- SEOUL (Reuters) - North Korea
said Monday victory would be certain for the communist state in any nuclear
war with the United States thanks to the "army-first" political
system of the heavily armed but impoverished North.
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- As a crisis over Pyongyang's suspected drive to build
nuclear weapons passed the four-month mark, Seoul's central bank said South
Korea could miss its 2003 growth target if the crises over Iraq and North
Korea dragged on.
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- The United States and South Korea announced Monday the
schedule for annual bilateral military exercises to be held in the South
in March and April. The U.S. Forces Korea said the allies had informed
the North about the war games.
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- North Korean state media returned to saber-rattling after
a weekend of reinforcing cult worship of reclusive leader Kim Jong-il.
It was Kim's 61st birthday Sunday.
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- "Victory in a nuclear conflict will be ours and
the red flag of army-first politics will flutter ever more vigorously,"
state radio said, reported by South Korea's Yonhap news agency.
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- "Our victory is certain and the future ever more
radiant," it said, touting the dominance of the army in the world's
most heavily militarized society.
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- The million-strong Korean People's Army, out of a population
of 22.5 million, is the world's fifth-largest and military spending accounts
for as much as a quarter of the economically struggling country's gross
domestic product.
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- PERSISTENT WAR TALK
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- War warnings and claims the United States is poised to
attack North Korea have been almost daily fare in Pyongyang's official
media since the nuclear crisis flared up last year.
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- South Koreans have lived within range of forward-deployed
North Korean artillery for years and have largely played down recent threats.
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- But the prolonged nuclear impasse has raised concerns
about the South's economy as President-elect Roh Moo-hyun prepares to assume
power on February 25 from President Kim Dae-jung.
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- "We will maintain a low interest rate policy...as
our economy may fail to meet expectations if the uncertainty over war in
Iraq and North Korea's suspected nuclear programs is prolonged," said
the central Bank of Korea in a statement to parliament.
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- The standoff over North Korea's suspected nuclear program
has been simmering since mid-October, when Washington said Pyongyang had
admitted to pursuing a program to enrich uranium in violation of major
international treaty commitments.
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- Since then, North Korea has expelled U.N. nuclear inspectors
and withdrawn from the treaty that aims to curb the global spread of nuclear
weapons and said it was ready to restart a mothballed reactor capable of
producing plutonium for bombs.
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- Pyongyang has insisted that it only intends to produce
electricity for its decrepit economy and that the nuclear row is a bilateral
dispute with Washington that can only be resolved through two-way talks
leading to a non-aggression treaty.
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- But a vote on February 12 by the International Atomic
Energy Agency (IAEA), the U.N. nuclear watchdog, referring the nuclear
issue to the Security Council was seen as a rebuff to North Korea's insistence
on a bilateral solution.
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- The Security Council has the power to impose economic
sanctions -- a step North Korea has said would amount to a declaration
of war.
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- TALKS NOT SANCTIONS
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- But the IAEA says its members had no plan to push for
sanctions now. North Korea's allies Russia and China and neighbors including
South Korea are against sanctions.
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- The United States has said it has no intention of invading
North Korea and is willing to talk to Pyongyang but not to negotiate any
new nuclear deal.
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- The incoming Roh is keen to see talks get under way soon.
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- "Our stance is that the U.S. needs to talk with
North Korea if it has no intention of attacking," Roh said in a weekend
speech to labor unionists.
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- Last week, Central Intelligence Agency Director George
Tenet reiterated U.S. intelligence estimates that North Korea has already
extracted enough plutonium for one or two nuclear bombs.
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- Britain's Sunday Telegraph quoted North Korea's director
of energy Kim Jae-rok as saying the country planned to build four nuclear
power plants, each bigger than the mothballed Yongbyon plant Pyongyang
has vowed to reactivate.
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- Kim told the newspaper "desperate measures"
were needed to tackle the country's heat and lighting shortages, but insisted
North Korea was not producing nuclear weapons at its existing facilities
and would not use the planned new plants to do so.
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- The United States keeps 37,000 troops in South Korea
under a 50-year-old alliance formed to deter a repeat of the North Korean
invasion of the south that sparked the 1950-53 Korean War.
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- The allies said they would hold their annual Reception,
Staging, Onward Movement and Integration (RSOI) exercises from March 19
to 26. The related Foal Eagle drill would be held from March 4 to April
2, they said.
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