INTERVIEW-North Korea seeks end of handouts: aid group

from Reuters Alert Net

By Jack Kim

SEOUL, March 14 (Reuters) - North Korea is eager to end its dependence on food handouts and is seeking development assistance to become more self sufficient, the head of one of the biggest donor agencies to the North said on Wednesday.

Private aid from the South to the impoverished North grew in 2006 despite Pyongyang's defiant missile and nuclear tests, but security tensions cut sharply into what had been a growing trend, Lee Yong-sun of Korean Sharing Movement said in an interview.

With recent progress in international efforts to end the communist state's nuclear weapons programme and U.S. efforts to improve ties with the North, Pyongyang is poised to open its doors wider to foreign investment and development help, he said.

"North Korea is seeking more structural development assistance," Lee said. "They are saying they can't live on handouts forever."

North Korea asked the United Nations in 2005 to end all aid through its the U.N. food agency saying its farm production had improved and because Washington was politicising the programme.

But Pyongyang continued to depend on direct food aid from the South. It asked South Korea earlier this month for 300,000 tonnes of fertiliser, and Seoul said it would grant the request. North Korea is expected to also ask for rice aid soon.

"Food and fertiliser are nice but their fertiliser production facilities are obsolete so help is needed to upgrade them, that's the kind of proposals they're making," Lee said.

In one of the latest projects, Lee's group finished the overhaul of a hospital in Pyongyang in December.

The group has been involved in other projects to improve production at North Korean farms and build schools, spending about 10 billion won ($10.6 million) last year. Lee hopes donations will increase to about 15 billion won this year.

North Korea agreed to a breakthrough deal in February with five countries including the South and the United States to begin shutting down its nuclear facilities in return for fuel oil.

Under the agreement, Pyongyang and Washington agreed to work on normalising ties, and their envoys have begun rare dialogue that a North Korean official said was "constructive."

Lee said the deal has sharply improved the outlook among North Korean beneficiaries of aid that there would be more help on setting up a development programme that would let them overcome poverty and dependence on outside aid.

But that has yet to be matched by the government and private donors in the South, he added.

"If the North and the United States are able to agree (on normalising ties), the North will open up more and get into economic development. But melting of the ice among the donors is slower, much slower than the movement between the two countries.