To outsiders hoping for major changes in North Korea, though, Kim's somewhat mixed-up view of the capitalist world might seem less significant than his reiteration of the failings of socialism as he saw them. As his talk with the Chongryon representatives progressed, for example, he took a different tack on the causes of at least part of the power shortage. He criticized colleagues who insisted on taking juche's taking juche's self-reliant principle to extremes. "During my 1983 visit to China, Hua Guofeng and I visited the Baosan thermal power station," he said. "It was imported from another country. China was technologically advanced enough to build its own power plants but it decided to buy the plant abroad. I asked Hua why" The Chinese leader "said that China could have built the station but the foreign plant was better." In contrast, Kim observed, "Our people reason differently. Their idea is to buy only those parts that we cannot make and the rest we build here. This kind of att.i.tude has led to many costly failures. ... We are paying dearly for our mistakes. ... self-reliant principle to extremes. "During my 1983 visit to China, Hua Guofeng and I visited the Baosan thermal power station," he said. "It was imported from another country. China was technologically advanced enough to build its own power plants but it decided to buy the plant abroad. I asked Hua why" The Chinese leader "said that China could have built the station but the foreign plant was better." In contrast, Kim observed, "Our people reason differently. Their idea is to buy only those parts that we cannot make and the rest we build here. This kind of att.i.tude has led to many costly failures. ... We are paying dearly for our mistakes. ...

"Our socialist system is people-centered and we say that we serve the people, but the truth of the matter is that our economic system is not quite like that," Kim told his visitors. "In a capitalist society, customers are catered to and their pockets are picked clean in every possible way" He elaborated: "The socialist system is ice-cold and indifferent to the customers. In our country, our store workers take the att.i.tude that they don't care if the customers buy anything or not. Instead of servicing the customers and trying to sell something, they would rather that patrons did not show up so that they won't have to do anything. In a capitalist nation, service is everything. When our people visit j.a.pan, they are courted everywhere with 'Welcome, welcome, please come in.' j.a.panese eateries have managers who supervise the servers, and any service boy in trouble with a patron is severely reprimanded or punished. In our country, our servers are never fired for poor service. On the contrary, the patrons are expected to pay and bow to the servers for the privilege. It should be that those who receive money should thank the givers, but alas, here in this country, it is just the opposite. Capitalism has been around over one hundred years now and it tries all sorts of things to stay alive."

Kim spoke of some management changes that could help his system stay alive. One was to hold qualifying examinations instead of a.s.signing people more or less at random to such demanding jobs as handling foreign trade. "In organs like Foreign Economic Cooperation, anyone who knows Kim Guk-tae can join his outfit," he remarked (mentioning the official who had gotten reformer Kim Dal-hyon demoted and sent off to the provinces). "We need to change this and require specific knowledge of foreign trade." He spoke favorably of sending students abroad for training. "In China, one of Deng Xiaoping's great feats was to send two thousand or so students abroad annually to study, and upon their return they were given important jobs," Kim said. North Korea should emulate Deng on this point. "We have people at the top who don't have even the vaguest idea of how to get our economy moving. All they are able to think about is how much pay they are getting. Such is our sad situation and we must change it fast. Many of our workers have poor or no concepts of money. They are completely in the dark on making profits. They know about meeting production quotas, but they have no idea how to sell the products and make profits."

Those were strong criticisms indeed. But it was not that Kim Jong-il was ready to praise the capitalist system, after having struggled against the alien Western system throughout his career. "To be honest, we like the current financial meltdown in Asia," he told his visitors. "Some of our people in charge of our economy had harbored some illusions about emulating the capitalist economy of Asia, but now the current crisis made them realize how wise Leader Kim Il-sung's policy of juche of juche is. It was a rude awakening to these people." He added, "Currently we are poor and our life is hard, but you won't see any people on earth that is as united as we are." is. It was a rude awakening to these people." He added, "Currently we are poor and our life is hard, but you won't see any people on earth that is as united as we are."

Casting about for reasons to be optimistic, Kim imagined that North Korea could reverse its fortunes by turning into what, in his vision, sounded like a new Kuwait or Brunei. "We have untapped oil fields, and once we develop our oil fields our economy will change dramatically. Once we get the oil flowing, we won't need to work our farms. We will sell our oil to the j.a.panese devils and buy their rice. Our oil will be like a nuclear weapon."

On a more mundane level he showed a willingness to buy from successful countries their used equipment, such as tile factories and steel-rolling mills, to facilitate the manufacturing that North Korea still would need to do in addition to encouraging tourism. The problem was to avoid loss of face, a fate almost worse than death for a traditionally minded East Asian. So he asked his visitors to have Chongryon serve as intermediary in such deals. "Of course we can obtain these things through normal trades," he said. "But how can we save our face and ask the j.a.panese devils for cheap used merchandise? Our trading people are reluctant to negotiate such deals, and Chongryon should step in and help us here."

Economic backwardness had become so apparent as to tarnish the North's image among impressionable young South Koreans. Many of them idealized Kim Il-sung as a great patriot and studied his juche his juche philosophy, even after the successful end to South Koreans' struggle against military-backed dictatorships at home. By the time Kim Il-sung died in 1994, though, the economic failure of the North Korean system had become too obvious for any but the most devout Southern leftist to ignore. The South Korean news media, overcoming the taboo I had encountered in the 1970s, were throwing major resources into reporting on North Korean affairs. Of course there was far more negative than positive to report. If there was a defining moment in the decline of the North's image among idealistic South Korean leftists, perhaps it came in 1997 when no less a figure than Hw.a.n.g Jang-yop defected to the South. Hw.a.n.g was the North Korean senior official widely credited with having developed philosophy, even after the successful end to South Koreans' struggle against military-backed dictatorships at home. By the time Kim Il-sung died in 1994, though, the economic failure of the North Korean system had become too obvious for any but the most devout Southern leftist to ignore. The South Korean news media, overcoming the taboo I had encountered in the 1970s, were throwing major resources into reporting on North Korean affairs. Of course there was far more negative than positive to report. If there was a defining moment in the decline of the North's image among idealistic South Korean leftists, perhaps it came in 1997 when no less a figure than Hw.a.n.g Jang-yop defected to the South. Hw.a.n.g was the North Korean senior official widely credited with having developed t the juche ideology. ideology.

