Wooing expatriate Nepalese

By BINOD P BISTA 

The recent announcement by Prime Minister Lokendra Bahadur Chand that his government, in a bid to promote economic diplomacy, would encourage and employ expatriate Nepalese to national development is certainly a welcome initiative. Current statistics reveal that professionals from South Asia and South East Asia, who left their countries for various reasons, primarily for financial wellbeing, hardly came back to their native lands, excepting a new phenomenon that is being observed in the People’s Republic of China today. This reality, and the need to clearly establish a link between economic diplomacy and expatriate nationals can neither be undermined nor postponed if the government’s intent is to be taken seriously. Notwithstanding an apparent flaw in statistics about the repatriation amount from expatriate Nepalese being higher than that of carpet and garment sales, or pension received by retired Nepali soldiers in the British and the Indian military, unless one takes into account all skilled, semi-skilled or unskilled labourers sent to the Middle East, and some East Asian countries as expatriate nationals, the contribution that could be made by expatriate Nepalese, particularly the successful professionals, can be significant.

Among many relevant considerations, following two questions need to be answered during the planning phase itself: First, what type of support is the government looking from the expatriate Nepalese, and second, can the government create the necessary environment for the expatriates to take part in this exercise? The answer to former question would clearly involve in a need-assessment exercise, resulting in identification of a certain set of expertise and expatriates. This, perhaps, might be lot easier to work out than the latter part where fulfillment of necessary environment entails a wide array of activities. The environment not only refers to intrinsic needs of the expert (expatriate) but also essential conditions required to satisfy the basic needs of the expert’s family in areas such as education, health, communication and other modern facilities.

The concept of using an expatriate national for development work is not new. United Nations Development Programme (UNDP) has long introduced, and practiced with limited success, a programme known as Transfer of Knowledge Through Expatriate Nationals (TOKTEN). In fact, some of these programmes were run in Nepal as well. The employment of expatriate nationals almost always involves state-of-the-art technology to a company or an organization with a view to achieving better efficiency and higher productivity. Considering the current state of Nepali enterprises, both in the public as well as private sectors, Nepal may not be in a position to absorb the higher level of technology possessed by successful expatriate Nepalese working in North America, Europe or other advanced countries of Asia. Moreover, for leadership (supposing that the expatriate nationals were to be given a free hand at the top) to be effective, it must be able to communicate with the people first, and the communication gap between the successful expatriates and the local experts may simply prevent that.

It is but natural for the politicians to talk about transformation of a society, from a poverty-ridden state to an affluent one within no time. Faced with ever increasing demands from the poorest of the poor, especially in a less developed country like Nepal, the pressure to come up with more and attractive promises is of paramount concern to all governments. Blatantly broken promises of the past resulting in the current state of economy, security and stability speak for themselves. Nepali people are sick and tired of ‘so called’ initiatives that begin with an "i" and end with "s". Nepal must face the realities of the time. People must be informed, educated and prepared for still harder times that they must face. The government has no choice but to draw up judicious plans for development while conducting necessary investigations and taking appropriate actions against the enemies of state. There is no running away from truth. Furthermore, this particular government does neither need to follow a populist policy nor obscure the hard facts, because this government owes its existence to His Majesty King Gyanendra Bir Bikram Shah Dev.

The government must not fail the people and the king to bring about two main tasks: To provide safety and security to all its citizens by restoring law and order in the country, and to conduct free and fair elections for the house of representatives as per 1990 Constitution of Nepal. Most of the persons in the Cabinet had very little chance or none at all to be there, under our current multi-party system of democratic governance. It is the least that they can do, and in spite of them being un-elected representatives, their contribution to the Nepali nation and its people, will ever be remembered by all.

In addition, the time would be well spent if the government focused its attention to building a model of ‘good governance’ for all future elected governments to follow. The twin pillars of transparency and accountability need to be clearly outlined and practiced for every Nepali’s benefit. There is also a need to not only punish the corrupt officials but also instill a system at all levels that discourage corruptive behavior. The lessons of bad governance from the past can be a starting point to start an exercise in good governance. When people, whose condition is deteriorating day by day, have been asked to prepare themselves for more sacrifices, the government as their leader must also come forward giving up a significant portion of its perks and facilities. How else can the people be convinced if the government pays less than adequate attention to austerity measures?

