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182 Epilogue UNTYING THE KOREAN KNOT THE POLITICAL AND ECONOMIC ARRANGEMENTS on the Korean peninsula at the beginning of the new century represent both the postmodern future and an anachronistic Cold War past. South Korea joined the community of industrialized states in the 1990s by becoming a member of the World Bank and net exporter of capital in global markets. Its exports are well known throughout the world, and its manufactures are no longer limited to low-end products or semiprocessed goods. Like Japan before it, Korea has advanced on the product cycle and now focuses on value-added products: computers, LCD displays, processing chips, and so forth. Its rise to middle-class status within the nation-state system has been copiously documented, first as a model of third-world development and more recently as a harbinger of the future. A 2004 ROK Ministry of Information and Communications survey noted that 86 percent of the population had access (wired or wireless) to the Internet, and 72.8 percent over the age of six used the Internet at least once a week (NIDK, 2004). South Korea is, however, more than an economic and technological success story. The popularity across East Asia and beyond of the so-called Korean Wave (Hallyu) of cultural products such as films, TV productions, and popular music in audio disc form, was unprecedented in postwar Korean development. Long considered an imitator and follower in cultural terms, Korean film directors, TV producers, actors, and singers are now trendsetters. Entertainment exports are not only big money, they are also changing South Korea’s regional and global image. This is highly ironic given that until 1998 ROK authorities had banned the importation of Japanese popular cultural goods out of a fear that it would have a bad influence on Korean youth and corrode traditional values. South Korea is no longer just a piece in the strategic puzzle of Northeast Asian security, nor an increasingly troublesome importer into the US economy. Moreover, the fact that it now has multidimensional relationships, economic, political, and cultural, with the region and the world has altered decisively its relationship with the United States, its old security partner and economic guarantor. In contrast North Korea finds itself diplomatically and economically isolated from the world community. After the collapse of the Soviet Union and fall of the iron curtain, North Korea’s economic arrangements with the Communist inter- Untying the Korean Knot 183 national system collapsed. This plunged its economy into a free fall from which it has yet to recover. With almost no foreign exchange earnings based on exports, North Korea has been forced to rely on its own devices. Indeed, while this is compatible with its Chuch’e philosophy of self-reliance, it prevents acquisition of the new technology and ideas it needs to rebuild and grow its economy. As a hermit in the world system, North Korea also has no access to global capital markets. By the year 2000, however, North Korea was recovering from the worst of the devastating famine, and small cracks seem to be appearing in its walls of isolation. For the two Koreas at least, the unprecedented North-South summit meeting gave credence to the possibility of change in North Korea. In 2000, however, a different mood prevailed in the United States. Before his inaugural address George W. Bush announced a thorough reevaluation of the country’s policy toward North Korea. This anticipated a reversal of the Clinton policy of engagement represented in the Agreed Framework of 1994. In his 2002 State of the Union speech, President Bush identified North Korea, Iran, and Iraq as members of an“axis of evil”—rogue states that he considered the greatest threat to stability in the new world order. In so doing, he began a crisis in US-North Korean relations that escalated to the point of nuclear confrontation by the spring of 2003. When, following the World Trade Center bombing, he declared America’s right to unilateral pre-emptive military action, sent troops into Afghanistan to remove the Taliban regime, and invaded Iraq in the Second Gulf War, he confirmed in the minds of North Korea’s leaders that their regime is under threat from America. For North Koreans, this justified breaking the agreements embedded in the Agreed Framework and accelerating its nuclear weapons program. Fortunately, the People’s Republic of China was abandoning their earlier reticence in world affairs, and they organized six-party talks to defuse...

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