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Policy Forum Online: Ethical Governance Of Investment Biweekly Update
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I. United States1. ROK DPRK Nuclear Re-activation Confirmation The Associated Press ("SOUTH KOREA CONFIRMS NORTH RESTARTS REACTOR," Seoul, 2/28/03) reported that the ROK's Foreign Ministry confirmed Friday that the DPRK has restarted a small reactor that could produce plutonium for atomic weapons. The US and Japan had earlier said that the 5-megawatt reactor had been reactivated. But ROK President Roh Moo-hyun said earlier Friday that his Cabinet officials were still looking into the matter. In a statement, the Foreign Ministry expressed "deep concern and regret over North Korea's reactivation of the 5-megawatt reactor." US officials said Wednesday that the reactor at its Yongbyon nuclear complex had been reactivated in what could be a first step toward the production of nuclear weapons. For weeks, there have been conflicting reports about whether the reactor was up and running or not. "We repeatedly urge North Korea to positively respond to the international community's efforts to peacefully resolve the nuclear issue and to implement obligations of the Non Proliferation Treaty," the Foreign Ministry said in its statement. 2. DPRK-US Relations The Associated Press (Christopher Torchia, "NORTH KOREA SAYS US SPARKS NUKE CRISIS," Seoul, 2/28/03) and the Washington Post (Doug Struck, "OBSERVERS SEE RISING RISK OF US-NORTH KOREA CONFLICT," Seoul, 2/28/03) reported that the DPRK accused the US Friday of triggering a nuclear crisis by failing to provide promised energy, disrupting inter-Korean reconciliation and plotting war against the DPRK. At the same time, the DPRK reiterated that the only way to resolve the nuclear standoff on the Korean Peninsula was through direct talks with the US. The US says ties can only improve if the DPRK first abandons its nuclear ambitions. "The situation is getting tenser with each passing day," the North said in a dispatch on its state-run news agency, KCNA. "The US is entirely to blame for this." A separate DPRK statement on KCNA said a nonaggression treaty should be ratified by the DPRK's Supreme People's Assembly and both houses of the US Congress. "The DPRK's proposal for concluding the treaty is aimed to provide a legal binding force to control and prevent the US from using nukes and posing a threat of military attack to it," read the statement, which was described as an indictment of Washington by the North's "lawyers' committee." "It is not leverage to get a sort of reward nor is it a temporary expedient so-called 'brinkmanship tactics,'" the statement said. US officials have ruled out a formal treaty, though they say some form of written security guarantee is possible. They also say the issue should be handled by the U.N. Security Council. The Associated Press (Christopher Torchia, "NORTH KOREA URGES US TO "SIT FACE TO FACE" FOR TALKS ON NUCLEAR ISSUE," Seoul, 2/28/03) reported that the DPRK on Friday accused the US of triggering a nuclear crisis by failing to honor commitments to provide energy, disrupting inter-Korean reconciliation and plotting war against the DPRK. At the same time, the DPRK reiterated that the only way to resolve the nuclear standoff on the Korean Peninsula was through direct talks with the US. The US says ties can only improve if the DPRK first abandons its nuclear ambitions. "The situation (on the Korean Peninsula) is getting tenser with each passing day," the North said in a dispatch on its state-run news agency, KCNA. "The US is entirely to blame for this." BBC News ("UN ENVOY PLANS PYONGYANG TRIP," 2/28/03) reported that a senior United Nations official is to travel to the DPRK for further talks next month as a personal envoy of the UN secretary general. Maurice Strong's visit will form part of continued efforts to try to find a peaceful resolution to the stand-off over the DPRK's nuclear ambitions. The ROK has indirectly confirmed reports from Washington officials that the DPRK has restarted a nuclear reactor capable of generating weapons-grade plutonium. US officials further warned on Thursday that theDPRK was also continuing to prepare a more crucial, fuel re-processing plant near the reactor at Yongbyon, which could speed up any production of nuclear weapons. Strong, who has been holding talks in Seoul with the new administration on