Saturday, 31 March 2007

KORUS FTA at the Hyatt in Seoul

The KORUS FTA talks went down to the wire on Saturday morning, skipped over it, and negotiators set another deadline that will expire in the early hours of Monday local time. One unfortunate consequence for guests of the Hyatt Hotel in Namsan is that their temporary home away from home would resemble an armed camp for another couple of days.

In reality though, apart from the inconvenience of passing through metal detectors when entering the hotel, and a lobby full of bored journalists, it probably isn't so much a hardship as an adventure.

The authorities were taking no chances that negotiators, or paying guests for that matter, would be disturbed by anti-FTA protesters. Small groups of police were stationed on access roads up to more than a kilometer from the hotel.
But if all you were looking for was a quiet weekend, or an international ATM as one unfortunate member of the USFK and his family discovered, the Hyatt probably wasn't the place to head for.

These emergency flares were discovered in the trunk of the soldier's car during the routine search of all vehicles entering the hotel. The efforts of the bemused serviceman to explain their purpose to uncomprehending officials provided a little light relief to what was an uneventful afternoon.

At the time of this posting, there is perhaps a little over 24 hours left for the negotiators to strike a deal.

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Thursday, 29 March 2007

Drug company urges aid donors to "buy local"

(From The Korea Herald, Friday, March 30)

"Its not just about making money, at least not from our perspective as a producer," declared Felix Abt, president of the Pyongyang-based pharmaceutical company PyongSu Pharma. "The profit margins are very small. It is more about supplying a necessary and quality product at a price people can afford."
Abt was in Seoul earlier this week meeting with South Korean pharmaceutical companies and aid organizations. On the table was a unique opportunity that would allow them to expand their existing humanitarian work, while at the same time helping to lay a solid foundation for the future of the pharmaceutical sector in North Korea.
"One of the main purposes of my visit here is to meet with the people who donate drugs and medicines to North Korea, or their agents who are based here," Abt told The Korea Herald. The "frontier-businessman" believes substantial savings could be realized if the donor had the drugs produced locally, in North Korea, rather than purchasing them here in the South or overseas and then having them shipped in.
"We have lower production costs in the North, and of course there would be savings on transportation. All of these cost savings would translate into more money being made available for the actual provision of drugs. And after all, that is the whole point of the exercise, isn't it?" Abt said, posing a very pertinent question.
For each donated dollar, for each dollar spent, he explained, more medicines would actually reach the people who need them.
"So that, from a humanitarian position at the very least, is a very compelling reason for them to buy from us or have us produce them and then organize the distribution."
PyongSu has been gaining experience through contract manufacturing for charity organizations, donors and pharmaceutical companies, but Abt says there is plenty of scope to do more.
"We have a total staff of about 30 running one full shift," Abt said, "and obviously we have capacity to expand that."
Abt said in addition to helping even more North Korean patients in hospitals and clinics throughout the country, aid organizations could also help raise the quality standards of the local pharmaceutical industry.
"Just shipping aid here is all well and good," Abt explained, "but it has the danger of creating a culture of dependency. So rather than, for example, just giving them fish, we should give them a fishing rod and teach them how to fish."
By expanding local production in terms of quantity and variety, Abt said, donors would be helping the people to learn how to stand on their own feet.
"This should be particularly interesting for pharmaceutical companies based here in the South," he said, "it is absolutely in their long-term interests to see a pharmaceutical sector in the North that is developed and meets international standards which could later become a strong and important partner for South Korean companies."
PyongSu recently underwent an international inspection and has been approved as a producer that meets the highest standards of pharmaceutical producers worldwide.
The company was launched in the summer of 2004 in a joint venture between the Ministry of Public Health and a group of foreign investors. By the end of 2006, PyongSu was producing a range of medications including painkillers and antibiotics among others.
The company's mission was to reach and maintain production quality and service standards comparable to any pharmaceutical producer elsewhere in the world.
"We are making a direct contribution to the improvement of the local pharmaceutical sector," Abt said, "through training, education, and our sharing of knowledge with medical professionals and staff at all levels throughout the DPRK."
PyongSu pharmacists meet regularly with staff from hospitals and clinics to fully understand their needs, and provide them with up to date information on the latest drugs.
Abt said PyongSu has its finger on the pulse of the medical sector in the DPRK, and is in a unique position to serve humanitarian and aid organizations by producing drugs on their behalf and distributing them, "to those who are in need of them."

