BRUSSELS — Next year’s crisis on the Korean Peninsula has come early. The year 2003 was to see an explosive conjuncture of events: a change of regime in South Korea, markedly less sympathetic to engagement with the North than that of current President Kim Dae Jung; the final failure of the United States to deliver the North two promised nuclear- power stations; and the expiry of North Korea’s self-imposed moratorium on missile testing. All were pre-empted by North Korea’s admitting that — aided by Pakistan — it has been engaged in a clandestine program to produce enriched uranium since the end of the 1990s, breaching agreements made with the U.S. in 1994.

The question is, why have North Korea’s leaders triggered such a crisis now? The answer is twofold. First, they see the U.S. as comprehensively failing to deliver technically, politically and militarily on the promises of 1994, and, with Iraq in U.S. sights, an opportunity to negotiate a new comprehensive solution, thus breaking U.S. military hawks’ attempts to neatly sequence action against the three “axis of evil” regimes.

Second, they need international aid. North Korea has taken a series of, almost certainly irreversible, steps toward transforming its command economy into one in which the market plays a central role. The old system of guaranteed food delivered through the People’s Distribution Centers has, since July 1, been superseded by emphasis on producers and production; massive increases in wages are available as an incentive. The old emphasis on equality has been swept away. Now agriculture and industry must be competitive.

Yet these very changes pose a threat. Over the past five years, one in eight of the population has died of starvation. Food production still fails to match demand, and many factories lack fuel and raw materials but not workers. With no work possible, millions now face an even bleaker future. The consequences can only be eliminated by greater, rather than less, aid and assistance.

North Koreans are going for broke. They’ve agreed on a human rights dialogue with the European Union. They have made public a nuclear program so that they can trade it, their missiles and even arms exports for guarantees of system survival and stability. They have finally admitted to abducting a dozen Japanese nationals in a similar attempt to normalize relations with Prime Minister Junichiro Koizumi’s Japan, and now they want to draw the U.S. and the wider international community into the game. As Vice Foreign Minister Choi Su Hon said at a seminar last week in Brussels, North Korea wants to talk.

Back in 1994 the world came closer to a nuclear conflict than at any time since the Cuban missile crisis of 1962. The U.S. believed that the North Koreans had up to five nuclear weapons, made from diverting plutonium from their Russian-designed graphite moderated reactor. Refusing to allow Iraqi-style special inspections by the International Atomic Energy Agency, or IAEA, North Korea announced a suspension of its then-recent decision to adhere to the Nuclear Nonproliferation Treaty.

America’s defense planners prepared for surgical strikes against the North: F-111 aircraft in Okinawa were fueled. North Korea threatened to turn Seoul into a sea of fire. At the last minute, former U.S. President Jimmy Carter intervened directly with North Korean leader Kim II Sung. After long negotiations the two sides signed, in Geneva, a Framework Agreement in which the U.S. promised to construct two light-water reactors in North Korea in exchange for the North’s abandoning its nuclear program. The Korean Energy Development Organization, or KEDO, was to have the first of these reactors on line by the end of 2003 and the second a year later.

The U.S. strong-armed South Korea into committing two-thirds of the $4.5 billion funding required, while $1 billion was to come from Japan. The $500 million funding gap was to be filled by minor contributions from the European Union and others. The U.S. was to provide no direct funding, but until the reactors went on line, it was to supply 500 million tons of heavy fuel oil annually for delivery to North Korea’s aging power stations.

Parallel to this were to be moves toward full normalization of relations with the North and the gradual lifting of economic sanctions that had been in place since the end of the Korean War half a century earlier. In exchange for assurances that it would not be threatened by U.S. nuclear weapons, North Korea was to make ready its nuclear sites for inspection — immediately prior to the delivery of the key nuclear components for the KEDO site — so that the IAEA could establish whether nuclear material had in fact been diverted toward a clandestine nuclear weapons program.

Right from the start, the Framework Agreement was as much honored in the breach as in the observance. The heavy fuel oil flowed in fits and starts. Congress failed to deliver the money for it, and EU funds intended for reactor construction were dubiously diverted to pay for the oil. The project was delayed by Japan, South Korea and, at times, North Korea as a series of incidents soured relations. From the beginning, the North suspected that KEDO was not going to deliver. Senior administrators argued that KEDO was a means of procrastination aimed at waiting out the North’s collapse.

Eight years on, it’s clear that they were right. The construction of the light-water reactors is running seven years late; in fact, it has barely started. All the North Koreans have to show for it is two large holes in the ground and several thousand tons of concrete. Since U.S. President George W. Bush came into office, the U.S. has been demanding early IAEA inspections outside of the Agreement and added a further three years to completion. The U.S. has neither normalized relations nor lifted the embargo, and Bush’s “axis of evil” speech in January reinstated the threat of nuclear strikes against the North.

It is in the world’s interest to resolve this new crisis. The most intransigent will be the U.S., where Congress will not pay. It will not allow new resources, and maybe old ones, to be delivered to the North, even in the unlikely event that Defense Secretary Donald Rumsfeld wants to provide them. Yet the U.S. is now a minor player in KEDO. Any possible resurrection depends on the two key paymasters South Korea and Japan. The EU should take its lead from Seoul and Tokyo, rather than Washington.

On broader security and economic issues, the North Koreans want a comprehensive accord. To end the nuclear program and keep a permanent moratorium on missile testing, the U.S. could launch North Korea’s satellites and compensate it in the short-term for abandoning its only flourishing export trade — missile technology. That would be no different from the U.S. paying the Taliban $40 million in June 2001 to limit opium production.

At the same time, providing assistance to establish new export industries based on North Korea’s mineral wealth makes good sense. The EU and China could help supply the political impetus to overcome U.S. opposition, while South Korea, in its own best interests, and Japan, as part of the settlement of the legacy of World War II and in exchange for a normalization of relations, could provide the bulk of the financial resources.

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