A 1999 scandal in Seoul ill.u.s.trated the disillusionment that resulted among some South Koreans who had been beating the drums for Pyongyang. Kim Young-hwan, one of the most prominent leaders of pro-Pyongyang 1980s student radicals who called themselves Jusapa, the juche juche ideology faction, was reported to have confessed that he was a spy for Pyongyang. According to the National Intelligence Service (the former KCIA, in its latest renaming), Kim Young-hwan, by then a practically middle-aged thirty-six, confessed that he had joined Pyongyang's spy service in 1989 at the behest of a North Korean agent. Kim said he was then taken to the North on a semi-submersible spy vessel and there joined the Workers' Party, received a medal and met Kim Il-sung--who directed him to undertake development of a pro-Pyongyang underground and start a legal political party in the South. That he did, bringing in other veterans of the student anti-government movement. ideology faction, was reported to have confessed that he was a spy for Pyongyang. According to the National Intelligence Service (the former KCIA, in its latest renaming), Kim Young-hwan, by then a practically middle-aged thirty-six, confessed that he had joined Pyongyang's spy service in 1989 at the behest of a North Korean agent. Kim said he was then taken to the North on a semi-submersible spy vessel and there joined the Workers' Party, received a medal and met Kim Il-sung--who directed him to undertake development of a pro-Pyongyang underground and start a legal political party in the South. That he did, bringing in other veterans of the student anti-government movement.

Kim Young-hwan grew disillusioned with the North Korean system. In a 1995 magazine interview, he denounced t the juche ideology. He a.s.serted that Pyongyang had been seriously on his case from then on, scheming to a.s.sa.s.sinate him for his betrayal. He did not go to the South Korean authorities right away but, in fear for his life, fled to China. When he returned home and spilled the beans, the prosecution recommended leniency. ideology. He a.s.serted that Pyongyang had been seriously on his case from then on, scheming to a.s.sa.s.sinate him for his betrayal. He did not go to the South Korean authorities right away but, in fear for his life, fled to China. When he returned home and spilled the beans, the prosecution recommended leniency.

Such incidents did not by any means cause the South Korean left to disappear. Sympathy for the Northern brethren would remain strong. The anti-Americanism that had become p.r.o.nounced in the 1980s would continue to thrive and even grow in the South. But Kim Jong-il, unlike his late father, could hardly be seen realistically as leader of or role model for a future South Korean revolution. To the extent he recognized that, it was all the more reason why he needed to do something about the economy.

Being able to point to South Korea as an implacable enemy had been, from the beginning, an essential element in the North Korean regime's control of its people. Thus it seemed significant that in April 2000, practically on the eve of South Korea's National a.s.sembly elections, Pyongyang appeared to endorse blatantly the soft-line "sunshine" policy on North-South relations of South Korean President Kim Dae-jung. The endors.e.m.e.nt came in the form of a mutual announcement of plans for a June summit in Pyongyang. The agreement for the South Korean president to meet Kim Jong-il was reached in a Beijing session, five days before an election that observers deemed too close to call. It seemed clear that both sides hoped the announcement would give Kim Dae-jung's party the push it needed to achieve a majority in the national legislature, so that its policies could be continued.

That move came despite the fact that Southern hard-liners, if they took power in Seoul, "would provide more convincing bogeymen for the benefit of Northern propagandists. The South's chief opposition party was highly critical of Kim Dae-jung's use of aid to lure North Korea into shifting its emphasis from military preparations to economic reconstruction. "Keep it at home," opposition representatives repeatedly urged. "South Koreans need the help more."

The fact that North Korea at the moment had decided to endorse soft-line South Korean candidates did not prove it had said a permanent fare-well to enmity and militarism. Long-time Pyongyang-watchers believed that the Northern leadership kept various strategies for interim survival and some form of ultimate victory going at once and would shift back and forth among them as it saw advantage in doing so. In that regard, it was noteworthy that the North's version of the announcement differed from the South's in saying Kim Dae-jung's visit to Pyongyang would be at his request, instead of at the invitation of Kim Jong-il. The first conclusion to be drawn was that Pyongyang did not think enemies should be made to look like sought-after guests. (Only later would it become clear just how accurate Pyongyang had been in saying this was Kim Dae-jung's show.) News of the summit announcement suggested that Kim Jong-il had looked over the possibilities for fixing his busted economy and realized that it could hardly be done without the partic.i.p.ation of the estranged but filthy-rich Koreans living south of the Demilitarized Zone--who by that time had shown their staying power by weathering the Asian financial crisis. Hyundai, with its tour cruises to Mount k.u.mgang, had given Pyongyang a tantalizing sample of just how much help the South could provide if relations improved. And the basic strategy embodied in both Kim Dae-jung's sunshine policy and the South KoreanAmerican-j.a.panese "Perry process," named after the former defense secretary, was to combine aid with credible a.s.surances of domestic non-interference and hook Pyongyang on peaceful coexistence. The eventual goal was to end the military threat that Pyongyang posed to the South and, with its development of weapons of ma.s.s destruction, to other parts of the world.

The cynicism of South Korean opposition politicians was understandable enough. After all, the two sides had gotten that far in 1994 only to see a planned summit fall through. Many many, many lesser initiatives also had come to naught over the decades. Was there anything different this time? There was, and the differences provided some grounds for hope that something might eventually come of the new initiative.

One difference was that the North's economy, despite some visible recovery from the worst years of the mid-1990s, was in far worse shape both absolutely and relative to South Korea's than it had been when earlier initiatives failed. Kim Jong-il, although confused or naive on occasion, was not stupid. Neither he nor anyone else in Pyongyang could be unaware that the economy needed to be fixed. Kim Jong-il had blamed fall guys at home: ministers and other high-level officials who had tried to use the inherited Stalinist policies but (predictably enough, from a capitalist perspective) always failed. Some foreign intelligence people believed that the executions and banishments of thus-failed officials had begun to backfire, causing other officials who feared they might be next on the list to reflect privately upon where the blame really lay.