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Sunday, 25 March 2007

Anti-FTA Protest Seoul, Sunday 25th March

As trade negotiators prepared for their last round, eleventh hour, make or break talks to reach an agreement on a raft of issues from rice to auto imports, thousands of anti-FTA protesters gathered in downtown Seoul to register their opposition to the deal.

The protest was noisy but largely peaceful. For more pictures click on "Anti-FTA Protest Seoul" in the photo section.

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Anti-FTA Protest Seoul

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Saturday, 24 March 2007

Is Washington messing with Pyongyang's head?

"It was quite a rude awakening to hear on the news that my money was going to be used for charity," the holder of an account with the Macau-based Banco Delta Asia told me on the condition that I didn't reveal his identity.
He was referring to the announcement last weekend that a deal had been struck to release some $25 million dollars in North Korea related accounts held at the small family-run lender. The cash had been frozen by the Macau Monetary Authority after the U.S. Treasury Department accused the bank of being a money laundering concern back in September, 2005.
Under the deal, the money would be transferred to an account with the Bank of China in Beijing, and then disbursed for humanitarian and educational programs to help the people of North Korea.
"What needs to be understood," he said, "is that not all the funds belong to the North Korean government, but that a substantial amount belongs to private customers."
Colin McAskill, chairman of the London-based fund Koryo Asia Ltd was a little more direct. He told Bloomberg News, "Transferring all the money to a single North Korean Government-owned account would violate the rights of private parties."
Bloomberg quoted McAskill as saying he contacted the Macau Monetary Authority warning them that the money held by private businesses based in Pyongyang did not belong to the North Korean government and must not be included in the proposed transfer to settle the 18-month dispute between the North and the U.S. Treasury.

It has been a general misrepresentation by the authorities in Washington, and repeated by the media, that the $25 million dollars were in some way a secret slush fund operated by the North Koreans.
"Constant references to 'North Korean funds' have led many to make this mistaken assumption," said my anonymous account holder.
Another mistaken assumption is that the U.S. Treasury and the State Department are singing from the same hymn sheet. In several published interviews conducted with foreign businessmen with interests in Pyongyang, it has become obvious that Treasury and State are following quite different agendas. And these agendas are not complimentary. But then again, the heads of both these government bodies ultimately report to the Oval Office, so perhaps....

"President Roh suggested Treasury and State were playing a cunning three handed "go-stop" - a Korean card game - in which these two conspirators were secretly ganging up on their mark to gain the upper hand.The timing of the Treasury's move on the BDA was just too convenient to be a coincidence. Convenient that is if you wanted to sink the September Agreement and still give the impression of being reasonable, of holding the high moral ground."
(CG, The Korea Herald, Dec. 29 2006)

The following from a New York Times article reproduced in the Houston Chronicle suggest that others may also be getting a little suspicious of what games Washington is playing. Commenting on the North Koreans' boycott of this week's talks in Beijing over the failure to release the funds:

"The impasse has puzzled and frustrated people involved in the North Korea negotiations, and some public comments in the past week have led to an appearance of finger-pointing between the State and Treasury Departments. They deny they are blaming each other, but their comments suggest a difference of perspective."
(Full report

The Bank of China has reportedly refused to accept the transfer because it is concerned about the harm to its reputation if it is perceived to be handling "dirty money" from a bank that has been blacklisted by the U.S. Treasury. Let's face it, you can hardly blame them.