If the government still finds time to seriously consider the issue of engaging Nepali expatriates, then perhaps the best option could be assigning itself a role of a catalyst. As in other countries, the government can make proper arrangements for the meeting between expatriate Nepali nationals and public and private institutions, companies and enterprises. This process might also help expedite the privatization process of public enterprises, upgrade the operations of private enterprises thus benefiting the nation as a whole. The expatriates, too, depending upon their capabilities such as financial contribution or management expertise, can find suitable roles for themselves. Injecting mediocre or spent out expatriate Nepali nationals in public enterprises or institutions would not only raise the wrath of qualified domestic professionals but it could also lead to a net wastage of scarce financial resources that the government is bound to come up with for wooing these expatriates.

Helmet, a gift of Magi

By NIMESH BASNET

Once a publisher rejected George Bernard Shaw’s play when he was still an unknown playwright, but later on when one of his plays became a hit, the same publisher approached him and offered to publish his other plays, GBS wittingly replied, " Better never than late." So this does seem to apply to me now as well. Yup! some years back I had badly needed a helmet as a pillion rider.

Now, I’m no more a pillion rider, and I don’t intend to be one either. This does suffice when one thinks of the story by O Henry. Must be wondering what I’m talking about, hold on a sec! That was the time when my that funky cousin used to be the rider with control over the wheel with his spunky behaviour, and me a decent as ever pillion rider who badly needed some head gear or anything to cover my face. Thousands of Blistering Barnacles! His wacky yet amusing style of staring at beautiful Madmoiselles on the streets, on motorcycle back or inside the car, and given a opportunity did not refrain even from making a comment, though mostly commendable ones where he did not have to get snapped back at and sometime would get greeted instead with a smile, but it did most of the time put me in such an embarrassing situation that I cried to myself, "The Almighty was there no way to save me from while still being a pillion rider."

At that time I did not intend to wear a helmet, lest the onlookers considered me a person from Mars. The only option I had was to be the main rider myself, and put him at the rear , but I did not have a license to do so then. One fine incident, that did happen was he again made a nice long stare at an anon but a ravishingly beautiful dame standing in front of the Cake shop on the other side of Rotary Club at Thapathali, which no more exists there, and even made a funny gesture, I guess, to attract that lady’s attention. Oops! call it a coincidence or my nightmare that a beautiful girl was at my home some days later, she happened to my sister’s friend. I was really in an awkward situation. Making a flashback of the incident, a thought crossed my mind. Did she recognise me as that pillion rider? If so, what must have she thought of me? But finally she gave a smile, and that did break the ice. Not only that, she did also ask a ride back home in my Bike, but unfortunately I had no license then and had to make some excuse, even though I longed to give her a ride.

After those incidents I no longer wished to remain a pillion rider without some head gear, and hankered to get the license which would make me the captain of my own ship, which I did after a gruelling attempt. But my gosh! when I’m no more a pillion rider, the police have decided to make helmet compulsory. I guess, it does serve the purpose of the police and the helmet importers and the sellers more. Of course now, I can’t steal a look at beautiful mademoiselles even if I’m under the protective head gear. You all know it why.

Sometimes it can baffle us as well, and we do wish Sherlock Holmes was there to sort out the confusion, like the one I had. Yup! I was so enchanted by the cascading flow emerging out of the helmet of the seemingly a lady pillion rider. But to my surprise when the bike before me came to a halt and the pillion rider took off the helmet, gosh! It was a dude. These days my eyes are never again enchanted by mirage. I caution the others also to think twice before the admiration.

War over Iraq: when not if

By M R JOSSE

Despite a chorus of worldwide demonstrations against the feared US-led war against Iraq and notwithstanding repeated assurances from America and Britain that war is not inevitable, the inexorable logic of events suggests otherwise. Presently, the crucial question is not whether such a war will take place but rather when – and how.

LOGIC OF WAR

There is, after all, simply no getting away from that grim conclusion against the backdrop of events on the ground since the unanimous adoption of UN Security Council (UNSC) resolution 1441on November 8, 2002. That demanded that Iraq agree to a series of obligations to disarm – to be carefully monitored by UN weapons inspectors – or face "serious consequences."

True, UN chief arms inspector Hans Blix and IAEA’s Mohammed El Baradei’s first reports to the UN Security Council on Monday did not provide the "smoking gun" that most were looking out for. Yet, Blix’s bleak assessment of Iraq’s non-compliance with UNSC resolution 1441 in its entirety means that war has been delayed, not averted – despite El Baradei’s call for "several months" more time to continue.