Kim, as we have seen, harbored many private reservations about his own regime's policies. He had told South Korea's Hyundai Group founder Chung Ju-yung he wanted to learn about the New Communities movement that military dictator Park Chung-hee had employed in laying the foundations for South Korea's largely successful market economy. Perhaps, commented a writer for South Korea's Yonhap news agency, "2000 will be the year to test whether [Kim Jong-il] will transform himself into the North Korean version of Park Chung-hee."7 That did not happen, although in May 2002 Park's fifty-year-old daughter, Park Geun-hye, received a VIP reception when she visited Pyongyang. That did not happen, although in May 2002 Park's fifty-year-old daughter, Park Geun-hye, received a VIP reception when she visited Pyongyang.8 Why had Kim not moved faster to change things? Like some foreigners,9 reform-minded North Korean officials might blame hard-line communist traditionalist holdovers, including military men, for tying his hands. Still, some officials had to find it hard to escape the thought that Kim's power was enormous; if only he had sufficient will to take risks in pursuit of a clear vision of meaningful change, he should have a good chance of succeeding. Regardless of his status as dictator, Kim must have realized that some in the elite circles just beneath him would not accept his policy failures forever. Such reasoning could help explain why he saw detente with South Korea as a major opportunity to make some changes that might help ensure his longer-term survival. reform-minded North Korean officials might blame hard-line communist traditionalist holdovers, including military men, for tying his hands. Still, some officials had to find it hard to escape the thought that Kim's power was enormous; if only he had sufficient will to take risks in pursuit of a clear vision of meaningful change, he should have a good chance of succeeding. Regardless of his status as dictator, Kim must have realized that some in the elite circles just beneath him would not accept his policy failures forever. Such reasoning could help explain why he saw detente with South Korea as a major opportunity to make some changes that might help ensure his longer-term survival.

The televised reception given Kim Dae-jung in Pyongyang on June 13, 2000, was a revelation to many nonNorth Korean viewers. It showed a relaxed, confident and witty Kim Jong-il, the perfect host. Seventeen years after his first, initially sour foray into diplomacy in China, he appeared at last to have developed charisma worthy of the heir to Kim Il-sung. He personally went to the airport to receive Kim Dae-jung, clasping his hand and showing the deference due to an elder. "I am sure the people in South Korea were surprised to see you come to greet me," Kim Dae-jung told him as they began their first substantive meeting the next day.

Kim Jong-il displayed a previously underappreciated talent for making sly jokes. "Some Europeans have wondered "why I am so reclusive," he remarked to his Southern counterpart. "I am not such a great figure worthy to be called a recluse. The fact is I have made many secret trips to countries like China and Indonesia. How is it that people say I made a rare appearance to welcome you? Whatever the case, I have been here and there without people knowing."

In one remark he revealed both his addiction to news and something that could pa.s.s for compa.s.sion. He had watched South Korean television broadcasts to see how Kim Dae-jung's reception had been covered, he said. "I saw how excited the South Koreans were-especially those who have hometowns in the North, and North Korean defectors. I saw how many of them had tears in their eyes, anxiously waiting for news about their hometowns." Turning to a high official who accompanied him, he added, "There were scenes of people actually crying."

An article by a Seoul correspondent of Taiwan's Taipei Times Taipei Times reported Southerners' altered perceptions. Along with the historic handshake, "his casual and jocular manner yesterday is transforming his rogue image in Seoul," the article said. It quoted one Seoul resident as saying, "I always thought of him as a loser with a complex, but seeing him on TV has really changed my image of him. He behaved like the guy next door and appeared normal." The writer reported that on television "Kim Jong-il appeared comfortable and spoke in a booming voice in contrast with the seemingly fatigued South Korean president." The North Korean leader's "confident behavior during the summit is changing his image from one of a weak, second-cla.s.s heir to that of a statesman." reported Southerners' altered perceptions. Along with the historic handshake, "his casual and jocular manner yesterday is transforming his rogue image in Seoul," the article said. It quoted one Seoul resident as saying, "I always thought of him as a loser with a complex, but seeing him on TV has really changed my image of him. He behaved like the guy next door and appeared normal." The writer reported that on television "Kim Jong-il appeared comfortable and spoke in a booming voice in contrast with the seemingly fatigued South Korean president." The North Korean leader's "confident behavior during the summit is changing his image from one of a weak, second-cla.s.s heir to that of a statesman."10 Speaking the same language, the two leaders were able to pack some serious and sometimes frank discussion into their main session. As related in a Seoul speech soon afterward by General Hw.a.n.g Won-duk, the South Korean president's foreign affairs and security advisor, one exchange went as follows: "Kim Jong-il said, 'The Korean problems must be resolved by the Koreans themselves. Don't you agree?' Kim Dae-jung replied, 'Yes, indeed. That is what we have been asking for and we agree with you completely' Kim Jong-il shot back, 'Then why do you promote your alliance with the United States and j.a.pan to stifle us?'"

Kim Dae-jung replied, "That is a misunderstanding on your part. The three-nation alliance is not for the three nations to conspire to destroy you. On the contrary, it is to help you. ... My North Korea policy is 'sunshine' for peace, reconciliation and cooperation. It is because of my sunshine policy that-we are here today. Our policy of reconciliation is to help you-not to destroy you. The three-nation alliance is to support my sunshine policy. ... We may come up with some self-determining agreements, but if our neighbors ignore our agreements and hinder their realization, what good "would they be? They-would be meaningless. Therefore you must establish friendly relations with other nations. You must be friendly to the United States and also you ought to kiss and make up with j.a.pan. In this way we'll be supported by the four big nations around us"-including China and Russia.

Kim Jong-il, Hw.a.n.g continued, "intently listened to Kim Dae-jung's sermon and said, 'I understand,' and bought Kim Dae-jung's theme." The two leaders discussed whether U.S. troops should be withdrawn from the South. "Kim Dae-jung stated, 'The U.S. troops in South Korea help to prevent war in Korea. In addition they are needed to maintain military equilibrium in the Far East. They will be needed even after unification.'" Hw.a.n.g said he believed that Kim Jong-il accepted the argument. In any case, Kim Jong-il did not return to "his theme of going alone against the foreign powers."

"In this way" Hw.a.n.g said, the two Korean leaders "argued and agreed upon one issue after another. Some issues took less than twenty minutes and others took more than thirty minutes to resolve." One th.o.r.n.y issue was the South Korean request that Kim Jong-il promise to make a return visit to Seoul, Hw.a.n.g said. "When Kim Dae-jung stated that Kim Jong-il must come to Seoul, Kim Jong-il said, 'Oh, no! I cannot go to Seoul in my present capacity' Kim Dae-jung: 'Why not?' Kim Jong-il: 'I cannot go there in my present official capacity. If I were to go there my people would get upset.' Kim Dae-jung: 'Nonsense! You must come. You and I have been discussing reconciliation and if you don't come to Seoul who else will push our agreements. You have to come.' Kim Jong-il: 'No, I cannot go. ... [A]s an official it will be impossible for me to visit Seoul.' Kim Dae-jung tried various approaches to no avail. As the last-ditch try Kim Dae-jung said, You have mentioned several times that you practice the Oriental ethics. I am much older than you are, right? An older man came to see you and you, the younger man, refuse to pay the older man a return visit. Is that ethical?'" Kim Jong-il finally accepted wording in the joint declaration that said he "agreed to visit Seoul at an appropriate time in the future."

