Under the Loving Care of the Fatherly Leader: North Korea and the Kim Dynasty (97 page)

By early 1992, Pyongyang’s panic over the prospect of absorption seemed to have abated slightly. The regime might have felt that a campaign to frighten any wavering members of its elite class and unify them around the Kim Il-sung and Kim Jong-il leadership was succeeding. As part of the campaign, North Korean television broadcast a documentary showing former East German officials looking for jobs and peddling hot dogs on the street.
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No doubt another cause for at least momentary relaxation in Pyongyang was a shift of opinion in South Korea so drastic that it appeared, for the moment, that the interests of the Northern and Southern regimes might actually overlap. German unification had proven so expensive that many South Koreans who had looked forward to a quick, German-style reunification of
Korea now came to hope for a more gradual process, one that would allow time for the North to build up its economy so it would represent less of a burden to a prospective merger partner.

“German reunification is a good example of the worst case,” said Park Young-kyu, a scholar at Seoul’s Research Institute for National Reunification and one of the South Koreans on the trip. South Korea’s Finance Ministry estimated that the price tag, if the South should have to absorb the Northern economy before the year 2000, would be $980 billion—more than three times the South’s then-current gross national product of $280 billion.
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Such estimates took into account the needs for worker retraining, improvements in infrastructure such as roads and ports, social welfare benefits for Northerners and costs for environmental cleanup and administrative integration. One South Korean government-sponsored think tank reported that some 70 percent of East German firms would fail to survive reunification, and 20 percent of East Germans would lose their jobs in the process. As the North Korean economy stood then, the post-reunification job loss there would be far greater, on the order of 50 percent, said the Korea Institute of Economy and Technology.
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Many economists feared that the gap in incomes and living standards had grown too wide to permit splicing the two Korean economies together. The South was approaching a $7,000 per capita income, while the North was declining from a high that might have approached the $1,000 level.
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A consensus was building in South Korea that Seoul must help Pyongyang close that gap—and in the process help prop up the North Korean economy. As a theoretical bonus, prosperity presumably would make Pyongyang easier to deal with.

Mean-while, soaring labor costs had punched the export-based South Korean economy in the solar plexus—driving home the humbling lesson that a relatively scrawny Seoul would be much harder pressed than heavyweight Bonn to avoid the consequences of a sudden reunification. In their nightmares, Seoul residents saw their capital overrun by destitute Northern cousins fleeing south to pursue dreams of the good life. The Finance Ministry proposed severe limits on cross-border travel in the initial post-reunification period—-with an exception for the divided families whom the South sought to reunite.
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One Western diplomat with long experience studying Korean society painted for me an even more forbidding picture. “Abrupt unification along the lines of East and West Germany would be a disaster,” he told me in August 1991. “If they-were to reunify today, the South Koreans would take over everything. North Koreans would be the underlings—the guys sweeping, or wiping the babies’ asses.” Unlike the people from South Korea’s Cholla provinces, who previously had taken such menial roles in Seoul, North Koreans “are not stoic,” the diplomat said. “They wouldn’t take it. They’d get real violent real quick.”

Seoul’s Korea Institute of Economy and Technology, among others, argued that the South should help develop new, more competitive industry in the North
before
reunification to minimize such disruptions. The message went over expecially well with one particular group of South Koreans. Shin Woong-shik, a Seoul lawyer specializing in legal dealings with Pyongyang, went on the trip and told me that much of the Southern interest came from among the millions of South Koreans who hailed from the North. Before and during the Korean War people from the North, many of them from the upper socioeconomic groups purged by the communists, had migrated to the South. Himself the grandson of the operator of a gold mine in what became North Korea, Shin said many rich, Northern-born South Koreans had sentimental reasons for helping to develop their home region. Topping the list were Daewoo Group Chairman Kim Woo-choong and Hyundai founder Chung Ju-yung—the latter an unsuccessful candidate for president of South Korea, in the December 18, 1992, election.
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In May of 1991, Daewoo’s Kim Woo-choong had gone to Pyongyang and discussed both commodity trade and joint manufacturing ventures in such fields as textiles and electronics. The South had traded rice for North Korean coal and cement later that summer—directly, without routing the ship through a third country as in past trade arrangements. That was a third-flag ship, to be sure, but the South had begun to study the possibility of opening a regular shipping service between the two Koreas. Also under study were a proposed settlement account between Seoul’s Export-Import Bank and Pyongyang’s Foreign Trade Bank, to clear payments once direct trade should become active, and eventual issuance of soft loans to North Korea. In August of 1991, the South’s President Roh himself had registered his government’s support for joint ventures, not just the trade that had been encouraged in the past. Negotiations resumed on joint tourist development around Mount Kumgang. Besides such projects and joint development of North Korean natural resources, there had been some talk of joint fisheries zones and of joint ventures in third countries—specifically, using North Korean labor in construction and development projects overseen by South Korean contractors in places like Pakistan and the Middle East and in logging schemes in Russia.

Up to the time of our visit, Daewoo Group had made the closest thing to an actual investment deal. Chairman Kim Woo-choong (-whose brother, Kim Duk-choong, was on our trip) had gone to Pyongyang at Deputy Premier Kim Dal-hyon’s invitation in January 1992. While there, he had signed a contract for a joint venture in which the Northern regime would provide the land and the labor for a big industrial complex at the west coast port of Nampo—-which Pyongyang would designate as another free trade zone. Daewoo would provide capital and technology and help operate nine factories, making textiles, garments, shoes, luggage, stuffed toys and household
utensils. The Daewoo chairman was on record as expressing confidence that the factories could export $10 billion worth of goods a year.

