In and Around North Korea: 25 - 31 December 2008

• The fate of Christopher Hill, U.S. lead negotiator in the North Korean nuclear talks, is attracting keen interest in South Korea as the Bush administration nears the end of its term. The Korea Herald reported that analysts and diplomats in Seoul initially expected that Hill would leave his position with the launch of Barack Obama administration; however, according to a Seoul diplomatic source, “The new U.S. government is likely to create a new ambassadorial post solely responsible for tackling the North Korean nuclear issue. Hill is among the strong candidates for the new post." There has not been any confirmation to the validity of this report.

• U.S. New and World Report reported in its latest December issue that it appears likely that North Korea has high hopes for the incoming Barack Obama administration in Washington. The reclusive regime may be under the impression that it could get better deals and incentives, including more economic and fuel aid for continuing to dismantle its nuclear programs, from the new progressive U.S. government, according to the report.

• The Institute of Foreign Affairs and National Security, a think tank under the ROK foreign affairs ministry, stated in a report that Pyongyang will take a wait-and-see approach to determine the policy of the Barack Obama administration but then may raise the threat of missiles and a second nuclear weapon test in order to gain incentives. Such a strategy, however, is unlikely to draw compromises from Washington as US President-elect Obama may then toughen his position, it said. The new president will also be occupied with the ongoing economic crisis and pressing foreign policy issues such as the war in Iraq and Afghanistan and Iran's own nuclear ambitions, it said. "The Obama administration is expected to be strongly determined to hold sincere and direct negotiations, but it will also be very strict on the principle of denuclearization," the report said.

• A senior North Korean diplomat warned Monday that his government will suspend disablement of its nuclear facilities unless Japan fulfils its obligation to provide North Korea with energy assistance under a six-party deal. ''Unless Japan implements the heavy fuel assistance, the (disablement) activities will be suspended,'' the Beijing-based diplomat, who is a participant in the six-party talks, was quoted as saying by Japanese parliamentarian Yoshihiro Kawakami after their meeting in the Chinese capital.

• On 28 Dec, KCNA reported Kim Jong-il inspected two military units. On 29 Dec, KCNA reported Kim attended an orchestra performance. According to the ROK Ministry of Unification data, Kim appeared in public more in December than he has before – 13 times, which is nearly twice as many monthly visits as in 2007. North Korea reported 97 inspection tours by Kim as of 29 Dec, compared to 87 in 2007, the ministry said. This year's visits were concentrated in the first and last months of the year.

• The Institute for National Security Strategy, a subsidiary of the National Intelligence Agency, reported that North Korea is expected to hold general elections for its legislature in July and August 2009 to replace senior politicians with up and coming ones, preparing for an era without its supreme leader Kim Jong Il. The report also predicted the North will create another ideology to prepare itself for a post-Kim era and its military-first ideology will gradually lose support.

• Yonhap cited several North Korea experts in a report that the new U.S. administration may move faster than expected to deal with North Korea in its inaugural year, but Pyongyang's attitude will set the tone for the overall process. The current stalemate in the six-way talks on the North's nuclear program is almost certain to be inherited by President-elect Barack Obama, who will enter the White House in just three weeks. The Center for American Progress, an emerging think tank connected to the Obama camp, recently proposed that Obama send a presidential envoy to Pyongyang within 100 days of taking office. Washington pundits point to Albright, former Secretary of State Henry Kissinger, and retired Defense Secretary William Perry as possible candidates.

• STRAFOR, a private intelligence-consulting firm based in Austin TX, reported on Chinese views and reactions of three likely scenarios for how a North Korean succession would play out when Kim dies.

• In the first scenario, Kim falls into a state of decline; he cannot carry out the day-to-day functions of the government, and winds up operating from behind the scenes through proxies. Beijing’s concern is that this scenario could see wild policy swings from Pyongyang as various proxies compete for favor and influence with the ailing Kim.

