American Enterprise Institute

April 30, 2008

[Edited transcript from audio tapes]

2:15 p.m.	Registration
2:30	Panelists:	David Asher, Institute for Defense Analyses
		Nicholas Eberstadt, AEI
		Carolyn Leddy, National Institute for Public Policy
		Marcus Noland, Peterson Institute for International Economics
	Moderator:	Danielle Pletka, AEI
4:00	Adjournment

Proceedings:

Danielle Pletka:  Good afternoon, everybody.  Welcome to the American Enterprise Institute.  I am Danielle Pletka; I am the Vice President for Foreign and Defense Policy Studies here at AEI.  Let me ask everybody quickly at the outset before I forget to turn off or put on vibrate their cell phones.  Thank you very much.  I always forget to do it afterwards. 

We are here today to talk a little bit about the recent record on North Korea.  There is quite a lot to talk about in the news and not in the news.  When the Bush administration came to office, it did a thorough review of the previous administration's record on North Korea and of the agreed framework and declared that they were going to do better.  And I guess looking forward to the next administration, they are trying to enable the next administration to make the same statement about them, at least that would be my view of the current agreement. 

We are going to talk a little bit about a wide variety of issues today relating not just to North Korea's record on proliferation issues, but also on human rights questions and others.  We have an excellent group of panelists and let me introduce you to them very briefly.  You will find their full biographies in your folders in alphabetical order, if I may.  David Asher is a research staff member at the Institute for Defense Analyses.  He has also been a member of the Armitage Commission on U.S.-Japanese Relations.  But from 2001 to 2005, he served as a senior advisor for East Asia and the Pacific and coordinator of the North Korea working group at the Department of State.  Our own Nick Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute.  He is also--do I give your other title, Nick?

Nick:  Which one?

Danielle Pletka:  I didn't realize you had so many--I am very impressed.  Nick writes frequently and speaks frequently on Korea issues here at AEI.  Carolyn Leddy is a consultant to the National Institute for Public Policy, but from July 2006 to November of 2007, she served as the Director for Counter-Proliferation Strategy at the National Security Council where she covered North Korea's nuclear program, proliferation financing, WMD, and chemical and biological weapons.  She was actually a member of the U.S. delegation that first visited the Yongbyon facility in North Korea in September of last year. 

Marcus Noland is a senior fellow at the Peterson Institute for International Economics, and a visiting professor at Yale University.  He also writes frequently on North Korea issues and he's going to be talking to us a little bit about the record there as well.  I am going to ask Nick Eberstadt to lead us off.  We will go ahead with all of our speakers and then turn to our audience for questions.  Thank you very much, Nick.

Nicholas Eberstadt:  Thank you, Dany.  Ladies and gents, lovely to see you here this afternoon.  I am going to try to provide a little bit of background context for attempting to understand North Korea's record over the last number of years.  It seems to me at the very least we should give an adversary the respect of attempting to understand where they are coming from.  And phrases like “Axis of Evil” and “rogue state” are fine with me as far as they go. 

But I would think that a more helpful concept for understanding the DPRK and North Korean behavior would be the more classical notion of a revisionist state, a state that is deeply dissatisfied with existing aspects of the world or the environment that it faces.  I think we can see three areas in which the North Korean state has deep dissatisfactions, deep disagreements with the environment that it faces, and they are not trivial. 

The first is with the workings of the global world economy, the capitalist system.  The North Korean government speaks often of ideological and cultural infiltration, which they describe as a risk to system subversion.  The definition of ideological and cultural infiltration includes joint ventures, foreign investment, cultural exchanges, what most of us would think of as the ordinary workings of the world economy globalization.  That is one disagreement. 

Another disagreement with the system that it faces is a kind of a big dissatisfaction with the existing U.S. international security architecture which has been erected since the end of World War II.  This is what North Korean literature refers to as the imperialist system.  They don't like the imperialist system.  The imperialist system, of course, includes the U.S. structure of alliances in the Far East. 

The third disagreement with the world it faces, I think, concerns the existence of a South Korean state on the Korean Peninsula.  The North Korean government has always regarded the South Korean state as a cancer on the face of the earth that has to be eradicated or excised.  And if you think that I am exaggerating, you should look at the broadcasts of the AINDF, the Anti Imperialist National Defense Front.  It is an embassy that is recognized only by Pyongyang, it broadcasts from Pyongyang as the South Korean government in exile.  They talk about the puppet state in South Korea that is supported by American bayonets.  Until this February, that puppet state, supported by American bayonets was the government you know as the Ro Moo-hyun administration. 

So what do these disagreements mean in practice for North Korea's interactions with the world?  I make six points very quickly.  First, economic reform worthy of the name is impossibly dangerous for the Kim Jong Il regime, and that is we haven't seen any trends in sustained economic reform in the DPRK over the last twenty-five years, which is more or less the period in which Kim Jong Il has been in day-to-day charge of North Korean economic policy.  There have been movements forward and movements back, but obviously there has been no sustained movement towards economic reform.  There has been economic deterioration, but not economic reform. 

Two, nuclear weapons are indispensable for Kim Jong Il's security.  Nuclear weapons speak to all three of those disagreements I just mentioned to you.  Nuclear weapons make it possible to engage in international military extortion instead of military trade, instead of international peaceful trade.  Nuclear weapons are indispensable for making North Korea safer against the US security system.  Nuclear weapons are indispensable for any long-range chance in the contest against the abomination known as the South Korean state. 

Point number three, nuclear proliferation is by no means unthinkable for the North Korean government.  In fact, the logic of proliferation may actually lead the other way in North Korean thinking to the extent that this complicates or undermines the situation for the US international security system. 

I will leave it to others who are much more informed about proliferation questions to speak more specifically to these.  Fourth, a peace on the Korean Peninsula or rather on a Korean Peninsula with an ROK state existing on the Korean Peninsula is at best a provisional affair for a regime that involves itself at this very moment as being in a state of war that began in 1950 and has not yet ended.  We might well expect that the North Korean government would regard a peace mechanism for the Korean Peninsula as a stratagem or a device for forcing American troops out of the Korean Peninsula because that would speak to disagreement two and to disagreement three. 

 Finally, for the DPRK state, negotiations with international adversaries are not a win-win proposition.  They are not a face saving, everybody takes money back from the table sort of arrangement.  North Korean's affectionate term for Americans is meko mam [phonetic], the American bastards.  From a practical standpoint in the DPRK's viewpoint, one does not wish to have one's dreadful enemies save any face or bring any money back from the table or accord any slight win in negotiations.  From a metaphysical standpoint, it is immoral to let the American bastards take a penny off the table.  Propositions to consider.

 I think if you reflect upon the propositions I have laid out for you, they may help to explain some amount of the North Korean behavior that we have seen, let us say the last seven years, the last ten years, the last twenty-five years, the last fifty years.  One last thing to say.  We are in a think tank, and we like to do research at think tanks.  One of the things that think tanks are best at is talking about lessons learned.  In dealing with North Korea, no less important I think are lessons forgotten.  We have forgotten a lot of lessons with North Korea over the last seven years.  It almost seems, I would say, as if the Bush administration knows less about North Korea today than the day that it entered office.  Thank you very much.

 Danielle Pletka:  Thank you, Nick.  Carolyn?

