North Korea overcomes poverty, sanctions with cut-price nukes

SEOUL (Reuters) – North Korea has developed a nuclear weapons program despite poverty and international sanctions, using home-grown technology and virtually free labor to cut costs, experts said.

South Korean government analysis has put North Korea’s nuclear spending at $1.1 billion to $3.2 billion overall, although experts say it is impossible to make an accurate calculation given the secrecy surrounding the program, and estimates vary widely.

However, the weapons that North Korea has tested thus far are comparatively small and based mostly on less sophisticated fission, or atomic bomb, technology.

The isolated North’s claim that its fourth and most recent test, conducted last week, was of a more advanced and powerful hydrogen bomb has been widely doubted, although experts said it is possible Pyongyang took the intermediate step of boosting an atomic bomb with hydrogen isotopes.

A former South Korean official involved in nuclear diplomacy with North Korea told Reuters previously that it was likely the North’s nuclear program was cutting corners on safety, further driving down costs.

North Korea was at the bottom of a 2011 list on nuclear arms spending by Global Zero, a group campaigning to rid the world of nuclear weapons.

The full cost of Pyongyang’s program that year was estimated by the group at $700 million, making it the lowest spender among nuclear states, beneath Pakistan’s estimated $2.2 billion, although the analysis was made before the North’s two most recent nuclear tests.

By comparison, the United States spent $61.3 billion on nuclear weapons in 2011, according to the report.

Construction of the Yongbyon Nuclear Scientific Research Center, North Korea’s main nuclear facility, cost $600-700 million, based on a 2012 estimate, a South Korean defense ministry official told Reuters.

The small reactor at Yongbyon, which began construction in 1979, is based on Soviet-era technology and generates just 5 megawatts of power.

“Actually, what they spend isn’t that much,” Kim Min-gyu, a former North Korean diplomat who worked at the North Korean embassy in Moscow until defecting in 2009, told Reuters.

“Their workforce works for free and, except for a few key imported parts, they make everything else”.

TAX THE RICH

Paying for those parts is not easy for a country whose official economy was worth just $28.4 billion in 2014, according to South Korea’s central bank.

But it has turned to a variety of sources for hard currency in the past, including counterfeiting, insurance scams, selling missile parts to the Middle East, and, more recently, exporting manpower abroad under conditions that human rights groups say resemble indentured servitude.

North Korea also boasts a booming unofficial market economy, driven by private trade that has flourished since the devastating famine of the 1990s, giving the state a relatively new source of foreign currency.

That gray economy has eclipsed the official one, experts said, and generates so much wealth that, after previous nuclear tests, wealthy traders known as “donju”, or “masters of money”, were arbitrarily and suddenly taxed by the state to pay for the nuclear program, according to one report.

“After the first three nuclear tests, prominent donju were purged on ‘anti-socialist’ charges and their assets confiscated by the state,” a source inside North Korea told the Daily NK, a Seoul-based website staffed by defectors still in touch with contacts inside North Korea.

In addition, North Korea exported more than $1 billion in minerals last year, mostly coal, to China, its main trading partner, according to Reuters calculations based on Chinese export data.

Although heavily sanctioned, North Korea still sells small arms to buyers who turn to Pyongyang because of a lack of viable alternative supplies, according to a recent report by Andrea Berger at the Royal United Services Institute (RUSI) in London.

It also raises $200-300 million a year sending laborers as far afield as Poland and Mongolia to earn cash, said the Database Center for North Korean Human Rights in Seoul.

Kim Min-gyu, the former diplomat, said laborer salaries are usually used to prop up the Pyongyang economy, and not invested in the nuclear program.

“Since money is completely fungible, you can’t isolate the transactions that go to pay for bombs from those that pay for apartment buildings in Pyongyang,” said Christopher Green, a North Korea expert at Leiden University in the Netherlands.

(Additional reporting by Rebecca Jang, Hooyeon Kim and Jeeheun Kahng; Editing by Tony Munroe and Mike Collett-White)

Pressure grows on China to rein in North Korea; South launches propaganda barrage

SEOUL/BEIJING (Reuters) – South Korea unleashed an ear-splitting propaganda barrage across its border with North Korea on Friday in retaliation for its nuclear test, while the United States called on China to end “business as usual” with its ally.

