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NORTH KOREA NEWSLETTER NO. 244 (January 10, 2013)
*** INTER-KOREAN RELATIONS

Inter-Korean Cooperation Fund Increased in Anticipation of Better South-North Ties

SEOUL (Yonhap) -- South Korea has increased money allocated to its inter-Korean cooperation fund this year in anticipation of improved ties with North Korea, sources said on Jan. 3.

   Sources at the Ministry of Unification said the 2013 budget passed by parliament Jan. 1 set aside 1.09 trillion won (US$1.02 billion) in operating expenses for the cooperation fund, up 9.1 percent from a little over 1 trillion won last year. In addition the ministry's budget has been increased by 4.4 percent on-year to 222.2 billion won.

   The moves come as President-elect Park Geun-hye said she will take steps to open dialogue with the socialist country and seek a course to ease tension and promote cooperation with the North. Park, who visited Pyongyang in 2002 and held talks with late North Korean leader Kim Jong-il, will become South Korea's first female president when she takes office on Feb. 25.

   Cross-border relations have been stalled following North Korea's sinking of a South Korean naval vessel in March 2010 and the subsequent ban on most cooperative projects by Seoul. An artillery attack on an island in the Yellow Sea eight months after the sinking and the test firing of two long-range rockets this year further exacerbated tensions.

   Reflecting the increase, state support for the reunion of families separated by the Korean War (1950-53) and humanitarian assistance have been increased by 13 percent from the previous year to 735.7 billion won.
The total covers direct and indirect support for family reunions, support for private organizations that have taken the lead in expanding ties with the North, and money set aside to send 400,000 tons of rice and 300,000 tons of fertilizers to the North.

   Besides such money, Seoul will provide 27 billion won to international agencies that provide aide and other forms of support to North Korea.

   The ministry also said this year's budget allows for the use of 265 billion won to fuel economic cooperation. The 2.6 percent on-year increase can encourage trade and be used to give loans to companies that carry out business activities with the North, as well as money that can be used to develop a mineral mine in the country.

   Seoul said it has earmarked 90.2 billion won this year to facilitate the development of the Kaesong Industrial Complex.

   The complex located just north of the demilitarized zone that separates the two Koreas is considered the crowning achievement of the first inter-Korean summit meeting held in June 2000. Operations at the complex have not been affected by the downturn in inter-Korean relations but plans to expand it have made little progress.

   Lawmakers also increased funds that can be used to help North Korean escapees settle in South Korea from 123.9 billion won last year to 134.2 billion won in 2013.

  
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Execution of Inter-Korean Cooperation Fund Below 10 Percent for 4th Year

SEOUL (Yonhap) -- South Korea's execution of its inter-Korean cooperation fund remained below 10 percent last year for the fourth straight year, government data showed on Jan. 6.

   Last year, the government spent 69.4 billion won (US$65.2 million), or 6.9 percent of the 1.006 trillion won set aside for the inter-Korean cooperation fund, according to the data from the Unification Ministry, which handles inter-Korean affairs.

   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.

   Funding for inter-Korean projects has been low since the Lee Myung-bak administration took office in 2008 with a hardline stance toward the North's nuclear weapons program.

   In 2008, the fund's execution rate plunged to 18.1 percent from 82.2 percent the previous year. The rate has since hovered below 10 percent, at 7.6 percent in 2009, 7.7 percent in 2010 and 4.2 percent in 2011.

   Last year, the fund was used to support construction projects in the inter-Korean industrial complex in the North's border city of Kaesong, as well as for financial aid and loans for inter-Korean businesses, humanitarian projects and the construction of an inter-Korean youth exchange center.

  
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No North Koreans Visited South Korea in 2012: Report

SEOUL (Yonhap) -- The number of North Koreans who visited South Korea in 2012 fell to zero, a testament to the frosty state of inter-Korean relations, government data showed on Jan. 4.

   This is the first occurrence of no visitors from the North since 1998, the Ministry of Unification's monthly report said, and shows how bad inter-Korean relations stood in the last full year of the incumbent Lee Myung-bak administration.

   The conservative administration has taken a firmer stance against Pyongyang than previous liberal governments, which has affected exchanges and cooperation over the demilitarized zone that separates the two Koreas.

   Inter-Korean exchanges almost came to a stop in 2010 when Seoul adopted comprehensive sanctions limiting trades of goods and people, following the North's deadly sinking of a South Korean naval vessel in the Yellow Sea that left 46 sailors dead.

   Official data showed the number of North Koreans' visiting the South peaked at 1,313 in 2005 when the North dispatched a North Korean cheering squad for the South's hosting of the 16th Asian Athletics Championships in the city of Incheon.

   The corresponding figure stood at 62 in 1999 and rose to an average of around 1,000 per year during the Roh Moo-hyun government, which generally advocated policies that emphasized dialogue and cooperation with North Korea.

   The boom in inter-Korean exchange, however, experienced a downturn after Lee took office in early 2008. The number of North Koreans visiting the South tumbled to 332 in Lee's first year. The figure further dived to 14 in 2011, a year after the sinking of the South Korean warship and shelling of an island in the Yellow Sea by North Korean artillery and rockets.

   Inter-Korean relations plummeted further last year when the North conducted two rocket launches in April and December that drew universal condemnation. Despite Pyongyang's claims that the rockets are part of its efforts to peacefully explore space, outsiders believe the socialist country is using the launches to test its long-range missile technology.

   The unification ministry, meanwhile, said the number of South Koreans that visited the North during the January-November period last year stood at 110,116, but 99.8 percent of the total were those who only traveled between the South and the Kaesong Industrial Complex, a joint inter-Korean industrial project in the North Korean border city of Kaesong.

  
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N.K. Calls for Private Sector Cooperation in New Year's Greeting to Aid Groups

SEOUL (Yonhap) -- North Korea called for close private sector cooperation with the South in the country's New Year's greetings sent to private aid groups in Seoul, local groups said on Jan. 7.

   The Korea NGO Council for Cooperation with North Korea (KNCCNK), an association of more than 50 South Korean private aid groups, said they received the faxed greeting from the North at the beginning of the year.

   "Private cooperation projects between the South and North are an important mission to achieve reconciliation and unity of (Korean) people as well as for increasing national prosperity," read the message sent by the North's National Reconciliation Council, North Korea's organization for promoting friendship with the South.

   "When all the (Korean) people join forces, the national wish of unification will be advanced, and we strongly believe the KNCCNK will always lead the undertaking," the message also read.

   In a separate New Year's greeting sent to the Korean Council for Reconciliation and Cooperation, a South Korean meeting to promote unification of the Korean Peninsula, the North Korean council expressed its hope for the South Korean group's increased role in bringing forth unification.

   Another North Korean committee tasked with implementing the unification-promoting June 15 declaration, forged in 2000 between late South Korean president Kim Dae-jung and his North Korean counterpart Kim Jong-il, has also sent its greeting, according to sources.

   One official at a private aid group said "the North has sent such New Year's greetings every year and (this year's) has no special content except the overall positive message that outlined its wish for better relations."

   The greetings came as the North is believed to be scrambling to improve its ties with South ahead of president-elect Park Geun-hye's official inauguration in February.

   Inter-governmental exchange between the South and the North almost came to a halt under the current Lee Myung-bak administration following the North's sinking of South Korean navy vessel Cheonan in March 2010. This provocation coupled with the shelling of an island in the Yellow Sea later that year helped solidify the incumbent administration's hard-line policy toward the North.

   Experts have said Park is expected to come up with ways to ease tensions and improve inter-Korean ties although she may largely follow Lee's conservative stance.

  (END)
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