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Cablegate: Seoul - Press Bulletin; October 7, 2009

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UNCLAS SECTION 01 OF 07 SEOUL 001591

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; October 7, 2009

TOP HEADLINES
-------------


Chosun Ilbo
NGOs Allegedly Embezzled Hundreds of Millions of Won
in Government Subsidies

JoongAng Ilbo
Korea Development Bank May Withdraw Loans
from GM Daewoo

Dong-a Ilbo
ROK, Japan Mull Daylight Saving Time for Next Year

Hankook Ilbo
Prosecutors Did Not Investigate Hyosung Group Even after Being
Tipped Off about Its Illegal Activities

Hankyoreh Shinmun
Blue House Pressures Three Telecom Service Operators for KRW 25
Billion in Donations

Segye Ilbo, Seoul Shinmun, All TVs
Kim Jong-il Signals "Conditional Return to Six-Party Talks"


DOMESTIC DEVELOPMENTS
---------------------

Foreign Minister Yu Myung-hwan, in an Oct. 6 seminar with the media,
said that the latest North Korea-China economic cooperation deals
may be in violation of the UN Security Council resolutions imposed
on North Korea, adding: "We have expressed our interest in these
matters and expect China to explain itself." (Dong-a)

According to an ROKG source, the four North Korean containers seized
in Busan last month for allegedly carrying items related to chemical
weapons were headed for Syria. (Dong-a)


INTERNATIONAL NEWS
------------------

According to North Korea's official Korean Central News Agency,
North Korean leader Kim Jong-il told visiting Chinese Premier Wen
Jiabao on Oct. 5 that North Korea is "willing to participate in
multilateral talks, including the Six-Party Talks, depending on the
outcome of its talks with the U.S." (All)

According to an ROKG source, ROK and U.S. intelligence authorities
think that there is a high possibility that North Korea this month
may complete restoring its Yongbyon nuclear facilities (disabled
under previous accords) and resume reprocessing spent fuel rods.
(Dong-a, Hankook, Segye, Seoul)

MEDIA ANALYSIS
---------------

-N. Korea
---------
All media gave prominent play to North Korean leader Kim Jong-il's
hint at the possibility of a conditional return to the Six-Party
Talks during Oct. 5 talks with visiting Chinese Premier Wen Jiabao.
The North Korean leader was widely quoted as saying: "Depending on
the outcome of its talks with the U.S, North Korea is willing to
participate in multilateral talks, including the Six-Party Talks."

State Department Spokesman Ian Kelly was also widely quoted in
statements he made about the Six-Party process, calling it "the best
mechanism for achieving denuclearization" on the Korean Peninsula.

SEOUL 00001591 002 OF 007


Conservative Dong-a Ilbo quoted a Blue House official as saying:
"The North's hint at its possible return to the Six-Party Talks is
positive, but we cannot say that the situation has changed since
Pyongyang has suggested bilateral talks with Washington as a
precondition." Dong-a also noted Foreign Minister Yu Myung-hwan's
remarks during a seminar yesterday, in which he said that the latest
North Korea-China economic cooperation deals may be in violation of
the UN Security Council resolutions imposed on North Korea, adding:
"We have expressed our interest in these matters and expect China to
explain itself."

Most media described Kim's mention of the Six-Party Talks as
"progress," but observed that the focus of Kim's latest remarks
appears to be on bilateral talks with the U.S., rather than the
Six-Party Talks. In particular, conservative Chosun Ilbo commented
that Kim's remarks are only "lip service" to China and constitute a
de facto refusal by the North to participate in the Six-Party Talks
and a clear expression that the North will instead concentrate on
bilateral talks with the U.S. Chosun went on to report that
Chinese officials are apparently taken aback by the North Korean
leader's statement because they see little it that signals progress
over his expressed willingness to engage in "bilateral and
multilateral talks," which was conveyed to Chinese State Councilor
Dai Bingguo when he visited Pyongyang on Sept. 18.

