South Korea says sanctions shrank North Korean economy at sharpest rate in 20 years

FILE PHOTO: A North Korean man is photographed from the Chinese side of the border near the town of Changbai, China as he rides a bicycle along the Yalu River in the North Korean town of Hyesan, November 23, 2017. REUTERS/Damir Sagolj/File Photo

By Cynthia Kim and Hayoung Choi

SEOUL (Reuters) – North Korea’s economy contracted at the sharpest rate in two decades in 2017, South Korea’s central bank estimated on Friday, as international sanctions and drought hit growth hard, with signs living conditions were beginning to deteriorate.

Gross domestic product (GDP) in North Korea last year shrank 3.5 percent from the previous year, marking the biggest decline since a 6.5 percent drop in 1997 when the isolated nation was hit by a devastating famine, the Bank of Korea said.

North Korea does not publish economic data, and comprehensive public figures on social conditions are nonexistent.

However, analysts believe wider sanctions last year are likely to make the economic deterioration in 2018 worse than 2017, which could add to humanitarian need in the politically isolated state.

“The sanctions were stronger in 2017 than they were in 2016,” Shin Seung-cheol, head of the BOK’s National Accounts Coordination Team said.

“External trade volume fell significantly with the exports ban on coal, steel, fisheries and textile products. It’s difficult to put exact numbers on those but (export bans) crashed industrial production,” Shin said.

Both Seoul and Washington argue that increasingly strict international sanctions imposed over North Korea’s nuclear weapon and ballistic missile program have been instrumental in leader Kim Jong Un’s decision to impose a ban on weapons testing and to negotiate with international leaders.

North Korea has called the sanctions “vicious” but rejects suggestions that the pressure led them to pursue diplomatic talks.

The situation also worsened last year with international experts fearing North Korea was facing the worst drought in 16 years, though late summer rains helped avoid acute food shortages.

North Korean leader Kim Jong Un in April vowed to switch the country’s strategic focus from the development of its nuclear arsenal jump starting his economy, but analysts say that will be difficult while sanctions remain in place.

“As long as exports of minerals are part of the sanctions, by far the most profitable item of its exports, Pyongyang will have no choice but to continue with its current negotiations with the U.S.,” said Kim Byeong-yeon, an economics professor at the Seoul National University who specializes in the North Korean economy.

U.S. President Donald Trump has said that sanctions won’t be lifted until Kim moves to give up his nuclear and missile arsenal.

INDUSTRY TAKES A HIT

North Korea’s coal-intensive industries and manufacturing sectors have suffered as the UN Security Council ratcheted up the sanctions in response to years of nuclear tests by Pyongyang.

Industrial production, which accounts for about a third of the nation’s total output, fell 8.5 percent. That marked the steepest decline since 1997 as factory production collapsed on restrictions of flows of oil and other energy resources into the country. Output from agriculture, construction industries fell by 1.3 percent and 4.4 percent, respectively.

China, its biggest trading partner, suspended coal purchases last year which cut North Korea’s main export revenue source while its suspended fuel sales into to country sparked a surge in gasoline and diesel prices, data reviewed by Reuters showed earlier.

Since then, however, fuel prices have stabilized and even dropped in recent weeks, according to a report published last week on the North Korean Economy Watch website.

“My best guess is that it’s a combination of increased smuggling, perhaps aided by China’s declining vigilance in enforcing sanctions and restrictions against illicit trade across the border,” analyst Benjamin Katzeff Silberstein wrote in the report.

North Korea’s black market, or Jangmadang, has grown to account for about 60 percent of the economy, according to the Institute for Korean Integration of Society.

“Shrinking trade first hits the Kim regime and top officials, and then later affects unofficial markets,” said Kim at Seoul National University, noting the squeeze would also be felt in household income and private consumption.

China’s total trade with North Korea dropped 59.2 percent in the first half of 2018 from a year earlier, China’s customs data showed last week.

The BOK uses figures compiled by the government and spy agencies to make its economic estimates. The bank’s survey includes monitoring of the size of rice paddy crops in border areas, traffic surveillance, and interviews with defectors.

HUMAN TOLL

Prices for food staples like rice and corn have remained stable under changing sanctions, and there are signs that a growing number of North Koreans have access to electronic appliances, often powered by solar panels, according to data gathered by the DailyNK website.

North Korean defectors in the South, however, say they hear reports of increased suffering.

