at a seminar in Washington on February 27.

It is believed US officials no longer trust their South Korean counterparts on North Korea policy. Fueling that speculation has been the recent friction between Seoul and Washington over how to deal with US allegations North Korea is counterfeiting US dollars. While Washington has stepped up financial pressure on Pyongyang in an effort to defend the US currency, Seoul appears to have opposed such a move.

The US Treasury Department charged in September that Banco Delta Asia in Macau is one of the foreign financial institutions being used by North Korea to launder illegal money, including counterfeit currencies. The Treasury Department reportedly came up with a measure designed to prevent foreign banks with North Korean accounts from carrying out transactions with US banks.

So far, US pressure appears successful. South Korean banks have followed their Japanese counterparts in carrying out the US tactic - by last month the Korea Exchange Bank, Shinhan Bank and National Federation of Fisheries Cooperatives had stopped all transactions with Banco Delta Asia.

However, unlike its banks, the South Korean government has been reluctant to support the US financial pressure on the North.

South Korean Unification Minister Lee Jong-suk last month said his country still needs to make a strategic judgment based on relations between North and South Korea over how much will it support the US measure against Pyongyang.

The government of President Roh Moo-hyun is known to have urged the US administration of President George W Bush to stop putting financial pressure on the Kim Jong-il regime.

Michael Green, former senior director in charge of Asia and the Pacific for the White House's National Security Council (NSC), said early last month that Seoul has sent Washington signals several times suggesting that the US lessen pressure on Pyongyang over the counterfeit issue.

Sending such signals seems to be in line with Roh's US policy. In his New Year's address in late January, the president said that if the US tries to solve matters with North Korea by methods aimed at the regime's collapse, it will cause a feud between Washington and Seoul. This suggests he sees US financial pressure on North Korea as a hardline scenario aimed at toppling the Kim regime.

Two weeks after Roh's address, friction between the two allies increased. South Korea and the US disagree over the origins of counterfeit US$140,000 found in April at the Namdaemun market in Seoul. Washington says it told Seoul the counterfeit dollars were printed in North Korea. But Seoul countered that it hadn't received any notice from Washington.

Since the US Treasury Department identified Banco Delta Asia as one of Pyongyang's money-laundering channels, most North Korean trading companies have suffered difficulties in foreign exchange transactions.

If the US measure aimed at preventing foreign banks with North Korean accounts from doing transactions with US banks is successful, nearly all North Korea's foreign-exchange transactions are forecast to be paralyzed, according to the diplomatic sources.

If such a scenario materializes, Pyongyang may have difficulty maintaining its political and economic system. North Korea as a result has called on the US to halt the pressure as a precondition of its return to the six-party talks on its nuclear program.

And if Pyongyang is seriously affected by the US tactics, Seoul's feud with Washington is likely to worsen.

Meanwhile, the number of South Korean officials voicing concern over US financial pressure is increasing. If US sanctions designed to contain North Korea economically work, there is a strong possibility of a severe diplomatic conflict between South Korea and the United States. Such a diplomatic split could be a death blow to the half-century-long alliance, diplomatic sources say.

Meanwhile, the US State Department insists pressure on North Korea and the six-party talks (involving the two Koreas, Russia, Japan, China and the US) are separate matters. This suggests that regardless of the alliance's future, the US will continue its pressure on North Korea to stop the country printing counterfeit US currency.

Speculation that the alliance is in trouble is also precipitated by Seoul's three-year objection to Washington's policy aimed at enabling US Forces Korea (USFK) to be moved about freely beyond the Korean Peninsula.

The US Defense Department since 2003 has called on the Roh government to allow US forces to be dispatched to regions near the peninsula - such as the strait between mainland China and Taiwan - whenever there is a security crisis in the region. The Pentagon calls the policy "strategic flexibility".

But the Roh government had refused permission, based on a long-standing agreement involving US forces based on South Korean soil, because of its deep worry that South Korea could be unwillingly involved in military conflict between the United States and China.

Seoul decided early this year to accept a limited version of the Pentagon policy of strategic flexibility. South Korean Foreign Minister Ban Ki-moon and his US counterpart, Secretary of State Condoleezza Rice, signed an agreement in late January in Washington. According to the deal, the US is required to obtain permission from Seoul before deploying South Korea-based troops to other areas near the peninsula.

However, two weeks after the deal was signed, it ran into strong opposition within the South Korean government and the ruling Uri Party. Opposition is being led by lawmakers and some Foreign Ministry officials who have sought security policies more independent from Washington.

Uri Party Representative Choi Jae-chon produced a confidential NSC document showing that in late 2003 senior officials of the Foreign Ministry and the NSC sent Washington a memorandum spelling out their intention to permit USFK's strategic flexibility without Roh's permission. The document was made public with the help of some Foreign Ministry officials working in the presidential office who have reportedly advocated independent foreign policy.

It would appear that officials seeking independent foreign policy are accelerating their attack on their counterparts who have placed more emphasis on policy coordination with Washington.

With the South Korea-US alliance rapidly deteriorating, USFK is having difficulty securing training fields across the nation. US General Leon LaPorte last month expressed concern about the alliance's future in a speech before leaving his office as commander of both USFK and the South Korea-US Joint Forces.

"In the coming years, the ROK-US alliance will be tested," he warned, referring to South Korea by its official name, Republic of Korea.

If a conservative candidate supporting the alliance fails to win the Korean presidential election of 2007, the US is forecast to withdraw its forces from South Korea, according to diplomatic sources. In fact, speculation the allies' split may be imminent has begun spreading since Roh took office in 2003 - mainly because his government has officially sought much more autonomy from Washington in its North Korea and military policies.

Such a policy shift has contributed to widening the rift in the 53-year alliance. The split began with former president Kim Dae-jung's Sunshine Policy, which advocates peaceful cooperation between North and South with short-term reconciliation in advance of eventual unification of the peninsula.

Kim, Roh's predecessor, provided Pyongyang with economic support. Washington's neo-conservative hardliners lashed out at the Kim government for weakening their efforts by economic containment to prevent Pyongyang from making weapons of mass destruction. The policy rift is believed to have led to North Korea beginning its highly enriched uranium (HEU) nuclear-weapons program in the 1990s.

James Kelly, then assistant secretary of state for East Asia and the Pacific, told North Korean Deputy Foreign Minister Kim Kye-kwan during a visit to Pyongyang in October 2002 that Washington knew North Korea had an HEU nuclear-weapons program. Kim denied the accusation, though the next day North Korean First Deputy Foreign Minister Kang Sok-ju admitted to Kelly that his country had the program.

Two weeks after Kelly left Pyongyang, the White House announced North Korea's admission. But Pyongyang denied acknowledging existence of the program and called on Washington to sign a non-aggression pact in return for abolishing all nuclear-weapons programs. Washington rejected the proposal.

Since the end of 2002, the Kim Jong-il regime has adopted brinkmanship policies such as withdrawal from the nuclear Non-Proliferation Treaty.

The Roh government as part of its effort to seek independent foreign policy, has refused to join the Bush administration's diplomatic and military pressure on North Korea.

For example, the Roh government so as not to irritate North Korea hasn't participated in the June 2003 US-led Proliferation Security Initiative to diplomatically and militarily prevent weapons of mass destruction from proliferating. The initiative is believed aimed at blocking North Korea's proliferation of fissile material and missile technology.