Newspapers carried the following headlines: "Conditional Return to
Six-Party Talks... Kim Jong-il Remains Unchanged" (conservative
Chosun Ilbo); "Kim Jong-il Pockets $20 Million in Aid from China in
Return for Conditional Return to Six-Party Talks" (right-of-center
JoongAng Ilbo); N. Korea Sets 'Traps of Conditions' to Return to
Six-Party Talks" (conservative Dong-a Ilbo); and "China Saves Face,
while N. Korea Wins Practical Benefits" (conservative Segye Ilbo)

Conservative Chosun Ilbo editorialized: "North Korean leader Kim
Jong-il's statement, 'That North Korea is ready to hold multilateral
talks and these talks include the Six-Party Talks suggests that they
may, depending on circumstances, push for trilateral talks between
the U.S., North Korea and China, instead of the Six-Party Talks.
After all, Chinese Premier Wen's visit to Pyongyang resulted in
massive economic aid to North Korea in return for the North's mere
"expression of willingness" to return to multilateral talks, instead
of its clear promise to return to the Six-Party Talks.."

Right-of-center JoongAng Ilbo's editorial argued: "... North Korean
leader Kim Jong-il's position reveals his belief that discussion on
the nuclear issue should be between the U.S. and North Korea, and
that the Six-Party Talks will confirm (whatever outcome results from
those talks). However, the U.S. believes that any discussions about
the resolution of the nuclear issue must be within the framework of
the Six-Party Talks and that U.S.-North Korea dialogue should serve
as a stepping stone for the multilateral talks. A visit to
Pyongyang by U.S. Special Representative for North Korea Policy
Stephen Bosworth is (more) likely to happen if this difference in
position is narrowed to some degree."

Conservative Dong-a Ilbo editorialized: "It is highly likely that
the North mentioned the Six-Party Talks as a face-saving measure for
China. China's (economic) assistance may also violate U.N. Security
Council Resolution 1874 sanctioning North Korea. ... If Beijing
promised assistance banned by the U.N. to maintain its influence
over Pyongyang, it does not deserve a seat at the U.N. Security
Council. Rather, this could further encourage North Korea to
develop nuclear weapons, judging that international sanctions
against it might no longer be as strict as they used to be."

Moderate Hankook Ilbo editorialized: "The ball is now in other
Six-Party countries' court. ... The U.S. is likely to take cautious
steps to make sure that North Korea will return to the Six-Party
Talks while the international community continues to cooperate to
enforce sanctions against North Korea. The U.S., however, should
not miss this rare opportunity by moving too slowly."


SEOUL 00001591 003 OF 007

OPINIONS/EDITORIALS
--------------------

NO POINT IN SIX-PARTY TALKS IF THEY ONLY CONFIRM WHAT IS DISCUSSED
IN U.S.-NORTH KOREA BILATERAL TALKS
(JoongAng Ilbo, October 7, 2009, Page 42)

During North Korean leader Kim Jong Il's meeting with Chinese
Premier Wen Jiabao on October 5, Kim reportedly expressed that,
depending on the outcome of talks with the U.S., the North would be
willing to conditionally rejoin the Six-Party Talks. This is a step
forward from his previous position that "the Six-Party Talks are
gone forever." The statement also appears to be a face-saving
measure for China, which (evidently) promised the North massive
economic aid. Whatever the reason, (Kim Jong Il's hint at rejoining
the Six-Party Talks) is a welcome advance in his position. However,
since the Six-Party Talks are not expected to resume soon, and the
North did not (explicitly) promise to denuclearize, we cannot see
this as a reversal of the current situation. This is why the ROK,
the U.S., and Japan are reacting cautiously while China welcomes the
result of the Kim-Wen meeting, going so far as to say that it has
helped them to reach an "important consensus" and bring about
"active progress" in the pursuit of denuclearization of the Korean
Peninsula.

(The North's) statement may (still) facilitate U.S.-North Korea
dialogue, however, despite there being a wide difference between the
North and the U.S. over the perception of the nature of the
bilateral talks. Kim's position reveals his belief that discussion
on the nuclear issue should be between the U.S. and North Korea, and
that the Six-Party Talks will confirm (whatever outcome results from
those talks). However, the U.S. believes that any discussions about
the resolution of the nuclear issue must be within the framework of
the Six-Party Talks and that U.S.-North Korea dialogue should serve
as a stepping stone for the multilateral talks. A visit to
Pyongyang by U.S. Special Representative for North Korea Policy
Stephen Bosworth is (more) likely to happen if this difference in
position is narrowed to some degree.

