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Why North Korea Is Rushing to Cozy Up to Clinton
Six months ago, much of the world saw North Korean leader Kim Jong Il as a playboy terrorist. But after two days of cordial talks Oct. 23-25 with U.S. Secretary of State Madeleine K. Albright--the first American official Kim has ever met--the reclusive North Korean is suddenly projecting the image of a man the U.S. can do business with. During Albright's visit to Pyongyang, Kim and Albright spent many hours together--in discussions, at two dinners, and at a bombastic spectacle of 100,000 performers extolling the ideals of the Korean Workers' Party. As her visit ended, Albright suggested that Kim "pick up the phone anytime" he wanted to reach her. Kim responded: "Please give me your e-mail address."
The Secretary of State and the Dear Leader as e-mail pen pals? It's hard to imagine. But the speed with which the two nations are moving to end what Kim termed "50 years of silence" is breathtaking. The Albright visit capped a year of feverish diplomacy by the North Koreans. For both sides, realpolitik is driving the process. With only three months left before President Clinton leaves office, the North Koreans fear the next Administration--whoever is in charge--may not be as accommodating. Making nice to Albright was the best way for Kim to get Clinton to visit before the end of the year, and solidify some of the promises the U.S. President has made to get North Korea to back down on missile proliferation and its nuclear threat. These include steps toward diplomatic normalization and ending the trade embargo, plus more economic aid. As a lame duck, Clinton has nothing to lose politically by locking in agreements that can't be undone by his successor.
Neither Al Gore nor George W. Bush have said what their policies toward North Korea would be. A victorious Gore would be unlikely to squander political capital by pushing good relations with North Korea right away, especially if Republicans dominate Congress. The GOP has accused Clinton of giving in to nuclear blackmail by promising in 1994 to build nuclear power plants in exchange for Pyongyang halting its nuclear weapons program. Bush would almost certainly take a hawkish stance. He has, for instance, vowed to push ahead with the Theatre Missile Defense shield, developed in part as a deterrent to North Korean aggression.DIPLOMATIC BLITZ. It's been a dramatic year for North Korea. Kim has hosted his counterparts from South Korea and Russia, and has gone to China himself--a visit in which Chinese leader Jiang Zemin assured Kim that he can have economic reform without losing political control. Kim is working to normalize relations with Britain and Germany, following success with Italy and Canada. Until Albright's visit, the U.S. seemed the laggard in the campaign to bridge the Demilitarized Zone.
This outreach has to do with balancing superpowers. Since the collapse of the Soviet Union in 1991, Moscow isn't in a position to help economically. That's left Pyongyang heavily dependent on handouts from China, but reluctant to become a client state of Beijing. Analysts noted that while Chinese Defense Minister Chi Haotian visited at the same time as Albright, he didn't get a quick meeting with Kim, but rather was dispatched on a lengthy sightseeing tour that included the birthplace shrine of deceased Great Leader Kim Il Sung.
In addition to the promised steps, such as liaison offices in their respective capitals, Kim wants the U.S. to remove North Korea from the list of terrorist states and help Pyongyang launch a satellite. A Clinton visit could cement such agreements, and enhance the security of the Korean Peninsula. North Korea knows it has little time left to do it.By Mark L. Clifford in Pyongyang; Edited by Sheridan PrassoReturn to top
Fear of Default in Argentina
Try as it might, Argentina's government cannot shore up crumbling investor confidence. Fears that the country may be headed for a debt default caused Argentine bond prices to plunge to a 14-month low on Oct. 25. The spread on Argentine debt widened to more than 850 basis points over comparable U.S. Treasuries. Worries about Argentina's ability to finance its $123 billion public debt have been mounting since the government announced it might have to tap a $7.2 billion emergency credit line with the International Monetary Fund next year. The country needs to raise $19 billion to pay off maturing debt and fulfill other obligations over the next 14 months.
Under normal conditions, the 10-month-old government of President Fernando de la Rua would have tapped international capital markets to raise those funds. But with the economy mired in a two-year recession and the government engulfed by a political scandal, investor appetite for the country's bonds has all but evaporated.
Economy Minister Jose Luis Machinea tried to boost confidence on Oct. 23 by announcing a new package of tax cuts designed to stimulate economic activity. The measures include a reduction in the tax charged on interest payments on corporate debt and the elimination of some capital-gains taxes. Investors, however, were not impressed and kept dumping Argentine securities. Meanwhile, rumors continue to circulate that the government may invite former Economy Minister Domingo Cavallo, the architect of the country's currency board regime and a familiar face for Wall Street, to join the Cabinet.Edited by Sheridan PrassoReturn to top