Most telling, of course, is the ominous and inexorable build up of America military forces in the Gulf, followed by hard training activities, including rehearsals for urban warfare. According to the New York Times, America’s strength in the region would by mid-to-late February be in the vicinity of 150,00 soldiers, sailors, airmen and marines.

In addition, last week, nearly a quarter of the British army, or over 26,000 troops, was getting ready to sail for the Gulf. In a token gesture of support, Australia too has sent its first batch of 350 soldiers to join American and British forces there.

War preparations are reportedly actively underway in Iraq, too, including distribution of gas masks to Iraqi’s elite military forces. Ordinary Iraqis, while hoping to avoid war, are stocking up on food and fuel. Saddam Hussein and other members of his leadership have, through stirring speeches and other measures, been preparing their people for a war that they claim – quite incredibly – they will win.

Equally suggestive of how close the region is to the brink is that the foreign ministers of six of Iraq’s neighbours – Syria, Iran, Jordan, Egypt, Saudi Arabia and Turkey – recently got together in Istanbul from where they issued a last-ditch plea to Baghdad to intensify cooperation with UN arms inspectors. King Abdullah of Jordan, at the World Economic Forum in Davos, said it would be "a miracle" if a war were averted.

ON THE BRINK

As much is indicated by reports that a number of embassies in Baghdad have decided to send dependants home or shut down completely. Note may also be taken of reports that the Kurds of northern Iraq are waiting to join in any US-led war for a "free and democratic" Iraq.

America’s preparation for war against Iraq is manifest, too, from its open support for Iraqi dissidents, as underscored by its backing for a conference on that theme in London last December. Furthermore, Shia leaders are said to be receiving help from the CIA in preparation for an assault by American and other forces.

Another indicator is that a Pentagon-based office has been created to help rebuild Iraq’s schools, roads, hospitals and other critical building blocks of a civil society, in a post-Saddam Iraq.

As far as the timing of the war is concerned, the Russian military command is said to believe that Washington is planning for late-February. That, incidentally, also conforms to expectations that the campaign will not begin before the end of the Muslim season for hajj in mid-February.

To be sure, experts have long predicted that any military campaign would have to be timed not long after February because of the intense summer heat. Waiting for February end, at the earliest, was deemed necessary by them for America’s military might to be well positioned in the region before any planned or credible military action could be contemplated.

According to the Washington Post and CBS News, the proposed time for war to begin is March. The thrust of the contemplated battle plan, called "shock and awe", reportedly focuses on the "psychological destruction of the enemy’s will to fight rather than the physical destruction of its military forces." As such, America’s war plans call for the launch of 300 to 400 cruise missiles a day at the start, more than were fired during the entire first Gulf War which lasted 40 days!

That America’s patience is wearing thin has been made repeatedly clear. Condoleezza Rice, US National Security Adviser, in the International Herald Tribune, called Baghdad’s declaration on her weapons of mass destruction "a 12,000 page lie."

A few days later, American Secretary of State Colin Powell asserted in Davos that the onus was on Baghdad to prove that it had no weapons of mass destruction, not for the UN inspectors to discover them in a country the size of California.

SLIGHT DELAY

There has been a flurry of protestations against possible recourse to war by France, Russia and China and Germany, which will preside over the UN Security Council in February.

Given that within the US and in Britain there is growing opposition, especially against going to war without a second UNSC resolution sanctioning military action, British Prime Minister Tony Blair’s comment on a BBC programme that inspectors should be give some weeks more – not months – is very significant. Possibly, the exact date may be determined this Friday at the Bush-Blair summit.

Finally, for those who fervently believe, or fondly hope, that division in the UNSC will avert war, I direct attention to these excerpts from an article by Simon Tisdall in the Guardian. "Those opposed to war have little reason to believe that the security council, having voted unanimously for 1441, will thwart the US now. Although the council’s composition has changed since then, political considerations, rather than considerations of justice, remain uppermost for the other four permanent members.

"None can ultimately afford to alienate the Bush administration on so definitive an issue. The most they may do is to try for delay. Washington would see the casting of a veto as a hostile act. All four also have a considerable economic stake in a post-Saddam Iraq. Russia, for example, will want to recover sizeable Soviet-era debts; France, like the US, has strategically vital energy interests to pursue."

