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NORTH KOREA NEWSLETTER NO. 98 (March 18, 2010)

N. Korea's Food Imports from China More Than Triple in January

SEOUL (Yonhap) -- North Korea's food imports from China more than tripled in January from a year earlier, an indication the impoverished nation is bracing for serious food shortages, an agricultural expert said on March 14.

   North Korea brought in 13,834 tons of grain from the neighboring ally in January, a 3.6-fold increase from 3,869 tons a year earlier, said Kwon Tae-jin, a senior researcher on the North's agricultural sector at the South's Korea Rural Economic Institute, in a posting on his blog.

   Rice accounted for about 61 percent or 8,425 tons of the North's grain imports from China, followed by corn with 3,448 tons, beans with 1,553 tons and wheat with 304 tons, Kwon said, citing data from the Korea International Trade Association.

   "The big rise in imports of corn and beans, which the North didn't bring in last year, appears to be not only because the country's corn harvest was not good, but also suggests the North increased imports over concerns about possible food shortages," he said.

   Kwon also said that the North's regime could have increased imports to enlarge state food rations after last year's currency reform caused strains on the country's food supply system.

   North Korea has relied on foreign handouts to feed its 24 million population after natural disasters and mismanagement devastated its economy. The situation worsened in recent years as South Korea halted regular food aid to the North after President Lee Myung-bak took office in early 2008 under a policy to link aid to Pyongyang's process in ending its nuclear weapons programs.

   Deepening Pyongyang's economic woes were U.N. sanctions imposed for the North's nuclear test last year.

   The U.N.'s Food and Agriculture Organization said early this month that the North is expected to fall short by about 1-1.2 million tons of food this year.


Dialogue Needed to Resolve N. Korean Nuclear Standoff: ElBaradei

SEOUL (Yonhap) -- Constructive dialogue and engagement are needed to resolve North Korea's nuclear ambitions, the former secretary general of the International Atomic Energy Agency (IAEA) said on March 12.

   In a press conference held at the Summit of Honor on Atoms for Peace and Environment (SHAPE) in Seoul, Mohamed ElBaradei said that while pressure can resolve an impasse, a solution to ending Pyongyang's nuclear program will come from holding talks.

   "In my opinion, the issue involves North Korea's insecurity and need for economic development, and in order for headway to be made, the world should address both these issues," he claimed.

   He said that only by alleviating concerns that Pyongyang will not be attacked or be subject to regime change can there be progress.

   The former Egyptian diplomat who led the IAEA for 12 years said that the world -- and in particular members of the six-nation talks -- must try to give assurances to the North so it can change.

   He added that while there may be different views on whether or not to classify North Korea as a nuclear power, he personally believes Pyongyang is the ninth country in the world to have nuclear weapons capabilities.

   Despite warnings, the communist country detonated two nuclear devices in 2006 and 2009.

   On South Korea's mounting nuclear fuel waste problem that may force it to come up with a "definitive" solution by 2016, ElBaradei said a multi-lateral solution should be followed that is safe, economical and does not risk current non-proliferation efforts.

   He added that working with other countries is better than taking independent measures, even if South Korea has the know-how to engage in such advanced technologies as pyroprocessing. Pyroprocessing is a method that can reduce the total amount of nuclear waste and make it easier to reuse atomic resources.

   The former IAEA chief is in South Korea this week as co-president of this year's SHAPE conference, organized by local NGOs like the Forum on Climate Change and Energy. It is the first gathering of its kind, drawing 150 experts from 19 countries who engaged in discussion on the peaceful use of atomic energy and non-proliferation.


N. Korea Revises Law to Allow S. Koreans to Invest in Rason

SEOUL (Yonhap) -- North Korea has recently revised a law governing its Rason free trade zone in a bid to speed up its development and attract more foreign investment, including from South Korea, officials in Seoul said on March 14.

   According to the South Korean officials, a clause allowing "Korean compatriots living outside the Democratic People's Republic of Korea (North Korea)" to engage in economic and trade activities in Rason has been newly included in the legal code.

   The officials said the legal revision took effect on Jan. 27.

   The two border towns of Rajin and Sonbong in the northeastern part of the Korean Peninsula merged to form Rason, which became the North's first free trade zone in December 1991. Rason lies near where the borders of North Korea, China and Russia meet.

   But foreign investors have largely kept away from Rason due to worries about doing business with the isolated state, which is frequently sanctioned by international organizations for its provocative moves.

   The Seoul officials said the North may have signaled its intent to reopen Rason to South Korean businesses through the latest legal revision.

   The North has also lowered tax rates and simplified administrative procedures for foreign investors who want to establish branch and agent offices in Rason, said the officials.

   Pyongyang had banned South Korean investors from Rason with a revision to the law on the free trade zone in 1999.

   The reported legal revision in late January came after North Korea upgraded the status of Rason to a "special city" at the beginning of this year, in what appeared to be an attempt to revitalize its faltering economy.

   Media reports also surfaced last week that China is seeking to extend its 10-year lease contract on the use of the Rajin Port by another decade, while Russia obtained a 50-year lease on one of the port's piers.


N. Korea Allows Consular Access to Detained U.S. Citizen

WASHINGTON (Yonhap) -- North Korea has allowed consular access to an American citizen held since January for illegal entry into the socialist state, the State Department said on March 15.

   "We can confirm that on March 14, the DPRK (North Korea) granted the Swedish embassy, our protecting power, consular access to a detained U.S. citizen," spokesman Philip Crowley said. "We're not at liberty to disclose his identity."

