Foreign Assistance to North Korea

Publication Date: May 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

Type:

Coverage: Korea (North)

Abstract:

Since 1995, the United States has provided over $1 billion in foreign assistance to the Democratic People's Republic of North Korea (DPRK, also known as North Korea), about 60% of which has taken the form of food aid, and about 40% in the form of energy assistance channeled through the Korean Peninsula Energy Development Organization (KEDO). Additionally, the Bush Administration has proposed offering North Korea broad economic development assistance in exchange for Pyongyang verifiably dismantling its nuclear program and cooperating on other security-related issues. Although the President has considerable flexibility to offer some forms of short term development assistance, longer term aid would likely require congressional action.

Since the current North Korean nuclear crisis erupted in October 2002, when North Korea reportedly admitted that it has a secret uranium enrichment nuclear program, the dollar amount of U.S. aid has fallen by an order of magnitude. No U.S. funds have been provided to KEDO since FY2003, and the Bush Administration's position is that it would like to permanently end the KEDO program. U.S. food aid also has fallen considerably in recent years. Food has been provided to help North Korea alleviate chronic, massive food shortages that began in the early 1990s and that led to severe famine in the mid-1990s that killed an estimated 1-2 million North Koreans. Food aid to North Korea has come under criticism because the DPRK government restricts the ability of donor agencies to operate in the country, making it difficult to assess how much of each donation actually reaches its intended recipients and how much is diverted for resale in private markets or to the military. Compounding the problem is that South Korea and China, by far North Korea's two most important providers of food, send almost all of their aid directly to North Korea with virtually no monitoring. The WFP says that food conditions have worsened since North Korea introduced economic reforms in 2002.

The Administration appears to be loosely adhering to its DPRK food aid policy (i.e. it will provide base levels of food assistance to North Korea) with more to come only if the DPRK allows greater access and monitoring. After announcing the policy in February 2003, the Administration announced a new tranche of food aid, despite only marginal improvements on the ground. New North Korean restrictions in 2004 are likely to complicate U.S. policy. A decision on food aid for 2005 has yet to be reached. The North Korean Human Rights Act (P.L. 108-333) includes hortatory language calling for "significant increases" above current levels of U.S. support for humanitarian assistance to be conditioned upon "substantial improvements" in transparency, monitoring, and access.

This report describes and assesses U.S. aid programs to North Korea, including the controversies surrounding the programs, their relationship to the larger debate over strategy and objectives toward the DPRK, and policy options. The roles of China, South Korea, and Japan in providing assistance to North Korea are discussed, highlighting the likelihood that any dramatic decrease in U.S. aid to North Korea may have only marginal effects without the cooperation of these countries, particularly China and South Korea. This report will be updated as circumstances warrant.