NAPSNet Daily Report
wednesday, september 4, 2002

I. United States

II. Republic of Korea III. Japan IV. CanKor E-Clipping Service

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I. United States

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1. PRC DPRK Asylum Seekers

Agence France-Presse ("NORTH KOREANS' FATE UNCERTAIN AS CHINA AND GERMANY NEGOTIATE," 08/04/02) reported that fifteen asylum-seeking DPRK citizens remained holed up inside a German embassy school in Beijing, as German and PRC officials held urgent negotiations to end the complex diplomatic stand-off. The group, mainly men and women in their 30s and 40s, scaled the wall outside the compound as classes were being held at the German Embassy School on Tuesday afternoon, officials and witnesses said. Their fate remains uncertain, with issues to be thrashed out including whether the school is considered embassy territory under the Vienna Convention on diplomatic ties, meaning PRC police cannot enter without permission. Dozens of officers continued to seal off the German embassy-owned compound on Wednesday, but did not enter the grounds as both sides refused to say what they considered the school's status to be. "There are close contacts between the German embassy and the Chinese officials," a German embassy official said Wednesday. "Each side is interested in coming to a good solution," he said. A spokeswoman for the PRC's foreign ministry had no immediate comment. According to the 1963 Vienna agreement, embassy and consular territory is "inviolable". However, legal experts said the school is probably not covered by the convention, which defines protected diplomatic territory as that "used exclusively for the purpose of the work of the consular post."

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2. Australia on US Iraq Pre-emptive Strike

Agence France-Presse ("AUSTRALIAN PM QUALIFIES SUPPORT FOR PRE-EMPTIVE STRIKE ON IRAQ," 08/04/02) reported that Australian Prime Minister John Howard said he would have to be completely satisfied an attack on Iraq is in the national interests before committing troops. In remarks which appeared to soften the government's rhetoric on Iraq, he also said Wednesday if Iraq complied with UN weapons inspectors' requests he would be inclined to drop all talk of an attack on Baghdad. "If Iraq were to allow the inspectors in ... and if they were given unimpeded, uninterrupted access and then any requests about destruction of discovered material or weapons adhered to, then I believe the whole atmosphere of this thing would change overnight," he said. "I would hope that that might occur. I'm sure the Americans would be pleased to see that happen." Howard has previously declared Australia's support for a pre-emptive strike on Iraq by the US. Speaking to a Brisbane radio station on Wednesday he said he would not rule out committing troops if Iraq continued its hardline stance against weapons inspections. But he added: "I don't want to see Australian forces go overseas again. "I would never want to see that happen and I'd have to be completely satisfied it was in Australia's national interest before supporting that happening."

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3. ROK Storm Damage

Agence France-Presse ("SOUTH KOREA'S STORM DAMAGE HITS RECORD HIGH," 08/04/02) reported that property losses caused by Typhoon Rusa that left more than 200 dead have surged to a record 1.75 billion dollars but ROK officials warned final figures would be far higher. Rusa, which plowed across the ROK last week, caused 2.13 trillion won (1.75 billion dollars) in property damage, a record high for a storm, the government's anti-disaster agency said Wednesday. "The amount of damage is an all time high. Yet the final figures will be far higher as we are still getting a flurry of new reports on losses," agency official Im Kyo-Yong stated. The National Disaster Prevention and Countermeasures Headquarters said 205 people were feared dead or missing, while Yonhap News Agency said 240 were dead of missing. Rusa flooded 17,046 houses and 114,592 hectares (286,480 acres) of farmland. It also washed away roads and bridges in 1,137 places.

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4. PRC Presidential Succession

Agence France-Presse ("JIANG'S STAR TARNISHED AFTER BEIDAIHE MEET, CHINA ANALYSTS SAY," 08/04/02) reported that PRC President Jiang Zemin appears poised to step down as Communist Party head at a congress in November, after some arguments during a summer leadership retreat, according to PRC-watchers. Despite a swell of recent rumors that Jiang plans to keep hold of the party general-secretary's job, he is likely to hand over power to Vice President Hu Jintao as earlier expected during the 16th Party Congress, which opens in Beijing on November 8. Hu's position will then be consolidated next March when Jiang also hands over the state presidency at the annual session of the PRC's parliament, the National People's Congress. The handover appears to have been thrashed out by top leaders during their summer meetings at the Beidaihe seaside resort near Beijing which ended last month, said Jean-Pierre Cabestan, director of the Hong Kong-based French Center for Research on Contemporary China "Before the Beidaihe meetings a number of people were speculating that Jiang Zemin would try to maintain his two major posts" of party boss and head of the powerful Central Military Commission, Cabestan stated. "But after Beidaihe, a lot of people are going back to an earlier scenario where Jiang will only retain his position on the military commission, like (late former leader) Deng Xiaoping did." Cabestan warned, however, that such views are speculative, and that anything could happen before November 8.

