(LEAD) S. Korea mulls offering aid for release of POWs in North

(ATTN: RECASTS headline, lead, UPDATES the story with minister's press conference)
By Kim Hyun

SEOUL, Dec. 31 (Yonhap) -- South Korea may offer economic aid to North Korea in
exchange for the release of its citizens allegedly held in the communist country,
the unification minister said Thursday, an approach reminiscent of a past German
program.
The idea, officially laid out for the first time by Minister Hyun In-taek in his
New Year press briefing, came amid signs of improving ties between the two Koreas
after a year of tension. But its viability is in question, with North Korea
denying the existence of any South Korean detainees.
Seoul believes more than 1,000 people -- mostly prisoners of the Korean War or
fishermen whose boats had drifted to the North -- are still held against their
will north of the border.
"It has yet to be put up for discussion with North Korea, but if we provide
humanitarian assistance and North Korea can provide humanitarian cooperation, I
believe that will be a way to resolve the issue," Hyun told reporters.
Hyun did not elaborate, but the ministry has long considered the aid-for-abductee
swap modeled after West Germany's so-called "frei kauf" program.
From 1963-1989, West Germany brought back tens of thousands of political
prisoners and other detainees from East Germany by paying some 3.4 billion German
marks, or about $51,000 per person.
Amid reports of the German model under review in Seoul, North Korea renewed its
claim earlier December that it is holding no South Koreans against their will and
that the issue of POWs was settled by the Korean War armistice agreement in 1953.
Hyun has "seriously insulted and mocked the DPRK (North Korea) under the pretext
of a petty amount of humanitarian aid goods," the Rodong Sinmun, the North's
major newspaper published by the Workers' Party, said on Dec. 12.
The minister argued the scheme will benefit both sides.
"What we need is resolving the issues of POWs and separated families, and North
Korea has its humanitarian need. We think if both sides respond to and cooperate
with each other, they can come up with a solution," Hyun said.
Observers foresee improvement in inter-Korean relations in 2010, with
expectations rising for a third inter-Korean summit and progress in the North's
dialogue with the U.S. South Korea has rapidly increased its humanitarian aid to
the North, most recently with shipments of the anti-viral drug Tamiflu to help
prevent an H1N1 influenza epidemic there.
Hyun said "the possibility is open" for a summit between President Lee Myung-bak
and North Korean leader Kim Jong-il.
In an effort to solve Pyongyang's nuclear issue, Seoul will push forward its
offer of a "grand bargain" -- a package deal to end North Korea's nuclear drive
in return for aid and diplomatic guarantees -- as the centerpiece of its
inter-Korean policy, an approach reviled by Pyongyang.
North Korea has spurned the offer, presented by Lee in September, as "rubbish,"
accusing Lee of trying to impede its negotiations with the United States.
Seoul will "move forward the grand bargain proposal in six-party talks and also
in the inter-Korean context," Hyun said in his New Year policy briefing to
President Lee earlier in the day.
As one of new projects, the ministry said it will seek to launch a consultative
meeting between South Korea's unification minister and Germany's interior
minister.
On the Kaesong joint industrial complex, South Korea will continue to demand that
border traffic regulations be lifted so that its workers can freely travel to and
from the park late at night and use mobile phones there. The park, located in the
North's border town of Kaesong, currently hosts 116 South Korean firms employing
about 42,000 North Koreans.
Humanitarian aid efforts to the North will focus on infants, children, pregnant
women and the disabled, the ministry said. It will also propose joint forestry
projects to make the North greener, after years of deforestation driven mainly by
a need for fuel.
hkim@yna.co.kr
(END)