NAPSNet Daily Report 19 January, 1999

IN TODAY’S REPORT:

I. United States

II. Republic of Korea

III. Russian Federation

I. United States

1. US-DPRK Talks

Reuters (Robert Evans, “U.S., NORTH KOREA SET FRESH NUCLEAR TALKS NEXT WEEKEND,” Geneva, 01/18/99), the New York Times (Elizabeth Olson, “NORTH KOREA AND U.S. MEET ON INSPECTION OF ATOM PLANT,” Geneva, 01/17/99, 4) and the Associated Press (“US, N. KOREA DISCUSS SUSPECTED SITE,” Geneva, 01/18/99) reported that DPRK diplomats said Sunday that the US and the DPRK agreed to talk again next weekend about access to an underground construction site in the DPRK. Neither side would make any comment on substance at the end of several hours of talks on Saturday and Sunday, which alternated between the US and DPRK missions in Geneva. Earlier, DPRK delegation chief and deputy Foreign Minister Kim Gye-gwan said, “We have been quite stuck yesterday (Saturday). I don’t know if we’ll manage to overcome the difficulties.” US delegation leader and special envoy for Korea Charles Kartman before Sunday’s meetings said only, “We will try to do our best.” [Ed. note: This article appeared in the US Department of Defense’s Early Bird news service for January 19.]

2. Four-Party Peace Talks

Reuters (Andrew Gray, “NEW ROUND OF KOREAN PEACE TALKS STARTS IN GENEVA,” Geneva, 01/19/99) and the Associated Press (“GEIR MOULSON NEW ROUND OF KOREA TALKS UNDER WAY,” Geneva, 01/19/99) reported that officials from the US, the PRC, the DPRK, and the ROK on Tuesday began a new round of four-party peace talks. Kim Gye-gwan, the head of the DPRK delegation, said during a lunch break, “After listening to the keynote addresses, my feeling is that there are still significant differences of views among the delegations.” He added, “I have the feeling we will have to work very hard to narrow down the differences.” Kim also said, “My point of view is that as long as U.S. troops are stationed in the ROK, we must not expect too many positive developments in these peace talks.” The article said that unnamed diplomats have suggested that the fact that the DPRK is chairing this round could make progress difficult. Qian Yongnian, the head of the PRC delegation, stated, “It’s a very complicated matter. We’re trying to solve a problem that has been left over by history. So we can’t hope to get it settled in the next few days.” Christian Dunant, head of the Swiss team hosting the talks, stated, “International expectations for tangible progress in your talks are high. My country is convinced that such progress is possible in this forum.” ROK delegation head Park Kun-woo said that the talks were “on schedule.” Unnamed diplomats said that they hoped Tuesday’s meeting would formalize an agreement to assign two subcommittees the separate tasks of establishment of a peace regime and tension reduction measures.

3. DPRK Defector

The Associated Press (“NKOREA DIPLOMAT SAID SEEKING ASYLUM,” Seoul, 01/19/99) reported that an anonymous high-ranking ROK Foreign Ministry official on Tuesday confirmed media reports that the US has informed the ROK that a mid-ranking DPRK diplomat in Germany is seeking asylum in the US. News reports on Monday identified the defector as Kim Kyong-pil and his wife, Kim Kum-sun. The reports said that the couple was under the protective custody of US authorities in Germany pending safe passage to the US. The Yonhap News Agency said that Kim decided to defect after being reprimanded for his poor performance in earning foreign currency. The German Foreign Ministry said that the DPRK mission in Berlin, which operates out of the PRC Embassy, reported that one of its diplomats has disappeared.

4. US Defense Secretary’s Asian Trip

Reuters (“N KOREA SLAMS DEFENSE SECRETARY’S ASIA TRIP,” Tokyo, 01/19/99) reported that the DPRK’s Korean Central News Agency (KCNA) on Tuesday criticized the recent visit to the ROK and Japan by US Defense Secretary William Cohen. KCNA stated, “His junket showed that the U.S. moves to isolate and stifle the DPRK militarily are getting more reckless from the beginning of the year, assuming a new dangerous aspect.” It added, “The U.S. hawks should know that if they think they can survive a nuclear war in the Korean peninsula kindled by them, it would be a serious mistake.”