the DPRK crisis, urged the ROK and the US to talk face to face, something the US has so far shied away from, arguing that the North should give up its nuclear programme first. "As long as they do not engage, there is always a risk of misunderstandings, of misreading, of hardening of attitudes, which could lead to renewed conflict in this peninsula. That is a danger," Strong said. 3. US DPRK Military Strike Planning The New York Times (Nicholas D. Kristof, "SECRET, SCARY PLANS," 02/28/03) carried an analytical story that reported that some of the most secret and scariest work under way in the Pentagon these days is the planning for a possible military strike against nuclear sites in the DPRK. Officials say that so far these are no more than contingency plans. They cover a range of military options from surgical cruise missile strikes to sledgehammer bombing, and there is even talk of using tactical nuclear weapons to neutralize hardened artillery positions aimed at Seoul. There's nothing wrong with planning, or with brandishing a stick to get Kim Jong Il's attention. But several factions in the administration are serious about a military strike if diplomacy fails, and since the White House is unwilling to try diplomacy in any meaningful way, it probably will fail. The upshot is a growing possibility that President Bush could reluctantly order such a strike this summer, risking another Korean war. The sources of information for this column will be as mystifying as the underlying US policy itself, for few will discuss these issues on the record. But it seems those interested in the military option - consisting primarily of raptors clustered around Dick Cheney and Don Rumsfeld and in the National Security Council - have until recently been slapped down by President Bush himself. Recently Bush seems to have become more hawkish. He is said to have been furious when Deputy Secretary of State Richard Armitage (one of the few senior Bush aides who know anything about Korea) told Congress that the US would have to talk to the DPRK. So the White House has hardened its position further, swatting away its old willingness to engage the DPRK bilaterally within a multilateral setting. Now the administration has dropped the bilateral reference and is willing to talk to the DPRK only in a multilateral framework that doesn't exist. The old approach had a snowball's chance in purgatory; now it's less than that. "We haven't exhausted diplomacy," one senior player noted. "We haven't begun diplomacy. . . . We could have a slippery slope to a Korean war. I don't think that's too alarmist at all." Other experts I respect are less worried. James Lilley, an old Korea hand and former ambassador to Seoul and Beijing, says my concerns are "much too alarmist." He says the State Department controls Korea policy and realizes that "the military option is almost nonexistent." Maybe. But meanwhile, North Korea is cranking out provocations and plutonium. This week it started up a small reactor in Yongbyon. More worrying, America's spooks detected on-and-off activity at a steam plant at Yongbyon, which may mean that the North is preparing to start up a neighboring reprocessing plant capable of turning out enough plutonium for five nuclear weapons by summer. Look for reprocessing to begin soon, perhaps the day bombs first fall on Iraq. Dick Cheney and his camp worry, not unreasonably, that the greatest risk of all would be to allow the DPRK to churn out nuclear warheads like hotcakes off a griddle. In a few years North Korea will be able to produce about 60 nuclear weapons annually, and fissile material is so compact that it could easily be sold and smuggled to Iraq, Iran, Libya, Syria and Al Qaeda. The hawk faction believes that the US as a last resort could make a surgical strike, even without South Korean consent, and that Kim Jong Il would not commit suicide by retaliating. The hawks may well be right. Then again, they may be wrong. And if they're wrong, it would be quite a mistake. The DPRK has 13,000 artillery pieces and could fire some 400,000 shells in the first hour of an attack, many with sarin and anthrax, on the 21 million people in the "kill box" - as some in the US military describe the Seoul metropolitan area. The Pentagon has calculated that another Korean war could kill a million people. So if the military option is too scary to contemplate, and if allowing North Korea to proliferate is absolutely unacceptable, what's left? Precisely the option that every country in the region is pressing on us: negotiating with the DPRK. Ironically, the gravity of the situation isn't yet fully understood in either the ROK or Japan, partly because they do not think this administration would be crazy enough to consider a military strike against the DPRK. They're wrong. 