Disarmament Diplomacy

North Korean Denuclearisation: A Chinese View of the Way Forward

Hui Zhang

After more than two years of intermittent negotiations, participants in the fourth round of Six Party Talks in Beijing finally produced on September 19, 2005 a breakthrough agreement on a Joint Statement of Principles to denuclearise the Democratic People's Republic of Korea (DPRK) in return for North Korea receiving assistance to meet security and economic needs.

Since this agreement, the Six Party Talks[1] have made little headway. This is because the two key players - the United States and North Korea - are still disputing a number of major issues, including the timing and sequencing of North Korean denuclearisation.[2] Yet, since the current nuclear crisis broke out in October 2002, when the US accused North Korea of running a secret uranium-enrichment programme, North Korea appears to be unhindered in its efforts to increase its nuclear capabilities. The longer the crisis lasts, the greater North Korea's nuclear capability and the higher the stakes, for both Pyongyang and the Nuclear Nonproliferation Regime. Resolving this nuclear crisis is an urgent matter. Now it is the time for the Six Party Talks to agree to a roadmap for faithful implementation of the Joint Statement.

China's Approach to Resolving the North Korean Nuclear Crisis

China's strategic goal is "building a well-off society in an all-round way" by 2020.[3] For progress to be made in China's economic development towards reaching this goal, it is important for there to be stability in neighbouring countries, thereby promoting a stable regional and international environment. From the beginning of the nuclear crisis, China has made its position on the North Korean nuclear issue clear: preserving peace and stability on the Korean Peninsula; keeping the peninsula nuclear free; resolving the crisis through peaceful and diplomatic means; and addressing any of North Korea's reasonable security concerns.[4]

China is eager to see the North Korean nuclear programme dismantled sooner rather than later. China fears that a nuclear North Korea would stimulate a regional nuclear arms race - or worse, spark an all-out war between North Korea and the United States, which would have tremendous negative effects on China in terms of economics, politics and security.

Meanwhile, to preserve stability on the Korean Peninsula, Beijing maintains that the North Korean nuclear crisis must be resolved through peaceful diplomacy. As the Chinese Foreign Minister Li Zhaoxing explains, "To adhere to the direction of peaceful talks is the only correct choice complying with the interest of all the parties, and the Six Party Talks are the realistic and effective way of peacefully solving the nuclear issue on the peninsula through dialogue."[5]

China believes all coercive actions including economic sanctions, isolation, the use of force and regime change will not work and would escalate tensions.[6] Based on its own experience in the 1950s, when the United States and its allies imposed economic sanctions against China, Beijing does not believe North Korea would yield to economic sanctions or isolation. Beijing also worries that if it participates in sanctions against Pyongyang, it will lose influence with Kim Jong Il's regime, or even incur its hostility. Moreover, to maintain regional stability, Beijing's bottom line is to avoid a war on the peninsula or an abrupt collapse of the Kim Jong-Il regime.

An imploding North Korean economy would create a massive flow of refugees across China's border. A US military strike on North Korea would incur a full-scale war that would damage China's economic development and devastate the Korean peninsula. Also, a US military strike against North Korea could force Beijing into an embarrassing and potentially dangerous position vis-à-vis Washington: the 1961 China-Korean Treaty of Friendship and Mutual Cooperation obliges China to provide military aid in the event of war.

Furthermore, the fall of Kim Jong Il could lead to sudden Korean unification and an uncertain geopolitical realignment, including the prospect of US troops at China's border. Consequently, China believes that the best option to pursue a nuclear-free North Korea is through peaceful and diplomatic means that recognise the importance both of regime survival and of the need for reform in North Korea.

China believes that a resolution of the nuclear impasse has to address reasonable security concerns of North Korea. As Pyongyang sees it, its nuclear ambitions are driven solely by a threat from the United States. Hence, Pyongyang would most likely give up its nuclear programme if it could get reliable security, economic and political benefits. Indeed, the Joint Statement shows hope for a diplomatic resolution of the crisis. The six parties unanimously reaffirmed in their joint statement that "the goal of the Six Party Talks is the verifiable denuclearization of the Korean Peninsula in a peaceful manner". North Korea has indicated a willingness to pursue denuclearisation in return for a set of security and economic benefits.

