[Senate Prints 108-40]
[From the U.S. Government Publishing Office]


108th Congress                                                  S. Prt.
                            COMMITTEE PRINT                     
 2d Session                                                      108-40
_______________________________________________________________________

                                     


 
                       NORTH KOREA: STATUS REPORT
                          ON NUCLEAR PROGRAM,
                          HUMANITARIAN ISSUES,
                          AND ECONOMIC REFORMS

                               __________

                          A STAFF TRIP REPORT

                                 TO THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                      One Hundred Eighth Congress

                             Second Session

                             FEBRUARY 2004

                                     





92-278              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
SAM BROWNBACK, Kansas                JOHN F. KERRY, Massachusetts
MICHAEL B. ENZI, Wyoming             RUSSELL D. FEINGOLD, Wisconsin
GEORGE V. VOINOVICH, Ohio            BARBARA BOXER, California
LAMAR ALEXANDER, Tennessee           BILL NELSON, Florida
NORM COLEMAN, Minnesota              JOHN D. ROCKEFELLER IV, West 
JOHN E. SUNUNU, New Hampshire            Virginia
                                     JON S. CORZINE, New Jersey

                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)
?



                            C O N T E N T S

                              ----------                              
                                                                   Page

Letter of Transmittal............................................     v

Executive Summary................................................   vii

North Korea's Nuclear Program....................................     1

    Yongbyon Key Findings........................................     2

Humanitarian Issues..............................................     3

    Japanese Abductees...........................................     4

    U.S. Food Assistance to DPRK.................................     4

    The Gulags...................................................     6

Economic Reforms.................................................     7

    Background...................................................     7

    Markets Sprout...............................................     8

    Economic Prospects...........................................     9

Beijing, Seoul and Tokyo.........................................    10

Conclusions/Key Findings.........................................    10

Key Interlocutors................................................    11


Prepared Statement of Dr. Siegfried S. Hecker, Senior Fellow, Los 
  Alamos National Laboratory, University of California (presented 
  to the U.S. Senate Committee on Foreign Relations, January 21, 
  2004)..........................................................    13

                                 (iii)
?



                         LETTER OF TRANSMITTAL

                              ----------                              

                                                 February 23, 2004.
The Honorable Richard Lugar,
United States Senator,
Chairman, Committee on Foreign Relations.

The Honorable Joseph R. Biden Jr.,
United States Senator,
Ranking Member, Committee on Foreign Relations.

Dear Senators Lugar and Biden:
    In early January, we traveled to China, North Korea, South 
Korea, and Japan, to assess the prospects for a peaceful 
negotiated solution to the North Korean nuclear issue and to 
follow-up on three earlier visits to North Korea focused on 
gaining more transparency on food aid issues and encouraging 
greater North Korean adherence to international norms in the 
area of human rights. We met with foreign government officials 
as well as with professors and think tank specialists concerned 
with developments on the Korean Peninsula.
    While in North Korea, we visited the Yongbyon nuclear 
facility along with Dr. John Lewis of Stanford University, Jack 
Pritchard of the Brookings Institution, and Sig Hecker, former 
Director of Los Alamos Nuclear Laboratories. We also requested 
of North Korean officials and were granted meetings to afford 
us an opportunity to engage in detailed discussions on a number 
of humanitarian issues, including food aid, prison conditions, 
and the Japanese abduction cases. We also traveled to Seoul and 
Tokyo to meet with key officials. We wish to acknowledge the 
efforts of officials at the State Department in Washington and 
abroad who helped to facilitate our travels.
    A report on our major activities and key findings, 
including some thoughts about the next steps on the Korean 
Peninsula, follows below.
        Sincerely,
                                        Keith Luse,
                 Professional Staff Member, Majority Staff,
                                    East Asian and Pacific Affairs.

                                     Frank Jannuzi,
                 Professional Staff Member, Minority Staff,
                                    East Asian and Pacific Affairs.

                                  (v)





                           EXECUTIVE SUMMARY

                              ----------                              

    Senate Foreign Relations Committee (SFRC) staff members 
Keith Luse and Frank Jannuzi traveled to China, North Korea, 
South Korea, and Japan January 3-15 to assess the prospects for 
a peaceful negotiated solution to the North Korean nuclear 
issue and to follow-up on earlier visits to North Korea 
designed to encourage greater North Korean transparency on food 
aid and greater adherence to international norms of behavior on 
a broad array of human rights issues.
    While in North Korea, our delegation interacted with a 
group of three private citizens--Dr. John Lewis of Stanford 
University, Jack Pritchard of the Brookings Institution, and 
Sig Hecker, former Director of Los Alamos Nuclear 
Laboratories--and accompanied them to the Yongbyon nuclear 
facility. This marked the first time North Korea has allowed 
foreigners to enter its key nuclear facilities since it 
expelled IAEA monitors in December, 2002. We have relied on the 
observations of Dr. Hecker to convey key findings from 
Yongbyon. Dr. Hecker's testimony to the Senate Foreign 
Relations Committee is attached to this report. (See page 13.)
    Over the course of five days in the North, we held a 
variety of meetings with DPRK officials to discuss their 
nuclear program and to encourage greater North Korean respect 
for human rights. The delegation sought to clarify North 
Korea's December 9 offer to ``freeze'' its nuclear program, and 
urged North Korean officials to abandon their pursuit of 
nuclear weapons and seek a peaceful, negotiated solution to the 
crisis through multilateral dialogue.
    While at Yongbyon, Dr. Hecker was able to confirm that the 
5 MWe nuclear reactor is running normally and that the 8,000 
spent fuel rods which had been stored under International 
Atomic Energy Agency supervision under the terms of the 1994 
Agreed Framework have been removed from their canisters and are 
no longer in the spent fuel storage facility. Our tour of the 
Radiochemical laboratory also convinced Dr. Hecker that North 
Korea has the capability to reprocess spent fuel and produce 
plutonium metal. North Korea did not make available any DPRK 
personnel who may have expertise in nuclear weapons design and 
manufacture, and Dr. Hecker reached no conclusions about the 
North's ability to build a nuclear device.
    During a discussion with Foreign Ministry officials on the 
North's nuclear program following our time at Yongbyon, Vice 
Foreign Minister Kim Gye-gwan claimed that unlike Iran and 
Libya, North Korea actually has weapons of mass destruction. 
Kim said that North Korea had provided us with evidence of 
their ``nuclear deterrent.'' These were the most explicit 
statements we received that North Korea has produced nuclear 
weapons.

                                 (vii)

    As for U.S. allegations that North Korea has a clandestine 
program to produce highly enriched uranium (HEU), Kim Gye-gwan 
and other DPRK officials stated categorically that the DPRK has 
no program for enriching uranium.
    On the human rights front, Luse and Jannuzi had the 
opportunity to engage in detailed discussions on a number of 
issues, including food aid, prison conditions, and the 
abduction of Japanese nationals by North Korean intelligence 
agents. We emphasized that the United States' concern for the 
human rights situation in North Korea reflects the deeply held 
convictions of the American people. SFRC staff encouraged DPRK 
officials to permit greater transparency for food aid 
deliveries under the auspices of the World Food Program and 
various non-governmental organizations, and we discussed ways 
in which North Korea might reduce its dependence on foreign 
food aid by adopting new methods of food production and moving 
toward market-based distribution mechanisms. The delegation 
pressed DPRK officials to allow outside access to its prison 
facilities to assess food needs and humanitarian issues there. 
We also met with Foreign Ministry officials to express our hope 
that North Korea would take steps to fully resolve the issue of 
the past abduction by the DPRK of more than a dozen Japanese 
nationals. We explained that the prompt resolution of this 
issue was a matter of international concern and of particular 
interest to members of the Congress. The delegation requested 
information on the abductees and their family members still in 
North Korea and passed this information on to the Japanese 
government.
    Finally, the delegation had a chance to review the progress 
of North Korea's economic reforms launched in July of 2002. We 
found considerable evidence that North Korea is committed to 
moving toward a market economy, but it is too soon to draw 
conclusions about the ultimate success or failure of these 
initiatives. North Korea suffers from critical resource 
shortages and it may not yet fully grasp the institutional 
changes that will be necessary if its fledgling economic 
reforms are to yield a significant boost in DPRK production and 
an improvement in living standards for the North Korean people. 
Even if North Korea's economy begins to grow, it is not clear 
how this will affect the nation's social and political 
stability. Officials with whom we met recognized that the 
North's ability to expand trade and attract foreign investment 
and receive loans from international financial institutions 
depends in large measure on the peaceful resolution of the 
nuclear issue.