"The White House spokesman Tony Snow told his daily briefing that the Treasury action against the BDA has been completed and the bank's days as a front for illegal activities are over. I think, perhaps, these constant references to illegal activities might be upsetting more than a few people. It is worth repeating, the Macau and Beijing authorities say they have found no evidence of criminal activity at the bank. And the U.S. decision to ban any American financial institution from doing business with the BDA – effectively closing it off from the global financial system – has also struck a nasty chord."
(CG, Riding Home, Tuesday 20 March)

"Now since the Treasury has imposed a ban on any American financial institutions doing business with the BDA, and the funds are in U.S. dollars that will ultimately have to be cleared through a U.S. bank, that could be the “technical problem” the South Korean envoy is talking about. But I am sure the U.S. Treasury would have anticipated such a “technical problem” when they announced the ban on U.S. banks dealing with the BDA and then authorizing the release of the funds."
(CG, Riding Home, Wednesday, 21 March)

After 18-months, multiple investigations, and some of the allegedly finest financial minds in Washington focusing their entire attention on this one issue, you really would have thought they would have anticipated this. Wouldn't you?

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Tuesday, 20 March 2007

Art from the Daechu-ri Autonomous Village

DAECHURI, Gyeonggi Province - It is like entering a quarantine zone. Riot police, long coils of barbed wire stretching off into the distance, and checkpoints. Lots of checkpoints. There is no disease in the small village of Daechuri, near Pyeongtaek, but the hamlet is dying. Its final death certificate is likely to be issued at the end of this month when wrecking crews move in to demolish what is left of this formerly tight-knit farming community some 75 kilometers south of Seoul.

In December 2005 the government's Land Expropriation Committee approved the imminent seizure of Daechuri and the surrounding farmland to make way for the expansion of a nearby U.S. military base. The approval came with the ominous warning; forced evictions would take place if the residents did not move out peacefully.

Daechuri farmers and residents responded by marching to the Pyeongtaek City Hall where they burned their Korean residence cards, revoked their citizenship and declared the establishment of the Daechuri Autonomous Village. Over several years of negotiations, the government had offered compensation of up to 600 million won ($646,000) to the mostly elderly residents of Daechuri - meaning "great harvest village" in Korean - many of whom have already taken the cash and left. The small group of hold-outs who say the government offer is insufficient compensation for their land and their way of life, have made the village the focal point for anti-government, anti-American and anti-free trade activists from across Korea.

Last year, Daechuri was the scene of some of the fiercest and most violent confrontations between protesters and the government in recent years.

In one incident in early May, about 200 people were injured in clashes when thousands of riot police and soldiers escorted demolition crews into the village. Tempers flared when the demolition workers allegedly began destroying homes that had not been vacated by their owners.

The village school, once the focal point of resistance, has been reduced to a pile of crushed brickwork decorated with a strange array of items salvaged from the wreckage, including an old electric guitar.

As the villagers' struggle was more widely reported, Daechuri became something of a magnet not only for peace activists, but for artists and musicians. Vivid murals have appeared on walls throughout what remains of the village. Installation pieces and artwork of every description can found in what demonstrators and activists have dubbed the "Peace Village."

Residents and supporters gather daily for a candlelight vigil near the wrecked village school or in a warehouse decorated with anti-American slogans and now home to an extensive collection of oil paintings, posters and sketches. One of the larger and still intact buildings in the center of the village has thousands of photographs of Daechuri residents, past and present, on display. Faded sepia tone images of what were doubtless happier days.

In mid-February, the remaining residents gave up their almost six-year struggle and agreed to leave by the end of March.

Remarkably, given everything that the residents have gone through, they are still extremely welcoming and courteous to visitors. Willing to share their simple lunch with people who wander through the near deserted streets to marvel at the wrought iron sculptures and colorful murals.

The people of Daechuri feel they have been deserted by their own government as it pursues its alliance with Washington. Displaced by the Japanese who first built an airfield on their land back in 1939, and then by the Americans, who expanded the airfield even further with the establishment of Camp Humphreys.

Now as part of Washington's Global Posture Review and the reorganizing of the United States Forces Korea, Camp Humphreys is going to swallow up the last remains of Daechuri.

Soon the paddy fields that produced what some say was the best rice in Korea will disappear under concrete pavement. The residents, some of whom have known no other home, will be scattered. In less than two weeks it will all be gone, remembered only in photographs and in peoples' memories.