As North Korea's ally for more than fifty years and the provider of most of its fuel and food aid, China is playing a proactive and constructive role in defusing the nuclear crisis. During the Six Party Talks, China acted not only as the host, but also as a mediator and a constructive participant. China's role in the talks is intended to be "conducive to peace and talks (quan he cu tan)".[7] In order to resolve the nuclear issue peacefully, Beijing hopes the parties will take actions to build trust, reduce suspicions, enhance consensus, and promote cooperation so as to create a win-win situation.

Given the long history of deep mistrust and animosity between Washington and Pyongyang, North Korean denuclearisation cannot be achieved overnight. Beijing also understands that if Pyongyang gets nothing except more pressure it will continue to escalate the nuclear crisis until it obtains Washington's cooperation. Thus, North Korea needs a roadmap that links denuclearisation with the concrete benefits of security guarantees, normalisation and economic reform in a step-by-step manner.

This was emphasised by Foreign Minister Li in his opening speech to the fourth round of the Talks in July 2005: "We believe that we will finally eat our fill by biting gradually, finally get to the destination step by step and reach the peak after climbing numerous slopes. China will continue coordinating and cooperating with related parties to make relentless efforts to realize denuclearization of the Peninsula and maintain regional peace and stability.''[8]

A Chinese Roadmap

In the Joint Statement, the six parties have agreed to take coordinated steps to implement North Korean denuclearisation in a phased manner in line with the principle of "commitment for commitment, action for action". However, the US and North Korea have very different views on the time-lines and sequencing of actions towards denuclearisation. As a mediator, China should play a more constructive role by initiating its own roadmap to facilitate North Korean denuclearisation.

China's roadmap needs to include a timetable and reciprocal actions that each side ought to carry out at each stage, with the goal of complete denuclearisation of the peninsula, linked with security assurances and diplomatic normalisation, economic reform, peace-regime building on the Korean peninsula, and broader security cooperation for Northeast Asia.

For each stage, the roadmap should make clear: what North Korea should pledge to do; what inspection and verification provision should be taken; and what benefits North Korea would receive regarding security assurances and economic aids. To promote North Korean denuclearisation, China could play a number of active roles. For example, alone or together with Russia, China could provide North Korea with some kind of security guarantee to reduce its security concerns. China could help to settle some disputes between Pyongyang and Washington during verification. China could serve to monitor and press both parties to implement their pledges in good faith at each stage.

Specifically, what might a roadmap for resolving the North Korean nuclear crisis look like?

North Korea is using its known plutonium production facilities to increase its plutonium stockpile and thus build more bombs, and the nature of its centrifuge-based uranium enrichment programme is still not clear. Moreover, verification of a centrifuge-enrichment programme will require more transparency and more intrusive measures. Considering the deep distrust between both sides, this could be very difficult without more confidence- building measures.

To avoid the HEU issue and any associated roadblocks, the most promising approach to denuclearisation would focus on a "plutonium first" approach.[9] Here a three-stage process to North Korean denuclearisation could be envisaged: the first stage would focus on a freeze of plutonium production; the second stage would dismantle all of North Korea's plutonium programmes; and the third stage would dismantle the HEU programme.

Based on the Joint Statement, the Six Party Talks should make a joint declaration at the outset of an agreement on the roadmap: North Korea would commit itself to abandon all of its nuclear programmes and return to the Nuclear Nonproliferation Treaty (NPT) and to IAEA safeguards. North Korea would also need to pledge not to transfer any nuclear weapons, components or fissile material and know-how, pending the implementation of the three stages.