Seoul has also blocked Washington's plan to present Pyongyang's violation of the 1994 US-North Korea Agreed Framework on nuclear issues to the UN Security Council. North Korea has maintained that if the United States brings the issue before the council, it will regard the move as a provocation of war.

As proved by these disagreements in North Korea policy coordination, South Korea and the US seem to be having difficulty keeping a minimum alliance.

In South Korea, the progressive camp continues to seek a security policy much more independent of the United States regardless of concern over the weakening partnership, while the conservative camp strives to resurrect the struggling alliance.

The former maintains the current North Korean nuclear crisis originates from the US military goading the North. But the latter contends the South Korea-US alliance has prevented North Korea from provoking a war over the past five decades.

Arguably, the most important question for South Korea is whether it can succeed in peacefully solving the social and political conflict.

Lee Kyo-kwan is a Seoul-based writer covering Korean political and business affairs. He has worked for the Chosun Ilbo, the Korea Herald and the Sisa Journal.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)

March 7, 2006
North Korea Refuses Return to Nuke Talks
By THE ASSOCIATED PRESS
Filed at 10:02 p.m. ET

SEOUL, South Korea (AP) -- North Korea reiterated its pledge not to return to nuclear disarmament talks after a meeting with U.S. officials about the communist regime's alleged illicit financial activity, a top North Korean diplomat was quoted as saying Wednesday.

At Tuesday's meeting in New York, the Americans emphasized that moves against a Macau bank where Pyongyang held accounts were part of regulatory moves ''to protect the U.S. financial system from abuse, and not a sanction on North Korea,'' according to a U.S. Treasury Department statement.

''Our position is consistent that (North Korea) cannot return to the talks in the midst of the continued pressure (from the United States),'' Ri Gun, director-general of North Korean Foreign Ministry's American affairs bureau, said after the talks Tuesday, the Yonhap news agency reported.

Ri headed the North's delegation to the meeting.

Last September, the United States blacklisted Banco Delta Asia and several North Korean companies it said were involved in illicit activities, including counterfeiting, money laundering and funding weapons proliferation.

North Korea denies the allegations and has maintained since November that it will not return to six-party talks on its nuclear program until the restrictions are lifted. Washington says the issue is unrelated to the nuclear talks.



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Korea in Crisis: Three options for the future
By SEKAI NIPPO
Published March 7, 2006


TOKYO -- This is the thirty-first in an extended series of articles by a team of Sekai Nippo reporters on the crises that face North and South Korea and the prospects for a unified Korea.

The first section of the series focused on South Korea and the next on North Korea. The current section focuses on the prospects for unification.


A link to an index of articles previously published in this series can be found at the bottom of this page. (Editor's note)

For the United States, the most desirable outcome of the future of the Korean peninsula would be the emergence of a unified Korea that maintains an alliance with Washington. However, there are a number of unpredictable factors, including the intentions of other countries in the region. The United States cannot take for granted a scenario that is beneficial to its own interests.

There are two basic variables the United States has to take into consideration. One is China.

"China's primary objective is to maintain North Korea as a buffer zone," says John Tkacik, Jr., a senior research fellow at the Heritage Foundation specializing in China policy. He is also the chief of China analysis in the State Department's Bureau of Intelligence and Research.

China does not want the unification of Korea to result in its having to share a border with a country possessing a liberal democratic system.

Primarily for this reason, China's priority is to support the Kim Jong Il regime and maintain the status quo.

"China will try to control North Korea as a satellite country to prevent unification" even if the Kim Jong Il regime collapses, Tkacik said.

It is important to note that China and Russia held their first-ever joint military exercise in August 2005. This exercise has been widely regarded as being premised on a possible military invasion of Taiwan by China.

Tkacik disagreed. In his opinion, the exercise was conducted "with North Korea in mind." The scenario of the terrain and training fit that of North Korea rather than Taiwan, in Tkacik's observation.

According to Tkacik, the aim of this military exercise was to demonstrate the will of China and Russia to intervene in the event of unforeseen events on the Korean peninsula, such as a U.S. military invasion.

Even the United States cannot ignore China's interest in maintaining the buffer zone on the Korean peninsula.

Another variable is South Korea. The United States did not anticipate that its ally South Korea would assume such a pro-North Korea stance as it has today.

South Korean President Roh Moo Hyun announced in March 2005 that his country would play the role of a "balancer in North East Asia." The statement gave the impression that South Korea was moving away from cooperating with the U.S. and Japan, and moving closer to China.

An opinion poll that surveyed the young generation in South Korean in August 2005 surprised the United States. In response to the question, "which side would you support if the United States and North Korea went to war?," only 28.1 percent answered that they would support the United States. Nearly two-thirds, 65.9 percent, answered that they would support North Korea.

When these unpredictable factors are taken into consideration, the United States will be hard-pressed to see a good future for itself on the Korean peninsula.

Roughly, there are three possible scenarios for the future of the Korean peninsula: (1) unification of the North and the South, (2) maintenance of the status quo (continuation of Kim Jong Il regime), and (3) birth of a puppet regime of China following the collapse of the current North Korean regime.

Given current trends in South Korean politics and society, it is somewhat likely that the unification of Korea will result in the emergence of a country that is anti-U.S., anti-Japan and pro-China.

In such a situation, it is unlikely that U.S. troops can continue to be stationed on the Korean peninsula.

This will be particularly true if the current South Korean regime is "incredibly naive," in the words of Vanderbilt University professor James Auer, and goes along with the unification scenario outlined by North Korea.

If the Kim Jong Il regime collapses and China chooses to intervene for the purpose of maintaining its buffer zone, there is a high possibility that North Korea will move in the direction of becoming Beijing's client state.

The United States may accept this as a compromise if it puts a stop to North Korea's nuclear weapons development and proliferation of weapons of mass destruction. That will prolong the division of the Korean peninsula.

There are many unpredictable elements in the future of the Korean peninsula. This is the reason that many consider that the best outcome would be the second scenario, maintaining the present status quo.

There are hardliners within the Bush administration that consider the status quo inadequate and the defeat of the Kim Jong Il regime necessary. What scenario the United States chooses hinges on its global strategy, including its Middle East policy.

In any case, the option Washington chooses will have a decisive effect on the future of the Korean peninsula.

---

See an index with links to all installments in this series published to date: blog.wpherald.com/wphblog/?p=123

This article was translated from Japanese and edited by World Peace Herald. For the original text, please visit www.worldtimes.co.jp

March 8, 2006
North Korean Missile Test Causes Concern
By THE ASSOCIATED PRESS
Filed at 2:54 p.m. ET

SEOUL, South Korea (AP) -- North Korea test-fired two short-range missiles Wednesday, an unsettling reminder of the reclusive communist regime's ability to cause instability in the region where a standoff persists over its nuclear program.

The development underscored the dangers posed by the country's longer-range missiles and professed nuclear weapons program.

Pyongyang shocked Tokyo and other nations when it test-fired a ballistic missile over northern Japan in 1998. It has since test-fired short-range missiles many times, including one launched into the Sea of Japan in May. In 2003, North Korea test-fired short-range land-to-ship missiles at least three times during heightened tensions over its nuclear program.

