North Korea seen shaking up cabinet

SEOUL (Reuters) - North Korea has replaced five ministers in the past few months, a South Korea government agency said on Tuesday, while a leading daily newspaper said the impoverished state was shaking up its leadership team.

"The large-scale cabinet reshuffle seems to have been carried out with succession in mind," the country's largest daily, Chosun Ilbo, quoted an unnamed government official as saying, but analysts cautioned against reading too much into moves made by the secretive state.

The South's Unification Ministry said the North had replaced its ministers for railways, forestry, agriculture, electronics and the metal industry with veteran bureaucrats. It could not confirm reports that other top officials had also been replaced.

South Korean officials have said leader Kim Jong-il is still firmly in charge even though questions of succession were raised after his suspected stroke in August. Kim and his inner circle hold the real power while ministers have little sway in forming policy, analysts have said.

The Chosun Ilbo quoted its sources as saying the shake-up includes at least four other ministers as well as leaders of the army and the ruling Workers' Party of Korea (WPK).

North Korea's official media said in major policy statements on the first day of the year that top goals for 2009 included rebuilding the economy and boosting numerous sectors such as mining, steel, chemicals and agriculture.

"By looking at the New Year message, which cites a centrally controlled system, collectivism, mass mobilisation and ideology, North Korea seems to have chosen to go back to the past to weather the current crisis," said Park Young-ho, a North Korea expert at the Korea Institute for National Unification.

Analysts said the North's economy had been hard hit from a loss in aid, making economic improvement an imperative.

North Korea has lost out on aid from the South equal to about 5 percent of its estimated $20 billion a year economy after cutting ties with its wealthy neighbour in anger at the policies of its president, who has taken a tough stance towards Pyongyang.

The United States last month called for a halt in heavy fuel oil aid to punish the North for failing to agree at international disarmament talks to a system to verify the claims it made about its nuclear arms programme, considered one of the greatest security threats in Asia.

Analysts said the energy-starved state, whose economy is smaller now than it was 20 years ago, could see a downward slide in production if it lost out on the fuel aid promised to it as a part of the nuclear deal it reached with five regional powers.

The North's media said on Tuesday that Kim visited a newly built power plant and "warmly encouraged the workers (who have been) working miracles and innovations every day from the outset of the new year in hearty response to the call of the WPK."

(Additional reporting by Kim Junghyun; Editing by Nick Macfie)