The broadcasts, in rolling bursts from walls of loudspeakers at 11 locations along the heavily militarized border, blared rhetoric critical of the Pyongyang regime as well as “K-pop” music. North Korea later responded with its own broadcasts.

Wednesday’s nuclear test angered both the United States and China, which was not given prior notice, although the U.S. government and weapons experts doubt Pyongyang’s claim that the device it set off was a hydrogen bomb.

China is North Korea’s main economic and diplomatic backer, although relations between the Cold War allies have cooled in recent years.

China’s Foreign Ministry urged North Korea to stick to its denuclearization pledges and avoid action that would make the situation worse, but also said China did not hold the key to resolving the North Korean nuclear issue.

“Achieving denuclearization of the Korean Peninsula and safeguarding the peninsula’s peace and stability accords with all parties’ mutual interests, is the responsibility of all parties, and requires all parties to put forth efforts,” ministry spokeswoman Hua Chunying told a news briefing.

The North agreed to end its nuclear program in international negotiations in 2005 but later walked away from the deal.

U.S. Secretary of State John Kerry said on Thursday that he had told Chinese Foreign Minister Wang Yi that China’s approach to North Korea had not succeeded.

“APPROACH HAS NOT WORKED”

“China had a particular approach that it wanted to make, that we agreed and respected to give them space to implement that,” Kerry told reporters after the phone call. “Today, in my conversation with the Chinese, I made it very clear that has not worked and we cannot continue business as usual.”

In a call on Friday with his South Korean counterpart, Yun Byung-se, Wang said talks on the issue should be resumed as soon as possible, China’s Foreign Ministry said.

South Korea’s nuclear safety agency said it had found a minuscule amount of xenon gas in a sample from off its east coast but said more analysis and samples were needed to determine if it came from a nuclear test.

The head of the Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO), which uses monitoring stations around the world to detect atomic tests, said only “normal” levels of xenon had been detected, at a site in Japan.

“Xenon readings at 1st station downwind of #DPRK test site RN38 Takasaki #Japan at normal concentrations. Sampling continues,” the CTBTO’s executive secretary, Lassina Zerbo, said on Twitter on Friday evening.

The presence of xenon would not indicate whether the blast was from a hydrogen device or a simpler fission explosion.

Seismic waves created by the blast were almost identical to those generated in North Korea’s last nuclear test in 2013, Jeffrey Park, a seismologist at Yale University, wrote in a post on the Bulletin of the Atomic Scientists website, adding to scepticism about the hydrogen bomb claim.

Meanwhile, South Korea resumed its frontier broadcasts, which the isolated North has in the past threatened to stop with military strikes.

The last time South Korea deployed the loudspeakers, in retaliation for a landmine blast in August that wounded two South Korean soldiers, it led to an exchange of artillery fire.

The sound can carry 10 km (6 miles) into North Korea during the day and more than twice that at night, the South’s Yonhap news agency reported.

BORDER PROPAGANDA

A male announcer could be heard from South Korea telling North Koreans that their leader Kim Jong Un and his wife wear clothes costing thousands of dollars. Another message said Kim’s promises to boost both the economy and the nuclear program were unrealistic.

The North’s broadcasts were not clearly audible from the South and appeared intended to drown out those from the South, Yonhap said, citing a South Korean official.

As North Korea boosted troop deployments in front-line units, the South vowed to retaliate against any attack on its equipment, raised its military readiness to the highest level near the loudspeakers, canceled tours of the Demilitarized Zone on the border, and also raised its cyberattack alert level.

In Washington, the North’s actions appeared to have forged rare unity in the House of Representatives between Republicans and Democrats on tightening sanctions against North Korea.

Nancy Pelosi, the House Democratic leader, told reporters that Democrats would support a North Korea bill likely to be brought for a vote by Republicans next week. A congressional source said it was expected as soon as Monday.

But it is unclear how more sanctions will deter North Korea, which has conducted four nuclear tests since 2006.

The United States and South Korea are limited in their military options. Washington sent a pair of nuclear-capable B-2 stealth bombers over South Korea in a show of force after North Korea last tested a nuclear device in 2013.

North Korea responded then by threatening a nuclear strike on the United States.