The Los Angeles Times carried an analytical article (Tom Plate, “CONTAINING NORTH KOREA’S DANGEROUS VOLATILITY,” 01/19/99) which said that the key to security on the Korean peninsula is the “active and constructive involvement” of Japan and the PRC. US Defense Secretary William Cohen said that “Japan … is starting to reach out” diplomatically. Cohen added, “[Japanese] Prime Minister [Keizo] Obuchi is very positive about the new [US-Japan defense cooperation] guidelines. But at the same time, it will be very difficult to persuade the Diet to fund the KEDO (Korean Peninsula Energy Development Organization) plan if there is another incident. Any new missile firing would generate domestic political pressure in Japan to withdraw from the program.” He added, “How do you handle the North Koreans? You can suggest options or opportunities to them but you have to be careful and avoid linkage to compensation. You have to continue to talk to them and hope that they see the light. This will not happen overnight. They are very isolated.” He added, “The good news is, the North Koreans, despite everything, are still talking.” Cohen said that the PRC is crucial to dealing with the DPRK. He stated, “They don’t want to see North Korea go nuclear or develop longer-range missiles, either. And they don’t want to see Japan develop their own missile systems. There’s more and more contact between China and the Republic of [South] Korea. This is a positive development. Everyone feels we have to continue to engage with China.” Cohen did not foreclose the possibility of a further US buildup if “the Agreed Framework falls apart, for whatever reason. If they suddenly were to become more provocative, then we’d respond. On this, I spent a lot of time with the South Koreans, including President Kim [Dae-jung].” Cohen argued that Kim’s sunshine policy toward the DPRK is both pragmatic and courageous. The article said that the US Congress has given the Clinton administration a June 1 deadline to inspect a suspect underground construction site in the DPRK.

5. ROK Missile Development

Reuters (“COHEN ALLOWS S.KOREA TO DEVELOP LONG-RANGE MISSILES,” Seoul, 01/15/99) reported that an ROK defense ministry spokesman said Friday that US Defense Secretary William Cohen gave the ROK approval to develop longer-range missiles. The spokesman said that, in a meeting with ROK Defense Minister Chun Yong-taek, “Cohen approved the development of longer-range missiles in a positive and favorable manner.” The spokesman added, however, that the two ministers differed on their views over the development procedures. He said, “The United States demanded South Korea guarantee transparency in its development of longer-range missiles, whereas South Korea said it would report its development after deployment of the missiles. The two sides will continue to negotiate.” Cohen stated, “We have reached an acceptable accommodation on the needs of the Republic of Korea to deal with the situation as far as the threats posed by the North. And that agreement is satisfactory with the United States.”

6. DPRK Rocket Launches

Pacific Stars And Stripes (Richard Roesler, “NO SIGNS NK PREPARING MISSILE LAUNCH, PRUEHER SAYS” Tokyo, 01/20/99, 1) reported that Admiral Joseph Prueher, head of the US Pacific Command, said Monday that the US has seen no evidence of preparations by the DPRK for another rocket launch. Prueher stated, “Right now we don’t see any signs of them doing it, but I wouldn’t rule it out. We would try to discourage them from doing it.” Prueher said that the DPRK’s previous rocket launch, in his opinion, was either a way to bolster its international missile sales or a show of strength in a nation that has few things besides its military to point to. He argued, “It’s beggaring the country, what they spend on the military. My opinion is that that decision to launch the missile, based on our standards, was irrational. I think it did them long-term harm.” He added that the US wants the DPRK “to rejoin the group of responsible and hopefully prosperous nations. They have a long way to go.” Prueher also stated, “The U.S./ROK military alliance is a defensive alliance for protection for the South…. I don’t want to get into the war plan part of it, but it has no initiating phase on the part of the U.S. and the ROK. It is defensive and it is reactive, with the reaction to an action taken by the North.” [Ed. note: This article was one of the top stories in the US Department of Defense’s Early Bird news service for January 19.]

