Korean Peninsula Today, 05 August 2009

Today’s highlights:

1) Kim Jong-il ordered the release of the two American journalists who had been held since March after Kim met with the former US President Clinton in Pyongyang. The former President Clinton reportedly offered an apology to Kim Jong-il for the two journalists’ “hostile acts against North Korea”
and 2) a senior South Korean official stated that North Korean economy is on the brink of collapse due to the ongoing 150-day battle and this is one of the reasons why North Korea has recently wanted to engage in bilateral talks with the US.

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KCNA Carries Report Summing Up Clinton's Visit; DPRK Pardons Detained US Journalists (KCNA)

Pyongyang – A report on Former U.S. President Bill Clinton's visit to the Democratic People's Republic of Korea is as follows: Former U.S. President Bill Clinton and his party visited the Democratic People's Republic of Korea from August 4 to 5.

Kim Jong Il, general secretary of the Workers' Party of Korea and chairman of the National Defence Commission of the DPRK, met with Bill Clinton and his party.

During their stay Clinton and his party paid a courtesy call on Kim Yong Nam, president of the Presidium of the Supreme People's Assembly.

Clinton expressed words of sincere apology to Kim Jong Il for the hostile acts committed by the two American journalists against the DPRK after illegally intruding into it. Clinton courteously conveyed to Kim Jong Il an earnest request of the U.S. government to leniently pardon them and send them back home from a humanitarian point of view.

The meetings had candid and in-depth discussions on the pending issues between the DPRK and the U.S. in a sincere atmosphere and reached a consensus of views on seeking a negotiated settlement of them.

Kim Jong Il issued an order of the Chairman of the DPRK National Defense Commission on granting a special pardon to the two American journalists who had been sentenced to hard labor in accordance with Article 103 of the Socialist Constitution and releasing them.

Clinton courteously conveyed a verbal message of U.S. President Barack Obama expressing profound thanks for this and reflecting views on ways of improving the relations between the two countries.

The measure taken to release the American journalists is a manifestation of the DPRK's humanitarian and peace-loving policy.

The DPRK visit of Clinton and his party will contribute to deepening the understanding between the DPRK and the U.S. and building the bilateral confidence.

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Kim Jong Il Meets With Bill Clinton on 4 Aug (Korean Central Broadcasting Station in Korean)

Great leader Comrade Kim Jong Il received former US President Bill Clinton.

Comrade Kim Jong Il, Workers Party of Korea [WPK] general secretary and DPRK National Defense Commission [NDC] chairman, who is the great leader of our party and people, received former US President Bill Clinton and his party, who are visiting our country, on 4 August.

First Vice Foreign Minister Kang So'k-chu and Kim Yang Gon, WPK Central Committee department director, attended.

At the meeting, Bill Clinton respectfully conveyed to Comrade Kim Jong Il a verbal message from Barack Obama, president of the United States of America.

Great leader Comrade Kim Jong Il expressed his gratitude for this and welcomed Bill Clinton's visit to our country. He then had a sincere talk with him.

During the reception, there were broad exchanges of opinion on issues of mutual interest.

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N. Korean leader receives Obama's message from Clinton: state media (Yonhap)

SEOUL – North Korean leader Kim Jong Il met with visiting former U.S. President Bill Clinton in Pyongyang on Tuesday and received a "verbal message" from the U.S. president, the North's state media said.

Clinton arrived in North Korea earlier Tuesday in a trip apparently aimed at winning the release of two detained American journalists.

"Bill Clinton courteously conveyed a verbal message of U.S. President Barack Obama to Kim Jong Il," the official Korean Central News Agency said.

"Kim Jong Il expressed thanks for this. He welcomed Clinton's visit to the DPRK (North Korea) and had an exhaustive conversation with him," it said.

The White House, however, denied sending a message through Clinton. "That's not true," its spokesman Robert Gibbs told reporters.

North Korea's media report said there was "a wide-ranging exchange of views on the matters of common concern" between Kim and Clinton.

North Korean Foreign Minister Kang Sok-ju and a Workers' Party department director, Kim Yang-gon, attended the meeting, it said.

The National Defense Commission, which oversees the country's military and is chaired by Kim Jong Il, later hosted a dinner for Clinton and his entourage at the state guest house, according to the media report.

Laura Ling and Euna Lee, female reporters from the San Francisco-based media group Current TV, were arrested March 17 near the North Korea-China border while reporting on North Korean defectors. They were sentenced to 12 years of hard labor by the North on charges of illegal entry and hostile acts.

Current TV was co-founded by Al Gore, who was Clinton's vice president.

Clinton's surprise visit raised hopes for renewed momentum for dialogue and a breakthrough in the long-stalled nuclear disarmament talks.

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N. Korean Economy 'on Brink of Collapse' (Chosun Ilbo)

North Korea has press-ganged people into a "150-day struggle" of farm or factory work since April to produce results for leader Kim Jong-il's heir apparent Jong-un, but the project has backfired and brought North Korea's fragile economy to the brink of collapse, experts said Monday.