A South Korean military official said Seoul and Washington had discussed the deployment of U.S. strategic weapons on the Korean peninsula, but declined to give details. Media said the assets could include B-2 and B-52 bombers, and a nuclear-powered submarine.

(Additional reporting by James Pearson, Se Young Lee, Christine Kim, Jee Heun Kahng, Ju-min Park and Jack Kim in SEOUL, Dagyum Ji in GIMPO, Patricia Zengerle, Roberta Rampton, Doina Chiacu and Arshad Mohammed in WASHINGTON, Tim Kelly in YOKOSUKA and Francois Murphy in VIENNA; Writing by Tony Munroe; Editing by Paul Tait and Kevin Liffey)

North Korean Leader Claims Nation is Ready to Detonate Hydrogen Bomb

The leader of North Korea is reportedly claiming the country now has the ability to detonate a powerful hydrogen bomb, though his comments immediately drew skepticism from experts.

The state-run KCNA news agency reported Thursday that Kim Jong-un made the announcement while at the Phyongchon Revolutionary Site, which is significant to the country’s arms history.

According to the KCNA report, Kim said North Korea had evolved into “a powerful nuclear weapons state ready to detonate self-reliant A-bomb and H-bomb to reliably defend its sovereignty and the dignity of the nation.” If true, it would be a landmark development.

Hydrogen bombs rely on a different nuclear reaction than atomic bombs and are known to be much more powerful. South Korea’s Yonhap news agency reported that while Kim has publicly touted on numerous occasions that his country has atomic-bomb capabilities, this appeared to be the first time the leader publicly indicated that North Korea possessed a hydrogen bomb.

Still, experts took Kim’s claim with a grain of salt. The leader is known for making bold claims.

“It’s hard to regard North Korea as possessing an H-bomb. I think it seems to be developing it,” Lee Chun-geun, a research fellow at the Science and Technology Policy Institute, told Yonhap.

The BBC quoted John Nilsson-Wright, the head of the Asia Program at Britain’s Royal Institute of International Affairs, as saying Kim’s comments appeared to be “an attention-grabbing effort to assert North Korean autonomy and his own political authority.”

Iran’s Khamenei conditionally approves nuclear deal with powers

ANKARA (Reuters) – Supreme Leader Ayatollah Ali Khamenei on Wednesday approved the Iranian government’s nuclear deal with world powers but said Tehran should not give up core elements of its atomic program until allegations of past military dimensions had been settled.

In a letter to President Hassan Rouhani, whose pragmatist approach opened the door to nuclear diplomacy with the West, Khamenei ordered the July 14 agreement to be implemented, subject to certain security conditions the Iranian parliament stipulated in a law passed last week.

Under the Vienna agreement, Iran is to curb sensitive parts of its nuclear program to help ensure it cannot be diverted into developing bombs, in exchange for a removal of sanctions that have isolated the Islamic Republic and hobbled its economy.

Khamenei’s green light was the last procedural hurdle to carrying out a deal that ended a decade-long stand-off which raised fears of a wider Middle East war.

But the Supreme Leader has ruled out any detente with the West beyond the nuclear deal, and he said Iran would stop implementing it if the six powers – the United States, Britain, France, Germany China and Russia – imposed any new sanctions.

“Any comments suggesting the sanctions structure will remain in place or (new) sanctions will be imposed, at any level and under any pretext, would be (considered by Iran) a violation of the deal,” Khamenei said in the letter published on his website.

He said implementation of the deal should be “tightly controlled and monitored” because of some “ambiguities” in it.

“Lack of tight control could bring significant damage for the present and the future of the country,” he said, while praising the efforts of Rouhani’s negotiating team.

POSSIBLE MILITARY ASPECTS

The United States and the European Union took formal legal steps on Sunday that will rescind sanctions once Iran meets certain conditions such as reducing the number of centrifuges used to enrich uranium, and its enriched-uranium stockpile.

Another condition will be a resolution of a U.N. nuclear watchdog inquiry into whether Iran conducted atom bomb research at a military complex in the past – “possible military dimensions (PMD)” to the program, as the agency terms it.

On that point, Khamenei said that until U.N. inspectors settled the PMD issue, Iran should delay sending its stockpile of enriched uranium abroad and reconfiguring a heavy water reactor to ensure it cannot make bomb-grade plutonium.

