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2008/09/18 10:59 KST
NORTH KOREA NEWSLETTER NO. 21 (September 18, 2008)

   *** FOREIGN TIPS

North Korea's Investment Risk Edges Down: VOA

SEOUL (Yonhap) -- North Korea's investment risk rating has edged down on the back of its improved trade account and external relations, a Washington-based radio station said on Sept. 4, quoting a private economics organization.

   The Voice of America (VOA) cited Global Insight as saying that the medium-term sovereign risk rating for North Korea came down from 85 to 80 points, though the socialist state still remains at the default level.

   The higher the sovereign risk rate, the greater the possibility of default for the country, according to the report. Seventy points or more is considered the default level, while 40 points or fewer is considered the investment recommendation level. Presently, the possibility that the North cannot pay back its loans is 80 percent.

   Dan Ryan of Global Insight said on the phone with the VOA that the trade deficit of the North shrank to less than five percent of the gross domestic product from over 10 percent in the past, referring to the latest data from the Bank of Korea in Seoul.

   He pointed out that the North's external relations have gotten better since a Feb. 13, 2007 agreement in the six-way talks, saying the reported move by the North to restore its Yongbyon nuclear facility is nothing but a negotiation tactic.

   He also said that inter-Korean economic cooperation such as the Kaesong industrial complex continues to expand despite chilled ties between the two Koreas after the inauguration of the South's President Lee Myung-bak in February.

   Only war-torn Somalia, with 95 points, ranked below North Korea.

   North Korea became the first and only socialist government to default on its international debt in 1975. Western private creditors declared the North to be in default in 1986 because of its repeated failure to make payments.

  
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German Lawmaker Expects Military Regime after Kim Jong-il

BERLIN (Yonhap) -- A military regime will appear in North Korea if its leader, Kim Jong-il, dies in the near future, a German member of parliament who recently visited North Korea said on Sept. 14.

   Hartmut Koschyk, chairman of the German-Korean Parliamentary Group, said in an interview with the German news station NTV that a military regime may take over North Korea after the death of Kim Jong-il, who is rumored to be in failing health, because of the military domination in all sectors of the North under the Kim's Songun (military-first) politics.

   Koschyk, who is well-versed in Korean Peninsula affairs and visits both Koreas at least once a year, visited the North from Sept. 1-6 and met with Kim Yong-nam, the North's No. 2 leader.

   Kim Jong-il did not attend the diamond jubilee ceremony of the North's foundation on Sept. 9, sparking rumors that he had a stroke, along with speculation about who will reign after Kim.

   Koschyk expressed doubt that one of Kim Jong-il's three sons would succeed their father. Kim himself gained power through a father-to-son succession in the first such power transfer in the socialist bloc.

   Meanwhile, Koschyk was optimistic about the North's nuclear program, saying it seems ready to make concessions during the Bush administration for its regime's survival.

   Regarding the reason, he said China, host of the six-way talks, is also working to expand the talks into a kind of permanent multilateral forum to promote dialogue in Northeast Asia, modeled on Europe's Commission on Security and Cooperation in Europe (CSCE), also known as the Helsinki Commission.

  
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First Ever N.K. Defector Granted U.S. Green Card: Lawyer

WASHINGTON (Yonhap) -- The United States has granted permanent residence to a North Korean defector in the first such case since 2004 when the U.S. passed legislation dedicated to helping improve the human rights situation in North Korea and accommodating North Korean refugees, a local lawyer said on Sept. 15.

   The U.S. has accepted 63 North Korean defectors since it enacted the North Korean Human Rights Act, most of whom have applied for permanent residency.

   The North Korean woman, in her late 30s and identified as Kim, received her green card more than two years after being admitted to the U.S. in May 2006 through Thailand, said her lawyer, Chon Jong-joon. The green card was granted without an interview, he added.

   "I am very pleased to receive the green card and I now realize that I live in the United States," Kim said. "I worried whether I would receive the green card because of possible changes in the political situation."
Most North Korean defectors come to South Korea by way of China and a third country, while thousands more are believed to be hiding out in northeastern China, which borders North Korea.

   China considers these defectors to be economic migrants rather than refugees under an agreement calling for their immediate deportation signed with communist ally North Korea.

   More than 10,000 North Korean defectors have settled in South Korea since the end of the Korean War in 1953.

  
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N. Korea Developing Long Range Missile Thrusters at New Launch Site: Sources

SEOUL (Yonhap) -- North Korea appears to be testing a new thruster for its long-range missiles which, if developed, will have an expected range of nearly 7,000 kilometers, sources in Seoul said on Sept. 16.

   The socialist nation's Taepodong missile, currently with an estimated range of 6,000 kilometers, is already capable of hitting Alaska. An additional 1,000 kilometers could enable the long-range missile to reach most of the western coast of the U.S.