South Korea and North Korea would both agree to observe and implement the 1992 joint declaration on the Denuclearization of the Korean Peninsula. The US and others would pledge to respect Pyongyang's sovereignty, normalise their diplomatic relations with North Korea, negotiate a peace treaty on the Korean Peninsula, and pursue a mechanism for security cooperation in Northeast Asia. The US should also pledge to exist peacefully with North Korea, not to pursue regime change in Pyongyang, and not to attack or invade North Korea with nuclear or conventional weapons. Other nations as well as the US should also commit to providing North Korea with economic cooperation and energy assistance.

Stage One: Freezing Plutonium Production

Pyongyang has used its 5 MW (e) reactor at Yongbyon, which was frozen under the 1994 Agreed Framework (AF) and restarted operation since February 2003. In theory, these programmes add enough plutonium for six to eight bombs to the stockpile of one or two bombs that North Korea is believed to have possessed before the 1994 Agreed Framework.

Pyongyang has also resumed construction of the larger 50-megawatt reactor, which will be finished within a few years and could produce 56 kg of plutonium (up to nine bombs) per year.[10] Thus a freeze on plutonium production should logically be the first step; as such, it would gradually enable some confidence building measures to be established, making the goal of complete nuclear dismantlement more possible.

A problem faced at present is that Pyongyang has demanded compensation for freezing its nuclear facilities, but Washington refuses to pay what it characterises as 'rewards' while also insisting that North Korea quickly shut down its nuclear facilities. By exhorting an unrealistic price from the North, Washington is only providing more time for North Korea to expand its nuclear arsenal. Thus, it is necessary to freeze plutonium production as a first step towards North Korean denuclearisation.

A freeze could be put into place over a six month period. Initially, North Korea would declare all its plutonium production facilities, and shut down operation of these facilities and other programmes.[11] The freeze would need to cover the following facilities:

• shutdown of the 5 MW (e) reactor; monitoring of any remaining irradiated fuel;
• closing of the Radiochemical Laboratory; freezing of the fuel fabrication complex;
• freezing of the construction of the 50 MW (e) and 200 MW (e) reactors; and freezing of nuclear waste sites.

Based on the 'reciprocal action' principle, the US and other parties would take the following steps:

1) The US affirms its commitment to providing security assurances to North Korea, including that it would not seek regime change and would end the "hostile policy". This would show that the US respected Pyongyang's sovereignty and has no intention to attack or invade. The security assurance offered by the US would initially be provisional but would become permanent as denuclearisation proceeds. The US, South Korea and North Korea could consider replacing the current Armistice Agreement, signed after the 1950-53 Korean War, with a trilateral peace treaty.

2) The United States would resume shipments of 500,000 tons of heavy fuel oil (HFO) per year, or, if urgently needed, would provide other tangible energy services at the cost equivalent of the heavy fuel oil,[12] until South Korea begins to supply 2GW of electricity. The US would increase its humanitarian aid. Meanwhile, South Korea and others would begin an energy survey of North Korea to assist in its energy development. To compensate North Korea for the loss of electric power (due to the delay and cancellation of the LWR project), South Korea and others ought to begin work on the rehabilitation of the North Korean energy system including power generation plants and transmission and distribution (T&D) system.

3) At this stage, Washington would begin to take steps to remove North Korea from the US list of terrorist countries, lift economic sanctions, establish a liaison office toward normalised relations, and assure economic cooperation between North and South Korea, and Japan.

North Korea has been facing a huge electricity shortage for over a decade and this has constrained its economic development. In particular, this has contributed to worsened food shortages and the terrible famines of the mid-1990s. North Korea's electricity supply relies mainly on two domestic sources, coal and hydro-power. The coal-fired generation has decreased due to a reduction in coal production caused by flood damage and a lack of electricity. Hydro-power is diminished by flooding, the low water level of reservoirs, and the aging power system. Many of its T&D systems are also outdated and stretched beyond their design lives.