The International Atomic Energy Agency finished collecting samples from Iran’s Parchin military complex earlier this month and is expected to announce its conclusions on PMD by Dec. 15.

Iran has long denied covertly researching bombs and says its nuclear program has always been for civilian energy purposes.

“Any action regarding Arak (reactor) and dispatching uranium abroad … will take place after the PMD (possible military dimensions) file is closed,” Khamenei said in the letter.

Iran agreed with the powers to fill the Arak reactor’s core with concrete so that it could not yield plutonium, which along with highly enriched uranium constitutes the standard fuel for nuclear bombs.

Iran is also required to export more than 90 percent of its refined uranium stocks, keeping just 300 kg of the material enriched to 3.67 percent fissile purity – suitable for running civilian nuclear power plants – for 15 years.

Since the deal was struck, Khamenei, who holds together Iran’s multi-tiered, faction-ridden power structure, has ruled out normalizing relations with the United States, overriding Rouhani’s expressed wish to pursue further areas of cooperation.

In comments meant to reassure hardline acolytes particularly in the security services, Khamenei said U.S. President Barack Obama had sent him two letters pledging America had no intention of toppling the Islamic Republic’s clerical establishment.

“But this was soon proved a lie … Neither on the nuclear issue nor in any other cases has America taken any position except hostility and trouble (towards Iran). Therefore any change in the future is unlikely,” Khamenei’s statement read.

(Writing by Parisa Hafezi and Sam Wilkin; Editing by William Maclean and Mark Heinrich)

U.N. Nuclear Watchdog Taking Samples at Iran Military Site

The U.N. nuclear watchdog, which is investigating whether Iran carried out work related to developing a nuclear bomb, said on Sunday its chief had visited a sensitive military site during a trip to the country.

Environmental samples have been taken at a sensitive military site in Iran, the head of the U.N. nuclear watchdog said on Monday, citing “significant progress” in its investigation of Tehran’s past activities. The International Atomic Energy Agency (IAEA) Director-General Yukiya Amano said he and the head of the agency’s Department of Safeguards, which carries out inspections, visited a building at the Parchin site on Sunday that the agency had previously only observed by satellite.

The IAEA is due to provide an assessment of “possible military dimensions” of Iran’s nuclear program by the end of the year. That report is a vital confidence-building aspect of Iran’s landmark deal with six major powers reached in July, under which restrictions will be placed on Tehran’s atomic energy activities in exchange for a lifting of sanctions.The IAEA has drawn criticism over a confidential arrangement with Iran governing how inspections are done at Parchin. Critics of the international powers’ deal with Iran have argued that the accord on inspections limits the IAEA’s ability to investigate and gives Iran too much influence in the collection of samples.

U.S. Warns North Korea on Nuclear Threat

United States officials have issued a stern warning to North Korea because of their threats to the U.S. and the world over their nuclear capabilities.

The day after North Korea said they have turned up their nuclear reactor at Yongbyon to full production, U.S. officials said the North Korean government should focus on “fulfilling its international obligations.”

“We will work with our partners in the context of the six-party talks to try to return North Korea to a posture of fulfilling those commitments that they have made,” White House spokesman Josh Earnest said.

“We will repeat our call that North Korea should refrain from the irresponsible provocations that aggravate regional tension and should focus instead on fulfilling its international obligations and commitments.”

Earnest added that the world will not allow North Korea to become a nuclear state.

Analysts say that it’s likely Kim Jong-Un is looking at the way Iran was able to parlay their nuclear program into a financial windfall and removal of sanctions and is trying to position his nation to gain a similar bonus.

Netanyahu Says World Hasn’t Learned Lesson

Prime Minister Benjamin Netanyahu told those attending the Holocaust Remembrance Day ceremony that the world has not learned the lessons of the Holocaust.

Netanyahu used the current situation with Iran and nuclear negotiations as an example  of the world not learning lessons regarding appeasement of tyrannical regimes.

“Appeasing tyrannical regimes will only increase their aggression and is an approach that is liable to drag the world into larger wars,” he said.  “The bad deal with Iran signals that the lessons of the Holocaust have not been learned.”

The prime minister continued to say that even if the rest of the world bows down before Iran, Israel will stand alone.