 Carolyn Leddy:  Good afternoon, everyone.  I think everyone knows that today's event is entitled “Making the World Safer for Kim Jong Il.”  I would actually contend that we could also sort of classify today's event and title it “Making the World Safer for the Coalition of the Proliferators.”  Kim's not the only beneficiary of the Bush administration, particularly given this latest North Korea/Syria fiasco, feckless and dangerous North Korea policy.  Proliferators are ready to cash in and aspirant nuclear states worldwide have been emboldened. 

 But given that today's focus is on North Korea, I will restrict most of my comments to the Bush administration's North Korea policy and circle back at the end and look at the implications of the larger proliferation issue.  I think we were asked today to sort of look at North Korea's government objectives and how it has fared on its dealings with the Bush administration. 

 I am certainly not a North Korea expert or regional specialist, but I think it's fair to say that the North Korean regime's overall central objective remains its own survival.  That in seeking to acquire nuclear weapons and be reaffirmed as a nuclear weapons state through its “successful” test and to exact maximum benefits, this is clearly a rational strategy that has been working for the North Korean regime. 

 So how has the North Korean regime fared in its dealings with the Bush administration?  I am not really sure that I actually need to answer that question.  I say it's probably about ten in favor of North Korea, zero for the Bush administration at this point.  Looking at sort of our international engagement policies, I mean, there really aren't any ones with any teeth.  The only one that we're really talking about here, and it has no teeth obviously, is the Six-Party Talks, which is more of a process than a national set of talks and negotiating forum. 

 I will certainly be honest and admit I've always shared the “critics” healthy skepticism towards the efficacy of the Six-Party Talks.  But I am willing to go out on a limb, as well as risk a future invitation to AEI, and state that there was probably at least a tiny window where the Six-Party Talks could have played a potential role in at least maintaining the status quo, if not reducing the North Korean nuclear threat.  But that is certainly a big if, because I don't even think I believe that myself at the end of the day.  Kim's never made the strategic decision to give up his nuclear weapons.  There is no evidence that he ever intends to. 

 But if you do posit sort of that the Six-Party Talks were worth exploring.  They were doomed, unfortunately, from the outset even before the administration in the February 2007 agreement.  I am not talking about some conservative conspiracy here to derail the talks.  The administration has always lacked the will to apply and sustain pressure on the North Korean regime to actually make any kind of difference.  There have never been any consequences for North Korea since they tested their nuclear weapon. 

 The administration's rhetoric has never matched the reality of its policy decisions.  The Bush administration's lack of will to actually apply any pressure was demonstrated in the weeks following the nuclear test when the administration made a deliberate and conscious decision not to implement the United Nations Security Council Resolution 1718.  And to abandon its quite successful counter-proliferation strategy of defensive measures, including financial pressure, that we had put on the North Korean regime, which clearly made Kim sweat. 

 I think it's been most disappointing, actually for me, having had to listen to the administration continue their rhetoric about full and effective implementation of [Resolution] 1718.  I am thankful that they've actually finally abandoned that rhetoric in recent weeks.  I don't know of--and speaking of 1718--I don't know of any nuclear entity, any North Korean nuclear entity or any North Korean individual involved in a nuclear program, that has been sanctioned under 1718, let alone designated under our own unilateral sanctions and executive order. 

 I would suspect that at a minimum, we've got a list of folks and entities given the North Korea/Syria nuclear affair.  So the Six-Party Talks have been a completely one-sided affair for North Korea, accruing all of the benefits.  I mean, if you just look at--you can draw up a quick list of all the benefits that North Korea has received over the past year.  Obviously stated, there has been no implementation of any sanctions.  We laundered through our own Federal Reserve money to return to North Korea that was tainted.  They received heavy fuel oil shipments. 

 The North Koreans successfully watered down the “disablement” of Yongbyon in order to basically make it equivalent to the agreed framework freeze in 1994.  The North Koreans have been able to ignore a deadline set to disable Yongbyon fully and to submit its declaration of all new nuclear programs.  And most recently was successful in cutting the “Singapore deal” which it will be incumbent upon the United States rather than North Korea to actually submit a declaration of North Korea's proliferation activities and uranium enrichment program in which North Korea will “merely” acknowledge the U.S. concerns regarding these.

 And then of course most egregious is they've been able to earn cold hard cash by assisting a fellow state sponsor of terrorism in constructing a nuclear facility.  They will be imminently removed, of course, from a set of U.S. sanctions, including the terrorism list.  One thing I think is important to note that hasn't really received a lot of media attention and probably to a certain extent rightfully so because we've been very focused on the Syria/North Korea angle, North Korea has been pretty successful in sort of sweeping under the rug any concerns about their uranium enrichment program.  The Bush administration's focus has shifted over to the plutonium. 

 So while everyone in the administration is busy counting every kilogram of plutonium--and don't get me wrong, I mean, I think it's obvious that we need full verification of North Korea's plutonium stockpile--they've basically chosen to ignore North Korea's ongoing uranium enrichment program.  So I think it's a pretty clear know that the current approach, the Six-Party Talks, is not going to reduce the risk posed by North Korea unless we actually put some real teeth into it. 

 So in terms of alternative approaches that should be considered by the next administration, for starters the next administration needs to come out with a clear declaratory policy given that the Bush administration has basically shredded their own and make it clear that North Korea will actually be held accountable for the consequences of their behavior.  We need to breathe life back into our moribund counter-proliferation agenda by implementing sanctions, particularly where it hurts Kim with his cash supply. 

 Also other things are specific targeting strategies to get at those that facilitate the proliferation activities.  I mean, North Korea does a fairly good job of kind of operating on its own, but it certainly does need others to help facilitate its behavior.  And then, of course, we should look at ideas that the administration did originally look at, like develop a nuclear detection archer in the Asian-Pacific region. 

 Just a couple of closing thoughts.  I think it's been fairly easy to direct a lot of criticism towards the State Department and mostly for good reason.  State certainly values process over progress and consistently makes promises and commitments that have no basis in fact.  But while State is an easy target, the reality is that the buck stops with the President. 

 I think many folks, including myself who have spent many years working in administration on President Bush's non-proliferation agenda, we have not wanted to direct any criticism towards the President because we believed in his agenda.  We want to hold out hope and faith that he won't abandon it.  But the reality is, like I said, senior administration officials, Secretary Rice, have assured us repeatedly now that the President is fully informed about our North Korea policy and is always there to sort of nod his head yes or no. 

 Despite all of the misgivings I've had about the Six-Party Talks, I always had faith that we would never abandon our central objective to promote and safeguard and keep nuclear weapons and other weapons of mass destruction out of the hands of rogue states and terrorist groups.  But unfortunately, I have lost most of my faith these days. 

 I don't think--nothing illustrates more the Bush administration's abandonment of its own non-proliferation, counter-proliferation agenda than its non-action with respect to North Korea's nuclear assistance to Syria.  I found it particularly ironic if you look at the administration's statement that they came out with last week on the North Korea/Syria nuclear affair, that they actually attempted to send a “tough message” to Iran in the statement which they gave a complete pass to North Korea and particularly the call to enforce United Nations Security Council resolutions.  Actions obviously speak louder than words and I think through our North Korea policy, unfortunately, proliferators have heard the Bush administration's loud and clear--proliferation pays.  Thanks.