Thus, if Saddam doesn’t capitulate, war will come to Iraq if not by February end, at the most, a month or so later. The US and Britain may make a virtue out of necessity and advertise that, following the UN inspectors’ report to the UNSC, they are prepared to give allow some more time to Iraq to respond to the host of serious unanswered questions raised by Blix on Monday.

My guess is that after the inspectors’ February 14 report to the UNSC, the chips will rapidly begin to fall. After a final attempt to obtain UNSC endorsement, perhaps lasting for a few weeks, the US and Britain will go ahead with or without it. Thus war seems likely in March – if Saddam doesn’t change his still defiant stance.

New policies for women entrepreneurs needed

JAMUNA ULAK

Until a few years ago, women, especially from nuclear families, used to involve in business, primarily to meet their family expenses, but the youth today opt for business right after completing their school or college education. While the educated women go for small business, housewives are attracted towards small-scale cottage enterprises. The desire to be self-dependent and to contribute to family expenses is the driving force behind the middle class women that renders entrepreneurs. Various studies and researches show that an increasing number of women are involved in the economic activity, but the government has not formulated any specific policy to attract more women to enterprises.

Realising the economic and social empowerment of women as a necessary factor for the development of the nation, attempts have been made to involve them in enterprises since the sixth Five Year Plan and this is still continuing in the current Tenth Plan. Industrial Policy, 1992 also lays emphasis on women’s participation in the production sector. With an aim of raising women participation in various sectors, the government introduced some special programs last year that include production loan for rural women, women micro- credit project, small farmers development programme, women entrepreneurship development program and training for rural employment among others.

Similarly, the Industrial Enterprises Development Council has been operating women entrepreneurship development programmes for the past one decade. Small Enterprises Development Programme is another government initiative to uplift the status of women. Besides, the Women Entrepreneurs Association Nepal and WEAN Cooperatives have been operating women entrepreneurship development programs and small enterprise services, Nirdhan, Centre for Self-Help Development, Cottage and Small Industries Association and Women Entrepreneurs Association Nepal have been running micro-finance programs for women entrepreneurs.

Despite the programs being run by the government and the private sectors, there has not been remarkable increment in the number of women involved in enterprises. Studies and researches attribute lack of special policy to the low participation of women in enterprises. A recent study jointly commissioned by the Swiss Contact/Small Industries Promotion Program and Samanata, a non-government organisation, has also pointed out the need for introducing special policy and has suggested measures as well.

As the existing industrial policy does not define and does not encompass small enterprises, women’s contribution to the national economy has remained unacknowledged. In order to encourage women participation in industrial activities, the study suggests that micro-enterprises should be defied and concrete policies and programs should be implemented.

It has also recommended formulating policies and developing infrastructures of financial institutions to provide loans to aspiring women entrepreneurs, necessary technology, providing basis to production, designing, marketing, transaction of raw materials, banking transaction, technical advice and professional networking training including awareness generating programs focusing on gender discrimination.

Other recommendations of the study are, formulation of policy for women’s access to information, introduction of a special program to enhance women entrepreneurs’ access to extended market, establishment of various incubation organisations, formulation of strategy to co-ordinate big and medium enterprises and small and micro- enterprises, arrangement for access to information related to enterprises by the government and introduction of one window policy for facilitating and simplifying the process of import and export.

Likewise, identifying the areas where more women entrepreneurs are involved like handicraft and agriculture and service-oriented businesses and formulating strategies to help them in improving the quality of goods and services, design, related information and establishing professional network to promote such enterprises are the other requirements.

As women do not have right to property, it has become the greatest hurdle for them to run business. Therefore, unless the government introduces Gender Responsive Financial Package, the existing micro-credit and short-term loans cannot attract a sizeable number of women towards business. Hence, the study has pointed out the need for making a separate policy to provide loans through financial institutions. And there is a need to developing necessary mechanism and organisations for the bulk sale of raw materials.

In the same way, the study has also suggested to provide leadership development and self-evaluation training and to launch personality development and awareness generating programs related with gender issues to order to enhance women’s self-confidence.

It has become imperative to formulate a multi-dimensional strategic approach to increase women’s participation in enterprises by incorporating the issues resultant of professional and gender discrimination. The short-term and scattered programs will not be effective enough for accelerating the pace of women’s participation in enterprises.