It is estimated that the current total electrical output fell nearly 70 percent from 1990 levels. Thus, the urgent need to resolve North Korea's energy crisis includes rehabilitating its power station and T&D system. However, North Korea lacks the funds and technologies. Here I suggest that South Korea and others should refurnish and/or rebuild North Korea's power stations and T&D system as compensation for the loss of electric power cause by the delays and then cancellation of the LWR project.[13]

Stage Two: Dismantling Plutonium Programmes

At this second stage, North Korea would begin to dismantle all its plutonium weapons and plutonium production facilities. This stage would include three procedures:

1) dismantle plutonium weapons and surrender all its plutonium;

2) remove plutonium materials out of North Korea; and

3) dismantle or decommission all facilities associated with the weaponisation programme and plutonium production.

North Korea would first need to make a declaration of the total amount of plutonium it possesses. Pyongyang might prefer to take the South African disarmament model, i.e. dismantling its bombs first, then submitting plutonium totals from a pit or other sources, and accepting verification confirming the termination of its nuclear weapons programme.

When Pyongyang takes the first step to dismantle its nuclear weapons, surrender all its plutonium, and return to the NPT and accept full scope IAEA safeguards, it will be necessary for the US to normalise its relations with North Korea. This would facilitate the next steps. This second stage may take a few years (perhaps three or more) to dismantle North Korea's plutonium programmes.

To reciprocate for Pyongyang's cooperation in Stage Two, The US and others would be expected to provide security and economic benefits along the following lines:

1) Washington would replace its liaison offices with an Embassy and establish full diplomatic relations. Meanwhile, Japan would normalise its relations with North Korea after resolving the remaining issues regarding the kidnapping of Japanese citizens. The US, South Korea and North Korea would agree to a peace treaty to replace the Armistice Agreement. This is a key step toward truly normalising relations, and it will be imperative in freeing the Korean peninsula from the quagmire of the Cold War and maintaining sustainable peace and stability in the region.

2) During this stage, South Korea would begin providing North Korea with 2 gigawatts of electric power (say about seven years worth) until the LWR are operating or there is another equivalent energy supply. As the Joint Statement stressed, the six parties would "undertake to promote economic cooperation in the fields of energy, trade and investment, bilaterally and/or multilaterally". The others would continue assisting North Korea in improving its energy system, including the integration of the North's electricity grid with South Korea's and /or with Chinese and Russian networks.

3) The others would also help North Korea become a member of the World Bank and Asian Development Bank (ADB), as well as aiding North Korea's economic reforms and agricultural development.

It should be noted that the timing of "normalisation" is likely to be contentious. The September 2005 Statement stated that Washington and Pyongyang "undertook to respect each other's sovereignty, exist peacefully together and take steps to normalize their relations subject to their respective bilateral policies." However, the normalisation of relations "subject to their respective bilateral policies" is open to interpretation. According to Washington, there will be a long road to normalising relations with Pyongyang, which will include denuclearisation, but also encompass discussions on human rights, biological and chemical weapons, ballistic missile programmes, conventional weapons proliferation, terrorism and other illicit activities. Pyongyang, by contrast, wants normalisation at a much earlier stage, after a freeze but before actually dismantling its nuclear programme.

What North Korea most wants is for the US to give up its "hostile policy", and to obtain a reliable security assurance from the US, including its highest priority of "regime survival". As far as Pyongyang is concerned, the most tangible and vital security assurance it requires is the normalisation of relations with Washington. As its officials often emphasise, if both sides establish normalised relations and thus build trust, then North Korea will have no need for nuclear weapons. Pyongyang hopes to get out of the Cold War's shadow by improving its relations with the US and the west and by integrating itself into the international community.

The only leverage that Kim Jong Il possesses is his threat to go nuclear. Without building trust, Pyongyang is concerned that once it dismantles its nuclear weapons, it will lose its 'deterrent', with the likelihood that Washington would pursue regime change through the use of force, as it did with Saddam Hussein's regime. Pyongyang will therefore not dismantle its nuclear programme without receiving a tangible security assurance on this, and specifically the promise of normalised relations with Washington.

For this reason, the roadmap proposed here argues that Washington needs to establish normalised relations with Pyongyang when North Korea dismantles its plutonium programmes. Also, an additional requirement for normalised relations, which was pursued by the Clinton Administration from 1996-2000, is for Pyongyang to agree to a treaty ending the development of its long-range missiles and ending the export of missiles and techniques. This will significantly reduce the direct threat North Korean ICBMs pose to US territory.

