Asia-Pacific

North Korean eyes open as Hillary Clinton passes by

A North Korean soldier watches Mrs Clinton on a visit to the DMZ
Image caption Mrs Clinton was briefly on the North Korean side of the room

The curious North Korean soldier peering through the window must have had quite the surprise.

Instead of the usual group of camera-toting tourists inside the sky blue building straddling the demilitarised border between North and South Korea, two high-profile visitors and their retinue of advisors and bodyguards were being briefed by an American commander from the UN Central Command.

The Secretary of State Hillary Clinton and Robert Gates, the defence secretary, did not peek back.

The visit to the demilitarised zone (DMZ) separating the two Koreas appeared almost like a poke in the eye of North Korea by a US administration frustrated by its inability to restart denuclearisation talks with Pyongyang in the last year-and-a-half.

Its hands tied by the fear that if it pushes Pyongyang too aggressively it could aggravate tensions on the Korean peninsula and cause a crisis with Beijing, Washington is reduced to relying on mostly symbolic gestures.

Among those are joint US-South Korean military exercises, further sanctions targeting a North Korean elite that has survived years of sanctions and the dramatic visit to the last remaining Cold War dividing line - which seemed to unnerve the men guarding Kim Jong-il's isolated country.

Dividing line

Not since Madeleine Albright's visit to Pyongyang in 2000, has a US cabinet member been so close to North Korea.

Image caption The border between North and South Korea runs through the table

In fact, for just a few minutes, Mrs Clinton and Mr Gates were actually in North Korea, or at least in the North's side of the Military Armistice Commission meeting room in the DMZ.

The rectangular building has one door opening onto the South, the other onto the North, guarded on the inside by a South Korean soldier from the Joint Security Area.

The stern looking North Korean soldier was standing just north of the dividing line that runs through the building. Perhaps he wanted to make sure Mr Gates and Mrs Clinton were not walking through the North's door and into his territory.

The large group surrounding Mrs Clinton and Mr Gates was continuously monitored from across the border, with one North Korean guard taking pictures from the steps of Panmungak, a grey Stalinist structure overlooking the border, and Freedom House, the ceremonial building on the southern side.

Under a light drizzle, the group moved in and out of Freedom House amidst some indecision about where the two secretaries would make their comments to the press.

As the journalists, advisors and guards walked down the steps of Freedom House towards the MAC building, an alarmed North Korean guard ran down the steps of Panmungak towards the border.

"It struck me that although it may be a thin line, these two countries are worlds apart," said Mrs Clinton during the visit, which was planned to mark the 60th anniversary of the Korean war.

Luxury goods

The secretary of state said that while South Korea had made extraordinary progress, the North had "stagnated in isolation".

Image caption The sanctions are aimed at the military elite of North Korea

She later spoke of the "malign" policies of the North Korean leadership, which had caused years of suffering for the North Korean people.

The sanctions she announced in Seoul at the foreign ministry are designed to strike at the heart of the money making machine of that leadership, as well its sale and procurement of arms.

Illicit trade of luxury goods, like cigarettes, alcohol as well as counterfeit bills generates hard currency for North Korea's leadership, which uses the money to buy the support and loyalty of party officials.

At a time of uncertainty inside North Korea amidst growing talk about a possible succession, the money is key.

The sanctions will expand and strengthen measures already in place but it is also expected that new individuals and entities will be designated for sanctions by the US treasury.

Torpedo

The US measures build on existing UN sanctions.

Image caption Tensions have been high since the sinking of the Cheonan

But American officials briefing reporters after the announcement gave precious little details about the measures, how they would work and why they would have an impact.

It raised questions about whether the announcement was mostly part of the elaborate show of support that the US wanted to give its South Korean ally during the visit.

Tensions have been high on the Korean peninsula in the aftermath of the sinking of a South Korean warship by a North Korean torpedo in March. Pyongyang denies any involvement.

The new sanctions are a response to North Korea's ability to circumvent sanctions and exploit loopholes, according to one of the officials.

But it also shows that Washington is running out of options as it tries to pressure North Korea back to the negotiating table, while Pyongyang quietly continues to build its nuclear program.

The one US action that can be effective is the kind that freezes North Korea out of the international banking system.

In 2005, the US Treasury blacklisted the Macau-based Banco Delta Asia as a primary money launderer of North Korean illicit assets.

Even China took note, fearful of running afoul of the US Treasury.

'Renewed commitment'

Eventually the North Koreans came back to the talks, but only after they secured the release of the $25m (£16.5m) the bank had frozen.

That was the weak point in the deal - it effectively meant that North Korea had won the tug of war. Although it engaged in talks again, Pyongyang continued working on its nuclear program.

The same pattern was repeated in 2008, when President George W Bush removed North Korea from the list of state sponsors of terrorism, after North Korea promised to end its program.

It eventually reversed the steps it had taken towards denuclearisation.

The Obama administration has tried to break that cycle by not giving in to Pyongyang, but this has not produced any results yet either.

A second senior official, trying to stem doubts about the new measures, told the BBC that the new sanctions were part of a game plan that could not be discussed in full yet but which would be rolled out in the next couple of weeks.

In the meantime, Seoul seemed reassured by the show of support they received from the US, with newspapers splashing pictures of the high profile visit on their front pages, touting what they saw as a renewed US commitment to defend South Korea.