North Korea, hit hard by unprecedented power shortages, is seeking emergency supplies from South Korea. Officials from the two nations are expected to conclude three days of talks in Pyongyang today after agreeing on needed arrangements. Visitors to the North say factories are running at just 20 percent of capacity and blackouts in homes are routine.

The talks are the latest in a series of inter-Korean moves to improve relations following last June’s summit meeting between the North and South Korean leaders. Those moves have already produced promising results, such as talks on economic cooperation and reunions of separated relatives.

A project will get under way in March to restore the disconnected railway line across the Demilitarized Zone that separates the two Koreas. Also in the works are joint field surveys for flood control and fishery cooperation. Deeds, not words, are setting the pace. It remains to be seen, however, whether these efforts will lead to the establishment of a permanent framework of peace and stability on the Korean Peninsula.

North Korea has launched a spate of diplomatic initiatives since last year. During his widely watched visit to Shanghai in January, General Secretary Kim Jong Il toured industrial and financial facilities, including a U.S. auto plant, a Japanese high-tech company and a stock exchange. Another group of economic officials visited the boom city this month.

Obviously, Pyongyang is looking to China as a model of economic development. China, which shifted to a “socialist market economy” in the late 1970s, has since energized its economy and raised its income through the introduction of foreign technology and investment. This has been achieved, however, under the dictatorship of the Chinese Communist Party. North Korea is also committed to rebuilding its battered economy under the control of the Korean Workers Party.

North Korea has suffered severe economic setbacks in the past decade, for both external and internal reasons. Abroad, it has lost key markets in the former Soviet Union and East Europe due to the end of the Cold War. At home, it has been hit by famine because of floods and other natural disasters. Also to blame is the rigid central-economic-planning system maintained under a reclusive leadership. Acute food and power shortages stem largely from economic mismanagement.

In a message in the party newspaper early this year, Mr. Kim stressed the need for “new thinking” and expressed a determination to revive the moribund economy. Acknowledging that North Korea’s economic power is no longer what it was in the 1960s, when it arguably rivaled South Korea’s, he called for the introduction of advanced equipment and technology.

Mr. Kim has his work cut out. Since the death of his father, Kim Il Sung, the younger Kim has steadily built up his leadership with the solid support of the military. Aside from expanding diplomatic ties, reshaping the economy is his top priority. For the time being, free economy activity will be allowed in free-trade zones; additionally, certain private ventures will be tolerated. Food shortages have spawned small-scale free markets throughout the country. The free-trade zones, both new and old, will be vying for foreign investment and technology.

Will these moves take root and spur further liberalization? The answer depends, in the final analysis, on whether Pyongyang can get rid of the old systems and practices that were established under its command economy. Developments so far are not entirely encouraging. For example, North Korea has suspended port calls by South Korean ships in regular commercial service in an apparent attempt to raise the entry fee, causing a serious shortage of equipment and supplies for South Korean firms operating there. Such a move can undermine long-term economic cooperation.

South Korean President Kim Dae Jung also faces difficulties in pursuit of his “sunshine policy” of reconciliation. With the domestic economy in poor shape now, his popularity seems to be ebbing. Ahead of a presidential election set for next year, the opposition is attacking Mr. Kim for “leaning too far” toward the North. A planned revision of the National Security Law — once used to suppress human rights — is unlikely to materialize before Mr. Kim Jong Il visits Seoul, perhaps in the first half of this year.

Both Koreas are watching to see how the new U.S. administration will deal with Pyongyang. A key bellwether will be missile talks expected to be held in March between Washington and Pyongyang. A recurrence of confrontation, anathema to foreign investment and technology, is the last thing they want. Further expansion of Japan’s economic and other exchanges with North Korea will help prevent such a reversal of course.

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