The official Rodong Sinmun daily wrote that on the occasion of the struggle's 100th day on July 29, "phenomenal events are occurring and miraculous results are being produced to signify the building of a powerful nation" across North Korea. But the actual conditions of the 150-day struggle are reportedly quite the reverse.

A North Korea expert in China said that day police guards round up anyone the moment they see them on streets and send them to the countryside, "but there they loaf about or lie on the bare ground."

Since the early 2000s, North Korea has effectively turned into a barter society where people can survive if they have anything to peddle or till a vegetable garden on their own. The forced collective farm or factory work is spreading a sense of crisis among North Koreans that they could starve to death.

Kim Jong-il waged a "70-day struggle" after he was chosen as the heir apparent in 1974. In 1980 when he became the official successor, he supervised a "100-day struggle." Then, too, the North claimed the economy was making a leap forward. But Prof. Cho Young-ki of Korea University said, "This paved the way for the North Korean economy to collapse completely by distorting the distribution of resources."

There are fears that the effects of the current 150-day struggle will be more disastrous than in the 1970s and 80s. Since 1990, when the Soviet communism collapsed, North Korea has relied more on the nascent market and South Korean aid and trade with China than on the planned economy, but now South Korea has suspended aid, and China has been wary of the North since its second nuclear test.

Trade volume between the North and China between January and May this year stood at US$833.3 million, down 5.7 percent on-year. "If the North attacks the market with a retrogressive 150-day struggle, the North Korean economy will plunge into a deeper abyss," said Prof. Nam Joo-hong of Kyonggi University.

Besides, international economic sanctions enforced after the nuclear test are tightening.

A senior South Korean government official said, "In a sense, one of the reasons why North Korea has recently wanted to engage in dialogue with the U.S. is that the North Korean consumer economy is collapsing."

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North Korean coal exports to China hint at barter (Reuters)

BEIJING/SEOUL – North Korean coal shipments to China have risen steadily this year, hinting at a deepening barter trade that makes it more difficult for the international community to pressure the reclusive state.

North Korea's neighbors, and the United States, have been tightening sanctions to bring the country back to the negotiating table and contain its nuclear ambitions. Former U.S. president Bill Clinton arrived in Pyongyang on Tuesday to seek the release of two American journalists.

Chinese trade data for June showed no cut-off in normal trade shipments to and from North Korea after a series of missile and nuclear tests in May. Chinese experts argue that too strong a stance by China would lose it what leverage it has with its ally.

On the contrary, rising coal exports could reflect increasing investments by Chinese firms in North Korea, in which supply of equipment and capital is repaid in kind.

"There are mines there, under production by big Chinese companies. We give them oil, equipment, everything, they give us ore," said a Chinese trade official. "It's a kind of barter."

In the first half of this year, North Korea more than doubled its exports of anthracite exports to China to 2.36 million tons (111 percent increase). That far outpaced the 45 percent rise in China's overall anthracite imports, as importers bought cheap international coal.

Coal shipments from North Korea have leapt each month this year, with the exception of a slight retreat in May.

China imported 646,078 tons of coal from North Korea in June, the highest in recent years, a more than threefold (244 percent) increase from June 2008.

Coal made up 68 percent of North Korean exports to China in the first half of 2009, according to Chinese customs data.

Crude oil shipments to North Korea, steady since December at about 50,000 tons a month, slipped 6.7 percent year-on-year to 46,673 tons. Crude shipments in the first half were down 3 percent, at 294,084 tons.

None of those goods is covered by the sanctions, meant to cut off North Korean access to luxury goods and weapons components.

"I think sanctions have been effective to some extent, but I doubt they have done enough to change North Korea's attitude," said Masao Okonogi, a Korea expert at Keio University in Tokyo.

JOINT VENTURES

North Korea does allow foreign joint ventures the right to mine, and pointed to mining earlier this year as a key area of development.

Chinese companies are usually the partners in such ventures, although other foreigners have also invested.

They might take payment in ore, including coal, for building a "joint venture" factory in the North and the roads and bridges leading to it, said Park Byung-kwang of the Institute for National Security Strategy (INSS) in Seoul, affiliated with spy agency National Intelligence Service.

Even Chinese state-owned investors have complained of the murkiness of North Korean regulations and of North Korean requirements that they invest in local industry rather than simply investing to obtain raw materials.

Such investments could still be used to pressure North Korea, should Beijing so choose, but the involvement of state-owned partners means there are vested interests, and sunk capital -- harder to cut off than trading shipments.

South Korean media said last week that Beijing had suspended at least one joint mining project with a North Korean firm blacklisted under a U.N. Security Council resolution.

"It could mean either Beijing is making a strategic move to pressure the North by putting a stop to it as part of participating in sanctions. This would be an easy move to reverse," said Park, from the INSS.

"On the other hand, it is entirely possible the Chinese firm decided it made little economic sense to continue doing business."

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