The televised reception given Kim Dae-jung in Pyongyang on June 13, 2000, was a revelation to many non–North Korean viewers. It showed a relaxed, confident and witty Kim Jong-il, the perfect host. Seventeen years after his first, initially sour foray into diplomacy in China, he appeared at last to have developed charisma worthy of the heir to Kim Il-sung. He personally went to the airport to receive Kim Dae-jung, clasping his hand and showing the deference due to an elder. “I am sure the people in South Korea were surprised to see you come to greet me,” Kim Dae-jung told him as they began their first substantive meeting the next day.
Kim Jong-il displayed a previously underappreciated talent for making sly jokes. “Some Europeans have wondered “why I am so reclusive,” he remarked to his Southern counterpart. “I am not such a great figure worthy to be called a recluse. The fact is I have made many secret trips to countries like China and Indonesia. How is it that people say I made a rare appearance to welcome you? Whatever the case, I have been here and there without people knowing.”
In one remark he revealed both his addiction to news and something that could pass for compassion. He had watched South Korean television broadcasts to see how Kim Dae-jung’s reception had been covered, he said. “I saw how excited the South Koreans were—especially those who have hometowns in the North, and North Korean defectors. I saw how many of them had tears in their eyes, anxiously waiting for news about their hometowns.” Turning to a high official who accompanied him, he added, “There were scenes of people actually crying.”
An article by a Seoul correspondent of Taiwan’s Taipei Times reported Southerners’ altered perceptions. Along with the historic handshake, “his casual and jocular manner yesterday is transforming his rogue image in Seoul,” the article said. It quoted one Seoul resident as saying, “I always thought of him as a loser with a complex, but seeing him on TV has really changed my image of him. He behaved like the guy next door and appeared normal.” The writer reported that on television “Kim Jong-il appeared comfortable and spoke in a booming voice in contrast with the seemingly fatigued South Korean president.” The North Korean leader’s “confident behavior during the summit is changing his image from one of a weak, second-class heir to that of a statesman.”10
Speaking the same language, the two leaders were able to pack some serious and sometimes frank discussion into their main session. As related in a Seoul speech soon afterward by General Hwang Won-duk, the South Korean president’s foreign affairs and security advisor, one exchange went as follows: “Kim Jong-il said, ‘The Korean problems must be resolved by the Koreans themselves. Don’t you agree?’ Kim Dae-jung replied, ‘Yes, indeed. That is what we have been asking for and we agree with you completely’ Kim Jong-il shot back, ‘Then why do you promote your alliance with the United States and Japan to stifle us?’”
Kim Dae-jung replied, “That is a misunderstanding on your part. The three-nation alliance is not for the three nations to conspire to destroy you. On the contrary, it is to help you. … My North Korea policy is ‘sunshine’ for peace, reconciliation and cooperation. It is because of my sunshine policy that-we are here today. Our policy of reconciliation is to help you—not to destroy you. The three-nation alliance is to support my sunshine policy. … We may come up with some self-determining agreements, but if our neighbors ignore our agreements and hinder their realization, what good “would they be? They-would be meaningless. Therefore you must establish friendly relations with other nations. You must be friendly to the United States and also you ought to kiss and make up with Japan. In this way we’ll be supported by the four big nations around us”—including China and Russia.
Kim Jong-il, Hwang continued, “intently listened to Kim Dae-jung’s sermon and said, ‘I understand,’ and bought Kim Dae-jung’s theme.” The two leaders discussed whether U.S. troops should be withdrawn from the South. “Kim Dae-jung stated, ‘The U.S. troops in South Korea help to prevent war in Korea. In addition they are needed to maintain military equilibrium in the Far East. They will be needed even after unification.’” Hwang said he believed that Kim Jong-il accepted the argument. In any case, Kim Jong-il did not return to “his theme of going alone against the foreign powers.”