4. Russia on UN Iraq Resolution The Associated Press ("RUSSIA WARNS OF IRAQ WAR RESOLUTION VETO," Beijing, 2/28/03) reported that Russia is ready to veto a US-British resolution in the U.N. Security Council authorizing use of force against Iraq if such a step is needed to preserve "international stability," Foreign Minister Igor Ivanov said Friday. "Russia has the right to a veto in the U.N. Security Council and will use it if it is necessary in the interests of international stability," Ivanov said at a news conference in Beijing. The foreign minister's comments came a day after the PRC and Russia issued a joint declaration saying war with Iraq "can and should be avoided" and appealing for more time for U.N. weapons inspectors there. "Of course, if you use the veto power you should fully understand the responsibilities of it before using it. It can only be used for international peace and stability," Ivanov said. "At the same time Russia will not be in favor of any new resolution which allows the use of military force directly or indirectly to solve the Iraqi issue." 5. PRC Domestic Economy The Associated Press ("THE PRC REPORTS 8.1 PCT. 4Q ECONOMIC GROWTH," Beijing, 2/28/03) reported that the PRC's economy grew 8.1 percent in the fourth quarter of 2002 over the same period in 2001, the State Statistics Bureau reported Friday. The rate of growth was the same as for the third quarter of 2002, and slightly higher than the overall growth rate of 8 percent for the full year compared with 2001. The PRC's gross domestic product totaled 10.2 trillion yuan ($1.2 trillion) in 2002, a result of strong exports, increased foreign direct investment and heavy state spending on fixed assets. Speaking at a news conference to detail the PRC's 2002 economic performance, bureau Commissioner Zhu Zhixin said he expects the PRC's GDP (news - web sites) to grow about 7 percent in 2003, in line with the government's growth forecasts for the past three years. Zhu also said he expects the country's consumer price index will rise in 2003. The index fell 0.8 percent on year in 2002, due to oversupply from local manufacturers, reduced import tariffs and consumer hesitancy to buy amid falling prices. Zhu said retail sales rose 9.2 percent in the fourth quarter of 2002. 6. Japan Domestic Economy The Associated Press (Yuri Kageyama, "JAPAN'S JOBLESS RATE HITS 5.5 PERCENT," Tokyo, 2/28/03) and BBC News ("JAPAN STRUGGLES FOR REVIVAL," 2/28/03) reported that unemployment in Japan has climbed back to a record high and the country's economy is showing little sign of growth. The figures underlined the task facing the country's new central bank governor. The jobless rate reached 5.5% in January compared with a revised 5.3% in December. There was some positive news - industrial production rose by 1.5% over the month but that was after four months of decline. "Job conditions continue to be severe," said Economics Minister Heizo Takenaka. "Personal consumption is weak but industrial production came in positive. The economy remains on a plateau." The country has been looking to exports to lead the recovery. But Japan's biggest market, the US, has suffered its own economic slowdown and is now affected by concerns about war with Iraq. The rise in output was led by electric machinery, personal computers, liquid crystal displays and mobile phones. But economists said that despite the growth in production any recovery was still weak. "I would suspect the rise in January was a kind of bounce after four straight months of decline," said Peter Morgan, senior economist at HSBC Securities Japan. " I wouldn't say that this is a turnaround yet." 7. Japan DPRK Spy Case The Associated Press ("POLICE FILE PROSECUTION PAPERS FOR ALLEGED NORTH KOREAN SPY AGENT IN JAPAN," Tokyo, 2/28/03) reported that Japanese prosecutors will soon decide whether they have enough evidence to prosecute a North Korean man who allegedly used Japan as a base to spy on South Korea for decades, an official said Friday. Police have sent prosecutors a report on the 73-year old suspect, who is a