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5. IMF on PRC Economy

Reuters ("IMF SAYS CHINA'S ECONOMY FAVOURABLE, BUT MORE REFORMS NEEDED," Washington, 08/04/02) reported that the International Monetary Fund said on Tuesday that the PRC's economic prospects remained favorable despite recent shocks, but that some reforms were still needed to offset potential risks. The IMF said that while the PRC emerged almost unscathed from the recent global slowdown and the Asian financial crisis of 1997, reforms in the fiscal and monetary fields were needed to brush away potential medium-term vulnerabilities. The PRC economy was expected to grow 7.5 percent this year, up from 7.3 percent in 2001, the fund said in its annual review of the PRC economy. Prices were seen dropping 0.4 percent after a mild 0.7 percent increase in 2001. The IMF said that in the monetary arena, the PRC still had room to slash interest rates should the Asian giant's economic prospects wither. However, the lender stressed the need to make monetary policy more effective by liberalizing lending rates and reforming the banking system. The lender also said that deflation, spurred by lower international commodity prices, should be monitored closely. On the fiscal front, the fund encouraged the PRC to maintain the path of consolidation that it had established in recent years, but warned of potential vulnerabilities in the medium term. Overall, the IMF said, the PRC's sound economic policies had helped the country weather two major economic crises in five years and embark on the road to becoming a market economy. Important reforms also led to a stronger external position and eventually to the country's accession to the World Trade Organization in December. While trade dropped sharply last year, the country's current account gap narrowed slightly at the same time. Exports bounced back earlier this year, as did public sector investment.

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6. DPRK-Japan Dialogue

Reuters ("KOIZUMI REPORTEDLY PLANS TO APOLOGIZE TO NORTH KOREA, MAY INVITE LEADER TO JAPAN," Tokyo, 08/04/02) and Agence France-Presse ("'DIALOGUE' WITH NORTH KOREA DEPENDS ON ABDUCTION ISSUE: KOIZUMI," 08/04/02) reported that the DPRK will have to resolve allegations that it kidnapped a number of Japanese nationals in the 1970s and 1980s if it wants to forge "political dialogue" with Japan, Prime Minister Junichiro Koizumi warned. Speaking at the Earth Summit in the run-up to a historic visit to the DPRK later this month, he said he had told the DPRK that the abductions were "a grave issue for the Japanese people." The DPRK had been told that "without addressing this issue we shall not be able to proceed to political negotiations or political dialogue," he said. Koizumi, who was speaking at a press conference, said that Japan's concern about the alleged kidnappings was "a discreet signal that we've been sending to the North Koreans." He added, "the abduction issue and I'm sure numerous other issues will be laid on the table" during the September 17 visit. Koizumi announced the visit on August 30, saying he hoped his talks with DPRK leader Kim Jong-Il would spur normalization. It will be the first visit by a Japanese premier to the DPRK, with which Japan has never established diplomatic relations.

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7. ROK DPRK Ship Raising

Reuters ("SOUTH KOREA TO DISPLAY SHIP WRECKED IN CLASH WITH NORTH KOREA," Seoul, 08/04/02) reported that the ROK will display the patrol boat that was riddled with bullet holes in its deadly gunbattle with the DPRK in June to heighten sailors' vigilance, officials said Wednesday. The 150-ton "Chamsuri 357" will be displayed at the 2nd Naval Fleet Command in Pyongtaek on the west coast. The boat was salvaged last month, eight weeks after it sank in the June 29 clash that killed five ROK sailors. The DPRK acknowledged an unspecified number of casualties. With its hull pockmarked by hundreds of bullet holes and four soccer ball-sized shell holes, the boat proved irreparable, military engineers said. "We decided to display the ship to show our determination to guard the Northern Limit Line," a Navy official said. The official declined to be named.