All that glitters

BEENA KHAREL

Surely, gold is glittering in the Nepalese market. The last time it truly glittered was in the mid-nineties. Afterwards it began to lose its lustre. But not anymore.

The price of gold per 10 grams has increased by more than Rs 1,200 in the past six months. And it is going up every day by as much as Rs 130. Indications are that the price of the "star asset" is soaring towards Rs 9,500 per 10 grams.

In tougher times, so as to speak economically and politically, gold has reappeared as a safe haven for investment. The price hike is attracting traditional and modern investors who are either wary of trying anything new, or are fed up with low or negative returns.

Since Nepal totally relies on the international market for gold supply, international events, demands and transactions determine its price. Due to rising fears of war on Iraq, increasing oil prices, a weakening US dollar and tumbling stocks worldwide, many investors have jumped into the precious yellow metal as a safe investment zone. Many Asian gold trading centres are reporting a robust trading.

At home, gold has been and will always remain a reliable investment for an overwhelming majority. Its popularity can be traced back to ancient days, gradually assuming the role of a safe haven after being recognised as a currency along with other commodities. Not much has changed since then. Only that the trading in gold has become a bit more structured and organised. Bills, for instance, accompany the procurement, if a buyer goes to a registered gold shop. And in the non-black market, the chances of getting cheated are minimal.

Collection of jewellery is a popular method of savings in developing economies. And also a means of displaying one’s wealth, at times ostentatiously. With the marriage season still on, the rush to buy gold and jewellery will increase, and hence the price. Unlike in the developing economies, especially in South Asia, gold investors in developed economies are moving into new areas. The diversity of investment ranges from gold bullion and gold coins to gold certificates and gold mutual funds.

Treasured as an alternative to holding cash, the ancient role of gold as a safe way to store wealth is still intact in Nepal. So much so, it is still a long way off from being swayed by modern financial markets. Many are sitting on "idle" gold, literally, propping up the vices of idle assets.

Owing to the gold price hike, an increasing number of people are selling their old stock of gold and jewellery items to enjoy impressive capital gains many times higher than the interest rates offered by commercial banks. Since the demand for fresh gold has been adversely affected, gold traders have adopted various measures to discourage the sale of gold ornaments.

In the absence of lucrative and safe investment opportunities and capital mobilisation, and waning business confidence—partly attributed to the country’s poor law and order situation—the economy seems to have been left to serendipity.

The War on Terrorism speaks well for gold. But what happens if the war on Iraq is averted at the last moment, or restricted to a short and swift attack? Developed economies will return to other lucrative avenues. In Nepal, it will be gloom as usual. The gold boom will prove a fickle friend. Nonetheless, the gold—as a prized possession—will continue to be worshipped.

Unreal Reality

No less important is real estate.

Just as it is a dream of millions of Nepalis to acquire gold, be it even a speck of it, the real estate too holds a similar appeal. They are ravenous for land. Not a new thing in a developing economy defined by a dearth of investment opportunities.

When Nepal promoted liberal economic policies in the early 1990s, the real estate business boomed like anything. Thanks mainly to carpet and garment industries that enjoyed super-normal profits till the mid-nineties. When these two industries took a downturn, so did the fate of real estate. The business is now down, but not out. Thanks mainly to remittances and dirty money.

Some of the corrupt have become smarter these days. They not only know how to make quick bucks the crooked way, but also know how to invest them safely. Purchasing real estate at the home country comes first. The remaining millions and millions are either stashed away in foreign banks that offer high interest rates or invested abroad in petrol pumps and elsewhere.

Acquiring a piece of land in the Kathmandu Valley is still a much-cherished dream of many, not necessarily corrupt. This dream doesn’t end up with the buying of land. Getting a roof over one’s head in the Valley is as much essential. Having fulfilled one of the "basic necessities"—providing shelter for oneself and the family in an urban area—there comes the thought on investment. The house goes taller and fatter. "The savings of my whole life have gone into it," says its proud owner. How does he go about extracting returns from his investment in the house? Obviously, by renting it out. Every month, when he collects rent from door-to-door, he forgets the "unforeseen costs" he had to incur.

First comes the uncalled for expenses in water, one of the items under the head of "unforeseen costs." Tenants are a fussy lot. They shout and protest if the tap in the house runs dry. And why shouldn’t they? After all, they pay the rent regularly at a rate dictated by the owner.

