Is North Korea Too Poor to Be Dangerous?

If North Korea is threatening to invade and annihilate South Korea, why are Hyundai, Daewoo, Samsung and hundreds of other Korean companies expanding their businesses with renewed confidence?

Because they don’t believe North Korean dictator Kim Il Sung’s mammoth army is going to invade the South.

Rightly or not, the South Koreans see Kim’s nuclear ploy as a bid for recognition from the United States. That is, he’s like the man with a bomb strapped to his chest shouting, “Pay attention to me or I’ll blow everybody up!”

The truth about North Korea, a communist state of 22 million people that calls itself the Democratic People’s Republic of Korea, is that it’s irrelevant, an outdated disease like smallpox; it retains an ability to make healthy people suffer, but it’s not really a big threat anymore.

Even if it has atom bomb-making capability, it couldn’t deliver it, experts speculate. To feed and mobilize its army, North Korea depends on fuel from China and money from Korean sympathizers in Japan, both of which are being held back now and can be reduced further.

North Korea has gone downhill economically since the early 1950s, when, with help from China, it fought the Republic of Korea and the United Nations to a standstill. The North’s people are desperately poor--food is scarce, and the economy’s output per person has been shrinking for at least three years and is now only $869 a year.

One reason is that the North has poured its resources into supporting armed forces of 1.3 million troops, 6% of its population.

North Korea avoids openly importing goods from South Korea lest its people find out how prosperous their southern relatives have become. South Korea’s output per person, at $6,850 a year, is almost eight times that of the North.

But why don’t they know? Aren’t television signals beamed from Seoul, or even China or Japan?

“Because the television sets have no knobs for tuning in non-government stations,” says Charles Morrison, a director of the East-West Center, a research organization in Honolulu. “Also, the radio tuners are soldered.”

Meanwhile, South Korean industry is going global, finding new markets and low-labor-cost production sites in Vietnam, Thailand and Indonesia. But, alas, none of that work is going to North Korea, which has millions of laborers who toil on Siberian farms for Russian employers and would much rather work for Hyundai, Lucky Goldstar or Pohang Steel.

No wonder Kim Il Sung, now 82, and his 51-year-old heir-apparent son, Kim Jong Il, see the world leaving their country behind. With the Soviet Union broken up and China changing to a boisterous free-market economy, Stalinist North Korea is isolated as never before.

Therefore, in a mixture of anger, frustration and calculated menace, the Kims are brandishing a nuclear threat and openly trading Scud missile technology to Iran.

Their aims undoubtedly are complex and varied: to gain international respect, as an armed outlaw if nothing else; to reinforce the Kims’ hold over a populace growing restive with hunger and economic deprivation, and, in a strange way, to gain recognition from the United States and therefore legitimacy as a state.

Recognition could give North Korea bargaining leverage with the stronger, more prosperous states around it as it faces a need to change once Kim Il Sung passes from the scene.

South Koreans and other Asians, fearing miscalculations by either side, seem willing to grant that recognition.

Kim Il Sung could launch an attack that, even though defeated, would cost thousands of lives and wreak damage on Seoul. Or the United States could push the northern dictator into a corner.

“I hope Washington consults with Beijing and Tokyo and perhaps Moscow too,” says Andrew Kim, president of Sit/Kim International Investment Associates, a New York-based firm that invests U.S. pension fund money in South Korea and around the world.

Indeed, the Clinton Administration appears to be trying several approaches, from phased-in economic sanctions and military reinforcements to approval of former President Jimmy Carter’s visit to North Korea, at Pyongyang’s request. “Jimmy Carter could be a bright spot,” Andrew Kim says.

Truth is, South Korea both fears the collapse of the North’s economy and looks forward to it. A sudden collapse could be a burden because the Seoul government would be handed instant responsibility for 22 million poor people.

But if phased in over the years, reunification could bring South Korea a 50% increase in hard-working Korean employees for its big companies.

“The companies see business opportunities in the North,” says John Lee, a manager of the Korea Fund, which has $260 million invested in South Korean stocks and bonds and has suffered a decline with the rise of tensions.

So the business leaders want the United States, which has 17,000 troops stationed in South Korea, to keep the North cool and the transition gradual. And with help from China and Japan, perhaps the United States can succeed on the Korean Peninsula--again.

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We would do well to reflect on the U.S. policies that got us where we are today. In 1950, President Harry Truman sent in troops to counter North Korea’s invasion. President Dwight Eisenhower stopped the war in 1953 and began the long era of southern prosperity and northern decline.

The contrast was dramatic: North Korea, under protection of the Soviet and Chinese military, built a huge army and a totalitarian state. South Korea, under protection of the U.S. military, built cars and VCRs.

Today South Korea is a prosperous, advancing society and North Korea is a dangerous place where the people suffer. Who could have predicted that outcome? Anybody who looked at which side had tuning knobs on its TV sets.

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Comparing the Koreas North Korea, a communist state in the Stalinist mold, was a match for South Korea in a war 40 years ago. But since then, the North’s economy has plummeted, while that of the South has become a standout.

North Korea South Korea 1993 gross national product $20 billion $301.4 billion Annual GNP per capita $869 $6,850 Population 23 million * 44 million

* Approximate Sources: Central Intelligence Agency; International Institute for Strategic Studies