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Cablegate: Seoul - Press Bulletin; December 30, 2009

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UNCLAS SECTION 01 OF 03 SEOUL 002018

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV MARR ECON KPAO KS US
SUBJECT: SEOUL - PRESS BULLETIN; December 30, 2009

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

Chosun Ilbo, Hankook Ilbo
Chung-Ang University to Cut Departments by Half

JoongAng Ilbo
ROK Materials Likely Reused by North's Military; Diversion of
Light-Water Reactor Site Equipment Breaks Prior Agreement

Dong-a Ilbo
ROKG to Grant Permanent Residence to Overseas Koreans who Hold Local
Real Estate or Bank Deposits Worth More Than 500 Million Won

Hankyoreh Shinmun, All TVs
Former Samsung Chairman Lee Gets Presidential Pardon

Segye Ilbo, Seoul Shinmun
Kumho Industrial, Tire to Seek Debt Workout Program


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

According to the Unification Ministry and other sources, North Korea
took ROK equipment and materials left from the halted construction
work on light-water reactors from the site in Kumho, South Hamgyong
Province, breaking a prior agreement with the Korean Peninsula
Energy Development Organization (KEDO) to leave materials at the
site. (JoongAng)


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

According to the Dec. 27 issue of The Washington Post, Pakistani
Scientist Abdul Qadeer Khan claimed that North Korea may have been
enriching uranium on a small scale by 2002, with "maybe 3,000 or
even more" centrifuges. He went on to say that during a visit to
North Korea in 1999, North Korean hosts showed him boxes containing
components of three finished nuclear warheads, which he was told
could be attached to missiles within an hour. (Chosun, JoongAng,
Hankyoreh, Segye)

According to Daily NK, an online newspaper focusing on issues
relating to North Korea, Pyongyang recently issued a decree banning
its citizens from possessing or using foreign currencies. (JoongAng,
Dong-a, Segye, Daily NK)


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

-N. Korea
---------
All ROK media covered yesterday's report by North Korea's official
Korean Central News Agency that North Korea has detained an American
citizen for illegally entering the country, in an apparent reference
to a Christian missionary who reportedly crossed into the North
recently to bring international attention to Pyongyang's human
rights violations.

According to media reports, the North did not give his name or other
details, and said that he entered the North on Dec. 24, not Dec. 25
as a fellow human rights activist had originally claimed.

In a related development, State Department Spokesman Ian Kelly was
widely quoted as telling reporters on Dec. 28: "We are concerned by
these reports and we're looking into them. We don't have any
independent confirmation about either the reports that he crossed
over or about his whereabouts, and so we're seeking further
information."


SEOUL 00002018 002 OF 003


Conservative Chosun Ilbo conjectured that North Korea may use (the
detained activist) as a bargaining chip in negotiations with the
U.S., as it did when it detained two American journalists in March.

Moderate Hankook Ilbo and SBS TV replayed a Dec. 28 report by
Japan's Kyodo News Agency that North Korea conveyed to the U.S. that
it gives priority to signing a peace treaty replacing the current
armistice over normalizing bilateral ties. According to the Kyodo
News report, the North relayed the message to Special Representative
for North Korea Policy Stephen Bosworth when he visited the country
earlier this month.

Right-of-center JoongAng Ilbo gave top front-page play to a report
claiming that North Korea took ROK equipment and materials left from
the halted construction work on light-water reactors, breaking a
prior agreement with the Korean Peninsula Energy Development
Organization (KEDO) to leave materials at the (construction) site.
According to the report citing the Unification Ministry and other
sources, North Korea has taken 190 vehicles from the site in Kumho,
South Hamgyong Province, and 93 pieces of heavy equipment, including
cranes and excavators, and is likely using them for military
purposes.

FEATURES
---------

ROK MATERIALS LIKELY REUSED BY NORTH'S MILITARY
(JoongAng Daily, December 30, Front page)

By Reporter Lee Young-jong

Diversion of light-water reactor site equipment breaks prior
agreement

North Korea has reused equipment and materials left from the halted
construction work on light-water reactors, breaking a prior
agreement with a multinational organization that oversaw the botched
construction project.

According to the Unification Ministry and other sources, North Korea
has taken 190 vehicles from the site in Kumho, South Hamgyong
Province, and 93 pieces of heavy equipment, including cranes and
excavators, and is likely using them for military purposes.

Sources said thousands of tons of steel bars and cement and
communication devices are also being used by the North.

In late 2005, the Korean Peninsula Energy Development Organization,
also known as KEDO, stopped construction of non-military nuclear
reactors in the North. The work had begun in August 1997 as part of
the 1994 Agreed Framework between the United States and North Korea.
Under the terms of the agreement, Washington said it would build
two reactors in the North in exchange for Pyongyang's agreement to
freeze all nuclear weapons activities.

But in October 2002, the United States said it had obtained
intelligence that the North had been operating a clandestine program
to produce highly enriched uranium to develop weapons and the U.S.
State Department said North Korea admitted to doing so. By January
2003, the North withdrew from the Nuclear Non-proliferation Treaty.
KEDO suspended its construction in November 2003.

Two years later, KEDO's board decided to terminate the construction
project, which was about 30 percent complete. In December 2005,
North Korea asked KEDO workers to leave the country and said they
would not be allowed to repatriate equipment and construction
materials.

At the time, KEDO and North Korea had agreed to leave materials at
the site. Most belonged to ROK subcontractors, and they had planned
to sell off some of it to make up for financial losses stemming from
the halted work.

In 2003, after KEDO first suspended construction, the North said it

SEOUL 00002018 003 OF 003


would not allow the transfer of equipment unless it received
compensation. A government official here said, "The North moved the
equipment before we could even address the compensation issue, and
that's clearly in violation of our agreement. It can even be
regarded as stealing."

In January 2006, the Roh Moo-hyun Administration in Seoul said the
North had pledged to store the materials and that it expected the
North to honor its word. Despite suspicions that the North had used
some of the equipment in preparation for their second nuclear test
this year, the current Lee Myung-bak Administration has also
remained silent.

But intelligence sources tell a different story.

They said the North started using equipment almost immediately after
KEDO's withdrawal and that the North Korean military was involved.

"North Korea is trying to keep South Korean and KEDO officials from
going near the construction base," one source said. "Recent
satellite photos of the site show that hundreds of the black covers
that were used to conceal materials are mostly gone."

Sources estimate equipment and materials are worth about 46 billion
won ($39 million). The ROK, one of the founding members of KEDO,
spent $1.1 billion on the construction project.


STEPHENS

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