• The second scenario, which Beijing views as the least likely, is one in which Kim’s death triggers a rift in the security apparatus in North Korea. In this worst-case scenario, China would seal its border with North Korea and potentially even intervene militarily to “stabilize” North Korea under the auspices of the United Nations.

• The third scenario, which China sees as most likely when Kim dies — and the one for which Beijing has begun taking steps in preparation — is the establishment of a military leadership that places one of the Kim sons in a position of figurehead power. In this case, Beijing assesses the chances of unrest spilling onto the streets as low.

• Henan Yima Coal Mining Group, a major coal miner in Central China's Henan province, plans to invest in a 10-million-ton coal mine and a 1.2-million-ton coal chemical project in North Korea. Yima Group reached an agreement on Dec 12 with the Anju Coal Mining Association, North Korea’s largest coal mining enterprise with nearly ten coal mines, to develop the two projects, according to a statement on its website.

• The start of mobile phone service in Pyongyang, North Korea, which was planned for spring 2008, was delayed for over half a year due to the development of a wiretapping system, a Beijing diplomatic source revealed to Mainichi Shimbun. It is believed that the North Korean authorities aimed to contain the leakage of top secrets and criticisms toward the regime through the development of the wiretapping system, and thoroughly implement the management of the service so that it would not affect the Kim Jong-Il regime.

• On 27 Dec, the Voice of America reported food aid from the US government will arrive in North Korea on 03 Jan 09, quoting a NGO official. The official, who asked to remain anonymous, was quoted as saying that the “Easter Star” was en route to the reclusive country with 21,000 metric tons of corn and will soon arrive at the port of Nampo. It will be the sixth shipment of the 500,000 metric tons of promised food aid. In May, the US agreed to resume the aid in June for 12 months. The US has given 143,000 metric tons of food assistance so far, State Department spokesman Sean McCormack told reporters in Washington last week. The NGO official also said 4,940 metric tons of a corn-soya blend and corn oil will be separately shipped to North Korea in mid-January as the seventh shipment, and NGOs will distribute them in the same regions.

• The State Department said on 30 Dec that the latest batch of humanitarian food aid will arrive in North Korea on 2 Jan despite friction over the issuance of visas for Korean speaking U.S. staff monitoring food distribution. "The lack of sufficient Korean speakers on the WFP program is one of the key issues in ongoing discussions," it said. "The issuance of visas for Korean-speaking monitors for the WFP program is another issue currently being discussed, along with other technical issues." The spokesman reiterated that the U.S. government needs to assure transparency in the distribution of the food aid amid allegations that much of the food aid might have been funneled to the military and the power elite. Millions are said to be suffering from food shortages in the North due to chronic floods and failed policies.

• The US intelligence community has concluded that North Korea could export intercontinental ballistic missiles or technology to Iran over the next year. North Korea has been assisting the medium- and intermediate-range missile programs of Iran and Syria. Officials said Pyongyang has also sought to export ballistic missile systems to Libya, Sudan and Yemen.

• A Japanese public security insider says, "The United States is now strictly monitoring the exquisitely made counterfeit $100 bills, which first appeared as counterfeit bills commonly known as 'Super K.' "That is because the United States cannot deny the possibility that, not only simply to make money, North Korea will carry out 'counterfeit currency terrorism' to bring down confidence in the dollar by taking advantage of this lack of confidence in the dollar, and scatter around a large quantity of counterfeit $100 bills."

• A ROK government official said on 30 Dec, the ROK is considering offering incentives for North Korea in exchange for the return of war prisoners and civilians held in the North. More than 1,000 South Koreans -- soldiers captured during the 1950-53 Korean War and fishermen abducted during the Cold War era – are still detained in North Korea, Seoul officials claim. Pyongyang has denied holding any of them against their will. Seoul has repeatedly proposed a cash deal with Pyongyang for their return, but it has not been accepted. In a 2009 policy briefing, the Unification Ministry plans to propose that Seoul renew its efforts for their return, said ministry spokesman Kim Ho-nyoun.