Archive for August, 2003

Two Koreas boost crossborder trade

Thursday, August 28th, 2003


North and South Korea have signed a landmark agreement to increase direct trade, the latest step in the slow economic thaw between the two enemies.

According to the agreement, made at bilateral talks unrelated to the simultaneous discussions over nuclear capability, South Korean firms will be encouraged to set up in the North.

The town of Kaesong, just north of the border, has been selected as the site of an industrial park, currently being built by South Korea’s Hyundai.

The two governments will open a corporate liason office in Kaesong, which will deal with the many southern companies keen to exploit cheap northern labour.

Slowly opening

Cross-border economic contacts have become frequent in recent years.

But almost all the $270m (£172m) in north-south trade so far this year has been conducted through intermediary countries, a formality the new agreement aims to dispose of.

The deal represents another step in the extremely slow economic opening of the stalinist North, which long operated in complete isolation from the world economy.

Over the past three years, Pyongyang has reformed its currency, invited visits from foreign investors, cautiously liberalised some prices and planned various – mainly abortive – schemes along the lines of the Kaesong industrial zone.

Reliance on aid

The motivation in much of this, analysts say, is the desperate economic situation in the north.

A series of natural disasters in the 1990s crippled northern agriculture, and the government has done little to put the sector back on its feet.

North Korea – which long rejected outside help – has become increasingly dependent on aid.

This latest agreement concedes to the South the right to oversee the distribution of food aid in the North.


Koreans unite for student games

Wednesday, August 20th, 2003


More than 200 North Korean athletes, officials and journalists have arrived in South Korea for the World Student Games, after days of political wrangling.

The North Korean delegation flew south for the games at Daegu, after reversing a decision to withdraw from the event over a recent anti-North flag-burning protest in the South Korean capital Seoul.

The row erupted at a delicate time for inter-Korean relations, just a week before crucial talks on the North’s nuclear weapons programme are due to get under way.

In a further sign that relations between the two sides are thawing, both Koreas have agreed in principle to field a unified team for the 2004 Olympic Games in Athens.

The agreement was announced on Wednesday in a joint statement by the two delegations attending the Daegu games.

Athletes from North and South Korea marched behind a single “Korean Peninsula” flag for the first time at the 2000 Sydney Olympics but they competed as separate countries during the actual competition.

North Korea also sent a large delegation to last year’s Asian Games, participating for the first time in a major sporting event hosted by South Korea.

The BBC’s Charles Scanlon in Seoul says the North’s participation in those games was seen as an important symbol of warming ties.

But he says the next big test will come next week in Beijing, when the North Koreans sit down with their Asian neighbours and the United States for six-party talks aimed at putting a stop to Pyongyang’s nuclear ambitions.

Triumphant arrival

The North Korean delegation arrived in the South on Wednesday waving their hands and smiling at supporters waiting for them at the airport.

“Brothers in the South, we are happy to see you,” said Jon Guk-man, head of the North Korean delegation.

Reuters news agency said South Korea was paying all the expenses for the North’s team, which organisers consider a major draw in an event short on big sporting names.

North Korea’s about-face over its decision to boycott the games came after South Korean President Roh Moo-hyun expressed regret for last Friday’s anti-North protest, describing it as “inappropriate”.

Mr Roh’s government has been struggling to maintain good relations with Pyongyang, despite signs that the North is pushing ahead with the development of nuclear weapons.

His conciliatory remarks contrasted with comments by US President George W Bush on Monday, who said that North Korean leader Kim Jong-il was a “dangerous man” who loved “rattling sabres”.

Pyongyang has repeatedly warned that the US must change its “hostile policy” towards the North if forthcoming Beijing talks, which will also include Washington, are to make progress.