                       NORTH KOREA: STATUS REPORT
                          ON NUCLEAR PROGRAM,
                          HUMANITARIAN ISSUES,
                          AND ECONOMIC REFORMS

                              ----------                              


                     North Korea's Nuclear Program

    Prior to our visit to Yongbyon, Vice Foreign Minister Kim 
Gye-gwan told us that North Korea had decided to permit our 
visit to break through the ``stalemate'' at the six party talks 
and to provide ``more transparency on our nuclear program that 
has been shrouded in mystery.'' Kim also said North Korea hoped 
to differentiate its nuclear program from those pursued by 
Libya and Iran. ``They claim they do not have weapons of mass 
destruction. We claim that we do have weapons of mass 
destruction, and we leave the conclusions to your side.''
    Kim said that North Korea had chosen to reprocess the 8,000 
spent fuel rods from its nuclear reactor to ``strengthen our 
deterrence'' in response to the ``intensifying hostile policy'' 
of the U.S. Government. He specifically cited the President's 
reference to North Korea as a member of the ``Axis of Evil,'' 
as well as the inclusion of North Korea in a list of countries 
subject to ``pre-emptive strike'' by the United States. Kim 
told the delegation that he believes only the North's nuclear 
deterrent has prevented the United States from launching a pre-
emptive attack. ``Once we lay down our gun, the United States 
would attack immediately.''
    Nonetheless, Kim repeatedly stated that North Korea remains 
interested in the ``final goal'' of a nuclear free Korean 
Peninsula, and said, ``If we are to reach the final goal, we 
need to become serious about specific action steps, not just 
talk. A freeze of current activities might be a first step. At 
Yongbyon, you will see the importance of a freeze. We are 
prepared to give up our nuclear activities, have no transfer to 
other nations, and no testing of any kind. We truly believe 
this is the right place to start.'' Kim later clarified that 
the North's freeze proposal ``only makes sense as a starting 
point to reach the objective of a non-nuclear peninsula. We 
don't want to stop at a freeze.'' He also emphasized that ``how 
to freeze'' and ``what comes next'' are issues the North hopes 
can be discussed in detail at the next round of six party 
talks, and that North Korea is ``. . . fully open to these kind 
of talks.''
    Our delegation raised the question of the North's alleged 
program to develop highly enriched uranium (HEU). Kim Gye-gwan 
stated categorically that the DPRK ``has nothing to do with any 
HEU program.'' Kim said, ``We have no program, no facilities 
you are talking about, or scientists trained for this purpose 
[enriching uranium].''
    Kim Gye-gwan continued, ``Our policy on nukes is based on 
natural uranium, not highly enriched uranium . . . We don't 
have any plans for HEU or facilities for that purpose.'' 
Moreover, Kim flatly denied that North Korea had ever admitted 
to having an HEU program during the October, 2002 meeting with 
Assistant Secretary of State James Kelly in Pyongyang.
Yongbyon Visit
    On Thursday, January 8, we spent roughly six hours at the 
Yongbyon nuclear facility. Yongbyon is about two hours by car 
from Pyongyang, with much of the last hour spent on unpaved 
roads. The Yongbyon nuclear complex is a city unto itself. DPRK 
officials said that about 1,000 scientists and technicians work 
and reside at the facility, and several thousand others provide 
support services, grow food, etc. During our visit, we were at 
all times escorted by senior officials at Yongbyon as well as 
by Ambassador Li Gun, our Foreign Ministry host.
    Of the five Americans who visited Yongbyon, only Dr. Hecker 
possesses detailed understanding of the workings of a nuclear 
power plant and the science connected with the extraction of 
plutonium from spent reactor fuel and the production of 
plutonium metal. Dr. Hecker's expertise allowed him to ask 
probing questions and to engage in expert level discussions 
with his counterparts. Accordingly, we have not tried to make 
any independent assessments of the North's nuclear 
capabilities. We are relying on Dr. Hecker's findings, and will 
make only a few general observations about the tenor of our 
visit.
    North Korean officials at Yongbyon exhibited an easy 
confidence during our tour, answering questions promptly and 
with thoroughness. They seemed eager to showcase their 
facilities and what they had accomplished. Yongbyon facility 
director Ri Hong-sop told us that North Korea's nuclear program 
was developed indigenously. In response to a question, Ri 
denied that North Korea had provided any nuclear technology to 
Burma or any other country.
    The DPRK scientists confined their remarks and exchanges to 
the science of running a nuclear reactor and fabricating 
plutonium, generally avoiding political remarks or debate. 
Their tone and demeanor were professional. The North's 
officials appeared open to a repeat visit by Dr. Hecker to help 
confirm what we had seen through additional observations and 
scientific measurements.
Yongbyon Key Findings
    Dr. Hecker's key findings based on our visit to Yongbyon 
are these:

   The 5 MWe reactor has been restarted. It appears to 
        be operating smoothly providing heat and electricity, 
        while also accumulating approximately 6 kg of plutonium 
        per year in its spent fuel rods.

   The 50 MWe reactor construction site appears to have 
        seen no activity since the IAEA inspectors were 
        instructed to leave in 2002. The reactor and the 
        construction site look in a bad state of repair. It 
        would require a major construction program to finish 
        the reactor. North Korea reports the future of the 50 
        MWe reactor is still ``under evaluation.''

   The spent fuel pond is empty; the approximately 8000 
        fuel rods have been moved.

   The DPRK claimed to have reprocessed all 8,000 fuel 
        rods to extract plutonium metal during one continuous 
        campaign between mid-January 2003 and end of June 2003. 
        We could not definitively substantiate that claim. 
        However, the Radiochemical Laboratory staff 
        demonstrated that they had the requisite facility, 
        equipment and technical expertise, and they appear to 
        have the capacity to extract plutonium from the spent 
        fuel rods and fabricate plutonium metal. If all 8,000 
        fuel rods were reprocessed, the IAEA estimates they 
        would provide 25 to 30 kg of plutonium.

   It is possible that they moved the 8,000 fuel rods 
        to a different storage location. However, such storage 
        would represent a serious health and safety hazard.

   We were shown what was claimed to be a sample of 
        plutonium metal product produced last year. Dr. Hecker 
        was not able to definitively confirm that the sample 
        was actually plutonium metal, but all observations he 
        was able to make were consistent with the sample being 
        plutonium metal. However, Dr. Hecker was not able to 
        prove that the samples were from the most recent 
        reprocessing campaign. Such a determination requires 
        more sophisticated measurements.

   In the foreseeable future, the DPRK can produce 6 kg 
        of plutonium per year in its 5 MWe reactor. It easily 
        has the capacity to reprocess the spent fuel at any 
        time to extract the plutonium. It also has the capacity 
        to reload the reactor with fresh fuel for a second and 
        subsequent reloading. Unless North Korea has a 
        clandestine nuclear reactor, it appears the DPRK is not 
        in a position to increase the rate of plutonium 
        production beyond 6 kg per year without a major 
        construction project at the 50 MWe or 200 MWe reactor 
        sites.

   Officials of the DPRK Ministry of Foreign Affairs 
        claimed that the DPRK had weapons of mass destruction. 
        They believe that they provided us with evidence of 
        their ``nuclear deterrent.'' At Yongbyon, they 
        demonstrated that they most likely had the capability 
        to make plutonium metal. However, Dr. Hecker saw 
        nothing and spoke to no one who could convince him that 
        they could build a nuclear device with that metal, and 
        that they could weaponize such a device into a delivery 
        vehicle. We were not able to arrange meetings with DPRK 
        staff who may have such expertise or visit related 
        facilities.

                          Humanitarian Issues

    Upon arriving in Pyongyang, the staff delegation asked our 
host, Ambassador Li Gun, to arrange meetings on the topics of 
the Japanese abductee issue, prison camps in North Korea and 
their conditions, and food aid to the DPRK. These on-the-spot 
requests were all accommodated.

Japanese Abductees
    In 2002, Kim Jong-il acknowledged to Japanese Prime 
Minister Koizumi that North Korean agents had abducted 13 
Japanese nationals during the 1970's and 1980's. Japanese 
officials contend the number could go much higher. (South 
Korean officials estimate that several hundred South Koreans 
have been abducted by the North over the years, most never to 
return). The Japanese were abducted reportedly to teach 
Japanese language and culture to North Korean spies. At least 
five of the Japanese abductees remain alive and were returned 
to Japan last year following the Kim Jong-il-Koizumi summit. 
North Korean and Japanese officials continue to negotiate as to 
the fate of children and other relatives of these five, as well 
as eight additional Japanese abductees reported dead by North 
Korean authorities. North Korea has not provided evidence 
convincing to the Japanese that the remaining eight are 
deceased.
    The North Korean official with whom we met on the abductee 
issue was Song Il-ho, Deputy Director of the Foreign Affairs 
Ministry for Japan. We emphasized that the United States' 
concern for the human rights situation in North Korea--
including the fate of those abducted by North Korea and their 
families--reflects the deeply held convictions of the American 
people. We expressed our hope that North Korea would promptly 
take steps to fully resolve the issue, and explained the 
welfare of the abductees and their families was a matter of 
international concern and of particular interest to members of 
the Congress. We emphasized that we were not in North Korea to 
negotiate, but only to exchange views.
    Song gave his government's perspective on the abductee 
issue, beginning with an overview of Japan-Korea relations from 
the colonial period to the present. After this background, Song 
acknowledged that North Korean secret agents did wrongly abduct 
Japanese nationals. ``[They] did bring Japanese nationals to 
the DPRK. Thirteen were brought to the DPRK, some of whom have 
died of accidents or illness. Those responsible for bringing 
them here were charged under state law and punished.''
    After conveying his government's views, Song was 
forthcoming in answering questions we asked about the abductees 
and their relatives. He expressed his willingness to answer 
additional questions in the future. Song reported that Japan 
has been provided with videotapes and other information 
pertaining to the children and other relatives of the abductees 
remaining in North Korea. Song said that some of the abductees' 
children only recently became aware of the truth regarding 
their parents' origin, adding that the children have close 
relationships in his country, (including fiancees for some), 
have never been outside North Korea, and should be able to make 
individual decisions on whether they remain in North Korea or 
go to Japan. (Japanese officials counter that all abductees and 
their immediate relatives should be able to travel to Japan to 
live for a set amount of time before deciding on their own 
whether they would remain in Japan or return to North Korea.)

