North Korean Economy Watch

UPDATE 1 (2011-5-3): The Korea Herald offers some more information on the mission:

The World Food Program will increase its personnel residing in North Korea to tighten monitoring of the distribution of donated food, a U.S.-funded radio station reported Tuesday.

The plan comes as the U.N. agency prepares to launch an emergency operation to help feed 3.5 million starving North Koreans by providing 310,000 tons of food within the next year.

The WFP plans to keep 59 agents in the North, an increase from the previous 10. Up to 60 percent of these agents will be tasked with checking whether the food goes to ordinary people rather than the military in the impoverished state, according to the Voice of America.

Pyongyang’s reclusive Kim Jong-il regime has often refused to let outsiders monitor its food distribution process, triggering suspicions that most of the outside aid is being used to feed its army and political elite.

Apparently getting more desperate for outside assistance, the North has agreed to let the WFP agents monitor its food situations in some 400 regions every month, the U.N. body said.

South Korea and the U.S., which remain lukewarm toward resuming full-scale food aid to Pyongyang, suspect that the Kim regime may be stockpiling rice to prepare for potential war or to release on the 100th anniversary of its late founder Kim Il-sung next year.

While the WFP has been calling on the international community to donate 434,000 tons of food to feed starving North Koreans, the two traditional allies also question the accuracy of the assessment made based on Pyongyang’s own statistics on its harvest and rationing.

Among the newly dispatched agents, 12 can speak fluent Korean, the U.S. radio station said, quoting WFP officials.

A total of seven offices, including one in the capital Pyongyang, will open during the emergency operation period, with food being distributed in eight provinces and 109 districts in the North, it added.

In a recent statement, the WFP had stressed that the aid operation in the authoritarian single-party state “will include the highest standards of monitoring and control to ensure that food gets to where it is needed.”

ORIGINAL POST (2011-5-1): According to the UN press release:

The United Nations World Food Programme (WFP) and the UN Children’s Fund (UNICEF) today announced plans to introduce emergency operations in the Democratic People’s Republic of Korea (DPRK) to feed an estimated 3.5 million people in desperate need after crop losses and a particularly bitter winter.

Women and children will be the focus of the one-year WFP operation, which follows an assessment by several aid agencies of food security inside the DPRK, according to a press release issued by the agency. The operation is expected to cost just over $200 million.

UNICEF has launched a $20 million appeal to fund assistance programmes in the five DPRK provinces with the highest rates of malnutrition and in other counties with similar problems.

Although WFP said overall rates of acute malnutrition have not yet reached crisis levels, it warned that the situation could deteriorate rapidly if there is any further reduction in the food intake of those in need.

Many families have already resorted to cutting out the size or number of meals each day, and Government-supplied rations provide only about half of a person’s daily food needs.

“We face a critical window to get supplies into the country and reach the millions who are already hungry,” said Amir Abdulla, WFP’s Deputy Executive Director and Chief Operating Officer.

“Our primary concern is for those who are most vulnerable to shocks in the food supply – children, mothers, the elderly and large families.”

WFP spokesperson Emilia Casella told reporters in Geneva that the assessment found that the severe winter this year had damaged a large proportion of the seed potato stocks needed to plant the next crop.

The vegetable harvest late last year was also down 44 per cent on the expected volume, she said.

Under the operation WFP will provide cereals and the ingredients for the local production of such foods as corn-soy milk, rice-milk blend and high-nutrient biscuits through a public distribution system.

International staff working for the agency will make more than 400 visits each month to provincial markets and distribution points during the operation, and will only have to give 24 hours’ notice to local authorities.

The operation will continue through the harvest expected in October, with specialized nutritious products expected to be distributed then. WFP aims to procure food from neighbouring countries so that it can be distributed as fast as possible.

“WFP has worked in the DPRK for 15 years and we will be drawing on all that experience and expertise to ensure this operation provides vital, timely food and nutrition to those who cannot support themselves through these difficult months,” Mr. Abdulla noted.

UNICEF’s assistance programme will tackle behavioural and structural issues, such as hygiene, infant feeding practices, water and sanitation, as well as direct nutritional needs, agency spokesperson Marixie Mercado said.