(Photographs from Daechu-ri)

(Video from Daechu-ri)

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Photographs from the Daechu-ri Autonomous Village

More images from Daechu-ri soon...

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Video from Daechu-ri

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Friday, 16 March 2007

Transcript from Arirang Radio "Riding Home" March 16th

Monday to Friday I get to contribute a report on one of the day's top stories to the Arirang Radio program, Riding Home. This week my focus has been on developments regarding the U.S. Treasury's final report on the Banco Delta Asia, the Macau-based lender accused of laundering money for North Korea. As we head into the weekend, this "resolved but unresolved" issue casts a lengthening shadow over the six-party talks that are scheduled to convene in Beijing on Monday.

"Riding Home with Chris Gelken"

DJ: North Korea can now move ahead with the implementation of its initial steps to denuclearize, now that Washington has resolved its financial disputes with Pyongyang. That's according to Washington's top nuclear negotiator, Chris Hill speaking in Beijing today. Well, joining us to discuss the prospects for that is Chris Gelken, Senior Associate Editor from the Korea Herald.
Chris, with the next round of the six party talks set to convene on Monday, it seems Washington is rather on the defensive over its handling of the Banco Delta Asia issue.

CG: Indeed. It is hard to imagine that they really expected their decision to cut the BDA off from the world financial system to be welcomed by anyone – and certainly Washington's action has come in for heavy criticism from the Macanese and Beijing authorities. You are absolutely right, they do seem to be on the defensive or in damage control mode.

DJ: The North has yet to make any official statement regarding the decision by the U.S. Treasury, but reaction was swift and quite harsh from Macau and Beijing, right?

CG: Yes, we were seeing lots of expressions like “deeply regret” and so on, and on a diplomatic level, this is a pretty harsh condemnation of Washington's actions. As I mentioned yesterday, one analyst pretty much summed it up by saying that on the one hand Washington has kept to its side of the bargain by wrapping up the Banco Delta Asia issue within the 30 day time limit agreed under terms of the Beijing Agreement, but on the other, it still allowed hardliners in the Bush administration to punish the bank for doing business with the North. Now whichever way you look at it, this was almost certainly meant as a warning to other banks around the world to cut links with the North, and keep them cut.

DJ: What has been the reaction from the bank itself?

CG: Well yesterday the bank chairman, Stanley Au told reporters in Beijing that he was “not worried.” Today in Hong Kong, Au said the bank would challenge the decision and the conclusion of the U.S. Treasury investigation. Au emphatically denied the bank had any knowledge of money laundering by North Korea. He did add, significantly, that the bank is not prepared to resume any activity with Pyongyang. The United States, meanwhile, said it would share the results of its investigation with the Macanese authorities. Now remember, they have also conducted their own investigations and concluded there was no evidence of criminal activity. Lawyers for the small family owned lender admit that they did not have the technology to check large batches of U.S. currency for fake bills, for example, saying they relied on bigger banks to authenticate cash deposits from North Korean depositors. So, according to the Macau authorities, at most the BDA is guilty of not being the most efficient institution on the block. Perhaps that shortcoming was exploited by the North, right now we don't know. So it should be quite interesting to see their response to the American evidence.

DJ: The head of the International Atomic Energy Agency, who has just returned from Pyongyang, has told envoys to the nuclear talks that North Korea remains committed to denuclearization, but that conditions, obviously, are still attached.

CG: Yes, that's right. Mohamed ElBaradei said Pyongyang stressed that other countries in the process must also be equally committed, and repeated demands for the lifting of financial sanctions. Washington, as we have said, can claim it has resolved the Banco Delta Asia issue, but the Macanese authorities who now administer the bank, have yet to announce how much of the money that has been frozen for the past 18-months will be released. They are set to hold talks with a U.S. Treasury official this weekend, so its highly unlikely that any announcement will be made on this before the six-parties reconvene on Monday.

DJ: Many of the delegates are already in Beijing, how much of a shadow is this going to throw over the process?