U.S. Food Assistance to DPRK
    As we did last August, we met again this year with Jong 
Yun-hyong, Director of the Flood Damage Reconstruction 
Committee, who is working with American and European non-
government organizations (NGO's) and universities to expand 
efforts toward sustainable agriculture. During our meeting, 
Jong for the first time made reference to the topic of ``rural 
development,'' indicating that NGO's may be designated to take 
charge of small to medium-sized rural development projects in 
the areas of energy and agricultural production.
    Poor farming practices are evident in DPRK. Soybeans, corn 
and orchards planted vertically on mountainsides contribute to 
erosion. Poorly-built levees break during heavy rains causing 
fields to flood. There are often inadequate amounts of 
fertilizer, and the soil is over-worked. Double-cropping is 
practiced throughout the country. North Korea is interested in 
adopting better agricultural practices.
    Although anxious to achieve food production self-
sufficiency, Jong acknowledged emergency assistance will be 
needed for quite some time given the North's shortage of arable 
land. He expressed gratitude for the recent announcement from 
the U.S. of additional food aid. When the staff delegation once 
again questioned Jong on DPRK not allowing the World Food 
Program (WFP) to fully monitor food distribution and the lack 
of access to children, the elderly and pregnant women in 43 
counties, he responded by advocating a shift away from food 
assistance and toward agriculture development projects.
    Jong outlined the North's food production and distribution 
for 2003. He reported that the North produced 4.5 million 
metric tons of grain (primarily rice, corn, wheat, and barley). 
The DPRK calculates that after making allowances for food grain 
consumption, seed grain, livestock consumption, restaurant 
services, and spoilage, the North's production will fall 
roughly one million tons short of its needs for 2004. The 
Public Distribution System (PDS) largely broke down during the 
famine years of the mid-1990's, and has never fully recovered. 
Most North Koreans reportedly receive a meager allotment (300 
grams/day) from the PDS, and must supplement their allotment 
with purchases of food from markets. Jong expressed his hope 
that the World Food Program and other donors would help close 
the gap between the North's production (including imports) and 
its actual food needs.
     Kim Jong-il maintains a ``military-first'' policy in terms 
of food produced in North Korea, and Jong acknowledged that the 
military gets preferential access to the harvest. Once its 
needs are met, remaining food production enters the PDS. Given 
the minimal monitoring of bilateral South Korean and Chinese 
food aid (largely rice), we believe it is possible that North 
Korea may divert a portion of the rice from those two countries 
to meet any unfulfilled needs in the military for 2004, as it 
likely has in the past.
    The United States provides food assistance to North Korea 
through the World Food Program (WFP), which targets its aid to 
the elderly, children up to the age of 10, and pregnant and 
nursing women. In February, 2003, the U.S. Government announced 
its intention to provide 100,000 tons of food assistance in 
calendar year 2003, with 40,000 tons to be shipped immediately 
and 60,000 tons to be shipped depending on circumstances inside 
North Korea and on competing global demands for assistance. On 
December 24, 2003, the administration announced it would ship 
the last 60,000 metric tons. This assistance package will 
reportedly include 38,000 metric tons of corn, 4,000 metric 
tons of non-fat dry milk, 6000 metric tons of corn-soya blend, 
6000 metric tons of vegetable oil, with the remaining products 
including peas and beans. U.S. AID officials believe these food 
items are more apt to reach the hungry target groups than U.S. 
rice.
    Most of the recipients of WFP aid live in urban areas 
outside of Pyongyang. WFP staff now conduct about 500 
monitoring visits in North Korea per month, although most 
visits must be scheduled one week in advance and monitors are 
usually accompanied by North Korean officials. WFP has five 
field offices outside of Pyongyang. North Korea still does not 
permit WFP to feed the hungry in 43 out of 206 counties, mostly 
due to national security considerations. These off-limits 
counties are estimated to contain 15% of North Korea's 
population. WFP has no good information on the food needs of 
these counties, most of which are in mountainous regions of 
north-central DPRK or clustered along the border with South 
Korea (adjacent to the DMZ).
    Over time, the WFP's ability to monitor its food aid 
deliveries has improved. WFP personnel are now able to obtain 
Korean-language training inside North Korea, and WFP has 
dramatically increased the number of monthly inspection visits 
over the past three years. WFP has also chosen to curtail food 
aid in Pyongyang. This is appropriate, as Pyongyang residents 
are typically better off than residents of other parts of North 
Korea. WFP has issued an appeal for 485,000 tons of commodities 
for 2004, a decrease from 513,000 tons sought for 2003. Only 
300,000 tons of the amount requested for 2003 was actually 
received and distributed.
    An extensive UN/DPRK nutrition survey conducted last year 
showed significant reductions in malnutrition among young 
children since 1998, a decrease due in large part to outside 
food assistance. However, even with gains in nutrition 
standards, more than 40% of North Korea's children under the 
age of seven are markedly too short for their age--stunted--a 
condition largely irreversible with an impact on mental growth 
yet to be measured.

The Gulags
    During our trip to North Korea last August, we raised the 
issue of the prison system and the poor conditions and high 
levels of malnutrition reported there with Vice Foreign 
Minister Kim Gye-gwan. An estimated 150,000-200,000 North 
Koreans reportedly are held under harsh conditions in hundreds 
of political detention camps. Last year, Kim Gye-gwan said that 
North Korean officials would allow non-government organizations 
(NGO) access to prison camps on a ``case by case'' basis.
    During our recent trip to Pyongyang, we once again raised 
this issue with North Korean officials including Ambassador Li 
Gun and Jong Yun-Hyong, Director of the Flood Damage 
Rehabilitation Committee (FDRC). We advised North Korean 
officials that the U.S. Senate would be considering legislation 
later this year related to human rights conditions in North 
Korea and that deep concern exists regarding human rights 
abuses inside North Korea. The staff delegation also expressed 
concern about the status of North Korean refugees in China and 
the harsh treatment they sometimes receive upon returning to 
North Korea. We noted China's unwillingness to establish a 
formal structure of assistance for refugees, and urged North 
Korean officials to cooperate with NGOs and other members of 
the international community seeking to address the humanitarian 
needs of this vulnerable population. Given Kim Gye-gwan's 
initial willingness to engage in discussions on this sensitive 
issue, the question of DPRK prisons and the conditions under 
which prisoners are held should be a matter for future 
discussions involving the United States and other countries.

                            Economic Reforms

    North Korea launched a major economic reform initiative on 
July 1, 2002. These reforms hold both promise and peril for the 
North Korean people generally and for the regime of Kim Jong-
il. The government of North Korea has taken several steps to 
implement the reforms. Moreover, officials with whom we met 
recognize and acknowledge that North Korea's economic 
performance is ultimately tied to the peaceful resolution of 
the nuclear crisis.

Background
    The main goals of the North's economic reform initiative 
are to boost production and improve living standards by 
introducing agricultural price incentives and stimulating the 
production of light industrial goods. The first step of the 
reform process emphasized raising wages and commodities prices 
to increase food production and decrease dependence on foreign 
aid. Subsequent reforms include new laws governing foreign 
investment and trade and a renewed emphasis on the development 
of three special economic zones--Sinuiju along the Chinese 
border, Najin-Sonbong on the east coast, and Kaesong Industrial 
Park, a joint venture with Hyundai located close to the DMZ and 
Seoul.
    The 2002 reforms built on earlier initiatives--notably the 
1998 Constitutional revision which for the first time 
recognized private ownership of ``income obtained through legal 
economic activities''--while introducing several new concepts. 
Farmer income is now linked more closely to production, and 
small private plots are allowed to be planted alongside those 
plots allocated to state-directed food production. The state 
has taken steps to re-zone small plots into larger, more 
efficient plots, and introduced a variety of new seed 
technology and fertilizers. Similar initiatives in the 
industrial sector allow factories to shift production of goods 
once state quotas have been met--a kind of dual track system 
similar to that tried by China 30 years ago. Although 
ostensibly able to pursue new production, factories have no 
obvious source of capital for inputs, and they must still 
apparently maintain bloated work forces. In short, North 
Korea's antiquated industrial base is not well positioned to 
meet consumer demand for light industrial products.
    It is not clear how much productive capacity will be freed 
up by reforms, or indeed, if North Korea's industrial sector is 
capable of producing items North Korean consumers want absent a 
significant injection of capital and know-how. New small, 
family-size business are beginning to provide services and 
produce goods, but it remains unclear whether these grass-roots 
initiatives can compensate for the lack of productivity from 
large, state-owned factories that remain under utilized and 
largely dormant.
    For years, China has tried to encourage North Korea to 
follow its model of market socialism, but Pyongyang has proven 
reluctant, constrained by national pride and the juche (self 
reliance, independence) political philosophy. Since the 
launching of the July, 2002 economic reforms, however, DPRK 
officials have begun to study China's success more closely. But 
even as it begins to embrace market principles, the North's 
economic prospects remain hampered by resource constraints. The 
North suffers from chronic shortages of electricity, food, 
material resources (especially timber and coal), capital, 
technology, and trained administrative personnel. These 
constraints serve as a break on the pace of economic growth. 
The net result is a reform package that remains inchoate, but 
nonetheless significant.