Its operation will target more than 400,000 young children and an estimated 165,000 pregnant or lactating women, regarded as among the most vulnerable groups in the current crisis.

Ms. Mercado said the programme will also aim to help children living permanently in institutions as they do not have extended families from which to draw support.

A survey carried out in 2009 found that 32 per cent of DPRK children were stunted, with even higher rates in some rural areas.

Additionally, Greta Van Susteren (Fox News) has announced that she is returning to the DPRK soon.  She always travels with Samaritan’s Purse, so they will probably be launching a program in the DPRK as well. (SMALL UPDATE: Samaritan’s Purse announced they are launching a program)  Wouln’t it be nice if they got get to see Jun, the American detained in the DPRK–reportedly for clandestine evangelism.

The South Korean and US governments have hesitated in providing food aid this spring but they seem to be allowing limited private aid.

There is some debate as to how severe the food shortage is and what should/could be done about it.  Articles from all sides of the debate are cataloged here.

According to the Choson Ilbo:

China said that North Korea has been at the forefront of its international foreign aid efforts which it has been carrying out for the past 60 years.

Speaking at a press conference on Tuesday, China’s Vice Commerce Minister Fu Ziying spoke in detail for the first time about the aid his country has given to the North.

He said that China helped to build Pyongyang’s public infrastructure such as its subway system, but he emphasized that no cash aid has been given.

Beijing issued a white paper last week that outlines its foreign aid policy to Africa and Asia.

Read the full story here:
China Releases Details on Aid to N.Korea
Choson Ilbo
4/28/2011

India is providing the DPRK with USD$1m in assiatance via the UN World Food Program.  According to the WFP web page:

The United Nations World Food Programme (WFP) today welcomed a generous donation of US$1 million from the Government of India for its operation to reach the most vulnerable children and their mothers in the Democratic People’s Republic of Korea (DPRK).

In an event organised at the Government of India’s Ministry of External Affairs, Honourable Minister of State for External Affairs Mr. E. Ahmed handed over an official pledge letter to WFP India representative Mihoko Tamamura.

“We are delighted to accept this donation from the government on behalf of the people of India,” said Ms. Tamamura. “As the people of DPRK are coming to the end of one of the bitterest winters in living memory – this act of generosity is extremely timely.”

The donation from India is to be used to buy pulses, rich in protein, which is a key missing ingredient in the daily DPRK diet.

Meanwhile the Reserve Bank of India (India’s Central Bank) has issued a warning to Indian banks regarding North Korean funds.  According to the Business Standard:

Fearing possible money laundering and terror-financing risks from Iran and North Korea, the Reserve Bank of India (RBI) has asked banks and other financial entities to be cautious in dealings with entities and funds from these countries.

The RBI warning follows a fresh global caution notice issued by the Financial Action Task Force (FATF) on Iran and Democratic People’s Republic of Korea.

The FATF is an inter-governmental body responsible for making policies at national and international levels to combat money laundering and terror-financing.

The RBI said the FATF has issued a fresh public statement on February 25, 2011, “calling its members and other jurisdictions to apply counter-measures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/FT) risks emanating from Iran and the Democratic People’s Republic of Korea (DPRK).”

“All banks and all-India financial institutions are accordingly advised to take into account risks arising from the deficiencies in AML/CFT regime of these countries, while entering into business relationships and transactions with persons (including financial institutions) from or in these countries/jurisdictions,” the RBI said in a March 24 circular.

A similar circular could be issued soon by the market regulator Sebi to warn market entities against their dealings with funds and entities related to these two countries.

An FATF public statement in this regard is always followed up by various regulators in India and other member countries asking the entities regulated by them to exercise extra caution in dealings with countries where anti-money laundering and terror-financing regulations have deficiencies.

The RBI and Sebi had last issued such a warning in January about Iran, pursuant to a directive from the FATF.

India became a member of the FATF last year. Following the nation’s accession into the global body, it is required to follow the global standards prescribed by the FATF to check money laundering and terror-financing activities.

As per the FATF warning, all financial institutions have been advised to give special attention to business relationships and transactions with Iran and North Korea, as well as their companies and financial institutions.