 Danielle Pletka:  Thank you very much, Carolyn.  David?

 David Asher:  Thanks Dany, it's a great pleasure to be back here at AEI.  I am not representing the Institute for Defense Analyses.  If you, for any reason, decide you want to quote something I say, please just refer to me as a former State Department official.  We think of ourselves as former regime elements these days. 

 At this critical juncture in U.S. policy towards North Korea, I think it's really helpful, as painful as it is and I will be covering some of the same ground as Carolyn did, to constructively and critical review our approach top down and from start to finish.  I had the opportunity to sort of be there at the beginning and hang on for the first year of the Rice State Department and saw her policy dramatically change. 

 When we began the Bush administration, we conducted a policy review that tried to address three big questions.  First, what are our essential strategic priorities?  Second, what is our desired end state?  Third, what sort of policy can support these aims?  Very simple things that one would expect the National Security Council to go through.

 On essential strategic priorities, we decided obviously containing WMD proliferation was at the top of the list, containment above all else.  Deterrents, including deterring against the deployment and potential offensive use of weapons of mass destruction and conventional military forces was number two.  Number three was changing the nature and direction of the regime.  We never had a regime change policy, but we knew that the regime was part of the problem in North Korea and we felt that it had to be compelled, coerced, induced to change its direction following the example of China, in particular, and the other side of the coin, the Soviet Union.  What is our desired end, what was our desired end state? 

 Now North Korea does not pose a threat to the world, obviously.  That is important.  And a unified Korean Peninsula on terms favorable, and this is important as we think of it today, to the ROK, the United States and the UN allies who fought the war that left North Korea standing, fortunately.  We also asked was the Clinton policy worth continuing and what could we do better to address our common sense priorities and achieve the desired end state?  We assessed the previous U.S.-ROK diplomatic approach of Sunshine had, in effect, what we called a Moonshine policy as we started to look at the results of it placating the North rather than fostering change. 

 And I am not faulting that there were motives that at the beginning of the policy they really wanted to open North Korea up, but it rapidly became a policy of trying to addict North Korea to South Korea's assistance and make it feeble and control North Korea so it would not collapse into South Korea's lap.  So it basically sort of left the Cold War running in North Korea and assumed that was okay.  We didn't think that was okay.

 We also saw our alliances had weakened under the threat of missile deployment and potential WMD weaponization, something which has not been talked about very much and the United States itself felt threatened by developing ICVM capability in North Korea.  We realized also early on that the DPRK was in serious breach of its commitments under the great framework and was engaged in proliferation activity well outside the boundaries of the non-proliferation treaty and the missile technology control regime.

 I think that people are starting to realize how bad things were.  It is not something that we didn't understand to a fair degree early on and this was at the heart of many of the debates that we had in the administration.  Our solution was three fold--Six-Party Talks, number one. 

 Number two was bolstering the alliances with the ROK in Japan and employ missile defense and enhance for deterrents.  Third was the proliferation of security initiative and the illicit activities initiative, directed principally against North Korea.  Let me reflect on our progress in achieving our desired ends, beginning with the Six-Party Talks, something I actually helped create. 

 We designed the Six-Party Talks with the clear purpose of establishing the grounds for ending the cold war in East Asia.  We had all of the parties to that cold war at the table.  It was not just about nuclear weapons; it was about changing North Korea's regime and its intrinsically hostile orientation to the world.  We aimed to remove the fear of change inside the DPRK and surround it with opportunities for opening up and developing while still requiring it to abandon a hostile military first state policy built on nuclear weapons and programs. 

 And I as someone who has been analyzing North Korea for a long time in the government, for eighteen years, can say, at least from my own vantage point, that military first and nuclear weapons are synonymous.  If you understand how it's used and how the concept developed inside North Korea, they were dovetailed.  So it's very important to understand that without nuclear weapons can't really change unless the military first policy changes if you look at it from the internal standpoint.  To provide us with important leverage, we developed the illicit activities initiative, used law enforcement rather than just abject pressure, to put pressure on North Korea's considerable illicit income streams and overseas financial networks.  Unfortunately, after establishing a sound policy direction and modest success in the early stages of the Six-Party Talks, and I agree with Carolyn, there were a few times where it looked like we might actually get some serious progress. 

 The administration seems now to have gotten inebriated on the Clinton era moonshine and lost sight of its own original goals.  In the Six-Party Talks, we are today ready to declare preemptive victory without any serious change in North Korea's direction strategically or empirically, as far as I am concerned, including on nuclear weapons and programs, proliferation and human rights which really are more, as Marc may discuss, human wrongs. 

 A declaration that tells us only what we already know, and that seems to be the heart of our Singapore strategy, perhaps because someone has coached them on what to say, which I won't comment further on, is worthless as is a deal that looks past the substantial threats that matter most to our security here and now--weapons, nuclear weapons, nuclear proliferation, and clandestine nuclear production. 

 Likewise, lifting the Trading with the Enemy Act against North Korea when they haven't withdrawn a single gun in placement or a troop from areas abutting the DMZ or stood down a single missile battery targeting South Korea or Japan or even the United States of America, which is something people don't like to talk about, is frankly absurd.  As is lifting them, from the state-sponsored terrorist list at a time when, as Carolyn points out, they are selling weapons of mass destruction and the means to deliver them to larger state sponsors of terror abound.  But it actually gets worse. 

 The PSI, Proliferation Security Initiative, which is one of the very best ideas to come out of the administration, also has been a failure.  This is not due to the founder's intent.  I have nothing but high regard for the motives and the work that went into the PSI.  But the failure is due to a failure to implement a regime of cooperation that is ready, willing and able to counter proliferation globally, especially against North Korea, due to a bizarre fear of the consequences of doing so.

 Under our watch, it has been made painfully public in recent months some unacceptable and dare I say outrageous acts of proliferation by the North Koreans have occurred which we have been unwilling, though certainly not unable, to counter.  Our counter-proliferation efforts have been continuously emasculated by a fear that they could undermine diplomacy.  I saw this myself. 

 Some people say, oh, well, it was the East Asia Bureau at the State Department that was the problem.  The East Area Asia Bureau of the State Department, which I was the number two political appointee in, proposed on repeated occasions very serious and significant programs to counter North Korean proliferation.  It was a critical element in our strategy.  Our efforts were continuously rebuffed by a variety of players at the National Security Council. 

 So as the historians will some day see, we were at the forefront of counter proliferation working with the non-proliferation bureau hand-in-hand.  And we are continuously stopped for reasons which are hard to explain.  The cost of this failure is alarming and totally unacceptable, whatever one thinks of the importance of the diplomatic track.  2001 and 2002, Libya received blueprints for nuclear weapons to make Aku Khan’s network in the north which the North Koreans were essentially a part of.  And North Korea provided uranium hexafluoride, the gas that is used to feed enrichment centrifuges.  We should have known right away that was a sign that something very wrong was occurring at the beginning of our policy. 

 Throughout the first term of the Bush administration, we saw critical procurements happening for the highly enriched uranium program typically going through China, the nation that sponsors and hosts the Six-Party Talks.  In 2003 and 2004, according to The Wall Street Journal, Iran received a BM25 intermediate range ballistic missile, the most formidable missile ever exported from North Korea.  Delivered, according to The Journal, on a North Korean flied [sounds like] vessel right through the Persian Gulf, right under noses, despite the PSI.

