Economy key to North Korea talks

And very bare are its coffers.

North Korea's tiny economy, estimated at US$17 billion, or just two percent the size of neighboring South Korea, has been buffeted on several fronts. First, a new government in Seoul cut off aid to North Korea in early 2008. It said the aid, roughly equivalent to 5 percent of North Korea's economy, would only flow again if Pyongyang took concrete steps on nuclear disarmament. Most recently, tough U.N. sanctions in the wake of the nuclear test in May have cut Pyongyang's lucrative arms sales while the country is also suffering a poor harvest.

The North could get more from South Korea, which once supplied US$1 billion in annual aid, than by trying to revive assistance worth a quarter of that value that was suspended when Pyongyang left the six-way nuclear talks a year ago. But by returning to the nuclear talks, the North would please Beijing, host of the discussions and a critical player in enforcement of the U.N. sanctions. It could also head off any U.S. plans to further crack down on its international finances.

In recent months Pyongyang has sought direct talks with the United States even as Washington has refused to relent in enforcing the sanctions. Pyongyang has also reached out to the government of South Korean President Lee Myung-Bak, which angered Pyongyang by cutting off unconditional handouts in early 2008.

“The North is shackled and can feel it. Its conciliatory moves and the attempt to improve things with the United States are all part of trying to unlock the shackles,” said Kim Yong-Hyun, an expert on the North at Dongguk University in Seoul.

Kim has also moved to firm up relations with China, the closest Pyongyang can claim as a major ally and the main supplier of the aid that keeps him from sinking.

Some experts think the upper limit in any new talks would see North Korea give up its Soviet-era Yongbyon nuclear plant, thus putting it out of the plutonium-producing business, and perhaps handing over a portion of its stockpile of fissile material, estimated to be enough for six to eight bombs.

1|2

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email