7. Remains of US Servicemen from Korean War

USA Today (Barbara Slavin, “U.S. PRESSES CHINA ON MIAS,” 01/19/99, 7) reported that Bob Jones, director of the US Defense Department’s office for POW-MIA affairs, arrived in Beijing on Tuesday to seek the PRC’s help in accounting for US military personnel missing from the Korean War. The PRC has thus far rejected US requests for access to veterans, military museums, and other sources of information. Jones stated, “We’ve not yet had a constructive response from them. I’m disappointed … but I’m always hopeful. My job is to help them understand why we consider this one of our highest national priorities.” Donna Knox, director of the Coalition of Families of Korean and Cold War POW/MIAs, stated, “The Chinese are the key. The Chinese controlled the battlefields from December 1950 until the end of the war. They controlled the POW camps. They would know about people taken to China and Russia. But they are stonewalling.” University of Chicago Professor Bruce Cumings noted that some Russian and East European archives have been opened recently because “the Soviet Union collapsed, but the Chinese state didn’t. Access to Chinese archives is still a very sensitive thing.” Some analysts said that one reason that the PRC is reluctant to aid the US on this issue is that it sees no benefit to releasing what could be damaging information. They also pointed out that the current leaders of the PRC military were mid-level officers during the Korean War, perhaps making any revelations particularly sensitive. David Fortune, a former prisoner of war in a PRC-run camp, stated, “They have a lot to hide.” He said, “They would not even let American and British doctors among the prisoners treat us. Especially in the winter of 1951, so many prisoners died.” Representatives of some veterans’ organizations said that PRC cooperation could improve its negative image in the US in regard to human rights. [Ed. note: This article appeared in the US Department of Defense’s Early Bird news service for January 19.]

8. PRC-Taiwan Talks

Reuters (“TAIWAN SAYS OFFICIALS INVITED TO VISIT CHINA,” Taipei, 01/15/99) reported that Taiwan’s Straits Exchange Foundation said in a statement on Saturday that the PRC had invited its negotiators to visit in late February or early March to prepare for a visit to Taipei by chief PRC negotiator Wang Daohan. The statement said, “We on Friday received a letter from the Association for Relations Across the Taiwan Strait, which said that Wang will visit Taiwan at an appropriate time.” It added, “We reiterate our welcome to Mr. Wang’s visit, and are willing to arrange talks by appropriate staff levels between the two sides.”

9. Taiwanese Submarine Development

The Associated Press (“TAIWAN BOLSTERS SUBMARINE FLEET,” Taipei, 01/19/99) reported that the United Daily News said Monday that Taiwan will purchase and outfit six to ten submarines based on German and US technology. The first of the submarines is expected to be launched in 2005. The craft will be outfitted with sonar, weaponry, and other on- board systems from the US and Europe by the Taiwanese Defense Ministry’s Chungshan Institute of Science and Technology and the China Shipbuilding Corp. [Ed. note: This article appeared in the US Department of Defense’s Early Bird news service for January 19.]

10. South Asian Missile Tests

The Associated Press (“U.S. CONCERNED ABOUT POSSIBLE MISSILE TESTS BY SOUTH ASIAN RIVALS,” Washington, 01/15/99) reported that US State Department spokesman James P. Rubin expressed concern on Friday over recent press reports in South Asia predicting possible tests of ballistic tests by India and Pakistan. Rubin said that the Clinton administration has urged both sides to exercise restraint and “to avoid inflammatory actions that would heighten tensions and fuel a missiles arms race.” Rubin said that missile tests would not be helpful to efforts to reduce tensions and build confidence through dialogue, nor would they help US efforts to promote reconciliation. He added that the US embassies in the two countries have raised concerns on the issue, and that US Deputy Secretary of State Strobe Talbott will be visiting both countries later in the month to discuss the matter. Rubin said that the prospect of a nuclear exchange between India and Pakistan was “horrifying,” adding that increased nuclear and missile capabilities by the two also raises the possibility of related technologies spreading to countries hostile to the US.