Japan's Kyodo News agency gave conflicting details about Wednesday's launches, saying a security source in China told it the missiles were fired by mistake in the direction of China and apparently landed in North Korean territory.

However, the agency also quoted a Western military source as saying the missiles were test-fired from North Korea's eastern coast toward the Sea of Japan. At least one missile landed in the sea about 60 miles northeast of the launch site, Kyodo said, citing a Japanese defense official.

''Indications are that North Korea launched two short-range missiles,'' White House spokesman Scott McClellan said in an e-mail to reporters traveling with President Bush. ''We have consistently pointed out that North Korea's missile program is a concern that poses a threat to the region and the larger international community,'' he said.

The White House said Wednesday's launches demonstrated the importance of six-party negotiations aimed at resolving the crisis over Pyongyang's nuclear weapons program.

''We work closely with our allies in the region on ballistic missile defense and to maintain a strong deterrent against the threat North Korea poses,'' McClellan said. ''We believe the six-party talks remain the way to get North Korea to abandon its nuclear ambitions and deal with the threat from its missile program and activities.''

North Korea would be extremely hesitant to do anything to offend China, its last major benefactor, and the type of missiles reportedly fired wouldn't pose much of a threat far beyond its borders. Despite remaining technically at war with South Korea, the sides have embarked on reconciliation efforts since a 2000 summit between their leaders, and many South Koreans don't view the North as a threat.

Pyongyang recently has pursued diplomacy to resolve its nuclear standoff, sending a top diplomat to New York for a briefing Tuesday by U.S. officials on the country's alleged illicit financial activities.

The U.S. last year blacklisted a Macau bank and North Korean companies it said were involved in counterfeiting, money laundering and weapons proliferation -- a move that prompted the North to boycott international arms talks. After the New York briefing, the North maintained it won't return to disarmament negotiations but said it has proposed ways to resolve the issue.

''At a time when North Korea is trying to play the diplomatic card, it wouldn't necessarily make sense for them to try and pull out the military card as well,'' said Jon Wolfstahl, a fellow at the Center for Strategic and International Studies in Washington.

The commander of the U.S. military in South Korea, Army Gen. B.B. Bell, said Tuesday in Washington that reports indicated the North was ''preparing to field a new intermediate-range ballistic missile which could easily reach United States facilities in Okinawa, Guam and possibly Alaska,'' according to prepared comments.

However, Bell noted the North Koreans had done ''very little'' in recent years on long-range ballistic missiles. Instead, he said officials have seen increasing work on short-range missiles that could be used on the Korean Peninsula.

Besides producing a large number of weapons, Bell said North Korea also ''appears willing to sell to anyone.''

It isn't known if the North has built a functioning nuclear weapon as it claims, since the country isn't believed to have performed any nuclear tests. Putting a device on a missile is even more complicated, and there's no evidence the North has done that either.

Still, experts believe the North has extracted enough plutonium from its main nuclear reactor for at least a half-dozen nuclear weapons or more -- a concern that has lately been getting less attention due to the intense diplomacy surrounding the Iranian nuclear crisis.

''We're getting 24-7 coverage on Iran -- which is still likely several years away from being able to produce a single nuclear weapon -- and little coverage on North Korea, which any day could shut down its nuclear reactor and obtain the plutonium for what could be its 10th, 11th or 12th nuclear weapon,'' Wolfstahl said.

------

Associated Press writers Hiroko Tabuchi in Tokyo and Nedra Pickler, who is traveling with President Bush on the Gulf Coast, contributed to this report.



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Asia Times

By Lee Kyo-kwan
Seoul and Washington closer to divorce

SEOUL - South Korea and the US have drifted so far apart on North Korea policy there is now speculation the longtime partners are getting close to divorce.

Kurt Campbell, former US deputy assistant secretary of defense for Asia and the Pacific, reportedly likened the two to a king and queen who live separately but pretend to be happy before their subjects. The allies do not want to announce their divorce because it would have enormous consequences, he said at a seminar in Washington on February 27.

It is believed US officials no longer trust their South Korean counterparts on North Korea policy. Fueling that speculation has been the recent friction between Seoul and Washington over how to deal with US allegations North Korea is counterfeiting US dollars. While Washington has stepped up financial pressure on Pyongyang in an effort to defend the US currency, Seoul appears to have opposed such a move.

The US Treasury Department charged in September that Banco Delta Asia in Macau is one of the foreign financial institutions being used by North Korea to launder illegal money, including counterfeit currencies. The Treasury Department reportedly came up with a measure designed to prevent foreign banks with North Korean accounts from carrying out transactions with US banks.

So far, US pressure appears successful. South Korean banks have followed their Japanese counterparts in carrying out the US tactic - by last month the Korea Exchange Bank, Shinhan Bank and National Federation of Fisheries Cooperatives had stopped all transactions with Banco Delta Asia.

However, unlike its banks, the South Korean government has been reluctant to support the US financial pressure on the North.

South Korean Unification Minister Lee Jong-suk last month said his country still needs to make a strategic judgment based on relations between North and South Korea over how much will it support the US measure against Pyongyang.

The government of President Roh Moo-hyun is known to have urged the US administration of President George W Bush to stop putting financial pressure on the Kim Jong-il regime.

Michael Green, former senior director in charge of Asia and the Pacific for the White House's National Security Council (NSC), said early last month that Seoul has sent Washington signals several times suggesting that the US lessen pressure on Pyongyang over the counterfeit issue.

Sending such signals seems to be in line with Roh's US policy. In his New Year's address in late January, the president said that if the US tries to solve matters with North Korea by methods aimed at the regime's collapse, it will cause a feud between Washington and Seoul. This suggests he sees US financial pressure on North Korea as a hardline scenario aimed at toppling the Kim regime.

Two weeks after Roh's address, friction between the two allies increased. South Korea and the US disagree over the origins of counterfeit US$140,000 found in April at the Namdaemun market in Seoul. Washington says it told Seoul the counterfeit dollars were printed in North Korea. But Seoul countered that it hadn't received any notice from Washington.

Since the US Treasury Department identified Banco Delta Asia as one of Pyongyang's money-laundering channels, most North Korean trading companies have suffered difficulties in foreign exchange transactions.

If the US measure aimed at preventing foreign banks with North Korean accounts from doing transactions with US banks is successful, nearly all North Korea's foreign-exchange transactions are forecast to be paralyzed, according to the diplomatic sources.

If such a scenario materializes, Pyongyang may have difficulty maintaining its political and economic system. North Korea as a result has called on the US to halt the pressure as a precondition of its return to the six-party talks on its nuclear program.

And if Pyongyang is seriously affected by the US tactics, Seoul's feud with Washington is likely to worsen.

Meanwhile, the number of South Korean officials voicing concern over US financial pressure is increasing. If US sanctions designed to contain North Korea economically work, there is a strong possibility of a severe diplomatic conflict between South Korea and the United States. Such a diplomatic split could be a death blow to the half-century-long alliance, diplomatic sources say.

Meanwhile, the US State Department insists pressure on North Korea and the six-party talks (involving the two Koreas, Russia, Japan, China and the US) are separate matters. This suggests that regardless of the alliance's future, the US will continue its pressure on North Korea to stop the country printing counterfeit US currency.