Markets Sprout
    Perhaps the most significant aspect of the July 2002 
economic reform package was the introduction of ``general 
markets'' at which farmers could sell their produce and 
craftsman could sell their wares. Until recently, these markets 
have been rather rudimentary, consisting of large open-air 
stalls enclosed by some kind of fencing, and they have been 
strictly off limits to foreigners. That is changing. Farmers 
markets are evolving into general markets. In recent months, 
the North has taken the concept of the market to its next 
logical evolution--a large, covered, regulated market, complete 
with foreign exchange service, a cafe, and a wide variety of 
both domestic and imported consumer goods. The ``fire wall'' 
that used to separate markets for food and markets for goods 
has been breached.
    We visited Pyongyang's ``flagship'' general market: the 
Tong-il Street Market. It must be noted that the Tong-il Street 
market is not typical, and that Pyongyang as a whole is not 
representative of conditions elsewhere in North Korea. 
Therefore, one cannot draw conclusions about market conditions 
throughout North Korea based only on a visit to one market in 
Pyongyang. That said, the Tong-il Street market, completed last 
summer, appears to be in the vanguard of market reform in North 
Korea, and was presented to the delegation as a clear 
indication of where North Korea wants to go.
    The Tong-il Street Market has more than 500 vendors, each 
renting stall space from the Tong-il Street Market for 80 won a 
day (about $3 month). Vendors sell a huge variety of food 
imported from China, including pineapple, bananas, and melons. 
They also sell Fuji apples from Japan--seven for one dollar--
and Russian vodka. In addition to food, shoppers can find 
clothing, shoes, consumer electronics, major appliances, 
furniture, artwork, etc.
    Unlike the markets set aside for senior Korean Workers 
Party officials, the Tong-il Street Market appears to be open 
to the general public. There are no ID checks and no armed 
security guards. The market was bustling when we visited. 
Pyongyang residents typically tend to be a better off than 
residents of other parts of the country, but given the prices 
for most goods, there is no reason to believe that similar 
markets would not attract shoppers elsewhere in urban North 
Korea. We saw vendors accepting a variety of currencies--
Chinese Renminbi, Japanese Yen, American Dollar, Euros--and 
gladly taking the opportunity to negotiate a favorable exchange 
rate with an unwary shopper. Vendors appeared to have the 
ability to provide change in several currencies. One dollar 
traded for 1,000 DPRK Won at the stalls, slightly above the 
official rate of 900 Won/dollar, but below the ``floating'' 
black market rate of roughly 1,200 Won/dollar. Vendors 
bargained with enthusiasm and exhibited considerable 
entrepreneurial spirit.
    Are these kinds of markets the future for North Korea? It 
is too soon to say. The Tong-il Street market was opened last 
August, and plans call for similar markets to be constructed in 
each of Pyongyang's 21 districts and then throughout the 
country. These covered, climate-controlled markets are intended 
gradually to replace the open-air markets that continue to 
cater to buyers with more limited income. Large markets are 
part of the story of North Korea's market reform initiative. In 
Pyongyang, we also observed new small vendor stalls launched 
since last summer. We saw similar stalls last summer in Nampo 
and in Yongbyon city this year. These street stalls, selling a 
variety of small snacks, cigarettes, and liquor, appear 
popular, and have grown steadily in number over the past two 
years. For the first time, we were able to make a purchase at 
one of these street stalls--five Chinese chocolate bars for a 
dollar. The vendor smiled as she took our one dollar bill, but 
also seemed a bit wary of making a sale to a foreigner.

Economic Prospects
    North Korea has a shortage of economic expertise at all 
levels of government, but is beginning to take steps to remedy 
that deficiency. Interestingly, China has begun training 
programs for DPRK economic officials under the auspices of the 
Chinese Academy of Social Sciences. Chinese officials and think 
tank specialists report a new willingness on the part of their 
DPRK counterparts to learn from China's experiences with 
economic reform and the privatization of state-owned 
enterprises.
    North Korea's economic reforms are not without risk. In the 
short run, price adjustments could increase inequality and 
exacerbate existing social differentiation. North Korea has 
long maintained an elaborate system of preferences, and the 
``haves'' are now even more distant from the ``have nots.'' 
Inflation has also become a major concern. Some initiatives--
such as a zero interest 10-year bond with lucky lottery winners 
eligible for ``bonus interest''--at first blush seem ill-
considered or downright Orwellian. However, bonds could in the 
long run provide a vehicle for privatizing state assets through 
debt-equity swaps as occurred in the former Soviet Union.
    If North Korea is able to stimulate agricultural production 
and create functioning markets, it may not be enough to turn 
around its ailing economy. North Korea is primarily an 
industrial society, with roughly 70 percent of the population 
residing in cities. Building a viable light industrial sector 
in North Korea and making obsolete heavy industries productive 
will require major restructuring and large infusions of capital 
and technology.
    In sum, reforms in North Korea may create as many 
``losers'' as ``winners,'' at least in the short run, and this 
could eventually undermine social stability. Reforms designed 
to boost commodity prices may be good for farmers and those 
with access to hard currency, but for urban dwellers on fixed 
income, the price increases for food and the devaluation of the 
North Korean Won against the dollar exact a heavy toll. The Won 
has gone from 150 Won/dollar in 2002 to 900 Won/dollar in 
October, 2003, with unofficial ``black market'' rates reaching 
as high as 1200 Won/dollar. The state seems aware of this 
problem, and has boosted salaries for miners and members of the 
armed forces--presumably two sectors of the work force the 
government must keep happy to avoid major unrest.
    While it is too soon to judge whether North Korea's 
economic reforms will kick-start its economy, there is no doubt 
that the state is committed to the reforms and is pursuing them 
with gusto. Success may depend in large measure on whether 
North Korea can solve the nuclear crisis and gain access to 
foreign capital, investment, and trade.

                        Beijing, Seoul and Tokyo

    Upon departing Pyongyang, and en route back to the United 
States, we met with U.S. and respective country officials in 
China, South Korea, and Japan to answer questions regarding 
details of our visit to the DPRK. While all the parties to the 
six party talks share the goal of a non-nuclear Korean 
Peninsula, each nation brings its own priorities to the talks. 
Officials in Beijing, Seoul, and Tokyo, each shared their 
country's particular concerns with the staff delegation. We 
gained a deeper appreciation for the special responsibility 
China feels as host and facilitator of the talks, and were 
reminded of the priority Seoul attaches to the maintenance of 
peace and stability on the peninsula as this diplomatic process 
moves forward. In Tokyo, we gained insights into the incredibly 
important issue of the abductees, and how it informs Japanese 
policy making as Tokyo participates in the talks.

                        Conclusions/Key Findings

   1. DPRK officials believe the United States will launch a 
            pre-emptive attack on their country.

   2. North Korea has restarted its Yongbyon nuclear reactor 
            which has the potential to produce 5-6 kilograms of 
            plutonium per year. The North could at any time 
            easily reprocess spent fuel from the reactor to 
            harvest plutonium for use in nuclear bombs.

   3. North Korea is in the midst of a significant economic 
            reform movement, the full implications of which 
            remain to be seen. North Koreans intimately 
            involved with the reform initiatives appear to be 
            among those in the DPRK pushing the hardest for 
            resolution of the nuclear issue.

   4. DPRK officials are interested in reducing the nation's 
            dependence on food aid and want outside help 
            developing a more productive agriculture sector.

   5. Eliminating North Korea's gulags and addressing the 
            humanitarian needs of North Korea's prison 
            population should become a priority for the United 
            States government and the entire international 
            community.

   6. Significant communications and coordination problems 
            continue to hamper the six party talks. The talks 
            are more likely to make progress if multi-party 
            working groups are established to define terms, 
            discuss verification protocols, and exchange views 
            on how any deal might be phased.

   7. China and South Korea place a premium on maintaining 
            peace and stability on the Korean Peninsula. Both 
            seem prepared to go to great lengths to avoid 
            either a war on the peninsula or an abrupt collapse 
            of the Kim Jong-il regime.

   8. China, on whom we rely as key facilitator in the six-
            party talks, shares our goal of a non-nuclear 
            Korean Peninsula. Nonetheless, China will always 
            place its own interests first in this process, and 
            Beijing's interests are not identical to our own. 
            DPRK officials are not certain that China has 
            accurately transmitted messages between Washington 
            and Pyongyang.