“The economic status in Hamgyong area was very bad, according to my sources within North Korea,” said Kim Seung-cheol, a defector who heads the NK Reform Radio station in Seoul, referencing an area near the border with China.

“In South Hamgyong, some people died of hunger. Since trade with China fell significantly, foreign traders in the border area are suffering from poverty.”

The United Nations’ top aid official visited the country last week and said there was “clear evidence of humanitarian need.”

Other U.N. officials warn that aid groups face difficulties accessing international banking channels, transporting goods into the North Korea, while rising fuel prices hinder aid delivery.

North Korea’s Gross National Income per capita stands at 1.46 million won ($1,283.52), making it about 4.4 percent the size of South Korea’s, the BOK said.

Overall exports from North Korea dropped 37.2 percent in 2017, marking the biggest fall since a 38.5 percent decline in 1998, the BOK said on Friday, citing data from the Korea Trade-Investment Promotion Agency.

($1 = 1,137.5000 won)

(Additional reporting by Cynthia Kim,; Editing by Sam Holmes)

Trump expects ‘big results,’ including North Korea, after Putin summit

U.S. President Donald Trump speaks about his summit meeting in Finland with Russia's President Vladimir Putin at the start of a meeting with members of the U.S. Congress at the White House in Washington, July 17, 2018. REUTERS/Leah Millis

(Reuters) – President Donald Trump said on Wednesday his meeting with Vladimir Putin would lead to “big results,” in a continuing bid to calm a storm over his failure to criticize the Russian leader for Moscow’s actions to undermine the 2016 U.S. election.

In a tweet Trump said he elicited a promise from Putin to help negotiate with North Korea but did not say how. “Russia has agreed to help with North Korea, where relationships with us are very good and the process is moving along,” he said. “There is no rush, the sanctions remain! Big benefits and exciting future for North Korea at end of process!”

Russia’s RIA news agency, citing Moscow’s envoy to Pyongyang, reported on Wednesday that a summit between the leaders of Russia and North Korea is “on the agenda” and that it would be “logical” to raise the idea of lifting sanctions.

Trump met North Korea’s Kim Jong Un last month in the first meeting between leaders of the two countries, and recently received a letter from Kim expressed hope for “practical actions” in the future.

Trump had said he and Putin discussed reducing nuclear weapons worldwide.

“So many people at the higher ends of intelligence loved my press conference performance in Helsinki,” Trump said in a series of early-morning tweets about their Monday summit. “Putin and I discussed many important subjects at our earlier meeting. We got along well which truly bothered many haters who wanted to see a boxing match. Big results will come!”

Republicans and Democrats both accused him of siding with an adversary rather than his own country after he shied away from criticizing the Russian leader for what U.S. intelligence agencies say were Moscow’s efforts to undermine the 2016 election.

Instead, standing next to Putin Trump cast doubt on the agencies. On Tuesday Trump said he had misspoken and that he had complete faith in U.S. intelligence agencies and accepted their conclusions.

Trump also tweeted on Wednesday that his NATO meeting in Brussels last week was an “acknowledged triumph,” adding that his one-on-one with Putin “may prove to be, in the long run, an even greater success. Many positive things will come out of that meeting.”

(Additional reporting by Denis Pinchuk in Moscow and Alison Williams in London; Editing by Jon Boyle and Jeffrey Benkoe)

U.S. hopes for return of 50 Korean War dead from North Korea within two weeks

Directional signs bearing North Korean and U.S. flags are seen near the demilitarized zone in Paju, South Korea, June 12, 2018. REUTERS/Kim Hong-Ji

By John Walcott and Daphne Psaledakis

WASHINGTON (Reuters) – The United States hopes North Korea will return the remains of about 50 American Korean War dead within two weeks, the first of thousands President Donald Trump says Pyongyang has promised to hand over, a senior U.S. defense official said on Tuesday.

However, the timing of the handover and the number of sets remains to be returned is still uncertain, in spite of two days of talks between U.S. and North Korean officials on Sunday and Monday, said the official, who did not want to be identified.

U.S. President Donald Trump announced after an unprecedented June 12 summit with North Korean leader Kim Jong Un aimed at persuading North Korea to give up its nuclear weapons that Kim had agreed to return the remains of “thousands and thousands” of Americans killed in the 1950-53 Korean War.

Trump subsequently said the remains of 200 American servicemen had already been sent back, but so far none have been handed over.