 Danielle Pletka:  I am enjoying this, but you are speaking too quickly.  You can have an extra minute to say the interesting things you are saying.

 David Asher:  I apologize.  According to the DNI, as we are all aware now, Syria's Yung Yung and the Euphrates actually dates back to 1997 with major aspects being delivered right in the middle of the Six-Party Talks from 2004 to 2007.  One only could wonder if North Korea would sell a nuclear program to Syria, what wouldn't they sell to its patron in Iran.  Regarding DPRK-Syria nuclear cooperation, President Bush said at a news conference yesterday, we wanted to advance certain policy objectives through the disclosure of the program. 

 One would be to the North Koreans to make it abundantly clear that we know more about you than you think.  Then we have an interest in sending a message to Iran and the world, for that matter, about just how destabilizing nuclear proliferation would be in the Middle East. 

 The irony of the President's remarks is that the Bush administration has done so little to counter the threat that he describes.  By acting as the low cost and most aggressive supplier of WMD technology and systems, North Korea is fueling an arms race throughout the Middle East that has dramatically accelerated under our watch.  Spurred on by Iran and Syria, there are now multiple nuclear research programs going on in the oil rich Gulf. 

 One would not be surprised if the North Koreans were assisting these programs too, although I can't comment.  North Korea's proliferation networks represent a clear and present danger to the United States, to the stability of the Middle East and the international economy.  They have crossed all of the red lines we have delivered in the Six-Party Talks, have blown past all of their international treaty commitments including when they were members of the non proliferation treaty and the MTCR, have paid no attention to UN resolution 1695 and 1718, neither of which has been implemented. 

 North Korea remains in the business of selling weapons, including weapons of mass destruction, associate technology, and will not voluntarily exit.  As one can simply find by looking them up in the phone book in various Middle Eastern countries, multiple sanctioned entities continue to do business and, as usual, with few consequences. 

 I have a simple proposal.  North Korea's weapons trading companies, their people, their finances, accomplices, and facilitators should be given ninety days to completely cease operations in the Middle East, Asia, Africa, and Europe or face being acted against using all instruments of national and international power.  All of this is essentially mandated under UN resolution 1718, which should be implemented immediately beginning with the specific designation of entities and the freezing of their finances, as Carolyn is suggesting.

 We can do this and it will not get in the way, I believe, of whatever hope one might have of diplomatic solution.  In late 2003, 2004, the United States and many friendly governments acted around the world against the Aku Khan Network, fundamentally disrupting its operations.  This effort showed that nuclear proliferation could be stopped decisively and effectively when sufficient political and resources are brought to the table.  It did not undermine the U.S.-Pakistani relationship either, as some had felt. 

 The U.S. counter-proliferation is manned by some of the finest policy officials and intelligence officers, and I know many of them personally.  I have great confidence in their abilities.  Unfortunately, they have been given, and frequently given, insufficient top cover to accomplish their mission.  Finally, the final point, many argue that North Korea will not get out of the lucrative business of weapons proliferation without some compensation.  I have no problem with a non-nuclear [phonetic] program being put forward to help transform North Korea's weapons producing facilities and turn them from swords to plowshares.  The South Korean government alone has put up an enormous amount of money for this purpose and I think it's incumbent upon us to make that offer. 

 However, if North Korea does not accept that offer and voluntarily withdraws its capabilities to produce and sell weapons of mass destruction, I think it is absolutely essential for the United States national security to take action.  If you think about it, despite our bold ambitions, we have not contained the threat of proliferation, we have weakened the credibility of deterrents and we spurred doubt among our allies even as North Korea has significantly bolstered its own nuclear capabilities.  We failed to compel a regime shift in North Korea.  Allowing North Korea to win in its cold war with the world will go down in history as one of the most remarkable and disturbing elements in the Bush administration's legacy, I'm afraid.  Thank you.

 Danielle Pletka:  Thank you very much, David.  Mark?

 Marcus Noland:  Well, I don't want to make the world safe for Kim Jong Il, on the contrary.  But I would like to make the world safer for the North Korean people, and I believe that North Korea is on the precipice of a famine on the back of improved harvests and aid principally from South Korea and China. 

 In 2005, the North Korean government undertook a series of very reckless actions.  It reneged on agreements with farmers and began expropriations in rural areas.  It banned the private trade in grain in effect criminalizing the principal mechanism through which North Korean families secured food and tried to force people back into the state-run public distribution system.  It threatened to expel the World Food Program (the WFP) and foreign NGOs.  These policy changes proved to be unsustainable, but the new restrictions on the WFP and the NGOs, in effect, took the canary out of the mineshaft. 

 Now the food situation is deteriorating, a function of self-destructive internal policy responses, global market conditions and the regime's extraordinarily mishandled relations with its aid donors.  There are three sorts of evidence, the first is quantities.  I am an economist, and when economists talk, we have to have at least one completely incomprehensible chart, Danielle.  That's why I have to use the PowerPoint.  I will caution you, there are significant uncertainties about major underlying components in these calculations. 

 But nevertheless, I think walking through this is instructive.  On the top line what you see is what the WFP and the FAO say is the minimum grain requirements for North Korea.  That includes both human demand, livestock feed, seed, some provision for spoilage and wastage and so on.  And if you add up what they produce domestically, this checkered part and this blue stuff which is commercial imports and then the crosshatched bit, which is aid, that gives you total available supply.  And as you can see, total available supply has been below needs continuously for this period.  This pink part is the shortfall. 

 The problem is this diagram is, of course, implausible.  If North Korea were literally short a million metric tons year after year after year as this diagram implies, they would be in a famine now.  The issue is that for analytical reasons, I believe the WFP and FAO have miscalculated the actual human gain requirements in North Korea by approximately 20 percent. 

 If one makes an adjustment to this line to take into account this over-estimation of human need, you get this second line, a line which I argue much more tracks the actual experience of North Korea.  In the mid-1990s, it is above total supply, you get that pink area and you have a famine.  Then as aid starts ramping up, they develop a margin of security where the actual supplies exceed the line.  That has dwindled away in the last couple of years and if you believe the specific numbers in this chart, their margin of error is now down to less than 100,000 metric tons. 

 Now this calculation involves assumptions that are highly uncertain and as an economist, I wouldn't want to rely solely on those, so let's look at the price evidence.  This is an index of nominal prices for food in North Korea.  In the last year, nominal food prices have risen, have nearly tripled and grain prices have risen even more quickly.  These price increases have been larger than my estimation of the overall level of inflation in North Korea, which is to say real food prices are increasing.  And they are increasing at a more rapid rate than global prices, so this is not just a global prices story; there is a specifically North Korean component in it.  That is a tremendous increase in prices. 

 Third, anecdotes.  The North Korean regime is extraordinarily insecure and risk adverse with respect to the domestic political implications of economic changes and in particular the marketization of the economy.  In good times, the regime's instinct, as I've mentioned in the 2005 as a good example, in good times the regime's instinct is to reassert control, not build on or deepen economic reforms. 

