North Korean Issue Is All About Money and Political Compromise

North Korean Issue Is All About Money and Political Compromise. March. 24, 2007 09:18. gun43@donga.com.

The essence of the North Korean nuclear issue can be summed up in three words: money and political compromise. The same is true of the six-party talks that ended on March 22 in Beijing without any tangible results.

North Korea stalled the talks because its money frozen at the Macau-based Banco Delta Asia was not transferred to it. Prior to that, the U.S. made political compromises with the North to release the funds raised through illegal activities.

A breakthrough was made when Washington made political compromises in response to Pyongyang’s demand for money. But when the North demanded too much and the U.S. changed its stance, the issue became tangled again. In the negotiations, money was a constant and political compromise was the variable.

Political Compromise Over the North’s Threat-

The crux of the agreement signed by North Korea and the U.S. in August 1994 was to provide 500,000 tons of heavy fuel oil in return for the North’s closure of its nuclear facilities, and to build a 2,000-megawatt light water reactor in exchange for the dismantlement.

It looked like a reasonable “deal.” But a closer look at the background reveals a different story. Pyongyang violated the nuclear safety agreement that it signed with the IAEA, which it had to conform to as a member of the non-proliferation Treaty. The amount of plutonium North Korea reported to the IAEA that it extracted from the Yongbyon nuclear reactor was greatly different from the outcome of the IAEA’s inspection.

The U.S. demanded that the North conform to the agreement and accept a re-inspection by the IAEA. But Pyongyang rejected the demand, extracting fuel rods from the nuclear reactor and saying that it would make Seoul a “sea of fire.” As a result, the U.S. made political compromises and agreed to provide heavy oil and a light water reactor to prevent the North from developing nuclear weapons.

The Bush administration changed this approach when it took office in 2001. Unlike former President Bill Clinton who even attempted to visit Pyongyang, President Bush pressured the North, raising suspicions over the North’s highly enriched program. As a result, the Agreed Framework was broken.

Prior to that, the U.S. raised suspicions in March 1998, saying, “There is a hidden nuclear facility in the underground cave in Geumchang-ri, Pyongbuk Province.”

The U.S. conducted an investigation at Geumchang-ri in exchange for 500,000 tons of rice. However, it found just an empty tunnel.

The 18-month-old Demand for $25 Million-

North Korea has stalled the six-party talks over the past 18 months, and seems to be obsessed with the funds frozen at BDA.

Ever since the funds at BDA were frozen shortly before the Joint Statement was adopted in September 19, 2005, Pyongyang has reiterated, “We will not discuss the denuclearization process unless we regain our money,” which has broken down the last three rounds of six-party talks.

Until last year, Washington argued, “As the asset freeze at BDA is the result of law enforcement, we cannot connect the issue with the denuclearization talks.” But it changed course at the one-on-one talks in January in Beijing, accepting Pyongyang’s demand to free its assets at BDA, including illegal funds.

However, that did not satisfy the North. In this round of the six-party talks, Kim Kye Kwan, the North’s chief negotiator, flew back to Pyongyang, saying, “We will not return to the negotiating table before we actually get our money back.”

A Disgraceful Demand for Money-

In the ministerial-level talks held in Busan shortly after the North launched its missiles last July, the North requested 500,000 tons of rice and raw material assistance. The North attempted to get money, even when the South’s public opinion towards the North was worse than ever.

Pyongyang also requested 400,000 tons of rice and 300,000 tons of fertilizer at the inter-Korean ministerial-level meeting held after the February agreement of the disarmament talks.

Contrary to the boasting of its military prowess by missile launches and nuclear tests, it does not hesitate to solicit help to resolve its economic hardship.

Ironically, however, it shows that the North’s weakness is money. Given Pyongyang suffered so much from the $25 million frozen at BDA, it is foolish for the Roh administration to not use its three-trillion-won assistance to the North as leverage.

Therefore, experts say that the administration should demand step be taken toward denuclearization when providing assistance to the North, however small the assistance may be.