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8. US-Russia Nuclear Safety

The Associated Press ("US, RUSSIAN NUCLEAR SECURITY OFFICIALS DISCUSS COOPERATION," Moscow, 08/04/02) reported that the official in charge of US nuclear security matters met Wednesday with Russia's deputy foreign minister to discuss cooperation to reduce the threat of weapons of mass destruction, including a dlrs 20 billion Western effort to help Russia dispose of its arsenal of aging nuclear, biological and chemical weapons, the Foreign Ministry said. Deputy Foreign Minister Georgy Mamedov and Linton Brooks, the acting administrator of the US National Nuclear Security Administration, also discussed the secure storage and transport of nuclear materials, military conversion, surplus fissile materials and refitting reactors "to meet modern nonproliferation, ecological and economic needs," the Foreign Ministry said. Meanwhile, the general responsible for the security of Russia's nuclear arms facilities asserted it would be "impossible" to steal nuclear weapons, and a spokesman said Russia's customs service has installed four US-funded monitors to detect radioactive cargoes at northern border crossing points. One of the systems is in place at St. Petersburg's Pulkovo airport, and the three others have been installed at sea cargo checkpoints on the Baltic Sea, said Nikolai Vragov, head of the Northwest Customs Department's press service. He said that five or six more such systems would be installed.

II. Republic of Korea

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1. DPRK's Economic Reform

Joongang Ilbo (Jung Chang-hyun, "MONEY IS FLOWING INTO NORTH KOREAN POCKETS, IN REFORM," Pyongyang, 09/04/02) reported that Daeseong Department Store is one of three shops in Pyongyang that accept foreign currency. The two story building was crowed with foreign customers and a few privileged DPRK citizens on Friday afternoon despite sultry heat on the street. The sales clerks were talking to customers in Japanese or Chinese and trying to sell as many goods as possible. Tourists from PRC and ROK were regretting that some items, including oriental medicine pills said to cure chest problems, were sold out. Signs of change were everywhere in Pyongyang during a reporter's five-day visit last week. DPRK leader Kim Jong-il's new open-door policy is seen as a decision to attract foreign investment. The first step to that end is opening a special economic zone. Pyongyang began reviewing the option in the late 1990s; Sinuiju, Wonsan and Cheongjin were the candidates. The project for the special economic zone gained impetus when Pyongyang decided to carry out economic reform in July.

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2. Inter Korean Family Reunion

Joongang Ilbo (Lee Young-jong, "CITING FLOODS, NORTH DELAYS FAMILY TALKS," Seoul, 09/04/02) reported that Inter-Korean Red Cross talks, scheduled to begin Wednesday, were postponed until Friday due to typhoon damage in DPRK, officials said Tuesday. "It is unavoidable to delay the fourth inter-Korean Red Cross talks for two days," said Chang Jae-on, the DPRK Red Cross chief, in a telephone message to his ROK counterpart. Typhoon Rusa, the fifth typhoon of the season, directly hit the Korean Peninsula, sweeping away a bridge in the resort complex in DPRK's scenic mountain. Four roads between the Jangjeon Harbor, mainly used to receive ROK visitors and tourists, were cut by landslides. The official Central News Agency reported Tuesday that an average of 30 millimeters of rain per hour poured in the North's Gangwon province. "More than 550 millimeters of rain fell one day, creating enormous damage, including dozens of deaths, missing and injured persons," the agency said.

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3. DPRK-Japan Relations

Joongang Ilbo (Oh Day-young, "JAPAN CONSIDERING LIASION OFFICE IN NORTH," Tokyo, 09/04/02) reported that the Japanese government is negotiating with DPRK to open a permanent liaison office in Pyongyang, the Japanese daily Asahi Shimbun reported Tuesday. To prepare for the Sept. 17 summit between the Japanese and DPRK leaders, a temporary contact point was established in Pyongyang on Tuesday, the newspaper said. Japan believes it needs a permanent liaison office, the daily said, because the two sides are expected to maintain frequent contacts once full-scale talks begin to normalize diplomatic ties. The principal goal of the first-ever Japan-DPRK summit is to open bilateral ties, but Japan sees the issue of Japanese nationals allegedly kidnapped by DPRK as a crucial matter. Fifty-three percent of 2,000 eligible Japanese voters polled by Asahi Shimbun on Tuesday indicated that they expected Japan's relations with DPRK to improve after the summit.

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4. Asylum Seekers in PRC

Joongang Ilbo ("16 DEFECTORS SUCCESSFULLY ENTERS GERMAN EMBASSY IN BEIJING," Seoul, 09/04/02) reported that sixteen North Korean defectors managed to make their way into the accommodation section of the German Embassy here Tuesday at 3 p.m., immediately calling for asylum in ROK and other countries, German sources said. The actual Germany Embassy is not located faraway. The sources said the defectors succeeded by jumping across the two meter-high embassy wall and some of them were detected sitting at the stairs of German school within accordion to the eye witnesses. They explained since the school is within the embassy area the place is qualified as part of foreign mission.

