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Briefing Report

North Korea’s Nuclear Weapons and its Economy

Head of School of Asia 21, Kokushikan University
Professor Teruo Komaki

[International] February 23 , 2007

Today I will divide my speech into two parts. The first is my evaluation of the nuclear issues of North Korea and the results of the six-party talks held on February 13. The second part is about North Korea’s economic situation and its future. As to the six-party talks, I can evaluate it as having made some progress, for example, it has shown concrete results in the creation of an atmosphere in which North Korea will freeze its nuclear development, including the agreement on initial-phase measures that the six parties including North Korea and the United States (US) have to put forward, the establishment of working groups, and a road-map for denuclearization. The “initial-phase measures” say that North Korea will close down its nuclear facilities, accept the IAEA inspections, and have talks with the other five parties on all of its nuclear-related plans, that the US will start to work on improving US-North Korea relations, that Japan will start a negotiation on diplomatic normalization with North Korea, and that the other five parties will provide North Korea with 50,000 tons of heavy fuel oil. I think the direct talk between the US and North Korea brought about these compromises and agreement. Prior to the Six-party talks, the US and North Korea held intensive discussions on key issues in Berlin. With regard to the lifting of the financial sanctions, both countries consulted in a concrete and business-like manner. This time the US flexibly responded to North Korea on US-North Korea diplomatic normalization, excluding North Korea from the list of terrorist-supporting states, and terminating the application of the Trading with the Enemy Act. North Korea agreed on receiving support equivalent to 950,000 tons of heavy oil in return for reporting all of its nuclear programs and disabling its nuclear facilities if the next stage after the initial phase measures is implemented. As a result, North Korea will receive a total of one million tons which is seen equal to about 300 million US dollars. That is not a sizable amount.
As I said before, on the whole, I think that North Korea appreciated the positive approach by the US. Even though it was said that North Korea would not easily compromise until it got economic assistance, it is worth noting that both countries reached agreement because North Korea received political gains. However, there is another consideration: this agreement still contains very big problems. I said that I fairly evaluated this agreement but I am not wild with joy. I would rather think there would be harder negotiations after the agreement on initial-phase measures. As specialists point out, there are some more issues to be considered.
First, can international organizations effectively inspect, observe, and evaluate? Will North Korea accept them? Secondly--it may be a bigger problem--the agreement does not mention anything about nuclear weapons. Furthermore, in the next stage after the initial-phase measures, issues related to nullification of enriched uranium program and existing nuclear facilities will draw our attention, but how can they be implemented? The issue of enriched uranium can be possibly discussed even in the initial phase, within the 60-days period after the agreement. As to the issue of the enriched uranium program, North Korea totally denies it as you know. From the viewpoint of security in North East Asia, how a permanent peace structure in the Korean Peninsula can be created is also worth noting in the future. This agreement says that the issue will be discussed within the parties concerned, which is a different framework from the six-party talks. Since the two countries in the Korean peninsula are still merely in a state of armistice and no peace agreement has been ratified between them, there would have to be a peace agreement, or any kind of a permanent-peace structure. There is a possibility that North Korea will demand the withdrawal of the US troops from South Korea. I would like to keep an eye on whether the initial-phase measures will be really implemented or not.
The biggest issue is whether North Korea will really decide to abandon nuclear weapons. While we are very curious about North Korea’s attitude, it is still uncertain as to whether Japan, the US, and the other parties can really carry out the agreement in the face of domestic public opinion. The positive attitude of the US this time triggered resentment from conservatives in the US. Likewise, because Japan has a special issue, namely the “abduction issue,” the other parties are concerned about whether Japan can really implement an agreement of the six-party talks. In the future prospects, I think that whether the relevant countries can really coordinate their interests besides North Korea’s abandonment of its nuclear capability is also a significant point.
I will make a few comments on whether North Korea will really abandon nuclear weapons. As you know, there is no doubt that the reason for North Korea’s developing nuclear weapons is to maintain its regime and survive. In other words, the question will be whether possessing nuclear weapons will affect them positively or negatively. The three major North Korean newspapers including “The Rodong Sinmum (official publication of the Party)” issued a Joint Editorial on January 1 this year, summarizing that “the possession of nuclear deterrence” was a major achievement last year. It is, therefore, true that North Korea will not easily abandon its nuclear capability once it acquires it. On the other hand, I think North Korean leaders are also well aware that no bright outlook lies ahead if North Korea keeps possessing it, considering their country’s present situation, especially its economic situation. Sooner or later they will be forced to make a decision, and I think they are also quite capable of it. At the same time, though, North Korea will be tempted to manage somehow to retain its nuclear capability and leave some loopholes. Hence my first conclusion is that tenacious negotiations through international dialogue and pressure are important in order not to leave such loopholes.