11. Russian Nuclear Safety

The New York Times (David E. Rosenbaum, “CLINTON TO PROPOSE SPENDING MORE TO CURB RUSSIAN NUCLEAR THREAT,” Washington, 01/19/99) reported that US National Security Council spokesman David Leavy said that US President Bill Clinton in his State of the Union message on Tuesday night would call for a substantial increase in US financial assistance to Russia to minimize the threat posed by the Russian nuclear arsenal. Leavy stated, “The president believes it’s in the national security interest of the American people that we work with Russia and other former Soviet countries to reduce the risk that materials, technology and expertise for weapons of mass destruction fall into the hands of rogue nations or terrorists.” Another anonymous senior official said that the president was concerned about “people trying to sell what has value.” He stated, “As Russia is in a period of greater economic distress, it is even more in our interest to accelerate these programs.” Administration officials said that the president would propose spending US$4.2 billion over the next five years, a 68 percent increase. Michael Krepon, president of the Henry L. Stimson Center, said that the increased spending to be proposed by the president would be “a good down payment to solve an important problem.” Asked how much it would cost to solve the problem, Krepon replied, “There isn’t a soul who knows the answer.” [Ed. note: This article was one of the top stories in the US Department of Defense’s Early Bird news service for January 19.]

12. US Missile Defense

Defense Week (John Donnelly, “NMD COST ESTIMATE UP 30 PERCENT SINCE LAST WEEK,” 01/19/99, 1) reported that Air Force Lieutenant Colonel Richard Lehner, a spokesman for the Ballistic Missile Defense Organization (BMDO), confirmed Friday that the US Department of Defense’s estimate of the cost to develop and deploy a National Missile Defense (NMD) system has increased 30 percent since last week, from about US$10 billion to US$13 billion. Lehner said that the previous figures do not take into account changes to the program that have occurred since the estimate was drawn up in 1996. US officials added that US President Bill Clinton might underscore his commitment to the NMD program in the State of the Union address on Tuesday evening. Colonel P.J. Crowley, spokesman for the National Security Council, stated, “We are putting money in the budget to make a deployment decision as early as the summer of 2000. The ultimate costs will depend on the maturity of the technology at that point and the architecture of the NMD program. We’ll have to wait and see before we know precisely what the system will cost.” Robert Bell, a national-security adviser to President Clinton, said that, contrary to press reports earlier this month, the US will spend about US$10 billion, rather than US$7 billion, from fiscal 2000 to 2005 on spending for NMD. [Ed. note: This article appeared in the US Department of Defense’s Early Bird news service for January 19.]

II. Republic of Korea

1. DPRK Defectors

Chosun Ilbo (“DPRK OFFICIAL IN GERMANY SEEKING U.S. ASYLUM,” Seoul, 01/18/99) reported that Commerce attache Kim Kyung-pil of the DPRK’s trade representative office in Germany has sought political asylum in the US. Kim, accompanied by his wife, is currently under the protection of US authorities, sources said. The Kims fled the trade office last Wednesday and turned themselves over to US authorities in Berlin. The ROK government was informed of the defection over the weekend on January 16. An ROK government official believes that Kim belongs to the Unification Front Department, one of the DPRK organizations dealing with ROK affairs under the DPRK Workers’ Party. The Unification Front Department is the agency that specializes in anti-ROK activities overseas. Kim was known to have been serving in the trade office since 1995. The office was formerly the DPRK embassy to East Germany. While the motive of the Kims’ defection is not yet confirmed, the couple is following through with political asylum procedures and their final destination will be decided soon. Observers speculate that the official may have decided to flee from the DPRK because he was severely reprimanded by his government in a recently held meeting of commercial attaches stationed abroad for sluggish foreign exchange earnings.