The final argument was over who would sign the declaration. Kim Jong-il insisted that Kim Yong-nam, who as chief of the Supreme People's a.s.sembly-was officially head of state, should sign for North Korea. "Kim Dae-jung said, 'No, that will not do. You are the real leader of North Korea. The real leader must sign it. I am the president of South Korea and it is only proper that I should sign it. You must sign it, too.' They argued over this issue for some twenty-five minutes. Things were going nowhere. Finally [Kim Dae-jung's aides] broke in and said, You two have met and have been ironing out the agreements and it is not right for any other person to sign it.' At last, Kim Jong-il agreed to sign it himself." The Southerners, Hw.a.n.g said, wanted it signed that very night so that it would make the news in Seoul the following morning, before their return. "Kim Jong-il chuckled and said, 'You want to return as a triumphant hero, right?' Kim Dae-jung said, 'Well, what is wrong with you making me a hero?' Kim Jong-il said, 'OK, OK, let's sign it today'" They signed it that night, the fourteenth. However, they postdated it to the fifteenth so that the date would not include the unlucky number four, which, when p.r.o.nounced in Korean, sounds like the word for death.11 The completed declaration was a short and simple doc.u.ment starting with an agreement that North and South would "solve the question of the country's reunification independently by the concerted efforts of the Korean nation responsible for it." In one item the leaders pledged to seek common ground between the North's proposal for a federation and the South's for a looser confederation. They also promised to work on humanitarian issues involving separated families and some North Korean soldiers and agents who were still imprisoned in the South for refusal to recant their loyalty to Pyongyang. They pledged cooperation and exchanges in various fields and promised to "promote the balanced development of the national economy through economic cooperation."12 The remaining items on Seoul's wish list were saved for later negotiation by lower-ranking officials. The remaining items on Seoul's wish list were saved for later negotiation by lower-ranking officials.

The South Koreans believed that Kim Jong-il was seriously interested in a new approach. For the last meal of the Pyongyang summit, the North Korean leader invited all of his top subordinates in the party and the military and called upon them to toast Kim Dae-jung as a show of support for the agreements in the declaration. At one point Kim Jong-il turned to the chief of the People's Army's political commissars and asked if he had halted anti-South propaganda broadcasts along the Demilitarized Zone. "We will stop it today," the commissar said. Kim Jong-il did not like that reply and said so: "Why haven't you stopped sooner? Stop it now!" It was done. The South followed suit the next day, ceasing its own propaganda broadcasts.13 Hw.a.n.g's speech in Seoul detailing the summit talks was delivered to a military veterans' group. One of the veterans asked him, "Prior to the summit, North Korea was our enemy. How shall we view the North now?" The general replied, "Both you and I have served in the military. We have to view the North using the best of our judgment and our job function. For example, it should be clearly stated that the North is the enemy as far as our front line troops are concerned. If our soldiers treat Northern soldiers as their friends, they will be unable to defend our country. Another example: if our business people dealing with North Korea considered Northerners as enemies, there would not be any economic cooperation." Note that his formulation was virtually identical to what Kim Jong-il had said to his Chongryon visitors in 1998 regarding North Korea and the American devils.

"When we talk about changes in the North, we are in fact talking about changes in Kim Jong-il's mind-set," Hw.a.n.g told the South Korean veterans. "Kim Jong-il was quite different from what we antic.i.p.ated." The North's leader "speaks well and is jovial, well informed and intelligent." Reflecting that view of Kim Jong-il, Hw.a.n.g said, "the North's politics, economy, society and culture have changed. They are not what they used to be in the past. If we add momentum to the changes, no one will be able to stop them now. We must make sure that the changes continue on."

The South's "sunshine" policy of engagement, with the summit symbolizing its supposed success, won Kim Dae-jung the n.o.bel Peace Prize for 2000. Kim Jong-il, gracious as he had been in his role of host, had to settle for being named Time's Time's "Asian of the Year." Worldwide, the magazine named as its "Person of the Year" George W Bush, winner of that year's close and disputed U.S. presidential election. "Asian of the Year." Worldwide, the magazine named as its "Person of the Year" George W Bush, winner of that year's close and disputed U.S. presidential election.14 Kim Jong-il gave a further signal of big things to come when an article in large type bearing his name appeared in the January 4, 2001, issue of Nodong Shinmun. of Nodong Shinmun. Ent.i.tled "The Twenty-first Century is a Century of Gigantic Change and Creation," it put North Koreans on notice that "things are not what they used to be in the 1960s, so no one should follow the way people used to do things in the past." As in the case of the 1998 const.i.tution's stress on costs, prices and profits, it could be argued that Kim's exhortation represented not mere rhetoric but genuine ideological change. In the view of one German scholar, "In 2001 a far-reaching reform policy finally entered into its implementation stage in North Korea after some years of preparation, discussion and formulation." Ent.i.tled "The Twenty-first Century is a Century of Gigantic Change and Creation," it put North Koreans on notice that "things are not what they used to be in the 1960s, so no one should follow the way people used to do things in the past." As in the case of the 1998 const.i.tution's stress on costs, prices and profits, it could be argued that Kim's exhortation represented not mere rhetoric but genuine ideological change. In the view of one German scholar, "In 2001 a far-reaching reform policy finally entered into its implementation stage in North Korea after some years of preparation, discussion and formulation."15 Kim Jong-il had told visiting Chinese officials that he would like to visit their country again.16 He made the visit in January 2001 with a retinue that included military leaders as well as civilian economic officials. He did much of his sightseeing in Shanghai, the showcase city of the new China, where he saw high-tech installations and toured a joint venture Chinese-General Motors automobile plant. He made the visit in January 2001 with a retinue that included military leaders as well as civilian economic officials. He did much of his sightseeing in Shanghai, the showcase city of the new China, where he saw high-tech installations and toured a joint venture Chinese-General Motors automobile plant.17 He even visited the Shanghai Stock Exchange- twice. Chinese reform had been in full swing since Kim's visit in 1983, when he had gleaned a few ideas but-evidently not terribly impressed overall- had criticized his hosts for "revisionism." This time, he appeared to take the bait, reportedly exclaiming that "Shanghai has had unbelievable change and attracted world-wide attention." He even visited the Shanghai Stock Exchange- twice. Chinese reform had been in full swing since Kim's visit in 1983, when he had gleaned a few ideas but-evidently not terribly impressed overall- had criticized his hosts for "revisionism." This time, he appeared to take the bait, reportedly exclaiming that "Shanghai has had unbelievable change and attracted world-wide attention."18 He was quoted as having told Chinese officials he would build in North Korea a high-tech city modeled on Shanghai. To his accompanying subordinates he said, "Let's build skysc.r.a.pers. China has succeeded in economic reforms. Why have we failed?" He was quoted as having told Chinese officials he would build in North Korea a high-tech city modeled on Shanghai. To his accompanying subordinates he said, "Let's build skysc.r.a.pers. China has succeeded in economic reforms. Why have we failed?"19 Kim returned to Pyongyang and, later in 2001, ordered his economic advisors to pursue "practical benefits" while maintaining socialist principles. In March 2002 Prime Minister Hong Song-nam announced that "dramatic" measures had been taken. The changes indeed appeared dramatic. Low, government-set prices would give way to prices that bore realistic relationships to the market. This involved enormous inflation from the old prices. Pyongyang bus and sub-way fares rose ten times. Rice sold through state agencies went up a stupendous 550 times, to reflect what people had been paying for the grain on the private market. "Resident fees," house and apartment rents paid to the state, went from token to very substantial figures. A country that had boasted of being free of taxes now inst.i.tuted taxes on household electronic devices-still considered luxuries.