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5. DPRK-Japan Geographical conflict

Chosun ilbo (Kwon Dae-yul, "NK PROPOSES NEW NAMES FOR DISPUTED SEA," Tokyo, 09/04/02) reported that Tuesday that DPRK proposed the "disputed" sea previously referred to as the "Sea of Japan" should be called the "Korean Sea," "Joseon East Sea," or "East Sea" at the 8th UN Conference on the Standardization of Geographical Names being held in Berlin, Germany, from August 27 to September 5. The daily quoted a DPRK diplomatic official in Berlin official as saying any of the names could be used and DPRK could take joint action with ROK if this was agreed to.

III. Japan

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1. Koizumi's Visit to US

The Japan Times ("KOIZUMI TO VISIT U.S. FOR SEPT. 11 CEREMONY, MEET BUSH," Tokyo, 08/27/02) reported that Japanese Prime Minister Junichiro Koizumi will visit the US to observe the first anniversary of the September 11 terrorist attacks, Chief Cabinet Secretary Yasuo Fukuda said. Koizumi will also hold talks with President George W. Bush during his visit, which will run from September 9 through 14, Fukuda told a news conference. Koizumi will also give a speech at the UN general assembly on September 13, Fukuda added.

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2. US Bases in Okinawa

The Japan Times ("INAMINE ASKS KOIZUMI TO REVIEW SOFA, REDUCE U.S. PRESENCE," Tokyo, 08/27/02) reported that Okinawa Governor Keiichi Inamine asked Prime Minister Junichiro Koizumi to review the Japanese-US Status of Forces Agreement (SOFA) and reduce the size of US forces based in Okinawa. At their meeting at the Prime Minister's Official Residence, Inamine also asked Koizumi to urge the US to strengthen discipline so that incidents involving US service members will not recur. These requests, noted in a letter submitted to Koizumi, were made after a series of recent mishaps, including the August 21 crash of an F-15 fighter plane into the sea while on a training mission 100 km off the main island of Okinawa. Inamine also asked Koizumi in the letter to halt flights of F-15s until the US military takes preventive steps. Koizumi told Inamine he would consider what he could do to fulfill the demands. The government meanwhile said it will hold the first meeting of local leaders in Okinawa, including Inamine, and Koji Omi, state minister in charge of Okinawa issues, on September 10 in order to discuss how to use land now occupied by Futenma Air Station after the base there is relocated.

Kyodo ("F-15S RESUME DRILLS," Naha, 08/27/02) reported that the US Air Force at Kadena Air Base in Okinawa resumed F-15 fighter drills on August 26, according to base officials. The drills were halted after an F-15 crashed into the sea on August 21 while on a training mission about 100 km south of the main island of Okinawa, but were resumed despite requests from the Okinawa Prefectural Government and the municipality of Kadena. Also on August 26, the Kadena Municipal Assembly in Okinawa passed a unanimous resolution at an extraordinary session protesting the F-15 accident. The resolution says the accident is unacceptable and criticizes the US forces for neglecting flight safety since drills were intensified after the September 11 terrorist attacks.

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3. US Bases in Japan

The Japan Times ("PCBS FROM MILITARY BASES MAY BE SENT BACK TO U.S.," 08/29/02) reported that the US Department of Defense hopes to ship over 3,000 tons of materials containing polychlorinated biphenyls (PCBs) stored at military bases in Japan to the US for recycling or disposal, officials at the US Embassy in Tokyo said. The department will release an environmental assessment of the shipping procedure finding "no significant impact," but recommending that the materials be transported to the US instead of stored indefinitely, the US officials said. The move is an effort to overcome a glut of PCB-containing materials stored at US bases in Japan since a US court ruled against the import of PCBs in 1997. Contaminated materials are stored at at least 15 sites around Japan, but the bulk, or 357 tons, is located at the Sagami Depot administered by Camp Zama in Sagamihara, Kanagawa Prefecture. The majority of PCB-containing equipment, 1,234 tons, is still in use at Kadena Air Base in Okinawa.

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4. Japan Coast Guard

The Japan Times ("COAST GUARD TO BUILD BEEFED-UP PATROL VESSELS," Tokyo, 08/29/02) reported that the Japan Coast Guard plans to build 11 high-speed patrol vessels that authorities hope would give the force more muscle to hunt down unidentified ships operating off the nation's coasts, officials said. The coast guard is seeking around 10 billion yen from the fiscal 2003 budget to start building the vessels, which will take four years to complete. At the heart of the buildup program are three 1,800-ton-class, high-speed, high-performance patrol vessels that would be equipped with 40-mm canons that officials say can accurately hit moving targets. The coast guard also plans to build three 770-ton high-speed patrol ships and five special-duty patrol boats that can cruise faster than 40 knots. It currently has four such special-duty patrol boats.