Korea Herald (“DPRK FAMILY OF THREE DEFECTS TO ROK,” Seoul, 01/18/99) reported that a DPRK family of three arrived in Seoul on Saturday after fleeing from their homeland, intelligence officials said. Han Son-kyu, 47, an engineer who worked at state-run Kim Chaek shipyard, flew in from a third country with his wife, Kim Hyon-Sook, 44, and daughter Han Eun- joo, 17, said the officials. The agency uses the term “third country” to avoid naming the PRC, which is required by treaty with the DPRK to return defectors to their homeland. Han’s wife Kim was an editor at a publishing company, they said. The agency said it was questioning the family, but gave no further details. ROK officials believe that hundreds, perhaps thousands, of DPRK defectors are in hiding in the PRC waiting to get into the ROK.

2. ROK-Japan Fishing Talks

Korea Times (“FISHING TALKS WITH JAPAN FACE TROUBLES,” Seoul, 01/18/99) reported that the ROK and Japan are expected to postpone their fishing agreement scheduled to take effect on January 22. According to the Ministry of Maritime Affairs and Fisheries (MOMAF) on Sunday, the two nations have failed to mediate differences on major pending issues at official meetings held in the MOMAF building in southern Seoul on January 15-16. “We have talked with the Japanese officials on key agendas but failed to come up with a conclusion due to conflicting opinions on some matter,” said a ministry official. MOMAF plans to hold another meeting this week, but the implementation of the agreement is likely to be postponed if the two sides cannot rectify the situation. “It can be considered for the two nations to apply temporary measures for the time being should the two nations fail to reach agreement in this regard in order to prevent possible fishing disputes from taking place,” said the official. The ROK and Japan discussed agendas pertaining to fishing quotas and the number of fishing vessels in the exclusive economic zone (EEZ), fishing territories, and periods in areas other than the EEZ.

3. Mount Kumgang Tour

Korea Herald (“HYUNDAI EXPECTS 4.9 MILLION TOURISTS TO VISIT MT. KUMGANG BY 2004,” Seoul, 01/19/99) reported that the Hyundai Group plans to attract 4.9 million tourists to its Mt. Kumgang tour by the year 2004, and bring in US$3.79 billion in revenues. Hyundai will invest a total of US$397 million by the end of next year to develop Mt. Kumgang on the DPRK’s east coast into an international tourist attraction with facilities including hot springs, ski resorts, golf courses, condominiums, hotels, and beaches. Hyundai will also establish “Asan Co.” with an initial paid-in capital of 100 billion won to promote the mammoth development project later this month, a senior official of Hyundai said. Asan is the pen name of Chung Ju-yung, founder and honorary chairman of the Hyundai Group. Kim Yoon-kyu, head of the Hyundai’s DPRK business team, was appointed as the first president of Asan Co. on Monday. Seven Hyundai subsidiaries will participate in Asan Co. as major shareholders. Hyundai will introduce two more deluxe cruise ships in the first half of the year and spend a total of US$390 million to develop the Mt. Kumgang tourism business. Of the total, Hyundai will mobilize US$100 million from domestic and foreign business partners and another US$100 million through the issuance of asset-backed securities and stocks, he said.

III. Russian Federation

1. RF-Japanese Relations

Izvestia’s Vasiliy Golovnin (“TOKYO IS SENDING SIGNALS,” Tokyo, 1, 01/14/99) reported that a Tokyo-published newspaper said that Japanese officials were drafting a new compromise proposal for the South Kuril islands. Japan allegedly plans to propose signing of just some “intermediate agreement” in 2000 to establish the sovereignty over Habomai and Sikotan islets, while the future of larger Kunasir and Iturup isles would be solved in a “real peace treaty” to be signed at some indefinite future date. In the author’s opinion, the news could mean that, in view of the pending parliamentary and presidential elections, Japan has decided to return at least some of the territories it claims. Soon after the above-mentioned news however, some leading newspapers published materials, again with reference to governmental sources, claiming that Japan will reject proposals previously made by the RF and will “toughly demand that its rights to South Kurils be confirmed in a peace treaty.” The Japanese government denounced both types of reports as “journalistic inventions.” Izvestia’s author noted “a growing irritation” in Japan, especially after the RF’s freeze on debt servicing. Simultaneously the speeches last year about an RF-Japan partnership are not as popular in Japan. Facing the DPRK’s stubbornness and missile tests, Japan habitually turns back to a one-sided orientation toward the US. On January 21 Japanese Deputy Foreign Minister Minoru Tamba will have consultations with his RF Colleague Grigoriy Karasin in Moscow on border delimitation and joint economic development of the South Kurils.

