North Korean Prime Minister Kim Yong-il arrived yesterday in South Korea for talks in the highest-level visit by a Pyongyang official to Seoul in 15 years.
Kim, whose brief includes reviving the North's crumbling economy, will hold three days of discussions with his counterpart Han Duck-soo on large-scale development projects agreed during a historic summit last month.
Relations are warming following the meeting between South Korean President Roh Moo-hyun and North Korean leader Kim Jong-il in Pyongyang last month -- the second such meeting since the Korean Peninsula was divided more than half a century ago.
"Our nation is now ushering in a rapidly changing era of peace and prosperity," said a North Korean arrival statement, referring to both Koreas.
It pledged "utmost efforts" to agree practical steps to carry out the summit declaration.
At their meeting Roh and Kim Jong-il agreed both on economic projects and on various measures to ease tension. The two countries have remained technically at war since their 1950 to 1953 conflict ended only with an armistice.
But security issues are expected to be put aside for discussion at a meeting of defense ministers late this month, Seoul officials said.
Kim Yong-Il, the top economic policy official in the hardline communist state, visited four Southeast Asian countries, including Vietnam, last month in an apparent attempt to learn from their experiences in boosting growth.
The North's economy shrank an estimated 1.1 percent last year, due partly to floods and the international standoff over its nuclear program, South Korea's central bank said.
It still relies on foreign food aid to feed millions of its people.
South Korea sees joint developments like the flagship Kaesong industrial estate as a way to narrow the huge wealth gap between the two nations in preparation for any eventual reunification.
Media reports its priority would be to set up a joint fishing area around the disputed Yellow Sea border -- a prelude to establishing a "peace zone" to avoid a repetition of bloody naval clashes in 1999 and 2002.
Hundreds of riot police guarded the talks venue, a luxury riverside hotel, and dragged away five protesters just before the visitors arrived.
The protesters displayed signs calling on the North to dismantle its nuclear program, repatriate kidnap victims and improve human rights. They also urged Seoul to make no concessions on the sea border.
South Korea will press for less red tape at the Kaesong estate just north of the border, where some 20,000 North Koreans earning about US$60 a month produce clothes, utensils, watches and other goods for South Korean firms.
Southerners must notify the North Korean military of their entrance or departure three days beforehand. There is also no Internet access, telephone calls are restricted and customs procedures are time-consuming, businessmen say.
The two leaders at their summit called for a quick expansion of the estate.
The two sides are also expected to discuss construction of joint shipbuilding districts in the North and the development of its crumbling railways, roads and natural resources.