Wage increases on the order of twenty-fold were announced to help citizens cope with the new system. Jettisoning a relatively uniform wage structure, the state would now take account of the nature of the work. Miners, stuck with the nastiest job of all, were to receive pay three times higher than factory wages-and twice what was paid to trading company managers. The new compensation structure also took into account regional factors and- reflecting Kim Jong-il's decades-old, privately expressed gripe about lazy workers-job performance. Foreign currency exchange rates were brought closer to the black market rates, so that the official exchange rate for the U.S. dollar became 200 won won instead of 2.2 instead of 2.2 won. won.

Impressive as those measures were, questions remained. In particular: Did Kim Jong-il envision a market economy in a communist party-ruled country-a structure similar to the hybrid structure that China had created? Or was he trying, yet again, to sh.o.r.e up a basically socialist, non-market-in large part unchanged-economy? a.n.a.lysts differed on that question.20 Skeptics noted that the new prices, while reflecting market realities, still were not market-set prices but state-set prices. Skeptics noted that the new prices, while reflecting market realities, still were not market-set prices but state-set prices.

Would the changes, regardless of intent, lead to more fundamental changes? A reporter for Seoul's Dong-A Ilbo Dong-A Ilbo first visited North Korea at the time of the July announcement of the new measures. He returned three months later and found intriguing anecdotal evidence. During the summer Pyongyang had hosted a festival called Arirang, to celebrate the country's return to economic growth after the horrible period of famine-now dubbed the "arduous march." The festival represented a huge drain of funds with few discernible gains, and to that extent suggested that the regime might have failed to learn the lesson of the 1989 youth festival. Just as in 1989 a prime motive was rivalry with the South--which, with j.a.pan, co-hosted soccer's 2002 World Cup matches. On the other hand, though, the Arirang festival had been the occasion for officials to issue operating permits for Pyongyang street stalls selling beverages, snacks and takeout food. The permits were temporary. However, as the first visited North Korea at the time of the July announcement of the new measures. He returned three months later and found intriguing anecdotal evidence. During the summer Pyongyang had hosted a festival called Arirang, to celebrate the country's return to economic growth after the horrible period of famine-now dubbed the "arduous march." The festival represented a huge drain of funds with few discernible gains, and to that extent suggested that the regime might have failed to learn the lesson of the 1989 youth festival. Just as in 1989 a prime motive was rivalry with the South--which, with j.a.pan, co-hosted soccer's 2002 World Cup matches. On the other hand, though, the Arirang festival had been the occasion for officials to issue operating permits for Pyongyang street stalls selling beverages, snacks and takeout food. The permits were temporary. However, as the Dong-A Ilbo Dong-A Ilbo reporter observed, after the festival concluded in August the bustling stands continued to line busy streets near sub-way stations and bus stops. Their operation now had been legitimized by the July measures. Such stands were not confined to Pyongyang but could be found in other places such as the parking lot for tourists visiting Mount Myohyang. The reporter quoted a guide as saying the mania for street vending had affected bricks-and-mortar enterprises. "During the summer, street vendors sell more soft drinks than regular stores. Many enterprises want to branch out into the street vendor business, which has triggered a fierce compet.i.tion for good spots." reporter observed, after the festival concluded in August the bustling stands continued to line busy streets near sub-way stations and bus stops. Their operation now had been legitimized by the July measures. Such stands were not confined to Pyongyang but could be found in other places such as the parking lot for tourists visiting Mount Myohyang. The reporter quoted a guide as saying the mania for street vending had affected bricks-and-mortar enterprises. "During the summer, street vendors sell more soft drinks than regular stores. Many enterprises want to branch out into the street vendor business, which has triggered a fierce compet.i.tion for good spots."

A new spirit had affected farmers, as well. "It was the normal practice for civil servants and soldiers to go out to help with the weeding," the reporter wrote. "This year, however, the farm workers informed them that no one needed to come because they would do it on their own." The farmers, he explained, "have realized that each person can make more money by increasing production and reducing costs. They have also come to understand that accepting nonessential helping hands in exchange for daily wages chips away at their profits." Income of goat-and-corn farmers whom the reporter visited had soared thanks to the July price increases. Introduction earlier of an "individual compet.i.tive system" had transformed many of the farmers' att.i.tudes and work habits. "Based on last year's output, the difference in income between those who worked cleverly and the lazybones is five-fold," the farm manager said. The former "herded goats up the hill at eight in the morning with a lunch box and returned at eight in the evening." The slackers "slept late. Then they came down the hill with the goats to have lunch and take a nap before climbing back after two in the afternoon, only to come back early." As the reporter asked rhetorically, "Is it not natural that there is a difference between the goats that grazed the whole day and those that came and went with the shepherd?"

Buzz words appearing often in the North Korean media included "innovation" and "good at calculation," the reporter found. "In the past, 'good at calculation' meant 'selfish,' an utterly insulting expression in North Korean society. At present, however, being good at calculation for both companies and individuals is turning into a virtue."21 One could look for further clues in subsequent events. It would be difficult for North Korea to join the world economy if the U.S. market remained essentially closed to its products. On that point, the outlook did not seem promising. Both the Clinton and George W. Bush administrations, citing security, had restricted the scope of the relaxation of U.S. sanctions that Clinton had promised. The Bush administration had rather contemptuously rained on Kim Dae-jung's sunshine policy, starting with a reception of the South Korean president in Washington in which Bush presented a studied and insulting contrast to the deference and hospitality that Kim Jong-il had provided.

