The two great hopes for South Korea after a year of nuclear crisis and economic uncertainty were that the economy would flourish and North and South Korea would resolve their differences, opening the way to trade and personal contacts.
By the end of 2003, South Korea appeared far closer to realizing the first ambition than the second. If prospects for resolution of differences with North Korea did not appear altogether bleak, they were not high despite Chinese success in getting the North to agree to a second round of multilateral talks early in 2004.
The visit this week of a high-level US delegation to Pyongyang strikes at the differences between the Bush administration and critics, including many South Korean offiicals, who prefer a more conciliatory tack in dealing with the government of Kim Jong Il.
US officials clearly view the visit as an attempt to play on hopes for reconciliation in advance of the next round of talks, while ignoring demands for verifiable abandonment of the North's program. The State Department's deputy spokesman, Adam Ereli, signaled official distaste, saying that the mission was "independent of the administration."
The delegation - which includes Sig Hecker, former director of Los Alamos National Laboratory, and Jack Pritchard, dismissed last year as the State Department's point man on the North - arrives Tuesday in Pyongyang in hopes of visiting the nuclear complex at Yongbyon.
The CIA estimates that North Korea processed enough plutonium there to produce two nuclear warheads before the facility was shut down under the 1994 Geneva framework agreement.
North Korea said last year that it had resumed reprocessing plutonium after expelling two IAEA inspectors at the end of 2002.
At issue is how to respond to Pyongyang's admission, in October 2002, of a separate program to build nuclear warheads from highly enriched uranium - a revelation that caused the collapse of the 1994 agreement.
The North, for its part, wants the US to remove it from the list of nations supporting terrorism and lift its trade embargo. But it is also calling for resumption of monthly shipments of heavy fuel oil, suspended in late 2002, and compensation for suspension of a project - under the 1994 accord - to build twin lightwater reactors for energy.
Impasse on vital issues does not mean that no agreement will emerge. South Korean officials hope that Bush, in the runup to the 2004 election, might be susceptible to a compromise. Similarly, they hope Mr. Kim might be willing to deal to avoid more severe problems after the election.
In the meantime, the South Korean government is counting on spreading economic influence in the North through special industrial zones at Kaesong, northwest of the truce village of Panmunjom, and at Sinuiju, across the Yalu River from the Chinese city of Dandong, though chances of the latter seem remote since the Dutch-Chinese entrepreneur named by Mr. Kim to run it was arrested on corruption charges in China.
But for many South Koreans, corruption scandals at home have overshadowed concerns about their neighbor to the north.
President Roh Moo Hyun, inaugurated last February as successor to Kim Dae Jung, who forged the "sunshine" policy of reconciliation with North Korea, suffered severe embarrassment from squabbles over corruption in which a number of his top aides were arrested. The conservative opposition, which had a majority in the National Assembly, suffered scandals as well.
These issues dominated the headlines, giving the impression that members of all parties have been accepting and giving bribes and that top aides are likely to be targets for investigations.
One concern is that political unrest will undermine the government at a time when leftists are still able to marshal support against the US-Korean alliance and the government's agreement to send 3,000 troops to Iraq. The economy, moreover, was roiled by the increasing numbers of Koreans falling behind on credit payments.
Yet Korea is still thriving at the beginning of 2004. The figures show new records last year in terms of trade surplus, foreign trade, and industrial output. And while economic growth for 2003 increased by less than 3 percent, forecasters estimate the economy will increase by 5 or 6 percent in 2004, more than that of almost any other country in the region.