   The Swedish mission in Pyongyang handles consular affairs for citizens of the U.S., which does not have diplomatic ties with North Korea.

   North Korea has said that it detained the American citizen who illegally entered the North in late January, separately from Robert Park, who was released in early February after crossing into the North through the Chinese border on Christmas Day to call international attention to the country's poor human rights record.

   A Korean-American Christian activist, Park has been mum since being released amid reports that he was dispirited after being tortured while in the North. The 28-year-old was briefly admitted to hospital for an alleged mental disorder after returning to the U.S.

   Separately, two American journalists were released in August, months after they were detained for illegally entering the North via China while reporting on North Korean defectors. The release came soon after former U.S. President Bill Clinton met with North Korean leader Kim Jong-il.


N. Korea Names Trade Expert as Second-highest Official on S. Korea

SEOUL (Yonhap) -- North Korea has named a top trade specialist as one of its second-highest officials in charge of relations with South Korea, sources in Seoul said on March 16.

   The appointment of Ri Kwang-gun, who oversaw the communist state's foreign trade for about three years until April 2004, took place late last year, they said, when the North began to open dialogue with the South after drawing new U.N. sanctions for its nuclear test in May.

   Ri, 57, works with several other officials of his rank to support Kim Yang-gon, director of the United Front Department of the ruling Workers' Party of (North) Korea, which governs policies on South Korea, the sources said.

   Ri is in charge of the department's policies on inter-Korean economic cooperation, which has shrunk over the past two years since a conservative government took power in Seoul with a pledge to tie cooperation to North Korea's efforts toward denuclearization, the sources said.

   Ri led the North Korean delegation of players and officials when the two countries held a friendly football match in Seoul in September 2002. The graduate of the North's top Kim Il-sung University headed the country's football ruling body for about four years until late 2005.

   He also served at North Korea's representative office in Germany and then at an equipment import-export company in the 1990s, according to the South's Unification Ministry.


North Korea Could See Fissures in Ruling Elite: Think Tank

SEOUL (Yonhap) -- North Korea may see rifts open in its ruling elite as they grapple with deepening economic woes from U.N. sanctions and a failed currency reform, along with a food shortage and other domestic challenges, an international think tank said on March 16.

   The International Crisis Group said in a report that the communist regime is facing a slew of such "mini crises," but has little capacity to manage them simultaneously. Though the regime is adept at shifting the brunt of such hardships to its tightly controlled population, "government failure could cause dissension within the senior group," the report said.

   "Although unlikely in the short term, fissures in the senior leadership, particularly during a succession crisis, cannot be ruled out," the report said, referring to North Korean leader Kim Jong-il's apparent efforts to hand power over to one of his sons.

   "Instability, a coup d'etat or collapse would not be observable from the outside until well under way," the report said. "Any of these scenarios could create a humanitarian emergency that would require international intervention."

   North Korea was slapped with tough U.N. sanctions last year for conducting its second-ever nuclear test in May. The sanctions severely restricted the North's weapons exports, which have long been a major source of hard currency for the impoverished nation. The think tank said Pyongyang's foreign exchange sources "are drying up."

   "There are several signs that the government is seeking to increase its hard currency earnings, but with no real prospect of success," it said.

   Further disrupting the North's ailing economy was its currency reform last year. The currency redenomination, which dropped two zeros from the value of the North Korean won, reportedly resulted in massive inflation, worsened food shortages and even social unrest.

   "Under these dire economic conditions and increasing political pressure, Pyongyang is facing several domestic problems that in isolation would be manageable but together could have serious consequences for regime survival," the think tank said.


N. Korea Has 1,000 Missiles, Continues to Beef up Arms Capacity

SEOUL (Yonhap) -- North Korea is believed to have about 1,000 short and longer-range missiles, and is continuing to bulk up its military power without giving up its nuclear ambitions, South Korea's defense chief said on March 17.

   The assessment from Defense Minister Kim Tae-young appears to be the latest update on the North's missile stockpile estimate, following South Korean and U.S. intelligence authorities earlier estimates that the communist nation had about 800 missiles as of 2008.

   It also underlines the fact that Pyongyang is bent on putting its scarce resources into building up its arms capacity.

   Kim told a local economic forum that North Korea has deployed some 1,000 missiles, including intermediate-range ballistic missiles (IRBM) that are capable of reaching Russia, India and Guam with a range of over 3,000 kilometers.

   North Korea's missiles have long been a security concern in Northeast Asia, along with its atomic program.

   The minister also reconfirmed his government's belief that North Korea has up to 40 kilograms of plutonium, enough to produce at least six nuclear weapons, according to arms specialists.

   "North Korea is believed to possess 30-40 kilograms of plutonium and is continuing to push forward its uranium enrichment program," he said.

   Pyongyang rolled out its first -- and so far only, according to intelligence -- IRBM in 2007 and is also believed to be developing a 6,700-kilometer-range Taepodong-2 long-range ballistic missile that could reach as far as Alaska, according to defense experts.

   The North has also deployed short-range Scud- and Rodong-missiles near the inter-Korean border.

   "North Korea is striving to stabilize the Kim Jong-il regime and is continuing to work on strengthening its arms and military capacity, but internal anxiety appears to be growing due to economic difficulties," Kim said.

   North Korea has conducted two nuclear tests, the first in 2006 and the second in 2009. The regime pulled out of multinational nuclear disarmament talks and announced in 2009 that it began reprocessing thousands of spent nuclear fuel rods to make nuclear weapons.

   The impoverished North, which relies on outside aid to feed its 24 million people, maintains a military of 1.2 million troops and is believed to spend a sizeable amount of money on arms development.