South Korea. The approach to North Korea encountered
obstacles. During President Kim Dae Jung's visit to the
United States in March, US President George W. Bush made it
clear that the US attitude to North Korea under his
leadership would be tougher than during the Clinton
administration. To mark the so-called sunshine policy
towards North Korea, Kim appointed a well-known advocate for
this policy to reunification minister Lim Dong Won.
Nevertheless, North Korea broke down all contact with South
Korea at ministerial level as a result of the US position.
To show its support for the reunification process, in May
the EU sent a delegation, led by then EU President Prime
Minister Göran Persson, to Pyongyang and Seoul.
In early September, North Korea proposed to resume talks,
which South Korea accepted. At the same time, however, the
Seoul Parliament voted for a declaration of confidence in
the reunification minister. Formally, Lim was blamed for a
South Korean delegation's failure to visit Pyongyang, but
widespread dissatisfaction with the expensive and
unsuccessful dialogue with the North was considered to be
the real reason. Kim was forced to dismiss Lim and as a
result the entire government resigned on September 4.
did a government transformation with unexpectedly small
changes. China's ambassador and former Foreign Minister Hong
Soon Yung became the new reunification minister. Lim was
given an important advisory role near Kim.
In mid-November, dialogue with North Korea broke down
again and recently entered into agreements on, among other
things, more family reunions were jeopardized. The countries
could not agree on the view of the global fight against
terrorism. As a close ally of the United States, South Korea
remained in high alert following the September 11 attacks
against the United States, which North Korea considered
In November, President Kim Dae Jung resigned as leader of
the ruling party MDP in an attempt to stave off an internal
political crisis following the party's defeat in several
filling elections in October.
South Korea's economy was affected by the international
downturn. In November, forecasts suggested that GDP growth
for 2001 would halt at 2-3%. However, through various
package of measures, the government managed to avoid
economic recession, even though important exports fell. In
August, however, the last repayment could be paid off on the
$ 19.5 billion IMF loan that South Korea was forced to take
during the 1998-99 Asian crisis. At the end of the year,
South Korea lifted the heightened military readiness, which
was supposed to be able to facilitate attempts to breathe
life into the reconciliation process with North Korea.