                              ----------                              


                Key Interlocutors Include the Following:

People's Republic of China

  John Aloisi, Political Counselor, U.S. Embassy

  Donald Steel, Political Officer, U.S. Embassy

  Wang Shenghong, Director, Foreign Affairs Bureau of the 
        National Committee of the Chinese People's Political 
        Consultative Conference

  Xia Jihui, Deputy Director, Foreign Affairs Bureau of the 
        National Committee of the Chinese People's Political 
        Consultative Conference

  Cao Huayin, Deputy Secretary-General, China Reform Forum

  Ding Kuisong, Vice Chairman, China Reform Forum

  Dai Fengning, Program Officer, China Reform Forum

  Yu Meihua, Director of East Asia Studies, China Reform Forum

  Maj. Gen. Pan Zhenqiang (Ret.), Professor, Institute for 
        Strategic Studies, National Defense University

  Ning Fukui, Ambassador for Korean Peninsula Issue, Ministry 
        of Foreign Affairs

  Li Yang, Deputy Director, Office for Korean Peninsula Issue, 
        Ministry of Foreign Affairs

  Tu Jingchang, Deputy Director, Office for Korean Peninsula 
        Issue, Ministry of Foreign Affairs

  Liu Xuecheng, Director of American Studies, China Institute 
        of International Studies
North Korea

  The Honorable Paul Beijer, Ambassador, Embassy of Sweden

  The Honorable Wojciech Katuza, Embassy of Poland

  The Honorable Doris Hertrampf, Ambassador, Embassy of Germany

  The Honorable David Slinn, Ambassador, Embassy of Great 
        Britain

  Ri Hak-gwon, Vice President, Committee for the Promotion of 
        International Trade

  Professor Doctor Ri Mun-ho, Head of Counsellors for Science, 
        Academy of Sciences DPRK

  Dr. Jong Hun-il, Senior Officer, Bureau of International S & 
        T Cooperation, Academy of Sciences

  Jong Yun-hyong, Director, Flood Damage Reconstruction 
        Committee

  Kim Gye-gwan, Vice Foreign Minister, Ministry of Foreign 
        Affairs

  Ambassador Li Gun, Deputy Director General, North America 
        Division, Ministry of Foreign Affairs

  Dr. Ri Hong-sop, Director, Yongbyon Nuclear Scientific 
        Research Center

  Choi Kil-man, Deputy Director, Yongbyon Nuclear Scientific 
        Research Center

  Sung Il-ho, Deputy Director, Japan Division, Ministry of 
        Foreign Affairs

  Col. General Li Chol Bok, Korean People's Army
South Korea

  The Honorable Thomas Hubbard, U.S. Ambassador

  Sangmin ``Simon'' Lee, Control Officer, U.S. Embassy

  Scott Snyder, Asia Foundation

  Rhee Bong-Jo, Chief, Policy Coordination Bureau, National 
        Security Council

  Park Sun-won, Ph.D., Senior Director, National Security 
        Council

  Park Ro-byug, Senior Director, National Security Council

  Park Chan-bong, Ph.D., Deputy Assistant Minister for 
        Unification Policy, Ministry of Unification

  Wi Sung-lac, Director General, North American Affairs, 
        Ministry of Foreign Affairs

  Yang Chang-seok, Director, International Cooperation Office, 
        Ministry of Unification

  Jun Bong-geun, Policy Advisor, Ministry of Unification
Japan

  The Honorable Howard Baker, U.S. Ambassador

  Torkel Patterson, Minister-Counselor, Senior Advisor to the 
        Ambassador (U.S.)

  Richard A. Christenson, Deputy Chief of Mission, U.S. Embassy 
        Tokyo

  Daniel L. Shields, Political Section Deputy and Foreign 
        Policy Unit Chief, U.S. Embassy Tokyo

  Ken Moskowitz, Director, Tokyo American Center

  David Jonathan Wolff, Embassy Control Officer, Bilateral and 
        Foreign Policy Unit, Political Section, U.S. Embassy 
        Tokyo

  Yasumasa Nagamine, Deputy Director General, North American 
        Affairs Bureau, Ministry of Foreign Affairs

  Kazuhiro Suzuki, Senior Policy Coordinator, Foreign Policy 
        Bureau, Ministry of Foreign Affairs

  The Honorable Shinzo Abe, Secretary General, Liberal 
        Democratic Party

  Mikio Mori, Director for Multilateral Nuclear Cooperation, 
        Foreign Policy Bureau

  Naoki Ito, Director, Northeast Asia Division, Asian and 
        Oceania Affairs Bureau, Ministry of Foreign Affairs

  Mitoji Yabunaka, Director General, Asian and Oceania Affairs 
        Bureau, Ministry of Foreign Affairs

  Akitaka Saiki, Deputy Director General, Asian and Oceania 
        Affairs Bureau, Ministry of Foreign Affairs

  Koji Tsuruoka, Deputy Director General, Foreign Policy Bureau

  Nobuyuki Takakura, Director, Economic Affairs Division, 
        Health Policy Bureau, Ministry of Health, Labour and 
        Welfare

  Kaoru Manabe, M.D., Deputy Director, Economic Affairs 
        Division, Health Policy Bureau, Ministry of Health, 
        Labour and Welfare


                              ----------                              


   Prepared Statement of Dr. Siegfried S. Hecker, Senior Fellow, Los 
          Alamos National Laboratory, University of California


                [presented to the u.s. senate committee
                on foreign relations, january 21, 2004]


    Mr. Chairman, distinguished members of the Committee, I am 
honored to share with you my report of a rather unexpected and 
extraordinary visit to the Yongbyon Nuclear Scientific Research 
Center in North Korea (the Democratic People's Republic of 
Korea). I will submit a written statement for the record and 
summarize my observations this morning.

Background
    I visited the Democratic People's Republic of Korea (DPRK) 
and the Yongbyon Nuclear Scientific Research Center as part of 
an unofficial U.S. delegation led by Professor John W. Lewis of 
Stanford University. Professor Lewis is an Asian scholar at 
Stanford, specializing in China and North Korea. Professor 
Lewis' visit was part of his ongoing dialog with officials of 
the DPRK concerning the North's nuclear program. He has visited 
the DPRK ten times since he began this dialog in 1987. He last 
visited the DPRK just before the official six-party talks in 
Beijing last August. DPRK officials invited him to return. When 
they indicated that they may allow him to visit the nuclear 
facilities at the Yongbyon Nuclear Scientific Research Center, 
he contacted me to accompany him to provide scientific 
expertise. Since I work for the Los Alamos National Laboratory, 
which is operated by the University of California for the 
Department of Energy, I requested and received the necessary 
U.S. Government approvals for travel to China and the DPRK. I 
have known Prof. Lewis for approximately 15 years. We have 
collaborated on other global security issues.
    Joining our delegation at Prof. Lewis' invitation was 
Charles L. (Jack) Pritchard, Visiting Scholar at the Brookings 
Institute and formerly the U.S. special envoy for DPRK 
negotiations. In addition, two Senate Foreign Relations 
Committee experts on Asian affairs, Mr. W. Keith Luse and Mr. 
Frank S. Jannuzi, had separately planned a trip to the DPRK. 
They joined our delegation in the DPRK and participated in our 
visit to the Yongbyon Nuclear Scientific Research Center.
    The host organization for our visit was the DPRK Ministry 
of Foreign Affairs. Ambassador Li Gun accompanied us during the 
entire visit. Vice Minister Kim Gye Gwan met with us on three 
separate occasions. In addition to the visit to the Nuclear 
Scientific Research Center, Prof. Lewis had arranged other 
meetings with DPRK officials to cover economic, military, and 
science issues. Mr. Luse and Mr. Jannuzi arranged some 
additional meetings on their own. I will restrict my written 
statement to the areas of my expertise, namely the nuclear 
issues. More specifically, I will focus on what we learned 
during the visit to the Yongbyon Nuclear Scientific Research 
Center.

