The worker -- who crossed the demilitarized zone dividing the Korean peninsula to return home late Thursday -- was let go a week after a visit to Pyongyang by former U.S. President Bill Clinton that helped secure the release of two American journalists imprisoned in the North for illegally entering the country in March.
"It's a positive development," said Daniel Pinkston, a Seoul-based senior analyst for the International Crisis Group. The release of the prisoners, he said, indicates the North Korean leadership is "ready to engage again with the outside world."
Since dictator Kim Jong Il fell ill a year ago, North Korea, which conducted its second nuclear test in May, has taken a markedly harder line in its dealings with other nations while, analysts say, the North's political elite worked to solidify its control domestically.
The South Korean freed Thursday, identified as Yu Seong-jin, worked as a maintenance supervisor at an industrial park in Kaesong, North Korea, where South Korean companies run factories employing low-cost North Korean laborers. Mr. Yu was accused of criticizing the North's political system and encouraging a North Korean woman to defect.
"I am happy to be back safely," Mr. Yu said in brief remarks to reporters after arriving in the South. He expressed his gratitude to all who worked for his release and declined to give details about his detention.
He was released after a visit to Pyongyang by the chairwoman of Hyundai Group, one of whose units manages the industrial park and employs Mr. Yu. Hyundai Group and its Hyundai Asan Corp. subsidiary in recent years have played an important role in facilitating commercial contacts between the North and South.
Relations between the two countries have deteriorated since conservative South Korean President Lee Myung-bak took office last year. Among other things, Mr. Lee ended a policy of essentially unconditional economic assistance for the North, instead insisting that aid be linked to progress on ending Pyongyang's nuclear programs.
It is unclear whether Mr. Yu's release will prompt much of a thaw. The North is still holding the four-person crew of a South Korean fishing boat seized after it strayed into North Korean waters late last month. North Korea Thursday told the South that it is still investigating their case, the South Korean government said.
Mr. Yu's release "is fortunate for the family of Mr. Yu," said Cho Hyun-jin, a spokesman for the South Korean president's office. "Our government will maintain a consistent policy" toward the North, he added.
U.S. officials have said Kim Jong Il, who met with Mr. Clinton, said he wanted to improve ties and hold bilateral talks with Washington. The U.S. has said discussions must take place within the framework of so-called six-party talks that for years have sought to persuade the North to give up its atomic ambitions. China, Japan, Russia and South Korea also participate in those talks.
"To restart the dialogue with the U.S., Kim Jong Il knows that North Korea also needs to talk to South Korea, a U.S. ally," said Jeung Youngtae, a senior researcher at the Korea Institute for National Unification, a government-funded think tank.
Analysts also said they believed the freeing of Mr. Yu is part of an effort by the North to win new cash infusions from the South to shore up its tottering economy, which is under further pressure since the imposition of new United Nations sanctions after May's nuclear test.
"They are absolutely short of money," said Mr. Jeung, and likely want to restart visits by South Korean tourists to a resort on the North's east coast. The visits provided the country with steady income before they were halted last year after a South Korean tourist was shot and killed by a North Korean soldier for reasons that are unclear. Pyongyang is also seeking more benefits from the Kaesong industrial park.
In June, North Korea outlined a series of demands related to the industrial park, calling, among other things, for a $500 million payment to allow continued use of the land on which the complex is built. It also wants to bring forward, to next year from 2015, the start of previously agreed annual land-use payments.
The North also wants Kaesong factory workers' wages to be raised to $300 a month from the current $75. That money is paid by South Korean employers to the North Korean authorities. It is unclear how much actually ends up in the pockets of the workers.
Mr. Clinton's trip, and the release of the two American journalists, prompted some in the South to urge their government to do more to win the freedom of its citizens held in the North. More than 500 South Korean civilians are believed to have been abducted by the North since Korean War hostilities ended with an armistice in 1953.
"Kim Jong Il is a terrorist. We shouldn't accept his behavior," said Choi Sung-yong, president of the Abductees' Family Union, which represents relatives of the missing. He said Seoul "shouldn't hold any dialogue with the North unless it first frees the South Korean abductees and gives up its nuclear weapons."