After receiving these kinds of tangible benefits, it is believed that North Korea would be able to give up its nuclear programme and agree to strict verification.

Stage Three: Dismantling the Uranium Enrichment Programme

In this last stage, North Korea would complete dismantlement of its HEU programme. From the beginning, North Korea would have to make a comprehensive declaration of its HEU programme including centrifuge design, research and development (R&D), procurement, production and operation and identify all associated facilities or items that are to be dismantled and decommissioned. This stage could take one to two years.

The verification required will depend on the status of the programme, such as whether it has produced HEU or not. According to current estimates, North Korea is still several years away from producing enough HEU for even one or two bombs. The programme appears to be somewhere between the R&D level and pursuing a capacity of a pilot experimental facility.[14] If so, it should be relatively easy to verify the declared HEU activities. Detecting an undeclared centrifuge enrichment programme would be a challenge, so North Korea will need to explain and destroy the centrifuge prototypes and blueprints provided by Dr Abdul Qadeer Khan.

At this stage, North Korea would also be required to ratify the IAEA Additional Protocol to allow more intrusive inspections, including complementary access and environmental sampling which would make undeclared nuclear activities more difficult to hide. In addition, other cooperative measures including interviews with related persons should be accepted.

While disputes between Washington and Pyongyang over compliance may continue to occur, they should become less severe at this stage, once both sides have given up their mutual "hostile policies" and built more confidence measures. China, Russia and the IAEA may also assist in resolving disputes should they continue to occur. Moreover, the verification provision itself would play a role of deterrence.

At this stage, it is assumed Pyongyang would have achieved what it wants most: security guarantees and the full normalisation of relations with the US. Since by this stage it will already have dismantled its larger plutonium programme, Pyongyang would have no rationale to undertake the high risk of trying to maintain its HEU ambiguity. If Pyongyang took such a risk and was detected, it would lose all vestige of understanding from other countries, and would also probably lose any chance of regime survival.

To completely root out the source of the nuclear problems on the Korean peninsula and maintain lasting peace and stability in the region, the six parties, as agreed in the Joint Statement, would "explore ways and means for promoting security cooperation in northeast Asia" In addition to denuclearising, North Korea would also need to accede to and implement the Chemical Weapons Convention (CWC) and Biological and Toxin Weapons Convention (BWC). Pyongyang should also be encouraged to cut its conventional forces gradually in a way that is qualitatively equivalent to cuts in the South, particularly the reductions in US forces. This would reduce significantly North Korea's economic burden and facilitate its economic reform progress. Such a cut for Pyongyang would be especially facilitated if US troops were removed from the South. It is to be hoped that the other parties and states in the region would help both Koreas to pursue a gradual integration toward reunification.

At this third stage, other countries would continue to aid North Korea's economic reform, help Pyongyang improve its human rights, and provide funds and technologies for modernisation of the economic infrastructure. For example, South Korea could speed up its economic cooperation with North Korea, including initiatives such as the Kaesong industrial park and the reconnection of the inter-Korean railway. China, based on its reform experience over the last two decades, could help North Korea switch to a market economy without losing political stability in the process. As it did for South Korea, Japan would be expected to provide up to $10 billion as a form of compensation for its colonisation of Korea in the first half of the 20th century. Russia could also help to modernise North Korea's railroads and link them up with Russia's Trans-Siberian railroads en rout to European markets.

Pyongyang would put its nuclear power system under IAEA safeguards and accept the Additional Protocol. North Korea would also observe and implement the 1992 joint declaration of the Denuclearization of the Korean Peninsula, which requires "no enrichment and reprocessing" on the peninsula.

This process would be greatly facilitated if a group of supportive countries were to establish a multilateral cooperative threat reduction (CTR) programme for funding North Korean denuclearisation, including dismantling nuclear facilities, shipping fissile materials or remaining spent fuels out of North Korea, and environmental cleanup activities such as dealing with nuclear waste. The CTR programme could also help redirect the "nuclear resource" to civilian purposes.

