The Two Koreas_ A Contemporary History - Don Oberdorfer [235]
The supply of so much cash to North Korea without restriction proved to be controversial in South Korea and among Washington policy-makers. Nevertheless, Kim Dae Jung's strategists believe the payments were crucial in demonstrating that the South would keep its economic promises toward the North consistently and reliably. "North Korea was suspicious whether the government would allow the Hyundai to pay cash," particularly in periods of tension between the two governments, a senior official told me. When it did so month after month, he said, "they began to trust us." Looking toward more important things to come, he added, the Hyundai deal was "a bite to catch a fish."
Shorn of trade and aid from its original Soviet Union and East European allies, uncertain of China's stopgap assistance, barred from most commercial loans due to the defaults on its debts in the 1970s, and excluded from international lending agencies due to its closed economic and political systems and the opposition of the United States and other key sponsors, cash-shy North Korea in recent decades has had its hand out for money on nearly every possible occasion. In 1994, it traded its nuclear activities at its production works at Yongbyon for the eventual supply of light-water reactors costing about $4 billion from a consortium of outside nations, plus heavy fuel oil from the United States, which has cost from $60 million to $100 million per year. As noted, it asked $300 million for U.S. inspection of the Kumchang-ni cavern. It initially asked $1 billion in cash yearly for three years for the United States to buy out its ballistic missile exports. Requests for payments from South Korea in food, fertilizer, and currency have been constant; much of the dialogue between the two Koreas in recent years has involved such transactions.
Owing to the reports of extreme famine in outlying areas, the international community began supplying large amounts of humanitarian assistance, principally food and medicine, to North Korea in the mid-1990s. The aid-through foreign government grants, the UN's World Food Program, private aid agencies, and the heavy fuel oil provided by the United States-is worth about $400 million annually, according to the Institute for International Economics' Marcus Noland, a careful independent record keeper of such data. This aid has come from forty-nine different countries, with the United States, South Korea, China, Japan, and the European Union being the largest contributors. In addition, North Korean income from missile sales, remittances from sympathetic Koreans living in Japan, and illicit activities such as counterfeiting and drug trafficking adds up to nearly as much, Noland has estimated. Altogether these sums are roughly equal to the aggregate value of all of North Korea's recorded exports of slightly less than $1 billion per year. Looking at these developments, Noland recently described the DPRK as "an increasingly aid-dependent economy."
The significance of this change has been great in political as well as economic terms, internally as well as externally. Although the regime continued to express fealty to Kim II Sung's theory of juche, or self-reliance, North Korea by the end of the 1990s had become dependent on others for much of its sustenance. Unlike the assistance from communist countries during the cold war, most of this flow was not from ideological allies or sponsors, but from those who were not committed to survival of the regime. To keep money flowing and improve his standing abroad, Kim Jong