“Even if we are forced to stand alone against Iran we will not fear. In every circumstance we will preserve our right and our ability to defend ourselves,” he added.

Netanyahu said that the world needs to protect the values of freedom and tolerance to ensure that humanity can be free.

French Fact Sheet On Iranian Deal Shows Iran Could Get Bomb

A French government fact sheet on the Iranian nuclear deal, not meant for public view but leaked to the Times of Israel, shows that Iran could be able to quickly generate material needed for a nuclear bomb.

The deal allows Iran use of the IR-2 and IR-4 centrifuges, which can rapidly create highly enriched uranium that is needed for nuclear weapons.

In addition, the deal allows Iran to continue their research and development on the IR-4, IR-5, IR-6 and IR-8 centrifuges.  The IR-8 centrifuge could enrich uranium at 20 times the speed of the current IR-1 centrifuges.  The document released by American officials did not specify this fact.

Israeli Prime Minister Benjamin Netanyahu has been assailed by American officials after he said the deal was “very bad” for Israel and paves the way for Iran to create a nuclear bomb.  The French document appears to back up the claims of Netanyahu that were criticized by American officials.

This is the second time documents have conflicted with the American “fact sheets” on the Iranian deal.

Israeli analysts noticed differences between the American and Iranian fact sheets just days after the announced deal.  Ehud Ya’ari of Israel’s Channel 2 News noticed that while the U.S. says restrictions on enrichment last 15 years, Iranians say it’s only 10.  The Iranians also said that they can continue R&D on centrifuges, which the French document confirms, and the American documents say is not permitted.

Israeli Officials Downplay Obama Statements Of Support

Israeli officials responded to an interview by President Obama claiming he supports Israel by saying his platitudes are irrelevant if Iran gets a nuclear weapon.

Israel’s Strategic Affairs Minister Yuval Steinitz told Israel’s Channel 2 that while President Obama’s claim it would be a “fundamental failure” of his presidency if Israel is weakened is “pleasant-sounding”, “no assistance and no backing will help if Iran acquires nuclear weapons.”

Steinitz, a colleague of Netanyahu, released a government fact sheet outlining 10 differences in the deal between Israel and American views.  Among the questions were what would happen to Iran’s stockpiled enriched uranium and why the lifting of sanctions was not connected to changes in Iranian behavior.

The document concludes “the alternative to this framework is a better deal, one that will significantly dismantle Iran’s nuclear infrastructure, bring about a cessation of its aggression in the region and terrorist activities around the world, as well as end its efforts to destroy Israel. The framework deal does not block Iran’s path to the bomb. By removing the sanctions and lifting the main restrictions on Iran’s nuclear program in about a decade, this framework paves Iran’s path to a bomb. The result will be a dramatic increase in the risks of nuclear proliferation and an increase in the chances of a terrible war.”

U.S. officials dismissed the Israeli fact sheet and statements regarding the deal.  Obama advisor Ben Rhodes said the deal “is the best deal that can emerge from these negotiations” and refused to even consider adding the clause the Iran affirms Israel’s right to exist.

Israeli Prime Minister Netanyahu told CNN that while he respects the president, the deal is a threat to the Israeli people.

“I trust the president is doing what he thinks is good for the United States. But I think we can have a legitimate difference of opinion on this,” Netanyahu said.

President Obama admitted Tuesday to NPR, without acknowledging Israeli’s claims from the beginning about this fact, that at the end of the deal Iran would have an “almost zero” breakout time to a nuclear bomb.

Iranian Leader: West “Stupid” To Think I’ll Curb Nuclear Missile Program

The highest-ranking member of the Iranian government says that western leaders are “stupid” if they think that Iran will do anything to curb their nuclear missile weapons program.

“They expect us to limit our missile program while they constantly threaten Iran with military action,” Ayatollah Ali Khamenei told Iran’s state-owned news agency.  “This is a stupid, idiotic expectation.  The revolutionary guards should definitely carry out their program and not be satisfied with the current level.  They should mass produce.”

Khamenei also said that western countries were working to bring the Iranian people to their knees with a list of sanctions but that they would never be able to stop Iran.

The “Supreme Leader” also said that he wants political leaders to find ways to end sanctions against Iran without giving up any of the country’s nuclear program.

No western nations are currently threatening military action against Iran.