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Economic Respite for N. Korea Seen in Nuclear Accord : Asia: U.S. officials believe North gained time to deal with severe problems by agreeing to freeze program.


WASHINGTON — American government analysts have concluded that the nuclear deal the Clinton Administration just negotiated with North Korea will provide significant economic relief for the fledgling regime of its new leader, Kim Jong Il.

Although the assistance will probably not make the difference between the eventual survival and collapse of one of the world's last Communist governments, U.S. officials believe that North Korea has bought some time in return for agreeing to freeze its nuclear weapons program.

The agreement "takes some of the sting out of their problems," asserted one U.S. government expert who closely follows developments in North Korea. "It puts them in a better position to deal with the (economic) pressures they are under."

During the 18-month nuclear crisis, some American and South Korean hawks argued that the United States and its allies should do as little as possible to shore up the Pyongyang regime.

"Through these negotiations . . . you're helping the North Korean regime to survive," James Lilley, former U.S. ambassador to South Korea, said last year. He warned that over the next five years, North Korea might be able to keep on developing its missiles and sell them to countries such as Iran and Syria.

The Administration, by contrast, believes that the importance of stopping North Korea's nuclear program outweighs the costs.

U.S. government analysts and some outside experts argue that the economic benefits of the Administration's nuclear deal are not enough, by themselves, to prevent an eventual collapse of the North Korean economy.

The American promise to arrange for supplies of fuel oil to North Korea will raise by about 25% the amount available for energy-starved North Korean factories, experts said. And the American pledge to lift barriers to trade and dollar-based transactions could open the way for North Korea to obtain foreign investment and other economic benefits.

"Does this deal do it for them? No," said Nicholas Eberstadt, a Korea specialist at the American Enterprise Institute. "It may be cause for jubilation in terms of beating the Americans in negotiations, but it doesn't put the economy back on its feet. . . . (North Korea) is still a highly unattractive environment for foreign investment."

Under the deal signed in Geneva on Oct. 21, North Korea agreed to an immediate freeze of its nuclear weapons program, which the CIA believes has already produced enough weapons-grade plutonium for one or two nuclear bombs.

In exchange, the Administration agreed to reduce trade barriers between the two countries and to clear the way for the opening of diplomatic liaison offices in Washington and Pyongyang in the next few months.

It also agreed to supply North Korea with 500,000 metric tons of fuel oil a year and to arrange for construction of two 1,000-megawatt light-water nuclear reactors, which cannot easily be used to make fuel for nuclear weapons. These new reactors will replace North Korea's gas-graphite reactors, which can more readily produce weapons-grade fuel.

North Korea also promised to open the way in about five years for special international inspections that would show how many nuclear weapons it might have produced. And it agreed to dismantle its nuclear facilities and ship radioactive fuel rods out of the country in about 10 years, when the light-water reactor project is completed.

The U.S. government specialists said the time delays contained in the deal let North Korea postpone, for now, the ultimate decision of whether to abandon its nuclear ambitions.

"The agreement puts off the core of the decisions about the nuclear weapons program," one official said. "They haven't had to bite the bullet now, and that may be important to them (the North Korean leadership) internally."

Over the last five years, North Korea's economy has shrunk by about 20% as the country first lost the benefits of economic assistance from the Soviet Union and then was required by China to pay for goods at market prices.

"North Koreans now are told to get by with two meals a day," Korea specialists Rinn S. Shinn and Robert Sutter of the Congressional Research Service reported in the summer. "Industrial facilities are running at 40% of operating capacity, due to shortages of fuel, electricity and raw materials."

North Korea also faces enormous economic problems because of the need to support its army of 1.2 million men, a huge size for a nation of 22 million people.

"By the late 1980s, non-civilian males accounted for fully a fifth of North Korea's men of working ages," Eberstadt of the American Enterprise Institute wrote last year. "There is no more surplus labor in the country. To satisfy its thirst for ever more inductees, the army must deprive state enterprises or universities of their recruits."

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