The FATF has urged member countries to take into account the risk of money laundering and terror-financing when considering requests by Iranian and North Korean financial institutions to open branches and subsidiaries.

Iran and North Korea have been subjected to various sanctions by the US and some European countries to thwart the flow of funds allegedly used to finance their nuclear weapon ambitions and sponsor terror-related activities.

You can read the full story here:
RBI warns banks against dealings with Iran, N Korea funds
Business Standard
3/27/2011

According to the Korea Times:

Dr. Stephen Linton, founder of the Eugene Bell Foundation, says his group’s program to combat multidrug resistant TB (MDRTB) has cured its first patients after four years of working to establish adequate care in the North.

“We’re making progress,” Linton, 60, said in a phone interview. “It has been a tremendous learning curve for the North Koreans on a very short time frame. It takes most nations decades to put together a good MDRTB program because the treatment is so intensive.”

A growing health concern worldwide, MDRTB emerges when regular TB is inadequately treated, creating bacteria resistant to first- and sometimes second-line drugs. Half of those who do not get treatment, which can take up to two years to complete, die.

The problem is compounded in poor countries not properly equipped to diagnose the disease and where malnutrition makes the body more susceptible to TB.

The organization’s hopeful outlook follows its most recent trip to the North in November last year, when it found a steadily-increasing rate of patients testing negative for the strain ― meaning they are no longer infective.

It also comes as the international community wrestles with how to help the impoverished country ― which has called in recent weeks for humanitarian assistance ― without supporting its provocative behavior.

In the case of treating MDRTB, the doctor says the breakthrough would be impossible without meaningful contributions on both sides of the tense border that divides the Koreas.

Powerful medicine

By 2007, Linton had been travelling to the North to treat TB for more than a decade, so he was braced for the news when caregivers complained that first-line drugs were not helping some patients.

“I knew it was going to be a real headache,” he said of the undertaking. “But the commitment of our donors and the desire to treat the people in most need ― that was a powerful incentive.”

Later that year, Linton and his team took sputum from 19 patients, brought the samples to a South Korean hospital for analysis, and returned six months later with medicine. On subsequent trips, the number of patients wanting the test grew.

By 2009, as an indication of the worsening health situation but also the growing trust in the program, Eugene Bell was overwhelmed by crowds of people at its testing centers.

The program now accommodates upwards of six hundred patients at six specialized centers across the country’s northwest.

Linton, who spent his childhood in South Korea, says the process requires significant “buy-in” from North Koreans, beginning with the health authorities.

In their biggest show of cooperation, the government agreed to Eugene Bell’s recommendation that treatment take place in centrally-located MDRTB centers, despite reluctance over the logistics.

It also needs the dedication of health care providers, who must vigilantly keep patients on their programs. If not, they can become resistant to MDRTB medications, opening the door for the emergence of XDRTB, which Linton calls “virtually incurable.”

But the biggest commitment comes from patients, who are prescribed with a harsh cocktail of drugs. Some need to learn to trust outside help, not always an easy task in the isolated country.

“This is a very rigorous and rough treatment program. It takes a lot of very strong, toxic medicines to treat MDRTB. Patients suffer a good bit,” said Linton, who counted nausea, vomiting, temporary deafness and psychosis as side effects.

If after eighteen months, a patient’s sputum tests negative for MDRTB, they are effectively cured. But if after a year they still test positive, the treatment is considered a failure.

“Most of those people know, because they are still coughing up phlegm,” the doctor said. “But failing people is terrible. This work can be very dramatic at times.”

You can read previous posts about the Eugene Bell Foundation here.

UPDATE: On February 24th the Korea Economic Institute held a conference with Dr. Sharon Perry, DPRK Tuberculosis Project, Stanford School of Medicine.  You can see the video of the conference here: Part 1, Part 2, Part 3, Part 4. The paper is here (PDF).

Read the full sotry here:
Aid group engages N. Korea in fight against TB
Korea Times
Kim Joung-jin
2/21/2011

UPDATE 3: The JoongAng Daily (2/12/2011) reports on comments made by Robert King:

King explained that in the past, the U.S. had agreed to give North Korea 500,000 tons in food aid, but was only able to give 170,000 tons as North Korea refused the rest and ordered foreigners who had entered North Korea to deliver the aid to leave.