In April 2002 South Korea hoped to invite Pyongyang delegates to the annual a.s.sembly of the Asian Development Bank, to which North Korea had applied for membership. But politics, once again, thwarted business deals. Washington, the bank's leading shareholder, vetoed the invitation.22 Even more ominously, the Even more ominously, the Dong-A Ilbo Dong-A Ilbo reporter noted during his October visit that "our delegation caught sight of six Mercedes-Benz sedans taking U.S. delegates to Pyongyang, including James Kelly, U.S. a.s.sistant secretary of state for East Asian and Pacific affairs." As we shall see in chapter 36, Kelly's visit would slam the door on hopes for U.S. cooperation in the near term. reporter noted during his October visit that "our delegation caught sight of six Mercedes-Benz sedans taking U.S. delegates to Pyongyang, including James Kelly, U.S. a.s.sistant secretary of state for East Asian and Pacific affairs." As we shall see in chapter 36, Kelly's visit would slam the door on hopes for U.S. cooperation in the near term.

And there was still more bad political news to come. In 2003 allegations surfaced in Seoul that Kim Dae-jung's aides, through Hyundai, had bought Kim Jong-il's partic.i.p.ation in the 2000 summit by transferring $500 million or more to the North Korean leader's account. Chung M.ong-hun, fifth son of Hyundai founder Chung Ju-yung and chairman of the Hyundai group company that had developed the North Korea projects, was to be tried for violating foreign currency regulations with the secret transfers. On August 4, 2003, Chung M.ong-hun leapt to his death from the twelfth floor of the Hyundai Building, leaving a note saying: "This foolish person has committed a foolish thing." The following month six Hyundai and government officials were convicted in the case but given suspended sentences. The scandal called into question both Kim Dae-jung's n.o.bel Prize and Kim Jong-il's sincerity about reconciliation. Pyongyang bitterly blamed the right-wing main opposition party in the South for pushing the investigation, saying instigators would be unable "to escape the crimes that they committed in the face of their people and history itself."23

THIRTY-SIX.

Fear and Loathing While events around the turn of the millennium suggested that Kim Jong-il had become willing to yield some points on economic and legal policies, he had other, less peaceable things on his mind as well. His continuing policy of placing heavy emphasis on military readiness led to a high-stakes war of nerves with Washington, Tokyo and Seoul. That struggle put at risk any gains the North Korean people might hope to derive from his other initiatives.

The official position, expressed at the beginning of 2000 by an economics professor at Kim Il-sung University, was that Kim Jong-il's emphasis on "military-first" politics meant guns and and b.u.t.ter. Yes, it was intended to "defend the nation from the invasion of hostile forces." But it was "a comprehensive plan which includes an effective means for an economic buildup." The policy had "nothing to do with military rule or a military regime." And the "powerful state" that the Dear Leader wanted to create did not mean a country pursuing hegemony. Rather, the policy had "two goals: defending the system and restoring the economy" b.u.t.ter. Yes, it was intended to "defend the nation from the invasion of hostile forces." But it was "a comprehensive plan which includes an effective means for an economic buildup." The policy had "nothing to do with military rule or a military regime." And the "powerful state" that the Dear Leader wanted to create did not mean a country pursuing hegemony. Rather, the policy had "two goals: defending the system and restoring the economy"1 Following September 11, 2001, and the Al Qaeda terrorist attacks on the World Trade Center and the Pentagon, speech-writers working on President Bush's State of the Union address for 2002 liked the catchy phrase "axis of evil." Partly to avoid making it appear the United States focused only on Muslims in the new War on Terror, they added North Korea to the original "axis" members Iraq and Iran. Many people felt that the stance was justified when Washington acquired evidence suggesting that North Korea might be continuing secretly-despite the 199495 agreements-to develop nuclear weapons. A second nuclear weapons crisis erupted.

Even as international attention focused again on North Korean weaponry, however, Kim Jong-il's regime continued to experiment at home with potentially far-reaching adjustments to the Stalinist-Kimilsungist system. By early 2004 foreign visitors and other outside a.n.a.lysts were hopping aboard what seemed to be a developing consensus: Pyongyang was more serious than before about accepting-and even encouraging-economic change.

Early in 2000 South Korea's Ministry of National Defense reported that North Korea had stocked enough food for a yearlong war and enough oil for at least three months, in addition to ammunition. Interpretations varied. A substantial body of foreign opinion held that North Korea, far from being an aggressive state that might attack the South at any moment, was a weak country that simply sought to defend itself against a feared attack by the United States and South Korea. Of course that school of thought had long included sympathizers with North Korea and its socialist ideal. But quite a few others coming from elsewhere on the ideological spectrum had concluded in the 1990s that the North--with the collapse of communism in the Soviet Union and especially with the economic disaster that afflicted the country through much of the decade-had irreversibly fallen into weakness. Pyongyang must know that the days were past when it could have mounted a successful south-ward invasion. Looking at the matter from that point of view, the North could be squirreling away war rations, fuel and ammunition purely for the sake of deterring its enemies from attacking. After all, the South Korean ministry claimed to know where the North's storage facilities were-presumably thanks to satellite photos and other intelligence. Knowing it was being watched and hoping to discourage attack, Pyongyang would have to make sure it put up a credible front of being ready, indeed eager, to fight effectively.

There were plenty of reasons for being skeptical about that argument, and I was skeptical. One could suspect that the Pyongyang regime's adamant refusal for so many decades to change in any basic way applied fully to its more than fifty-year-old objective of ruling the whole peninsula. For the regime to relinquish that goal and settle permanently for taking its chances in peaceful compet.i.tion with its Southern brethren, wouldn't there have to be an enormous change? There might be temporary policy shifts, such as emphasizing deterrence more than preparations for aggression whenever the regime felt itself temporarily weakened. But if such a huge change of long-term policy as the renunciation of conquest were to occur, wouldn't we know about it? How could it be accomplished without internal turmoil sufficient to register on Pyongyang-watchers' seismographs? Remove one element of the "unitary idea," Kim Jong-il himself had warned for decades, and the whole system would start to unravel. Along with such a major policy change, wouldn't we see, at the minimum, some new faces at the top, rather than continuing to watch a country being ruled for better or for worse-usually for worse-by the same people who had been in charge for decades?

