The Two Koreas: A Contemporary History

by Oberdorfer, Don

  Quite apart from politics, the South’s growing economic dominance on the peninsula made the country difficult to ignore. Although in the first decades after the Korean War the economy of the North was considerably ahead, by 1988 South Korea’s GNP was at least seven times larger than the North’s, and the gap was growing rapidly.

  Up to 1984, the Soviet Union had provided more than $2 billion in foreign aid and credits to North Korea, much of it in the form of whole factories financed by soft loans that were never repaid. Following the trips to Moscow by Kim Il Sung in 1984 and 1986, the Soviet Union had provided increasing quantities of oil and gas, weapons, and a variety of other goods on easy credit and concessional terms. In 1984, however, Pyongyang stopped paying even interest on its smaller debt to Western creditors, and three years later it was officially declared in default, making it ineligible for further commercial loans. By 1988 Moscow was shipping $1.9 billion in goods to North Korea while receiving less than $0.9 billion in return. This heavily subsidized Moscow-Pyongyang trade made up nearly three-fifths of North Korea’s total trade turnover.

  The vibrant economy of South Korea, on the other hand, was booming, with economic growth rates over 10 percent annually and a large global trade surplus, as its automobiles, ships, television sets, and computer chips made their mark on the international economy. No longer the recipient of foreign aid, Seoul in mid-1987 had become an aid-dispensing nation by establishing an Economic Development Cooperation Fund to assist developing countries. In their contacts with Moscow, leaders of South Korea’s highly successful chaebols were expressing intense interest in investment and trade in Siberia, a high priority in Soviet economic plans for which massive foreign investment was needed. Moscow initially had hoped for major Japanese funds, but the unresolved dispute over the Soviet-held Northern Islands interfered with this prospect. The ROK was the logical substitute.

  Even before the Politburo decision to move toward ties with the South, North Korea demanded an explanation from its Soviet ally for its growing trade relations with Seoul. In a memorandum in late-September 1988, the International Department of the Soviet Communist Party’s Central Committee responded in astonishingly frank terms:

  The USSR, to solve its economic problems, is interested in new partners. South Korea possesses technology and products that can be of use, especially in the Far Eastern regions of our state. As is well known, South Korea maintains commercial links with almost all countries in the world, including such socialist states as the People’s Republic of China. The opening up of direct economic contacts between the Soviet Union and South Korea will also benefit peace and stability in the Asia-Pacific region. We don’t want to rush developing these ties. We’ll move gradually, measuring progress in the economic field with the political trend in the region.

  The memo added, “At the same time the USSR remains loyal to obligations to the DPRK. We don’t intend to start political relations with South Korea.”

  In December 1988, a month after the Politburo decision on improving ties with South Korea, Seoul passed word that it would favorably consider Moscow’s request for a $300 million commercial loan and also study a possible $40 million project to build a trade center in the Soviet Far East.

  As Gorbachev had directed in the Politburo meeting, Shevardnadze traveled to Pyongyang that month to inform the North Korean leadership directly of Moscow’s decision. The North Korean capital struck members of the Soviet traveling party as depressingly cold and gray with unsmiling people and little clouds of dust in the streets. Kim Il Sung, however, did his best to stay on the good side of his visitors, and in an internal report the Soviet foreign minister described the discussions as “especially cordial.”

  It was left to Foreign Minister Kim Yong Nam, the official who often performed the job of presenting Pyongyang’s most intractable positions, to fiercely attack Moscow’s shift in policy. According to Shevardnadze’s report, his counterpart “rather sharply accused the socialist countries of not evaluating the situation in South Korea correctly, of deepening the division of the country and hindering inter-Korean dialogue and [charged that] some socialist countries are betraying socialism for the sake of money.” Shevardnadze reported that “these fabricated accusations were firmly rejected by us.” The Soviet foreign minister assured the North Koreans that Moscow’s relations with Seoul would continue to be unofficial, and he included this commitment in the formal communiqué issued at the end of the talks.

