20000412

N.Korea courts former foes in hunt for bigger aid

DPRK hopes summit will bring financial aid

SEOUL, April 11 (Reuters) - Impoverished North Korea hopes its first summit with South Korea will lead to billions of dollars in badly needed aid and investment, analysts said on Tuesday.

"The Korea summit will lead to better relations between North Korea and its former enemies, and with such confidence building, world agencies may come to terms with Pyongyang," said Hong Yong-pyo, a research fellow at the Korea Institute of National Unification.

"But North Korea must show the world it's commited to change through frequent dialogue and peace gestures," he said.

The two Koreas announced on Monday Kim Dae-jung would travel to Pyongyang for a June 12-14 summit with North Korean leader Kim Jong-il, a stunning breakthrough on the Cold War's last frontier.

Officials in Seoul said the summit agenda would focus on economic cooperation, including South Korea investments in the North's shattered infrastructure.

North Korea desperately wants more aid from international agencies like the World Bank and International Monetary Fund and analysts say it believes the way to get this is through the backing of its former enemies.

The isolated state is in the midst of a diplomatic offensive to try and revive an economy left prostrate by near famine conditions and the dissolution of the former Soviet-led Communist block.

NORTH'S DIPLOMATIC OFFENSIVE

"To accelerate the whole process of securing aid and joining world agencies, by possibly getting South Korea to guarantee payments, Pyongyang has come to the summit agreement," said Chang Dal-joong, a political science professor at Seoul National University.

"By isolating South Korea, North Korea has realised the progress of assistance from the United States and Japan was moving at a snail's pace," he added.

Some analysts say Pyongyang's moves are also aimed at helping President Kim Dae-jung's ruling party in Thursday's general elections, to give Kim a mandate to continue his engagement policy with the North.

President Kim said in late March North Korea should become a member of the Asia-Pacific Economic Cooperation forum and suggested member nations do business with the Stalinist state.

Kim said he also hoped Pyongyang could get aid from agencies such as the IMF and the World Bank, which can potentially provide billions of dollars.

The opposition Grand National Party has criticised Kim Dae-jung's "sunshine policy" of engagement with North Korea as "all carrots and no sticks".

The United States, Japan and South Korea have been coordinating their positions towards North Korea, with Tokyo and Washington both urging Pyongyang to improve ties with Seoul if it wants better ties with the rest of the world.

CHINA TIRED OF SUPPORTING NORTH

Japan and North Korea held their first talks in seven years last week and although they ended inconclusively both sides agreed to talk again, probably next month.

North Korea has also been holding discussions about improving ties with the United States.

North Korea's only strategic ally, China, is getting tired of providing life support for Pyongyang and has been pushing its hungry neighbour to open up its economy, diplomats said.

North Korea is one of the world's most impoverished countries with a per capita income of about $1.50 a day.

Money is the reason North Korea has allowed more than 150,000 South Korean tourists to visit a mountain range near the heavily militarised border dividing the peninsula.

The tours have also had a beneficial side effect for the South. Since they began in November 1998, no incidents of spy ship intrusions or infiltrations have been reported along the ferry route off South Korea's northeastern coast.

The two Koreas remain technically at war because the 1950-53 conflict ended in an armed truce that has yet to be replaced by a peace agreement.-Reuters