1. EU Welcomes DPRK Decision
2. Japan to Finance DPRK Nuclear Facilities
3. ROK Fishermen Accuse Japanese
4. DPRK Economic Plan

I. United States

1. DPRK Formal Leadership Succession

The Associated Press ("NORTH KOREA ENDS MOURNING PERIOD," Tokyo, 7/08/97) and Reuters ("N.KOREA ENDS MOURNING FOR KIM IL-SUNG," Seoul, 7/08/97) reported that the three-year official mourning for the DPRK's founding leader Kim Il-sung ended Tuesday with no indication of when his son, Kim Jong-il, would formally assume his late father's titles of president and head of the ruling Workers Party. The 55-year-old Kim Jong-il has ruled as supreme military commander since his father died on July 8, 1994, at age 82. "The mourning is over," announced Foreign Minister Kim Yong-nam at a one-hour ceremony on a vast Pyongyang plaza to honor the DPRK's founding father. The DPRK's official Korean Central News Agency (KCNA) said that the country's military, government and social leaders swore loyalty Tuesday to the younger Kim at a meeting marking the anniversary of his father's death. Vice Marshal Jo Myong-rok, speaking on behalf of the powerful military, swore to defend Kim Jong-il with "the spirit of human bombs and the spirit of suicidal attack," KCNA said. Observers speculate that Kim Jong-il's formal assumption of the leadership titles has been delayed due to the country's worsening economic problems and encroaching famine. "The curtain is raised for Kim Jong-il but he is in a dilemma," said Park Sung-hoon, a DPRK expert at Seoul's unification ministry. Official DPRK TV footage of Tuesday's anniversary showed paintings of waving fields of grain, and well-fed farmers handing the fruit of bumper crops to the elder Kim. At the ceremony before the Kumsusam memorial palace in Pyongyang, where the elder Kim's body is kept, thousands of people, many of them in military uniform, stood in ranks and bowed in unison to Kim Jong-il as he stood expressionless and silent.

2. DPRK Food Aid

The AP-Dow Jones News Service ("CHINA DONATING 80,000 TONS OF GRAIN TO NORTH KOREA: REPORT," Beijing, 7/08/97) reported that on Tuesday the PRC's official Xinhua News Agency said that the PRC offered an additional 80,000 tons of grain to the DPRK to alleviate food shortages, and that the DPRK accepted the gift offered in a spirit of "traditional friendship and humanitarian consideration." The UN says the DPRK needs another 800,000 tons of food aid this year to avert widespread hunger.

3. DPRK Offshore Oil Exploration

The AP-Dow Jones News Service ("AUSTRALIA BEACH PETROLEUM STARTS EXPLORING OFF NORTH KOREA," Sydney, Australia, 7/08/97) reported that Beach Petroleum NL, an Australian oil and gas concern, announced Tuesday that it has started exploring for oil in DPRK waters in the East Korea Bay. The company said it is among the first foreign oil companies to undertake exploration work in the DPRK. Reg Nelson, Beach's chief executive officer, said in an interview that preliminary drilling by the DPRK in the late 1980s recovered traces of oil, "which we find highly encouraging." However, he added the project falls in the high risk-high reward category. "They've established a base there with good oil potential and we regard it as being akin to Vietnam in the days before western companies were allowed in," he said.

4. ROK-Russia Economic Agreement

The AP-Dow Jones News Service ("S. KOREA, RUSSIA AGREE TO IMPROVE ECONOMIC COOPERATION," Seoul, 7/08/97) reported that the ROK and Russia on Tuesday agreed to push forward the construction of major industrial and trade complexes and to improve technology exchanges, the ROK Finance and Economy Ministry said. In talks between ROK Finance and Economy Minister Kang Kyong-shik and Russian Deputy Prime Minister Oleg Sysuyev, Russia also agreed to continue to repay its US$457 million in outstanding loans with arms, steel and other goods, the ministry said. The agreement to jointly build the US$160 million Nakhodka Industrial Complex in the Nakhodka Free Economic Zone -- located near Russia's border with the DPRK along the Sea of Japan -- was part of a 1992 summit agreement. The two sides also agreed to cooperate closely for the early conclusion of two other construction projects: building a Korea-Russia Trade Center in Moscow and developing a gas field. In a deal linked to establishing diplomatic relations with Moscow in 1990, Seoul agreed to lend it US$3 billion in cash and goods. But in 1992, Seoul halted further disbursement after providing US$1.47 billion when Moscow failed to meet interest payments. At the meeting, the ROK also promised to back Russia's membership in the World Trade Organization and agreed to establish a science and technology information exchange center, the ministry said.

5. NATO Expansion and the Russian Response

The USIA ("NATO LEADERS REPORTED TO REACH CONSENSUS ON THREE NEW MEMBERS," USIA Report, 7/08/97) reported that on Tuesday in Madrid, Spain, heads of state of the 16 nations in the North Atlantic Treaty Organization (NATO) reached consensus on inviting Poland, Hungary and the Czech Republic to join the alliance. The leaders reportedly reached a consensus at their first official meeting in the morning, but still needed to work on the specific language in the communique they will issue later.