DPRK Statements and Motivation to Set the Context for the Visit
    Vice Minister Kim [Gye Gwan] indicated that they were very 
interested in resuming the six-party talks. The DPRK made a 
proposal on Dec. 9, 2003 to freeze its nuclear activities and 
received no response from the United States. Vice Minister Kim 
indicated that they have just repeated this proposal, and this 
time Secretary Powell responded positively. [The following 
quote from Secretary Powell appeared in AFP, January 7, 2004: 
``This is an interesting step on their part, a positive step, 
and we hope that it will allow us to move more rapidly to six-
party framework talks. I am encouraged, I am encouraged by the 
statement the North Koreans made.'']
    Vice Minister Kim stated, ``The most reasonable way [to 
proceed] is to have simultaneous action steps. . . . The U.S. 
says it will give us a security assurance if we dismantle our 
nuclear program. We say it differently. The first step would be 
a freeze of the present [DPRK] nuclear activities. You will see 
how important a freeze will be when you are at Yongbyon. This 
means there will be no manufacturing, no testing, and no 
transferring of nuclear weapons.''
    Vice Minister Kim stated, ``We view the delegation's visit 
to Yongbyon as a way to help contribute to breaking the 
stalemate and opening up a bright future. We will not play 
games with you. We have invited you to go to Yongbyon. The 
primary reason for this is to ensure transparency. This will 
reduce the assumptions and errors. . . . This visit can have 
great symbolic significance.''
    ``We want you to take an objective look, and we will leave 
the conclusions to your side. This is why the inclusion of Dr. 
Sig Hecker is so significant.'' Mr. Pritchard stated that we 
are unofficial and that we are not an inspection team. Kim 
continued, ``Hecker's presence will allow us to tell you 
everything. This is an extraordinary approval by us. . . . We, 
too, emphasize that you are not making an inspection. But, 
because we are allowing this visit, we will provide you enough 
access to have good knowledge.''
    Vice Minister Kim indicated that based on the U.S. actions 
in November 2002, the DPRK decided that the Agreed Framework 
was no longer in its interest, so it terminated the IAEA 
[International Atomic Energy Agency] inspections and withdrew 
from the NPT. The DPRK decided to operate the 5 MWe reactor and 
resume reprocessing of plutonium for peaceful nuclear 
activities. He stated, ``It is the only way to keep the spent 
fuel rods safe.'' He added, ``At the same time, the hostile 
U.S. policy had been intensified. So, we changed our purpose 
and informed the U.S. that the plutonium that was to have been 
used for peaceful purposes would now be used for weapons. 
Originally, we had wanted to keep the reprocessed plutonium in 
a way we could store it safely. Then, we changed the purpose in 
order to strengthen our deterrent.''
    Vice Minister Kim added that the DPRK wants a peaceful 
resolution of the nuclear crisis. They want a denuclearization 
of the Korean Peninsula. He emphasized that the DPRK has been 
very flexible and very patient, adding, ``I should note that 
the time that has been lost [in dealing with us] has not been 
beneficial to the U.S. side. With an additional lapse in time, 
our nuclear arsenal could grow in quality and quantity. The 
outcome has not been a success for the U.S.''
    I provide this political background to set the context for 
potential motivations for the DPRK decision to invite us to 
visit the Nuclear Scientific Research Center. They have 
publicly stated that they have reprocessed the fuel rods to 
extract plutonium and strengthen their ``deterrent.'' It 
appears they were concerned that the United States (and perhaps 
others) did not believe them. So, they may have invited us to 
provide independent confirmation of their claims.
    However, Vice Minister Kim also expressed a concern about 
their decision to invite us to Yongbyon. He stated: ``If you go 
back to the United States and say that the North already has 
nuclear weapons, this may cause the U.S. to act against us.'' 
At a later meeting, he returned to this concern by stating, 
``We are concerned that the U.S. Government will use what you 
conclude [as a pretext] to attack us. The U.S. might claim that 
this visit proves that the DPRK has crossed a red line when it 
restarted the reactor. Can we be sure that the U.S. will 
refrain from action if it declares that we have gone beyond its 
red line--such as finishing of the reprocessing and the change 
in the purpose of the reprocessing [from peaceful safety-
related reasons to making weapons]?''
    So, I believe the DPRK wanted to show us the Yongbyon 
Nuclear Scientific Research Center to verify that they had 
taken significant actions since December 2002 and to impress us 
with their nuclear capabilities. The Center leadership and its 
specialists were very cooperative within the boundaries of what 
they were authorized to show us. Nevertheless, DPRK officials 
had reservations about our visit and they recognized the risks 
involved. They obviously decided the potential benefits of our 
visit justified taking the risks.
My Motivations for Going to the DPRK
    I explained to our DPRK hosts my decision to accept Prof. 
Lewis' invitation to join him on this trip. I have been 
concerned about the ambiguities associated with the DPRK 
nuclear program. I realize that some of the ambiguities may be 
deliberate. However, ambiguities often lead to miscalculations, 
and in the case of nuclear weapons related matters, such 
miscalculations could be disastrous. So, I had hoped that as a 
scientist I could help to bring some clarity to the DPRK 
nuclear situation by visiting the Yongbyon Nuclear Scientific 
Research Center.
    I also stated that I believe the role of scientists (and I 
should add engineers) is very important to the diplomatic 
process. I see three important roles. First, to bring clarity 
to the issues so as to facilitate a diplomatic solution to the 
nuclear crisis. Second, if a diplomatic solution is found, 
scientists must help to implement any solution such as a freeze 
or eventual denuclearization. Third, scientists will be crucial 
to help verify any such solution. So, it is my hope that my 
visit might be a small step in this direction.

Logistics of the Visit to the Yongbyon Nuclear Scientific Research 
        Center
    On Thursday, January 8, 2004, all five members of our 
delegation visited the Center, which is near the town of 
Yongbyon, roughly 100 km north of the DPRK capital of 
Pyongyang. We were accompanied by Ambassador Li Gun, an 
official from the General Bureau of Atomic Energy and a 
security escort. We were greeted by Professor Dr. Ri Hong Sop, 
Director of the Nuclear Scientific Research Center. The Center 
reports to the General Bureau of Atomic Energy. Also present at 
our introductory briefing were Choi Ku Man, assistant director 
of the center, Li Yong ho, safeguards section head, Kim Haik 
Soon, senior center researcher, Pak Chang Su, center 
researcher.
    At the Yongbyon Nuclear Scientific Research Center, 
Director Ri [Hong Sop] toured us through the following 
facilities:

   The Experimental Nuclear Power Plant (the DPRK name 
        for what we call the 5 MWe [5 megawatt electric] 
        reactor). We were toured through the control room and 
        the observation area for the reactor hall. This 
        facility is inside the first security area of the 
        Yongbyon facility. Our guide was Chief Engineer of the 
        facility, Li Song Hwan.

   The spent fuel storage pool building next to the 5 
        MWe reactor, also guided by Chief Engineer Li Song 
        Hwan.

   Drive by (twice) of the 50 MWe reactor site. Inside 
        the second high-security area of the Yongbyon facility.

   Radiochemical Laboratory--3rd floor corridor that 
        allowed for viewing of the hot cell operations through 
        shielded glass windows and a conference room. (This 
        facility is also inside the second high-security area). 
        Our guide was Chief Engineer of the Radiochemical 
        Laboratory, Li Yong Song.

   Guest House for introductory and wrap-up discussions 
        with Center facility leadership.

