Night Watch

North Korea-South Korea: The Korean Central Broadcasting Agency (KCNA) broadcast the terms of North Korea's agreement to South Korea's proposal to resume reunions for families separated since the 1950-53 Korean War.

The North' Committee for the Peaceful Reunification of Fatherland has proposed working-level talks on 22 August to resume tours to the Mount Kumgang resort in southeastern North Korea. It proposed on 23 August working-level talks to resume family reunions also at the Mount Kumgang resort. It proposed that the resumption of reunions take place on the Festival of the Harvest Moon, called Chusok, on 19 September.

It also proposed a separate round of indirect family reunions via video conference around 4 October -- the anniversary of the 2007 inter-Korean summit, according to the KCNA statement.

Comment: The North's agreement and statement responded to South Korean President Park Geun-Hye's proposal last Thursday that urged the North to "open its heart" and agree to hold the first family reunions since 2010.

The North's reply attempted to finesse two very different programs of engagement. The North tried to ensnare the South into agreeing to discuss resuming tours to Mount Kumgang ahead of the discussions about family reunions. That is because the Mount Kumgang tourist business from South Korea to North Korea, which flourished between 1998 and 2008, was much more profitable than family reunions, which used to take place at the Mount Kumgang resort facilities.

The result is that South Korea has counter-proposed that working level talks occur at Panmunjom and that the order of talks should be reunions followed by tours.

Assuming the North's need for hard currency is as great as it seems, the North will agree to the South's terms.

Iran: For the record. Press sources report that Iran faces a budget shortfall of one third in this year's budget because of lower than expected revenues, senior government officials said.

Oil exports have halved since 2011 as the result of sanctions on Iranian oil sales, shipping and banking imposed by Western nations over Iran's nuclear program. About one-third of the approximately $68 billion budget for March 2013-March 2014 will not be realized, according to Vice-President Eshaq Jahangiri, citing figures provided by the administration of former President Ahmadi-Nejad.

Night Watch

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