   Adding more urgency to what could potentially become a major source of dispute between North Korea and the United States is the fact that the missile thruster is apparently being developed at a new launch site located on the North's western coast.

   That means a missile launched from there would be capable of flying over the Atlantic Ocean, reducing the possibility of it being intercepted by the U.S. missile defense system deployed in the Pacific.

   North Korea recently set off a tied-down missile thruster at its new launch site in Dongchang-ri, North Pyongan Province, in what appeared to be a test of the new thruster's performance, according to sources.

   "We believe they tested a rocket thruster at the new site in May or June," a source said, adding analysis of satellite images had suggested the thruster could be for a long-range missile.

   Officials at the Defense Ministry refused to confirm or deny the report, but said military intelligence has closely followed all activities at the new missile launch site.

   North Korea adopted a self-imposed moratorium on long-range missile tests in 1999, but test-fired a Taepodong-2 missile in July 2006, along with six other short and medium-range missiles.

   Pyongyang has also begun rehabilitating its nuclear facilities, reversing its yearlong work under a six-nation accord to disable them.

  
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N. Korea Likely Be Controlled by Communist Party after Kim's Death: Top Defector

SEOUL (Yonhap) -- North Korea will likely be ruled by communist party officials rather than the military after the death of its leader Kim Jong-il, a top North Korean defector said on Sept. 16.

   "Chances are low that the military will take over the reign of the country since Chairman Kim has thoroughly been managing the military," Hwang Jang-yop, the highest-ranking North Korean official ever to defect to South Korea, said when he met with a South Korean lawmaker.

   North Korea's ranking military leaders thus have no complaints against Kim, the defector was quoted by Kim Dong-seong of the ruling Grand National Party as saying.

   The claim is in stark contrast with the views of a number of North Korea experts who claim that the country will likely be collectively led by military officials after Kim's death.

   Kim has not been seen in public since Aug. 14 when he reportedly inspected a military unit in the North. His conspicuous absence at a parade marking his country's 60th anniversary a week ago and on the Korean Thanksgiving, Chuseok, on Sunday, fueled speculation about his illness.

   South Korea's main intelligence agency said Kim suffered a stroke in the middle of the previous month but is recovering well enough to brush his teeth by himself and stand on his feet if assisted. Seoul officials said they have yet to verify the report.

   Kim succeeded his father and North Korean founder Kim Il-sung in 1994, when he died of heart failure, marking the first hereditary succession of power in a communist country. Kim Jong-il, however, has yet to designate a successor.

   Hwang, who served as a secretary of the Workers' Party before his defection to Seoul in 1997, said Kim's first son Jong-nam is most likely the heir.

   "That's because the Chinese government has continuously managed Kim Jong-nam (as an heir apparent) and he is supported by Chairman Kim's in-law Jang Song-thaek," the 86-year-old defector said.

   After spending years in the political wilderness, Jang, husband of Kim's sister and a senior Workers' Party official, rose to the de facto No. 2 position in Pyongyang's power hierarchy.

   Hwang predicted the death of Kim Jong-il will never be followed by chaos or anarchy because Kim's close aides are ready to rule the country.

   "If North Korea falls into anarchy, it is 100 percent certain that China will send in its troops," Hwang said. "But we don't have to worry too much about that because China has no ambition to take North Korean territory. U.S. troops, rather, need to go into the North and build a joint management system," he added.

  
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U.S. Warns N. Korea against Long-range Missile Test

WASHINGTON (Yonhap) -- The United States warned on Sept. 17 that any long-range missile test by North Korea would violate a United Nations ban, while refusing to confirm whether Pyongyang actually conducted such a test.

   "I don't have any further information for you on those news reports of tests of an engine that would be suitable for a long-range ballistic missile," State Department spokesman Sean McCormack said. "I would only note, as I did yesterday, that any work in that regard would be contrary and in contravention of U.N. Security Resolution 1718."

   McCormack was responding to a report that North Korea has tested an intercontinental missile engine at a new launch site under construction on its western coast.

   South Korean Defense Minister Lee Sang-hee told a parliamentary committee the previous week that the new launch site is about 80 percent complete.

   Reports have said North Korea has been building a mobile launch pad and a 10-story tower capable of launching intercontinental ballistic missiles that could possibly reach the U.S. west coast.

   The Security Council adopted a resolution in 2006 demanding that the North "suspend all activities related to its ballistic missile program," and abandon its missile program in a "complete, verifiable and irreversible manner."

   The resolution was issued soon after North Korea test fired a long-range missile in a break from its voluntary moratorium on missile testing imposed in 1998 to defuse international criticism after parts of a ballistic missile fell into the sea off Alaska.

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