MONGOLIA-DPRK ECONOMIC DISCUSSIONS CONTINUE; GOM

C O N F I D E N T I A L ULAANBAATAR 000375

SIPDIS

STATE FOR EAP/CM, EAP/K, S/NKP, ISN/NNPN, ISN/NESS, EEB
ENERGY FOR KAY THOMPSON

E.O. 12958: DECL: 12/29/2029
TAGS: ECIN EMIN ENRG ETRD PGOV PREL SCUL MG
SUBJECT: MONGOLIA-DPRK ECONOMIC DISCUSSIONS CONTINUE; GOM
ALSO CONSIDERING OTHER NUCLEAR AND EDUCATION INITIATIVES

REF: EAP/CM 12/23 NIGHT NOTES TO EMBASSY ULAANBAATAR

Classified By: Political Officer Dan Rakove for reasons 1.4 (b) and (d)


1. (C) SUMMARY: Dr. UNDRAA Agvaanluvsan, professor of nuclear
energy issues and policy at Stanford University and newly
appointed Deputy Director of the in-house think tank of
Mongolia's National Security Council, informed Embassy
officers on December 26 that the DPRK and Mongolia continue
to discuss increased bilateral trade and exchanges. This
will be a major topic of discussion during Foreign Minister
Zandanshatar's visit to the DPRK at the end of January 2010.
Undraa also discussed a separate effort by her and other
Stanford faculty to host a US-DPRK-Mongolia trilateral
meeting in Mongolia in Spring 2010. Separately, Undraa
described a proposed Mongolia Nuclear Initiative to establish
an international uranium enrichment zone that could provide
nuclear fuel to the region while supporting geopolitical
stability through Mongolia's neutrality and repudiation of
weaponization ambitions. Finally, Undraa expressed a strong
interest in Peabody-sponsored mining scholarships at the
University of Arizona. END SUMMARY.

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Background
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2. (SBU) Dr. UNDRAA Agvaanluvsaa was recently appointed as a
Deputy Director of the National Security Council's in-house
think tank, the Institute for Strategic Studies (ISS). She
told Embassy officers on December 26 that beyond her ISS
duties she is the government's point person on nuclear
issues. Undraa is currently a visiting professor at Stanford
University's Center for International Security and
Cooperation (CISAC),but will leave the university in
mid-March due to her new position with ISS. Though invited
to join FM Zandanshatar's planned visit to North Korea in
late January 2010, her teaching obligations through March may
prevent her attendance.

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GOM and DPRK Economic Ties
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3. (C) EmbOffs met with Undraa to discuss the FM's upcoming
visit to North Korea. Undraa confirmed that FM Zandanshatar
will visit North Korea, and stated it would likely be in late
January, following the conference at Davos. He will likely
be accompanied by Mongolia's Vice Ministers of Defense,
Agriculture, and Labor. In addition to discussing economic
ties, Undraa described the meeting as an opportunity for her
government to urge the DPRK to open up. She recounted that
before he became FM, the North Koreans told MP Zandanshatar
that they needed nuclear weapons because they are "cornered."
Zandanshatar replied that faced with a similar geopolitical
situation Mongolia had succeeded through greater engagement
under its Third Neighbor Policy.


4. (C) Heavily reliant upon Chinese labor, Undraa reported
that Mongolia is interested in bringing in North Korean
metallurgical experts as well as agricultural workers for
work in Selenge Province, potentially to ship the resultant
grain to the DPRK. Undraa also expressed an interest in
gaining access to DPRK ports. The DPRK in turn is interested
in any available economic exchanges and trade, and has sent
and plans to continue sending prominent officials to Mongolia.


5. (C) Embassy officers shared ref points provided by EAP/CM
and EAP/K regarding the FM's planned trip to the DPRK. After
being demarched, Undraa stated it would be best for Post to
follow-up directly with the Foreign Minister regarding U.S.
concerns about the visit to the DPRK since she may not see
the FM in person before the trip.

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Stanford-Based Initiatives on the DPRK
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5. (C) Undraa stated that she and other Stanford faculty are
also engaged with a couple of nominally private initiatives
on North Korea. The first is to organize a trilateral
US-DPRK-Mongolia meeting in Mongolia in the spring. She
attributed this idea to former Secretary of Defense William
Perry, and spoke of working with professors John Lewis
(emeritus) and Siegfried Hecker as well. It is motivated by

the notion that Mongolia enjoys good relations with both the
US and the DPRK.


6. (C) The second initiative is to establish remote
diagnosing facilities in China and Mongolia for tuberculosis
in North Korea. This project is also a product of John Lewis
and Undraa's discussions. Lewis previously hosted North
Korean health officials in the Bay Area for preliminary
discussions. He intends to follow up with his DPRK contacts
as well as with the WHO. Undraa said that she and her
Stanford colleagues may follow-up directly with State
Department and other US officials in Washington regarding
these two initiatives prior to her departure from the
university and return to Mongolia in March.

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Mongolia Nuclear Initiative
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7. (C) Undraa aspires to make Mongolia a supplier of enriched
uranium to the region. Whereas current supplies originate
from Russia or Western countries, Undraa spoke of a Mongolia
Nuclear Initiative (MNI) to fill a niche as a small, neutral
country without ambitions for nuclear weapons. Although
Undraa allowed that political support for the initiative is
yet unknown, the MNI envisions an international enrichment
zone, likely in Mongolia's south or southwest, operated by
international technical experts and designed largely for
export to China and through Dalian to Japan if not elsewhere.
This proposal is inspired by the IAEA's framework for
multinational arrangements and discussions with Stanford
emeritus professor Burton Richter; the broader initiative
proposes similar international zones in other regions.
Undraa reported that a January meeting at Stanford's Hoover
Institution involving professor Thomas Isaacs and U/S Ellen

Tauscher will focus upon the idea of multinational
arrangements.

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Education Initiatives
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8. (SBU) Undraa raised the issue of U.S.-based Peabody
Energy's efforts to fund scholarships for Mongolian students
to attend the University of Arizona (UA). While at Stanford,
Undraa has served at the Director of the Mongolian-American
Scientific Research Center (MonAme),which focuses on
research and training. Post had heard previously from
Peabody that they are seeking to fund four bachelor's degree
scholarships at UA and two master's degree scholarships at
the Colorado School of Mines, but this was the first
indication of MonAme's involvement. According to Undraa,
MonAme will help identify and recruit Mongolian students, and
is also working on the visit of Mary Poulton, UA's Dean of
the School of Mining, from January 8 to 15. MonAme is also
participating in the steering committee exploring the pursuit
of an American University in Ulaanbaatar.
ADDLETON