 Most recently the government has cracked down on trading activities, both in local markets, and with respect to trading in China.  It is engaged in execution of migrants who have crossed into China with the purpose of trading.  Their reports disputed failures of the public distribution system, deaths in the countryside, incredible reports of children now begging in poorer neighborhoods, even in Pyongyang. 

 All of the indicators point to a worsening situation, but having effectively expelled the WFP and the NGOs we, or at least we the outside world, are effectively flying blind without any early warning system.  The crisis of 2008 will not approach the magnitude of the great famine of the mid-1990s.  There are far greater sensitivities to these developments, I suspect in North Korea itself, and I know in the outside world.  And the North Korean economy, even in its sort of hamstrung constrained state today, is simply more flexible than it was ten or fifteen years ago. 

 Nevertheless, the political dynamics are similar.  Once again, North Korea is in a nuclear standoff both complicating its own response to the emerging internal crisis, as well as the response of the donors.  And the North Korean response today, as in the past, to such core humanitarian values as non-discrimination and the provision of aid, makes support for humanitarian activities there problematic. 

 Based on these considerations, I would recommend the following policy starting with North Korea, although I will not hold my breath about the North Korean government taking on board what I have to say.  I know there are some members of the press, maybe you can write this up and maybe Pyongyang will pay attention. 

 First of all, in the broadest sense, the North Korean leadership has to understand that the path to a secure future does not lie in the possession of nuclear weapons or a posture of belligerence, but rather security, cooperation, detente and economic reform.  The long run solution to North Korea's chronic food insecurity is revitalization of the industrial economy, which would allow North Korea to export industrial products, earn foreign exchange and purchase bulk grains on a commercially sustainable basis just like its neighbor South Korea, China, and Japan do. 

 In the short run, North Korea needs to openly acknowledge these growing internal problems and conclude negotiations with the WFP and other donors so assistance can begin to flow.  It also needs, obviously, to reverse this pattern of self-defeating interventions that it has made in its domestic economy.  China and South Korea are pivotal because of their geographic proximity and the availabilities of stocks of both food and fertilizer that could be potentially released on short notice.  China needs to reverse its policies of export controls, tariffs and quotas that are hampering the flow of food across the Chinese border into North Korea so the markets can once again begin to function, even if they are functioning at very high prices.  South Korea needs to restate its standing policy, that humanitarian assistance is separate from security issues. 

 Now obviously there are very deep bilateral political problems now between North and South Korea.  Nevertheless, South Korea could route food contributions via the WFP or possibly through South Korean NGOs which are active in the Chinese border region, although this would require cooperation with China.  And in the case of the United States, it is unlikely--I thought it was unlikely until this afternoon when someone told me that it is highly likely--but I would have thought it was unlikely that the United States would make large new aid commitments in the absence of a meaningful nuclear declaration and the emerging evidence of North Korea's proliferation activities. 

 But the United States still could undertake at least planning and coordination with the WFP and/or U.S. NGOs that would permit a rapid response should the political situation change.  There are three key issues.  Number one, the one that people always focus on is monitoring.  Monitoring and verification is always a problem in North Korea and it has been a tug of war for the last fifteen years. 

 So given that it is and will remain problematic, there are other things that we can do to try to ensure that an aid program has maximum humanitarian impact and minimizes the likelihood of simply reinforcing the regime.  Number one, given that the aid is diverted but markets are fragmented, we can identify the worst affected areas of North Korea and essentially inject aid into those areas.  Even if the stuff is stolen straight off the bus, it is likely to pool in that area, so we will get to the people, even though it will not get to them on the terms that we may have wanted to get. 

 Secondly, we can give--or thirdly--we can give food in forms that are not preferred by the elite, that is to say things like barley and millet.  Here the problem is with us, because our own political economy of our own aid programs and our own farm lobby, but what we should be doing is basically injecting food into food deficit areas, providing it in non-preferred forms and then monitoring as best we can. 

 As outside actors trying to formulate a strategy in dealing with North Korea, it is always good to step back and consider first principles.  That our ultimate objective ought to be a North Korea in which its citizens can live in freedom and dignity without fear of recurrent hunger and privation.  Kim Jong Il's extraordinary mismanagement of the situation is made possible by his total lack of accountability within the North Korean political system and sadly, he has enormous capacity and scope to inflict suffering on his own people. 

 For the outside world, in the short run at least, there is little choice but to spotlight the situation as I've tried to do in the last ten minutes and press for immediate and large scale relief to avert calamity.  If our ultimate objectives can only be met via change in or of the regime, well, so be it.  Thank you.

 Danielle Pletka:  Thank you very much and for the pictures with your presentation which were actually very illuminating, even to those of us who are hostile to PowerPoint.  There have been, I think, some hopes entertained that as the evidence becomes clearer, that the North Korean government does not intend to abide by its February commitments to the United States and actually disclose the details of its nuclear program.  That somehow the President of the United States and his staff would wake up and see that perhaps a mistake has been made. 

 And I think that those hopes, actually, grew in the last week when it became clear that this wasn't a bunch of conservative, right-wing lunatics who--I of course speak only for myself--who were opposed to the specifics of this deal.  But that in fact, individuals like when Winston Lord and Leslie Gelb, who wrote rather eloquently in The Washington Post last weekend, made clear their objections from a far more liberal standpoint that, in fact, the administration was making concessions to North Korea. 

 In fact, this has not been the case.  To the contrary.  The deal, such as it is, has advanced again, notwithstanding objections from senior members of the President's own party in private meetings with him in the White house who have expressed profound concerns about the concessions on the trading with the enemy, on the terrorism list and on the failure to reveal the details of North Korea's transactions with state sponsors of terrorism. 

 And I think the dynamic is one that is very similar, as I cracked at the beginning of our session, as the one at the end of the Clinton administration. And that is, in essence, that administration who is seeking a legacy rather than a concrete achievement become captive to their negotiating partners.  We saw this with the Israelis and the Palestinians when the Clinton administration, in effect, became an apologist for the malfeasance of Yasir Arafat and the peace process. 

 We saw it in the agreed framework when the Clinton administration ignored evidence that there was an HEU program, despite the fact that the North Koreans have told us that there was one.  And now I think that we see that at the end of the Bush administration when the administration will be forced to ignore increasing, growing evidence that the North Koreans have no intention of abiding by their agreements with us in order to preserve the myth that we have reached some sort of agreement and that the President has achieved something for his legacy.  Which is a shame for, as you've heard, the people of North Korea, as well as for our own national security.  Let me open the floor to questions from the audience.  If I can ask you very nicely to wait for the microphone, to identify yourself and to please, make your question brief and concise.  Thank you very much, this gentleman right here, go ahead. 

 Miles Pomper:  Hi, Miles Pomper from Arms Control Today.  A question for Carolyn. I am trying to understand why the administration before the nuclear test and after the nuclear test, seemed to have such a different policy and it seems sort of counter-intuitive the stance that they took.  I mean, before the test, they were not willing to hold, I mean at least frequently, direct talks with the North Koreans at a time where it actually might have made some difference. 

 And after the test, they were willing to have these direct talks and they made the kind of concessions you talked about.  And what was the thinking within the administration at this time that kind of prompted this 180-degree shift at a time when they actually finally had some leverage over the North Koreans?

