North Korean Economy Watch

BBC
2/5/2003

The two Koreas have re-opened their land border for the first time in half a century, despite continuing anxiety about the North’s nuclear programme.

About 100 South Korean tourism officials passed through the heavily fortified frontier by bus on Wednesday, travelling to the scenic Mount Kumgang tourist resort, some 30 kilometres (18 miles) to the north.

The opening of the first of a set of planned overland links came as the US made its strongest pledge yet to hold direct talks with the North to resolve the nuclear crisis.

North Korea says that the only way forward is for face-to-face talks with Washington, without pre-conditions.

Historic crossing

Buses carrying around 100 officials from the South Korean company Hyundai and invited guests snaked from Kosung on the South’s east coast for a 50-minute journey along a dirt road towards Mount Kumgang.

The 10 buses were escorted by a South Korea military jeep as far as the border.

The jeep then pulled over to allow the buses to make the historic crossing, and a military official from the US-led United Nations Command, which enforces the armistice agreement that ended the Korean War, followed their progress on the other side of the border through binoculars.

If the pilot visit is a success, tours will officially begin next week.

The road is the first of four planned overland routes between the two sides to be completed. A parallel rail link on the east, and a rail and road link on the west are still under construction.

Diplomacy

The links are a key part of South Korean President Kim Dae-jung’s “sunshine policy” of economic co-operation with the Stalinist state.

Seoul has been urging the US to pursue diplomacy rather than sanctions over the current nuclear crisis.

US Deputy Secretary of State Richard Armitage on Tuesday gave a strong assurance that direct talks with Pyongyang would take place.

“Of course we’re going to have direct talks with North Korea. There’s no question about it,” he told the Senate Foreign Relations Committee.

But Mr Armitage said that the consultations would only take place when Washington was confident that it had built a “strong international platform” from which to end North Korea’s nuclear programme.

He also warned that North Korea’s reported moves toward restarting a plutonium reprocessing facility could enable it to build four to six nuclear weapons within months.

Despite Washington’s assurances that it has no plans to invade North Korea, it has announced that is considering strengthening its military forces in the Pacific Ocean as a deterrent against Pyongyang.

US officials said the reinforcements would help signal that a possible war with Iraq was not distracting the US.

But the commander of the 37,000 US forces in South Korea, General Leon LaPorte, stressed on Tuesday that any deployment would be made in conjunction with Seoul.

Economic co-operation

Some analysts believe the nuclear stand-off is simply a blackmailing tactic by the North to obtain more aid for the impoverished nation.

In easing the North’s economic plight, Hyundai has played a key role. It has hitherto organised cruises to the North by boat, but they have lost the company money.

Hyundai hopes the cheaper overland trip will attract more tourists.

But its role in inter-Korean co-operation has not been without controversy.

The company became embroiled in a scandal last week when government auditors revealed that a Hyundai affiliate had sent nearly $200 million to North Korea just before the 2000 inter-Korean summit.

The company said the money was used to finance its business projects in the North; opposition lawmakers allege the money was a pay-off for the summit.

Members of the ruling Millennium Democratic Party have called on President Kim Dae-jung to make a public statement, while opposition politicians are calling for an independent counsel to investigate the fund transfers.

BBC
1/27/2003

North Korea has made a key concession on cross-border road and rail links with South Korea, South Korean officials have said.

The move means that tourists and businessmen from the South could be able to cross over to the North Korea within weeks.

The apparent breakthrough in the long-running negotiations came as South Korea’s top national security adviser, Lim Dong-wan, arrived in Pyongyang seeking to resolve tension over the Stalinist state’s nuclear programme.

Mr Lim, a former unification minister, said he hoped to avert war, but warned he did not have a quick solution.

“My visit to Pyongyang is designed to lay the ground for dialogue on the peaceful settlement of the North Korean nuclear issue that will help avoid war,” Mr Lim said before leaving Seoul on Monday.

The BBC’s Caroline Gluck in Seoul says North Korea’s decision to allow the visit indicates it is now willing to accept mediation from its neighbours. Before, it had said it would only discuss the nuclear issue with Washington.

North Korea’s concession in the separate, cross-border talks ends months of wrangling over who should control the so-called Demilitarised Zone (DMZ) that separates the two Koreas.

Analysts said North Korea might be pushing for progress with the South as a way to undermine South Korea’s alliance with the United States, which favours a much harder line policy on engaging with the North.

