North Korea in the Socialist World, 1948-1991

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North Korea in the Socialist World, 1948-1991 NORTH KOREA IN THE SOCIALIST WORLD: INTEGRATION AND DIVERGENCE, 1945-1970 THE CROSSROADS OF POLITICS AND ECONOMICS by Avram Asenov Agov A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in The Faculty of Graduate Studies (History) THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) April, 2010 ©Avram Asenov Agov, 2010 ii ABSTRACT This thesis investigates the background behind the resilience of North Korean system, one which has endured numerous shocks and upheavals in its history. The era from 1945 to 1970 was decisive in the formation of North Korea’s domestic system; it also provides sufficient perspective to examine the major trends in the evolution of North Korea’s political and economic structure. The thesis analyzes DPRK history from the perspective of the regime’s internal and external integration into the socialist system, as well as efforts to diverge from that system. The dynamics of integration and divergence relate to the commonalities and distinctiveness of North Korea’s political and economic structure compared to other socialist countries, mainly the Soviet Union and China. This thesis studies the formation and evolution of North Korea’s political economy and defines its uniqueness within the socialist system. Socialist aid and trade are one focus of the study. We analyze four realms of relationships – ideology, politics, economy, and security. The northern regime’s ideological positioning was closely linked to North Korea’s nationalist course and to the regime’s divergence from the socialist system; economic considerations and security imperatives, by contrast, tended to push the regime toward the socialist world. The thesis defines North Korea’s place in the socialist world from the view point of the interaction between politics and economics. It argues that despite North Korea’s ideological and political divergences from the socialist system based on the Chuch’e (self-reliance) paradigm, the regime remained more integrated economically than is usually perceived. This factor is one of the main reasons for the DPRK’s ability to withstand the blow of the Soviet collapse, for it retained considerable economic ties to China. During the 1945-1970 era, North Korea occasionally deviated from one or another of its two major allies, but it never distanced itself from both the Soviet Union and iii the People’s Republic of China simultaneously. The DPRK also tried to compensate reductions in its interactions with one major ally or camp, including the Eastern bloc, by nurturing more active relations with capitalist states. This trend represents an important consistency in North Korea’s history. iv TABLE OF CONTENTS Abstract……………………………………………....…………………..………...…..…...ii Table of contents…………………………………………………………….……....…..…iv List of tables……………………………………………………………….…..…..…....vii Acknowledgments…………………………………………………………….…..…..….viii Dedication……………………………………………………………………………...…...x Chapter One: Introduction………...…………………………...….….……...…...1 Theoretical framework…………………………………...….…...........3 Interpretations of North Korean history……….………...….………..16 Scope of study…………………………………………..…....…..…..24 Thesis structure………………………………………...…....….....….29 Part One: Formation of the DPRK and Integration into the Socialist System, 1945-1953…………..…………………..……………..………………...………..….…33 Chapter Two: The Formation of the DPRK and the Korean War……...….....…..34 The Soviet occupation and the creation of the DPRK………...........….....….35 The Cold War in East Asia………..……………………….......….......38 Divided Korea………………………………………….……………..41 Creation of the Democratic People’s Republic of Korea….............................45 Occupation………………..……………………………..…..............45 “People’s democracy”…………………………………………..…....50 The rise of Kim Il Sung and the guerrilla group…………..…..…..…57 The Korean War……………………………………………….…...…..….....68 The failed military solution………………………………...…...…....68 Wartime North Korea……………………………………..……….....73 Summary………………………………………………………....…..............75 Chapter Three: North Korea’s Economic Policy and Integration……..............84 The North Korean economy…………………....……………….….………….85 Colonial legacy and reconstruction……………………….……..…....85 Land reform…………………………………………………………..89 Nationalization of industries………………………………………….93 Soviet-Korean economic relations……………………………………99 Trade integration………………………………………………...…..103 Wartime economy…………………………………………...….…...107 Fraternal aid to the DPRK……………….…………………...……….…….109 Wartime allies……………………………………………….………109 Humanitarian aid to North Korea………………………….…...........111 Economic aid………………………………………………...............117 Summary…………………………………………………………..................125 Part Two: Postwar Reconstruction and Further Integration, 1954-1961…………131 Chapter Four: The Consolidation of the North Korean System……………...132 Politics in North Korea…………………………………………….