Right after the outcome of the Kim-Wen meeting was disclosed, the
U.S. Department of State released a statement concluding that the
five parties (excluding the North) had agreed that "the Six-Party
process (would serve as) the best mechanism (for resolving the
nuclear issue)." The State Department also stressed that the five
parties had reached a consensus on the complete enforcement of the
resolution of UN Security Council sanctions. We believe that the
USG should continue to maintain this stance. Looking back to how
the North Korean nuclear issue has unfolded over the past two
decades, we think that there is no alternative (to the Six-Party
Talks). The reason for this is that, even though Kim Jong-il has
maintained that the denuclearization of the Korean Peninsula was the
dying wish of (his father,) North Korea's founder Kim Il-sung, the
younger Kim's actions have not matched his words. We cannot simply
believe what he says and expect the nuclear issue to be resolved.
The two-track approach of "pressure and dialogue" should be
maintained until there is an assurance that North Korea abandons its
nuclear (ambitions.).

President Lee Myung-bak will attend the ROK-U.S. summit on October 9
and the ROK-China-Japan summits on October 10. During these
summits, he should not only figure out North Korea's true intentions
but also clearly state the ROK's position. He should try to calm
controversy over the "grand bargain" proposal and ensure that the
five parties adhere to the agreements that "the nuclear issue should
be resolved within the Six-Party framework" and "the UNSC sanctions
should be maintained unless the North shows any change in its
attitude." In particular, the ROK should closely coordinate its
(North Korean) policy with the U.S., which will have bilateral
dialogue with the North, and China, which maintains a special
relationship with the North.


CHINA'S FAILURE TO DO MORE

SEOUL 00001591 004 OF 007


(Dong-a Ilbo, October 7, 2009, page 35)

China has failed to persuade North Korea to return to the Six-Party
Talks in the near future. North Korean leader Kim Jong-Il told
visiting Chinese Premier Wen Jiabao in Pyongyang Monday, "We are
willing to go ahead with multilateral dialogue including the
Six-Party Talks after looking at the outcome of bilateral talks with
the U.S." Kim added, "Our relationship with the U.S. must turn
peaceful through bilateral talks." By mentioning the Six-Party
Talks, Kim apparently meant Pyongyang would return to them only if
the North gets its way with Washington first. If China is content
with his comment, it does not deserve to be the host of the
Six-Party Talks.

Beijing is said to have promised substantial economic assistance to
Pyongyang on the occasion of Wen's visit. His delegation signed
several agreements, including an "exchange document on economic
assistance." China will provide an estimated KRW 170 billion (USD
145 million) for the construction of a bridge over the Yalu River.
It is highly likely that the North mentioned the Six-Party Talks as
a face-saving measure for China.

China's (economic) assistance may also violate U.N. Security Council
Resolution 1874 sanctioning North Korea. The resolution requires
all member states and international financial and credit
institutions not to enter into new commitments of grants, financial
assistance, or concessional loans with the North, except for
humanitarian and developmental purposes that directly address the
needs of the civilian population or denuclearization. If Beijing
promised assistance banned by the U.N. to maintain its influence
over Pyongyang, it does not deserve a seat at the U.N. Security
Council. Rather, this could further encourage North Korea to
develop nuclear weapons, judging that international sanctions
against it might no longer be as strict as they used to be.

China must clearly realize why North Korea insists on bilateral
talks with the U.S. North Korea has long argued that the two
countries must discuss nuclear disarmament in tandem with the
signing of a peace treaty and withdrawal of U.S. forces from the
ROK. If this argument is accepted, this means that Pyongyang is
recognized as a nuclear power. Even if the Six-Party Talks are
resumed, they will end up on the sidelines of North Korea-U.S.
dialogue.

The international community must not be duped by North Korea's
tactics. U.S. Secretary of State Hillary Clinton said of the North
Korea-China talks that the five parties of the ROK, the U.S., Japan,
China and Russia have all agreed that the Six-Party Talks are the
best way to resolve North Korea's nuclear program. This is a
relief. The ROK's Foreign Minister Yu Myung-hwan also said
yesterday, "North Korea's nuclear issue must be discussed in the
Six-Party Talks." The ROK, China and Japan held a trilateral summit
in Beijing Saturday. The leaders of these three countries can and
should advance coordination efforts for the denuclearization of
North Korea.

