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North Korea

Power play ignores North's power crisis

PUBLISHED : Saturday, 03 November, 2007, 12:00am
UPDATED : Saturday, 03 November, 2007, 12:00am

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One of the most significant problems facing North Korea grows more apparent the further away you stand - in space, even. Glance at a satellite photo of the region at night and the hermit state is conspicuous only by its absence.

All other countries, and even many islands, are ablaze with light. Big cities such as Shanghai, Tokyo and Seoul shine like large diamonds on the black silk of a dealer's tray. North Korea, however, is totally dark, apart from a tiny point of light that marks Pyongyang.

The image stands as a stark reminder of the country's electricity woes. It is often forgotten that North Korea is primarily an industrial, rather than agricultural country, reflecting the fact that much of its hinterland is mountainous. With ample rivers and coal, 40 years ago it was able to power a Soviet-designed industrial heartland that made it a richer country than South Korea. Now, after decades of mismanaged central planning and bankruptcy, North Korea's dams are struggling to function, its mines inefficient and what is left of its national power grid crippled. Electricity output has slumped 30 per cent since 1990.

The importance of electricity is difficult to underestimate as Pyongyang embarks on a flurry of international engagement. Signs of progress on the six-nation agreement pledging to get rid of North Korea's nuclear weapons are raising the long-term prospect of a new era of peace and diplomatic normality on the Korean Peninsula.

Last month saw the first North-South summit in seven years. South Korean President Roh Moo-hyun returned triumphant to Seoul after his three-day visit to Pyongyang to meet Kim Jong-il with a better-than-expected package of pledged projects. Precise details may be vague, but they are certainly ambitious - including work to intensify progress at the South Korean-funded industrial park at Kaesong, a second complex at the nearby fishing port of Haeju, and two centres for shipbuilding on the east and west coasts, as well as improvements to roads and railways.

Funding - both amounts and sources - remains vague, with the private Hyundai Research Institute estimating costs to run to at least US$11 billion. Large South Korean industrialists escorted Mr Roh to Pyongyang, but no large firm has yet committed itself to any fresh deal.

As the dust settles from Mr Roh's trip, one question is increasingly being asked as Seoul investors, analysts and officials examine the potential underlying the pledges with Mr Kim. Where is all the power going to come from? Industrial zones need and railways soak up electricity, and shipbuilding - a core South Korean industry - requires massive amounts of energy.

Significantly, however, electricity is not covered among the various infrastructure pledges. Nor was it discussed in any great detail during the summit meetings.

Seoul officials say it is simply too much of a hot potato at this point, given Pyongyang's sensibilities at becoming over-reliant on its vastly richer southern brother and losing the control they crave.

Electricity represents these fears perfectly - giving Seoul the option of flipping the switch at the first sign of real trouble with Pyongyang.

But it is not just simply a question of plugging the North into southern supplies. First, extensive upgrades of the North's grid would be needed to handle the load required. Already the fledgling Kaesong park, home to 17,000 workers, is too much to be handled by the northern system. Electricity is discretely wired-in from the South, but not plugged into the North's grid.

'It is a key question, but one we cannot sort out yet,' one official admitted. 'Until we do, it makes all the plans unveiled last month look even more ambitious ... at some stage soon we are going to have to sit down and talk power.

'They still don't completely trust us on this.' It may be a problem the wider region, rather than South Korea, is left to fix.