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NORTH KOREA NEWSLETTER NO. 243 (January 3, 2012)
*** TOPIC OF THE WEEK (Part 1)

N. Korea Calls for Improving Inter-Korean Relations, Building Economic Power

SEOUL (Yonhap) -- North Korean leader Kim Jong-un on Jan. 1 called for building economic power and resolving tension with South Korea through the improvement of inter-Korean relations in a New Year's address.

   The North Korean leader called for an end to the confrontation with rival South Korea in what appeared to be an overture to the incoming South Korean president without mentioning its desire to develop nuclear weapons.

   He also refrained from denouncing the South's newly elected president and did not mention its No. 1 enemy, the United States, in the New Year's message delivered verbally for the first time since his grandfather's verbal message 19 years ago.

   North Korea issued a major policy statement on New Year's Day, following a tradition set by Kim's grandfather, North Korea founder Kim Il-sung, and continued by his father, Kim Jong-il. Kim Jong-il died in December 2011, bequeathing the dynastic rule to Kim Jong-un.

   This year's message broadcast at 9:05 a.m. by the North's Korean Central TV and Korean Central Broadcasting Station marked the first New Year's message given verbally by a North Korean leader since Kim Il-sung delivered one in 1994, the year of his death.

   In the address, released later by the (North) Korean Central News Agency (KCNA), Kim was quoted as urging the South Korean government to follow through on previous inter-Korean joint declarations.

   "A key to ending the divide of the nation and achieving reunification is to end the situation of confrontation between the North and the South," the North Korean leader said. "A basic precondition to improving North-South relations and advancing national reunification is to honor and implement North-South joint declarations."

   He was referring to two inter-Korean agreements signed in 2000 and 2007 by the two previous administrations of Kim Dae-jung and Roh Moo-hyun under a "Sunshine Policy" of reconciliation and economic cooperation with North Korea. Both presidents held summit talks with late North Korean leader Kim Jong-il in Pyongyang.

   "All the Korean compatriots in the North, South and abroad should launch a dynamic struggle to carry out to the letter the June 5 Joint Declaration and the October 4 Declaration," Kim said, referring to the inter-Korean declarations.

   Kim called them "great reunification programs common to the nation in the new century and milestones for peace and prosperity," according to KCNA's English script. He added it was important to "remove confrontation" to end the division of the peninsula.

   Kim also urged his country and the South to prioritize "the great national cause of reunifying the country" and said "by holding fast to the ideals of independence, peace and friendship, we will, in the future too, strive to develop relations of friendship and cooperation with the countries that are friendly to our country."

   Kim said, "As we can see with the previous relations, the confrontation only leads to war. The anti-unification people in the South should abandon the policy of confrontation and move toward reconciliation, cooperation and unification."

   "The entire nation should vehemently reject any moves for domination, intervention, aggression and war by outside forces, and never tolerate any acts hindering the country's reunification," he said.

   The North Korean leader's message is a major turn from the menacing rhetoric against South Korea's outgoing Lee Myung-bak administration, which has pursued a hard-line North Korea policy during his five-year term. Lee suspended large aid deliveries and investments because of the lack of progress toward dismantling the North's nuclear weapons programs. As a result, inter-Korean relations spiraled downward, further aggravated by the North's torpedoing of the South Korean battleship Cheonan and shelling of a South Korean island in 2010.

   The young North Korean leader also vowed to strengthen his country's military, calling for the development of more advanced weaponry. But he made no mention of relations with the United States or the international efforts to halt North Korea's nuclear weapons program.

   He simply reiterated that his government was willing to "expand and improve upon friendly and cooperative relationships with all countries friendly to us."

   In his speech, Kim Jong-un echoed themes of previous New Year's messages, emphasizing that improving the living standards of North Koreans and rejuvenating the agricultural and light industries were among the country's main priorities.

   While most of the speech placed an emphasis on strengthening the ailing economy, Kim has also called for building up a "strong, prosperous nation of socialism."