“In this way” Hwang said, the two Korean leaders “argued and agreed upon one issue after another. Some issues took less than twenty minutes and others took more than thirty minutes to resolve.” One thorny issue was the South Korean request that Kim Jong-il promise to make a return visit to Seoul, Hwang said. “When Kim Dae-jung stated that Kim Jong-il must come to Seoul, Kim Jong-il said, ‘Oh, no! I cannot go to Seoul in my present capacity’ Kim Dae-jung: ‘Why not?’ Kim Jong-il: ‘I cannot go there in my present official capacity. If I were to go there my people would get upset.’ Kim Dae-jung: ‘Nonsense! You must come. You and I have been discussing reconciliation and if you don’t come to Seoul who else will push our agreements. You have to come.’ Kim Jong-il: ‘No, I cannot go. … [A]s an official it will be impossible for me to visit Seoul.’ Kim Dae-jung tried various approaches to no avail. As the last-ditch try Kim Dae-jung said, You have mentioned several times that you practice the Oriental ethics. I am much older than you are, right? An older man came to see you and you, the younger man, refuse to pay the older man a return visit. Is that ethical?’” Kim Jong-il finally accepted wording in the joint declaration that said he “agreed to visit Seoul at an appropriate time in the future.”
The final argument was over who would sign the declaration. Kim Jong-il insisted that Kim Yong-nam, who as chief of the Supreme People’s Assembly-was officially head of state, should sign for North Korea. “Kim Dae-jung said, ‘No, that will not do. You are the real leader of North Korea. The real leader must sign it. I am the president of South Korea and it is only proper that I should sign it. You must sign it, too.’ They argued over this issue for some twenty-five minutes. Things were going nowhere. Finally [Kim Dae-jung’s aides] broke in and said, You two have met and have been ironing out the agreements and it is not right for any other person to sign it.’ At last, Kim Jong-il agreed to sign it himself.” The Southerners, Hwang said, wanted it signed that very night so that it would make the news in Seoul the following morning, before their return. “Kim Jong-il chuckled and said, ‘You want to return as a triumphant hero, right?’ Kim Dae-jung said, ‘Well, what is wrong with you making me a hero?’ Kim Jong-il said, ‘OK, OK, let’s sign it today’” They signed it that night, the fourteenth. However, they postdated it to the fifteenth so that the date would not include the unlucky number four, which, when pronounced in Korean, sounds like the word for death.11
The completed declaration was a short and simple document starting with an agreement that North and South would “solve the question of the country’s reunification independently by the concerted efforts of the Korean nation responsible for it.” In one item the leaders pledged to seek common ground between the North’s proposal for a federation and the South’s for a looser confederation. They also promised to work on humanitarian issues involving separated families and some North Korean soldiers and agents who were still imprisoned in the South for refusal to recant their loyalty to Pyongyang. They pledged cooperation and exchanges in various fields and promised to “promote the balanced development of the national economy through economic cooperation.”12 The remaining items on Seoul’s wish list were saved for later negotiation by lower-ranking officials.
The South Koreans believed that Kim Jong-il was seriously interested in a new approach. For the last meal of the Pyongyang summit, the North Korean leader invited all of his top subordinates in the party and the military and called upon them to toast Kim Dae-jung as a show of support for the agreements in the declaration. At one point Kim Jong-il turned to the chief of the People’s Army’s political commissars and asked if he had halted anti-South propaganda broadcasts along the Demilitarized Zone. “We will stop it today,” the commissar said. Kim Jong-il did not like that reply and said so: “Why haven’t you stopped sooner? Stop it
now!” It was done. The South followed suit the next day, ceasing its own propaganda broadcasts.13
Hwang’s speech in Seoul detailing the summit talks was delivered to a military veterans’ group. One of the veterans asked him, “Prior to the summit, North Korea was our enemy. How shall we view the North now?” The general replied, “Both you and I have served in the military. We have to view the North using the best of our judgment and our job function. For example, it should be clearly stated that the North is the enemy as far as our front line troops are concerned. If our soldiers treat Northern soldiers as their friends, they will be unable to defend our country. Another example: if our business people dealing with North Korea considered Northerners as enemies, there would not be any economic cooperation.” Note that his formulation was virtually identical to what Kim Jong-il had said to his Chongryon visitors in 1998 regarding North Korea and the American devils.