 Carolyn:  I am not sure there is an easy answer to your question, Miles.  I was part of discussions, at least at my level, and with some senior officials right after the nuclear test where we were coming up with lists of even tougher measures to go after the North Koreans.  We got this great resolution and we had all of these tools in place and then bam, one day I woke up and went to work and now it was all about how we were going to be accommodating to the North Koreans and how we were going to really invest in the Six-Party Talks. 

 But I mean, I think--as you did point out, it's not fair to say that the administration hadn't engaged in Six-Party Talks.  I mean, we've been engaging in the Six-Party Talks for several years, and we did take a dramatic shift, but unfortunately, it was in the wrong direction.  We abandoned all of the actual teeth that we had in the process. 

 Hee Seok Chae:  My name is Hee Seok Chae.  Just a related to the previous question.  Which side or which party might have effected on the change of either strategy or tactics towards North Korea?  Just anybody can think of just which or where those changes are coming from, either the North Korean side or the South Korean government or the State Department, the government officials or the NSA or the White House or the Vice-President of his office?

 David Asher:  I mean, I am personally convinced, and I am just a casual observer on this, that we've just never really cared that much at the highest level of the Bush administration about North Korea.  It's always been a nuisance.  It was a nuisance from day one and my interactions at the NSC, I was also in charge of the North Korea activities group at the NSC, which was the policy coordinating committee for all of the bad stuff that the North Koreans were doing and trying to stop it.  We had some success, actually, most of which people don't know about, thankfully.  We actually can keep a few secrets. 

 An interesting thing is the North Koreans never responded in an adverse way.  When they were being stopped from doing something really bad, they usually just withdrew.  They didn't lash out.  And we discussed this with senior colleagues and we proposed basically that we needed to keep the pressure up on stuff that was overtly bad, I mean, be it illegal activity or weapons proliferation, just stuff that we can't accept. 

 The fall answer I always get--well, we've got a war going on in the Middle East and if we did anything like that, it could be disruptive.  We saw that with the Sosang [phonetic] incident, that ship that was going to Yemen with missiles which we did a great job of stopping and an even greater job of giving to the Yemenis.  Because the complained that if we didn't give them the missiles, they would cease cooperation on the War on Terror.

 And my view is, I don't think they would have done that, frankly, and I don't think they were giving us much cooperation to begin with.  But it is just the sort of thing that somehow if North Korea gets into a crisis, like after the nuclear test, it was going to divert critical attention from the war.  My own view is that North Korea is fueling the very arms race that is creating the strategic tension in the Middle East and we need to do something about it if we care about the Middle East. 

 Andrew Wyva:  My name is Andrew Wyva [phonetic], I am consulting currently to some of the Sudanese resistance movements.  What I would really, what was not mentioned by any of the speakers, I've heard in the past there was mutiny in one of the military corps in the past year and the half, a mutiny in one of the military corps.  Also the proliferation of homemade or jerry-rigged transistor radios so people can listen to Western broadcasts.  How much of a development or potential there is among the North Korean people to take matters into their own hands?  After all, Eastern Europe fell pretty easily about ten years ago and --

 Danielle Pletka:  Okay, I think we get the gist.  Marc, this sounds like a question for you.

 Marcus Noland:  There was a mutiny of a corps but that was, I believe, in 1995 during the peak of the famine.  And as for transistor radios and so on, yes.  The North Korean society is becoming increasingly permeated by information, not just radios but DVDs and other media, initially from China and now from South Korea.  And indeed, there are reports of people being executed for watching or trading in this kind of material. 

 But having said that, what I would say is, a big difference between North Korea and Eastern Europe.  Number one, we may not like it, but Kim Il Sung seems to have successfully fused Korean nationalism with his own regime in a way that was much, much, much more effective than those sort of puppet regimes in Central and Eastern Europe. 

 Secondly, there are no institutions; there is no civil society.  There are no institutions in North Korea capable of channeling mass discontent into effective political action.  The only institution capable of challenging the rule of Kim Jong Il is the military and he courts them assiduously and indeed runs the country from his position as Chairman of the National Defense Council. 

 Finally, unlike, I don't know, South Africa during the apartheid period or Algeria fighting the French, you do not have a situation in which the neighboring governments are likely to be hospitable to anti-regime organizing activity.  There are no marauding guerrilla armies on the Chinese border or in South Korea.  And indeed, South Korea, until very recently, has been actively hostile to dissident groups and defector groups trying to do things like radio broadcasts.  So I think it's a very different situation. 

 The one thing you can say is that there are reports of organized strikes and I don't want to call them insurrections, but significant civil disobedience and/or riots associated with the regime's attempts in the last year to crack down on market activity.  Once the markets get going, once that becomes the principle means of people feeding themselves, for the government to come in and try to prevent people from trading or to prevent households from purchasing food is a politically risky thing.  So I think there is embryonic or indications of embryonic forms of civil disobedience or unrest or dissent, but I think we are far from a situation where you have any kind of organized opposition to the regime outside of potentially the Army itself. 

 Chris Isham:  Chris Isham with CBS News.  Nick had mentioned earlier that North Korea is wired to proliferate because it has a tendency to make the United States and our allies uncomfortable.  There would be another incentive, I would assume of proliferating, which is hard cash and North Korea's need for hard currency, I would assume, would have something to do with that.  Syria is not known to be a large repository of hard cash.  I am wondering if any of the panelists could comment on where the financing for the nuclear reactor might have come from.

 Danielle Pletka:  I am afraid that is going to me, your moderator, but only because you are asking about Syria, which I know better. Chris, my colleagues from the administration may have seen indications about this, but I think there is ample evidence to indicate in the last couple of years that Iran is financing Syria's military purchases.  They are now basically, they are their most important trading partner.  They have liaison banking relationships. 

 We have seen Iranian officials, and IRGC officials at most of the, what we would call WMD type sites, whether it's the missile sites or the attempts to load WMD warheads onto North Korean missiles where you have seen North Koreans, although we haven't necessarily heard anecdotally about Iranian officials being present, especially at the Darjala [phonetic] site.  I think that it is natural for us to assume that the cash came from the Iranians.  I don't see of anybody else who would have been a likely financier.  Maybe my friends on the panel would like to add to that, or maybe not.  Shake or nod?  No, that's my guess. 

 Male Speaker:  Yes, a two-part question.  We've heard in presidential campaigns from the media constantly why the administration would not sit down and have direct negotiations it would have made a difference.  What is the thinking behind this and why or why not would direct negotiations have made a difference?  And second, could anyone say a word, if they would like, about what Russia is doing with respect to North Korea or not? 

 Nicholas Eberstadt:  Could you repeat the question, please?  My own perspective and prejudice as an isolated individual is that it's barbaric not to talk to your enemies.  So there is always some scope for talking with adversaries, if only to eliminate the needless aspect of the disagreements or misunderstandings.  But that is not the same thing as saying there is an impelling reason for getting into deep negotiations. 

 There is a kind of recurring myth in United States diplomacy.  The Ho Chi Minh disgruntled nationalist, Fidel Castro, disgruntled nationalist yearning for a loving relationship with the United States.  I am trained in political economy, not in psychiatry, so I can't tell you exactly why this continues, but it does seem to be a continuing fancy that we have. 

 As far as the Russia aspect of the situation, we have a great Russian specialist on the DPRK in the audience, Professor Toloraya.  I don't know if we can put him on the electric chair and ask him to say a few words, but if he is game, I am sure we would all learn something from it.  Georgy, are you keen to say a few words?