‘Cat’s paw’

The South Korean delegation includes Lee Jong-suk, an advisor to President-elect Roh Moo-hyun, who takes office next month.

Its visit comes a day after the US said it had no intention of attacking North Korea but warned the nuclear standoff was a danger to Asia.

Mr Lim is expected to meet North Korean leaders and other top officials during his visit.

North Korea on Monday hit out at the United Nations nuclear watchdog, describing the International Atomic Energy Agency (IAEA) as the “cat’s paw” of the United States.

“It is… an objective reality that the secretariat of the IAEA is not in a position to discuss the DPRK’s (North Korea) issue and the days are gone, never to return, when it could unreasonably handle it,” reported the official Korean Central News Agency.

The Vienna-based IAEA has said it will hold an emergency session on 3 February to decide whether to refer the nuclear issue to the UN Security Council.

The crisis started last October, when the US said North Korea had admitted it was working on a banned nuclear weapons programme.

The US stopped fuel aid to North Korea in protest, and that led to North Korea expelling United Nations weapons inspections and announcing it was reactivating a previous nuclear programme.

Earlier this month North Korea announced it was pulling out of the Nuclear Non-Proliferation Treaty.

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BBC
11/26/2002

North and South Korea have begun land surveys for a cross-border railway across the heavily-fortified Demilitarised Zone (DMZ) that has separated the two sides since the 1950-53 Korean War.

The work is the latest evidence that the two sides are still co-operating on the goodwill project, despite an international furore over North Korea’s alleged admission that it has a nuclear weapons programme.

The two sides began clearing mines from the border in mid-September in preparation for the transportation links.

But the project has been delayed by North Korea’s refusal to co-operate in agreed landmine removal verification procedures.

The joint survey which began on Tuesday is aimed at finding the best place to connect the railway and road planned for the east side of the peninsula.

This will conclude on Wednesday, followed by similar procedures along the west coast later in the week, South Korea’s unification ministry said.

The two sides will exchange the results of the surveys in early December, South Korean officials said.

The plan is to link the western line to China and the eastern line to Russia, so freight can travel overland to Europe, significantly cutting costs.

Delay

The first of the rail links had been scheduled to be re-connected as early as this month.

But a US army general accused North Korea on Tuesday of delaying the project, by demanding two weeks ago that the US-led United Nations Command (UNC) – which supervises the southern half of the DMZ – hand over control of the transportation corridors to the two Koreas.

South Korea’s defence ministry said Pyongyang was refusing to deal with the UNC in arranging mine clearing inspections, arguing that the body had no right to be involved in the project.

Major General James Soligan told cable television YTN that North Korea wanted to retain authority over the transport links so “they could move combat forces into this corridor and challenge the security of South Korea”.

BBC
9/19/2002

South and North Korean troops have begun clearing landmines from the heavily-fortified Demilitarised Zone (DMZ) that separates the two countries.

Dignitaries watched as about 100 South Korean soldiers, some armed, others carrying demining gear, marched through a previously locked barbed wire gate into the treacherous buffer zone.

South Korean officials said a similar event was taking place in the North.

The work is aimed at clearing two 250-metre (277-yard) corridors through the border so that road and rail links can be reconnected for the first time since the Korean War half a century ago.

Peppered with mines

The work follows spectacular ceremonies on both sides of the border on Wednesday to mark the resumption of the work, which was agreed to two years ago, but has been heavily delayed.

It is just the latest in a series of acts of reconciliation between the rival neighbours, which are still formally at war.

Our correspondent in Seoul, Caroline Gluck, says South Koreans are cynical about the ups and downs in cross-border relations. So much was promised two years ago, when their two leaders met in an historic summit, but so little has been delivered.

Demining the border will prove a challenge for both sides.

“Neither of us (North or South Korea) know where the mines are,” said South Korean Lieutenant Colonel Kim Kye-won.

“We are being very careful in consideration of the safety of the troops involved.”

Passageway to Europe

A South Korean defence ministry spokesman told Reuters news agency the number of mines was a secret, but that some dated from the Korean War, whilst others had been put down recently.

Clearance work is expected to take several months.

The work is symbolic, as it will physically reconnect the divided halves of the peninsula.

But it could also turn Korea into a transport hub.

The project involves two sets of cross-border road and rail links, on the east and west coast of the DMZ.

