The Two Koreas_ A Contemporary History - Don Oberdorfer [130]
To Rogachev's unexpected request, the Koreans initially offered $350 million in ready cash. Rogachev declared the offer "unacceptable" in view of his long journey and the many statements of support that had been made by Koreans during earlier discussions. After intense bargaining and a threat to break off the talks and return home premptorily, Rogachev was able to raise the offer to $500 million. Suddenly the tables had been turned on the Moscow-Seoul relationship; the supposed superpower was the supplicant and the Korean side was deciding what it could provide. On the third day of negotiations, the Koreans agreed to supply $1 billion in cash and to negotiate later with Maslyukov on the rest of the aid program.
Maslyukov's mission three weeks later resulted in an agreement to supply $1.5 billion more in loans to finance Soviet imports of Korean consumer goods and industrial raw materials, and $500 million for the financing of plants and other capital goods. Together with the $1 billion bank loan obtained by Rogachev, the total was $3 billion, all of which was to be repaid at prevailing interest rates after a three-year grace period.
The deal was controversial in Seoul, especially because Korea had to borrow the money to lend to the Soviet Union. Korean officials justified the arrangement by arguing that the relationship with Moscow was a valuable asset to national security. According to a senior Korean official, Kim Chong Whi told Maslyukov during the negotiations that it would be politically impossible to aid the Soviet Union while Moscow continued to supply arms to North Korea. Maslyukov responded that he had personally rejected a recent North Korean request to Moscow for a new tank factory and would take similar action on future requests. Soviet exports of military equipment to North Korea dropped sharply in 1991, but it is unclear whether this was due to changed political decisions or simply to the economic straits of both Moscow and Pyongyang.
The last official meeting of Gorbachev and Roh, when the Soviet leader stopped at Korea's Cheju Island after a state visit to Japan in April 1991, included a financial transaction of a different sort. Gorbachev returned to Moscow with an unannounced gift from Roh of $100,000 in U.S. currency. An aide to Roh told me later that the money was at least nominally intended for "victims of Chernobyl," the Soviet civil nuclear disaster that had taken place five years earlier. Gorbachev's chief of staff, Valery Boldin, said the Soviet leader eventually had papers drawn up contributing the money to a children's hospital.
Slightly less than half ($1.47 billion) of the ROK aid for the Soviet Union was actually paid out before the collapse of the USSR in December 1991. As the successor state, Russia assumed the debts but lacked the money to make more than token repayments. Eventually Russia began providing tanks, helicopters, missiles, and spare parts to Seoul in partial repayment of the loans. By then Russia had again become an arms exporter to the world, but this time to nations that could pay with hard cash rather than to those with which it shared ideological solidarity. In supplying South Korea with arms, Moscow reversed its historic role as an armorer and ally of the state it had created north of the thirty-eighth parallel.
The Soviet reversal and later the Soviet collapse would have a powerful impact on North Korea. Strategically, it left Pyongyang more vulnerable and more isolated than before. Economically, the loss of North Korea's most generous and most important