N Korea strikes deal with South - Pyongyang eases border restrictions

N Korea strikes deal with South - Pyongyang eases border restrictions
By Christian Oliver in Seoul
Copyright The Financial Times Limited 2009
Published: August 17 2009 09:42 | Last updated: August 17 2009 09:42
http://www.ft.com/cms/s/0/9425f70c-8b09-11de-9f50-00144feabdc0.html


North Korea has struck a deal to revive South Korean tourism and factory investment in its territory, seeking hard currency while under increasingly effective UN sanctions.

In a further sign of rapprochement after months of military brinkmanship, Pyongyang also agreed to resume cross-border meetings of families divided by the Korean War of 1950-1953.

Hyun Jeong-eun, chairwoman of Hyundai Group, the South Korean company leading investment in the North, spent six days in Pyongyang before a breakthrough meeting with Kim Jong-il, the communist state’s dictator.

Hyundai’s Asan division has not only developed a factory complex in the North Korean city of Kaesong but also used to run hiking tours to the scenic resort of Mount Kumgang. Both projects have run into severe problems. The North heavily restricted access to Kaesong over recent months and the tours were halted after North Korean soldiers shot dead a South Korean tourist last year.

After Mrs Hyun’s visit, the North agreed to open the border fully to Kaesong. The parties also agreed to not only resume the tours to Mount Kumgang but also to start trips to Mount Paektu on the Chinese border, the legendary crucible of Korean civilisation where the founder of the nation, Tangun, was born.

Details of the agreement were announced by KCNA, North Korea’s official news agency.

Mrs Hyun’s trip came hard on the heels of a visit from Bill Clinton, the former US president, who visited Pyongyang to secure the release of two US journalists. Kim Jong-il has used both visits expertly for his domestic audience, confounding speculation about his poor health by styling himself as a strongman from whom world leaders must seek favour.

North Korea rose to near the top of the west’s foreign policy agenda by firing a long-range missile over Japan in April and detonating a nuclear warhead in May.

Although KCNA cast the meeting as part of a greater restoration of political ties, massive challenges remain to the building of deeper ties between North Korea and the rest of the world. Political analysts say North Korea will never surrender its atomic arsenal but will instead focus its diplomacy on wringing short-term economic concessions out of its partners.

Even on the issue of Kaesong, the statement had no word on the thorny issue of increased rent and wages, which Pyongyang is demanding from the factories. South Korean diplomats described the suggested increases as “preposterous”.

Although South Korea remains insistent that talks should ultimately lead to nuclear disarmament, Seoul on Saturday suggested negotiations on conventional disarmament. North Korea has not responded.