U.S. and North Korean officials met on the inter-Korean border on Sunday to discuss the issue and again on Monday.

The first meeting had initially been scheduled for July 12, but the North Koreans failed to show up, the senior U.S. official said, saying this was “a reminder that this process is off to a slow start and isn’t likely to get any faster or easier as we try to repatriate thousands more of our people.”

U.S. Secretary of State Mike Pompeo unveiled the plan for talks on the remains issue after visiting Pyongyang this month to press North Korea to agree to a specific time line for giving up its nuclear weapons.

He touted it as one of the key issues on which the two sides had made progress, though North Korea accused his delegation of making “gangster-like” demands in connection with denuclearization during the trip, adding to doubts about Pyongyang’s intentions.

According to South Korean media, U.S. forces brought about 100 wooden coffins into the Demilitarized Zone between the Koreas last month to prepare for the handover of remains.

The Pentagon declined official comment but said the talks on Monday were to “continue coordination on the transfer of remains already collected in (North Korea) and the recommencing of field operations in (North Korea).”

About 7,700 U.S. military personnel remain unaccounted for from the Korean War, in which the United States fought alongside South Korea against the North.

The Pentagon has said North Korean officials have indicated in the past they have the remains of as many as 200 U.S. troops, but if and when they are handed over, their identities will have to be confirmed at the U.S. casualty identification facility in Hawaii before families can be notified.

The United States conducted joint operations in North Korea to recover remains from 1996 to 2005, but the program was halted amid rising tensions over Pyongyang’s pursuit of nuclear weapons.

The program helped bring in vital hard currency to North Korea, which has been under U.S.-led sanctions for decades.

According to the Pentagon’s Defense POW/MIA Accounting Agency, the United States conducted 33 joint field activities in North Korea between 1996 and 2005.

A Congressional Research Service report said the missions recovered over 220 sets of remains, while the United States paid $28 million to North Korea for assistance in the effort.

(Reporting by John Walcott and Daphne Psaledakis; Additional reporting by David Brunnstrom and Matt Spetalnick; Writing by David Brunnstrom; Editing by James Dalgleish)

‘Clear evidence of humanitarian need’ in North Korea: U.N. aid chief

North Korea's Minister of Health Jang Jun Sang meets with the United Nations Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Mark Lowcork in Pyongyang, North Korea in this photo released July 11, 2018 by North Korea's Korean Central News Agency. KCNA via REUTERS 

By Josh Smith

SEOUL (Reuters) – There is “very clear evidence of humanitarian need” in North Korea, the top U.N. aid official has said during the first visit of its kind to the isolated country since 2011.

U.N. Humanitarian Chief Mark Lowcock arrived in the North Korean capital of Pyongyang on Monday.

He met Kim Yong Nam, the nominal head of state and president of the Presidium of the Supreme People’s Assembly, on Wednesday, the North’s state media said.

Lowcock posted a video online outlining his observations after traveling to several areas in the southwest of the country.

“One of the things we’ve seen is very clear evidence of humanitarian need here,” he said in the video, posted to his official Twitter account and the U.N. website.

“More than half the children in rural areas, including the places we’ve been, have no clean water, contaminated water sources.”

Although humanitarian supplies or operations are exempt under U.N. Security Council resolutions, U.N. officials have warned that international sanctions over North Korea’s nuclear weapons and ballistic missile programs are exacerbating humanitarian problems by slowing aid deliveries.

About 20 percent of children in North Korea suffer from malnutrition, highlighting the need for more funding for humanitarian aid, Lowcock said.

Access for humanitarian workers was improving, he said without elaborating, but he noted that funding was falling short.

The United Nations says it had to stop nutrition support for kindergartens in North Korea in November because of a lack of funds, and its “2018 Needs and Priorities Plan” for North Korea is 90 percent underfunded.

While visiting a hospital that is not supported by the United Nations, Lowcock said there were 140 tuberculosis patients but only enough drugs to treat 40 of them.

More than 10 million people, some 40 percent of the population of North Korea, need humanitarian assistance, the United Nations said in a statement.

Lowcock was also due to meet humanitarian agency representatives and people receiving assistance to get a better understanding of the humanitarian situation, the United Nations said.