  Shevardnadze did not repeat in public or in his internal report his most emphatic statement in Pyongyang. At the height of the argument with his North Korean counterpart, he declared heatedly that “I am a communist, and I give you my word as a party member: the USSR leadership does not have any intention and will not establish diplomatic relations with South Korea.” This would be thrown back in his face later by North Korea—and sooner than anyone guessed.

  GORBACHEV MEETS ROH

  In 1989, a year of dramatic change in the external relations of the Soviet Union, ideology gave way to pragmatism and internationally accepted standards. The last Soviet troops left Afghanistan in February, ending an occupation that had severely damaged Moscow’s standing abroad. In May Mikhail Gorbachev traveled to Beijing to terminate once and for all the decades-long dispute between the two giants of communism. In August, with Gorbachev’s approval, the Polish Communist Party gave up power to a coalition headed by the noncommunist trade-union movement Solidarity. This spelled the end of the Brezhnev doctrine, under which Soviet military power enforced the loyalty of its peripheral satellite states. A series of spectacular events in Eastern Europe followed, in which the communist governments of Hungary, Czechoslovakia, Bulgaria, and Romania were ousted or their leaders forced to reverse their political direction. In November the crossing points in the Berlin Wall were flung open, bringing the symbolic end of the Iron Curtain that had divided Europe since World War II and leading in time to the absorption of communist East Germany by the West. At a windblown, sea-tossed summit meeting with President George Bush in Malta in December 1989, Gorbachev gratefully accepted American economic aid and declared that the United States and the Soviet Union were no longer enemies.

  While his foreign policy was winning praise abroad, Gorbachev was under growing criticism at home. The Soviet Union was in the first stages of a painful economic transition, with consumer-goods shortages causing longer and longer lines and the budgetary deficit soaring to 12 percent of GNP, at that point considered abnormally high. Public confidence in the Soviet leadership was sharply declining, just when loosening controls on expression made it possible for the public to declare its views.

  In these circumstances, Gorbachev saw better relations with Seoul as a promising new source of economic help for the embattled Soviet leadership. Moreover, by forging visibly close ties with South Korea, Moscow was poking a finger in the eye of the standoffish Japanese, who were refusing to provide economic assistance because of the Northern Islands issue. Gorbachev had diminished concern about North Korea, which was seen as a holdover from the Stalinist era and the epitome of the Cold War states that were rapidly passing from the scene in Europe.

  Looking back on the Korean developments, Gorbachev wrote in his memoirs, “Our interest in South Korea, one of the East Asian dragons which had succeeded in creating an economic miracle, grew in relation to the worsening of the economic situation in the USSR.” In an interview for this book, the former Soviet leader also pointed out other factors, noting that he took up relations with Seoul “after a serious change in US-Soviet relations and after the concept of New Thinking began to materialize, after the important process of change got under way in Eastern Europe, and after we abandoned the so-called Brezhnev doctrine.”

  In Seoul President Roh watched the signs of a developing Soviet shift, particularly Gorbachev’s two policy speeches on Asian affairs in July 1986 in Vladivostok and September 1988 in Krasnoyarsk. “I took this as an indication that the time was right, the opportunity had come to make ou
rselves available” for realizing the goal of establishing relations, Roh told me in 1993. “I would say I started smelling their real intention.”

  At the end of 1988, Moscow lifted entry restrictions to the USSR by South Koreans, giving them for the first time the same treatment as citizens of other capitalist and developing countries. Shortly thereafter, the two nations opened postal, telegraph, telephone, and telex links. In January 1989, Korea’s most senior business figure, Chung Ju Yung of Hyundai, Korea’s largest conglomerate, visited Moscow and reached an agreement on business cooperation with the Soviet Chamber of Commerce. Soon after, the deputy chairman of the Soviet chamber traveled to Seoul and agreed on the exchange of unofficial trade offices in the two capitals. When the South Korean office in Moscow opened, it was immediately mobbed by hundreds of Soviet entrepreneurs and government officers proposing deals.