(This is a translation provided by the newspaper, and it is
identical to the Korean version.)


CHINA WEAKENS IMPACT OF PRESSURE ON N. KOREA
(Chosun Ilbo, October 7, 2009, page 35)

North Korean leader Kim Jong-il told visiting Chinese Premier Wen
Jiabao on Monday that his country is willing to attend multilateral
talks, including the Six-Party Talks, depending on the progress in
its talks with the United States. It was a shift from the vow never
to return to the Six-Party Talks which the North made in protest
against UN sanctions following its second nuclear test.

But Kim's comments contain strategic pitfalls and ambiguities that
are trademarks of the Stalinist country's diplomatic style.

A prime example is the caveat that the North's return to Six-Party

SEOUL 00001591 005 OF 007


Talks depends on progress in bilateral talks with Washington, which
seems to imply it wants rewards first. But the U.S. government
wants to avoid promising rewards or discussing the specifics of
North Korea's nuclear program during the meeting. That would make
it difficult for North Korea to walk away with rewards, and the
Six-Party Talks could once again be postponed indefinitely. That
North Korea is ready to hold multilateral talks and these talks
include the Six-Party Talks suggests that they may, depending on
circumstances, push for trilateral talks between the U.S., North
Korea and China, instead of the Six-Party Talks.

After all, Chinese Premier Wen's visit to Pyongyang resulted in
massive economic aid to North Korea in return for the North's mere
"expression of willingness" to return to multilateral talks, instead
of its clear promise to return to the Six-Party Talks. In doing so,
it is repeating the mistake of the past of rewarding North Korea
before it has done anything, especially when UN sanctions are still
in effect. This approach weakens international pressure on North
Korea and the negotiating powers of the countries in the Six-Party
Talks.

Kim repeated that denuclearization on the Korean Peninsula was the
"last wish" of former leader Kim Il-sung and that Pyongyang would
continue to achieve that wish. But North Korea has used that line
in the past, only to shift back to supporting its nuclear weapons
program citing "hostile" policies by the ROK and the U.S. Even if
talks resume, this attitude shows that Pyongyang can quit again at
any time, to say nothing of the trouble it can make during talks.

In bilateral talks between North Korea and the U.S., Washington
could give Pyongyang a hint of the contents of the "comprehensive
package" the allies are promising, but specific details should be
left for the Six-Party Talks. U.S.-North Korea talks must be kept as
brief as possible.

(This is a translation provided by the newspaper, and it is
identical to the Korean version.)


LEE ADMINISTRATION MUST CHANGE NOW-OBSOLETE N. KOREA POLICY
(Hankyoreh Shinmun, October 7, 2009, page 31)

An important situational change in the North Korea nuclear issue has
taken place over the past two days during the high-level meeting
between North Korea and China. Meeting with Chinese Prime Minister
Wen Jiabao two days ago, Kim Jong-il, Commissioner of North Korea's
National Defense Commission said North Korea is prepared to accede
to multilateral talks, including the Six-Party Talks, because there
has been progress in discussions about holding bilateral North
Korea-U.S. talks..

The return to Six-Party Talks is conditioned on the results of
bilateral North Korea-U.S. talks, but Kim's direct reference to the
Six-Party Talks, which North Korean authorities had declared dead on
several occasions, seems to be a signal that North Korea will return
to the path of dialogue. The statement also indicates that the
situation on the Korean Peninsula might move from sanctions that
began with last spring's North Korean satellite launch and nuclear
test towards dialogue.

Of course, even if dialogue begins, there are many mountains to
cross. First, there is a high probability that North Korea will
continue its push for bilateral talks, stressing that the starting
point of the North Korean nuclear issue is U.S. hostile policy
towards North Korea. Moreover, even if North Korea agrees to
multilateral talks, a tug-of-war will ensue between the relevant
countries over whether the talks should be six-party, three-party
(North Korea, U.S., China) or four-party (the ROK, North Korea,
China, U.S.). It is also unclear whether results from North
Korea-U.S. bilateral talks will draw North Korea back as a
participant in multilateral talks. Despite these uncertain factors,
it is fortunate that tensions on the Korean Peninsula have settled
and the door for dialogue has opened.