Naturally, the responsibility of providing water to the tenants falls on the landlord. Desperate, he buys "clean" water from private water suppliers, for our public corporation is totally unreliable on this matter. In order to store water, he needs to build a large underground water tank that can reserve litres and litres of water for several days for both his family and the tenants. Not to talk of electricity costs incurred while feeding water into dry household water pipes.

Drain pipes are another nuisance that suck a lot. Problems galore. But is the monthly rent of, say, Rs 5, 000 for a non-descript and unfurnished four-room one-story house any match for Rs 600 thousand that goes into its construction? Add to that the costs of purchasing land. How many years will it take and how much miscellaneous and unforeseen expenses are to be incurred before the landlord recovers his capital investment? Several years. That kind of investment is said to be made largely for "psychological security" purposes.

Well, was it not JM Keynes who said, "We are all dead in the long-run?" That means those who hanker after "psychological security" will have to leave the task of recovering the capital investment plus the returns, if any, to posterity.

N Korean’s withdrawal from NPT

If the United States abandons its hostile policy and refrains from nuclear threat, the Democratic Republic of North Korea (DPRK) may substantiate through a special verification between the two countries that it does not manufacture nuclear weapons.

The nuclear issue of the Korean peninsula should be settled peacefully through fair negotiations that call upon both the DPRK and the US to clear each other of their concerns on an equal footing. This is the consistent stand of the DPRK government.

The Korean Central News Agency stresses this in a detailed report on the circumstances of the DPRK government’s recent withdrawal from the Nuclear Non-Proliferation Treaty.

On the details of the DPRK’s accession to the NPT, the report says:

The purpose of the DPRK’s accession to the NPT was to remove the U.S. nuclear threat to it and mainly, to satisfactorily solve the power problem with nuclear energy.

To begin with, we intended to buy advanced LWRs from Western countries such as Canada, Sweden and France but failed to do so due to the U.S. obstruction based on the COCOM.

So, we had to negotiate with the former Soviet Union on this matter, though its LWR was less advanced than Western countries in technical aspect. At that time, the Soviet Union contended that its offer of nuclear-related technology to the DPRK would be possible only when it acceded to the NPT and signed the Safeguards Agreement with the International Atomic Energy Agency. So, the DPRK prudently examined this matter.

The DPRK acceded to the NPT on December 12, 1985 for the purpose of ensuring international cooperation in nuclear power industry and at the same time, removing the nuclear threat to itself and turning the Korean peninsula into a nuclear-free zone. On the circumstances of the delayed conclusion of the Safeguards Agreement, the report says:

Even after the DPRK’s accession to the NPT, the United States escalated its nuclear threat to the DPRK, making it impossible for the former to sign to SA according to the NPT.

On Jan. 7, 1992, the South Korean Defense Ministry and the U.S. Department of Defense and the south Korea-U.S. "combined Spirit" jointly declared the discontinuation of the "Team Spirit" joint military exercises. And high-level talks were held between the DPRK and the U.S. on Jan. 22, 1992.

As conditions and circumstances were created after the United States and South Korea made a verbal promise, the DPRK signed the SA with the IAEA on Jan. 30, 1992.

The Third Session of the Ninth Supreme People’s Assembly of the DPRK held on April 9, 1992, approved the SA on "the premise that none of the depositories of the NPT will deploy nukes on the Korean peninsula and pose a nuclear threat to the DPRK," and DPRK informed the IAEA of this approval on April 10, the following day.

The SA between the DPRK and the IAEA thus came into force from April 10, 1992.

Referring to the details of the DPRK’s declaration of its withdrawal from the NPT the report says:

After the conclusion of the SA between the DPRK and the IAEA, the United States spread the rumour about "suspected nuclear activities" in the DPRK’s graphite-moderated reactor and its related facilities, sparking a "nuclear crisis".

An agreement was reached between the DPRK and the former Soviet Union on economic and technical cooperation in building nuclear power plants in 1985 after the DPRK’s accession to the NPT. But, this agreement was not implemented except a site survey made for the project.

We, therefore, adopted it as a policy to create a nuclear power industry suited to its specific conditions to live our way and began developing its own nuclear power technology.

For the development of its nuclear power industry, the DPRK choose a graphite-moderated type reactor which could be developed not with any other country’s raw materials but with its own rich resources and technology.