(Reporting by Josh Smith; Editing by Robert Birsel)

South Korea scraps annual government war drill as talks with North go on

FILE PHOTO - South Korean President Moon Jae-in and North Korean leader Kim Jong Un meet in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters

SEOUL (Reuters) – South Korea said on Tuesday it has decided to scrap an annual government mobilization drill this year as part of a suspended joint exercise with the United States but will carry out its own drills to maintain readiness. The ministers of safety and defense made the announcement at a media briefing on Tuesday. The drill, called the Ulchi exercises, usually takes place every August in tandem with the joint Freedom Guardian military drill with the United States.

Seoul and Washington said in June they would halt the joint exercise after U.S. President Donald Trump pledged to end war games following his summit with North Korean leader Kim Jong Un in Singapore on June 12.

Seoul’s presidential office has said the suspension of the combined exercise could facilitate ongoing nuclear talks between North Korea and the United States.

South Korea would develop a new drill model by incorporating Ulchi and the existing Taeguk command post exercises, which would be aimed at fighting militancy and large-scale natural disasters, the ministers said.

That incorporated exercise would be launched in October when the Hoguk field training drill takes place, the ministers said.

“Our military will carry out planned standalone drills this year and decide on joint exercises through close consultations with the United States,” Defence Minister Song Young-moo said.

(Reporting by Hyonhee Shin, Christine Kim; Editing by Paul Tait)

Trump says nuclear talks with North Korea ‘going well’

FILE PHOTO: U.S. President Donald Trump and North Korea's leader Kim Jong Un walk together before their working lunch during their summit at the Capella Hotel on the resort island of Sentosa, Singapore June 12, 2018. Picture taken June 12, 2018. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) – U.S. President Donald Trump said on Tuesday that talks with North Korea were “going well” as U.S. officials seek to reach an agreement with Pyongyang over a denuclearization plan following last month’s summit between Trump and North Korean leader Kim Jong Un.

The White House has characterized ongoing meetings as positive but not commented on recent news reports of U.S. intelligence assessments saying North Korea has been expanding its weapons capabilities.

In a Twitter post, Trump said that North Korea has conducted “no Rocket Launches or Nuclear Testing in 8 months.”

On Monday, the White House said U.S. Secretary of State Mike Pompeo would travel to North Korea this week to continue talks on denuclearization of the Korean Peninsula.

A U.S. delegation met over the weekend with North Korean counterparts at the border between North and South Korea to discuss the next steps to implementing the June 12 summit’s declaration, according to the U.S. State Department.

“Many good conversations with North Korea-it is going well!” Trump said in his Twitter post, echoing his sentiments following the historic meeting with Kim in Singapore.

(Reporting by Susan Heavey; Editing by Doina Chiacu and Jeffrey Benkoe)

U.S. has plan to dismantle North Korea nuclear program within a year: Bolton

FILE PHOTO: White House National Security Advisor John Bolton steps from Air Force One upon U.S. President Donald Trump's arrival in West Palm Beach, Florida, U.S., April 16, 2018. REUTERS/Kevin Lamarque/File P

By Hyonhee Shin and Doina Chiacu

SEOUL/WASHINGTON (Reuters) – White House national security adviser John Bolton said on Sunday he believed the bulk of North Korea’s weapons programs could be dismantled within a year, as the United States and North Korea resumed working-level talks.

Bolton told CBS’s “Face the Nation” that Washington has devised a program to dismantle North Korea’s weapons of mass destruction – chemical, biological and nuclear – and ballistic missile programs in a year, if there is full cooperation and disclosure from Pyongyang.

“If they have the strategic decision already made to do that and they’re cooperative, we can move very quickly,” he said. “Physically we would be able to dismantle the overwhelming bulk of their programs within a year.”

He said Secretary of State Mike Pompeo will likely discuss that proposal with the North Koreans soon. The Financial Times reported that Pompeo was due to visit North Korea this week but the State Department has not confirmed any travel plans.

South Korea media reported on Sunday that Sung Kim, the U.S. ambassador to the Philippines, met with North Korean officials on Sunday at the border village of Panmunjom within the demilitarized zone separating the two Koreas to coordinate an agenda for Pompeo’s next visit to North Korea.

Kim’s delegation delivered Pompeo’s letter to Kim Yong Chol, a top Pyongyang official who met Pompeo and U.S. President Donald Trump ahead of last month’s historic summit between Trump and North Korean leader Kim Jong Un in Singapore, Yonhap news agency said, citing an unnamed diplomatic source.

Some experts disputed Bolton’s optimistic time frame for decommissioning the North’s weapons.