    Our hosts drove us from Pyongyang to the Yongbyon facility. 
We left the hotel at 8:30 a.m. and returned shortly before 7:00 
p.m. We spent from 10:30 a.m. to 5:15 p.m. at the facility,
Observations From the Visit: What We Were Told and What We Saw
    I will present my observations for each facility. I will 
first summarize what we were told by the Center leadership 
(shown in italics) and then summarize my observations (in 
regular font). The director and the two chief engineers each 
stated that it was U.S. actions that forced the DPRK to take 
steps to resume nuclear operations.
    The 5 MWe Reactor. They stated that they have restarted 
only the Experimental Nuclear Power Plant (the 5 MWe reactor). 
The plant was restarted in February 2003. It now is operating 
smoothly at 100% of its rated thermal power. They are producing 
electricity and heat from the reactor now for their town. The 
reactor is the main source of heat for the town now that the 
10,000 metric tons (tonnes) of heavy fuel oil supplied annually 
to their region (as part of the 500,000 tonnes agreed to in the 
Agreed Framework) has been cutoff.
    We confirmed that the 5 MWe reactor is operating now. We 
were shown the control room and the reactor hall. All 
indications from the display in the control room are that the 
reactor is operating smoothly now. The steam plume emanating 
from the cooling tower [visible both in the morning and 
afternoon] confirmed operation. However, we have no way of 
assessing independently how well the reactor has operated 
during the past year.
    The length of time the reactor is expected to operate with 
the current load of fuel depends on how the situation with the 
United States develops. They do not have safety concerns about 
running the reactor for a long time [implying years]. They 
stated that some of the operational problems experienced 
previously have been corrected. However, they are prepared to 
reprocess the current fuel at any time.
    We commented to our hosts that in addition to producing 
electricity and heat the reactor is also producing new 
plutonium. Best estimates are that under current reactor 
operations approximately 6 kg of plutonium is produced annually 
in the spent fuel.\1\ The reactor may currently contain 
approximately 6 kg of plutonium in the spent fuel rods, and it 
will continue to produce an additional 6 kg each year assuming 
the reactor operates efficiently.
    They stated that have one more charge of fuel for the 
reactor fabricated now. The fuel fabrication facility is 
partially operational and partially under maintenance. They are 
in no hurry to fabricate more fuel since the two bigger 
reactors under construction are not close to operation.
    We did not have the opportunity to visit the fuel 
fabrication facility. However, these comments are consistent 
with previous U.S. estimates. In previous years, the fuel 
fabrication complex was reported to be making fuel elements 
containing about 100 tonnes per year of uranium. The complex is 
believed to have produced enough fuel for the initial loading 
of the core for the 50 MWe reactor under construction. 
Moreover, the nominal capacity was appreciably
larger.\1\
    50 MWe Reactor. They told us that construction stopped in 
1994. They stated that at that time it was within one year of 
completion. Nothing has been done since. They are currently 
evaluating what to do with the reactor.
    We drove past the 50 MWe reactor site twice. We confirmed 
that there is no construction activity at this site. There were 
no construction cranes on site. The reactor building looks in a 
terrible state of repair. The concrete building structure 
showed cracks. The steel exhaust tower was heavily corroded, as 
was other steel equipment on the site. The building was not 
closed up and resembled a deserted structure. The NSC director 
expressed his great dismay about the deterioration of the 
facility because of the eight-year freeze. This reactor is much 
more than one year from completion now. It is not clear how 
much of the current structure can be salvaged.
    200 MWe Reactor at Tacheon. (This reactor site is 20 km 
from Yongbyon.) They stated that construction also stopped in 
1994. They are also evaluating what to do with the reactor.
    This reactor location is at a different site. We were not 
able to assess the current situation.
    Spent Fuel Storage Building. They stated that they removed 
all 8,000 fuel rods from the spent fuel storage pool and 
shipped them to the Radiochemical Laboratory (plutonium 
reprocessing facility) and reprocessed them [to extract the 
plutonium]. The fuel rods were taken out of the pool in Korean 
containers (metal baskets) and placed in specially shielded 
shipping casks. During the removal of the fuel rods they found 
that about half of the U.S. canisters had leaked during 
storage. But they claimed not to have experienced major 
problems getting the spent fuel rods out of the pool and 
transporting them in special casks by truck daily to the 
Radiochemical Laboratory for reprocessing.
    These are the spent fuel rods that the DPRK had removed 
from the 5 MWe reactor after it ceased operation in 1994 as 
part of the Agreed Framework. In 1995, a few months after the 
Agreed Framework was signed, preparations for the canning 
began. The process turned out to be quite involved and was not 
finished until June 2000. During this time, the United States 
Department of State and Department of Energy (supported by the 
Pacific Northwest National Laboratory and the Nuclear Assurance 
Corporation) worked jointly with the DPRK to package these rods 
in 400 U.S. supplied stainless steel canisters to store safely 
(with dry inert gas inside the canisters) in a deep pool of 
water (for radiation shielding) to allow the radioactivity 
level of the rods to decrease with time. This facility was 
fitted with various devices and seals by IAEA inspectors to 
ensure that the fuel rods would not be tampered with. However, 
the IAEA inspectors were dismissed by the DPRK in December 
2002. Only DPRK personnel have had access to the Nuclear 
Scientific Research Center since that time.
    Our initial look into the spent fuel pool showed that the 
locking plates and associated structures that the U.S. Spent 
Fuel Team had put in place after the canisters (loaded with the 
8,000 fuel rods) were inserted into the pool were gone. We 
immediately confirmed the fact that all fuel rods were no 
longer in the pool because many of the canisters were missing 
and many were open. The building was not heated, and we found a 
thin sheet of ice on the pool surface. When I expressed concern 
that some of the canisters were still closed, they took the 
extraordinary step of allowing me to pick one at random and 
open it [all done under water in the pool] to demonstrate that 
there are no fuel rods remaining, even in the closed canisters. 
The randomly selected canister did not contain any fuel rods 
(it initially contained 20). This and other observations 
convinced me that the spent fuel pool is empty; the fuel rods 
are gone. It is possible that they moved the 8,000 fuel rods to 
a different storage location. However, such storage would 
represent a serious health and safety hazard. [During the tour 
of the Radiochemical Laboratory, I asked if we could visit the 
Dry Storage Building, which serves as the port of entry for the 
fuel rods into that laboratory; they said that it was not 
available for a tour because their was no activity, and there 
were no workers in the building.]
    Radiochemical Laboratory. They stated that they reprocessed 
all 8,000 spent fuel rods in the Radiochemical Laboratory in 
one continuous campaign, starting in mid-January 2003 and 
finishing by the end of June 2003. They stated that their 
capacity in the Radiochemical Laboratory is 375 kg uranium per 
day (they said they worked four 6-hr shifts around the clock). 
They later added that the reprocessing capacity of the facility 
under normal operating conditions is 110 tonnes of spent 
uranium fuel per year. Therefore, they were able to finish the 
current campaign of 50 tonnes of spent fuel rods in less than 
six months. They told us that we would tour the corridor next 
to the hot cells in which the reprocessing occurs. The campaign 
is complete; the facility is not operating now. Everything has 
been cleaned up, and there is no radiation hazard in the 
corridor.
    At the Radiochemical Laboratory we confirmed that they 
possessed an industrial scale reprocessing facility. The 
facility appeared in good repair. They demonstrated the 
requisite facilities, equipment, and technical expertise 
required for reprocessing plutonium at the scale in question. 
They use the standard PUREX (plutonium uranium extraction) 
process for separating plutonium from the fission products and 
uranium fuel. They answered all our technical questions about 
the reprocessing chemistry very competently. We were not able 
to see the glove boxes used for the final plutonium 
purification and production. They indicated that these were 
downstairs and not part of today's tour. In his book, Albright 
stated that five glove boxes were used during this process to 
produce plutonium dioxide product. He also reported that one or 
two glove boxes may have been removed before inspectors were 
permitted on site.\1\ These boxes could presumably have been 
used to process plutonium dioxide [the typical plutonium 
product from the reprocessing operation] into metal and to cast 
or shape plutonium metal. Based on our tour we are not able to 
confirm or deny that the facility operated during the first 
half of 2003.
    They stated that the Radiochemical Laboratory was built 
through their own efforts. They began construction in 1986 and 
the main parts were completed by 1990. At that time they ran a 
``hot test'' of the facility with 80 fuel rods and natural 
uranium rods to extract 60 grams of plutonium.
    Albright reported that the hot test involved 86 fuel rods 
irradiated in the 5 MWe reactor combined with 172 fresh fuel 
rods. He also reported that in 1992 the DPRK presented 
plutonium oxide containing about 62 grams of plutonium to the 
IAEA inspectors. However, the total amount of plutonium 
actually processed by the DPRK before IAEA inspections began in 
1992 is still strongly disputed.\1\
    When asked about the disposition of the waste stream, they 
stated that the waste from the most recent reprocessing 
campaign was mixed in with the waste from the ``hot test'' of 
the 80 fuel rods processed in spring of 1990.
    We were not able to visit the waste facilities and, hence, 
cannot confirm this statement. Even if we had toured the 
facility, we could not make a judgment without sophisticated 
sampling and measurements of the nuclear wastes. However, this 
type of information is important for tracing the reprocessing 
history of the facility.
    They stated that they initially intended to run the fuel 
cycle for civilian purposes (which means they would have stored 
the plutonium product as plutonium dioxide) but because of the 
hostile U.S. actions, they reprocessed the entire campaign to 
plutonium metal. They stated that this processing was done in 
the Radiochemical Laboratory by installing some glove boxes 
that were not present during IAEA inspections. It took them 
three months to install the equipment and prepare it for the 
plutonium metal processing step.
    We were not able to see the glove boxes for the final 
plutonium operations. However, their comments indicated that 
they had glove boxes for plutonium metal production ready to 
go. This indicates that they had experience making plutonium 
metal before the IAEA inspections began in 1992. Albright \1\ 
estimated that the 8,000 spent fuel rods in question could 
yield between 25 and 30 kg of plutonium metal.
    Although we could not see the plutonium glove box 
operations, they took the extraordinary step of showing us the 
``product'' from what they claimed to be their most recent 
reprocessing campaign. In a conference room following the tour, 
they brought a metal case that contained a wooden box with a 
glass jar they said contained 150 grams of plutonium oxalate 
powder and a glass jar they said contained 200 grams of 
plutonium metal for us to inspect.
    The glass jars were fitted with a screw-on metal lid and 
were tightly taped with transparent tape. (The plutonium's 
alpha-radiation is easily stopped by the glass jar). The green 
color of the plutonium oxalate powder is consistent with 
plutonium oxalate that has been stored in air for some time. 
The plutonium metal was a thin-walled (approximately \1/8\-inch 
thick) funnel (approximately 2-inch diameter at the base and 1-
inch diameter at the top, approximately 1\1/2\ inches high) 
that they claimed to have been scrap from a casting from this 
reprocessing campaign. When asked about its density, they 
responded, ``between 15 and 16 g/cubic centimeter and that it 
was alloyed [a practice common in plutonium metallurgy to 
retain the d-phase of plutonium which makes it easier to cast 
and shape]. The metal surface and color were consistent with 
moderately oxidized plutonium metal from a casting (I believe 
it could not have been in the jar for a period of many weeks 
because it did not show any loose oxide powder). I tried to get 
a feel for the density and heat content of the alleged 
plutonium metal by holding the glass jar in a gloved hand. The 
glass jar (very thick walled) was reasonably heavy and slightly 
warm (importantly, however, it was definitely not cold as was 
everything else in this building). The bottom line is that with 
the rather primitive tools at hand I was not able to 
definitively identify the purported metal and the powder as 
plutonium. It was radioactive, however, because a radiation 
probe (which appeared to be a Geiger counter [Geiger-Muller 
detector]) registered a count when turned on near the wooden 
box containing the glass jars. With a few relatively simple 
tests, we would be able to positively identify the product as 
plutonium metal, but that was not possible to do during this 
visit.
    Furthermore, even if we could confirm that the product we 
were shown is plutonium, we would not have been able to confirm 
that it came from the most recent campaign without additional, 
more sophisticated isotopic measurements that would let us 
identify the age of the plutonium. The director of the NSC 
confirmed this by stating, ``you would have to measure the 
americium to plutonium-241 ratio to determine its age.'' He was 
correct.
    When asked about the isotopic content of the plutonium, 
specifically its Pu-240 content, they stated, ``the plutonium-
240 content from this campaign is low, but we are not 
authorized to tell you. The IAEA knows, you can ask them.'' We 
were in no position to assess the isotopic content of the 
plutonium produced or that shown to us.
    They also stated that the plutonium metal was alloyed, but 
they were not authorized to tell us what alloying element was 
used [they did add, you know what it is, and we do it the 
same]. We were in no position to tell whether or not the 
plutonium metal shown to us was alloyed. However, the fact that 
it was not cracked and that their specialists claimed that the 
plutonium had a density between 15 and 16 grams/cubic 
centimeter is consistent with plutonium alloyed with 
approximately 1 weight percent of gallium or aluminum. A 
calculation of the rough dimensions and weight is also 
consistent with these values. However, the uncertainty in my 
observations is very large.
    Mr. Luse asked about a concern of yours Mr. Chairman; that 
is, the security of their nuclear materials. Director Ri 
responded, ``Be at ease with this problem. I am not authorized 
to give you an explanation on this, but we feel certain that 
the protection and safety--the security--are good.''
    We were also told that the effects of another freeze or 
decision to denuclearize would have devastating effects on the 
work force. Director Ri indicated that all of his people, 
including he, would have to look for new jobs.