But people who met Kim face to face continued to get the impression he was prepared to make deals that would permit him to abandon old policies so that the country could move on. One of those people was then-U.S. Secretary of State Madeleine Albright, whose memoir includes a chapter describing a visit to Pyongyang in the waning days of the Clinton administration.2 She found Kim "an intelligent man who knew what he wanted." Exuding confidence, he made clear he wanted normal relations with the United States that would "shield his country from the threat he saw posed by American power and help him to be taken seriously in the eyes of the world." She found Kim "an intelligent man who knew what he wanted." Exuding confidence, he made clear he wanted normal relations with the United States that would "shield his country from the threat he saw posed by American power and help him to be taken seriously in the eyes of the world."

Albright was in Pyongyang for preliminary talks looking toward a possible summit meeting between President Clinton and Kim-and what both sides hoped would be a comprehensive agreement on missiles and the other issues that kept the two countries at odds. In her first meeting with Kim ("I was wearing heels, but so was he") she told him she could not recommend a summit meeting without having an agreement on missiles. Kim told her his country was selling missiles to Iran and Syria because it needed foreign currency. "So it's clear, since we export to get money, if you guarantee compensation it will be suspended." Indeed, he offered to halt not only exports but also production for deployment within the country. "If there's no confrontation, there's no significance to weapons," he explained.

Describing a meeting the following day, Albright wrote, "I said we had given his delegation a list of questions and that it would be helpful if his experts could provide at least some answers before the end of the day. To my surprise Kim asked for the list and began answering the questions himself, not even consulting the expert by his side."

Kim told Albright that he could see a postCold War role for U.S. troops in South Korea: maintaining stability. But he said his military was split down the middle on whether to improve North KoreaU.S. relations and that some in his foreign ministry had argued against his speaking with the Americans. "As in the U.S.," he said, "there are people here with views differing from mine, although they don't amount to the level of opposition you have."

Kim confirmed that his country was in severe economic difficulty, and Albright asked if he would consider opening the economy. Not if it would "harm our traditions," he replied. He said he was not interested in the Chinese mix of free markets with socialism, preferring the model of Sweden, which he saw as more socialist than China.

"On a personal level," Albright wrote, "I had to a.s.sume that Kim sincerely believed in the blarney he had been taught and saw himself as the protector and benefactor of his nation. ... One could not preside over a system as cruel as the DPRK's without being cruel oneself, but I did not think we had the luxury of simply ignoring him. He was not going to go away and his country though weak, was not about to fall apart."

Albright concluded that Kim was serious about negotiating a deal on missiles, and that the costs to the United States "would be minimal compared to the expense of defending against the threats its missile program posed." But efforts to arrange for Clinton to meet with Kim and seal such a deal ran into obstacles. First, Albright wrote, there was considerable opposition in Washington from people who "feared a deal with North Korea would weaken the case for national missile defense," or who "argued that a summit would 'legitimize' North Korea's evil leaders." But what really scuttled the proposed trip was a competing demand for Clinton to deal with the latest Mideast crisis during his fast-dwindling time in office.

The George W. Bush administration took over in Washington early in 2001. Republican officials in charge of foreign policy, suspicious of the Clinton administration's efforts to find accommodation with Pyongyang, set out to review U.S. policy. After President Bush's Axis of Evil speech, there was more to come. In October 2002 U.S. a.s.sistant Secretary of State James Kelly and other officials visiting Pyongyang surprised their hosts with evidence that North Korea was continuing nuclear weapons development using uranium enrichment, a different and separate process from the plutonium process the country had frozen earlier. The delegation returned to Washington to report that its counterparts had come clean on the uranium project, defiantly insisting there was no reason why the country should not have its own nukes.

Washington sought to keep the issue on the back burner while it took on Iraq first. North Korea used various provocations to try to force the United States into making concessions while the Pentagon was occupied in the Middle East. In December 2002 the country expelled International Atomic Energy Agency inspectors and started reactivating a reactor that had produced plutonium before the 1994 freeze. In January 2003 North Korea withdrew from the Nuclear Nonproliferation Treaty.

The quick initial success of the Iraq war most likely was blood-curdling news to Kim Jong-il, whose whereabouts were not known for a number of days. He was presumed to be in hiding for fear one of those smart U.S. weapons, launched in the preemptive attack that the Bush administration openly contemplated, would find him. After all, Bush had told author and Washington Post Washington Post reporter Bob Wood-ward that he "loathed" Kim Jong-il, whom he referred to as a "pygmy." reporter Bob Wood-ward that he "loathed" Kim Jong-il, whom he referred to as a "pygmy."

In October 2003, Pyongyang said it had reprocessed some eight thousand spent fuel rods that had been in storage during the period of the freeze. "If that is indeed the case, it could have produced enough fissile material for an additional five or six nuclear weapons," Kelly said.3 When Pyongyang hinted broadly that it might simply declare itself a nuclear power, China, for one, did not like that idea and cut off North Korea's oil supplies for several days to enforce a demand for negotiations. By early 2004 Pyongyang had offered to re-freeze its plutonium-based program (evidently realizing its admission had been a tactical error, it now denied it had acknowledged having a uranium enrichment program) while negotiating with the United States, South Korea, China, j.a.pan and Russia to see what sort of deal it could get. What it wanted from Washington included a non-aggression pact and diplomatic relations. When Pyongyang hinted broadly that it might simply declare itself a nuclear power, China, for one, did not like that idea and cut off North Korea's oil supplies for several days to enforce a demand for negotiations. By early 2004 Pyongyang had offered to re-freeze its plutonium-based program (evidently realizing its admission had been a tactical error, it now denied it had acknowledged having a uranium enrichment program) while negotiating with the United States, South Korea, China, j.a.pan and Russia to see what sort of deal it could get. What it wanted from Washington included a non-aggression pact and diplomatic relations.

While the first nuclear crisis had appeared pretty much to halt movement toward economic change, Pyongyang the second time around kept moving on a parallel track-to the extent that quite a few foreign skeptics started to become believers that something major could be happening this time.