2. PRC Economic Situation

Izvestia’s Yuriy Savenkov (“WILL THERE BE A BIG BANG IN CHINA?” Moscow, 5, 01/15/99) published an interview with Professor Vilya Ghelbras, an expert on the PRC, focused on the PRC economic situation. Ghelbras argued that “the Asian crisis has reached China, exports are falling, and capital inflow is declining.” The growth rate, in his opinion, is some 5-7 percent, rather than the official 9 percent. Comparing the PRC’s 9- month foreign trade balance of US$31 billion and the fact that its gold and currency reserves stayed at the same US$140 billion level as in late 1997, Ghelbras concluded that the foreign currency earnings have been spent fully to preserve the yuan exchange rate and avoid a devaluation. He quoted PRC Chairman Jiang Zemin as saying recently: “By rejecting a devaluation, we pay a high price and our risk is high. But I am not 100 percent sure about the future developments.” Ghelbras speculated that ambitious plans to modernize state sector enterprises, to upgrade the banking system, and to reduce the “astronomical” number of officials and radical reform in general, were put to the background and that British economist John Keynes with his increased state spending to keep mass unemployment at bay was gradually emerging as a new “great helmsman” for the country. Ghelbras pointed out in particular, that the PRC would try to avoid a devaluation of the yuan by all means, but the costs of servicing the domestic debt might equal the state revenue in a not- distant future. However, he said, “we cannot guess” whether and when there will be a big financial bang in the PRC.

3. Korean Peninsula Situation

Nezavisimoye voyennoye obozreniye’s Vadim Solovyov (“ARMED CHALLENGES OF THE NEW YEAR,” Moscow, 1, 2, 01/15-20/99 #1(124)) published his interview with Dr. Terence Taylor, Director, London International Institute of Strategic Studies. Dr. Taylor, among other issues, dwelled on the world regions where armed conflicts might erupt. Among those, he named the Korean peninsula: “The missile (medium- and long-range) program of North Korea is continued to be developed, and recently there were tests in the Sea of Japan. In Pyongyang, they openly declare that they earn hard currency by means of the transfer of technologies to Pakistan and Persian Gulf countries. There is evidence that North Korea builds missiles of an even greater range. Your readers could have heard about Yongbyon construction used, as the US suspects, for the purposes of military programs, including possibly nuclear ones, about which North Korea does not want to talk. So, in brief, the Korean peninsula is a difficult region.”

4. Mt. Kumgang Tour Project

Izvestia’s Gennadiy Charodeyev (“PYONGYANG SURRENDERS TO TOURISTS,” Moscow, 3, 1/16/99) reported that for the first time in half a century an ocean-going vessel “Hyundai Kumgang” with tourists and journalists on board, visited the DPRK port of Kumgangsan on DPRK leader Kim Jong-il’s personal permission. It is a historic event, considering the fact that until now only 120 individual permissions to visit the DPRK were issued to ROK citizens. This time, 1,000 tourists and dozens of journalists landed on DPRK soil at once. Yet 15 journalist and officials were forbidden to do so because of their allegedly “hostile attitude to Pyongyang regime” and “spying” intentions. Also, DPRK authorities warned that the whole plan of visits initiated by Hyundai founder Chung Ju-yung would be at a risk unless the DPRK gets its first US$24 million in payment for the tourist trip. In its turn, Hyundai demanded to be granted exclusive rights to arrange such events for the next 30 years. In 6 years the DPRK might earn a total US$940 million from that joint tourist project.

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