Speculation that the alliance is in trouble is also precipitated by Seoul's three-year objection to Washington's policy aimed at enabling US Forces Korea (USFK) to be moved about freely beyond the Korean Peninsula.

The US Defense Department since 2003 has called on the Roh government to allow US forces to be dispatched to regions near the peninsula - such as the strait between mainland China and Taiwan - whenever there is a security crisis in the region. The Pentagon calls the policy "strategic flexibility".

But the Roh government had refused permission, based on a long-standing agreement involving US forces based on South Korean soil, because of its deep worry that South Korea could be unwillingly involved in military conflict between the United States and China.

Seoul decided early this year to accept a limited version of the Pentagon policy of strategic flexibility. South Korean Foreign Minister Ban Ki-moon and his US counterpart, Secretary of State Condoleezza Rice, signed an agreement in late January in Washington. According to the deal, the US is required to obtain permission from Seoul before deploying South Korea-based troops to other areas near the peninsula.

However, two weeks after the deal was signed, it ran into strong opposition within the South Korean government and the ruling Uri Party. Opposition is being led by lawmakers and some Foreign Ministry officials who have sought security policies more independent from Washington.

Uri Party Representative Choi Jae-chon produced a confidential NSC document showing that in late 2003 senior officials of the Foreign Ministry and the NSC sent Washington a memorandum spelling out their intention to permit USFK's strategic flexibility without Roh's permission. The document was made public with the help of some Foreign Ministry officials working in the presidential office who have reportedly advocated independent foreign policy.

It would appear that officials seeking independent foreign policy are accelerating their attack on their counterparts who have placed more emphasis on policy coordination with Washington.

With the South Korea-US alliance rapidly deteriorating, USFK is having difficulty securing training fields across the nation. US General Leon LaPorte last month expressed concern about the alliance's future in a speech before leaving his office as commander of both USFK and the South Korea-US Joint Forces.

"In the coming years, the ROK-US alliance will be tested," he warned, referring to South Korea by its official name, Republic of Korea.

If a conservative candidate supporting the alliance fails to win the Korean presidential election of 2007, the US is forecast to withdraw its forces from South Korea, according to diplomatic sources. In fact, speculation the allies' split may be imminent has begun spreading since Roh took office in 2003 - mainly because his government has officially sought much more autonomy from Washington in its North Korea and military policies.

Such a policy shift has contributed to widening the rift in the 53-year alliance. The split began with former president Kim Dae-jung's Sunshine Policy, which advocates peaceful cooperation between North and South with short-term reconciliation in advance of eventual unification of the peninsula.

Kim, Roh's predecessor, provided Pyongyang with economic support. Washington's neo-conservative hardliners lashed out at the Kim government for weakening their efforts by economic containment to prevent Pyongyang from making weapons of mass destruction. The policy rift is believed to have led to North Korea beginning its highly enriched uranium (HEU) nuclear-weapons program in the 1990s.

James Kelly, then assistant secretary of state for East Asia and the Pacific, told North Korean Deputy Foreign Minister Kim Kye-kwan during a visit to Pyongyang in October 2002 that Washington knew North Korea had an HEU nuclear-weapons program. Kim denied the accusation, though the next day North Korean First Deputy Foreign Minister Kang Sok-ju admitted to Kelly that his country had the program.

Two weeks after Kelly left Pyongyang, the White House announced North Korea's admission. But Pyongyang denied acknowledging existence of the program and called on Washington to sign a non-aggression pact in return for abolishing all nuclear-weapons programs. Washington rejected the proposal.

Since the end of 2002, the Kim Jong-il regime has adopted brinkmanship policies such as withdrawal from the nuclear Non-Proliferation Treaty.

The Roh government as part of its effort to seek independent foreign policy, has refused to join the Bush administration's diplomatic and military pressure on North Korea.

For example, the Roh government so as not to irritate North Korea hasn't participated in the June 2003 US-led Proliferation Security Initiative to diplomatically and militarily prevent weapons of mass destruction from proliferating. The initiative is believed aimed at blocking North Korea's proliferation of fissile material and missile technology.

Seoul has also blocked Washington's plan to present Pyongyang's violation of the 1994 US-North Korea Agreed Framework on nuclear issues to the UN Security Council. North Korea has maintained that if the United States brings the issue before the council, it will regard the move as a provocation of war.

As proved by these disagreements in North Korea policy coordination, South Korea and the US seem to be having difficulty keeping a minimum alliance.

In South Korea, the progressive camp continues to seek a security policy much more independent of the United States regardless of concern over the weakening partnership, while the conservative camp strives to resurrect the struggling alliance.

The former maintains the current North Korean nuclear crisis originates from the US military goading the North. But the latter contends the South Korea-US alliance has prevented North Korea from provoking a war over the past five decades.

Arguably, the most important question for South Korea is whether it can succeed in peacefully solving the social and political conflict.

Lee Kyo-kwan is a Seoul-based writer covering Korean political and business affairs. He has worked for the Chosun Ilbo, the Korea Heraldand the Sisa Journal.

http://www.atimes.com/mediakit/content-form.html

- North Korea Test-Fires Two Missiles Near Border With China
http://www.spacewar.com/reports/North_Kore...With_China.html

Tokyo (AFP) Mar 09, 2006 - North Korea on Wednesday test-fired two missiles near its border with China, Japanese news reports said. The Stalinist state carried out the missile tests at around 9:00 am (0000 GMT) and at noon (0300 GMT), Nippon Television Network said, quoting officials of the Japanese Defence Agency and public security authorities.

- US Calls NKorea's Missile Program Global Threat After Tests
http://www.spacewar.com/reports/US_Calls_N...fter_Tests.html

- China Urges Nuclear Talks Re-Start After Missile Test
http://www.spacewar.com/reports/China_Urge...ssile_Test.html

Beijing (AFP) Mar 10, 2006 - China on Thursday urged the resumption of six-party talks aimed at ending North Korea's nuclear ambitions amid reports that the Stalinist state test-fired two missiles near the Chinese border. "We hope all the relevant parties will show flexibility... and sincerity to create conditions for the resumption," foreign ministry spokesman Qin Gang said.

http://www.wpherald.com/storyview.php?Stor...09-055820-1363r

China begins work on North Korean port development
By WORLD PEACE HERALD
Published March 9, 2006


SEOUL -- China has begun work on a major development project in North Korea's northeast region based on an agreement with Pyongyang that gives Beijing the right to develop and use a North Korean port over a 50-year period.

When completed, the project will open direct sea routes from China's northeast industrial region to the export markets of South Korea and Japan.


A joint Chinese-North Korea company set up for the project has completed the designing phase to construct an expressway that will run 67 km (42 miles) from from Wonjong Ri on the North Korean bank of the Tumen River southeast to the port of Rajin, South Korea's Chosun Ilbo newspaper reported March 9 in its online edition.

The South Korean daily said it had obtained a copy of a report recently delivered by the Chinese president of the Rasun International Product Distribution Joint Management Company, a joint Chinese-North Korean company set up to develop Rajin Port and its surrounding infrastructure. Rasun is the North Korean city that encompasses Wonjong Ri.

The South Korean daily quoted the report as saying China and North Korea had each invested 304.52 million euros ($362.7 million) in the project.

China's investment was in the form of cash, construction materials and machinery and other equipment. North Korea's investment was in the form of transferring to the joint venture company development rights related to the project and the right to use a 5-square kilometer (2 square miles) area within the city of Rasun.

