India Intelligence Report



   Positive Movement on NK, Many Hurdles Remain

  The United States (U.S.) and North Korea (NK) seem to have resolved a dispute over $25 million of frozen funds, a key point that stopped the progress in negotiations to dismantle the NK nuclear weapons program.



Hot Topics

Indian Economic Reforms
Wheat Import Shows Falling Agri Self-Sufficiency
China:Defense Modernization to Guard Development
Food Bill Passed as Pesticides Makeup Colas
North Korean Nuclear Program
Energy Deficiency
Banking Reforms
Indo-EU Relations


Other Stories

China's Lunar Satellite
China's Non-Energy Focus
Govt Panicking on Wheat
Heidelberg in Gujarat
NABARAD Bonds Worth Rs. 5000 cr
Reliance and Nova Talk JV
SEZs Exports Nearly USD 5B
Textile Exports to Double
The Britannia Breakup
U.S. Trade Court Dismisses Shrimp Anti-Dumping Charges

The United States (U.S.) and North Korea (NK) seem to have resolved a dispute over $25 million of frozen funds, a key point that stopped the progress in negotiations to dismantle the NK nuclear weapons program. U.S. negotiator Christopher Hill said that the six-party talks will now "move on to the next problem" indicating that are "many" more problems with the NK weapons program. U.S. Deputy Assistant Treasury Secretary Daniel Glaser clarified that the frozen funds in a small Macau bank would be transferred into a North Korean account at the Bank of China in Beijing. NK, which proposed this arrangement, has "pledged" to use these funds only for "the betterment of the North Korean people,: for education and humanitarian purposes. A State Department spokesperson confessed that the U.S. will have no means to monitor how the funds will be used. However, newswire reports cite unnamed sources to say that North Korea's top nuclear negotiator Kim Kye-Gwan had promised the work at the Yongbyon reactor would stop as soon as the money was released.

The U.S. had leaned on banks and world governments to freeze NK funds because it has circumstantial evidence of money-laundering and counterfeiting by Pyongyang Government. After last year's shocking nuclear test, the six-nation negotiation process got rekindled again primarily because of Beijing's leadership. On February 13, the six nations agreed on a disarmament agreement gave NK 60 days to shut down its main reactor and its plutonium unit and allow U.N. inspectors to verify the closures. In return, NK was to get energy and economic aid and a possible lifting of financial sanctions starting with the said USD 25 million. While NK is cash-strapped and desperately needs the money, it is more a prestige issue than the money that irks Pyongyang.

Japan agreed to the agreement but also laid many conditions on Japanese hostages and missile tests. Responding to continued Japanese criticism, according to Japan's chief envoy Kenichiro Sasae, Pyongyang questioned Japan's right and "qualifications" and "commitment to meet its requirements" to be part of the negotiations. Tokyo and Pyongyang have been exchanging verbal barbs publicly in the recent weeks. Sasae has said that Pyongyang's question "is not worth a comment" and said that NK's "argument is totally off the mark." Despite this serious dispute, Hill feels that it will not obstruct negotiations but insisted that "Japan is an important country" and urged NK to improve its relations with Japan.

Japan and NK have been talking about normalizing relations and even met in Vietnam earlier this month but emotions ruled the conversation and no progress was really made. Japan has been accusing NK of kidnapping Japanese citizens in the 1970s and 1980s and demanding answers from Pyongyang on their whereabouts. NK has been dismissing these accusations while China, through its envoy Wu Dawei has been counseling both sides to "make joint efforts to overcome" the "difficulties and obstacles." While Beijing has played a positive and leadership role in this set of negotiations, its leaders have been raking up Japanese conduct during World War II and has made little progress over their specific "difficulties and obstacles."

As the six nations race against the April 14 deadline, the negotiations seemed to have gather positive momentum. Whether it will reach its destination, stall, or crash on the way remains to be seen.