U.N. Closes N. Korea Development Office

By Colum Lynch
Washington Post Staff Writer
Tuesday, March 6, 2007

UNITED NATIONS, March 5 -- The U.N. Development Program has suspended its operations in North Korea, saying it cannot carry them out under guidelines that prohibit payments in foreign currency and the employment of local workers handpicked by the North Korean government.

The decision to halt the $3.7 million-a-year program represented an awkward situation for the North Korean government as it prepared for its highest-level talks with the United States on American soil since 2000.

Vice Foreign Minister Kim Gye Gwan arrived in New York on Monday, and he and Assistant Secretary of State Christopher R. Hill began two days of talks at the Waldorf-Astoria Hotel about implementing a recent agreement for North Korea to abandon its nuclear weapons program. Last week in San Francisco, Kim told a small group of U.S. experts on North Korea that there is still a lot of doubt in North Korea that the nuclear deal will hold. But one expert who met with the diplomat in California over the weekend said Kim's mood brightened, in part because of the security coverage the State Department accorded him.

On Monday, Kim spent more than four hours at the Korea Society in New York with a group of U.S. officials, including Victor Cha, an Asia expert on the National Security Council staff, and diplomatic luminaries including former secretaries of state Madeleine K. Albright and Henry Kissinger.

Albright, who traveled to Pyongyang in October 2000 to meet with North Korean leader Kim Jong Il, said that the discussion was "fruitful" and that she was pleased to see the Bush administration engaging the North Koreans. But she said that a final agreement between the two sides would require long, arduous negotiations.

A statement released after the meeting at the Korea Society said that the participants discussed a broad range of issues related to U.S. and North Korean relations, including the normalization of bilateral relations "in a friendly and forthcoming atmosphere." Several people in the audience privately urged Kim to seize the opportunity offered by this week's talks to make progress.

It remained unclear how the U.N. Development Program's decision to suspend North Korean operations, posted Friday evening on the agency's Web site but never otherwise announced, might affect this week's talks. North Korean officials have accused the United States of provoking the UNDP to change its operating practices after more than 25 years in the country.

The program is one of four U.N. agencies, including the World Food Program and UNICEF, that carry out development and relief work in North Korea. They are required to hire government-appointed workers and pay salaries through state-controlled offices.

The UNDP's decision followed complaints from senior U.S. officials that the program was channeling hard currency to the North Korean government. Mark D. Wallace, the U.S. representative to the United Nations for management and reform, voiced concern in January that the UNDP had "systematically perverted" its own rules by pouring millions of Euros into the North Korean economy each year.

In response to such concerns, the UNDP executive board decided Jan. 25 to restrict payments to local staff and businesses to North Korean currency, the won, and to halt its practice of hiring local aid workers from a government-controlled roster. Pyongyang has a seat on the agency's executive board but did not have the power to block its decision.

U.N. officials warned that it was unlikely that they would be able to recruit local labor, and on Thursday, North Korea's U.N. ambassador, Pak Gil Yon, rejected the board's terms in a meeting with UNDP Associate Administrator Ad Melkert.

"Under the circumstances, UNDP has no choice but to suspend its operation in" North Korea, UNDP Administrator Kemal Dervis said in a confidential letter sent Friday to Pak. "Should circumstances change at a later date, we would be willing to reconsider this position."

The decision will immediately shutter 20 UNDP operations, but eight international workers who manage the program will remain in Pyongyang for a few days to see whether the government backs down. The UNDP's action will have no impact on other U.N. humanitarian operations in North Korea, senior U.N. officials said.

Staff writer Glenn Kessler in Washington contributed to this report.

© 2007 The Washington Post Company