   "We should prompt a decisive turnabout this year in developing into an economic power and improving the livelihoods of people," Kim said.

   Kim also stressed economic development, suggesting change in its economic system. "The new year of 2013 is a year of creation and change, when we should open up a decisive turnabout in developing a strong, prosperous nation," he said.

   "To bring it about, we should fundamentally improve the work ethic of our workers and our business style."

   The leader noted that the country's most important task is to "build an economic giant," calling for an increase in production, especially in the sectors of agriculture and light industry.

   "Agriculture and light industry remain the major fronts for economic construction this year," Kim was quoted as saying. "All economic undertakings for this year should be geared to effecting a radical increase in production, and stabilizing and improving the people's living standards."

   Kim emphasized that the socialist country will also boost livestock, fishery and fruit industries as well.

   But he revealed no details of any planned economic policy changes. He mentioned only a need to "improve economic leadership and management" and "spread useful experiences created in various work units."

   Since July, reports from various media suggest that the North Korean regime has begun carrying out cautious economic incentives aimed at bolstering productivity at farms and factories.

   Some reports said the state was considering letting farmers keep at least 30 percent of their yield. Currently, it is believed, they are allowed to sell only a surplus beyond a government-set quota that is rarely met.

   "We should make innovations in coal-mining and metallurgical industries in particular so as to revitalize the overall economy of the country. We should direct great efforts to bolstering up the sectors and units that have a direct bearing on the people's livelihoods and increasing production there, so as to give them more benefits in living." he said.

   Praising the country's successful launch of a long-range rocket in December, he said the launch helped "carry out the instruction of Kim Jong-il with credit and fully demonstrate the high level of space science and technology, and overall power of Juche Korea," referring to the country's guiding ideology of juche, or self-reliance. He also reiterated Pyongyang's position that the launch was solely to put a satellite into orbit.

   "Let's begin the phase of developing into an economic giant with that spirit, that might that conquered space," Kim said. "This is the slogan that our party and people should carry out this year."

   The international community suspects the Dec. 12 rocket launch was a cover for testing rocket technology used for launching long-range missiles.

   Since 1994, the country had released New Year's messages, deemed a major guideline for future policy direction, in the form of a joint editorial by its three main newspapers -- Rodong Sinmun of the Workers' Party, Joson Inmingun of the (North) Korean People's Army and Chongnyon Jonwi of the Kimilsung Socialist Youth League.

   The rare New Year's speech, analysts said, came as part of Kim's efforts to emulate the popular founder Kim Il-sung, who was known for friendliness and being one with the people.

   The youngest son of late leader Kim Jong-il has mimicked the gestures and fashion style of his grandfather, who frequently made public addresses, differing from his more reclusive father.

   Seoul's Unification Ministry in charge of inter-Korean relations said the North's address is largely consistent with the country's previous policy line of defending its military-first and socialist systems as well as revering its two late leaders.

   The North's reference to its plan to continue to develop cutting-edge defense equipment denotes the country's willingness to further develop long-range missiles, the ministry said in a statement.

   While South Korea's President-elect Park Geun-hye did not make any comment on the North's message, her aides said they would rather take a wait-and-see approach.

   "It is not bad that North Korea appears to be sending a reconciliatory gesture, but it will not lead South Korea to come forward," said one aide who drew up Park's North Korea policy. "Seoul should and will watch further developments."

   Another North Korea affairs expert working for Park said the North seems to be sending "a positive signal to the president-elect, but it remains to be seen how Pyongyang will act after the two sides work on pending issues in earnest after her inauguration." Park will take office on Feb. 25.

   "It is notable that he emphasized improving the direction and management of the economy, although he didn't mention it specifically," the Ministry of Unification said in an analysis.

   The South Korean leader-in-waiting has hinted at a more flexible stance toward the North, vowing effort for an inter-Korean summit and the creation of liaison offices in Seoul and Pyongyang for exchange and cooperation between the divided Koreas.