Q+A: Why did North Korea free South Korean worker?

By Jon Herskovitz

SEOUL (Reuters) - North Korea on Thursday freed a South Korean worker it had held since late March at a joint factory park for allegedly insulting the state's communist leaders, South Korea's Unification Ministry said.

The release of the worker, identified by his family name Yoo, comes about a week after former U.S. President Bill Clinton went to North Korea to win the freedom of two American journalists also held in the reclusive state since March.

Following are some questions and answers about the releases:

WHY DID PYONGYANG FREE THE AMERICANS AND THE SOUTH KOREAN?

The North's troubled economy may have been a key factor. The country has little it can export except weaponry and has been hard hit by U.N. sanctions that have made it tougher to sell missiles and other arms overseas. North Korea has also suffered from floods in recent weeks that have wiped out crop land. Agriculture is a vital part of its economy, estimated to be worth $17 billion a year, and which has only become weaker since leader Kim Jong-il took over in 1994.

HOW WILL THE RELEASES HELP THE NORTH'S ECONOMY?

The release of the worker from the giant Hyundai Group could put an end to disruptions and rows over wages at the joint factory park in the North. The park is partly run by Hyundai Asan, an affiliate of the group, and is one of the communist state's few legitimate sources of foreign currency, bringing in tens of millions of dollars a year.

It could also lead to the reopening of a mountain resort in North Korea run by Hyundai Asan that has also been a lucrative project for the North's leaders. The South halted visits last year after a North Korean soldier shot dead a South Korean tourist who wandered into a military area.

The release of the two journalists will not lead to any increased business. But the North may hope to ease tensions with Washington and perhaps halt any moves by President Barack Obama to implement unilateral moves to crack down on funds suspected of being tied to illicit activity. The U.S. Treasury brought North Korea's international finances to a virtual halt in 2005 by cracking down on a Macau bank. Other banks, worried about being snared by U.S. financial authorities, steered clear of the North's money after that. The Obama administration has said its policy toward the North has not changed.

WILL KIM BE SEEN AS BUCKLING?

Quite the contrary. The releases have been a propaganda coup for Kim. The Clinton visit was portrayed by the North's media as proof that the country's recent nuclear test and missile launches were a stunning victory for Kim and that this resulted in the former U.S. president coming to Pyongyang to pay tribute and negotiate.

Hyundai Group Chairwoman Hyun Jeong-eun went to North Korea this week to secure the release of the company worker. Her trip will also be trumpeted as a tributary visit that shows one of South Korea's leading conglomerates has great respect for Kim and wants to do business with him.

HOW DOES THIS CHANGE NORTH KOREA'S INTERNAL POLITICS?

Kim can suggest to a domestic audience, especially the military, that he has put the country's military might on show to the world and forced the international community to treat North Korea as a serious power.

By meeting Clinton, the 67-year-old Kim has shown he is in command and may have sufficiently recovered from a suspected stroke a year ago that raised questions about his grip on power.