The plan is to link the western line to China and the eastern line to Russia, so freight can travel overland to Europe, significantly cutting costs.

The first of the rail links is expected to be re-connected as early as November.

BBC
9/18/2002

North and South Korea have held ceremonies ahead of work to re-link road and rail connections between the two states for the first time in more than 50 years.

Fireworks crackled and balloons were set free at the ceremonies, held simultaneously on either side of the heavily fortified border separating the Koreas.

It is the latest act of reconciliation between the rival neighbours, and came a day after North Korea moved a step closer to normalising relations with Japan following an unprecedented visit to Pyongyang by Prime Minister Junichiro Koizumi.

Work to clear the heavily-mined buffer zone on the border will begin on Thursday, and the first of the rail links is expected to be re-connected as early as November.

The South Korean Prime Minister-designate Kim Suk-soo said he hoped the work would herald a new chapter in relations between the two Koreas.

Symbolic ceremonies

At one of the ceremonies on the South Korean side of Demilitarised Zone (DMZ), workers unlocked a barbed wire gate leading to the border.

South Korea has already built a rail line and road on the western side of the peninsula right up to the DMZ fence, and on Wednesday, a train trundled as far as it could.

Television pictures then showed a South Korean girl dressed as a North Korean step out from behind the fence and link hands with a South Korean boy, as fireworks exploded overhead.

Speaking at Dorasan train station – the last stop on the South’s western rail line – the South Korean prime minister-designate said the two countries had embarked on a “monumental project”.

“We are burying a history marked by the scars of war and the pain of division,” he said.

Closer ties

Rail links between the two Koreas have been cut since the end of the 1950-1953 Korean War.

North and South Korea agreed to re-link the connections two years ago as part of a series of steps to improve relations.

The project involves two sets of cross-border road and rail links, on the east and west coast of the DMZ.

The plan is to link the western line to China and the eastern line to Russia, so freight can travel overland to Europe, significantly cutting costs.

BBC
9/15/2002

Military officials from North and South Korea have agreed to start clearing land-mines inside part of the demilitarised zone separating the two countries.

The deal paves the way for the reconnection of cross-border road and rail links, after more than half-a-century of division.

The agreement – between two countries that are still technically at war – was reached after 14 hours of talks in the border village of Panmunjom.

It is due to be formally signed on Wednesday, when the two sides plan to simultaneously start work on cross-border projects.

Work to tear down barbed-wire and clear land-mines inside specified areas within the demilitarised zone is expected to begin on Thursday.

The deal also guarantees the security of workers and soldiers, and provides for the first military hotline between the two countries.

No man’s-land

The BBC’s Caroline Gluck in Seoul says it is a major breakthrough.

The demilitarised zone, a heavily fortified no-man’s-land, has been in place since the end of the Korean war in 1953 – with nearly two million troops stationed on either side.

If the work goes smoothly, one of two planned cross-border railways could be completed by the end of the year.

The South has agreed to provide construction materials to the North to enable the work to be completed.

South Korea regards the routes as a powerful symbol of reconciliation efforts, our correspondent says.

It also believes they could turn the peninsula into a transport hub.

With the lines linked to rail networks in China and Russia, freight could travel overland to Europe, significantly cutting costs.

Opening up?

The Panmunjom talks were part of a broader political agreement reached in August.

High-level talks between the two Koreas resumed last month and have been followed by a series of exchanges.

Limited numbers of elderly relatives from the two Koreas have been holding emotional reunions in the North this weekend after being separated for half-a-century.

They are the fifth round of reunions since the historic Korean summit in June 2000.

Correspondents say that the new agreement comes as North Korea is moving to improve relations with the outside world.

Japanese Prime Minister Junichiro Koizumi is making an unprecedented visit to North Korea on Tuesday

BBC
Caroline Gluck
9/14/2002

Military officials from the two Koreas have held talks to discuss carrying out work inside the demilitarised zone separating them, so that cross-border road and rail links can be restored.

These talks – the first of their kind in more than a year and a half – are another sign of improving ties.

The meeting, in the border village of Panmunjom, focused on the technical details of reconnecting cross-border road and rail links, which will pass through the heavily-mined demilitarised zone.

Agreements signed by defence ministers from both countries are needed to guarantee the safety of workers and prevent accidental clashes between the two armies, which have maintained an uneasy truce since the Korean War ended in 1953.