In view of such developments, it was tempting during much of 1992 to foresee that investment in North Korea might proceed according to what might be called the China pattern. When China a decade before had set out to reform its economy and attract outside investment, Japanese and Western business people and financiers had watched with interest—but put down relatively little money particularly at the beginning. The largest part of the outside investment came from co-ethnics: Chinese in Hong Kong and abroad. Seoul lawyer Shin argued that North Korea, like China, was more fortunate in its built-in overseas net-work than the likes of Vietnam, Cambodia and Cuba—-which “don’t have brother countries.” Indeed, it seemed a good bet that, for a while at least, the bulk of any significant investment in North Korea would come from ethnic Koreans abroad—not only in Japan and the United States but, especially, in South Korea.
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Although some South Koreans still argued that the South should not lift a finger to prevent a collapse of the North’s system, Southerners who were on the tour generally took a contrary view. To many of the visitors the odds at long last seemed to have shifted decisively in favor of economic reform in the North; although the process would take years, they wanted to encourage reform because it would bode well for North-South detente and, down the road, a relatively smooth reunification. “If you get wealthier you’ll get more flexible,” observed economic researcher Kim Ick-soo.

Such optimistic thinking, however, soon fell victim to more politics. Shortly after Daewoo’s Chairman Kim signed letters of intent with Pyongyang— and before a contract could win the required approval by the South Korean authorities—the Seoul government suspended all economic cooperation talks and banned all economic exchanges. To get the ban lifted, the government said, Pyongyang must go through with its agreement to permit inspections by North and South Korea of each other’s suspected nuclear-weapons facilities.

One is pleased to see the bugs die in a fire even though one’s house is burned down.

—
KIM IL-SUNG
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Was Kim Il-sung an East Asian Saddam Hussein? There certainly were some similarities. With a ruthlessness that would have won Saddam’s approval, Kim consolidated his power after being installed by Soviet troops in
1945,
purging members of rival factions. Afterward he displayed what we might now describe as a Saddamesque love of sycophancy and aversion to hearing straight factual reports that might conflict with his views. And when Kim started the Korean War in 1950 by invading the South, he guessed “wrong—as Saddam was to do in 1990 and again in 2003—about American resolve and found his own military capabilities quickly overrun. If the Chinese “volunteers” had not come to the rescue and taken over the war effort from Kim and his Korean People’s Army the struggle would have ended in regime change.

That was not to say however, that he would make the same mistake twice. Kim had presided over an enormous amount of construction. Although his people suffered, and were about to suffer even worse, up until the 1990s the citizens of truly destitute Third World countries would have welcomed a North Korean standard of development. Miscalculating and waging a war—-without Soviet or Chinese help—-would have brought the certain destruction of all the North’s economic achievements and of Kim’s and his
son’s dreams of dynastic rule. Kim’s caution in not attacking since that first mistake in 1950—he didn’t move even when Seoul was engulfed several times in anti-government riots—suggested, as did his age, that he would not do so now that South Korea’s superiority had become so evident.

Seoul-based analyst Kim Chang-soon said as the first North Korean nuclear crisis raged that in the wake of Desert Storm, the U.S.-led assault that cancelled Iraq’s conquest of Kuwait, “I don’t think any North Korean leaders believe they can win a war with their present weapons systems. They are developing nuclear weapons not to win a war but to deter and to avoid losing a war.” Japanese Korea-watcher Katsumi Sato offered a similar assessment: “They don’t have enough oil to make war.” Still, it was believed that Kim could not help but dream that the South’s people would prepare the way for him or his son one day. “They are thinking of keeping a military balance, and also they hope that the South may some day experience a crisis of domestic chaos so that a Vietnam-type war could be waged,” said Kim Chang-soon.

Kim Il-sung had pretty much transferred day-to-day power to his son except in three fields, experts believed. Those three were foreign diplomacy North-South relations and the military. Kim senior remained chairman of the military commission while Kim Jong-il was number two. The military had always been the older man’s base, and there was little evidence of disloyalty. But many in the South and elsewhere theorized that once Kim Il-sung died, a movement would arise within the military to kick out Kim Jong-il and install a military government similar to the one under which South Korea had modernized. That was only speculation, of course. The point is that Kim Il-sung himself—not his son—-was believed to be in charge of the military and of any decision to attack or not. The assumption was reassuring to many analysts. The elder Kim had been around for long enough and seen enough world leaders that they could at least make a stab at figuring him out. The younger Kim had been unwilling to have much to do with foreigners and was a largely unknown quantity. Only a few odd traits such as his movies fetish were known.

The consensus of those abroad who had thought about it—and it was faint praise, indeed—-was that they would much rather try to deal with Daddy while he remained alive than take their chances with Junior.

Not only in title, however, but also in fact—as defector testimony since then makes clear—Kim Jong-il’s power was increasing, so much so that his father became almost a figurehead. People’s Army First Lieutenant Lim Yong-son, who defected in 1993, recalled that in 1988 Kim Il-sung had instructed the army, “As you have been following me in participating in a revolution, from now on follow the orders of the Central Committee’s secretary
for organization, Kim Jong-il.” At that point, “inside the military, people thought Kim Jong-il didn’t have the ability to rule,” Lim said. Some officers pointed out, “He didn’t even enlist in the army. He went to university and spent only one month or so in military camp. He doesn’t know how to lead the army. If we make war with Kim Jong-il as our leader, we will all die.”