“It would be physically possible to dismantle the bulk of North Korea’s programs within a year,” said Thomas Countryman, the State Department’s top arms control officer under President Barack Obama.

“I do not believe it would be possible to verify full dismantlement within a year, nor have I yet seen evidence of a firm DPRK decision to undertake full dismantlement.”

North Korea is completing a major expansion of a key missile-manufacturing plant, the Wall Street Journal reported on Sunday, citing researchers who have examined new satellite imagery from San Francisco-based Planet Labs Inc.

Images analyzed by the Middlebury Institute of International Studies at Monterey, California show North Korea was finishing construction on the exterior of the plant around the time Kim Jong Un held a summit with Trump last month, the report said.

The Chemical Material Institute in Hamhung makes solid-fuel ballistic missiles, which could allow North Korean to transport and launch a missile more quickly, compared to a liquid-fuel system that requires lengthy preparation.

Last week, 38 North, a website run by the Johns Hopkins University, said satellite imagery showed the North had been upgrading its Yongbyon nuclear complex.

“None of this activity technically violates any agreement Kim may have made,” said Vipin Narang, an associate professor at MIT’s security studies Programme.

“What it suggests is that Kim has no intention of surrendering his nuclear weapons.”

Kim agreed at the June 12 summit to “work toward denuclearisation of the Korean Peninsula,” but the joint statement released after the meeting gave no details on how or when Pyongyang might forsake its nuclear and missile programs.

As negotiations progress, the North could try to trade sites and technology that have relatively low values in exchange for sanctions relief, while covertly operating facilities required to advance key capabilities, Narang said.

“It is perfectly rational for North Korea to shift the emphasis to developing solid fuel missiles now that it already has a suite of liquid fuel missiles to deter an attack,” he said.

FILE PHOTO: U.S. President Donald Trump and North Korea's leader Kim Jong Un (L) arrive to sign a document to acknowledge the progress of the talks and pledge to keep momentum going, after their summit at the Capella Hotel on Sentosa island in Singapore, June 12, 2018. REUTERS/Jonathan Ernst/File Photo

FILE PHOTO: U.S. President Donald Trump and North Korea’s leader Kim Jong Un (L) arrive to sign a document to acknowledge the progress of the talks and pledge to keep momentum going, after their summit at the Capella Hotel on Sentosa island in Singapore, June 12, 2018. REUTERS/Jonathan Ernst/File Photo

TRUST BUT VERIFY

Siegfried Hecker, a nuclear scientist and Stanford University professor, has predicted it would take around 10 years to dismantle and clean up a substantial part of North Korea’s Yongbyon nuclear site.

U.S. intelligence is not certain how many nuclear warheads North Korea has. The Defense Intelligence Agency is at the high end with an estimate of about 50, but all the agencies believe Pyongyang is concealing an unknown number, especially smaller tactical ones, in caves and other underground facilities around the country.

The U.S. intelligence agencies believe North Korea has increased production of fuel for nuclear weapons at multiple secret sites in recent months and may try to hide these while seeking concessions in nuclear talks with the United States, NBC News quoted U.S. officials as saying on Friday.

The Washington Post reported on Saturday that U.S. intelligence officials have concluded that North Korea does not intend to fully give up its nuclear arsenal and is considering ways to hide the number of weapons it has. It also reported Pyongyang has secret production facilities, according to the latest evidence they have.

Bolton refused to comment on intelligence matters but the United States was going into nuclear negotiations aware of Pyongyang’s failure to live up to its promises in the past.

“There’s not any starry-eyed feeling among the group doing this,” he said. “We’re well aware of what the North Koreans have done in the past.”

(Reporting by Doina Chiacu in WASHINGTON and Hyonhee Shin in SEOUL; Additional reporting by David Brunnstrom, Lindsay Dunsmuir, Howard Schneider, John Walcott, Soyoung Kim; Editing by Lisa Shumaker, Nick Zieminski, Michael Perry and Lincoln Feast.)

Explainer: What will it cost for complete denuclearization of North Korea?

U.S. President Donald Trump shakes hands with North Korean leader Kim Jong Un at the Capella Hotel on Sentosa island in Singapore in this picture released on June 12, 2018 by North Korea's Korean Central News Agency. KCNA via REUTERS/File Phot

VIENNA (Reuters) – At a summit in Singapore in early June with U.S. President Donald Trump, North Korean leader Kim Jong-Un pledged to “work toward complete denuclearization of the Korean Peninsula”.