Other observations and comments related to the nuclear issues
    The DPRK ``deterrent.'' During follow-up discussions with 
Ambassador Li and Vice Minister Kim in Pyongyang, they stressed 
that the DPRK now has a nuclear deterrent and that U.S. actions 
have caused them to strengthen their deterrent--both in quality 
and in quantity. Ambassador Li inquired if what I had seen at 
Yongbyon convinced me that they had this deterrent.
    I explained to both of them that there is nothing that we 
saw at the Yongbyon Nuclear Scientific Research Center that 
would allow me to assess whether or not the DPRK possessed a 
nuclear deterrent if that meant a nuclear device or nuclear 
weapon. We found that both in our visit and in previous 
declarations by the government of the DPRK that the term 
``deterrent'' was used in a very ambiguous manner.
    I explained that I view a ``deterrent'' to have at least 
three components: (1) The ability to make plutonium metal, (2) 
the ability to design and build a nuclear device, and (3) the 
ability to integrate the nuclear device into a delivery system. 
What we saw at Yongbyon was that they apparently have the 
capability to do the first. However, I saw nothing and talked 
to no one that allowed me to assess whether or not they have 
the ability to design a nuclear device. And, of course, we were 
not able to assess the integration into a delivery vehicle. 
Moreover, during additional discussions I cautioned that 
``deterrence'' might have worked between the United States and 
the Soviet Union, two equally armed nuclear superpowers under 
rather predictable circumstances. The concept of nuclear 
deterrence may have little meaning for the U.S.-DPRK situation. 
I asked Ambassador Li in the late morning of the last day of 
our visit if I could meet individuals who could talk to me in 
some detail about their ``deterrent'' in the spirit that I had 
just described. He said he would try, but that evening told me 
that the time was insufficient to make such arrangements.
    Highly-Enriched Uranium Issue. In the Foreign Ministry, we 
discussed the contentious issue of DPRK's supposed admission on 
October 4, 2002, to having a clandestine highly enriched 
uranium (HEU) program in violation of the letter and spirit of 
the 1994 Agreed Framework. There is a controversy about whether 
the DPRK admitted to having such a program at a meeting with 
U.S. officials. The disagreement concerns a difference between 
what DPRK officials believe they said and what U.S. officials 
believe they heard. DPRK officials provided us with a copy of 
the Korean text of what Vice Foreign Minister Kang Sok-ju said 
at the meeting. Regardless of how this issue is eventually 
clarified, one will still have to deal with the facts.
    During our meeting, Mr. Pritchard stated, ``The key issue 
is the intelligence that makes the United States believe that 
the DPRK has an HEU program. In the U.S., there is the 
widespread view that the complete, verifiable resolution of 
this HEU issue is now mandatory. This is a practical issue, and 
there must be a multilateral discussion to resolve it.'' In 
response, Vice Minister Kim Gye Gwan stated that the DPRK had 
no HEU program. Upon further questioning he stated that the 
DRPK had chosen the plutonium path to a deterrent. It had no 
facilities, equipment or scientists dedicated to an HEU 
program, adding, ``We can be very serious when we talk about 
this. We are fully open to technical talks.''

Concluding Remarks
    Mr. Chairman, I would like to summarize my observations 
based on our visit to the Yongbyon Nuclear Scientific Research 
Center and discussions in Pyongyang.

   The 5 MWe reactor has been restarted. It appears to 
        be operating smoothly providing heat and electricity, 
        while also accumulating approximately 6 kg of plutonium 
        per year in its spent fuel rods.

   The 50 MWe reactor construction site appears to have 
        seen no activity since the IAEA inspectors were 
        instructed to leave in 2002. The reactor and the 
        construction site look in a bad state of repair. It 
        would require a major construction program to finish 
        the reactor.

   The spent fuel pond is empty; the approximately 
        8,000 fuel rods have been moved.

   The DPRK claimed to have reprocessed all 8,000 fuel 
        rods to extract plutonium metal during one continuous 
        campaign between mid-January 2003 and end of June 2003. 
        The 8,000 fuel rods are estimated to contain up to 25 
        to 30 kg of plutonium metal. We could not definitively 
        substantiate that claim. However, the Radiochemical 
        Laboratory staff demonstrated that they had the 
        requisite facility, equipment and technical expertise, 
        and they appear to have the capacity to do so.

   It is possible that they moved the 8,000 fuel rods 
        to a different storage location. However, such storage 
        would represent a serious health and safety hazard.

   We were shown what was claimed to be a sample of 
        plutonium metal product. I was not able to definitively 
        confirm that what we saw was actually plutonium metal, 
        but all observations I was able to make are consistent 
        with the sample being plutonium metal. However, even if 
        the sample were plutonium metal, I would not have been 
        able to substantiate that it was plutonium from the 
        most recent reprocessing campaign. Such a determination 
        requires more sophisticated measurements.

   In the foreseeable future, the DPRK can produce 6 kg 
        of plutonium per year in its 5 MWe reactor. It easily 
        has the capacity to reprocess the spent fuel at any 
        time to extract the plutonium. It also has the capacity 
        to reload the reactor with fresh fuel for a second and 
        subsequent reloading. It is not, however, in a position 
        to increase the rate of plutonium production much 
        beyond 6 kg per year without a major construction 
        project at the 50 MWe or 200 MWe reactor sites, 
        something that would be difficult to do clandestinely.

   Officials of the DPRK Ministry of Foreign Affairs 
        claimed that the DPRK had weapons of mass destruction. 
        They believe that they provided us with evidence of 
        their ``deterrent.'' At Yongbyon, they demonstrated 
        that they most likely had the capability to make 
        plutonium metal. However, I saw nothing and spoke to no 
        one who could convince me that they could build a 
        nuclear device with that metal and that they could 
        weaponize such a device into a delivery vehicle. We 
        were not able to arrange meetings with DPRK staff who 
        may have such expertise or visit related facilities.
   Officials of the DPRK Ministry of Foreign Affairs 
        also stated categorically that the DPRK has no program 
        for enriching uranium. Moreover, they claim to have no 
        equipment and no scientific expertise to do so. We were 
        not able to substantiate these claims.

    Let me close by stating that I shared these conclusions 
with our DPRK hosts before my departure. I told them that my 
observations still have uncertainties. I may be able to reduce 
some of the uncertainties through discussions with other U.S. 
specialists, with additional analysis, and through peer review. 
I intend to do so and write a more comprehensive technical 
report in the future. The response of the DPRK officials was 
quitc positive although they had hoped that my conclusions 
would be more definitive. They asked me to report my 
observations as I presented them.
    Finally, Mr. Chairman, I found the trip to be remarkable. 
Our DPRK hosts were most courteous and cooperative. I would 
like to acknowledge the Albright/O'Neil book, Solving The North 
Korean Nuclear Puzzle, the Report from the Department of State/
Department of Energy Spent Fuel Canning Team, and discussions 
with several of my colleagues at Los Alamos, all of which 
helped me to prepare for this visit. I hope that our findings 
will contribute at least in some small way to a resolution of 
the current nuclear crisis and the eventual denuclearization of 
the Korean Peninsula. Thank you for giving me the opportunity 
to share our findings with you.


Note:

\1\ David Albright, Kevin O'Neill, editors. ``Solving the North 
Korean Nuclear Puzzle,'' ISIS Reports, The Institute for 
Science and International Security, Washington, D.C., 2000.

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