U.N. suspends N. Korea aid program

The U.N. Development Program said Monday that it had suspended its operations in North Korea after the nation rejected conditions it set to ensure U.N. money was not being diverted to Kim Jong Il’s regime.

The move came as North Korea’s top nuclear negotiator and American envoys held talks Monday about renewing diplomatic relations if the Pyongyang government scraps its nuclear weapons program in exchange for U.S. aid. The two countries have been foes since the 1950-53 Korean War.

North Korean Vice Foreign Minister Kim Gye Gwan met with Christopher Hill, the top American negotiator, at six-nation talks on the North’s nuclear program. Those discussions will continue today.

U.S. State Department spokesman Sean McCormack played down prospects of a breakthrough, despite expectations that the U.S. might lift restrictions on a Macao bank suspected of helping Pyongyang launder money. He said the agenda would include U.S. trade sanctions as well as Washington’s designation of North Korea as a state sponsor of terrorism.

Washington wants Pyongyang to follow through on a Feb. 13 agreement to shut down its main nuclear facility within 60 days and allow access to United Nations nuclear inspectors, who are to visit next week to discuss dismantling the country’s nuclear program.

While the nuclear program negotiations continue at the U.S. ambassador’s suite at the Waldorf-Astoria hotel in New York, North Korean diplomats at the U.N. were reeling from the Development Program’s announcement.

The suspension affects 20 projects with a budget of $4.4 million, including food production and efforts to help the government improve systems to manage the economy. Eight international staffers are being recalled from Pyongyang, and 15 North Korean employees will probably lose their jobs.

After charges by the U.S. this year that lax accounting meant that U.N. money could be diverted for illicit uses, the development agency’s board, which includes North Korea, voted unanimously Feb. 25 to change the way it operated in the country. The reforms included stopping the payment of salaries in euros to the North Korean government and local staff, refusing to employ government officials as UNDP workers, and narrowing its programs to those that help the people, but not the government. It also agreed to an outside audit.

But North Korean Ambassador Pak Gil Yon refused to accept the new conditions during a Thursday meeting with the program’s associate administrator. The next day, UNDP administrator Kemal Dervis informed Pak that the agency “had no choice” but to suspend the program.

“For us, these conditions were nonnegotiable,” said spokeswoman Christina LoNigro. “They came from our board, and we would reconsider restarting our program if these conditions were met.”

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maggie.farley@latimes.com