Follow-up talks between U.S. Secretary of State Mike Pompeo and North Korean officials are due to be held, and Trump said last week, “It will be a total denuclearization, which has already started taking place.”

Assuming denuclearization of North Korea does take place, what would it look like and how much would it cost?

WHAT DOES DENUCLEARIZATION MEAN?

That is far from clear and may have different meanings for each side.

The exact form denuclearization takes will depend on negotiations. North Korea may seek to continue some nuclear activities with possible civilian uses like uranium enrichment, as Iran is able to do under its deal with major powers.

For Washington, however, denuclearization means at least eliminating the threat posed by North Korea’s nuclear weapons. That requires removing or dismantling existing weapons, shutting down the program that makes them, and limiting or eliminating Pyongyang’s ability to enrich uranium and produce plutonium, another key ingredient in atomic bombs.

It would also most likely require restricting or eliminating North Korea’s ballistic missile programs.

KNOWN AND UNKNOWN UNKNOWNS

To complicate matters further, much remains unknown about North Korea’s nuclear activities, its weapons program and its ballistic missile capabilities. These are among the most secret activities in a highly secretive state that foreign intelligence services have struggled to penetrate.

North Korea has carried out six increasingly powerful nuclear tests since 2006 and surprised foreign governments with a series of missile tests showing rapidly improving technology and increasing range.

Pyongyang tested an intercontinental ballistic missile in December that governments and experts said appeared to bring all of the continental United States within range, though many believe it has yet to fully develop the re-entry vehicle in which the warhead returns to the Earth’s atmosphere as it approaches its target.

BEATING HEART

Historically the Yongbyon complex north of Pyongyang has been at the heart of North Korea’s nuclear program. It houses a reactor that produces spent fuel from which plutonium is reprocessed, and an experimental reactor that analysts observing satellite imagery say is close to being completed.

Yongbyon is also widely thought to house a uranium enrichment plant, though many experts say one or more larger enrichment sites are likely to exist outside Yongbyon.

By pursuing plutonium reprocessing and uranium enrichment, North Korea has developed the two tracks to obtaining the fissile material for nuclear weapons.

While Yongbyon is closely watched by satellites and was monitored by International Atomic Energy Agency (IAEA) inspectors before they were expelled in 2009, far less is known about facilities elsewhere in the country.

Nuclear analyst David Albright of the Institute for Science and International Security has quoted an anonymous “official source” as saying that about half of North Korea’s nuclear facilities are outside Yongbyon and the site where it has carried out nuclear tests.

FEW PRECEDENTS

There are few cases in which a country has voluntarily given up nuclear weapons. Those that have did so in particular circumstances, and provide imperfect analogies.

South Africa shut down its nuclear weapons program and dismantled its weapons shortly before the 1994 end of apartheid. Several former Soviet republics gave up their weapons after the 1991 break-up of the Soviet Union. Of those, Ukraine had the most, roughly 5,000, and it held onto them the longest.

South Africa kept its nuclear weapons program secret until after it had dismantled its six atom bombs and destroyed many of the documents relating to them, meaning the cost is not known. The weapons were dismantled in just months.

In Ukraine, which had ground-based strategic weapons with roughly 1,250 nuclear warheads, a Defence Ministry official said the United States paid around $350 million to dismantle the silos from which those missiles would have been launched.

At its peak Ukraine’s nuclear arsenal was the third biggest in the world. North Korea’s is much smaller – its exact size is not known but several analysts estimate it has around 30 weapons.

SO, HOW MUCH?

Given the uncertainties involved, most analysts are reluctant to be more specific than to predict costs for denuclearization running into billions of dollars.

“I think it would be fair to say that dismantling and cleanup of a substantial part of the North Korean nuclear complex (not even considering the missile complex) would cost many billions and take 10 years or so,” said Siegfried Hecker, a nuclear scientist and Stanford University professor who visited Yongbyon in 2010.

The U.S. Congressional Budget Office in 2008 estimated at $575 million the cost of dismantling the reactor at Yongbyon and two nearby plants that made fuel rods and separated plutonium from spent fuel, plus shipping its spent fuel out of the country and reprocessing it. It said that should take four years.

North Korea’s nuclear activities and stockpiles have increased significantly since 2008. There is now a second reactor at least near completion at Yongbyon, and the CBO estimate did not cover uranium enrichment, weapons facilities, missile technology or sites like uranium mines.