  Korean industrialists flocked to Moscow, where they were feted by Soviet officials and presented with requests to help in a wide variety of enterprises, ranging from building consumer-goods factories to converting Soviet military industries to civilian uses. Trade between the two nations increased rapidly.

  Trying to respond, in early 1989 North Korea launched a spirited campaign to persuade Gorbachev to visit Pyongyang, hoping that this could reverse or at least halt the drift toward Seoul. It was widely known that Gorbachev planned to visit China in the spring, which would provide a convenient occasion for a stopover in Pyongyang. High-ranking North Korean leaders and their ambassador in Moscow used every possible tactic to get Gorbachev to add Pyongyang to his itinerary, including begging, demanding, and threatening. “It was very hard for us to invent new reasons all the time why he couldn’t come,” said a Gorbachev aide who prepared his trip to Beijing. Gorbachev’s national security assistant, Anatoly Chernyayev, said Gorbachev feared his reformist reputation would suffer in Pyongyang because “he realized that once he went [there] and they staged a performance of hugging and kissing, everyone would accept it as a double standard.”

  Gorbachev’s refusal to visit was difficult for Pyongyang to swallow. This was especially so because the resolution of the Sino-Soviet dispute—which the Gorbachev journey to Beijing symbolized—created a new situation in which neither major communist power would be fearful about pushing Kim Il Sung’s regime into the arms of the other. Kim was worried about losing leverage with them both, and worse, the potential threat to the North either might pose.

  In Beijing Gorbachev spoke of his fast-developing friendship with South Korea in terms that would have been impossible during the Sino-Soviet split. Briefing materials prepared for him in Moscow noted that “Beijing energetically promotes unofficial ties with Seoul. The PRC’s volume of trade with South Korea is $3 billion, ours is less than $200 million. This connection with Seoul does not harm China’s relations with Pyongyang and at the same time helps the peace process on the Korean peninsula.” Gorbachev told Chinese premier Li Peng, “We think that the USSR is behind China in developing ties with South Korea. Very far behind.” Li responded, “If you mean trade volume, you are right.”

  On the political side, Moscow was reaching out to Seoul through its party-dominated think tanks. In February 1989, the Institute of the U.S.A. and Canada, headed by the influential Georgi Arbatov, hosted Kim Dae Jung, the most internationally prominent opposition leader. The Institute of World Economic and International Relations, headed by the redoubtable Yevgeni Primakov, invited Kim Young Sam, his political rival.

  Kim Young Sam’s visit in June 1989 coincided with a trip to Moscow by North Korean Politburo member Ho Dam. Soviet authorities arranged for the two to meet. Acting on the basis of an understanding reached with the Blue House before his trip, Kim declined Ho’s invitation to visit Pyongyang, insisting that a North-South summit meeting come first. Had Kim accepted and traveled to Pyongyang, the contacts and understandings with the North that resulted might have changed Korean history. As it turned out, Kim’s careful handling of the Moscow visit and the invitation from Pyongyang won acclaim from the government in Seoul and paved the way for his political alliance with Roh Tae Woo in January 1990—an alliance that eventually resulted in Kim becoming Roh’s successor as president.

  Throughout this period, a struggle over Korea policy was taking place in Moscow. On one side were most Foreign Ministry officials, the Soviet military, and the Korea experts in the Central Committee, who favored caution because of the long-standing ties to North Korea; on the other side were members of the Soviet political and economic leadership, who considered the North Korean tie an anachronism and were eager to move ahead quickly with the South to obtain economic assistance. The central issues concerned pace and procedure rather than direction. “We understood the inevitability of future recognition of South Korea, but we were calling for going to this aim step by step,” said a senior Foreign Ministry official. However, he said, some departments in the Central Committee and some personal aides to Gorbachev insisted on taking dramatic steps at once, due to their urgent desire for financial aid. Vadim Tkachenko, the veteran Korea expert on the Central Committee staff, who favored a measured approach, said the top decision makers “from the beginning converted the issue into trade [where] the most important thing was money. . . . [They were] doing everything on the spot, without thinking.”

