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NORTH KOREA NEWSLETTER NO. 35 (December 25, 2008)

All Headlines 13:34 December 25, 2008


South Korea Sets Aside More Budget for Inter-Korean Programs

SEOUL (Yonhap) -- South Korean lawmakers on Dec. 14 earmarked more budget for supporting inter-Korean cooperation programs for next year, despite heightened tension with North Korea.

Lawmakers approved a government bill using about 1.59 trillion won (US$1.18 billion) from the civilian-government fund to support inter-Korean cooperation projects next year, up 8.6 percent from roughly 1.4 trillion won this year.

The increase reflects the government's intent to improve relations with Pyongyang, despite the current stalemate.

Notably, Seoul set aside 643.7 billion won to provide 400,000 tons of rice and 300,000 tons of fertilizer aid to North Korea.

Inter-Korean relations worsened after conservative South Korean President Lee Myung-bak took office in late February and pledged to link non-humanitarian aid to the North's nuclear disarmament.

Lee later softened his position and has since repeatedly offered to resume reconciliation dialogue. Pyongyang, however, spurned the offers and did not request the annual shipment of humanitarian aid from the South this year.

Tension has grown further since Pyongyang suspended almost all cross-border programs, including a regular cargo train service and the sightseeing tour to the ancient North Korean city of Kaesong in protest of what it calls Seoul's "confrontational" policy toward Pyongyang.

"The government's contribution to the fund was scaled back from 650 billion won to 350 billion won in next year's budget, but the government decided to make up for the shortage with the unspent budget for this year," a Unification Ministry official said, requesting anonymity.

With no humanitarian aid delivered to the North this year, the government had spent only 15 percent of the year's budget by the end of November.

Since the fund was created in 1991, Seoul has used 8.2 trillion won out of a total of 9.3 trillion won worth of government and civilian donations over the past 18 years, according to the "2008 White Paper on Inter-Korean Cooperation Fund" published by the ministry on Dec. 15.


Inter-Korean Trade Falls for Second Straight Month

SEOUL (Yonhap) -- Trade between South and North Korea decreased for the second consecutive month due to the economic downturn and frozen cross-border relations, the Unification Ministry said Dec. 20.

Inter-Korean trade volume fell 27.7 percent in November from the previous year to US$142.72 million, according to ministry data posted on its Web site.

"Payments to North Korea are mostly made in dollars or euros, so the weak Korean currency has been the primary reason for the falling trade," a ministry official said.

More than 80 South Korean firms produce watches, shoes, clothes and kitchenware at a joint industrial complex in the North's border town of Kaesong. North Korea also exports sand to the South.

In October, South and North Korea traded goods and services worth $163.06 million, down 23.2 percent from a year earlier.

Inter-Korean trade volume for December is expected to drop further after North Korea curtailed business operations in the Kaesong complex in retaliation against Seoul's hard-line policy toward it. The number of South Koreans allowed to stay in Kaesong was cut in half as of Dec. 1. The North also suspended tours to its Mount Kumgang resort and curtailed border traffic.

Meanwhile, inter-Korean trade from January to November reached $1.69 billion, an increase of 3.7 percent from the same period in 2007.


N. Korean Defectors to Receive Longer Resettlement Training in the South

SEOUL (Yonhap) -- North Koreans defecting to the South will undergo a 12-week rehabilitation program beginning in March, officials said Dec. 22.

Currently, the South Korean government requires those starting a new life here to participate in an eight-week program at the Hanawon resettlement center in Anseong, about 70 km south of Seoul.

"The extension of the period is to give adequate education," a Unification Ministry official said. "It will go into effect around March after related preparations."

The government is also in consultations with experts to update the curriculum in the center, he added.

Earlier this month, the ministry completed the remodeling of Hanawon, doubling its housing capacity to 600.

More than 14,000 North Korean refugees have entered South Korea since the end of the Korean War in 1953.

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