Last month, the two sides set out a timetable for the work, saying they hoped to complete one rail link by the end of the year.

Reunions

At least two more rounds of working-level talks are expected, and officials are confident that agreements will be in place before ground-breaking ceremonies are held in the two Koreas next Wednesday, marking the resumption of work.

The South has agreed to provide construction materials to the North, and in separate meetings held in North Korea officials are discussing the engineering details of the projects.

The two Koreas are still technically at war, but Seoul sees transport links as one of the most powerful symbols of their reconciliation efforts.

High-level talks between the two Koreas resumed last month and have been followed by a series of exchanges.

Limited numbers of elderly relatives from the two Koreas are currently holding emotional reunions in the North after being separated for half-a-century.

They are the fifth round of reunions since the historic Korean summit in June 2000.

BBC
8/30/2002

The two Koreas have agreed to begin work on restoring road and rail links across their troubled border.

The agreement, which followed two days of economic talks in Seoul, is the latest sign that the secretive North is determined to end its diplomatic isolation.

The North has also agreed to receive Japanese Prime Minister Junichiro Koizumi for an historic visit in September.

The two countries have no diplomatic relations and no Japanese prime minister has ever visited.

Mr Koizumi was due to spend one day in the North on 17 September and hold talks with its leader Kim Jong-il.

“I want to discuss directly with him the possibility of restarting efforts to normalize our relations,” Mr Koizumi said.

Japan and South Korea’s eagerness to engage with North Korea appeared to sit at odds with American wariness towards the communist state.

On Thursday, a senior US diplomat warned that North Korea was the world’s leading exporter of ballistic missile technology and repeated President George W Bush’s assertion that it forms part of an “axis of evil”.

Mr Koizumi said he had discussed the visit with both US President George W Bush and South Korean President Kim Dae-jung. A Japanese official said the visit had been under discussion for more than a year.

North-South progress

According to the South Korean version of a joint statement issued on Friday, both sides had agreed to reconnect one railway line by the end of this year and construct a second by early next year.

Importantly, the two sides’ militaries will hold talks before work begins on 18 September.

The 4-kilometer-wide (2.5-mile-wide) demilitarized zone is heavily mined. Military co-operation is seen as a pre-requisite for the transport links, which have been cut since the end of the 1950-53 Korean War, to be restored safely.

South Korea said it had agreed to send 400,000 tonnes and 100,000 tonnes of fertiliser to North Korea on credit as soon as possible.

The North’s command economy has been unable to feed its people for several years and there have been widespread reports of famine.

Mr Koizumi’s proposed visit to North Korea was apparently raised at talks in Pyongyang this week between Japanese and North Korean officials.

Japan and North Korea relations are often tense, especially over Japanese allegations that some of its nationals were kidnapped to train North Korean spies.

BBC
8/20/2002

North Korea’s reclusive leader Kim Jong-il has begun a visit to the Russian far east.

The plane-shy leader’s private train crossed the two countries’ border at Khasan where he was met by regional officials as the train’s wheels were changed to fit the Russian gauge.

Mr Kim was accompanied by senior officials including the army’s chief of general staff, Kim Yong Chung.

He is expected to meet Russian President Vladimir Putin in the region’s main city, Vladivostok, on Friday.

Russian officials reported earlier that special care had been taken to ensure the North Korean leader’s train would not snarl up rail traffic in the region after a similar visit last summer caused widespread disruption.

“The railway authorities have… given an assurance that the timetable will be drawn up so that passenger train schedules are not violated,” said Yevgeny Anoshin, a regional official in Vladivostok.

Mr Kim was due to travel on to the defence industry town of Komsomolsk-on-Amur, 900 km (560 miles) to the north, after an hour’s stopover at Khasan. He is expected to visit defence plants there.

The North Korean leader earlier sent a message to Mr Putin in which he talked of the two countries’ relations entering a new phase.

Russian diplomats said the main reason for the visit was for Mr Kim to witness Russia’s experience of economic reforms.

North Korea has recently introduced a number of economic changes, including price and wage hikes. Analysts suspect the measures are designed to lift production and rein in the black market rather than a genuine reform of the state-controlled system.

North Korea has also embarked on a number of new diplomatic initiatives in recent weeks – meeting South Korean officials, planning talks with Japan and offering to host a US delegation.

Correspondents say all Pyongyang’s moves are being scrutinised to see if its often erratic behaviour can be trusted.