  The moment of truth arrived in May 1990, when Gorbachev met privately in his office with former Soviet ambassador to the United States Anatoly Dobrynin, who had returned to Moscow to become a senior foreign policy adviser to the Soviet leader. Dobrynin had been invited to visit Seoul for a conference of the InterAction Council, an unofficial group of former heads of state and senior diplomats organized by former West German chancellor Helmut Schmidt. In view of the sensitivity of this trip to Seoul by a high-ranking Soviet official, Dobrynin was required to obtain Gorbachev’s permission.

  The day they met, Gorbachev had just received a report from his finance minister on the dire state of the Soviet Union’s coffers. Foreign goods were urgently needed in an effort to keep living standards from sinking while reforms were under way, but financial markets were refusing to supply further credit because of Moscow’s inability to pay its debts. Searching for money wherever he could, Gorbachev was in the process of authorizing a series of secret financial appeals to the West German government as part of the intense negotiations on the future of Germany.

  Dobrynin recalled that Gorbachev’s words to him were “we need some money.” With that practical preamble, Gorbachev proposed that Dobrynin use the trip to Seoul to explore the possibility of a major loan from the South Korean government. At this stage, Gorbachev was not ready to go to Seoul himself, but he told Dobrynin that he would be willing to meet Roh somewhere else, perhaps in the United States, where he was scheduled to have a summit meeting with Bush in late May or early June.

  Dobrynin arrived in Seoul on May 22 and the following day was taken to a secluded Korean-style building on the grounds of the Blue House. There he met secretly with Roh and his security adviser, Kim Chong Whi, the architect of the Nordpolitik maneuvers. Dobrynin relayed the news that Gorbachev was willing to meet the South Korean leader, a powerful symbolic step tantamount to official recognition and certain to lead rapidly to full diplomatic relations. “You are the third to know,” Dobrynin told the Korean president, “and you are the fourth,” he said to Roh’s aide. Emphasizing the need for secrecy, the Soviet emissary obtained a commitment that the Korean Foreign Ministry would not be informed until the last minute, because the Soviet Foreign Ministry had also been kept in the dark. It was agreed that the meeting would take place two weeks later in San Francisco, which Gorbachev planned to visit after the completion of his Washington summit. Dobrynin did not inform Foreign Minister Shevardnadze of the meeting until shortly before it was publicly announced, and the Soviet Foreign Ministry took no part in the session—extraordinary given the event’s importance.

  According to Dobrynin, he discussed with Roh a loan of some billions of dollars, though
without being specific on figures. In a 1993 interview for this book, Roh quoted Dobrynin as telling him that Soviet leaders “were in a desperate situation for their economic development.” Having seen what Korea had done economically, Roh recalled, “they expected that South Korea could somehow play a role in the success of perestroika. As a model, they were attracted by the Korean economic development. That was their top priority at the time, and they naturally expected that South Korea could contribute to this.” Roh told Dobrynin that Korea would make a major contribution to the Soviet Union, but only if and when full diplomatic relations were established.

  From the Korean perspective, a full breakthrough with the Soviet Union would be of immense importance. It would deprive North Korea of the undivided support of its original sponsor, its most important source of economic and military assistance, and an important military guarantor against American power. Moreover, the spectacle of the general secretary of the Communist Party of the Soviet Union meeting with the president of South Korea meant the legitimization of the Seoul government virtually everywhere and the final collapse of North Korea’s long-standing effort to wall off the southern regime from communist nations. There was little doubt that eventually China would follow Moscow’s example.