Over the past years, the DPRK has honestly fulfilled its commitments under the SA.

We presented the initial inventory report on nuclear material and design information on nuclear facilities to the IAEA Secretariat on May 4, 1992, far ahead of the schedule, which were to be sent until the end of the year under Articles 42 and 62 of the SA.

We also ensured the DPRK visit of the IAEA delegation led by its general director from May 11 to 16, 1992, allowing it to inspect all the nuclear facilities it wished to see and even the objects it considered doubtful.

We provided full cooperation to the IAEA’s ad-hoc inspection team in its activities on six occasions.

However, the United States and its followers of the IAEA Secretariat used such inspections under the NPT and the SA to spy on the DPRK and undermine its socialist system.

Some of the IAEA Secretariat systematically conveyed the results of the IAEA’s inspections of the DPRK to the U.S., which, under the pretext of what the IAEA called "inconsistency," demanded a "special inspection" of DPRK’s military objects, complicating the nuclear issue of the Korean peninsula.

The US invited the the IAEA general director to a US house of representatives joint hearing on July 22, 1992, toinform it of the DPRK’s nuclear programme, while urging him to conduct a "special inspection" or "surprise inspection" of the DPRK.

Raising a hue and cry over the "suspected nuclear development" in the DPRK, the U.S. instigated some of the IAEA Secretariat and certain member nations of the agency to adopt at the February, 1993, meeting of the IAEA Board of Governors an unreasonable "resolution", which called for an inspection of the DPRK’s military facilities that have nothing to do with nuclear activities.

Timed to coincide with the adoption of this "resolution", the U.S. resumed the already suspended "team spirit" again seriously threatening the DPRK’s sovereignty and right to existence.

Talks between the DPRK and the U.S. were held to discuss the "nuclear issue" at the former’s request, but came to a rupture owing to the long-standing hostile relationship and distrust between the two countries.

Under the prevailing situation, the DPRK proclaimed a semiwar state to defend the sovereignty and security of the country and decided to withdraw from the NPT on March 12, 1993 to protect its supreme interests.

It also took a measure of withdrawing from the IAEA on June 13, 1994 as the June 10, 1994, meeting of its Board of Governors adopted a resolution on the suspension of the agency’s cooperation with the DPRK, calling for opening its military objects under the pretext of the "nuclear issue".

The DPRK-U.S. joint statement was adopted on June 11, 1993, after several rounds of the bilateral negotiations.

In the statement, the U.S. promised not to use force including nukes against the DPRK nor threaten it with them but respect its sovereignty and refrain from interfering in its internal affairs. And the DPRK decided to temporarily suspend the effect of its withdrawal from the NPT as long as it considers necessary.

The DPRK had thus been placed in a unique status as regards its relations with the NPT.

This unique status was also recognized by the United States and the IAEA Secretariat.

After the publication of the DPRK-U.S. joint statement, three phased talks took place between the two countries and they resulted in the adoption of the DPRK-U.S. Agreed Framework on October 21, 1994 which called for a fundamental solution to the nuclear issue on the Korean peninsula.

The report elaborates on how the DPRK’s withdrawal from the NPT on which it had declared a moratorium took effect.

It says:

The U.S. had no will to implement the AF from the beginning and has systematically violated the AF, calculating that the DPRK would collapse.

It has not honored its commitment to provide LWRs to the DPRK. The key point of the AF is the U.S. provision of LWRs to the DPRK in return for its freeze on nuclear facilities.

The U.S. deliberately delayed its conclusion of a contract on the provision of light water reactors to the DPRK, urging it to receive South Korean type LWRs.

As a result, the agreement on the provision of LWRs between the DPRK and the U.S.- led Korean Peninsula Energy Development Organization (KEDO) was concluded on December 15, 1995, almost 8 months after April 21 of the same year, the last day pointed out in the AF.

Only site preparation has been made in the project of the LWRs which the U.S. committed itself to provide to the DPRK by 2003 under the AF.

Due to the US delayed provision of LWRs the DPRK suffered a huge loss of electricity and underwent a grave economic crisis which led to the present situation where even its right to existence is seriously threatened.

The US has not sincerely honored its legal commitment to annually supply 500,000 tons of heavy oil to the DPRK in compensation for the energy loss caused by its freeze on graphite-moderated reactors and their related facilities until No 1 light water reactor power plant is completed in line with Paragraph 2 of Article 1 of the AF.

