Lifted Sanctions Unlikely to Bring Immediate Economic Benefits to North Korea

The North Korean people are told to remain on constant vigil against American attack, and that the food shortages and constant blackouts they suffer are caused by U.S. sanctions.

Better relations with Washington, signaled by the latest progress in their nuclear standoff, could eventually lead to an improvement in the dire economic situation for the country's 23 million people. But with many steps to go in the North's disarmament, analysts say that is unlikely to happen anytime soon.

The United States announced Thursday it would lift key trade sanctions against the North and remove it from a U.S. terrorism blacklist as a reward for Pyongyang submitting a long-awaited list of its nuclear programs.

The concessions have been among the North's long-coveted goals on the way to its No. 1 foreign policy objective: full diplomatic ties with Washington.

"North Korea is likely to use the rapid progress as propaganda to its people, saying: 'We won a diplomatic victory,"' said Kim Yong-hyun, a North Korea expert at Seoul's Dongguk University. "That would give North Korean people expectations for a better life."

The North's removal from the terror list, which will happen 45 days later, would theoretically clear the way for the impoverished nation to seek low-interest development loans from U.S.-controlled international lenders, such as the International Monetary Fund.

But such loans are not possible unless Pyongyang makes significant progress in dismantling its nuclear programs and opening up to the outside world. Washington's easing of trade sanctions under the an act limiting trade with enemy countries will also have little effect on the North's economy as the communist nation remains subject to a host of other sanctions.

The actions "won't bring any immediate benefits to the North's economy," said Yang Moo-jin, a professor at Seoul's University of North Korean Studies. "They're only meaningful in that they symbolize a shift in the U.S. hostile policy toward the North."

U.S. Secretary of State Condoleezza Rice also said in an opinion article contributed to the Wall Street Journal on Thursday that "nearly all restrictions" to be lifted with regard to the enemy act "will remain in place under different U.S. laws and regulations."

Still, Thursday's progress, which will be followed by the North blowing up the cooling tower at its main Yongbyon reactor, would pave the way for the remainder of the economic aid — pledged to the North under the disarmament agreements — to flow into the country more smoothly.

Pyongyang was promised 1 million tons of oil worth of economic aid under the nuclear pacts. But only about 40 percent of that has gone to the North so far, which had earlier caused the North to slow its work to disable the nuclear reactor.

If disablement picks up, more of the oil and energy aid will begin flowing again.

North Korea faces the worst food shortages in years due to severe floods that devastated its farmland last year. The country has relied on foreign handouts to feed its population since mismanagement and natural disasters devastated its economy in the mid-1990s. As many as 2 million people are estimated to have died of famine then.

The North's goodwill could also facilitate Washington's promised food aid of 500,000 tons and encourage other nations to join in providing humanitarian assistance to the communist nation, analysts said.

The World Food Program says the first shipment of the U.S. food aid is supposed to arrive in Pyongyang this week.

"North Korea has been considered a rogue nation, but its removal from the terror list would make it look more like a normal country," Yang said. "That would make other nations to feel more comfortable in providing assistance to the North."

More aid will depend on whether the North allows monitoring to ensure it reaches the needy, something the reclusive country has been touchy about in the past.

"We hear from many escapees and refugees in very bad conditions, who should have been beneficiaries of food aid, that they had not received it," said Kay Seok, Korea researcher for U.S.-based Human Rights Watch.

For the situation to improve, she said the North will "have to allow foreign aid workers into the country to conduct proper monitoring of aid."

Neighboring South Korea has also recently offered aid to the North. But Pyongyang has refused to say if it would accept help from the new conservative Seoul government, which has said the North should give something in return like release of POWs and other citizens captured since the end of the Korean War.

The progress in the nuclear standoff received little attention on the streets of Seoul, where protesters against a deal to resume U.S. beef imports clashed with riot police — shunning the meat for health concerns. South Korea is long used to the North Korean threat that has existed since the Korean War ended in a 1953 cease-fire.

"Beef is a more important and urgent issue for us because it is about our basic right to eat something safe," said Shin Hae-kyung, 36, an office worker holding a candle during a rally where hundreds of others shouted anti-government slogans. "I think the North Korean nuclear issue is a long-term matter."