S. Korea tells North to pay up as ties worsen

Saturday, May 5, 2012

SEOUL -- South Korea reminded North Korea Friday that it must soon start loan repayments for food aid shipped more than a decade ago, as Pyongyang repeated threats against Seoul's government.

South Korea provided the North with some 2.6 million tons of food worth US$720 million in six installments between 2000 and 2007, with repayments in the form of a low-interest, long-term loan.

The first payment of US$5.83 million in principal and interest is due on June 7 for food shipped in 2000, said Kim Hyung-suk, spokesman for the unification ministry which handles cross-border affairs.

The South's state Export-Import Bank sent a notice to its North Korean counterpart Friday morning, Kim said.

The food aid was provided under low-interest loans while fertilizer aid worth a total of 799.5 billion won (US$707 million) was given free from 2000 to 2007, the ministry said.

South Korea also lent the North equipment and material worth 140 million dollars for railways and roads, and another US$88 million dollars for developing light industry and natural resources.

The food and fertilizer aid ended after conservative President Lee Myung-bak took office in early 2008 and rolled back the previous liberal government's “sunshine” policy of aid and engagement with the North.

The cash-strapped North is supposed to reply to the South's notice within 15 days. Cross-border relations are tense, with the communist state threatening “sacred war” against Lee's government.

It accuses him of insulting remarks during Pyongyang's commemoration last month of the 100th birthday of North Korean founding leader Kim Il Sung.

State media have heaped invective on Lee in response. Military dogs are being trained to chew up portraits of Lee's “rat-like” group, the North's official news agency said Friday.

There is also widespread speculation that the North may carry out another nuclear test, following international criticism of its failed rocket launch on April 13.

And South Korean officials say the North is to blame for the jamming of GPS signals to civilian planes and ships in the South.

The transport ministry said the jamming signals were continuing Friday afternoon, with 412 aircraft affected since last Saturday.

The Incheon coastguard said 122 ships have also reported GPS disturbances since Saturday but no navigational problems resulted.

The jamming affects planes using the South's two biggest airports, Incheon and Gimpo, both near Seoul. Officials say the aircraft can use other navigation devices and there is no safety threat.

The South also accused the North of disrupting GPS signals during a military drill last year and in 2010.

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