The joint venture company is scheduled to develop this are as an industrial complex and a bonded area for customs purposes.

According to the report, items in the development project also include reconstructing one existing pier in Rajin and constructing three additional piers, developing an intermediary trade of 1 million tons annually, and constructing and operating various service facilities along the Wonjong-Rajin expressway.

China has already begun a project to upgrade 48 kilometers (29.8 miles) of existing roadway as part of the new expressway, the report said.

http://www.wpherald.com/storyview.php?Stor...09-023359-8753r

Korean in Crisis: Kim decides to learn from China
By SEKAI NIPPO
Published March 9, 2006


TOKYO -- This is the thirty-third in an extended series of articles by a team of Sekai Nippo reporters on the crises that face North and South Korea and the prospects for a unified Korea.

The first section of the series focused on South Korea and the next on North Korea. The current section focuses on the prospects for unification.


A link to an index of articles previously published in this series can be found at the bottom of this page. (Editor's note)

A few years ago North Korea began to send more of its students to study at various Chinese universities. In particular, there was a marked increase in the number of those sent to study in China's Guangdong Province, which pioneered that country's policies of economic reform and opening.

A few dozen young North Korean students, candidates to become economic bureaucrats and military officers, have been sent to study at the prestigious Sun Yat-sen University in Guangzhou, Guangdong Province, and are working to master the inner workings of Chinese theories on the economy, business management and information technology.

When North Korean leader Kim Jong Il visited Guangzhou, his itinerary included a stop at the branch campus of Sun Yat-sen University located in the Guangzhou University Complex. At the time, more than 700 foreign students at the university from both North and South Korea eagerly volunteered to serve as interpreter staff to prepare for the official delegation from Pyongyang.

Sun Yat-sen University officials said they were conducting rehearsals in preparation for a possible visit by the North Korean leader began in mid-December.

According to a report by Hong Kong-based China News Service, Kim Jong Il was originally scheduled to visit China's Northeast region. At North Korea's strong request, China agreed to change the itinerary and have him visit Guangdong Province in the southeast, instead.

Kim was reported to have expressed pleasant surprise at what he saw.

"Sun Yat-sen University is really wonderful," he was reported to have said during his Jan. 13 visit.

As an expression of his pleasure, Kim presented the university's library with a piece of personal calligraphy.

China News Service quoted Chinese government officials dealing with North Korean relations as saying that Kim left Guangzhou deeply impressed by what he had seen.

"I contemplated for a long time that night about how I could apply what I learned about the success of China's reform and opening to my country's economic reform and development," Kim was quoted by the Chinese officials as saying.

He was apparently particularly impressed by the Guangzhou University Complex.

Li Changchun, member of Standing Committee of Political Bureau and former secretary of Guangdong Province party central committee, and Zhang Dejiang, member of Political Bureau and Guangdong Province party central committee, accompanied Kim Jong Il in his visit to Guangdong Province.

Li is number 8 in the Chinese Communist Party rank and Zhang is a politician in the Jiang Zemin faction who studied at the economic department of Kim Il Sung University as a foreign student.

"I don't want to see North Korea's current situation," Kim reported told the officials.

"On the premise that a planned economy will be maintained, I would like to apply the successes of China's reform and opening to North Korea's economic reform," the North Korean leader was reported to have said.

According to the Korean Central News Agency (KCNA), Kim Jong Il visited VTRON, a manufacturer of specialized metals, an agricultural company, the Guangzhou International Convention center and the China Industrial Commerce Bank software development center in Guangzhou.

He took a trip on the Zhu Jiang River, on board cruise ship. While on the cruise, he remarked, "Guangdong Province's enormous change has left me with a very deep impression. I wish the province continued prosperity and development."

This was a complete turn-around from his comment after visiting China's Shenzhen economic zone in 1983.

At that time, Kim said, "China's special economic zone is the result of its subjugation to imperialism. China has fallen into revisionism."

He concluded, "There is nothing I can learn from China," which provoked Deng Xiaoping to anger.

With his recent visit to Guangdong Province, he finally lavished praise for Chinese-style economic reform and allowed the media to report his plan to follow China.

According to KCNA, Kim Jong Il was accompanied on his recent China visit by Prime Minister Pak Pong Ju, First Deputy Foreign Minister Kang Sok Ju, Party Central Planning Director of Finance Pak Nam Gi, Party Central Committee Director of Science and Education Li Gwang Ho, and Deputy Prime Minister Roh Mun Chul.

Some South Korean media reported that the entourage included about 50 officials, including Korean People's Army chief of staff Kim Young Chun, Secretary of Workers' Party Central Committee (in charge of defense) Chun Byung Ho, People's Army General Political Bureau deputy chairman Pak Jae Gyung and other senior military leaders.

If true, it is likely that Kim Jong Il wanted to demonstrate to China that North Korea is genuinely serious about economic reform by having senior military officers and other hardline conservatives accompany him.

Kim Jong Il's visit to China came only about 70 days after Chinese President Hu Jintao had visited North Korea. His unusual 9-day visit to southern China by train might have been a gesture designed to show that North Korea was ready to follow the path of China-style economic opening.

Although the North Korea's leaders are worried by the possibility of China's economic colonization of their country, they took a big step toward economic reform, on the condition that a planned economy will be maintained.

---

See an index with links to all installments in this series published to date: blog.wpherald.com/wphblog/?p=123

This article was translated from Japanese and edited by World Peace Herald. For the original text, please visit www.worldtimes.co.jp

http://www.wpherald.com/storyview.php?Stor...09-015718-7322r

Analysis: N. Korea wants financial sanctions talks with U.S.
By Jong-Heon Lee
UPI Correspondent
Published March 9, 2006


SEOUL -- North Korea's proposal to open a new channel with the United States to discuss financial sanctions was largely welcomed in South Korea, as it purports to remove the obstacle that has stalled talks on the communist nation's nuclear program.

But suspicions have also arisen that the North's move is aimed at buying time to diffuse U.S.-led pressure over its alleged financial illegalities, such as counterfeiting of U.S. bills and money-laundering.


South Korean officials have urged Pyongyang to take actual moves to prove its claim of innocence.

In a rare meeting with U.S. officials in New York, a senior North Korean diplomat proposed the establishment of a joint body for consultations with the United States on the financial sanctions, South Korea's Hankyoreh Shinmun daily reported Thursday.

The newspaper quoted Li Gun, the North Korean Foreign Ministry's head of North American affairs, as saying that he presented the idea of exchanging information about financial illegalities and jointly mapping out countermeasures through a negotiation framework established separately from the current six-nation nuclear talks.

"If such a consultative body opens, we can exchange information on financial crimes and prepare countermeasures," Li said in an interview with the South's pro-unification newspaper after the New York meeting.

"If Washington provides information (on North Korea's involvement in counterfeiting), Pyongyang would confiscate the machine, paper and ink, and notify the U.S. Treasury Department (of the seizure)," Li said. "(The U.S. side) said it would study it," he added.

Last September, the United States slapped restrictions on Banco Delta Asia, a Macau-based bank accused of laundering money for North Korea. The U.S. Treasury Department labeled the bank as a "primary money-laundering concern."