SEOUL 00001591 006 OF 007


The significance of this meeting between China and North Korea for
the international community, including the ROK, is twofold, broadly
speaking. First, with China agreeing to large-scale economic aid to
North Korea, sanctions against North Korea have been rendered
virtually powerless. With China, which accounted for over 70
percent of North Korean trade last year, pledging large-scale
economic cooperation, pressuring North Korea through sanctions is
nothing more than a joke.

The other point of significance is that the two nations have pledged
to strengthen their friendship "for generations to come." This
means China will support the North Korean regime in the long-term.
One could say a honeymoon era between North Korea and China has
begun. The Lee Myung-bak Administration is greatly at fault for
letting the situation reach this point, because (the Administration)
thoroughly blocked exchanges and cooperation with North Korea.

Having secured Chinese political and economic support, North Korea's
will become more insistent in its demands with the ROK and the U.S..
Our government, however, says it will stick to pressuring North
Korea through international cooperation, the limit of which was
clearly displayed here. It is not too late. It is time for the Lee
Administration to craft a new North Korea policy in line with the
new changes.

(This is a translation provided by the newspaper, and it is
identical to the Korean version.)


N. KOREA THROWS BALL FOR SIX-PARTY TALKS INTO OTHER COUNTRIES' COURT

(Hankook Ilbo, October 7, 2009, page 39)

North Korean leader Kim Jong-il expressed a conditional willingness
to return to the Six-Party Talks. During talks with Chinese Premier
Wen Jiabao, Kim said, "North Korea is willing to participate in
multilateral talks, including the Six-Party Talks, depending on the
outcome of its talks with the U.S." This seems to be a considerable
jump in progress from last month's meeting between Kim Jong-il and
Chinese State Councilor Dai Bingguo, who was visiting Pyongyang as a
Chinese presidential envoy. (During the meeting,) Kim said that the
North would be willing to participate in bilateral and multilateral
talks, but did not (specifically) mention the Six-Party Talks.
There is even a probability that, depending on the outcome of
U.S.-North Korea bilateral talks, discussions on the North Korean
nuclear issue may progress more rapidly following the resumption of
the Six-Party Talks. (According to sources,) U.S. Special
Representative for North Korea Policy Stephen Bosworth is expected
to visit North Korea late this month.

Still, Kim Jong-il's intentions are dubious because he attached
conditions (to a return to the Six-Party Talks.) This has led to
suspicion that while his statement may have been a face-saving
measure for China, the North intends to bide its time while avoiding
international sanctions and pressure. It would be difficult for
North Korea, which declared the Six-Party Talks dead (months ago),
to issue a sudden announcement that it will return to the Six-Party
Talks. Therefore it seems that Pyongyang needed time to find a
justification (for its return to the Six-Party Talks.) Some
analysts believe that North Korea and China must have made
behind-the-scenes deals considering Chinese state media's report
that there was significant progress on the North Korean nuclear
issue during the Kim-Wen meeting.

The ball is now in other Six-Party countries' court. Attention is
turning to what next move the Obama Administration, which has
expressed its interest in holding bilateral talks with the North,
will make. The U.S. is likely to take cautious steps to make sure
that North Korea will return to the Six-Party Talks while the
international community continues to cooperate to enforce sanctions
against North Korea. The U.S., however, should not miss this rare
opportunity by moving too slowly. Other Six-Party countries such as
Japan should undertake more efforts to put the Six-Party Talks back
on track. North Korea stuck to the expression of "multilateral

SEOUL 00001591 007 OF 007


talks" apparently to warn of the possibility of engaging in
three-party or four-party talks excluding Japan.

The ROKG also should step up efforts (to resume the Six-Party
Talks.) Our wait-and-see approach may leave us sidelined amid signs
of a drastic change in developments (surrounding the Korean
Peninsula.) The ROKG needs to take a more active approach to make
President Lee's "grand bargain" proposal a practical and tangible
concept since it has been criticized for being somewhat far-fetched.

STEPHENS

© Scoop Media

 
 
 
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