North Korea's stunning admission that it has been cheating on its 1994 agreement with the United States and enriching uranium for nuclear weapons is the latest in a string of remarkable confessions from Pyongyang that includes an apology for the killing of five South Korean sailors in a naval battle and the admission that North Koreans kidnapped Japanese citizens.

What lies behind Kim Jong Il's new urge to confess? All three admissions appear motivated by his desire to try to wipe the slate clean, win international credit for candor and move on to a new focus on domestic economic development.

Kim's decision in the 1990s to violate the Framework Agreement and continue with a nuclear program reflected his understanding of the world at that time: If he were able to keep the program secret, he would strengthen his deterrence against an American or South Korean attack. If the Americans or the International Atomic Energy Agency inspectors found out about the program, he would trade it away (or pretend to do so) in exchange for aid.

Why should we think Kim's 2002 decision to reveal the nuclear program is any different? And how should we respond?

What's different is that Kim has a domestic program that cannot succeed without help from the United States, South Korea and Japan. After a series of visits to China and Russia, he has embarked on a genuine effort to reform North Korea's Stalinist-style economy. He could build nukes without us, but he cannot build an economy without us.

In late September I visited North Korea for five days at the invitation of a government think tank and had the opportunity to talk with national and local officials, as well as with some ordinary North Koreans. Like other recent visitors, I came away convinced that the reforms were serious and significant, albeit at a very early and fragile stage. My background as a scholar of China's economic reforms helped me compare North Korea's measures with China's.

To lay the groundwork for structural changes, prices and wages have been raised for the first time in more than 20 years. Everyone I spoke to had received a salary increase of 10 to 20 times their original wage. Prices of goods in food markets and department stores have moved closer to international prices in what amounts to a drastic currency devaluation.

Food rationing, except for rice, has been abolished. If you can afford eggs, you can buy as many as you want. Farmers are paid more for what they produce. For several years, they have been allowed to produce vegetables on small private plots and sell them on the free market. Now the collective also may grow profitable crops after meeting its grain quota, putting North Korea where Chinese agriculture was in 1977.

Industrial policy is on pace to match the Chinese reforms introduced around 1980. Profit incentives have been introduced into factory management. Factories exceeding their mandatory quotas can retain profits and distribute them to workers as bonuses.

The regime is laying the groundwork for further changes just as China did in 1977. In political indoctrination sessions, people have been learning how Kim Il Sung's "practical juche (self-reliance) philosophy" now means "shaking off Soviet-style methods" to find "economic methods more suitable to Korea."

In its effort to attract foreign investment and promote trade, North Korea is emulating China's special economic zones, first established in 1979. The choice of Chinese businessman Yang Bin, a citizen of the Netherlands who was made a North Korean citizen, to lead the new "Special Administrative Zone" on the Chinese border at Sinuiju, has proved to be a fiasco, however. The Hong Kong stock market is investigating him and his company, and China has arrested him on suspicion of tax evasion and other criminal activities.

North Korea's early stumbles reflect its inexperience and lack of competent economists. Moreover, North Korea lacks the natural advantages -- a rich resource base and large domestic market -- that China has. Fuel and electricity shortages hamper production.

Reform-minded North Korean officials freely admit that they also confront formidable political resistance from the military. Kim Jong Il was powerful enough to impose the new economic measures over the military's opposition, but he could be forced to reverse course if the changes do not improve performance.

Kim surely knows that the reforms will succeed only if he can put relations with the United States, Japan and South Korea on a new footing. Without technical assistance and foreign investment, the reforms will fail.

In this context, how should the United States handle the North Korean nuclear problem? We should not treat North Korea like Iraq (that is, threaten to use military force to disarm it and change its regime) or like Pakistan and India (give the nuclear program a pass because the country is strategically important).

Instead we should treat North Korea like North Korea: Build on its desire to reform its economy by pursuing a negotiated approach to closing down completely and finally, and under international verification, its programs for weapons of mass destruction and missiles.

Promising to normalize relations and cooperate with North Korea's reform efforts if it agrees to shut down its weapons programs makes sense from the standpoint of our own interests and those of our South Korean and Japanese allies, as well as of China and Russia.

All the northeast Asian governments should support a coordinated effort to insist that the North Koreans undertake a verified abandonment of the weapons programs at the same time as they develop economic and political ties with all of us.

The United States has a strong interest in seeing North Korea's nascent reforms succeed, both from a humanitarian standpoint and because U.S. security interests would be served in two ways: by the elimination of North Korea's capabilities for weapons of mass destruction and by the emergence of a North Korea that puts priority on its own economic development and therefore is motivated to be more cooperative internationally.

The writer is research director of the University of California Institute on Global Conflict and Cooperation in San Diego.