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2009/10/29 11:17 KST
NORTH KOREA NEWSLETTER NO. 78 (October 29, 2009)


South Korea Offers North Korea Small-scale Corn Aid

SEOUL (Yonhap) -- South Korea offered on Oct. 26 limited volumes of corn and other humanitarian aid to North Korea in what would be the first official assistance to the impoverished country in nearly two years.

   South Korea's Red Cross said in a press release that it sent a faxed message to its North Korean counterpart, stating it will send 10,000 tons of corn, 20 tons of milk powder and some medicine "on humanitarian and compatriotic grounds." The Red Cross said the aid is aimed at helping "vulnerable" sectors of the population, including infants and pregnant women.

   The aid, if accepted by the North, would be the first of its kind since South Korea's Lee Myung-bak government came to power early last year, tying state-level assistance to Pyongyang's denuclearization.

   On Oct. 16, North Korea requested humanitarian aid from the South during Red Cross talks on cross-border family reunions. It was the North's first official request for assistance from the conservative Lee government.

   North Korea has yet to respond to the Red Cross message, but the offer is widely believed to have been coordinated between the two governments through recent contacts. When North Korea rejected the 50,000 tons of corn Seoul offered in May last year, tensions were high and Pyongyang was boycotting any dialogue with Seoul.

   "It's difficult to say yet (whether the North would accept), but this is offered on purely humanitarian grounds," Unification Ministry spokesman Chun Hae-sung stressed in a press briefing.

   Chun said it will take a month or so for the Red Cross to purchase, pack and ship the corn worth US$33.38 million and $126,870 worth of milk powder.

   The 10,000 tons of corn is hardly enough to assuage the chronic food shortages in the North. The country's harvest this year is believed to fall more than 1 million tons short of the amount needed to feed its 24 million people. South Korean visitors have reported the poor conditions of rice paddies and corn fields due to the lack of fertilizer.

   Lee's liberal predecessors annually provided about 300,000 tons of fertilizer and 400,000 tons of rice to the North over the past decade, but the large-scale aid came to a complete halt last year.

   "Considering the North's food shortages and various other circumstances, the 10,000 tons would not be sufficient," Chun said, but "no additional aid" is currently under review.
In another conciliatory move, the ministry decided to provide 949 million won for several local humanitarian organizations operating in the North, the second such funding following one in August.


Economic Gap Between Two Koreas Remains Wide

SEOUL (Yonhap) -- South Korea's economy stayed well ahead of the North last year as Pyongyang's closed economic system hampered its trade and other outbound business activities, government data showed Oct. 26.

   According to the data provide by the finance ministry and the National Statistical Office, South Korea's total trade volume amounted to US$857.3 billion last year, 225.6 times larger than the North's $3.8 billion.

   South Korea's exports totaled $422.0 billion compared with $1.1 billion posted by the North, while its imports came to $435.3 billion compared with $2.7 billion by the communist country.

   The income gap also remained wide between the two Koreas. South Korea's gross national income stood at $934.7 billion last year, 37.7 times larger than the North's GNI of $24.8 billion during the same year. South Korea's per capita GNI was 18.1 times larger than North Korea's.

   In the manufacturing sector, the disparity was even more evident. South Korea churned out 4.08 million cars and had a steel-producing capacity of 51.51 million tons in 2007, with the North manufacturing a mere 5,000 vehicles and maintaining a steel-producing capacity of 1.23 million tons during the same year, the data showed.

   The latest tally, in addition, showed South Korea outperforming the North in both the energy and agriculture sectors, generating 403.1 billion kWh in 2007 compared to the North's 23.6 billion kWh, the data showed. The South also produced 4.4 million tons of rice compared with 1.5 million tons in the North.

   North Korea, however, outpaced its South counterpart in the mining industry with its coal production amounting to 24.1 million tons in 2007 compared to the South's 2.9 million tons, according to the data.

   Experts attribute the wide economic gap between the two Koreas mainly to the North's closed economic system that inhibits free trade with the outside world. The two remain technically at war as the 1950-53 war ended in a truce, not a peace treaty.

