North Korea cites an energy crisis, which is real. However, the crisis is not due to shortage of fuel (half a millions tons of heavy fuel oil per year from the US, two light water nuclear reactors, vast deposits of coal and the prospect of an oilfield beneath West Korea Bay). Much of the electricity is derived from hydro-power. It is North Korea’s infrastructure that is at fault – an aging power grid and the inability to transport sufficient coal to power stations because of a poor rail network.
North Korea is strapped for cash. It either can’t or won’t invest in new a infrastructure to improve the generation and distribution of electricity. Instead it wants Yongbyon back on line. The problem is, the two light water reactors supplied by the US are good at generating electricity but need slightly enriched Uranium which is useless if you want to produce weapons grade Plutonium. North Korea’s nuclear weapons programme was stalled when IAEA closed down the Yongbyon plant because it CAN produce weapons grade Plutonium.
Russia, which shares a border, does not want North Korea to begin nuclear proliferation. China and South Korea, who also share borders with North Korea, can’t be too happy about the prospect either. Strangely, after some initial political posturing and sabre rattling, the US has backed away from the problem leaving North Korea to do what it wants for the time being. Maybe it’s clearing the way to having Russia and China pick the coals out of a very hot fire. Perhaps a diplomatic solution is being sought to prevent a mad dictator from getting his ands on nukes.
North Korea is in the grip of a suspicious and increasingly paranoid Stalinist dictatorship. They may already possess fissile material. However, Bush and Blair consider Iraq to be the greater threat. There is no tangible proof that Saddam possesses nukes or the means to produce weapons grade plutonium although it is possible that he has managed to buy some.
North Korea is known to supply arms and equipment to so called Evil Axis countries. There is a possibility that bankrupt North Korea might set up a trade in nuclear weapons. However, North Korea lacks massive oil reserves and poses the greatest danger to South East Asia and Japan, whose economies rival that of the US.
Make of that what you will.
Of Course, there is the possibility that Bush's firm grasp of the world's political arena elicited the classic response, "North whut?".