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Business ties continue despite clash in Koreas

Trade and business ties between North and South Korea have experienced little fallout from the rivals' military clash in June, their worst in three years.

South Korea had one of its frigates sunk, and at least four sailors killed, with the North losing an unknown number of men in the shootout between the two countries' navies over a disputed sea border.

The clash soured opinion in South Korea and prompted Seoul to freeze plans to send experts to Pyongyang to help set up a mobile phone network in the North's capital.

But businessmen and officials say trade between the two has hardly been affected.

"Our businessmen visited North Korea even after the clash," said Park Kyung-suk, a South Korean Unification Ministry official who monitors inter-Korean economic relations.

"Newcomers seem to wait and see if the situation gets better, but the old hands are still visiting North Korea," he said.

After falling slightly last year, trade between the two Koreas rose 8.9 percent to US$215 million in the first half of 2002 on the year, South Korean government figures show.

This is just half a day's exports for powerhouse South Korea, but represents a significant flow of hard currency for North Korea -- a communist-lead country where drought and economic mismanagement mean many of its 22 million people go hungry.

Dubbed by Washington as part of an international "axis of evil," North Korea has few friends and a steady trickle of residents flee poverty and politics across its border to China.

South Korea's economy is about 27 times as big as the North's, which grew 3.7 percent in 2001 on massive aid inflows to address the food shortage.

The clash over the maritime border, set at the end of the 1950-1953 Korean War but no longer observed by the North, had no lasting effect on container traffic between the two Koreas, the South's unification ministry said.

Nineteen South Korean firms began trade with North Korea in June, raising to 214 the number of companies operating business projects in North Korea, it said.
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