 Georgy Toloraya:  Well, for Russia, it is very simple.  We don't share the notion that there are things more important than peace, so we are against anything that would lead to a war or a conflict with the [indiscernible] of North Korea.  So we think that the way to do it is to try to find some compromise and help North Korea change, and that is what we are doing in the Six-Party Talks. 

 And regarding this, I also want to ask the question to anybody of the speakers who know the answer, what is basically is suggested is getting back to the year 2002, employing sanctions and pressure and things like that.  Well, the last time it led to the nuclear test and as we know, the proliferation to Syria and maybe to something else we don't know about yet.  What do you think the reaction of the North Korean government would be if we apply this pressure again?

 Nicholas Eberstadt:  Georgy, I will try it.  I don't know, maybe they would secretly proliferate for ten years--oh no, we are here, I forgot.  No, I mean, we have this analytical problem in dealing with DPRK behavior which is, at least in the United States, we tend to take a somewhat solipsist view of North Korea's behavior as being directly related to something that we may be doing or something that we may even have a thought bubble somewhere that they haven't seen. 

 It's a little bit like a teenager thinking that his parents got divorced because he didn't make the football team.  There is an analytical problem here.  I find it compelling if one wants to figure out what the scope would be of dealing with the DPRK, maybe to go back before the Bush administration and all of the bad neo-conservatives and the other adverse types who have been in U.S. policy and take a look at what North Korea said during the sunshine years of the Clinton administration. 

 We had a very significant--you know all of this and Georgy knows all of this--we had a very significant visit by a DPRK leadership figure to the United States in October of 2000.  Vice Chairman Jo Myong Rok, the number two person in the DPRK National Defense Commission.  Madeline Albright threw a party for him at the State Department, it was a lovely occasion, and he gave a very nice toast at this.  I think it's still up on the State Department website, you can see the toast. 

 Mark, you were there, you heard this.  I won't get it exactly right, but close enough.  Chairman Kim Jong Il has instructed me to tell Washington that we can move from confrontation to cooperation, and from hostility to friendship as soon as Washington provides the security guarantees for the DPRK's territorial integrity and its national sovereignty.  Now we used to be a little bit better at semantics in the Clinton administration than we are, perhaps, now and maybe we should be. 

 But go back and unpack what Jo Myong Rok said.  What’s a U.S. security guarantee for the DPRK's territorial integrity?  What is the DPRK's territorial integrity?  Does the DPRK's territorial integrity end at the DMZ?  I don't think so.  Take a look at the maps; take a look at the preamble to the Worker's Party charter.  It's the whole peninsula.  We can be friends with North Korea if we are willing to subsidize North Korean government behavior and throw South Korea into the bargain too, but that is a pretty high opening bid, it seems to me.  I don't know where it leads us.

 Danielle Pletka:  Yes?

 Sung Joo Lee:  My name is Sung Joo Lee from Georgetown and I want to ask David Asher.  I think it's not a good question, but I think it is time to ask.  We know that there is criticism from the democratic side that the first Bush administration policy towards North Korea, namely ABC, Anything But Clinton, make matter worse.  It made Pyongyang have a nuclear bomb.  You know, I think [indiscernible] is very similar, your solution, like PSI and economic sanctions and so on.  So what do you think about that point?

 David Asher:  Entered the agreed framework in 1994 and I was in the Pentagon at the time as undeclared nuclear power, as far as we were concerned.  We always assessed that they had a nuclear weapons capability and had done reprocessing in 1991 and 1992.  That has been brought out in public over the years.  We also were aware of weaponization activities in the Clinton years that were only consistent with nuclear weapons.  Why would they be doing that if they didn't have a nuclear weapons program?

 And then of course then the development of a whole new range of missiles, which had a clear nuclear capacity, capability and frankly an intent, as far as I think most of us were concerned.  So you know, Anything But Clinton was not the policy.  The policy was that we saw North Korea actively breaching the agreed framework. 

 As you heard from the Director of National Intelligence or unidentified spokesman, the Syria problem apparently began in 1997.  It's long standing.  Highly enriched uranium maybe around the same time.  Aku Khan says he went to North Korea and saw nuclear weapons, I think, or something to that effect in that book that Norsharif [phonetic] wrote in this period.  This was all happening.  So to me, you saw the rhetoric of the Clinton policy, but we were looking at the reality. 

 I spent three months early in the administration just going through all of the intelligence for the whole years of the Clinton years in office and all of the policy papers.  And I saw incredible things, deliberate willingness--we had information on counterfeiting activity all over the world.  No, push that to the side, that could get in the way of the talks.  Proliferation--there was always a concern, especially at the beginning of the Clinton administration when there was an extremely effective counter proliferation strategy with North Korean proliferation.

 But over the years, we got caught up in the same; they got caught up in the same problem we're caught up in now.  If we do anything about it, the North Koreans might get mad.  That relates to the previous question.  My distinct experience, and I've been involved in a lot of this stuff, as Carolyn has too, is that the North Koreans may get mad, but they don't necessarily react the way you think when they get nailed for something they know is over the line.  Jim [Lilley] you've experienced both in the CIA and the State Department with this.  They know, when they are doing something bad and you nail them, they usually shut up.  That has usually been my experience and we can have a deterrent effect against them that has lasting implications.  The Banco Delta Asia thing was hardly the only thing that we ever did and it did have an impact. And I think frankly, whatever the cost of it is, it is worth it given the stakes of nuclear proliferation in the Middle East that this country is feeling. 

 Steven Morris:  Steven Morris, Paul H. Nitze School of Advanced International Studies at Johns Hopkins University.  When one looks back at the history of U.S. foreign policy towards North Korea, in the future historians might say that one great turning point was the decision of the Clinton administration in 1994 to follow the advice of former president Carter and not bomb North Korean installations. 

 I would like to ask you, if it's possible for you to answer the following question.  Had the Clinton administration bombed North Korean installations, how far would it have set back the nuclear development which we see today?  And secondly, how far would it have made possible, and this is a more difficult question, obviously, the kind of reformist, mildly reformist policies that some of you have been suggesting the North Koreans need to undertake to stop the famine which ensued?  Thank you.

 Carolyn Leddy:  Well, I think at the time the only site that the Clinton administration could have gone after would have been the Yongbyon facility.  But as good as our intelligence is, we don't know the breadth and the scope of the full North Koran nuclear program or when they actually began for their uranium enrichment activities and where that program is.  So it might have taken care of, sort of an immediate problem, but I don't think it would have stopped the North Koreans from pursuing an overall nuclear weapons program. 

 Nicholas Eberstadt:  We have an author and former government official in the audience, I believe, E. Charles Downs, who wrote a book about negotiating with the DPRK.  As I recall, Chuck, you have a comment in that book saying that if the Clinton administration had not followed President Carter's lead, the division of the Korean Peninsula might be over at this moment or something to that effect.  Am I misquoting you badly there?

 E. Charles Downs:  I assume your memory is better than mine is.

 Nicholas Eberstadt:  I mean of course, one of the alternative history questions that you beg is what the North Korean reaction would have been to an American military strike against Yongbyon.  Would it have led to a general war in the Korean Peninsula or would the North Korean state have been deterred in interest of its continuing survival?  And we can't answer that question now.  It's a terrible question and it involves millions of lives. 