It is estimated that such a programme to achieve North Korean denuclearisation could stretch out five years or longer and cost anywhere from 200-500 million dollars.[15] This could be paid as compensation for North Korean plutonium "buyoff".

The timing of the LWR is crucial. While the other parties expressed in the Joint Statement their respect for North Korea regaining its sovereign right to acquire LWR technology, the subject of the LWR provision will be discussed "at an appropriate time" - which is subject to different interpretations. Just after the Joint Statement was issued, Pyongyang declared that the LWR should be undertaken before any disarmament. But Washington said it would "discuss" the LWR subject only after Pyongyang disarms, which could mean never reaching a provision on the LWR. This LWR issue would continue to be a big obstacle in the following Six Party Talks.

What motivates Pyongyang to demand a LWR provision? One major reason is Pyongyang wants to use the LWR as a tangible measure to build mutual trust with Washington. Pyongyang hopes to have a special interaction with Washington during its disarmament procedure through a linkage between the LWR provision and nuclear dismantlement. As it tried to do under the 1994 Agreed Framework, it will seek to use the LWR to schedule the timing of several other matters including IAEA inspection at suspect waste sites, the removal of spent fuels and the dismantlement of nuclear facilities.

Given Pyongyang's concerns, it is not irrational for it to place so much emphasis on the LWR provision. Pyongyang is concerned about its energy security and does not want its economy depending on electricity from the South. Its fuel resource, as in the South, is very limited: no oil, no gas, and very limited coal. What North Korea has plenty of is natural uranium, which could supply nuclear power for hundreds of years. While the South could supply 2 GWe of electricity, the North does not want this offer to replace the LWR project, which would be on North Korean soil and is viewed as more important.

Pyongyang also has political imperatives. It wants to use the LWR provision to force the US to show its serious commitment to recognising North Korea's sovereignty. Consequently, it is suggested here that after North Korea dismantles verifiably its plutonium programme at Stage Two, the US and others should start construction of the LWR, and help to meet North Korea's long-term energy demand with oil and gas. Other countries could also be invited to help build several gas-fired power stations for North Korea, with a generation capacity of 2 GWe linked to the Russian pipeline.[16] A denial of the LWR provision would make North Korean denuclearisation too difficult.

On the other side, the North Korean "LWR provision first" proposal is not feasible. Construction time is around several years, and as shown in the KEDO LWR programme, is often delayed. The other countries cannot wait for another ten years. Moreover, the urgent need for Pyongyang is to rehabilitate its current power stations and T&D systems as suggested above. Once North Korea gets what it wants most - normalisation and a reduction of its major security concerns - it would be expected that as trust begins to be built, both sides will have fewer problems over the LWR issue. Consequently, Pyongyang needs also to reconsider the timing of the LWR provision and show more flexibility.

A Discussion of the Cost of the Roadmap

The total cost to "buy off" a nuclear North Korea and its missile threat, according to this proposed three-stage roadmap, is estimated at between $25-50 billion stretched out over ten years. South Korea would be expected to pay one third of the cost, and Japan would be expected to provide $10 billion as compensation for its occupation of North Korea. It has been reported the South Korea would be willing to pay as much as $15 billion in order to buy off the North Korean nuclear threat.

The estimate given here is comparable to that of some officials in Washington. For example, Curt Weldon (Republican, Pennsylvania), vice chair of the House Armed Services Committee, visited North Korea in 2003 with a bipartisan delegation of six members of the House of Representatives. On that occasion, he proposed that the six parties "shall negotiate and ratify a Korean Economic Development and Security Initiative to promote investment, economic growth, trade and humanitarian aid in North Korea. These nations, with the participation of European partners, commit a total of $3 billion to $5 billion per year for the next 10 years, most of the funds coming from South Korea and Japan."[17]

Is the cost of several tens of billions of dollars too much? In comparison, the current war in Iraq costs the US about $4.5 billion a month, not including the cost of replacement weapons and equipment. Taking into account the long-term costs of healthcare for wounded soldiers, a recent study, by Columbia University economist Joseph E. Stiglitz, who won the Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, concludes that the total cost of the Iraq war could reach $1-2 trillion.[18] A full-scale Korean war would likely cost more than this, given the fact that Seoul would be destroyed by the North's sustained artillery and that its nuclear missiles could target some of Japan's cities.