Under the U.S. measure, BDA has cut off transactions with North Korea. The U.S. administration has also frozen the U.S.-based assets of eight North Korean companies.

North Korea interpreted the U.S. actions as "financial sanctions," and declared that it would not return to the six-party nuclear talks until the sanctions were lifted. Washington has dismissed the demand, saying that the financial issues have nothing to do with the nuclear standoff.

North Korea has denied any government involvement in the alleged illegal activities, and said it was a "victim" of counterfeiting and money-laundering operations. Pyongyang also said it has ordered its embassies and trading entities to stay away from any kind of illegal activities in an attempt to dispel allegations.

During the New York meeting, Li said North Korea was forced to use only cash due to Washington's blockage of financial transactions. "So I asked my U.S. counterparts about the possibility of opening an account in a U.S. bank," he told Hankyoreh.

Li's proposal of creating a new consultation body on the financial issue was largely seen as a concession on the part of the North in Seoul since it complies with the U.S. position that the financial issue should be separated from the nuclear issue.

Chun Young-woo, South Korea's chief delegate to the six-way nuclear talks, described the New York meeting as "useful," expressing hope that the contact would pave the way for the resumption of the nuclear talks.

"It is expected to serve as a starting point for the resumption of the nuclear talks as they had useful discussions to understand each other's position," Chun told reporters before leaving for Beijing to meet Chinese officials to discuss ways to revive the nuclear talks.

"We have to wait until the United States finishes its study on the proposal because it was something that has not been in the mind of Washington," Chun said. "If the United States can't accept it, Washington could try to search other countermeasures that can satisfy the North's demand in another way."

Chun also called for North Korea to take actions to dispel the allegations that it has counterfeited U.S. dollars and circulated them through the Macau bank.

"North Korea should diffuse all suspicions on the alleged illicit activities linked with the Banco Delta Asia," Chun said. "In order to resolve the BDA issue, at least, North Korea should present how it will get rid of the suspicions."

Another government official said it would take "several weeks" for North Korea and the United States to reach a compromise, indicating the six-nation talks could not be resumed before late April.

Government officials pinned high hopes on the planned trip by Chinese President Hu Jintao to Washington -- slated for April -- to provide momentum for global efforts to end the North's nuclear ambitions.

"We are making efforts to resume the six-way talks through diplomatic steps we can take," Foreign Minister Ban Ki-moon said in a recent briefing, adding that active measures will be taken immediately for resolving the nuclear issue once negotiations begin

- South Korea-US Alliance At Risk
http://www.spacewar.com/reports/South_Kore...ce_At_Risk.html

Seoul (UPI) Mar 13, 2006 - Concerns are growing in South Korea over further troubles in its decades-long security alliance with the United States as Washington seeks to reshape its military presence in the Asian country.

March 17, 2006
N.Korea Wants Norway to Broker Nuclear Deal
By REUTERS
Filed at 8:29 a.m. ET

OSLO (Reuters) - North Korea wants Norway to mediate in its nuclear standoff with the international community, a newspaper reported on Friday, but Oslo said it favored a resumption of stalled multi-lateral talks.

North Korea says it has nuclear weapons, though the United States has been unable to confirm this, and six-party talks aimed at ending the communist state's nuclear weapons program ran aground in November.

``Norway has a good reputation as a peace mediator and very good experience in international conflict resolution,'' North Korea's ambassador to the Nordic region, Jon In Chan, told Verdens Gang, Norway's top selling daily.

``We hope Norway can contribute as conflict solver in the ongoing nuclear dispute between the U.S. and North Korea.''

Norway played down the offer, however.

``We have no intention of taking unilateral action toward North Korea,'' Deputy Foreign Minister Raymond Johansen told Reuters.

He said the country backed the six-party talks involving the United States, Russia, Japan, China and the two Koreas.

Since talks stalled, the United States has cracked down on firms it suspects of helping North Korea in illicit activity such as currency counterfeiting. Pyongyang has refused to return to the talks until Washington calls off its drive.

Norway's Johansen said he would bring up the nuclear question when he visited North Korea later in the year to discuss humanitarian aid.

``The international community should urge a six-party agreement, but if there is anything any one country can do toward North Korea, we would welcome it.''

He said North Korea's ambassador had not raised the question when they spoke on Wednesday. The North Korean embassy in Stockholm, where the ambassador is based, declined to comment.

Norway, a member of NATO but not of the European Union, has a reputation as a peace mediator after involvement in seeking to end conflicts from the Middle East to Sri Lanka.

It is also the home of the Nobel Peace Prize and in 1999 the committee, which is independent of the government, gave the award to South Korea's former President Kim Dae-jung for his efforts to mediate a peace with North Korea, still technically an enemy since the 1950-53 war.



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http://online.wsj.com/article/SB1142952417...e_whats_news_us
North Korea Reiterates
It Has Nuclear Weapons

Associated Press
March 21, 2006 9:59 a.m.

SEOUL -- North Korea reconfirmed on Tuesday in no uncertain terms that it has nuclear weapons and demanded the U.S. make a "nuclear cooperation" agreement instead of seeking to disarm it.

The announcement escalated tension in the prolonged standoff over the North's nuclear program, clouding the prospect of resumption of six-nation talks on the dispute.

"We have built nuclear weapons for no other purpose but to counter U.S. nuclear threats," said a spokesman for the North's Foreign Ministry, according to the North's Korean Central News Agency. It is rare for North Korea to mention its nuclear capabilities so explicitly. The communist state usually refers to its claim of a nuclear arsenal as its "nuclear deterrent force."

North Korea first declared last year that it has nuclear weapons, although the claim could not be confirmed independently.

"If the U.S. is truly interested in finding a realistic way of resolving the Korean peninsula nuclear issue, it would be wise for it to come out on the path of nuclear cooperation with us who are outside the Nuclear Nonproliferation Treaty," the spokesman said.

The spokesman was apparently referring to a recent nuclear deal between the U.S. and India, under which the U.S. will provide India with nuclear know-how and atomic fuel, even though New Delhi has not signed the global anti-nuclear weapons treaty. North Korea has condemned the U.S. for giving India "preferential" treatment by formally recognizing it as a nuclear power.

North Korea backed out of the NPT in early 2003, right after the outbreak of the nuclear crisis in late 2002.

The North's spokesman also said his country has the right to launch a pre-emptive strike, saying it will strengthen its war footing ahead of South Korea-U.S. military exercises scheduled this weekend.

The spokesman made Tuesday's announcement, denouncing a U.S. national security report, which among other things reaffirmed President Bush's strike-first policy against terrorists and enemy nations and said North Korea poses a serious nuclear proliferation challenge.

The North's spokesman accused the U.S. of harboring hostile policies against his country and of trying to shift blame for the stalling talks on his country's nuclear weapons program, saying that it has presented utmost flexibility and generosity to resolve the financial dispute over its alleged currency counterfeiting.

Copyright © 2006 Associated Press

North Korea Touts First-Strike Capability :

North Korea suggested Tuesday it had the ability to launch a pre-emptive attack on the United States, according to the North's official news agency. A Foreign Ministry spokesman said the North had built atomic weapons to counter the U.S. nuclear threat.
http://informationclearinghouse.info/article12436.htm

===
N.Korea upgrades mobile missile arsenal -report:

North Korea is upgrading its mobile missiles, making it easier to launch a surprise attack on neighbours, but it does not have a missile that could hit the continental United States, a report said on Wednesday.
http://tinyurl.com/p9xhh

http://www.heraldsun.news.com.au/common/st...55E1702,00.html

N Korea threatens action against US
From correspondents in Seoul, South Korea
24mar06

NORTH Korea has threatened to take "strong" action against US moves to "stifle" the communist nation.