CG: There are obvious concerns that this “resolved but unresolved” status could spill over and negatively effect the wider denuclearization process. It would be easy to say – look, its only 24 million dollars – get over it. But we also have to consider the wider implications of the U.S. Treasury's move – if it is perceived to be an act of spite – and we have already seen the reactions from Beijing and Macau that suggest this is the way Pyongyang might see it. Plus, remember the North is still subject to Japanese sanctions and United Nations sanctions, U.S. sanctions linked to the “trading with the enemy act” etc etc… So yes, it is only 24 million dollars, get over it. But the symbolism value of that money far exceeds its monetary worth. It always has. Getting over that isn't going to be so easy.

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Tuesday, 13 March 2007

The elusive truth

The key reason why North Korea walked out on the September 2005 agreement reached at the six-party talks in Beijing was the economic fallout from accusations that a Macau-based bank was helping to launder and provide a safe haven for the ill-gotten gains of the Pyongyang regime. Legitimate businesses in the North Korean capital, many of them owned and operated by Europeans, vigorously protested the freezing of their accounts after the U.S. Treasury blacklisted the bank.

As part of the latest Beijing Agreement reached on Feb. 13, the U.S. Treasury promised to resolve the Banco Delta Asia issue once and for all. There has been widespread speculation that an official announcement will be made this week ahead of the next round of six-party talks in Beijing on Monday, 19th March. But while the North may get its money back, they may remain completely isolated economically.

"The U.S. Treasury Department will apparently cut the Macau-based Banco Delta Asia off from the U.S. financial system on Thursday. The Macau bank has been under suspicion of being a money-laundering channel for North Korea. The Treasury will announce final results of its investigation of North Korea’s US$24 million accounts with the BDA 18 months after it froze them in 2005."
(Full report:

The reported intention of the U.S. Treasury to continue punishing the Banco Delta Asia appears to be out of sync with the findings of numerous independent investigations. Except of course, the unpublished findings of the Treasury's own investigation.

"The U.S. Treasury has alleged that over many years Banco Delta Asia laundered money from North Korean weapons proliferation, cigarette counterfeiting and drug trafficking, and dealt in counterfeit U.S. dollars printed by North Korea.
After a recent visit to Macao, a senior U.S. Treasury official said the investigation, which reviewed about 300,000 documents, had "confirmed our suspicions" about the bank's activities.
But the results of separate investigations in Macao, which were forwarded to the Treasury last year, do not support the U.S. charges against the bank, according to the bank's lawyers. One of those investigations was conducted by the accounting firm Ernst & Young on the orders of the Macao government within days of the Treasury's declaration against Banco Delta Asia."

(Full report:

The lengthy blacklising of the BDA, plus the extensive pressure applied by the United States on other banks around the world to sever their links with North Korea has left Pyongyang economically isolated. If the Banco Delta Asia is forced to close, even after being found blameless by the Macau government's own investigations, then it will only exacerbate Pyongyang's isolation.

Whatever is said at the working group meetings between parties to the six-way talks on energy aid and economic cooperation this week in Beijing, the fate of the BDA will still send a clear message to banks around the world that it probably still is not worth the risk of dealing with North Korea.

Washington's designation of the bank as a money laundering concern could so easily be interpreted by Pyongyang as nothing more than an act of spite. Expect Washington to act surprised if North Korea responds in kind.

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Monday, 12 March 2007

Is there a Kurdish policy?

Korea is expected to bring home its troops from Iraq by the end of this year. They have "mission accomplished" in their area of responsibility, and the general consensus is that the locals will long cherish the contribution Korea has made to the region.

Well, that is until they see their villages being pounded by Korean made artillery and tanks. This is not such a far fetched idea as the following article published in The Korea Herald shows:

"Meanwhile, Lee Jun-kyu, policy director of the activist group, Civil Network for a Peaceful Korea, said the government's arms exports to Ankara show Korean policymakers' lack of strategic planning in their pursuit of the national interest. The peace activist notes that Turkey has a record of oppressing Kurds within its territory.
'It is nonsense that our country stations troops in the Kurdish region under the guise of a peace and reconstruction force while selling weapons to Turkey, which has a poor record in its treatment of Kurds. The government's policy has lost logical coherence,' said Lee. "

(Full report:

The apparent hypocrisy and mismanagement described in the article is a common thread that seems to run through the foreign policies of many countries when it comes to dealing with the Middle East.