VERIFICATION

For the whole process to work, Washington will need to be convinced North Korea has declared all its relevant sites and activities. Verification is likely to play an important role.

Any doubt over whether North Korea has declared all its activities could lead to a dispute like the one over whether Iraq had stockpiles of weapons of mass destruction before the U.S.-led invasion of that country in 2003. A balance will have to be struck between transparency and intrusiveness.

The cost of IAEA safeguards activities for Iran, where the agency is policing the country’s 2015 nuclear deal, was 15.8 million euros ($18.42 million) last year, according to a confidential IAEA report obtained by Reuters.

But the IAEA was already inspecting Iran’s declared nuclear facilities before the deal was reached. Starting essentially from scratch in North Korea will be much more expensive.

“If you take the annual cost of IAEA verification and monitoring in Iran and multiply it by roughly three or more, you might get a rough estimate for the annual cost for North Korea after any denuclearization deal,” Mark Fitzpatrick of the International Institute for Strategic Studies said.

“North Korea’s nuclear program is more secretive than Iran’s and, in terms of nuclear weapons, far more advanced.”

(Reporting by Francois Murphy in Vienna, Pavel Polityuk in Kiev, Anthony Deutsch in Amsterdam, Ed Cropley in Johannesburg, Joyce Lee, Joori Roh and Heekyong Yang in Seoul; Writing by Francois Murphy; Editing by Mark Heinrich)

U.S. identifies North Korea missile test site it says Kim committed to destroy

FILE PHOTO: A North Korean long-range rocket is launched into the air at the Sohae rocket launch site, North Korea, in this photo released by Kyodo February 7, 2016. Mandatory credit REUTERS/Kyodo

By Matt Spetalnick

WASHINGTON (Reuters) – The missile engine test site that President Donald Trump said North Korean leader Kim Jong Un had committed to destroy is a major facility in the western part of the country that has been used for testing engines for long-range missiles, according to a U.S. official.

Trump told reporters after their June 12 summit that Kim had pledged to dismantle one of his missile installations, which would be North Korea’s most concrete concession at the landmark meeting in Singapore.

However, the president at the time did not name the site.

A U.S. official identified it on Wednesday as the Sohae Satellite Launching Ground, saying North Korea “has used this site to test liquid-propellant engines for its long-range ballistic missiles.”

Pyongyang has said its missiles can reach the United States.

“Chairman Kim promised that North Korea would destroy a missile engine test stand soon,” the official told Reuters, speaking on condition of anonymity.

There was no immediate word on the exact timetable, and North Korea has not publicly confirmed that Kim made such a commitment.

CBS News was the first to identify the site, which is the newest of North Korea’s known major missile testing facilities.

Although Trump has hailed the Singapore summit as a success, skeptics have questioned whether he achieved anything, given that Pyongyang, which has rejected unilateral nuclear disarmament, appeared to make no new tangible commitments in a joint written declaration.

The U.S.-based North Korea monitoring group 38 North said in an analysis at the end of last week there had been no sign of any activity toward dismantling Sohae or any other missile test site.

The U.S. official said: “The United States will continue to monitor this site closely as we move forward in our negotiations.”

LITTLE-KNOWN SITE

What little is known about the Sohae site, located in Tongchang-ri, has been pieced together from analysts’ assessments and the North Korean state news agency KCNA.

It was reported to have been established in 2008 and has research facilities nearby for missile development as well as a tower that can support ballistic missiles. The site is mainly used to test large Paektusan engines built for long-range missiles such as the Hwasong-15.

North Korea has spent considerable effort and resources to develop the site as a “civilian space program” facility, denying that it has a military application, said Jenny Town, a research analyst at the 38 North.

“Presumably, if North Korea does destroy the Sohae facility, they are also signaling that they are willing to stop satellite/rocket launches this time around as well, a point that has derailed negotiations in the past and is a significant new development,” she said.

North Korea has other missile testing facilities but the shutdown, if it happens, would be significant, analysts said.

“The missile testing is not just done in Tongchang-ri so it does not necessarily mean all ICBMs (intercontinental ballistic missiles) will be disabled. But the most well-known one is this, so there is a great symbolic meaning if this is shut down,” said Moon Hong-sik, a research fellow at the Institute for National Security Strategy in South Korea.

North Korea announced ahead of the Singapore summit the suspension of its ICBM testing and also closed its nuclear bomb test site. U.S. officials, however, have cautioned that such actions are reversible.