The envoy also said that it has not yet been decided whether the U.S. will grant food aid to the North and that three prerequisites must be fulfilled if it does.

The three conditions, he explained, are whether a real demand for food truly exists in North Korea, whether the North’s need for food is on the same level as other countries in need of aid, and whether monitoring of the aid will be securely guaranteed. Only when these three prerequisites are met can the U.S. grant aid, King said.

UPDATE 2: According to the JoongAng Daily (2/9/2011) the North Koreans have made an official request for food aid to the US government:

North Korean deputy ambassador to the UN, Han Sang-ryol, requested U.S. food aid last month through Robert King, the U.S. special envoy for North Korean human rights, a diplomatic source told the JoongAng Ilbo yesterday.

Local analysts suspect that King, who is currently in Seoul, informed the South Korean government of the request and is discussing a joint response to it.

“Ambassador Han met King in New York on Jan. 14 and requested large-scale U.S. food aid for the North,” said the diplomatic source in Washington.

It is the first time in years that a behind-the-scenes diplomatic discussion between Pyongyang and Washington on aid has come to the surface. U.S. food aid to the North has been suspended since March 2009 after the Kim Jong-il regime rejected a U.S. proposal to increase the number of Korean-speaking food-distribution monitors to make sure aid was getting to the public.

Han told King that the North was willing to enhance international monitoring of food aid “as much as the U.S. wants,” the source said.

King, who came to Seoul on Sunday, started meetings with Seoul officials yesterday, including Wi Sung-lac, the top envoy on North Korean nuclear issues. At a brief media conference after the meeting with Wi, King did not elaborate on the purpose of his visit or his discussion with the South Korean envoy, saying only it was “very good, very serious and a very thoughtful discussion.”

When asked whether food assistance to the North was on the agenda, King said they “talked about a lot of issues.”

“[It is] extremely important for the U.S., as we pursue our policies toward North Korea, to coordinate with the government of South Korea,” King said. “We have a close working relationship, we are able to work together well on issues, we share our analysis, we share our ideas in terms of making progress.”

The official United States stance, as U.S. Assistant Secretary of State Kurt Campbell said earlier this month, is that it does not have a plan to resume food aid to the North for now.

“The U.S. does not think the North has met conditions to get U.S. food aid,” the source said.

And even if Washington decides to resume aid, it will take time because of congressional procedures, the source said. But some analysts see the possibility of change, citing some opinions in the U.S. State Department in favor of engaging the North with aid to sway its attitude on other issues, including denuclearization.

UPDATE 1: According to the Donga Ilbo (2/6/2011):

The U.S.-based Radio Free Asia says the U.S. government and nongovernmental organizations are discussing the resumption of food aid to North Korea.

Quoting diplomatic sources in the U.S., the broadcaster said Washington has not decided to resume food aid to Pyongyang but is having many talks and discussions on the issue.

Voice of America said Friday that the World Food Program and the U.N. Food and Agriculture Organization, both of which are under U.S. influence, also plan an additional survey of the North`s food situation for about a month from Feb. 10.

In an interview, Dr. Kisan Gunjal of the food organization said he will survey the North’s food security and crop situations from Feb. 10 to March 12 at Pyongyang’s official invitation.

In a phone interview with The Dong-A Ilbo, an official at a South Korean aid group said, “The U.S. has asked South Korean non-governmental organizations about North Korea’s crop and food supply situations in 2011 since the North’s artillery provocation on Yeonpyeong Island in November.”

Washington, however, remains officially cautious. U.S. State Department spokesman Philip Crowley told a news briefing Monday that the U.S. government has no immediate plans to provide humanitarian aid to the North.

ORIGINAL POST: According to the Donga Ilbo (1/31/2011) the US and DPRK are talking food aid once more:

The U.S. and North Korea have begun their third round of food diplomacy, with Washington considering resuming food aid to Pyongyang.

