Introduction

The Democratic People's Republic of Korea (DPRK – North Korea) occupies the northern half of the Korean Peninsula, bordering China and Russia, and has a population of 24 million. North Korea is a highly centralised state ruled by the Korean Workers' Party, and led by Kim Jong-un, the grandson of North Korea's founder, Kim Il-sung, who took power in the north after 1945 with the support of the Soviet Union.

North Korea's invasion of the Republic of Korea (ROK – South Korea) on 25 June 1950—an attempt to unify the Korean Peninsula through force—was condemned and opposed by the UN Security Council. Australia was one of 16 nations that dispatched combat troops to defend South Korea in a war that lasted three years, and cost millions of Korean lives and 339 Australian lives. The Korean War ended with an armistice in 1953. However, North Korea continues to conduct military provocations against South Korea that threaten the stability of the peninsula. These include the sinking of the South Korean naval vessel Cheonan and the shelling of Yeonpyeong Island in 2010, which together left 50 South Korean citizens dead.

An economic collapse in North Korea in the 1990s led to a famine in which millions of North Koreans were reported to have died. North Korea’s economy has not grown significantly since then, but the regime has continued to invest heavily in its military and its missile and nuclear programs. North Korea tested plutonium-based nuclear devices in 2006 and 2009. The regime has admitted to running an illegal uranium-enrichment program and has tested long-range ballistic missile technology, most recently on 12 December 2012. North Korea declared it had conducted a third nuclear test on 12 February 2013. The test is in clear violation of UN Security Council Resolutions 1718 (2006), 1874 (2009) and 2087 (2013) and the Security Council is considering its response.

The new leadership of Kim Jong-un, who took over after the death of his father, Kim Jong-il, in December 2011, has not yet made any moves towards greater political and economic openness, the protection of human rights or nuclear disarmament. Ordinary North Koreans remain almost entirely cut off from the global economy and information about the outside world. China is North Korea's largest trading partner and its principal external economic partner.

Government, business and people-to-people links

Australia and North Korea first established diplomatic relations in 1974, and Australia had an Embassy in Pyongyang for several months in 1975, until our diplomats were expelled without adequate explanation. Australia has not reopened an embassy in Pyongyang since, but maintains diplomatic accreditation to North Korea through the Australian Ambassador in Seoul, South Korea. A North Korean Embassy operated in Canberra from 1974 to 1975 and from 2002 to 2008, when it closed for budgetary reasons. The North Korean Ambassador in Jakarta, Indonesia, is accredited to Australia.

North Korea is seeking to re-open its embassy in Canberra, which the Australian Government does not oppose because it would provide a readily available channel to Pyongyang to convey messages of importance to Australia, including on the North's nuclear and missile activities and human rights. The Australian Government postponed the arrival of North Korea’s embassy set-up team following the North’s 12 February nuclear test.

The Australian Government implements fully UN Security Council sanctions against North Korea and imposes a number of additional autonomous sanctions, including financial sanctions, a ban on North Korea -flagged ship visits, and a travel ban on North Korean nationals visiting Australia.

Australia's bilateral aid program in North Korea was suspended in 2002, following disclosure of North Korea's nuclear program. However, Australia has continued to provide humanitarian assistance through the United Nations and other multinational agencies (including $8.5 million in 2011–12) to relieve the suffering of the vulnerable, including children, pregnant and nursing women and the elderly. Australian humanitarian assistance to North Korea is subject to strict monitoring and verification conditions, and has consisted of the provision of therapeutic foods to treat the severely malnourished and nutritional supplements to make fortified biscuits, as well as clean drinking water systems.

There is currently no trade or investment of any significance taking place between the two countries.

Towards 2025

Australia is willing to develop the bilateral relationship further if North Korea demonstrates its sincerity in pursuing denuclearisation and undertakes confidence-building measures on the Korean Peninsula.

In future, Australia would hope to see North Korea recognise that its real security depends on engagement with its neighbours and the broader international community, and not with isolationism. Australia will continue to urge North Korea to reform, open-up its economy and improve the human rights of its citizens. Should North Korea decide to engage constructively with its neighbours and the international community and denuclearise (real signs of which there are none at present), Australia would stand ready to help North Korea re-enter the community of Asian nations and rebuild its shattered economy.

The reconstruction of North Korea will be a herculean task, but many countries are willing to help if North Korea changes its policies. Australian expertise and technology in the mining, construction and agricultural sectors, in particular, could make major contributions to the country's reconstruction. In the meantime, Australian commercial and investment engagement with North Korea is likely to remain limited by UN and Australian sanctions, but also by restrictions that North Korea places on private enterprise and by its poor commercial infrastructure.