Buying off a nuclear North Korea

The cost of the aid suggested in the roadmap would come to somewhere between $25-50 billion, based on the following assumptions:

i) The rehabilitation of its power stations and T&D system within three to five years costs about $6 billion;

ii) The cost for the HFO delivery for three years could be about $300 million, assuming that South Korea will then begin supplying its 2 GWe electricity;

iii) If the South supplies its 2 GWe electricity for seven years, such a cost could be $7 billon. Here it is assumed that the South would end its electricity supply when the LWRs begin operation, and that LWR construction starts within about three years, with a construction timeline of seven years.

iv) The two LWRs would cost about $5 billion.

v) Nuclear dismantlement, decommission, removal and environment cleaning would cost about $350 million.

iv) The cost for building gas-fired power stations (with a total installation capacity of 2 GWe) linked to the Russian gas pipeline and associated local grids would be about $1.3 billion if operations started within five years. Also it is assumed North Korea would get free gas supply for these gas-fired power stations for five years - at a cost of about $5 billion. Thus, the total cost of this 'gas' aid is about $6.3 billion.

The total cost of buying off North Korea could also include additional money funds for CTR, CWC & BWC implementation and the retraining and re-employment of nuclear scientists, as well as more aid for its agriculture and economic development, and so on. With all elements taken into account, a conservative estimate of the total cost would be somewhere between $25 and $50 billion. As noted above, this is still far less than the US spends on the war in Iraq in a year.

Conclusion

Beijing should already have delivered Pyongyang the clear message that nuclear weapons will not serve North Korea's primary national interests in the long term. A nuclear North Korea will incur much more international pressure, including international economic sanctions; this will worsen or break its already poor economy, or even provoke a military confrontation with the US, risking regime collapse as well as war. Moreover, North Korea's leadership has realised that economic reform is necessary for economic development. Given that it has very limited resources to reform its economy, Pyongyang needs to open its door to the international community, especially its neighbours South Korea and Japan, for foreign investment, trade and aid.

If, on the other hand, Pyongyang tries to maintain its nuclear programme, its economy cannot be sustained. Since all its neighbours have made clear that they cannot tolerate a nuclear North Korea there will be no lasting cooperation or aid if the nuclear programme goes forward.

At the same time, the US needs to take a more realistic and effective way of peacefully solving the nuclear issue on the peninsula through peaceful diplomacy. Once Pyongyang receives what it wants most from the US - no "hostile policy," no "regime change," and "normalisation", as well as other economic benefits, North Korea is very likely to abandon its nuclear weapon-related programmes. Such a denuclearisation would be achieved verifiably through the three stages proposed here, in accordance to the "reciprocal action" principle.

The cost for such a roadmap is economically affordable. However, North Korean denuclearisation is dependent on whether Washington, which has the power to grant or deny what Pyongyang most wants, has the political will to move forward constructively.

The last several years have shown that the Bush administration's hard line policy generally backfires. It is time for Washington itself to take real actions to negotiate a way out of the nuclear crisis. As the world's dominant power, the US needs to demonstrate more strategic flexibility, and show leadership to help implement a feasible roadmap to accomplish North Korea's denuclearisation in a step-by-step manner.

Dr. Hui Zhang is a research associate in the Project on Managing the Atom at Harvard University’s John F. Kennedy School of Government, specialising in issues related to nuclear arms control and China's nuclear policy. The views expressed here are the author’s alone.

Notes

[1] The parties to the Six Party Talks are China, DPRK, South Korea, United States, Russia and Japan.

[2] See, e.g. Daryl G. Kimball, 'Getting Serious about North Korea', Arms Control Today, December 2005; and Paul Kerr, 'North Korea Nuclear Talks Stall', Arms Control Today, December 2005.

