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NORTH KOREA NEWSLETTER NO. 80 (November 12, 2009)

All Headlines 11:17 November 12, 2009


N. Korea's Foreign Currency Reserves Larger Than Estimated: Professor

SEOUL (Yonhap) -- North Korea may have accumulated a larger-than-expected amount of foreign currency over the past decade, a South Korean professor said on Nov. 5, dismissing speculation that the communist country might be suffering a dollar drought due to global financial and economic sanctions.

The claim was made in a paper written by Chang Hyung-soo, a professor at the school of economics and science at Hanyang University. The paper was cited by the Korea Development Institute, a South Korean state-run think tank.

"It is highly likely that the North posted a net foreign currency surplus annually between 2000 to 2008, and if the dollars earned from weapons trading and illegal imports are included, Pyongyang would have posted a significant surplus," Chang said.

"Especially in 2008, the North posted a large surplus in its foreign currency balance despite a steep decline in weapons trade and other illegal activities, caused by global sanctions and suspended aid of fertilizer and rice from the South," he added.

Chang, however, did not provide detailed figures or fully explain how the North obtains foreign currencies.

His claim counters speculation that the North might be suffering from a dollar shortage as its trade has been restrained by sanctions imposed by the U.N. The restrictions were further tightened after the country went ahead with its second nuclear test in May in defiance of warnings from the international community.

The North's holding of dollars has drawn attention from many countries as they suspect the communist country of using the money to develop its missile and nuclear technologies. The North earns most of its dollars from its trade with South Korea and China.

Chang, however, said that the amount of money used in pursuing its nuclear ambitions must be smaller than many media have reported, as it is far-fetched to apply the same level of labor and technology costs used by advanced countries.

"It is a little unreasonable to calculate the amount of money the North spends on its missile and nuclear tests by using data from advanced countries where labor costs are expensive and top-notch technologies are employed," Chang said.


U.S. Envoy on N.K. Human Rights Denounces China for Refugee Repatriation

WASHINGTON (Yonhap) -- The U.S. nominee for North Korean human rights envoy on Nov. 5 denounced China for deporting and repatriating North Korean refugees, saying he will continue to press Beijing on the issue.

Robert King, speaking at a Senate confirmation hearing, said, "We have raised these issues with the Chinese, and it would be my intention to continue to do that ... The Chinese have been less hospitable than we would like in terms of accepting these refugees and allowing them access to the U.N. High Commissioner for Refugees."

China, Pyongyang's staunchest communist ally, sees North Korean defectors as economic migrants rather than refugees, and deports them under a secret agreement with North Korea where they are persecuted.

Reports say that hundreds of thousands of North Korean defectors are hiding in China. Most defectors cross the Chinese border seeking better living conditions, mainly in South Korea, which has received nearly 20,000 of them since the end of the 1950-53 Korean War.

The U.S. has taken in about 80 North Korean refugees since the North Korean Human Rights Act was enacted in 2004.

King, a former congressional aide, ist set to replace Jay Lefkowitz, who quit in January after three years of service. Under the rights act, then President Bush appointed Lefkowitz in 2005 as special envoy and provided financial aid to help improve human rights conditions in the North and accept North Korean defectors into the U.S.

Congress extended the act for another four-year run, calling for "activities to support human rights and democracy and freedom of information in North Korea," "assistance to North Koreans who are outside North Korea" and 12-hour radio broadcasts to North Korea.

In his final report, Lefkowitz in January urged Obama to emphasize human rights in the multilateral talks on ending North Korea's nuclear ambitions and proposed that the U.S. and its allies link any aid to Pyongyang with human rights improvements.


North Korean Leader Pulls Plug on TV Commercials: Sources

SEOUL (Yonhap) -- North Korean leader Kim Jong-il has sacked his television point man in anger over commercials that made a splash earlier this year by promoting the communist state's beer and other local products, sources here said on Nov. 8.

"Recently, Kim saw the commercials while watching TV. He was enraged, asking where the commercials came from and describing them as the prototype of China's early reforms," one source said.

Starting July 2, North Korea's television played commercials that showed young women in traditional clothes serving frothy mugs of Taedong River beer billed as "Pride of Pyongyang."

Other products, including ginseng and quail, soon followed in television advertisements, which had rarely been seen in the country, generating outside speculation that North Korea may be starting to embrace the capitalist mode of life.

But according to Yonhap News Agency's own analysis, the commercials disappeared as of the end of August. The sources said Cha Sung-su, the North's top broadcaster, has also been discharged.

One source said Cha may have been unduly victimized in the case because the commercials were a product of Kim's earlier instruction to create "more interesting and diverse" television programming.

