Prospering North Shrouded in Myth

Juche is also evident in economic strategy. While the south is thriving by tying its future to the world economy, its rival has relatively little foreign trade (about $2.5 billion in 1985, Japanese officials say, compared to the south's $31 billion). It prefers to make everything it can itself, ignoring economies of scale. Although it could buy them overseas more cheaply, it makes locomotives, trucks, bulldozers and boring machines in its own factories.

Last year, North Korea reported a 220 percent increase in gross industrial production between 1977 and 1984. Western analysts generally mark down such claims substantially, but agree that the standard of living has increased markedly. Some compare it to that of Eastern Europe. The capital, Pyongyang, is a tree-shaded, clean city of high-rise, if Stalinesque, architecture.

Visitors say nutrition appears to be uniformly strong. Doctors are in good supply, although it is unclear how much training they get. "Children's palaces," facilities that combine day care, schooling and political education, are found around the country.

The economy is modeled on Soviet-style central planning and suffers from some of the same ailments of poor management, shop-floor ideology and mismatched quotas as the original.

The Kims constantly intervene. Their support is critical for getting major projects moving, but no one knows how many have been put on the wrong track by some chance gesture or remark they make during a visit.

In the early 1970s, North Korea went on a buying spree for production equipment in Western Europe, accumulating about $2 billion in debt. It soon defaulted, forcing a rescheduling, and western banks and suppliers remain wary of it. The financial magazine Institutional Investor last year put North Korea last -- 109th -- in a ranking of world borrowers by credit-worthiness.

Equipment in factories is commonly rated as 20 or more years behind the times. "They need to introduce advanced technology from the West," said Takashi Uehara, a North Korea-watcher at the Japan External Trade Organization. "But because of foreign currency shortages, the only help they can expect is from other socialist countries, who don't have it."

South Korea, meanwhile, is purchasing that new technology helter-skelter. Comparisons of the two economies are difficult, given lack of reliable statistics from the north. The north claims a per capita gross national product of about $2,000, roughly equal to the south's. South Korean officials laugh -- they say theirs is three times higher. Western estimates play down the south's advantage somewhat but still have it well ahead.

Juche theoretically governs foreign policy, too, but often bends for the Soviet Union and China. There would be no North Korea were it not for them. After all, the Soviet troops who arrived in 1945 set up the North Korean state three years later. In 1950, the Chinese Army stopped the counterattacking U.S. forces that would otherwise have overrun it. Today, it depends heavily on these two patrons for machinery, coal, crude oil and advanced weaponry. But in politics it has avoided full association with either one.

The tilt now is toward Moscow. In July, Moscow pulled out the stops to celebrate the 25th anniversary of a friendship pact with Pyongyang. The Soviet aircraft carrier Minsk, bearing the commander of the Soviet Pacific fleet, led a flotilla that steamed into Wonsan port on the east coast. Twelve Soviet MiG23s flew into Pyongyang for a friendship visit, led by the commander of the Far East Air Force.

Soviet warships now call routinely, South Korean analysts say, at several east coast ports, partly to avoid ice that closes Vladivostok, their Pacific fleet's headquarters, during the winter. "In Najin port, we know that at least one pier is used exclusively by the Soviet fleet," said Kim Chang Soon, chief director of the Institute of North Korean Studies in Seoul.

In 1985, Moscow finally bowed to North Korean requests to upgrade their obsolescent Air Force with MiG23 jets. About 30 have been sold already, western intelligence sources say, with 15 or 20 more expected. In return, analysts say, Moscow's reconnaissance aircraft have received the right to overfly the north en route to their base at Cam Ranh Bay in Vietnam or on circular missions to spy on the United States, Japan and China.