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N. Korea Says South’s President Blocks Better Ties

North Korea warned that there would be no change in inter-Korean relations as long as Lee Myung Bak is South Korea’s president, accusing him of “unethical rowdyism” for his policies after the death of Kim Jong Il.

Lee’s “madcap saber-rattling” along the demilitarized zone between the two countries and his decision to limit South Korean visits to Kim’s funeral were provocations “baffling human imagination,” the Committee for the Peaceful Reunification of Korea said in a statement yesterday.

“This glaringly shows what rude political gangsters the group is and what a despicable immoral and depraved horde it is,” the statement said of Lee’s government. “It is clear that there is nothing to expect from the inter-Korean relations and the nation will suffer only calamities and misfortune as long as this guy stays in office.”

The statement was the second in two days that said the North would have no dealings with Lee’s government, and came as the Korean Central News Agency reported that Kim Jong Un was appointed supreme commander of the Korean People’s Army. KCNA cited a decision taken Dec. 30 at a meeting of the Politburo of the Central Committee of the Workers’ Party of Korea.

Both Kim Jong Un and Lee face leadership tests that could shape their attitude toward engagement. Kim Jong Un needs to cement his grip on power in a country where the United Nations says one-third of the children are physically stunted from a lack of nutrition. Lee and his ruling party, which rolled back the “Sunshine Policy” of engagement with the nuclear-armed North, have dropped in opinion polls ahead of elections later this year.

“Prove Himself”

Kim Jong Un needs to “prove himself in launching his new regime -- and an economic measure would be the most efficient way of doing that,” said Yang Moo Jin, a professor of North Korean politics at the University of North Korean Studies in Seoul. “What’s more hard-hitting for North Koreans than policies that affect how they’ll be able to put food on the table?”

North Korea must take a “decisive turn in the drive to build the country into an economic giant and improve the people’s standard of living,” the Workers’ Party central committee and Central Military Commission said in a joint statement yesterday, published by KCNA. The power, coal and metal industries must be developed, foreign trade expanded and the capital, Pyongyang, turned into a world class city, they said.

Songun Policy

Kim Jong Un’s appointment as leader of the army signals North Korea’s intent to carry on its military-first, or “Songun,” policy, which gives priority in allocating resources and in state affairs to the army, Yang said.

In his annual address tomorrow, Lee will focus on inter- Korean relations, inflation (SKCIYOY) and unemployment, according to a spokesman at Lee’s office who declined to be named, citing government policy. In a New Year’s message yesterday, Lee said his focus for 2012 will be on taming inflation, creating jobs and defending the country, the Yonhap news agency reported.

North Korea’s 2010 gross domestic product was 30 trillion won ($26.5 billion), one-fortieth the size of South Korea’s, according to estimates by the South’s central bank. North Korea’s economy probably shrank in four of the past five years, the Bank of Korea says. Pyongyang doesn’t release GDP data.

Growth to Slow

South Korea’s gross domestic product nearly doubled to 1,173 trillion won ($1 trillion) from 2001 to 2010. The Bank of Korea forecasts that the country’s economic growth will slow to 3.7 percent in 2012 from 3.8 percent in 2011.

Lee will take advantage of the transition in the North and announce a more conciliatory stance, said Kim Young Yoon of the Seoul-based Korea Institute for National Reunification. The opposition has blamed Lee for escalating tensions, saying his tough stance provoked hostilities that killed 50 South Koreans in 2010.

Lee scaled back the Sunshine Policy implemented by his predecessor, Kim Dae Jung, when he entered office in 2008, saying that Kim Jong Il’s provocative policies shouldn’t be rewarded. Lee’s approval rating is at 26.9 percent, according to a poll of 3,750 South Koreans conducted Dec. 19-23 by Seoul- based Real Meter. The margin of error was plus or minus 1.6 percentage points.

Nuclear Talks

“The current mood in South Korea is to take advantage of the North’s regime change and improve inter-Korean relations,” Kim said. “The easiest way to do that would be to call for high-level meetings to make way for resumed six-party talks,” he said, referring to a dialogue that is aimed at persuading North Korea to relinquish its nuclear-weapons program and includes the U.S., China, Japan and Russia.

South Korea ordered a “low-level” alert after Kim Jong Il’s death was announced and expressed “sympathy” with the North Korean people, while limiting the number of its citizens who could travel to Pyongyang on condolence visits. Lee said the measures were meant to signal that his country wasn’t hostile toward the North, while Pyongyang issued threats of “unpredictable catastrophic consequences” over the South’s restrictions on visits.

Tensions on the Korean peninsula erupted into open conflict in March 2010, when 46 South Korean sailors were killed in the sinking of the Cheonan warship. An international panel blamed the attack on North Korea, which has denied the allegations. Eight months later, the North shelled an island in the Yellow Sea, killing four South Koreans.

North Korea, which has twice detonated a nuclear device, has more than 250 long-range artillery installations along the world’s most fortified border in reach of the Seoul area and its 23 million citizens. North Korea and South Korea remain technically at war after their 1950-1953 conflict ended in a cease-fire.

To contact the reporter on this story: Sangwon Yoon in Seoul at syoon32@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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