Global Economics

A Nuclear Breakthrough in North Korea?


Ahead of the expected resumption of the six-party talks, BusinessWeek talks with Rhee Bong Jo, former vice-unification minister of South Korea

Will the U.S. and its partners at the next round of six-party talks find the right mix of carrot and stick to end North Korea's nuclear crisis? Next week, negotiators from the six nations are expected to meet in Beijing to discuss what steps toward denuclearization North Korea should take in return for 1 million tons of fuel oil, or its equivalent, as well as diplomatic and security guarantees. The Beijing talks will be followed by a two-day visit by South Korean President Roh Moo Hyun to Pyongyang on Oct. 2 for a summit with North Korean leader Kim Jong Il.

There are reasons to be hopeful. Experts from the U.S., China, and Russia have expressed satisfaction after touring nuclear facilities in Yongbyon, 60 miles north of Pyongyang, which North Korea shut down in July as part of an aid-for-disarmament agreement reached on Feb. 13. That accord is part of a broader deal worked out in September, 2005, by the six nations that also include Japan and North and South Korea.

The big question is if North Korea is serious about giving up the country's atomic arsenal. After all, Pyongang tested a nuclear device last October. And many North Korea watchers worry that Pyongyang could again turn to nuclear threats whenever its rickety economy is in desperate need of help. Pyongyang knows all too well that its escalating threats can unnerve the five other nations enough that they are likely to reward it for good behavior.

Amid the flurry of diplomatic initiatives, BusinessWeek Seoul bureau chief Moon Ihlwan discussed North Korea's motives with Rhee Bong Jo, former vice-unification minister of South Korea and now president of the Korea Institute for National Unification, a government-backed think tank. Edited excerpts of their conversation follow.

A shift in U.S. policy toward engaging Pyongyang instead of dismissing it appears to be a big reason for progress on ending North Korea's nuclear program. Do you see policy changes in the North as well?

North Korea knows it is vital for its survival to better relations with the U.S. After all, North Korea's "military-first politics" is a survival strategy aimed at overcoming its dire situation. I believe Chairman Kim Jong Il has made a strategic decision to normalize relations with the U.S. even if it means giving up the country's nuclear programs. In bilateral working group talks this month aimed at normalizing U.S.-North Korean relations, the North agreed to disable nuclear facilities within this year.

North Korea has had a record of reneging on promises. How do we know they won't do it again?

The difference this time around is that Pyongyang has already used its last card by carrying out the nuclear test last October. It badly needs to improve ties with the U.S. and it knows it will lose its own survival strategy unless it keeps its promises this time. North Korea can't afford to lose time any more to avert the political and economic crisis it is facing now. It needs to implement agreements to gain political and economic assistance from the international community.

But North Korea has been placing its top priority on maintaining Kim Jong Il's regime even at the expense of economic development. Will it be transparent about all its nuclear programs when they are its only source of leverage with the outside world?

North Korea has been suffering from chronic economic hardship over a long period of time and its citizens are getting tired of poverty. The situation in the North is not getting any better. Unrest within North Korea will only deepen if the gap widens between [Kim Jong Il's past promises] and its economic plight. The country has reached a point where it needs to trade its nuclear ambition with a deal guaranteeing stable and sustainable economic assistance. The North needs it in order to maintain the Kim Jong Il regime.

What needs to be done to persuade North Korea to completely give up all its nuclear programs?

Both North Korea and the other parties in the six-nation talks need to take a step-by-step approach to build trust. Having shut down its nuclear facilities at Yongbyon and cooperated with U.N. inspectors, Pyongyang must now disable a plutonium-based program to regain trust, and then move on to the next stage of removing its highly enriched uranium program. That will lay the groundwork for dismantling existing nuclear weapons and fissile materials.

During this process, the U.S. will have to normalize relations with North Korea, and all the parties involved will have to provide political and economic assistance to the North. Certainly it will be a difficult, time-consuming process. There will be many hurdles along the way, but we have witnessed encouraging initial steps and we now have the best chance to bring a solution to North Korea's nuclear problem.

Given Washington's preoccupation with the Middle East, do you think it is possible for President George W. Bush to resolve the North Korean nuclear problem during his term?

The Middle East is a crucial issue for the U.S., but Northeast Asia is also a key region for the U.S. strategy. We have tough challenges ahead, but as long as the Bush Administration maintains the current policy toward the North, I think President Bush can at least bring it forward to the point where North Korea can no longer reverse course.

What significance do you see in next month's inter-Korean summit?

The summit could expedite international efforts to end North Korea's nuclear issue. The fact that the North proposed the summit while the six-party talks are making headway underlines its intention of signaling to the international community that it has made a strategic decision. It is also meaningful for the leaders of both sides to discuss peace and prosperity in the peninsula. It will provide an occasion to gauge Kim Jong Il's determination. The two Koreas' leaders could also discuss economic cooperation that will go hand in hand with the progress in the six-party talks.

Do you think it is possible for North Korea to build an internationally competitive economy?

North Korea could learn lessons from China and Vietnam. Pyongyang is expected to maintain its authoritarian rule while gradually introducing elements of the market economy. North Korea will certainly seek to elicit maximum economic assistance as the international community tries to bring it into the global capitalist system.

What do you think is the most desirable scenario for ending North Korea's nuclear problem?

War should by any means be avoided. I would like to see the current process lead to free exchanges of people and goods between the South and North. The exchanges will encourage changes in the North and pave the way for social and economic unity that will eventually enable political unity.


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