Asked on Wednesday whether North Korea has done anything toward denuclearization since the summit, U.S. Defense Secretary Jim Mattis told reporters: “No, I’m not aware of that. I mean, obviously, it’s the very front end of a process. The detailed negotiations have not begun. I wouldn’t expect that at this point.”

Yang Uk, senior research fellow at the Korea Defence and Security Forum, agreed that a shutdown of the Sohae testing site would be a symbolic gesture rather than a move to technically disable its missile capabilities.

“Sohae has technically been used as an ‘engine’ testing site. North Korea has already finished developing (the) Baekdu Engine, so there would be no problem running ICBM missile programs even if they close down the Sohae site,” Yang said.

The move will only be significant if North Korea takes more than cosmetic steps to fully shutter the site, not just the test stand, said Melissa Hanham, a senior research associate at the James martin Center for Nonproliferation Studies.

“It’s only a good deal if they dismantle all the facilities at Sohae and re-employ the scientists in something civilian,” she said.

(Reporting by Matt Spetalnick; Additional reporting by Idrees Ali in WASHINGTON and Christine Kim, Josh Smith, and Jeongmin Kim in SEOUL; Editing by Lisa Schumaker and Darren Schuettler)

North Korea, China discuss ‘true peace’, denuclearization

North Korean leader Kim Jong Un and Chinese President Xi Jinping raise a toast in Beijing, China, in this undated photo released June 20, 2018 by North Korea's Korean Central News Agency. KCNA via REUTERS

By Christine Kim and Christian Shepherd

SEOUL/BEIJING (Reuters) – North Korea’s Kim Jong Un and Chinese President Xi Jinping came to an understanding on issues discussed at a summit of the two leaders, including denuclearization of the Korean peninsula, the North’s state media said on Wednesday.

Kim and Xi assessed the historic meeting Kim had with U.S. President Donald Trump in Singapore last week and exchanged opinions on ways to resolve the issue of denuclearization, Korean Central News Agency (KCNA) said.

The North Korean leader also promised during a meeting with Xi in Beijing to cooperate with Chinese officials to secure “true peace” in the process of “opening a new future” on the Korean peninsula, it said.

Xi told Kim the neighbors’ joint efforts could definitely ensure peace and stability on the Korean peninsula, China’s official Xinhua news agency said.

“I have faith that, with the joint efforts of China and North Korea, our relationship can definitely benefit both countries and both peoples,” he said, during a meeting at Beijing’s Diaoyutai state guest house.

Kim told Xi that previously China and North Korea had helped each other out like family members. “General Secretary comrade Xi Jinping has shown us touching and familial support and concern,” he said, according to Xinhua.

Kim wrapped up his two-day trip to Beijing on Wednesday with a visit to an agricultural sciences exhibition and the Beijing subway command center, Xinhua added.

The visit follows his Singapore summit, where Kim and Trump reaffirmed a commitment to work toward complete denuclearization of the Korean peninsula.

Trump surprised officials in South Korea and the United States after that meeting by saying he would end “provocative” joint U.S.-South Korean military exercises.

The United States and South Korea said they had agreed to suspend a joint military exercise set for August, although decisions regarding subsequent drills have not yet been made.

On Wednesday, South Korean Foreign Minister Kang Kyung-hwa said the decision to suspend the exercise could be reconsidered, based on future developments with North Korea.

“I think we’ve made it clear this is a goodwill gesture to strengthen dialogue momentum,” Kang said.

“It’s not irreversible. They could come back if the dialogue loses speed, or if North Korea doesn’t live up to its denuclearization commitment,” she said.

Kim is on his third visit to China this year. Xi offered high praise to the North Korean leader on Tuesday for the “positive outcome” of last week’s summit with Trump.

KCNA also reported that Xi said relations between China and North Korea had reached a new level of development since Kim’s first visit in March and that the pacts by the two leaders were being carried out “one-by-one”.

Kim also told Xi he was willing to bolster friendship and cooperation, it said.

It was widely expected that Kim would visit Beijing to brief Xi on his summit with Trump, which included Pyongyang agreeing to hand over the remains of troops missing from the 1950-53 Korean War.

Two U.S. officials told Reuters on Tuesday North Korea could start that process within the next few days.

(Reporting by Christine Kim; Additional reporting by Joori Roh and Joyce Lee in SEOUL and Idrees Ali in WASHINGTON; Editing by Paul Tait and Clarence Fernandez)