Bloomberg News

S. Korea Optimistic Aid Will Bring North Back to Talks

February 14, 2012

(Updates with more from North Korean statement in eighth paragraph.)

Feb. 3 (Bloomberg) -- South Korea’s chief nuclear envoy is “optimistic” that inducements offered by the U.S. and his country will persuade North Korea’s new leader, Kim Jong Un, to resume talks aimed at ending the regime’s atomic program.

“The prospects of the normalization of the relationship between Pyongyang and the international community, and eventually a lifting of sanctions, all those benefits will be a strong incentive for the new leadership,” Lim Sung Nam, South Korea’s representative to the dialogue, said in his office in Seoul. “The six-party talks are basically a process of putting them on a learning curve regarding the cost of having nuclear weapons and the benefit of giving up nuclear weapons.”

Sanctions over the nuclear program have so far failed to cajole North Korea, which is reliant on aid from China to feed its people, back to the table after negotiations broke down in 2008. Lim said that while the North hasn’t given any concrete sign it may engage following the Dec. 17 death of dictator Kim Jong Il, his son, Kim Jong Un, may be reexamining policies toward the outside world.

Lim said he believes the prospect of international aid to a country whose economy is one-fortieth the size of South Korea’s will ultimately persuade Kim to return to talks. He said that before Kim Jong Il died the sides had been making “meaningful progress” on the steps needed to restart negotiations, which involve the U.S., China, Japan and Russia.

Stability in Pyongyang

“Our reading is that Pyongyang is quite stable,” said Lim, whose father was born in the north and fled to the south during the 1950-1953 Korean War. “All those events related to the funeral, the military parade and everything, are going pretty smoothly and we didn’t hear any news indicating there is some sort of domestic political change.”

Before the talks collapsed, the five nations had pledged massive economic, humanitarian and energy aid for the North to denuclearize, including crude oil, food and electricity on top of trade and diplomatic relations.

Since Kim Jong Un, thought to be younger than 30, inherited the leadership, the rhetoric from Pyongyang has echoed that of his father’s rule. North Korea’s National Defense Commission issued a statement yesterday questioning South Korea’s commitment to dialogue. The statement, published by the state- run Korean Central News Agency, accused the South of conducting a “vicious anti-DPRK smear psychological campaign.” DPRK refers to the nation’s official name, the Democratic People’s Republic of Korea.

Military Exercises

It included nine points it said South Korea needed to address to show it is serious about negotiations, including a halt to major military exercises and an apology for not sending an official delegation to Kim Jong Il’s funeral.

There is no need to respond to such “stubborn insistence” from the North’s propaganda, said South Korea’s Unification Ministry in an e-mailed statement expressing “regret.”

Economic support from China could scuttle Lim’s hopes, said Kim Young Yoon, a senior research fellow at the state-run Korea Institute for National Unification in Seoul.

“It’s unlikely that the North will rejoin six-party talks because of economic concerns,” Kim said. “China is giving them enough aid to sustain them at the moment and South Korea is also giving humanitarian aid.”

Energy, Food

China provides almost 90 percent of the North’s energy imports and 45 percent of its food, according to a 2009 report from the New York-based Council on Foreign Relations.

South Korea says the North must show it is sincere about dismantling its atomic installations as a prerequisite for returning to negotiations. This would include allowing inspectors into the country to monitor a shutdown of the nuclear weapons program, said Lim, who keeps aerial photographs of the Yongbyon atomic facility on the wall of his office.

After six-party talks ended, North Korea in 2009 expelled International Atomic Energy Agency inspectors and conducted a second nuclear test. In April that year, it said it would restore its main nuclear reactor for making weapons-grade plutonium at Yongbyon, which was disabled under a February 2007 agreement.

Kim’s regime allocates a third of its budget to 1.2 million soldiers, 1,700 aircraft, 800 naval vessels and more than 13,000 artillery systems, according to the American military. The U.S. estimates that North Korea has enough plutonium for a half-dozen nuclear devices and sells ballistic missiles for cash.

Economic Sanctions

U.S. economic sanctions, which have frozen the assets of North Korean companies, prohibit direct and indirect imports of goods and services and ban luxury-goods trade and money exchanges. The UN banned all arms exports from North Korea and authorized searching of the country’s ships for weapons.

North Korea’s economy contracted 0.5 percent to 30 trillion won ($26.8 billion) in 2010, compared with South Korea’s 1,173 trillion won, according to the South’s central bank.

The country had a shortfall of as much as 700,000 metric tons of food last year, which could affect a quarter of the population, according to the United Nations Food & Agriculture Organization.

Kim Jong Un faces a dilemma in deciding how much he can open up to the outside world in return for the economic assistance needed to fulfill his regime’s promise of creating a strong and prosperous country, said Peter Beck, the Korea representative for the Asia Foundation in Seoul.

Reaching Agreement

“The only way they can follow through on that pledge is to start by reaching agreement with the U.S. and the other four parties,” said Beck.

Lim, 53, is a graduate of Seoul National University and holds a master’s degree in political science from Harvard University in Cambridge, Mass. His last post was at the South Korean embassy in China.

“Through their own channel of communication in Beijing with Pyongyang, the Chinese should be making a lot of effort to bring the North Koreans back to the six-party process,” he said.

Lim will travel to Moscow next week for talks with his Russian counterpart, deputy foreign minister Igor Morgulov. Russian Foreign Minister Sergei Lavrov said on Jan. 29 that it was “absolutely realistic” to reconvene six-party talks by the middle of the year.

“We might have to wait for some more time but I’m basically optimistic that the new leadership in Pyongyang could make the right decision,” Lim said.

--Editors: Brett Miller, Paul Tighe

To contact the reporters on this story: Peter Hirschberg in Hong Kong at phirschberg@bloomberg.net; Sangwon Yoon in Seoul at syoon32@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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