N. Korea Gains Aid Despite Arms Standoff

SEOUL -- The latest round of six-party negotiations on North Korea's nuclear weapons program achieved no breakthrough last week, but the Communist country is already benefiting from a series of economic and diplomatic rewards from its closest neighbors, especially South Korea.

Increased commercial and diplomatic ties were intended as an incentive for North Korea to drop its nuclear program. But the North Korean government is receiving benefits although it has not fulfilled a disarmament agreement that it signed at six-party talks in September. In fact, the North has said it will move forward with a 50-megawatt reactor capable of boosting its avowed nuclear arsenal.

A three-day round of six-nation talks on North Korea ended Friday in Beijing without even an agreement on the schedule for new meetings. But South Korea's National Assembly last week approved $2.6 billion in economic and humanitarian aid to North Korea -- an amount that is more than double the 2005 allotment and so large that it may require the South to issue bonds to finance part of it.

South Korea also opened an official liaison office this month in the North for the first time since the 1950-53 Korean War. The two Koreas, meanwhile, inaugurated a new $10 million joint venture textile company last month in Pyongyang, the North Korean capital.

Plans are being mapped out to more than double the size next year of a South Korean-funded industrial park built just across the border in the North Korean city of Kaesong, where 15 South Korean companies now employ 5,000 North Koreans. Meanwhile, a railroad line that will transit the most heavily militarized border in the world is set to be completed by year's end.

Eager to lure more foreign investment for the North, the South Koreans will unveil a Kaesong Industrial Tradeshow in the southern city of Pusan this week at the Asia-Pacific Economic Cooperation, or APEC, summit of 21 world leaders including President Bush.

After the six-party agreement in September, "the mood for reconciliation has improved," said Moon Dae Keun, director of economic cooperation for South Korea's Unification Ministry, the South's agency responsible for dealing with North Korea. "We still need to resolve the nuclear issue, but the agreement has helped us to move ahead with South-North cooperation."

China has also increased its profile with North Korea. President Hu Jintao visited Pyongyang last month, a rare visit for a Chinese official. He was greeted by North Korea's leader, Kim Jong Il, at Pyongyang's international airport, visited a new Chinese-financed glass factory and was quoted by China's official New China News Agency as promising more economic cooperation.

Leading critics of North Korea are complaining about the reaction to the September agreement. Signed in Beijing by both Koreas, the United States, China, Japan and Russia, the deal called for North Korea to give up all of its nuclear weapons programs in return for unspecified economic and diplomatic incentives.

"We can't give them everything they want now. Instead, we need to make them understand the consequences if they don't comply" with the agreement, said Hwang Jin Ha, a member of the National Assembly from the opposition Grand National Party. "We should only make positive gestures with food aid, economic assistance and investment when we see real steps being taken to resolve the nuclear issue."

But others, particularly in South Korea, contend that the aid gives North Koreans an early taste of the far larger economic and diplomatic benefits possible if it complies with the nuclear agreement.

South Korea has been engaged in a program of rapprochement with the impoverished North since the 1990s, under a "sunshine policy" initiated by Kim Dae Jung, a former dissident and Nobel Peace Prize winner who was president from 1998 to 2003.