At the DPRK-US New York Talks held in March 2000 the DPRK side suggested the US to compensate for the loss of electricity caused by the delayed provision of the LWRs. On November 14 last year the US decided to stop supplying heavy oil to the DPRK from December, thus abandoning the last commitment it had been honoring under the AF.

This compelled the DPRK to restart its nuclear facilities, which had been frozen under the AF, to make up for a vacuum created in power generation due to the US decision to stop supplying heavy oil to the DPRK.

According to Article 2 of the AF, the DPRK government decided to lift the measures whereby the US made goods were restricted from entering into the DPRK and the US-flagged trading vessels were banned from entering ports in the DPRK when involved in the DPRK’s trade with other countries from mid-January, 1995, three months since the adoption of the AF.

But the US lifted only part of such symbolic sanctions applied against the DPRK in travel, telecommunications, finance and passage of territorial air but did not take any substantial measures to ease sanctions in such fields as trade and investment barrier.

Under Article 3 of the AF the US is committed to give the DPRK formal assurances against the use or threat of nukes.

In 1993 when the DPRK –US talks were under way for a peaceful settlement of the nuclear issue on the Korean peninsula, the US worked out a "new operation plan 5027" for a preemptive nuclear attack on it behind the curtain of the dialogue and systematically stepped up its preparations to put it into practice to stifle the DPRK.

From early in 1995 "Foal Eagle 95", "Hoguk 96", "RIMPAC 98". "Hwarang 98", "Ulji Focus Lens" joint military exercises and other nuclear war exercises targeted against the DPRK were frantically staged on the land, sea and in the air in all parts of south Korea almost everyday every year.

In February 1997 the US moved depleted uranium shells from its Okinawa base to south Korea to deploy them there for an actual war and on June 8 that year it issued "an interim report" on the reexamination of the "US-Japan Defence Cooperation Guidelines", in Honolulu.

In January 1999 the US defense secretary and the chairman of the US joint chiefs of staff flew into south Korea to hold the 20th meeting of the "Military Commission" and the 30th "annual security consultative meeting" with south Korea brasshats at which they released a joint statement. In that statement they claimed that the DPRK remained a constant threat to their national interests and they would strongly retaliate against the DPRK with nukes and all other means in case of emergency.

No sooner had the authorities of the Bush administration taken office then they adopted it as their policy to stifle the DPRK by force and put the already started bilateral talks in total stalemate.

Bush went to lengths of letting loose vituperation against the supreme leadership of the DPRK and dubbed the DPRK "part of an axis of evil" in his "state of the union message" delivered at the congress on January 30, 2002.

In the wake of the Pyongyang visit of the US president’s special envoy early in October last year the Bush administration groundlessly pulled up the DPRK, asserting that it has pushed ahead with its nuclear program in violation of the AF, and blustered that there would be no bilateral talks and that would adversely affect the DPRK-Japan and Inter-Korean relations unless the DPRK scraps its program.

The US insisted on the brigandish assertion that the DPRK should receive nuclear inspection though it was stipulated in Article 4 of the AF and in point 7 of the confidential MOU under the AF that the DPRK would receive it only after turbine, generator and other non-nuclear parts of LWRs are delivered to it, thus driving the situation to a phase worse than what was early in the 1990s.

The US again instigated the IAEA on Jan 6 this year to adopt an anti-DPRK "resolution" in the wake of the similar one on Nov 29 last year.

The US which openly scrapped the AF, instigated even the IAEA to internationalise its moves to stifle the DPRK, thus putting into practice its declaration of a war against the DPRK. This compelled the DPRK to withdraw from the NPT, which is being misused as a tool for implementing the US hostile policy toward the DPRK, in order to protect its sovereignty and right to existence.

As seen above, the nuclear issue to the Korean peninsula is a product of the US hostile policy toward the DPRK and, therefore, it is an issue to be settled between the DPRK and the US through negotiations.

The conclusion of a non-aggression treaty between the DPRK and the US would provide the only realistic way of fundamentally solving the nuclear issue on the Korean peninsula and peacefully settling the obtaining grave situation.

If the US signs the treaty and legally assures the DPRK of its non-aggression including the non-use of nukes, the DPRK can also clear the US of its security concerns.

Though the DPRK pulled out of the NPT its nuclear activities will be limited to peaceful purposes including power generation at the present.

Korean Central News Agency