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5. Defense Agency's Budget Request

The Japan Times ("DEFENSE AGENCY BUDGET REQUEST EXCEEDS 5 TRILLION YEN," Tokyo, 08/31/02) reported that the Japan Defense Agency hopes to increase the capabilities of the Self-Defense Forces (SDF) to combat terrorism, guerrilla attacks and spy ships, and requested an allocation of 5.0043 trillion yen in the fiscal 2003 general account budget to achieve this -- an increase of 64.8 billion yen, or 1.3 percent, from the initial budget for the current fiscal year. Agency officials said the extra funds are not only to enhance the SDF but also to continue the five-year defense buildup program that started in 2001. The agency is seeking 19.3 billion yen for measures to counter a guerrilla attack, including the creation of a special 300-member Ground Self-Defense Force unit. In the wake of the Japan Coast Guard shootout with a suspected North Korean vessel in the East China Sea in December, the agency also plans to bolster the ability of Maritime Self-Defense Force (MSDF) to deal with such incidents. The MSDF hopes to strengthen surveillance in the East China Sea by assigning an additional P-3C patrol aircraft, they said. The MSDF also plans to improve image transmitting systems and defense devices for P-3Cs. The Air Self-Defense Force is asking for the purchase of a second aerial tanker in the next fiscal year. The force is also seeking a budget allocation to enable its F-15s to participate in the US-hosted Corp Thunder exercise for the first time. The drill is held annually in Alaska, during which the fighter jets would practice in-flight refueling with US tankers, they said. The Defense Facilities Administration Agency is seeking 569.1 billion yen in the fiscal 2003 budget, up 10.3 billion yen from the current fiscal year. This includes 253.6 billion yen for US military facilities in Japan.

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6. Japan-RF Relations

The Japan Times ("PEACE BOAT ACTIVISTS LAND ON DISPUTED ISLAND," 08/28/02) reported that the Peace Boat, a ship owned by a non-governmental organization of the same name, and more than 500 passengers landed on RF-held Kunashiri Island off Hokkaido despite a Japanese Foreign Ministry request that they not visit the disputed islet. The group of 530, mostly young Japanese along with some South Koreans, Americans, German and Inuits, arrived aboard the ship. They will meet local people to exchange views on the relationship between Japan and the island, organizers of the trip said. In Tokyo, Hatsuhisa Takashima, the Foreign Ministry's press secretary, expressed regret that Peace Boat passengers visited Kunashiri despite repeated efforts by the ministry to convince them not to. "The (Japanese) government has been urging its citizens not to enter the Northern Territories like this . . . because doing so while the Russian Federation is illegally occupying the territories will make it appear as if they consider the land belongs to Russia," Takashima said in a statement. Peace Boat representatives in September 1991 visited Kunashiri as well as the Russian-held Etorofu and Shikotan islands, also without visas. The Japanese Foreign Ministry did not object to the group's action in 1991. But this time the ministry pressured the NGO and urged Russia not to permit the visit. The Peace Boat organization protested the ministry's attempts to persuade Russia to block the visit.

IV. CanKor E-Clipping Service

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1. Issue #97

As luck would have it, the DPRK delegation bound for the Canadian National Exhibition was unable to get seats on flights to Toronto, after the delay in receiving their visas. They are now scheduled to arrive 8 September, too late to exhibit their wares at the CNE. Two Canadian companies, Excel Geophysics and Sovereign Ventures Canada Ltd, have been contracted to survey for oil and gas reserves in northeastern DPRK. The Winnipeg Free Press reports on Kim Jong-Il's recent meeting with Russia's President Vladimir Putin in Vladivostok. In what appears to be a breakthrough in relations, the DPRK expects Japanese Prime Minister Koizumi on 17 September, the first ever visit by a Japanese Head of State. Also found in this issue of CanKor is the text of a DPRK-Japan joint statement issued after a recent meeting of Foreign Ministers. The re-connection of railways and roads across the DMZ, and the construction of an industrial park in Kaesong were two of several projects agreed upon by North and South Korean delegations at the second inter-Korean economic talks in Seoul. In another set of talks, an agreement was reached on the participation of 305 North Korean players and a 355-strong "cheering group" in the 14th Pusan Asian Games. The players will take a direct flight from north to south. Both Korean teams plan to enter the stadium under a unified flag. More details emerge on the effect of economic reforms in the DPRK, as CanKor's FOCUS highlights apparent changes in agriculture, state-run stores, and even the Workers' Party apparatus.

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