…………133 v Failure of de-Stalinization…………………………………………...136 Repressions……………………………………………………….....146 Sino-Soviet dispute and North Korea……………………………….154 Economic reconstruction……………………………………………………..157 Heavy industry line………………………………………………….157 Micro-management……………………………………….................172 Collectivization and socialist revolution…………………………….176 Collectivized and nationalized farming……………………………..189 Summary……………………………………………………………………..193 Chapter Five: North Korea’s Integration into the Socialist World.…………..200 International brotherhood: aid for the reconstruction of North Korea…….....200 Humanitarian aid…………………………………………….………201 Economic aid………………………………………......…………....205 Industrial projects………………………………………………………….…223 The Soviet Union and China...............................................................223 Eastern Europe………………………………………………...….…232 Technical assistance……………………………………........………245 Socialist familiy: perception of socialist help……………………….252 Summary………………………………………………………………….….255 Chapter Six: North Korea’s Foreign Trade and “Socialist Market”…..................259 From aid to trade..............................................................................................259 The Soviet Union and China…………………………………….......261 Eastern Europe…………………………………………………...….267 Reaching out to developing and capitalist countries…………….......282 Trends of North Korea’s trade……………………………………..................285 Summary…………………………………………………………...…...........290 Part Three: Divergence from the Socialist System, 1962-1970………….……........294 Chapter Seven: Chuch’e Socialism in North Korea and the Crumbling of Socialist System…………..…….….....………………...…………………..………...295 The socialist system under strain………………………………….................297 The Sino-Soviet Split and North Korea’s policy…………................298 North Korea’s self-reliance versus integration……………...............309 North Korean politics…………………………………………………….......321 Tightening the screws……………………………………....…….... 322 Militarization…………………………………….……………....…..328 Summary………………………………………………………….………….341 Chapter Eight: Economic Policy, Isolationism, and Integration………..….....345 Economic policy…………………………………………………………...…345 Seven Year Plan……………………………………………………..345 Living standards……….………………………………………….....358 Reform attempts…………………………….…………………….…365 Economic (non)cooperation – the difficult road of self-reliance……….…....373 vi Chuch’e at the helm………………………………………………....374 The drying well of fraternal aid………………………………….….382 Technical assistance from the socialist countries……….…………...394 North Korea’s perception of Soviet camp and assistance…………...401 Summary…………………………………………………………………..…403 Chapter Nine: Trade – Trademark of Relative Consistency in DPRK’s Economic Relations………………………..……..………………….………..……406 Chuch’e and trade……………………………………………………..……...406 Socialist integration – a web of bilateral trade relations……….….….…..….417 The Soviet Union and China…………………………….......……....417 Eastern Europe…………………………………………...…....….…425 Capitalist countries………………………………………...………...444 Summary……………………………………………………...……………...448 Chapter Ten: Conclusion: Waves of Integration and Divergence...........................451 North Korea’s internal integration and divergence………...………….….….454 External integration into the socialist system………………………….….….462 Fraternal aid………………………………...………………...….….462 Trade with the socialist world………….………….......…………….465 The North Korean pattern of integration…….……...………………470 References……..……………………………......………………………………………...478 Appendices………………………………………………………………………………..492 vii LIST OF TABLES Table 1: Soviet-North Korean trade, 1946-1953…………..………….…..……..…..……103 Table 2: Wartime aid to North Korea………………………………….…..………....…...123 Table 3: Fraternal aid, 1954-1961………………………………………..….….………...219 Table 4: Fraternal aid as share of North Korea’s income, 1954-1960……...………….... 221 Table 5: Soviet-North Korean trade, 1954-1961………………………………………….262 Table 6: Sino-North Korean trade, 1954-1961……………………….….……………….266 Table 7: East German-North Korean trade, 1955-1961……………….….………………269 Table 8: Bulgarian-North Korean trade, 1954-1961……….……………..………………273 Table 9: Socialist loans, 1962-1970……………………………….…………..………….392 Table 10: Soviet-North Korean trade, 1962-1970…………………..……….…………….419 Table 11: Sino-North Korean trade, 1962-1970…………………………….……………...423 Table 12: East German-North Korean trade, 1962-1970…………………….…………….426 Table 13: Bulgarian-North Korean trade, 1962-1970……………………….……………..432 Table 14: Aggregate socialist aid to North Korea, 1945-1970…..………….…………......463 viii ACKNOWLEDGMENTS I offer my deepest gratitude to Dr. Steven Lee, my advisor, for his guidance through
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