“When we talk about changes in the North, we are in fact talking about changes in Kim Jong-il’s mind-set,” Hwang told the South Korean veterans. “Kim Jong-il was quite different from what we anticipated.” The North’s leader “speaks well and is jovial, well informed and intelligent.” Reflecting that view of Kim Jong-il, Hwang said, “the North’s politics, economy, society and culture have changed. They are not what they used to be in the past. If we add momentum to the changes, no one will be able to stop them now. We must make sure that the changes continue on.”
The South’s “sunshine” policy of engagement, with the summit symbolizing its supposed success, won Kim Dae-jung the Nobel Peace Prize for 2000. Kim Jong-il, gracious as he had been in his role of host, had to settle for being named Time’s “Asian of the Year.” Worldwide, the magazine named as its “Person of the Year” George W Bush, winner of that year’s close and disputed U.S. presidential election.14
Kim Jong-il gave a further signal of big things to come when an article in large type bearing his name appeared in the January 4, 2001, issue of Nodong Shinmun. Entitled “The Twenty-first Century is a Century of Gigantic Change and Creation,” it put North Koreans on notice that “things are not what they used to be in the 1960s, so no one should follow the way people used to do things in the past.” As in the case of the 1998 constitution’s stress on costs, prices and profits, it could be argued that Kim’s exhortation represented not mere rhetoric but genuine ideological change. In the view of one German scholar, “In 2001 a far-reaching reform policy finally entered into its implementation stage in North Korea after some years of preparation, discussion and formulation.”15
Kim Jong-il had told visiting Chinese officials that he would like to visit their country again.16 He made the visit in January 2001 with a retinue that included military leaders as well as civilian economic officials. He did much of his sightseeing in Shanghai, the showcase city of the new China, where he saw high-tech installations and toured a joint venture Chinese-General Motors automobile plant.17 He even visited the Shanghai Stock Exchange— twice. Chinese reform had been in full swing since Kim’s visit in 1983, when he had gleaned a few ideas but—evidently not terribly impressed overall— had criticized his hosts for “revisionism.” This time, he appeared to take the bait, reportedly exclaiming that “Shanghai has had unbelievable change and attracted world-wide attention.”18 He was quoted as having told Chinese officials he would build in North Korea a high-tech city modeled on Shanghai. To his accompanying subordinates he said, “Let’s build skyscrapers. China has succeeded in economic reforms. Why have we failed?”19
Kim returned to Pyongyang and, later in 2001, ordered his economic advisors to pursue “practical benefits” while maintaining socialist principles. In March 2002 Prime Minister Hong Song-nam announced that “dramatic” measures had been taken. The changes indeed appeared dramatic. Low, government-set prices would give way to prices that bore realistic relationships to the market. This involved enormous inflation from the old prices. Pyongyang bus and sub-way fares rose ten times. Rice sold through state agencies went up a stupendous 550 times, to reflect what people had been paying for the grain on the private market. “Resident fees,” house and apartment rents paid to the state, went from token to very substantial figures. A country that had boasted of being free of taxes now instituted taxes on household electronic devices—still considered luxuries.
Wage increases on the order of twenty-fold were announced to help citizens cope with the new system. Jettisoning a relatively uniform wage structure, the state would now take account of the nature of the work. Miners, stuck with the nastiest job of all, were to receive pay three times higher than factory wages—and twice what was paid to trading company managers. The new compensation structure also took into account regional factors and— reflecting Kim Jong-il’s decades-old, privately expressed gripe about lazy workers—job performance. Foreign currency exchange rates were brought closer to the black market rates, so that the official exchange rate for the U.S. dollar became 200 won instead of 2.2 won.