member of the DPRK Workers' Party and a former ranking member of a DPRK resident organization in Japan, said a Tokyo Metropolitan Police spokesman on condition of anonymity. Police refused to disclose the suspect's name. Kyodo news service identified him as Kim Sang Gyu and said he had already confessed to police that he had spied for the DPRK. Police raided his Tokyo home in December and allegedly found evidence that he gave instructions to agents in the ROK. 8. DPRK on US DPRK Humanitarian Aid The Associated Press (Christopher Torchia, "AMID BELLICOSE RHETORIC, NORTH KOREA ACKNOWLEDGES US FOOD AID," Seoul, 2/28/03) reported that the DPRK daily denounces the US as a nation of wanton warmongers, and warns it is ready for battle. But observers say a brief, largely overlooked announcement from the DPRK this week reflects its desire to improve ties with its No. 1 foe. "The US government on Feb. 25 decided to donate 100,000 tons of food to (North Korea) this year through the World Food Program," read the one-line dispatch Thursday on the state-run KCNA. The terse KCNA dispatch offered no thanks for the food, which was announced by US Secretary of State Colin Powell in Seoul on Tuesday. But the DPRK acknowledgment could be an indirect expression of gratitude despite the furor over its efforts to develop nuclear weapons, aid workers said. "Several years ago, they probably wouldn't have announced that," said Kim Soon-kwon, an ROK agricultural expert who travels frequently to the DPRK. 9. ROK Historical Forced Labor The Associated Press("SOUTH KOREA IDENTIFIES HUNDREDS OF THOUSANDS OF FORCED LABORERS UNDER JAPANESE RULE," Seoul, 2/28/03) reported that ROK lawmakers on Friday identified hundreds of thousands of additional people who allegedly were conscripted as forced laborers by Imperial Japan last century, as families pushed for compensation from the Japanese government. The lawmakers said millions of Koreans were captured or pressed into labor by Japan during its 1910-45 colonial rule of the Korean Peninsula. A total of 480,000 have already been identified as forced laborers. But a new list, made public Friday, boosts that number by about 300,000, according to Kim Hee-sun, a lawmaker from the ruling Millennium Democratic Party. The new list contains the names of 413,407 people, but some overlapped with older data. It was compiled by the General Association of Korean Residents in Japan, a group of pro-Pyongyang Koreans living in Japan. Lawmakers are tallying the number of victims in the hope that a comprehensive list will help victims or their families receive compensation from Japan. Japan has generally refused to pay damages to individuals despite accusations at home and abroad that it has not fully atoned for wartime atrocities. Officials say the issue was settled on a government-to-government basis in postwar treaties. 10. Japan KEDO Program Reconsideration The Japan Times (Junko Takahashi, "JAPAN TO RETHINK KEDO PROGRAM," 2/28/03) reported that Japan is reconsidering its commitment to building light-water nuclear reactors in the DPRK now that the DPRK has reactivated nuclear facilities linked to its weapons development program in violation of a 1994 accord. According to the US, the DPRK has restarted its graphite-moderated nuclear reactor at Yongbyon, which could be used to produce weapons-grade plutonium. Before that provocation, Japan had been hesitant to pull out of the reactor project, as such a move would close a key dialogue channel with the DPRK and hinder Japan's pursuit of normalizing diplomatic ties with the reclusive state. On Friday, however, Chief Cabinet Secretary Yasuo Fukuda said Japan will consult with other member countries of the Korean Peninsula Energy Development Organization, which oversees the reactor project, over what steps to take. "The KEDO project has been slowing down, and we'll have to discuss what to do from now with KEDO group countries," Fukuda said. The official, who declined to be named, said that if the DPRK reactivates its nuclear reprocessing plant capable of extracting plutonium from spent fuel, the government will have to get serious about putting an end to the KEDO project and imposing other sanctions. Japan has pledged $1 billion (117 billion yen) to finance the KEDO reactor project in the form of loans, of which $320 million (37.44 billion yen) was disbursed by the end of 2002.
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