US President Bill Clinton ("CLINTON STATEMENT TO THE NORTH ATLANTIC COUNCIL JULY 8," USIA Transcript, 7/08/97) made a statement to the members of the North Atlantic Council meeting on the morning of July 8 to consider admitting three new countries to the NATO alliance. In the statement, Clinton said: "Three and a half years ago in Brussels, we began to construct a new NATO for a new Europe -- taking on new missions and new partners. ... With respect to enlargement, I believe we should make our alliance broader by inviting Poland, Hungary and the Czech Republic into NATO, for the following reasons: Over the past seven years, these are the countries that have proved their readiness to join us at this table. While their work is still in progress, they have met the highest standards of democratic and market reform. They have now pursued those reforms long enough to give us confidence they are irreversible, just as our offer of NATO membership is irreversible. ... Poland, Hungary and the Czech Republic have settled outstanding disputes with their neighbors. They have established civilian control of their armed forces and shown that they are prepared to meet the stiff military requirements NATO demands. I believe we can afford the cost to ourselves of adding these three countries to NATO's strength. I also believe that these three countries' smooth and successful integration will create momentum for others to follow. Today, we must commit to keep the door of this Alliance open to all those ready to meet the responsibilities of membership. I believe we should exclude no European democracy. There are other states that are close to being fully qualified to join. When they are ready and the time is right, I believe we should welcome them. ..."

The USIA ("ALBRIGHT: NATO SUMMIT TO CHANGE POLITICS OF EUROPE FOREVER," USIA Report, 7/08/97) reported that on Monday in Madrid, on the eve of the NATO decision to add new three new members from Central Europe, US Secretary of State Madeleine Albright said that the action "will change the politics of Europe forever." Albright repeated a point she and other US officials have stressed in the past, that the US remains committed to "an open door policy" which would enable other European democracies to enter the Alliance at a later time.

The Washington Times (Bill Gertz, "RUSSIANS PRACTICED NUCLEAR COUNTERATTACK ON NATO," Washington, 07/08/97) reported that, according to a US Defense Department intelligence report, Russian forces recently conducted large-scale military exercises simulating attacks by invading NATO, Lithuanian and Polish military forces and counterattacks with nuclear weapons. According to the intelligence report, based on sensitive information, the exercise was carried out between March 31 and April 5, several days after the Helsinki summit in which Russian President Boris Yeltsin agreed to cooperate with NATO and US President Bill Clinton assured him that no nuclear weapons would be placed in the new NATO states. According to the intelligence report, "Exercise scenarios depicted Russian defenses -- including requests for nuclear munitions." The report did not elaborate on Moscow's use of nuclear arms, which presumably simulated the use of battlefield nuclear warheads that can be delivered by short-range missiles, aircraft and artillery. Russia has deployed an estimated 4,400 tactical nuclear warheads. Intelligence officials said reports from Moscow indicate Russia's generals know well the poor state of their conventional forces and would respond to any NATO conventional "first strike" with limited nuclear attacks. The exercise was viewed by many Pentagon officials as a sign the Russian military continues to regard NATO as its key threat and primary enemy.

II. Republic of Korea

1. EU Welcomes DPRK Decision

The European Union (EU) recently issued a statement welcoming the DPRK's agreement to participate in the preliminary meeting for the four-way peace talks for a permanent peace mechanism on the Korean Peninsula, said a ROK Foreign Ministry official yesterday. In the statement, issued last Wednesday, the Foreign Ministry of Luxembourg, chaircountry of the EU, expressed on behalf of the EU its hopes that "those negotiations and a resumption of direct dialogue between the two Koreas will pave the way for the restoration of durable peace on the Korean Peninsula." (Korea Herald, "EU WELCOMES DPRK MOVES TOWARD TALKS," 07/08/97)

2. Japan to Finance DPRK Nuclear Facilities

Japan will pay 20 percent of the cost of supplying the DPRK with light water nuclear reactors, according to the Japan's 'Asahi' newspaper. The paper said that the government had estimated the cost of construction to be US$5 billion, and will pay US$1 billion in the form of a long-term credit arrangement. The Japanese government is to earmark the first installment of US$30 million in next year's budget. (Chosun Ilbo, "JAPAN TO PAY FOR 20% OF NORTH'S LIGHT WATER REACTOR," 07/07/97)

3. ROK Fishermen Accuse Japanese

The captains of the two seized ROK fishing boats arrived at Kimpo Airport July 7, twenty-two days after they and their crews were detained by the Japanese after allegedly entering Japanese territorial waters by crossing the disputed straight line boundary of Japan's self-proclaimed exclusive economic zones (EEZ). Ahn Hyong-ryul, 37, and Ahn Kwang-wuk, 43, claimed that during their internment they had been mistreated by their captors, who handcuffed and beat them regularly. Both captains stated that Japanese authorities told them they would not be returned to the ROK unless they formally admitted violating the EEZ. They further claimed that they were denied access to any ROK embassy staff, and therefore, at a summary trial, both captains admitted violation of the disputed border and were each fined 500,000 yen before being released July 4. (Chosun Ilbo, "KOREAN CAPTAIN CLAIMS ILL-TREATMENT IN JAPAN," 07/08/97)

4. DPRK Economic Plan

A ROK government official said that the DPRK is planning to convert the Nampo-Wonsan area into a tax free zone similar to the free export zone in Masan. The official, who recently participated in a tourism workshop in the PRC as a part of Tuman River Area Development Programme (TRADP), spoke with a high-ranking DPRK official who said that foreign investors will be encouraged to manufacture in the said zone. There they will enjoy favorable conditions including tax-free importation of primary and secondary materials and other incentives. (Joong-ang Ilbo, "DPRK TO DECLARE NAMPO-WONSAN TAX-FREE ZONE," 07/08/97)

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Wade Huntley: napsnet@nautilus.org
Berkeley, California, United States

Choi Chung-moon: cily@star.elim.net
Seoul, Republic of Korea

Peter Razvin: icipu@glas.apc.org
Moscow, Russian Federation

Chunsi Wu: dlshen@fudan.ihep.ac.cn
Shanghai, People's Republic of China

Dingli Shen: dlshen@fudan.ihep.ac.cn
Shanghai, People's Republic of China

Hiroyasu Akutsu: akutsu@glocomnet.or.jp
Tokyo, Japan

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