Open Radio for North Korea (ORNK) reported on the 29th in its weekly newsletter that the North Korean demand for $500 million in rent for the Kaesong Industrial Complex which was made at the working group meeting on the 11th was done on Kim Jong Il’s direct order.
ORNK revealed, “Kim Jong Il issued the order personally, in order to gain time so that financial sanctions over North Korea could be loosened, and any hard line moves by South Korea as a result of the second nuclear test could be mitigated.”
According to the ORNK newsletter, Kim Jong Il received a report from the Secretarial Office of the Central Committee of the Party and the Ministry of the Munitions Industry on U.N. sanctions and domestic foreign currency reserves on May 29th. What Kim Jong Il heard was that available foreign currency would be about one billion dollars if foreign bank accounts were to be frozen. Kim Jong Il needed time to fill up the reserves and to blunt the edge of the financial sanctions.
Accordingly, Kim allegedly told his negotiators to demand 500 million dollars in Kaesong Complex rent.
The newsletter said, “This tactics was only to run out the clock, not to find a point of compromise.”
The current situation is apparently more serious than when sanctions were put on Banco Delta Asia in 2005. ORNK suggested, “At that time, cash transactions were not affected by the sanctions, although there was some general financial damage. This was because South Korea’s Roh Moo Hyun administration was supplying dollars for the Kaesong Industrial Complex and Mt. Geumgang tourism as part of Uriminzokkiri (being amongst our nation).”
Now, all inter-Korean cooperative business is on hold, so financial flows are even more constrained than they were.