The U.S. has halted food aid to the North twice since its first provision in 1996 after blaming Pyongyang for diverting the aid.

The North has always asked for food aid first since North Korean leader Kim Jong Il confronted a series of crises in the early 1990s, when the former Soviet Union and China stopped economic assistance to the Stalinist country.

His father and the North`s founder Kim Il Sung died in 1994. When the North was devastated by floods and other natural disasters nationwide, Kim Jong Il ordered state cadres to beg the U.S. for help.

The North Korean Foreign Ministry then formed a committee for flood damage and went hat in hand to Washington. The Clinton administration provided 19,500 tons of food through the World Food Program in 1996, expecting the North to implement the 1994 Agreed Framework and be docile in talks for the repatriation of remains of American soldiers killed in action in the Korean War.

Washington increased its food aid from 177,000 tons in 1997 to 695,000 tons in 1999. In 2000, a joint communiqué between the North and the U.S. was signed.

North Korea, however, diverted the food aid in ignoring U.S. and international principles for humanitarian aid.

As public opinion in the U.S. worsened over the assistance, the George W. Bush administration slashed the aid volume from 350,000 tons in 2001 to 40,000 tons in 2003. The U.S. Congress demanded greater transparency in the distribution of the food aid in 2004, when it passed the North Korean Human Rights Act.

Rejecting the demand, Pyongyang expelled World Food Program staff in 2005. Washington opted not to provide food aid to Pyongyang in 2006.

Flexing its muscles in November 2006 by conducting its first nuclear test, North Korea again requested U.S. aid in 2008. The Bush administration, which was nearing the end of its term, chose to sit at the negotiating table with the North and offered 500,000 tons of food aid through the World Food Program.

The North received 169,000 tons of food by expanding the areas where food distribution is monitored and agreeing to allow more Korean-speaking monitoring personnel.

In early 2009, Pyongyang decided to test the newly inaugurated Obama administration by launching a long-range rocket and preparing for a second nuclear test. In March that year, the North expelled humanitarian aid groups, saying it would not be able to keep its promise of distribution transparency.

In fall last year, North Korea unveiled its uranium enrichment program and showed its centrifuges to the U.S. in a virtual threat to conduct its third nuclear test with uranium bombs if Washington failed to provide food.

What the U.S. will eventually do is attracting interest since South Korea is opposed to aid to the North.

Read the full stories below:
Pyongyang asks U.S. to restore food aid: source
JoongAng Daily
Kim Jung-wook, Moon Gwang-lip
2/9/2011

US, N. Korea begin 3rd round of food diplomacy
Donga Ilbo
1/31/2011

Radio Free Asia: US, NGOs discussing food aid to NK
Donga Ilbo
2/6/2011

According to Yonhap:

In another reflection of frayed inter-Korean relations, South Korea last year used the smallest amount of funds earmarked for exchanges with North Korea since the sides held their first summit in 2000, the Unification Ministry said Sunday.

The ministry, the main South Korean government arm handling affairs involving North Korea, spent 86.25 billion won (US$76 million), or 7.7 percent of the 1.12 trillion won designated as the “South-North Cooperation Fund,” officials said this week.

The fund was created in 1991 to support humanitarian and economic exchanges between the divided Koreas, which remain technically at war after the 1950-53 Korean War ended in a truce.

Last year’s spending was the smallest since 2000 when the sides held their landmark summit talks and agreed on a wide range of cooperation projects as part of their reconciliation efforts.

But the cross-border ties deteriorated to the worst level in more than a decade when the North bombarded a South Korean island and was also found responsible for sinking a warship last year.

South Korea has suspended humanitarian aid and cross-border trade in retaliation, pressing North Korea to apologize if the impoverished communist country seeks to restore their relations.

The cooperation fund’s implementation rate had ranged from 37 to 92.5 percent between 2000 and 2007, but nosedived after a conservative government took power in 2008 with a hard-line policy on the North. That year, the rate stood at 18.1 percent before dropping further to 8.6 percent in 2009.

Read the full story here:
Spending on inter-Korean exchanges lowest since 2000: ministry
Yonhap
1/23/2011

According to Yonhap:

South Korea has spent only 5.6 percent of its funds earmarked for promoting humanitarian and economic ties with North Korea this year, the unification ministry said Sunday, as inter-Korean relations tumbled to their worst in decades.