In a statement published by the North's official Korean Central News Agency, a foreign ministry spokesman accused Washington of tightening sanctions against Pyongyang and of heightening tensions on the Korean peninsula.
"Now that the US intention to stifle the DPRK (North Korea) has become very clear, the DPRK will react to it with a strong measure for self-defence," he said.

Tensions have increased on the Korean peninsula over South Korea's annual war games with the United States, which will begin on Sunday.

Pyongyang said the United States is using the drills to prepare for an invasion of the Stalinist state, which has been locked in a dispute with the outside world over its nuclear ambitions since October 2002.

"It is quite obvious that the saber-rattling the Bush administration is going to launch against this backdrop will threaten regional peace and security and adversely affect the favourably developing North-South relations," the spokesman said.

North Korea has called off high-level talks with South Korea, saying the military exercises would also set back efforts to end the standoff over Pyongyang's nuclear weapons ambitions.

Yesterday, it said it would not rule out first use of nuclear weapons against the United States.

Six-party talks involving the two Koreas, China, Japan, Russia and the United States to resolve the nuclear standoff are in limbo after Washington accused Pyongyang of counterfeiting US dollars and laundering money.

- US And South Korea Launch War Games
http://www.spacewar.com/reports/US_And_Sou..._War_Games.html

Seoul (AFP) Mar 27, 2006 - South Korea and the United States on Saturday launched large-scale war games as North Korea accused them of rehearsing for a nuclear attack on the communist state.

- North Korean Leader Touts "Burning Hatred" Towards The US
http://www.spacewar.com/reports/North_Kore...rds_The_US.html

Kaesong zone a troubled Korean jewel
By Andrew Salmon

KAESONG, North Korea - It may be the jewel in the crown of North-South Korean economic relations - but economically, is an industrial complex in one of the world's most isolated, insulated and ill-reputed states a viable proposition?

The Kaesong Industrial Complex, opened in 2003 on North Korean soil with southern capital, has been championed by Seoul's Roh Moo-hyun administration to the extent that the South Korean president last year reportedly extended an informal invitation to



US President George W Bush to visit. (To nobody's surprise, that visit did not transpire.)

Questions hang, however, over whether the complex can fulfill the dream of its founders, who see it as the blueprint for future North-South economic relations and a potential regional hub for low-cost manufacturing. And with the nuclear crisis simmering steadily, the shadow of a hawkish Washington hangs over Kaesong's future.

On the ground
Having said that, on the ground, things look rosy. A factory complex is rarely a thing of beauty, but amid the desolate landscape of North Korea, it adds a splash of color to the dominant browns and grays.

The 10-hectare complex sits in the midst of a dusty plain of excavated ground just north of the Demilitarized Zone (DMZ) separating the two Koreas. It is some 15 kilometers from the city of Kaesong, an ancient Korean capital, and an hour's drive from Seoul. Every day, convoys of some southern 300 cars and trucks trundle north along the barbed-wire-lined four-lane highway that cuts through the DMZ to the complex.

Fifteen small and medium South Korean enterprises - 11 are already operational - have established factories in this enclave of capitalism. About 6,000 North Koreans labor under South Korean direction, producing pots, footwear, textiles and other products primarily for the Southern market.

With the complex's South Korean backers clearly keen to sell the North on the joys of capitalism, these factories are no Third World sweatshops. They are spacious, well lit and equipped with industrial-safety features; the zone even boasts a gleaming red fire engine. Amenities include a bank, a convenience store and accommodation for the 500 South Koreans who currently work here, receiving a 50% hardship bonus. Electricity is piped in from the South. Cross-border telephone lines were laid in December - a historic event in itself - but there is, as yet, no Internet access or cell-phone use in the zone.

Officials from Hyundai Asan, the Southern conglomerate that has pioneered economic relations with the North, and the state-run (South) Korean Land Corp, were ebullient as they welcomed 120 foreign reporters on a tour of the US$220 million complex recently. "The North Korean workers are very diligent, with high manual skills," enthused Kim Dong-keun, the president of the complex's Industrial District Management Committee. "Their productivity level is, on average, 80% that of [their] South Korean counterparts."

One of the few Northern workers wheeled out to face the press was the delightful Kim Hyo-jung. "This is the first such attempt to work with South Koreans, so there is pride," said the attractive young female interpreter after delivering a snappy PowerPoint presentation, complete with laser pointer.

The monthly wage paid to Northern workers, $57.50, is about one-tenth to one-twentieth what employers pay in the South, estimated Moon Chang-sup, president of Stafild, a sports-shoe manufacturer that is planning to relocate its main operations from South to North in the near future. (Ironically, the only currency used in the complex is the US dollar.) A further boon for South Korean management used to dealing with unruly unions at home is the discipline of the Northern workforce: there have been no labor disputes.

Future vision, future issues
Planners envisage a grandiose future for the industrial zone. By 2012, they plan to expand it to 6,610 hectares, developing it into a regional manufacturing hub marrying Southern capital and expertise with the skills of 700,000 Northern laborers - who are a cheaper bunch even than their Chinese comrades. Meanwhile, Kaesong city itself is envisaged as a cultural tourism zone, attracting the history-hungry citizens of Seoul with the world's largest extant collection of Korean traditional architecture.

Unlike the planned free economic zone on the Chinese border at Sinuiju - a proposal that has been indefinitely shelved after the man Pyongyang chose to head it, Dutch-Chinese entrepreneur Yang Bin, was arrested by Beijing authorities in 2002 - Kaesong has realistic possibilities, some believe. Its proximity to a South whose small enterprises face a labor shortage and whose government is keen to build an economic bridgehead on the soil of its communist neighbor, grant it a fighting chance.

But tellingly, despite entreaties from Hyundai Asan, the promise of cheap, disciplined labor, and its adjacency to the lucrative Southern market, no foreign investors have yet signed up for the zone. And there are concerns that, with the United States at odds with South Korea over how to deal with the North, the Kaesong project could founder on the rocks of geopolitics.

Washington requires high-tech products destined for North Korea that include US intellectual property to undergo stringent export controls. This has irritated many in the South - particularly after the process delayed the transfer of telecommunications equipment. It also appears highly unlikely that Kaesong-built products will be included in a free-trade agreement between Seoul and Washington that is under negotiation.

"Kaesong is clearly getting in the way of the US putting a financial stranglehold on North Korea, so there is a looming showdown between Seoul and Washington on whether the project should move forward," said Peter Beck, who heads the International Crisis Group in Northeast Asia. "It is a pillar of North-South cooperation, but I think South Koreans are going to be in an increasingly difficult position when nuclear talks go nowhere; they are going to face pressure to slow down or pull back."

Outstanding issues
And even today, there are issues. The contrast between the complex, with its modern buildings, utility poles and street lighting - even a lawn - and its surroundings is striking. Beyond the 8.6km green perimeter fence, soldiers patrol. Against one section of fence is a drab village. The gray concrete of the shabby houses, set amid plots of brown dust, is cracked and crumbling. Many of their windows, lacking glass, are filled instead with sheet plastic.

