It was just the start of lunch hour here when the news was interrupted by a special broadcast from North Korea.

A very emotional anchorwoman wearing a traditional black funeral gown announced that ruler Kim Jong-il had died this past Saturday from a heart attack. She said he had been exhausted from all the guidance he had given to make North Korea a great nation.

The South Korean government went into immediate crisis mode.

Choi Bo-sun, spokesman for the Ministry of Unification, the government body that deals with all North Korean matters, says Seoul is following established protocol.

According to plan

"The way in which the government is coping with the death of Kim Jong-il has been laid out in a manual for some time. Now a special commission has been created to monitor all developments in the North."

A separate message from President Lee Myung Bak's office urged citizens to be calm and go about their day as normal.

And judging by reactions here in Seoul, it seemed many South Koreans were doing just that. Most here say what happens in the North has no impact on their lives.

But Yu Mi Hyun, 25, says people should care.

"I was at the office when I heard the news," she told Deutsche Welle. "At first I didn't think it was a big deal." But after she spoke to her friends in the military, she realized that "this is really important and we need to pay more attention."

Negative impact on stock market

One 56-year-old man, who only gave his family name, Seong, was reading newspapers pinned up on a billboard outside the Seoul Press Center. He seemed more concerned about how Kim's death will affect the economy.

"Everything in the market is going to change, Seong says. "All sectors are going to be impacted by his death."

Seong has reason to be concerned. South Korea's KOSPI index took a 3.2 percent hit as news of uncertainty on the Korean Peninsula reached investors abroad.

But the uncertainty is raising the hopes of some here in South Korea – the 22-thousand strong community of North Korean defectors.

Two directions

Kim Hung-kwang is president of North Korea Intellectuals Solidarity, an organization made up of former North Korean elites. He says it's still too early to tell if the regime will survive without its so-called Dear Leader.

"North Korea can go two ways," he says. "It can open up to the international community or it can become an even more militarized regime and become more dangerous than it was before."

Kim says for now, efforts must be made to reach out to ordinary North Koreans and counter the official propaganda about Kim Jong-il.

But the North Korean regime is already hard at work building up the credentials of heir apparent Kim Jong-un, the third youngest son of the late ruler who made his debut last year when he was named a four-star general. Not much is known about Kim except that he is in his late 20s and attended boarding school in Switzerland.

That Western education gives some hopes that he might be more open to engagement with the rest of his world, unlike his father and grandfather before him. But some analysts say Washington and Seoul should not get their hopes up for any dramatic change in Pyongyang's foreign or domestic policies, as any real change would have to be brought on by the North Korean people.

"The controlling power over the North Korean people is still in place and the regime is still capable of carrying violence to suppress the people," says Ryoo Kihl-Jae, a professor at the University of North Korean Studies in Seoul. "I don't think that kind of system can be shaken immediately."

Ryoo adds that if the North Korean regime does start to falter, then the people will eventually be able to challenge their authority.

Author: Jason Strother
Editor: Sarah Berning