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NORTH KOREA NEWSLETTER NO. 247 (January 31, 2013)

S. Korea's Humanitarian Aid to N. Korea Drops to 16-year Low Last Year

SEOUL (Yonhap) -- South Korea's humanitarian aid to North Korea dropped 28 percent to a record 16-year low last year, the unification ministry said on Jan. 27, as the cross-border relations remained chilled under Seoul's outgoing government of President Lee Myung-bak.

   Seoul's humanitarian aid to the impoverished North totaled 14.1 billion won (US$13.1 million), compared with 19.6 billion won a year earlier. Last year's amount is the lowest since 1996 when only 3.6 billion won was provided to the North in humanitarian aid.

   The sharp drop came as relations between the two Koreas remained frozen since the North sank a South Korean warship near their Yellow Sea border in March 2010 and then shelled a border island in November that year. Pyongyang's nuclear test and rocket launches also affected their ties.

   The total amount of assistance the South provided the North during the five years of President Lee was 257.5 billion won, including 155.1 billion won of civilian aid. The total amount is only 20 percent of the aid sent during the presidency of Lee's predecessor, the former late President Roh Moo-hyun.


Most South Korean Firms Show Interest in Inter-Korean Economic Ties

SEOUL (Yonhap) -- A majority of South Korean companies are interested in inter-Korean economic cooperation as the new government is expected to improve strained relations with North Korea, a poll showed on Jan. 29.

   According to the survey of 500 South Korean companies by the Korean Chamber of Commerce and Industry (KCCI), 73 percent of the respondents said that they have or will have an interest in economic cooperation with North Korea.

   The companies' keen interest in inter-Korean economic cooperation resulted from their hopes that the new South Korean government to be inaugurated next month will expand economic cooperation with North Korea, which has been suspended since May 2010.

   The Lee Myung-bak government imposed sanctions on North Korea in retaliation for the sinking of a South Korean warship blamed on the North, stopping all inter-Korean exchange.

   More than 40 percent of the companies polled said that inter-Korean economic cooperation will be expanded after the inauguration of the new government, while only 11.8 percent predicted it will shrink.

   The companies are pinning great hopes on the election pledges of President-elect Park Geun-hye on inter-Korean economic cooperation including the joint development of natural resources in the North, the internationalization of the Kaesong industrial complex located near inter-Korean border and the setup of a logistics network linking inter-Korean railways and ones in Russia.

   Of those polled, 44 percent of the respondents expressed their dissatisfaction with the incumbent government's tough policy toward the North, while a mere 8.6 percent said they are satisfied with the policy.

   The dissatisfaction stemmed from increased volatility in inter-Korean business due to the North's military actions and the South's subsequent economic sanctions against it, the KCCI said.

   The KCCI called for the new government to stabilize conditions of inter-Korean economic cooperation along with ensuring watertight security.


South Korea Develops Index Gauging North Korea's Stability

SEOUL (Yonhap) -- South Korea has developed an index gauging the level of stability in North Korea but it has yet to decide whether to release the index's figures to the public, a government official said on Jan. 29.

   The Ministry of Unification, which deals with inter-Korean relations, has recently completed the development of the so-called North Korea condition index, an official said. The project to develop the index began in 2010.

   The 100 point-scale index, designed to measure the overall stability of the country, assesses three key conditions -- risk of instability, regime change and crisis -- of the largely unpredictable and reclusive country. The index assess stability and recent transformations as well as the likelihood of a crisis developing in the fields of politics, economy, social affairs and the North military.

   The closer the number is to 100, the higher the risk of instability in the North.

   Official data released by various organizations will also be used to compile the yearly index, according to the official. The ministry, however, has yet to decide whether to release the annual figures to the public due to the sensitivity of openly assessing the North's political conditions as well as accuracy issues.

   In order to secure impartiality in compiling the index, the ministry plans to outsource the work to a private entity, which will be selected this month through a bidding process, the official said.