And from the archives..

"According to figures released on Tuesday, at the latest count 589 rebels have been killed so far this year with the loss of 20 members of the security forces. More than 39,500 soldiers are involved in the offensive and they have completely ignored national sovereignty and crossed international borders. Since 1984 about 37,000 people have died in the conflict - the vast majority of them were civilians. Sorry, perhaps I should have mentioned this at the top of the paragraph, I am talking about NATO member and Gulf War ally, Turkey - not Yugoslavia.
Chris Gelken

4 May 1998
Hong Kong"

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Tuesday, 6 March 2007

What are these fools doing?

This is insane.

For the past month or more the United States has been winding back its claims that North Korea absolutely and definitely had a highly enriched uranium program designed for the production of nuclear weapons. Washington was beginning to acknowledge the findings of independent inspectors and other experts that perhaps U.S. intelligence had "overstated" its claims that North Korea had an ongoing and determined uranium bomb program.

Yes, I am being generous. There are those who believe the United States deliberately overstated the HEU issue. The accusations put the final nail in the coffin of the 1994 Agreed Framework, and justified North Korea's place in George Bush's "axis of evil." Remember, this happened back in the days when some people still believed Saddam Hussein posed a "clear and present danger" with his weapons of mass destruction. And those warnings came from the same "intelligence" source.

Then, in the past month, there was Washington's admission that perhaps they had also been rather heavy handed regarding the financial activities of the Banco Delta Asia. Perhaps, said the U.S. Treasury without a hint of shame, some of the money frozen in the accounts of the Macau-based bank were in fact legitimate. While the funds are expected to be released, there has been no announcement regarding what compensation the U.S. Treasury is going to make for the damages suffered by the companies affected by their "mistake."

The U.S. acknowledgement that its HEU intelligence may have been flawed, and that they were willing to "take another look" at the Banco Delta Asia issue, encouraged North Korea back to the table and we ended up with the Feb. 13 Beijing Agreement.

So, okay, it was a "warmed up" version of the 1994 Agreed Framework, but it was progress. And it led to what the world media has been describing as the "historic" normalization of ties negotiations currently underway in New York.

And then this, the United States effectively contracting its earlier statements:

"SEOUL, March 6, 2007 (AFP) - US Deputy Secretary of State John Negroponte said Tuesday he is certain North Korea had a secret uranium enrichment programme to make bombs but stopped short of saying whether it still exists. The alleged highly enriched uranium (HEU) project has become a key issue as the United States and other countries press the communist nation to honour its pledge to scrap all nuclear programmes. "I have no doubt that North Korea has had a highly enriched uranium programme, and that has been and continues to be the judgement of our intelligence community," he told a news conference here."

This was followed by a truly unexpectedly harsh comment from the U.S. negotiator, Chris Hill, who up to this point had been cautious but unusually optimistic.

"NEW YORK, March 6, 2007 (AFP) - The United States demanded Tuesday that North Korea come clean with its highly enriched uranium program despite indications that US intelligence overstated Pyongyang's efforts to pursue such a program. "They need to come clean on it ... explain why they are doing it," US Assistant Secretary of State Christopher Hill said in a forum on the sidelines of negotiations aimed at normalizing US-North Korean diplomatic relations after Pyongyang agreed to freeze a key nuclear facility in return for largely energy aid."

Does the United States deliberately want to sabotage this process? It reminds me of the breakthrough September 2005 agreement in Beijing that quickly went down the toilet after the U.S. Treasury did its number on the Banco Delta Asia.

``We should all be attentive to what North Korea does,'' Negroponte told a news conference in Seoul. ``It's in North Korea's interest to comply with this obligation.''

Indeed. The next 24 hours are going to be very interesting.