Impressive as those measures were, questions remained. In particular: Did Kim Jong-il envision a market economy in a communist party-ruled country—a structure similar to the hybrid structure that China had created? Or was he trying, yet again, to shore up a basically socialist, non-market—in large part unchanged—economy? Analysts differed on that question.20 Skeptics noted that the new prices, while reflecting market realities, still were not market-set prices but state-set prices.
Would the changes, regardless of intent, lead to more fundamental changes? A reporter for Seoul’s Dong-A Ilbo first visited North Korea at the time of the July announcement of the new measures. He returned three months later and found intriguing anecdotal evidence. During the summer Pyongyang had hosted a festival called Arirang, to celebrate the country’s return to economic growth after the horrible period of famine—now dubbed the “arduous march.” The festival represented a huge drain of funds with few discernible gains, and to that extent suggested that the regime might have failed to learn the lesson of the 1989 youth festival. Just as in 1989 a prime motive was rivalry with the South—-which, with Japan, co-hosted soccer’s 2002 World Cup matches. On the other hand, though, the Arirang festival had been the occasion for officials to issue operating permits for Pyongyang street stalls selling beverages, snacks and takeout food. The permits were temporary. However, as the Dong-A Ilbo reporter observed, after the festival concluded in August the bustling stands continued to line busy streets near sub-way stations and bus stops. Their operation now had been legitimized by the July measures. Such stands were not confined to Pyongyang but could be found in other places such as the parking lot for tourists visiting Mount Myohyang. The reporter quoted a guide as saying the mania for street vending had affected bricks-and-mortar enterprises. “During the summer, street vendors sell more soft drinks than regular stores. Many enterprises want to branch out into the street vendor business, which has triggered a fierce competition for good spots.”
A new spirit had affected farmers, as well. “It was the normal practice for civil servants and soldiers to go out to help with the weeding,” the reporter wrote. “This year, however, the farm workers informed them that no one needed to come because they would do it on their own.” The farmers, he explained, “have realized that each person can make more money by increasing production and reducing costs. They have also come to understand that accepting nonessential helping hands in exchange for daily wages chips away at their profits.” Income of goat-and-corn farmers whom the reporter visited had soared thanks to the July price increases. Introduction earlier of an “individual competitive system” had transformed many of the farmers’ attitudes and work habits. “Based on last year’s output, the difference in income between those who worked cleverly and the lazybones is five-fold,” the farm manager said. The former “herded goats up the hill at eight in the morning with a lunch box and returned at eight in the evening.” The slackers “slept late. Then they came down the hill with the goats to have lunch and take a nap before climbing back after
two in the afternoon, only to come back early.” As the reporter asked rhetorically, “Is it not natural that there is a difference between the goats that grazed the whole day and those that came and went with the shepherd?”
Buzz words appearing often in the North Korean media included “innovation” and “good at calculation,” the reporter found. “In the past, ‘good at calculation’ meant ‘selfish,’ an utterly insulting expression in North Korean society. At present, however, being good at calculation for both companies and individuals is turning into a virtue.”21
One could look for further clues in subsequent events. It would be difficult for North Korea to join the world economy if the U.S. market remained essentially closed to its products. On that point, the outlook did not seem promising. Both the Clinton and George W. Bush administrations, citing security, had restricted the scope of the relaxation of U.S. sanctions that Clinton had promised. The Bush administration had rather contemptuously rained on Kim Dae-jung’s sunshine policy, starting with a reception of the South Korean president in Washington in which Bush presented a studied and insulting contrast to the deference and hospitality that Kim Jong-il had provided.
In April 2002 South Korea hoped to invite Pyongyang delegates to the annual assembly of the Asian Development Bank, to which North Korea had applied for membership. But politics, once again, thwarted business deals. Washington, the bank’s leading shareholder, vetoed the invitation.22 Even more ominously, the Dong-A Ilbo reporter noted during his October visit that “our delegation caught sight of six Mercedes-Benz sedans taking U.S. delegates to Pyongyang, including James Kelly, U.S. assistant secretary of state for East Asian and Pacific affairs.” As we shall see in chapter 36, Kelly’s visit would slam the door on hopes for U.S. cooperation in the near term.
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