Published on September 11, 2007
The Role of North Korea in Northeast Asia Energy Relations: The Role of North Korea in Northeast Asia Energy Relations David Dusseault Eurasia Energy Group Aleksanteri Institute 11th December 2006 Some Basic Ideas: Some Basic Ideas N. Korea’s energy situation is dire; Causes include common regional constraints as well as domestic economic strategy; and NK is a crucial actor in regional energy relations due to location andamp; potential knock on effects derived from regime’s survival strategy. The Scope of the Issue: The Scope of the Issue Energy Imbalance: Energy Imbalance Interdependency: Enabling and Constraining Conditions: Interdependency: Enabling and Constraining Conditions Physical Constraints: uneven resource distribution, finiteness of natural resources, existence of energy sector infrastructure, geography, climate, accessibility of resources; Informational Constraints: elites do not possess full information regarding their resources or how to fully maximise their benefits accrued from natural resource wealth; Financial Constraints: finite financial resources for investment and resource exploitation, commodity prices, market size; Actor-based Constraints: number of competing actors, how actors perceive their interests and how they determine to develop their interests; and Institutional Constraints: ability of state institutions to flexibly determine the rules of the game over time without marginalising actors or seeking rent. Regional Assessment: Regional Assessment Conditions: North and South Korea: Conditions: North and South Korea The Nuclear Issue in the Present Energy Context: The Nuclear Issue in the Present Energy Context Nuclear stand-off on the peninsula is tied to regime survival; NK’s regime survival strategy has been directly linked to external aid (food and energy (KEDO)); Energy can still form the basis for a flexible long term strategy to incorporate NK back into the international community. Priorities & Strategies: Regional Priorities: Catastrophic Regional Conflict Avoidance FDI, financial credits, ROK Japan loans; (Bi andamp; Multi-lateral) Regional Development aid (Bi andamp; Multi-lateral) Priorities andamp; Strategies US Priorities: Regime Change Economic Sanctions (Uni - andamp; Multi-lateral) Military 'Axis of Evil' (Sum zero) NK Priorities: Regime Survival Nuclear Threat (Sum zero) FDI, financial credits, WB loans; (Bi andamp; Multi-lateral) KEDO energy package, UNDP development aid. (Bi-andamp; Multi-lateral) ? Conclusions: Conclusions Re-think of US sum zero regime change strategy; Development of mutually beneficial, long term plan to incorporate NK into the international community; In the short term: resumption of HFO shipments and incremental easing of economic sanctions in return for negotiations over nuke issue; In the medium term: step by step programme for verifiable dissolution of nuclear programme in return for increased financial and technical assistance; In the long term: inclusion in regional based development initiatives with further cuts to conventional forces on the peninsula.