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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

Peace Spoiler?

Payment for Pyongyang's nuclear plants may pose a dilemma


BEFORE THE IMF, WAS the IAEA. The latter stands for International Atomic Energy Agency and is a reminder that, four years ago, Korea was at the center of another crisis that seemed almost as alarming as the South Korean debt debacle is today. The fuse was North Korea's alleged secret program to build an atomic bomb, which sparked tensions unfelt on the peninsula since the end of the Korean War. The crisis subsided after a deal was signed in October 1994. Pyongyang agreed to freeze its nuclear program. In return, the United States pledged to arrange the construction of two modern light-water reactors, each generating 1,000 megawatts of electricity. Meantime, Washington would supply heavy fuel oil to help keep North Korea's lights on. The Korean Energy Development Organization, or KEDO, was established to administer the program.

Pyongyang has largely lived up to its end of the bargain, and the U.S. has been shipping the oil. The project has also encouraged peaceful intercourse between the rival Korean governments. The dialogue might logically expand, now that the conciliatory Kim Dae Jung has been elected president of South Korea and economic contingencies have given the two sides at least a psychological bond. And four-party talks, pulling in the U.S. and China, have begun toward a peace treaty formally ending the Korean War.

Last summer, ground was broken on the North Korean coast for the promised plants. South Korean construction workers are laboring alongside their Northern counterparts in an unusual demonstration of peaceful coexistence. But a potential problem looms. The cost of the plants has swollen to nearly $6 billion, against an original estimate of $4 billion, and the bills are coming due at a most inopportune moment.

The actual financing had been left vague. According to the "Agreed Framework," financially prostrate South Korea is to assume a "central" role. That has been defined in a way that assigns Seoul a disproportionately large share -- about two-thirds -- of the construction costs, though the saving grace is that they are payable in won instead of expensive dollars. The U.S. has spent more than $100 million on the fuel supplies. But trying to persuade Congress, still uneasy about a deal that "appeased" Pyongyang, to appropriate money for the reactors or continued oil shipments will be no easy task for the Clinton administration, should South Korea falter in meeting its commitments.

Four years ago, it was the Americans who pumped up the nuclear crisis, since they consider stopping the spread of weapons of mass destruction their particular mission. South Korea was left on the sidelines in a deal negotiated directly between Washington and Pyongyang, something that still rankles in Seoul. Always sensitive about foreign pressure, South Koreans may feel they are being played for suckers -- on the nuclear deal as well as the IMF bailout.

President-elect Kim has promised to abide by the agreement on the reactors. That is reassuring since cancelation would be unthinkable, and any delay in the project could result in substantially higher construction costs. Meanwhile, it is essential that the U.S. continue to uphold its end of the bargain by supplying fuel oil to embattled North Korea. Pyongyang should not be given any pretext to renege on the nuclear deal. No one would want a security crisis to erupt just as the region is grappling with its economic woes.


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