   "The North focuses on the agriculture and military sectors with its industrialization still remaining comparatively undeveloped, while we have already emerged as a global powerhouse in the manufacturing sector, making it tough to catch up," a government official explained.


Seoul to Resume Sand Imports From N. Korea Under Stiffer Rules

SEOUL (Yonhap) -- South Korea has decided to resume imports of sand from North Korea on the condition that the imports be kept under strict procedures by the Seoul government.

   South Korea has suspended sand imports from North Korea since April, when the North test-fired a long-range rocket. Seoul had banned sand importers from traveling to the North.

   South Korea first brought in North Korean sand for use at local construction sites in late 2002, as part of an inter-Korean accord signed by leaders of the two Koreas in 2000.

   "The government is reviewing the resumption of imports of the North's sand, given strong requests from businesses and the overall state of current inter-Korean relations," an informed government official said Oct. 22.

   On Oct. 27, the Unification Ministry said the government has tightened rules on imports of sand, pine mushrooms and anthracite from North Korea in an apparent move to keep a close eye on cash flows into Pyongyang.

   The three items have been allowed into South Korea only with a declaration to the customs office, but the toughened rules now require their importers to receive approval from the unification minister, said ministry spokeswoman Lee Jong-joo.

   "Inter-Korean trade volumes of pine mushrooms, sand and anthracite have rapidly increased recently," Lee said in a press briefing. "This revision was prepared in consideration of two things -- transparency of inter-Korean trade and keeping the import volume at a proper level," she added.

   Seoul has so far required approval from the unification minister only when excessive imports of a certain item are feared to harm local producers. Those three items are not considered to fall into that category.

   North Korean sand has been rumored to be linked to the country's military. The concerns prompted Seoul to ban local sand importers from traveling to North Korea after it launched a long-range rocket in April, and such trips are not still allowed.

   Last year, US$73.35 million worth of sand, $14.93 million worth of pine mushrooms and $25.1 million in anthracite were imported from North Korea. Sand was the largest imported item, while anthracite was 9th and pine mushrooms came in at 18th.

   With the tightened entry rules, the government can "make a judgment on the site about whether each business is appropriate and get sufficient information about them, thereby enhancing the transparency of inter-Korean trade and its soundness," the spokeswoman said.


S. Korea Helps N. Korea Update Cross-border Communication Lines

SEOUL (Yonhap) -- South Korea sent optical cables and other communication equipment to North Korea on Oct. 28, following up on a recent pledge to upgrade phone and fax lines used to approve border crossings.

   The aid worth 850 million won (US$714,000) was the latest in a series of small-scale assistance projects Seoul has authorized in recent weeks, shifting from its earlier hard-line policy toward its nuclear-armed neighbor.

   "Today and tomorrow, our side will deliver optical cables and other equipment to the North for the renovations on the North's side," Unification Ministry spokesman Chun Hae-sung said.

   Cables and conduit lines loaded on about 30 trucks were delivered through transit pathways in the east and the west in the morning, he said.

   The purpose of the aid is to modernize North Korea's military communication lines used to issue permission for South Korean citizens traveling to and from the North. Seoul officials said the North's worn-out equipment caused some 30 cases of miscommunication last month alone, causing delays in daily border traffic.

   West-side lines are mostly used for those commuting to the South Korean-run industrial complex in the North's border town of Kaesong, while the east-side lines are used for Hyundai Asan Corp. staff traveling to the Mt. Kumgang resort on the east coast. With the mountain tours now suspended, Hyundai keeps a small staff there for the upkeep of the closed resort facilities.

   The lines that will be upgraded are used solely for such inter-Korean communication and have no internal purposes, ministry officials said.

   South Korea recently began renovations of its military communication lines, a project that will take about two months.

   The two Koreas had reached a tentative agreement to upgrade the communication lines in 2007, but the project was delayed after their relations soured following the inauguration of Seoul's conservative administration last year.

   In another batch of small-scale aid, South Korea offered 10,000 tons of corn worth US$33 million, 20 tons of milk powder and some medicine earlier this week. North Korea has yet to accept the offer, but Seoul officials expect Pyongyang to do so.