The Two Koreas_ A Contemporary History - Don Oberdorfer [57]
By the mid-1970s, by most outside estimates, the North's juche economy was falling behind. North Korea's gross national product, adjusted for inflation, doubled between 1965 and 1976, a highly creditable performance for a developing economy. But at the same time, South Korea's real GNP more than tripled. In the mid-1970s, as poverty was reduced below the thirty-eighth parallel, South Korea passed the North in per capita GNP for the first time since the division of the country.
Part of North Korea's economic problem was its very heavy spending for military purposes. From the mid-1960s to the mid1970s, the North devoted an estimated 15 to 20 percent of its economy to its military. The South spent an average of 5 percent on its military, though due to Park's massive armament program the proportion briefly jumped to near 10 percent in the mid-1970s.
In the early 1970s, in an attempt to override the South's growing advantage, Pyongyang abruptly shifted its autarkic policies to a "great leap outward," purchasing entire factories from Western Europe and Japan, in a burst of economic activity that matched its sudden outwardly directed drive for negotiations with the South. One JapaneseDanish venture, for example, was to provide North Korea with the largest cement factory in the world. But in the worldwide economic dislocation following the 1973 Middle East war and oil embargo, North Korea found itself unable to meet the fast-rising payments on its external debts. As a result, North Korea's access to international credit was severely restricted, while South Korea's growing international trade made it a major player on the global scene.
In his conversation with Honecker, Kim conceded none of this but reiterated his belief in the superiority of the North, based in large part on his second strategic direction, the revolutionary struggle in the South. Referring to the fight that he and his guerrilla band had waged against the Japanese, while Park Chung Hee and others were serving in the Japanese army, Kim expressed confidence in his superiority because "the leading circles of South Korea are traitors, whereas we here are patriots." Contrary to existing evidence and belief in the South, Kim claimed that North Korean communists had been behind the student revolution that overthrew the regime of Syngman Rhee in 1960, and that the United States had organized the military junta headed by General Park Chung Hee that took power in 1961. In all these years, said Kim, the South Korean students had supported North Korea and "have not demonstrated against us even a single time," although they had demonstrated repeatedly against "the puppet regime."
Kim expressed certainty that after the withdrawal of U.S. troops, when the South Korean people chose their own way, "then they would choose the way of socialism." In the meantime, he said the crucial objective for the North was to isolate Park and his government rather than return to the 1972-73 era of North-South dialogue. The Americans were trying to get the dialogue restarted, he said, but "if we get together with Park Chung Hee and hold negotiations, there is the danger of weakening the South Korean political forces who are opposing Park Chung Hee."
On the first day of his visit, Honecker had committed East Germany to have "no relations" with South Korea, but Kim continued to stress the need to isolate the South, perhaps in hopes that his visitor would pass along his views to Moscow. Honecker's pledge would prove to be costly to East Germany; over the years that followed, each time the GDR was tempted to trade with the South, a sharp protest from Pyongyang reminded Honecker of his commitment, and the proposed deal was squelched.
Honecker at the time was considered a slavish follower