From rice to nukes, Koreas find little unity

A huge banner dominated by a smiling image of late North Korean leader Kim Il Sung hangs above the entrance of the newly built railroad station in the special economic zone here.

The station, though, is empty. No trains are visible on the single track to South Korea, two miles south, and no one expects service any time soon despite a blaze of publicity that accompanied the only test run of a train on May 17.

"The North Korean military did not want the railroad connection," says Kim Tae Woo of the Institute for Defense Analyses in Seoul. "They have another agenda."

The failure to inaugurate North-South rail service suggests the frustrations in persuading North Korea to fulfill its obligations on a wide range of issues, none so difficult as the agreement of Feb. 13, under which the North was to have shut down its five-megawatt nuclear reactor at Yongbyon, 60 miles north of Pyongyang.

North Korea, under terms of the deal signed by the two Koreas, China, Japan, Russia, and the US, had 60 days to shut down the reactor and move to a more difficult phase, acknowledging all of its nuclear facilities and getting rid of them along with nuclear warheads made at Yongbyon. The North in turn would receive billions of dollars in aid, mostly to power and improve its electrical grid.

These steps – as well as other confidence-building measures – are on the table this week as South and North Korean officials meet in ministerial-level talks in Seoul. North Korea's state councilor, Kwon Ho Woong, talked Tuesday about "the green of spring" as a "good sign," but the talks may be rocky. At issue is whether North Korea will live up to any deal without demanding concessions that may just lead to more demands.

South Korean officials are targeting issues ranging from opening the railroad to freeing South Koreans held in the North, including Korean War prisoners whom the North refuses to acknowledge, to living up to the nuclear agreement.

North Korea is expected to press for shipments of rice, suspended while the South waits for the reactor shutdown. Oblivious to the views of South Korean conservatives that no deal will work, North Korea blames the delay on frustration in recovering $25 million from accounts in a blacklisted bank in Macao.

Few analysts believe the North's demands will stop there. "We should be prepared against a scenario after settlement of that issue," says Mr. Kim. "That is a decoy being used by North Korea. If we pay too much attention, we are playing their game."

Macao lifted the freeze on the account, imposed after the US labeled it a conduit for counterfeiting and barred firms dealing with the bank from business in the US. North Korea, however, demands transfer of the funds through a foreign bank, but none, including the Bank of China, wants to cooperate. Until one relents, North Korea remains an outcast from the international financial system.

Still, US envoy Christopher Hill hopes North Korea can "implement their part of the deal" very soon – and is on his way to Beijing this week to try to persuade China to prod North Korea. While Mr. Hill looks for "signals" of North Korean cooperation, North Korea on Friday again showed off its military potential by firing a short-range Silkworm missile off its east coast. South Korean officials played down the test, calling it a routine "training exercise," but analysts say the timing was not coincidental.

On the same day, South Korea's President Roh Moo Hyun and his wife launched a sophisticated destroyer capable of firing on targets on sea, land, and in the air with help of an advanced Aegis-class radar system. "The North Koreans want to project their will to destroy any vessel," says Kim Tae Woo. "It's just a political action."

The missile test, the first since North Korea tested seven missiles nearly a year ago, shows that North Korea can take "as long as it wants" to shut down its reactor, he says, and then "come back to the table in a majestic manner" while awaiting more concessions.

Kim Sung Han, professor at the Institute of Foreign Affairs and National Security, suggests that the second stage of fulfilling the nuclear agreement "will take a lot of time," especially since "everyone thought the first stage would be a brief but technical issue."

He doubts the train will run regularly until well into the second stage, a process that may take years. "We don't have to hurry about that," he says. "Rather than put this before the nuclear issue, we have to be courteous about pushing for an inter-Korean agenda."

One of the top items, though, is the industrial zone here in Kaesong, where 22 South Korean companies are now producing such light industrial products as clothing, shoes, cosmetics, and watches. South Korean managers and senior technicians supervise some 15,000 Korean workers – the vanguard of a force that is to climb some day to several hundred thousand working for several hundred companies.

For now, trucks clog the highway from the zone to South Korea, bringing finished products south and returning with parts and supplies. The highway parallels the track, all at a cost so far of more than $500 million, all paid for by South Korea.

The railroad, though, inspires dreams far beyond this zone. North Korean briefers display wall maps with lights showing a rail network over which goods could move from South Korea through the North to China and Russia – and on to Europe. A young briefer falls back on what appears a rehearsed response when asked when the train will run again, at least as far as the zone.

"The next stage of the railroad will be the subject of negotiations," she says. "All phases of the negotiation will be completed as soon as possible." Asked about the need for a railroad to replace the inefficient trucks, she says, "Delivery of raw materials and transportation of raw materials will depend on negotiations" – and, again, "all phases of negotiation will be completed as soon as possible." The response is about the same as that given by North Korean officials to visitors to Pyongyang when asked when they will fulfill the nuclear agreement.

In the meantime, Park Sung Chul, owner of a clothing factory, observes the strict rules that divide his 1,000 North Korean workers from him and his managers from South Korea. "We felt we have to do this with the help of God," he says, but his North Korean interpreter turns toward him, hesitates on "God," and substitutes "faith."

Mr. Park talks in a third-floor room that displays a cross and stained-glass windows – a chapel for daily services as well as briefings – while his North Korean workers below sit at rows of industrial sewing machines. "Close interaction is very difficult," he says. "We do as much we can. We greet the workers in the morning and when they go from work."

Never do he and his managers invite North Koreans to the chapel or try to give them religious material. "We are building for the future with our minds filled with the love of God," says the voice on a briefing film, but that's a message the North Koreans are not going to hear. "They will never allow it," says Park. "It is strictly forbidden."