Officials of the complex say they have assisted local villagers with heating briquettes and rice, but there is otherwise neither trade nor contact across the fence, indicating that the experience of capitalism is strictly insulated. This assumption is buttressed by relations inside the complex: despite talk of inter-Korean fraternity, social contact between Northern and Southern workers is non-existent.

"It is absolutely impossible to socialize; it is prohibited by the authorities," said Yoo Nam-yeol, a South Korean production manager at Taesang Hata, a firm producing cosmetics containers.

In addition, there is little transparency in wages, which are paid not to workers but to a North Korean government agency. "We have no idea what happens next," admitted one Southern factory foreman.

Beyond the red-dressed Kim, North Korean workers were reluctant to speak to reporters. "I was picked for this job by the government, but I cannot tell you my salary; it is best to ask the company," said one textile worker, who, like her colleagues, takes a bus to the complex daily.

Logistics are a further issue. While the railways between the two Koreas were reconnected in early 2004, theoretically linking Seoul and Sinuiju on North Korea's Chinese border, it is uncertain when trains will start to run through Kaesong.

"There will be talks on opening the line in July, but it is not certain," said a South Korean official at Dorasan Station, a giant steel-and-glass edifice on the southern side of the border. The lack of rail transport complicates his firm's logistics costs, said Stafild's Moon, whose head office is on the south coast of the peninsula, in Busan.

Andrew Salmon is the Seoul-based author of American Business and the Korean Miracle: US Enterprises in Korea, 1866 - the Present and a frequent contributor to the South China Morning Post, the Washington Times and The Times.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)

- NKorean Nuclear Negotiators To Meet In Tokyo
http://www.spacewar.com/reports/NKorean_Nu...t_In_Tokyo.html

Tokyo (AFP) Apr 07, 2006 - Japan on Thursday approved a rare visit by a senior North Korean official, bringing together chief negotiators from all six nations in the stalled talks on ending Pyongyang's nuclear drive.

- North Korean Defense Chief Warns Of Pre-Emptive Attack On US
http://www.spacewar.com/reports/North_Kore...tack_On_US.html

Seoul (AFP) Apr 10, 2006 - North Korea's defense chief has warned that Pyongyang could also launch a preemptive attack against the United States, with state media saying soldiers were ready to be "human bombs."

------------
KOREAN NUKES

- NKorea Vows No Compromise As It Threatens Military Buildup
http://www.spacewar.com/reports/NKorea_Vow...ry_Buildup.html

Tokyo (AFP) Apr 13, 2006 - North Korea on Thursday vowed no compromise on its nuclear program and said it would keep boosting its military amid the stalemate in six-nation disarmament talks. "There is no room for us to be flexible," North Korean Vice Foreign Minister Kim Kye-Gwan told reporters in Tokyo at the end of a private conference that brought envoys from the six nations in the stalled talks.

North Korea says it has "shocking evidence" of US plot:

"The CIA secretly enlist(s) experts on counterfeiting notes claimed to be the 'most sophisticated in the world' and invite(s) them to issue lots of fake currencies at 'counterfeit notes printing houses of North Korean-style' operating in U.S. military bases in different parts of the world," the spokesman said.
http://tinyurl.com/m2vbx

http://www.wpherald.com/storyview.php?Stor...27-120839-1789r

Analysis: North Korea's China card
By Jong-Heon Lee
UPI Correspondent
Published April 27, 2006


SEOUL -- In the face of the Bush administration's tough stance, North Korea has shifted its survival strategy from seeking a breakthrough in relations with the United States to deepening ties with its ally, China, officials and analysts say.

In recent years, North Korea has placed its top priority on improving diplomatic relations with the United States, which would pave the way for the isolated communist country to ensure security and get much-needed loans from the international lending institutions heavily influenced by Washington.


North Korea devised its nuclear development program to attract U.S. attention and used the nuclear game as a card to win more concessions from the United States, analysts say, but Pyongyang's years-long efforts have failed to pay off as Washington has tried to further isolate the North over the nuclear standoff.

The United States has recently stepped up pressure on North Korea over its alleged human rights abuses and financial illegalities, prompting Pyongyang's fears that the Bush administration is aiming for regime change in North Korea.

"Thus, North Korea has decided to wait until the Bush administration is replaced," said Koh Yu-hwan, a North Korea specialist at Dongguk University in Seoul. "North Korea... seeks to sustain (itself) for the next years until the inauguration of a new leadership in the United States by strengthening ties with China."

A senior Seoul government official accused the United States of increasing pressure on North Korea, saying Washington's tough stance could trigger a new round of tensions on the Korean peninsula and in East Asia.

"(The) United States' unilateral stance toward North Korea has lead to closer ties between Pyongyang and Beijing," a senior presidential official said, on condition of anonymity. "It may trigger East Asia's return to the Cold War era."

"North Korea seems convinced that the United States is trying to overthrow the regime by pressuring them with issues including financial sanctions, which have nothing to do with their nuclear program," said Prof. Kim Geun-sik of Kyungnam University.

Koh and other analysts said China has also changed its policy toward North Korea, from limited economic cooperation to protecting its political system, in response to the Bush administration's hard-line stance against the Kim Jong Il regime.

"Beijing is now dealing with the North Korean issue as part of China's future security," Koh said. "China is expected to boost its economic and security ties with North Korea to keep the neighbor afloat," he said.

China has long been the key supplier of food and fuel to the impoverished North. China has provided between 70 percent and 90 percent of North Korea's oil and more than one-third of its imports and food aid, according to officials in Seoul.

China's economic aid and investment in North Korea, as seen in its recent construction of a glass manufacturing plant in Pyongyang, is rapidly growing. North Korea and China recently agreed to jointly exploit offshore oil fields, which could boost Beijing's efforts to develop the impoverished North.

China has recently decided to develop its northeastern area, bordering North Korea, in a bid to increase its economic influence on its communist neighbor and reportedly plans to designate a border town as a free market to fuel to two-way trade with North Korea.

Nam Sung-wook, a North Korea expert at Korea University, said China aims to deal with the United States' security ties with Japan and South Korea by increasing its economic influence on North Korea.

"North Korea is left with no option but to depend on China for economic survival as it faces mounting U.S.-led pressure and sanctions," Nam said.

South Korea's chief North Korea policy-maker, Unification Minister Lee Jong-seok, also acknowledged the changing security situation in North Korea and East Asia, saying he detected "subtle changes" taking place in the region.

"The United States seems to be trying to resolve the North Korea issue in a comprehensive way, not just centering on the North Korean nuclear crisis, under a mid to long-term policy on the Korean peninsula," Lee said in a recent interview with a local radio.

The United States will not focus its efforts on resolving the nuclear crisis, but will seek a packaged solution to various problems involving North Korea, such as counterfeiting and human rights abuses, he said.

Analysts say the new situation poses a major diplomatic challenge to South Korea, which is pushing for reconciliation with North Korea while maintaining ties with the United States.

South Korea is still technically in a state of war with North Korea as their 1950-53 armed conflict ended without a peace treaty. South Korea hosts more than 30,000 American troops under a mutual defense treaty.