As of the end of November, the ministry said it had endorsed spending worth some 62.6 billion won (US$54.4 million) from its South-North Cooperation Fund, or 5.6 percent of the total allocated for this year.

Just over half the sum, or about 32.8 billion won, went toward financing loans for inter-Korean trade and economic cooperation, while another 27.8 billion won was spent on improving exchanges among families separated across the border and other humanitarian projects.

The low spending rate apparently reflects the ban on cross-border exchanges following the deadly March sinking of a South Korean warship, blamed on a North Korean torpedo attack, and escalated tensions on the peninsula since the North’s artillery attack on a southern island last month.

The fund’s implementation rate ranged from 37 to 92.5 percent between 2000 and 2007, but nosedived after President Lee Myung-bak took power in 2008 with a hard-line policy on the North. That year, the rate stood at 18.1 percent before dropping further to 8.6 percent in 2009.

Read the full story here:
S. Korea spends 5.6 pct of inter-Korean cooperation fund
Yonhap
12/26/2010

According to Voice of America:

Deforestation has contributed to major floods while also worsening chronic hunger problems in North Korea, but now the communist-led government is supporting a small but growing effort to recover the hillsides with fruit and nut trees.

For more than four decades after its creation in the wake of the Second World War, North Korea relied on its communist ally, the Soviet Union, to provide fertilizer for its farms. When the Soviet Union collapsed in 1989, food production in North Korea plummeted.

Environmental mess

Deputy Director Marcus Noland of the Washington-based Peterson Institute for International Economics has studied North Korea since 1995. He says as food production fell, forests in mountainous areas were cleared to grow more crops.

“And as trees were cut down on the hillsides, that contributed to soil erosion, river silting, which exacerbated the seasonal flooding problems,” says Noland. “So, the North Koreans have ended up with a real environmental mess on their hands.”

Major floods hit North Korea in 2007 and again this summer. But the environmental issues first got the government’s attention in 1995, when catastrophic floods damaged about 40 percent of the country’s rice paddies and contributed to a famine that killed an estimated two million people.

“Then the government said, ‘Okay, we need to do something,'” says Xu Jianchu, a senior scientist at the World Agroforestry Center, a global research institution.

According to Xu, different government ministries had different ideas concerning what to do about the floods. In many places, people had cut down trees to grow their own food. Xu says the agriculture ministry wanted trees back on the mountainsides and people’s crops off them.

Trees and crops together

But the environment ministry took a different view. Working with the Swiss aid agency, it started a small pilot project in 2002 to plant fruit and nut trees and medicinal bushes on the sloping hillsides, alongside people’s crops.

“We get the tree cover back, and, second, also, we do provide the needs of the local people for food,” says Jianchu.

The World Agroforestry Center joined the project in 2008. Earlier in the decade, Pyongyang had begun loosening its tight controls over the country’s food production. Xu says the government organized households into user groups which were given autonomy to choose what kinds of trees to grow. That was important, Xu says, because for one thing, the government had been offering only pine, poplar and larch trees for hillside planting – three species the farmers didn’t want really don’t want because they were not related to their food security.

The user groups were allowed to establish their own fruit-tree nurseries to expand production. With help terracing the steep hills and improving their farming practices, Xu says food production has increased, and farmers are even selling their surplus in local markets.

However, it is difficult to get an accurate picture of how much they are producing. According to Xu, people tend to say they grew less than they did because they believe the government will take away their surplus.

“They try to always under-report what they harvest because sometimes they are still afraid the government will take away if they produce too much,” he says.

A good start

While the policy remains controversial, Xu says it’s gaining support in the government. He says the best indication that the project is working is that it’s growing.

What started with just three groups is now up to about 60, covering several hundred hectares of land.

That’s a small fraction of the more than one million acres of deforested hillside being farmed, according to a report Xu co-wrote on the subject.

But it’s a good start, says the Peterson Institute’s Marcus Noland.