Let me shift to the second part of my lecture. As I mentioned, the nuclear issue is deeply connected with the North Korean economy, but at the same time it is not that simple. I disagree with the view that North Korea might abandon its nuclear capability in order to receive economic aid since its economy is in a very bad state. Should North Korea abandon its nuclear capability, it will be when the situation allows it to maintain its regime within political relations and international relations, especially with the US, or to be more concrete, when North Korea and the US are heading toward diplomatic normalization. That is exactly the scenario which North Korea is seeking for, and should that be guaranteed, there may be a possibility of North Korea’s abandoning nuclear weapons. Having said that, I would now like to talk about the economic situation.
In one word, the economic situation in North Korea is stagnant and struggling. After its peak around 1990, its economy aggravated rapidly from various reasons, and the negative growth continued. The worst period was 1997 and 98, and I believe the economic size around that time probably dwindled to 50 to 60% compared with 1990. Entering the 2000s, it gradually recovered. I think the current economic size compared with 1990 has recovered to as much as around 70 to 80%.
I mentioned this as I felt we need to look into more detail since we often argue about the North Korean economy being in very bad shape and heading toward collapse. There are two views on this matter: one is that the economy has recovered up to 70 to 80% and will keep going up, and the other is that it is staying at 70 to 80%, or lying beneath the surface. Whichever the case, if we were to ask what served as a big momentum for the recent recovery, I think trade with China and the ROK or the rapid trade-related expansion undoubtedly owed to it the most, not to mention domestic efforts.
Last year, North Korea’s trade with China, exports and imports combined, increased by about 8%, and about 30% with the Republic of Korea. In terms of trade, therefore, the North Korean economy was much stimulated, I guess. However, if we look at the whole economy, North Korea is suffering three serious shortages --- food, energy and foreign currencies. Food is the most serious problem for North Korea. Food production in North Korea is estimated by international organizations or the Government of the ROK. The figures differ slightly, but the common denominator is that North Korea is short of about one million-one million and half tons. I myself also think that way.
Energy is also one of the weakest points. When it comes to the energy problem of North Korea, I think I can point out one distinctive feature: North Korea’s primary energy greatly depends on coal. North Korea is one of the countries in the world that have a very high coal-dependent ratio for primary energy. Its dependence on coal for primary energy is higher than that of China or Poland, I am afraid. The big problem is, however, that coal production in North Korea has been decreasing. North Korea has a very low dependence rate on petroleum. To put it the other way around, North Korea gets its energy from hydraulic power and thermal power, and it gets thermal power mainly not from oil but from coal. At present, North Korea gets roughly 50% of its energy from hydraulic power and the other 50% from thermal power. North Korea is, therefore, concentrating its efforts mainly on the increased production of coal and the construction of hydropower stations, with a view to solving the shortage of electricity and energy. As you know, such efforts have not so far produced better results. This lies behind the fact that apart from developing nuclear weapons, North Korea is very eager for the peaceful use of nuclear energy, i.e., nuclear power generation. In terms of a pure economic view, I think North Korea is very strongly attracted to atomic power generation.
I am often asked about North Korea’s economic reform. My answer is that it is not progressing. One reason is that the leadership of North Korea is very cautious about going into a market economy. Another reason is that the international situation surrounding North Korea is very tense as a result of the nuclear issue. I would like to touch upon what economic measures North Korea will take in such a situation.
As you know, North Korea is raising a clamor for having obtained nuclear deterrence, putting military-first politics as its slogan. Now the situation is very delicate as the six-party talks have made concrete progress, we could predict that North Korea will further advance its military-first politics. 　In reality, however, I think there is a subtle difference. Here are very interesting figures investigated by Radio Press. As I mentioned before, these figures in the investigation show how many times the phrase “military-first politics (guns before butter)” was used in the New Year Joint Editorial of the Party to be announced on January 1 every year. In 2004, the use of the phrase jumped to 43 times, in 2005, 44 times and 2006, 43 times again. The phrase was used in the Joint Editorial many times for the three consecutive years from 2004 to 2006. The Joint Editorial of this year, however, uses the phrase “military-first politics” only 36 times. The Dong-A Ilbo, a South Korean newspaper, once reported that North Korean leaders had said that now that they had a deterrent capability, they could concentrate on economic construction. And this year’s Joint Editorial says that North Korea puts its policy priority on the improvement of people’s lives. I am not sure if we can verify whether or not North Korea is seriously considering abandoning its nuclear capability. I think we should not jump to conclusions. 　
I think, however, at least it could be said that the North Korean leaders now consider the reconstruction of their country’s economy very seriously. Objectively thinking, I think that for the recovery of the North Korean economy it is a necessary condition that North Korea gives up its nuclear capability and improves its relations with the neighboring countries. As a conclusion, under the existing conditions, the situation wherein the North Korean economy does not improve dramatically but does not break down either, because of its expanding economic relations with China and the ROK , will continue for quite a while. Therefore, as far as I see, the North Korean political regime will not break down in the near future although it has various causes for anxiety. When this is the case, improvement of the political relations with North Korea would be the most effective card for the international community. On the other hand, I think that the international community needs to say patiently that for the improvement of the economy, which the country has to work on earnestly from now, North Korea has no choice but to give up its nuclear capability. To do so, the question should once again be raised how the collaborative framework of the countries concerned, especially the five countries excluding North Korea, should operate.