One implication of Kelly's confrontation with North Korean officials on the bombs-from-uranium issue was, of course, that there would be no progress for the time being on resolving economic issues between Washington and Pyongyang. The month after the Kelly visit, however, Kim Jong-il's brother-in-law, Chang Song-taek, led a high-powered delegation to South Korea to learn from the Southern economy. Ignoring super-high-tech, capital-intensive operations that were way out of their league, the Northern visitors focused on what seemed within their reach: standard industrial commodities such as steel and fertilizer, which they had been producing and could hope to produce more efficiently, and smaller businesses including golf and tourism. "So while their South Korean guides expected they would like to see Samsung Electronics' cutting-edge technology," reported a Seoul newspaper, "they were more interested in how an LG subsidiary makes toothbrushes." Pak Nam-ki, the North's chief economic planner, looked intently at what he was shown and asked many detailed questions. South Koreans speculated that the travelers, upon their return to Pyongyang, would first disabuse Kim Jong-il of his misconceptions about the South Korean economy and then draft a new blueprint for restoring and reforming the North's economy.4 What about that old a.s.sumption that reform would unravel the ideology that kept the populace in thrall to the leader? For ma.s.s consumption, continuity was the byword. By February 2003 the regime had cranked up its propaganda machine to insist that the new initiatives fit right in with received scripture. Nodong Shinmun Nodong Shinmun published an article on Kim Jong-il's "wise leadership for improving socialist economic management"-an article that mentioned the term "profits" several times. Explaining the timing of the publicity, the paper said it marked the thirtieth anniversary of a work by his father, "On Several Issues for Improving Socialist Economic Management." Kim Jong-il had accomplished a "great feat," the paper said, by maintaining "the socialist economic management principle amid the imperialists' encirclement and mounting difficulties." Mean-while, he "leads us to thoroughly guarantee real profits in the socialist economic management." Perhaps the one-time political economy major had thought better of his student-princely disdain for instruction in computation. "Economic management requires scientific calculations," said that article on his management approach. published an article on Kim Jong-il's "wise leadership for improving socialist economic management"-an article that mentioned the term "profits" several times. Explaining the timing of the publicity, the paper said it marked the thirtieth anniversary of a work by his father, "On Several Issues for Improving Socialist Economic Management." Kim Jong-il had accomplished a "great feat," the paper said, by maintaining "the socialist economic management principle amid the imperialists' encirclement and mounting difficulties." Mean-while, he "leads us to thoroughly guarantee real profits in the socialist economic management." Perhaps the one-time political economy major had thought better of his student-princely disdain for instruction in computation. "Economic management requires scientific calculations," said that article on his management approach.5 Addressing the Supreme People's a.s.sembly-the parliament-on the state budget for 2003, Finance Minister Mun Il-bong went farther. "In all inst.i.tutions and enterprises a system of calculation based on money will have to be correctly installed, production and financial accounting systems be strengthened, production and management activities be carried out thoroughly by calculating the actual profits," Mun said. German scholar Ruedi-ger Frank found in another pa.s.sage of Mun's speech an effort to graft onto the old socialist ideology a new recognition of the role of entrepreneurs. "Our people, holding high the Great Leader's ideology of nation-building after liberation, have built a new democratic Korea upon the rubble," Mun said, "those with strength using strength, those with knowledge using knowledge and those with money using money." Frank noted that strength stood for the workers and peasants and knowledge for the intellectuals-the three groups represented in the hammer-sickle-writing brush emblem on Pyongyang's Juche Tower. "But 'money' is a new component," he wrote. "It stands for those who excel in economic activities." Frank found it "remarkable that the leveling of the ideological battlefield has begun so early. Kim Jong-il may be no Mikhail Gorbachev, nor a Deng Xiaoping, but the evidence makes it hard to believe he is a stubborn opponent of reform."

At the 2003 parliamentary budget session came an announcement of another initiative, issuance of People's Life Bonds. "Why would a state like North Korea care about collecting large quant.i.ties of its own currency?" asked Frank. He speculated that "the one-time extra revenue created by issuing the bonds will be used to pay wages until the new price system functions." Frank discerned in the issuance of the bonds "not only a sign of a desperate effort to prevent a failure of the reforms, but also another indicator of the strong determination of the North Korean leadership to stabilize ... with the goal of creating a domestically functioning and internationally compatible national economy in the future." He worried that circ.u.mstances-especially unavailability of loans and grants from outside--would block the achievement of that goal. The scholar concluded that "something has started which can hardly be stopped anymore, unless it either becomes a brilliant success or a miserable failure."6 I remained skeptical, for the time being, that the changes were truly momentous, and I was by no means alone. The head of one foundation dedicated to medical and food aid for North Koreans traveled through the country a couple of months after Finance Minister Mun's speech. Compared with what he had seen on earlier trips, the aid organizer found that the lives of ordinary people remained "difficult almost beyond description." Starting with the years of most acute famine, "North Koreans have had to turn to informal coping mechanisms," he told a U.S. congressional committee. But an ill.u.s.tration he offered could just as well have been taken as an omen of change for the better. "Even individuals who work in government ministries rely on outside sources of income to acquire the goods and services they need for their families," he said, reporting that "the North Korean economy has slowly improved over the past few years," thanks mainly to "the informal economy." He told how informal coping mechanisms, including produce from private plots and farmers' markets, had "halted North Korea's precipitous economic slide toward oblivion."

But the foundation chief still found the country unable "to move beyond an 'informal economy' on the macro level." Missing, he said, was "the structural reform needed to promote legitimate international trade. ... While some would argue that attempts to set up special economic zones and adjustments in currency represent a genuine willingness to embrace economic reform, these policies aimed at promoting economic growth have yet to make a meaningful impact on everyday life."7 Nevertheless, anecdotal evidence continued to pile up, suggesting a breakthrough that had ended the regime's stubborn resistance to major change. At the very least, North Korea was displaying that sense of bustle that I had found so lacking by comparison with China in earlier decades. A Russian scholar visited North Korea in July 2003 and found brighter lights in Pyongyang, where the electrical system had been repaired and was being modernized with Swedish a.s.sistance. Cellular phones were in wide use in the capital, which had begun to experience the predictable safety problems caused by people chattering away while driving or cycling. Bicycles in large numbers were a relatively new feature of the urban landscape; I had seen few on my visits starting in 1979. Strikingly, "people were using the word 'reform' without any reluctance," the Russian said. Because of the older generation's suspicion of a buzzword connected closely to the collapse of Soviet and Eastern European communism, North Koreans until the previous year had stuck to the euphemism "national measures." Touring outside Pyongyang, the Russian saw evidence that "the overall economic situation has been gradually improving and the economic reform is being continuously carried out despite the 'nuclear crisis,' while the internal situation has stabilized."8 Whether the regime was serious about reform was quite a different question from whether reforms would succeed. Regarding the latter, the evidence was mixed. An official of the Catholic aid organization Caritas who visited North Korea in August and September 2003 found smoke rising from factory chimneys and housing construction under way She encountered fewer electrical brownouts than before. "Small, family-size businesses or small cooperatives are providing services or producing goods (repairing bicycles, transporting wood, selling and bartering of agricultural products and consumer goods). A 'bottom-up' process seems to have started; there is more drive as people are left to fend for themselves. Under- or unemployed workers are engaged in the search for different coping strategies."

She found that flourishing kitchen gardens of farming