Predicting the future is risky business. But fundamentals are not too difficult to recognize. The most fundamental fact concerning the Korean peninsula is that North Korea cannot remain as it is. The only question is whether it will change suddenly and abruptly or gradually and incrementally. In either case, Korea will be unified. To maintain peace and security in the region, it is essential that the process of Korean unification remain a peaceful one. With luck, a unified and robust Korea will contribute to the creation of a stable multipolar equilibrium in the Northeast Asian region.”

“No Way Out: North Korea’s Impending Collapse”

Spring 1996

Nine years ago, I wrote “that there is a real possibility that Kim Jong Il may find himself on the way out in the next few years.” Yet Kim Jong Il still rules in Pyongyang, and no sign of “impending collapse” is visible.

What happened? Why did my “prediction” go wrong?

First of all, mine was not exactly a prediction. In the 1996 article, I stated that the collapse of the Kim regime was a real possibility, implying there was also a real possibility that the collapse would not come to pass. The title “No Way Out: North Korea’s Impending Collapse” is strongly predictive. But the title is a product of the editing process, not my own creation.

It is, however, true that the flow of my argument strongly suggested the possibility that Kim Jong Il may lose power. After protecting myself with cautious disclaimers, such as “predicting the future is a risky business,” I nevertheless went on to say that “fundamentals are not too difficult to recognize. The most fundamental fact concerning the Korean peninsula is that North Korea cannot remain as it is. The only question is whether it will change suddenly and abruptly or gradually and incrementally.” This is clearly a predictive statement, but one qualified by the suggestion that it is impossible to predict whether the future will be one of sudden or gradual change. Clearly, profound skepticism about man’s ability to predict the future runs throughout the entire article.

Should we, then, give up entirely the ambition to decipher the future? Perhaps the more appropriate question is whether it is possible to do without assumptions about the future. A man crosses a road, and we know he is able to do so because he assumes no moving vehicle will enter the space he will occupy at that time. In fact, every move we make is based on an assumption about the future. Prediction, in other words, is not a matter of choice. It is a necessity.

But how do we predict the future? What is the premise on which one’s conclusions are based concerning relative likelihood of alternative scenarios? In my 1996 article, I assumed that Kim Jong Il’s political fate would depend on his economic performance, which was a disaster. North Korea was clearly a failed state, unable to feed its own people. Since 1987, North Korean gross national product has been steadily declining, with grain production falling even faster. The collapse of communist regimes meant the loss of trading partners for North Korea and the disappearance of foreign friends who used to provide North Korea with its needs at what used to be called “friendship prices,” meaning subsidies. The choice facing Kim Jong Il today is this: should he go for “reform and opening” or stick to the status quo? If economy has higher priority than politics, the reform option is the obvious one to choose. What North Korea can expect from reformist policy in economic terms has been dramatically demonstrated by the Chinese example. But on the other hand, economic reform can be politically destabilizing. From the viewpoint of Kim Jong Il’s interests, the survival of the regime comes before economic improvement. That is why we should not expect North Korea to adopt serious structural market-oriented reforms anytime soon, which means that the North Korean economy is highly unlikely to improve anytime soon.

Kim’s dilemma is that he is going to be condemned either if he adopts market economic reform or if he does not. In the former case, the Kim Jong Il regime will come under intense political pressure, and in the latter, the North Korean economy will collapse sooner rather than later. On the basis of this inevitability of crisis, I suggested Kim Jong Il might have been forced out of power.

But, so far, there is no indication of Kim Jong Il falling out of power. Why is this so? What can account for Kim Jong Il’s survival?

In my 1996 article, I failed to consider the possibility of aid being extended to North Korea at a scale large enough to make a difference between survival and collapse. There was, first of all, emergency food aid to North Korea that was provided mainly by South Korea, Japan, and the United States, hardly North Korea’s best friends. Without international food aid, large-scale famine in North Korea surely would have occurred. Setting aside pride, on which the North usually pretended it had a monopoly, the North Koreans actively appealed to the international community for food aid. Clearly, the regime was in a crisis. It not only lacked resources to pay for basic necessities but also ran into shortages in military needs. That was serious business. It is one thing for a ruler to let ordinary citizens go hungry. It is an entirely different matter to fail to keep supplies moving to the military camps.

The Role of South Korea

From the standpoint of regime survival, the more important help came from South Korea where President Kim Dae Jung was pursuing what he called the “sunshine policy.” The concept of sunshine policy was to shower North Korea with kindness and generosity so as to convert the North Korean leadership into friendly, peace-loving neighbors. To accomplish this task, the South Korean government encouraged the Hyundai Group to enter into arrangements with North Korea. It has come to be known that the Hyundai Group was not exactly enthusiastic about transferring so much cash to North Korea when the Group itself was under considerable strain due to the financial crisis of 1998. US military officials were suspicious that the North Koreans were using the Hyundai money for military purposes. One thing that is certain is the fact that had the Hyundai Group not provided North Korea with such a large cash payment, it would have been very difficult for North Korea to survive into the 21st century