North Korea deals up new puzzles for South

Words of regret from North Korea are even more rare than good economic news from the world's last hard-line communist state, so South Korea is understandably excited at having received both from the North in one week.

North Korea surprised South Korea with a message expressing "regret" for a June naval clash in which the North's navy shot up and sank a southern boat, causing deaths on both sides and worsening an already chilly inter-Korean relationship.

Less than a week before the message from Pyongyang official Kim Ryong-song - which also proposed fresh talks - South Korea confirmed that the North had replaced its socialist grain rationing scheme with a system of market prices and higher wages.

Like most moves by the opaque, army-backed state led by Kim Jong-il, the two developments may be connected or they may be coincidences, but they raise more questions than they answer.

One early result of Pyongyang's message may be to take a harsh spotlight off North Korea ahead of key Asian diplomatic events, including the ASEAN Regional Forum in Brunei and visits to South Korea by the Russian and Chinese foreign ministers.

"North Korea found itself in a corner after the clash, with Washington suspending talks," said analyst Choi Choon-heum of the Korea Institute for National Unification (KINU).

The United States and Russia both said they hoped the North's gesture would lead to talks with South Korea, which is cautiously considering the offer to meet in North Korea next month.

North Korea also sent out feelers to Japan ahead of a meeting of the two neighbours' foreign ministers in Brunei next week.

In South Korea, the work of divining North Korea's motives has taken on added intensity in an election year in which parties espouse competing approaches to Pyongyang ahead of parliamentary by-elections in August and a presidential poll in December.

South Koreans who retain high hopes for President Kim Dae-jung's "Sunshine Policy" of bringing North Korea in from the Cold War through aid and exchange visits say the conciliatory message and the nascent reforms vindicate Seoul's approach.

President Kim Dae-jung's official spokeswoman, Park Sun-sook, said that while the analysis and policy response would be done by key ministries, "it looks like the intent of North Korea's offer is to break the current stalemate in North-South ties".

Seoul's unification ministry welcomed the first ever direct North-to-South statement of regret. Pyongyang's regrets over a 1996 submarine raid came through the UN armistice mission.

In National Assembly debate yesterday, ruling party lawmaker Chu Mi-ae said the regret message was "a de facto apology in light of the North's history of not admitting mistakes" even though Pyongyang took no responsibility for the clash.

Lim Dong-won, a former unification minister and adviser to President Kim on North Korea, called the new price system changes a sign "Pyongyang is slowly putting its reform scheme into practice" a year after Kim Jong-il toured reformist model China.

But many in Seoul see a repetition of old North Korean behaviour, designed to blunt criticism enough to keep aid flowing northward while forestalling pressure for fundamental change.

In the wake of the North's "regret", civic groups called on the government to restore plans to ship 300,000 tonnes of surplus rice to the North. The farm ministry, which froze the plans after the navy battle, said no decision had been reached.

Some South Koreans saw a clumsy North Korean effort to boost its sagging image ahead of elections in two weeks.

"North Korea always pays attention to South Korean public opinion, but especially in an election year," said KINU's Choi.

Lawmaker Kim Yong-gap of the opposition, which wants the Sunshine Policy scrapped, told parliament: "We have to be suspicious at a sudden message days before August 8 polls."

Control of the National Assembly hangs in the balance next month when 13 seats in the 273-seat parliament are contested.

Not all analysts agree that recent changes in North Korea's grain distribution policy presage Chinese-style market reforms.

"I don't share South Korea's excitement about the recent changes, because the government fears any significant steps that would threaten its control," said Lee Min-bok, a former North Korean agricultural economist who defected to the South in 1995.

Lee, who said he fled Pyongyang after getting into trouble for advocating China's model of private farm plots, said North Korea's recent rice pricing changes had merely caught up with the reality of a state distribution system that collapsed years ago.