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Monday, 5 March 2007

Tongue tied with the 'axis of evil'

It is just a thought, and as such, not to be taken too seriously. Maybe.
An internet search on the world's most difficult languages to learn will throw up some obscure or little known dialects, such as Basque for example. Or Hungarian, or Finnish. Chinese is a major contender, but it is fast becoming one of the most popular languages to learn.
But among the languages spoken by significant numbers of people, from countries that have an equally significant influence on the global stage, and languages that a certain "intelligence" agency has admitted it has very few people who can speak it fluently, there are three that keep cropping up.
Arabic. Farsi. Korean.
Coincidence? I think not.

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Friday, 2 March 2007

It's the intelligence, stupid!

Economic sanctions or trade embargoes against a country for the alleged misdeeds of its government, rarely -- if ever -- have the desired impact.

A European businessman based in Pyongyang recently told me the U.S. economic sanctions against North Korea were having an immediate and seriously negative effect on the people who were the least able to do anything about why the sanctions were imposed in the first place.

"In the case of PyongSu Pharmaceutical, there are now difficulties in transferring money to foreign suppliers which is causing substantial delays in the launch of new and effective medicines that are so badly needed," he told The Korea Herald. And in a statement reminiscent of the situation in Iraq in the 1990's, Abt said, "Thus it is the ordinary and the needy North Korean patients that have to suffer from the consequences of these U.S. sanctions."
(From The Korea Herald, September 18th 2006 -- Businessmen accuse U.S. of indiscriminate sanctions)

In several interviews I conducted over the past year and published in The Korea Herald, it became fairly obvious that the sanctions imposed for alleged collusion between the Macau-based Banco Delta Asia and Pyongyang to launder money from illegal financial activities, were just that, allegations. There was no "smoking gun" proof.

And now, the businessmen and other concerned parties who insisted this was nothing more than a Washington "smear campaign" look like they are on the verge of being vindicated.

"The United States, which used some false and exaggerated intelligence to make its case for invading Iraq, may also have inflated some of its allegations against North Korea to justify a hard-line policy toward the Stalinist regime, according to American news reports.
U.S. President Bush W. Bush claimed in 2002 that North Korea was making highly enriched uranium (HEU) for nuclear weapons when there was no intelligence that it was doing so.
Now there are new questions about the administration's assertions that a bank in Macau knowingly laundered proceedings from North Korean narcotics trafficking, cigarette smuggling and counterfeit American currency, McClatchy Newspapers reported on Thursday.
An audit of the Banco Delta Asia's finances by accounting firm Ernst & Young found no evidence that the bank had facilitated North Korean money-laundering, either by circulating counterfeit U.S. bank notes or by knowingly sheltering illicit earnings of the North Korean government."

(Full report:

Making false accusations is nothing new. And to be completely fair, we can't accuse the Bush administration of inventing this tactic. They just seem to have elevated it to the status of an art. From the archives of American Politics Journal:

"Looks like Tom Clancy is a popular author in Britain -- at least among the editors of the tabloid “The Sun” and spokespeople for the Prime Minister's Office. The recent alleged threat to flood Britain with the deadly anthrax virus is straight out of Clancy's “Executive Orders” -- except in the book the target was America, it was Ebola, and the nogoodniks originated in Iran.
Just when we were thinking Saddam might have been mellowing out by opening up the presidential sites for inspection, there he goes again with some alleged despicable nastiness. When Richard Butler was saying that UNSCOM could possibly wrap up their work by the end of the year, and other folks were worrying that the lifting of sanctions would result in an oil glut triggered by Iraq, there is the world's number one bad guy back on the front page of every newspaper in the free world.
Have you ever noticed that “security” leaks never seem to bring us good news? Wouldn't it be great, for example, to learn via a leaked security document that China has been secretly destroying its nuclear weapons, or that North Korea doesn't actually have any. Nope, these leaks are always bad news for the peace-loving people of the Western democracies, and always point the finger a nation that we all love to hate.
I'm not saying that the anthrax story was planted - but I am seriously suggesting it. True or not, the timing was perfect.
- Chris Gelken
25 March 1998, Hong Kong"

There was no anthrax. There were no weapons of mass destruction in Iraq, it appears the Banco Delta Asia was just doing what a bank does, and as for the highly enriched uranium in North Korea and Iran's plans for world nuclear domination, let's not go there right now. Or rather, let's not go to war there right now.

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