Cha, 69, is one of Kim's closest aides, having accompanied him on public inspections at least six times since the leader reportedly had a stroke last year and then recovered.

He is the North's top television man, having served on the communist country's broadcasting committee for about four decades. He is also known in North Korea for his numerous poems.


Obama Supports Inter-Korean Summit for N. Korea's Denuclearization

WASHINGTON (Yonhap) -- The United States fully supports South Korea's effort to seek an inter-Korean summit and pursue a comprehensive, rather than incremental, solution to the North Korean nuclear issue, a senior Obama administration official said on Nov. 9.

"That is an issue for South Korean President Lee Myung-bak to decide and we will support his decision," the official, asking anonymity, said on a possible inter-Korean summit. "President Lee and his government will speak for themselves with respect to the prospect of a North-South summit. One of the many points of commonality between our positions is that we seek a dialogue that will contribute to a peaceful resolution of the North Korean nuclear problem."

The official made the remarks at a background briefing to reporters ahead of U.S. President Barack Obama's nine-day trip to South Korea and three other Asian countries, Japan, Singapore and China, which begins on Nov. 12.

President Lee has said that he will not meet with North Korean leader Kim Jong-il unless the North agrees to discuss its denuclearization, which Pyongyang has said is the topic to be dealt with the U.S.

Former South Korean presidents Kim Dae-jung and Roh Moo-hyun had summit meetings with Kim in 2000 and 2007, respectively, but they failed to address the nuclear issue and were criticized for providing economic aid to the North that many say helped finance its nuclear weapons program.

A North Korean delegation composed of senior officials in charge of inter-Korean relations paid a visit to Lee in August when they attended a funeral for the late President Kim. Speculation arose then that they proposed an inter-Korean summit.

A senior Pentagon official reinforced such speculation last month when he said that Lee had been invited to visit Pyongyang, although the White House later dismissed the comment as a "misunderstanding."

South Korean media reports have also said that a close aide to Lee met with North Korea's Kim Yan-gon, who is in charge of inter-Korean relations, in Singapore last month to prepare for a possible summit, which the South Korean presidential office neither confirmed nor denied.


U.S. Should 'Front-load' Future Nuclear Deal with North Korea

SEOUL (Yonhap) -- The United States should press for a "front-loaded" denuclearization deal with North Korea when the communist state returns to negotiations that have centered on incremental approaches, a leading U.S. think-tank said this week.

"Back-loading makes agreements easier to attain, but harder to maintain through the difficult later stages," the Center for a New American Security (CNAS) said in a report seen by Yonhap News Agency on Nov. 11. The Washington-based group was co-founded by U.S. Assistant Secretary of State Kurt Campbell.

"Negotiate for a front-loaded agreement, which includes significant early actions," it recommended, adding the U.S should "strongly consider walking away" if the North refuses to conform.

"While the action-for-action concept seems sensible, its implementation has been disappointing," CNAS said in the report, which it based on interviews with over 50 ranking U.S. and South Korean officials and observers.

North Korea, which conducted its second nuclear test in May this year, has in recent months retracted its boycott of the six-party nuclear negotiations and signaled a willingness to return to the talks with the U.S., South Korea, Russia, China and Japan.

The six-nation talks led to a 2007 deal in which the North agreed to the dismantlement of its nuclear program, beginning with the disablement of three of its atomic facilities in return for fuel aid and steps toward normalized relations with the U.S.

But the accord left out North Korea's uranium enrichment program for further negotiations.

"Because of the deep and abiding suspicions that permeate U.S.-DPRK (North Korea) relations, each party is reluctant to fulfill its end of the deal," CNAS said. "The nature of the steps each side wants the other to take exacerbates this crisis of confidence."

The report -- co-authored by Abraham Denmark, Zachary Hosford and Michael Zubrow -- comes as the U.S. announced this week its point man on North Korea will fly to Pyongyang by the end of the year to jump-start the six-nation talks.

CNAS proposed that the U.S. offer security and political arrangements up front for major concessions by the North, such as the ending of its uranium enrichment program.

"Because America's most significant steps are more reversible than those it desires from Pyongyang, the United States can more easily withdraw its concessions if the DPRK refuses to implement its side of the agreement," it said.

South Korean President Lee Myung-bak said in September that a "grand bargain" should be pursued, calling for a "one-shot deal" that can put an end to the on-off pattern of negotiations with North Korea.

A senior Pentagon official said last month that "the old approach of trying in small increments" is seriously flawed.

"Limited agreements are costly and risky," CNAS said. "Without fundamental changes to this pattern, or the U.S.-DPRK relationship, it is unlikely Pyongyang will eliminate its entire nuclear program."

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