“I’m not sure whether the policies they’re now pursuing on these projects are the most optimal, but the idea that at least they’re trying to plant trees and reverse some of this process is a good sign.”

But Noland adds that deforestation is just one of the major food production problems North Korea faces. He says it will take a revival of the country’s overall economy to end the country’s chronic problems with hunger.

The Taedonggang Fruit Farm and Kosan Fruit Farm have received heavy attention in the DPRK media recently.  Although the North Koreans have never admitted to receiving assistance to set up all of their new fruit farms, I am willing to bet that some of these international organizations played a role.

Read the full story here:
Trees are North Korea Latest Weapons Against Hunger, Floods
Voice of America
12/14/2010

According to Voice of America:

The South Korean Unification Ministry’s annual report calls the Sunshine Policy of peaceful engagement with North Korea a failure.

The ministry’s white paper, issued Thursday, contends a decade of cooperation, cross-border exchanges and billions of dollars in aid did not change Pyongyang’s behavior or improve the lives of North Korean citizens.

Lee Jong-joo, a ministry spokeswoman, says South Korea’s goal is to see North Korea prosper, but Seoul must respond appropriately to any provocations from Pyongyang.

Compared with the previous two administrations here, North-South relations have significantly cooled under President Lee Myung-bak.

Mr. Lee, since taking office in 2008, has insisted North Korea give up its pursuit of nuclear weapons if it wants badly needed food and other aid from Seoul.

His conservative government points to North Korea’s continued nuclear programs and this year’s sinking of a South Korean warship as examples of deception by Pyongyang.

The white paper’s publication was delayed six months to include information on the sinking of the Cheonan navy ship in March.

Pyongyang denies responsibility for the sinking. An international investigation concluded the ship was hit by a North Korean torpedo.

Park Young-Ho is a senior research fellow at the government-funded Korea Institute for National Unification. He says Mr. Lee’s administration is trying to establish a relationship based on rules with the North.

Park says this is a shift, in response to four decades of Pyongyang’s questionable attitude towards inter-Korean engagement.

The ministry’s report complains about the lack of progress on other critical issues, including reuniting separated families and the release or information about South Korean prisoners of war, as well as citizens abducted by the North’s agents.

Referring to huge payments Seoul secretly made to Pyongyang to bring about a 2000 summit of the countries’ leaders, the Unification Ministry says any future engagement must be done transparently.

The policy document does stress the importance of dialogue between Seoul and Pyongyang.

On Thursday, Pyongyang sent a message to Seoul saying it is prepared to discuss the status of a jointly run resort in the North when their Red Cross societies hold talks next week.

South Korea’s government has asked Pyongyang to release assets it seized in Seoul’s portion of the Mount Kumgang resort.

Tours to the resort were a rare source of hard currency for the impoverished North. Seoul suspended the program in 2008 when a North Korean guard shot and killed a South Korean tourist near the resort.

Read the full story here:
South Korea Formally Declares End to Sunshine Policy
Voice of America
11/18/2010

According to the Indo-Asian News Service:

The Olympic Council of Asia (OCA) Friday decided to lend financial support to some of its National Olympic Committees (NOCs), including Pakistan and North Korea.

OCA president Sheikh Ahmad Al-Fahad Al-Sabah announced the decision at an executive board meeting here.

The OCA will aid the needy NOCs over a period of time. For now, the OCA will help North Korea and the flood ravaged Pakistan.

‘We will work very closely with the International Olympic Committee (IOC). We have asked our finance committee to allocate whatever amount of funds we can give them,’ said Sheikh Ahmad.

‘They are facing crisis and they need our support.’

The OCA along with IOC contributed $100,000 to the Pakistan Olympic Association (POA) earlier to repair the sports infrastrucure damaged in heavy flooding earlier thuis summer.

The executive board approved the initiative, and it brought an emotional response from one of its members – said Syed Arif Hasan, OCA vice president for South Asia and president of the Pakistan Olympic Association (POA).

‘Thank you for your assistance and your words of comfort. I appreciate the great work the OCA is doing under you (Sheikh Ahmad),’ said Arif.

Read the full story here:
OCA to provide financial aid to Pakistan, North Korea
Sify News
11/12/2010