 What I think I can suggest to you is that fifteen years later, the North Korean/U.S. situation in that regard has changed in some very important qualitative ways.  U.S. policy on the Korean Peninsula has been geared towards deterring North Korea since 1953, but it's not as if people in Pyongyang have not been thinking about how to deter the United States.  And over the last fifteen years, I think the very troubling question for American policymakers and for the next American administration will be how confident is the North Korean side that they may be able to deter the United States in a future conflict in the Korean Peninsula.

 Danielle Pletka:  I think that Nick makes a very important point, by the way, and I would just throw a question back.  As you think about these things, look exactly at how our adversaries or our future negotiating partners, depending on how you see things in the next administration, view these incidents.  We just saw the Israelis hit a nuclear reactor on the same model as Yong Byang and we also saw how the Syrians reacted. 

 At the same time, we watched the North Koreans observe very closely our operations in Desert Storm and diversify their resources in a way that would make that kind of action almost impossible.  You can bet, a) that the Syrians have learned that lesson, b) we know that the Iraqis have learned that lesson, c) we know that the Iranians have learned that lesson.  And by the way, we also know who is helping them learn that lesson by building the same kind of reinforced bunkers and tunnels that they have learned to build either in the DMZ or with their mysterious HEU program, and that is the North Koreans who have done it for Hezbollah, have done for the Iranians and have done it for others. 

 So again, I think it's very important, as Nick suggests, that we look at how these countries observe us as well.  We are going to wrap up, but I want to take one or two last questions with the indulgence of our panelists and turn to this gentleman here.

 Peter Huessy:  Peter Huessy, President of Geo Strategic Analysis and Senior Consultant at the National Defense University Foundation.  A question for Carolyn and David.  How useful has been the cacophony from the drive by media that tough action against North Korea is counter productive?  And not just this administration, but it goes all the way back.  When David Oberdorfer came out, remember, with his book on the Sunshine Policy, I debated him at NDU, and I was roundly castigated by him for saying that the Sunshine Policy would end up appeasing North Korea and making things worse.  But yet the predominant media at that time and today is that being nice and appeasement and making deals and what Phoebe Mark calls carrots and carrots would be more workable than the kinds of things we did with the bank and so forth.

 David Asher:  Just quickly--I don't really care.  When I had a responsibility for countering North Korea's bad stuff we will call it, for the National Security Council, our team, which included great people from the non-proliferation community, as well as the intelligence agencies, law enforcement--I think we had 240 people reporting to us at one stage--were really doing a great job isolating these activities, understanding them, penetrating the networks. And then when we tried to do something, all too often we were just told can't do it, sorry.

 I have come to the conclusion looking at the sort of disaster in the making that is now becoming apparent to people that a country, be it North Korea or anybody else, that is selling weapons of mass destruction to a state sponsored terror is actually worse than a terrorist and should be pursued with all of the authorities and capabilities that we have against terrorist groups. 

 So when I look at--these aren't rogue scientists, these are scientists under the employment of the North Korean government that are assisting people in these things.  These are national weapons trading companies.  I really don't care.  If they are engaged in activity in Syria or Iran, we should have the ability, and I believe we do legally, to hunt them down just like we have people that are working for Al Quaeda. 

 And to me, I mean, this is a major policy decision that should have been made a long time ago and I am hoping through these sorts of discussions, people will start to consider, because the implications are vast.  Dany is really one of the world's experts on Hezbollah and we know that Hezbollah is an Iranian creation and we know that the North Koreans have been engaged with them over the years.  What do you think--if Iran were to get a nuclear weapon through this network, maybe even sold one, who knows--I don't know that, but anything could happen here--would they allow Hezbollah to use it?  I mean, from their own doctrine, it's conceivable and therefore I don't think we should risk that possibility.  I think we are not taking the situation seriously enough.

 Carolyn Leddy:  Just to add quickly, I think the criticism, it only reinforces the views that are obviously prevailing right now in the administration.  It is certainly a problem.  For me it's never been, personally, about negotiations.  I mean, how do you have successful negotiations if you are not willing to put out sticks as well?  The North Koreans are not stupid.  If they are going to keep getting carrots for their nefarious behavior, what is the incentive for them to stop?  There is no incentive.

 And as David just reiterated, it's not only dangerous for the North Korean situation, it is extremely dangerous.  I mean, if we allow North Korea to build nuclear facilities for Syria, I mean, what about Al Quaida that may actually use those nuclear weapons?  Do we pull out the stops then?  I don't know. I am not sure I'm convinced that we would actually take any action.

 Paul Eckert:  Paul Eckert of Reuters News Agency for Mr. Asher and/or Miss Leddy.  With eight months left to go in this administration or a more like-minded administration in Seoul now and probably support from Japan, what stands in the way for reimposing the PSI and the financial strictures associated with the BDA and those sort of things that seem to be working a year or so ago?

 Carolyn Leddy:  There is just absolutely no will in the administration to do so.  I think it fundamentally comes down to that.  At this point, I don't think the administration will take any action.  It is really up to the next administration to actually demonstrate some will.  Are you going to believe the Bush administration after their statement last week that they are actually going to take serious action against proliferation after what they just let occur?  Just want to add an earlier caveat that David did, that my views are all personal views today.  Thanks.

 David Asher:  I want to thank people for taking the time and the attention to this issue, because this really is important.  I mean, I worked for Rich Armitage and Jim Kelly.  I didn't come at this from an ideological perspective, frankly--it's quite practical.  I have spent twenty years watching North Korea.  I remember when Chuck was in the Pentagon, I was working for him and others and we went through that 1994 crisis, we learned a lot. 

 And we studied these people, we know North Korea very well on an intelligence level.  We've had a lot of experience with them, but we don't seem to learn these lessons.  I mean, to me it does come down to, frankly, what Mark is dealing with right now with the famine in North Korea, which is a highly recommendable book to level at.  I mean, this is a problem of the regime. 

 I am for Six-Party Talks, I helped create the Six-Party Talks, but the Six-Party Talks and this whole strategy has got to be about getting this regime to shift away from a foundation of arms, nuclear weapons, popular repression, and, frankly, illicit proliferation activities towards what we might just call normal behavior.  Now I understand that I think this is something we all agree with.  We agreed on that in the Bush administration, we just had disagreements about the means to do it. 

 And I think as people are starting to realize, we had an awful lot of bad stuff coming at us and you should frankly be surprised that we kept, we even started this process given some of the stuff that we knew about North Korea.  There were real temptations to take a much more aggressive approach, but we felt it was actually our responsibility to our allies to be prudent, to be careful knowing that there were risks that North Korea would just flauntly [phonetic] disobey these agreements right under our noises and that we would be giving up certain means to control them, which we did whenever you are involved in these talks. 

 Right now though, we are just throwing everything to the wind, it seems to me and the fear that anything we do in North Korea will disrupt efforts in the Middle East.  And again, the key point is North Korea is itself disrupting our efforts in the Middle East and we need to get real about what it is doing.

 Danielle Pletka:  Very good.  Marc, David, Carolyn, Nick, and our audience, thank you very much for a terrific session.

[End Conference]