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SEOUL, Aug. 18 (UPI) -- South Korean officials were embarrassed Monday when a business tycoon returned home from a weeklong trip to North Korea with a controversial agreement on the resumption of cross-border projects. If implemented as agreed, the five-point accord reached between Hyundai Group Chairwoman Hyun Jung-eun and North Korean leader Kim Jong Il could normalize inter-Korean relations, which have been frozen since early last year.
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The South Korean government itself has sought to break the stalemate in inter-Korean ties so as to reduce cross-border tensions and geopolitical risks that have undercut its efforts to revive the economy.
But the agreement calls for the South to resume joint tour programs to the North, a much-needed source of cash for the impoverished North. Implementing this could weaken international collaboration to financially squeeze the communist country, which went ahead with nuclear and missile tests earlier this year despite global appeals.
South Korea halted its package tours to the North's Mount Kumgang in July 2008 after North Korean soldiers shot dead a South Korean tourist who strayed into a restricted military zone at the mountain resort.
The Seoul government had asked the North to offer an apology, allow an on-spot inspection by South Korean officials and promise to prevent a repeat of such an incident.
The suspension of the tour program is believed to have delivered a blow to the cash-strapped North, which earned $538 million in cash from the Hyundai-organized Kumgang tours since they began a decade ago.
Hyundai has also suffered $135.9 million in lost sales since the tours were stopped. This has put the company's North Korean business arm, Hyundai Asan, on the brink of bankruptcy.
The agreement on the resumption of the tour program could be a "win-win" deal for both Kim Jong Il and Hyundai, but not for the South Korean government, because the accord did not include an apology from Pyongyang or permission for Seoul to inspect the site of the shooting.
The accord also said the two sides had agreed to resume the other Hyundai-organized tour program to the North's ancient capital city of Kaesong, another source of cash for Pyongyang as it continues to face U.N. trade and financial sanctions.
The North abruptly halted the Kaesong tour program last December, imposed tough restrictions on border traffic and accused South Korea's conservative President Lee Myung-bak of pursing "confrontation" in response to Seoul's cutoff of economic and food aid.
In addition, the five-point accord said the North would allow reunions of families separated by the division of the peninsula, a move hoping to win humanitarian aid from the South. The North unilaterally suspended family reunions in July 2006 after the South halted food and fertilizer aid in response to a missile test the North carried out.
Pyongyang's state media said the five-point accord came as its "Dear Leader" Kim Jong Il "complied with all requests" from the South Korean businesswoman.
Hyun was originally scheduled to return home last Wednesday, but she extended her North Korean stay five times until Monday, seeking a chance to meet the North's reclusive leader. She met Kim on Sunday afternoon at Mount Myohyang, north of Pyongyang.
The Seoul government welcomed the agreement as "positive" but ruled out any immediate impact because it was not a government-to-government accord. An official said Hyun was just a business person who runs ventures in North Korea and she had no governmental message during her trip.
The government is unlikely to rush to resume tours to the North, as Lee has said part of the cash the South gave to the North under cross-border projects is believed to have been diverted to its nuclear and missile-development programs.
"There is no change in our government's policy in dealing with North Korea," the Unification Ministry, responsible for handling inter-Korean relations, said in a statement. "A change in the future situation will depend on North Korea's attitude and position," it said.
Some analysts say the North's agreement with Hyundai seems part of its effort to sideline the conservative government in Seoul in cross-border projects.
