North Korea's Kim restores relative to power: reports

SEOUL (Reuters) - North Korean leader Kim Jong-il has restored his brother-in-law to a major post, South Korean media reported on Thursday, a move analysts said could signal a major shift in domestic policy in the reclusive state.

Jang Song-thaek, once considered to be among his closest aides but who later fell from grace, has been promoted to the powerful role overseeing internal security, local media quoted unnamed South Korean sources as saying.

Jang, seen as something of an economic reformer in the communist North, was ousted in 2004 when Kim purged his inner circle fearful they were building up so much power it was threatening his own position.

His return may indicate that Kim wants to be surrounded by relatives in order to implement a policy shift for the destitute state or outline a succession path, analysts said.

"Jang is family and Kim trusts his loyalty and capabilities," said Chon Hyun-joon, a specialist on North Korea at the South's Korea Institute for National Unification.

"By appointing Jang as head of the administrative department of the ruling Workers' Party, it seems North Korea will proceed with party-centered reform and opening," Chon said.

Another analyst said Jang could also keep cadres in line if Kim finally indicates which one of his three known sons will succeed him in the world's only communist dynasty or help the North fulfill requirements set in an international agreement to end its nuclear arms program.

North Korea, desperate for hard currency, installed a new premier earlier this year who is seen by analysts as a backer of economic reform. It then sent him on a high-profile mission to Southeast Asia to inspect Vietnam's economic reforms and find new trading partners.

The North's GDP -- estimated to be 21.2 trillion won ($22.83 billion) by the South's central bank -- ranks around that of war-torn Sri Lanka, and is less than 3 percent of the South Korean economy.

Jang, 61, married Kim's sister in 1972 and then slowly rose through the ranks of the North's ruling Workers' Party, according to the South's Unification Ministry.

Jang was one of the top-level cadres present at a lunch Kim hosted last month in Pyongyang for South Korean President Roh Moo-hyun when he was there for only the second summit of the states divided since the end of World War Two.

(Additional reporting by Jessica Kim, editing by Jonathan Thatcher)

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