Questions and Answers

Q: Concerning the last point you made, according to what I see in press reports it seems that Japan is pretty much isolated in this Six-party talks. I found the observation at the end of your remarks very interesting that how the five countries excluding North Korea would make a collaborative framework would be the key, but why Japan has come to stand alone in the first place? I would like to ask your view, even if the answer were a negative one. The second question that I would like to ask is concerning the election in ROK next December; if there is a change of ROK’s administration, what will be its influence?
A: Thank you for your questions. Concerning the first question, I think the background of it would be that Japan could not sufficiently respond to or could not fully understand changes in the U.S. policy led by the situation wherein the U.S. was involved in the war with Iraq, facing Iran’s nuclear development issue, and suffering from a serious defeat of the Bush administration in the midterm elections. I think the original way to respond to North Korea had been that the U.S. was taking a strong position based on its military power, and Japan, on the other hand, was taking the role of tempting North Korea by showing economic issues. However, because of the abduction issue, Japan’s role has come to be showing the strongest attitude, even though it has not come to the point where the roles have been completely reversed. Considering that Japan does not have military power, and has a historical issue, this kind of role had not been something that Japan could take originally. I think that Japan’s primary arm, which may sound misleading, or power, is in economy. Therefore Japan would be able to obtain a proper position I think by returning to its original stance of “dialogue and pressure” while offering economic cooperation by normalizing diplomatic relations and negotiating with North Korea.
Concerning your second question, I think that relations between the ROK and North Korea will change to some extent according to which candidate is elected in the election. However, since the two countries have special relations, I think that the ROK’s policy toward North Korea will not change greatly whoever becomes president. As one reason is that they are ethnically identical. And to be more realistic, they have shared recognition that the collapse or instability of North Korea is undesirable, especially economically unfavorable for the ROK. The two countries are geographically contiguous and wish to avoid war again because of the memories of the Korean War. Therefore, I think, the basic stance of the ROK is to attempt the soft-landing of North Korea, whoever becomes president, by continuing assistance to North Korea to some degree.

Q: I want you to comment on the possibility that North Korea has a uranium enrichment facility.
A: I think this is one of the most difficult issues. Experts in the United States have been pointing out that North Korea has already had the facility or at least is trying to have one. The Government of the ROK also thinks in a similar way. Because I am not an expert, I cannot say certainly, but, I believe that North Korea has definitely been attracted to a uranium enrichment program. But in order to carry out a uranium enrichment program and to obtain results, North Korea has to carry out large-scale investment and I think this is preventing N.K. from having the facility. I will continue to observe as the discussion about uranium enrichment issue finishes within sixty days. I presume that this issue is probably solved in the form of the level of enrichment. In other words, I suppose, North Korea will be allowed to enrich uranium, but it has to limit the enrichment level so that they cannot use enriched uranium in nuclear weapons.

Q： I have two questions. First of all, please tell us how the North Korean media reported the Six-party talks agreement. Secondly, regarding (the) North Korean political leaders you talked about, could you give us more specific comments on the future succession issue? For example, how do you see the scenario if Kim Jong-Il falls from power in one way or another?
A: About the first question, no detailed story was released in North Korea on the Talks. It seems that they only reported that the country had succeeded in obtaining a million tons of crude oil by provisionally shutting down its nuclear facilities, which is a great accomplishment of the Great Leader. That means they only described the issue briefly, in a slightly different style compared with what was covered in other nations.
The issue of who will be the successor and how the power will be transferred is extremely uncertain. It was in February 1974 when the present leader Kim Jong-Il was appointed as the successor of Kim Il-sung, his father, who was then 61 years old. The succession was made by appointing Kim Jong-Il as a politburo member. Kim Jong-Il has already turned 65. As you know, there is an argument concerning who, among his three sons, will be chosen to succeed him. I believe, however, that the succession will face serious challenges. After being named as the successor, Kim Jong-Il was able to gain a strong support base of young key officials of the Party and army, and was groomed to become the leader. The national sentiment for Kim Il-sung was extremely strong, whereas Kim Jong-Il has not earned respect as his father did, I should say. There is a difference in that. As Kim Jong-Il was appointed by Kim Il-Sung, the esteemed leader, the decision process went quite smoothly, and I think the North Korean people accepted it. In contrast, the sons of Kim Jong-Il have limited experience in the political world, and also the national support for Kim Jong-Il is not absolute. Taking into account these factors, the three consecutive successions seem unrealistic. Frankly speaking, I have no idea as to what will happen. Although I do not know whether the army, party bureaucrats or technocrats will control the new regime, what I can expect now is that it may be formed as a coalition government. At any rate, I think that it is closely related to how long the 65 year-old leader Kim Jong-Il will remain in good health and in power.

* Given on February 23, 2007, at the Foreign Press Center/Japan (FPCJ). This paper is reserved for internal use; any reproduction or quotation is forbidden without prior permission from the FPCJ. ©FPCJ 2007