[3] Jiang Zemin, Report at 16th National Congress of the Communist Party of China, Xinhua News Agency, November 17, 2002, http://www.china.org.cn/english/features/49007.htm.

[4] See, e.g. http://news.xinhuanet.com/ziliao/2003-11/07/content_1165179.htm

[5] Li Zhaoxing, Speech at the Opening Ceremony of the Fourth Round of Six-Party Talks, Beijing, July 26,2005.

[6] See, e.g. Hui Zhang, 'Don't Blame Beijing: In its own way, China is actually trying to influence North Korea', Bulletin of the Atomic Scientists, September/October 2005.

[7] Wang Yi, former vice foreign minister and the head of the Chinese delegation to the first three rounds of the six-party talks, speech given at a press conference on the first round of six-party talks in Beijing, August.29, 2003.

[8] Li, Speech at the Opening Ceremony of the Fourth Round of Six-Party Talks, op. cit.

[9] Some other experts also suggest a "plutonium first" approach. See, e.g. Selig Harrison, et al., Ending the North Korean Nuclear Crisis: A Proposal by the Task Force on U.S. Korea Policy, 2004. Available at : http://ciponline.org/asia/Web%20Report.pdf.

[10] See, e.g. Siegfried Hecker, 'Technical Summary of the DPRK Nuclear Program' paper presented at the 2005 Carnegie International Non-Proliferation Conference, Washington, D.C. November 8, 2005.

[11] It should be noted that, although this stage focuses on freezing the plutonium programme, all parties should understand that any freeze should also cover the HEU programme.

[12] The US spent $405,106,000 from 1995 through 2003 for HFO supply in return for a freeze under the 1994 Agreed Framework. A half million ton of HFO costs about $100 million. See details in Peter Hates, et al., 'South Korea's Power Play at the Six-Party Talks', East Asia Science and Security Collaborative Special Report, July 21, 2005.

[13] Such rehabilitation, from current 2-3 GWe to 8-10 GWe in 1990 is estimated to cost roughly $5.5 - 7.5 billion. See Hates, et al., 'South Korea's Power Play at the Six-Party Talks', op. cit.. If the South Korean supply of 2 GWe electricity would begin within three years after implementing the denuclearisation agreement (say 2009) and the KEDO's LWR had been finished in 2003 as expected by 1994 Agreed Framework, then the delay of the supply of 2Gwe electricity would be about six years. The cost of 2 GWe electricity as South Korean estimated is around 1 billion US dollars per year. Thus a loss of a six-year delay of the supply of 2 GWe electricity is around $6 billion, which is comparable to a rehabilitation cost of North Korean power stations and T&D system.

[14] See,eg.Hui Zhang, 'Chinese Perspectives on the North Korean Nuclear Issue', presentation at 46th INMM Annual Meeting, Phoenix, AZ, July 10-14, 2005.

[15] See, e.g. Joel Wit, Jon Wolfsthal, and Choong-suk Oh, The Six Party Talks and Beyond: Cooperative Threat Reduction and North Korea, A Report of the CSIS International Security Program, December 2005.

[16] One projected pipeline of special interest is the Sakhalin I pipeline, which would cross directly from Russia through North Korea en route to South Korea. It is expected such a pipeline would be built within three to four years and cost around $3-3.5 billion. It is estimated that building eight 250MWe gas-fired power stations (i.e. total 2 GWe generation capacity) combined with the small local grids would cost about$ 1.2-1.36 billion. See details in Selig Harrison, 'Gas Pipelines and the North Korean Nuclear Crisis', Foreign Service Journal, December 2003.

[17] Curt Weldon, "A 10-point plan for N. Korea," The Philadelphia Inquirer, June 30, 2003.

[18] Linda Bilmes and Joseph E. Stiglitz, The Economic Costs of the Iraq War: An Appraisal Three Years after the Beginning of the Conflict, Harvard KSG Faculty Research Working Paper Series RWP06-002, January 2006.

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