s to Russia, North Korea can ill afford to antagonize China, Pyongyang's last and perhaps only source of outside support. Despite recent unconfirmed reports of border clashes, an intense effort has been under way to cultivate China's good will and economic and military support. So far, China has sought to accommodate Kim Il Sung as far as possible within the framework of its broader domestic and foreign policy agenda. In late 1991, China reportedly promised an increase in military aid. 22 In addition, to help the North weather its crisis of oil and foreign exchange shortages, Beijing reconsidered its decision to require that goods be paid for in hard currency. The decision was to go into effect in 1993. China also retains considerable leverage over Pyongyang's foreign affairs and has played a key role in bringing Washington and Pyongyang together for direct talks over the nuclear inspection and NPT issues. North Korea stands to receive several billion dollars from Japan as part of Tokyo's pre-World War II compensations (For injuries to Korea during Japan's occupation from 1910 to 1945). That would have been the case if its talks for diplomatic normalization, begun in 1991, had been completed. The talks were stymied by discords, notably the nuclear safeguards inspection issue. In time, there seems to be no question about Japan becoming perhaps the most important contributor to the development or resurrection of Pyongyang's economy. That prospect remains a concern of South Korean economic planners and policymakers. 23 POSSIBLE OUTCOMESFour outcome scenarios seem likely in the 1990s: status quo, reform, hardline, and collapse. Although these scenarios are analytically discrete, they could overlap to a degree. THE STATUS QUOSuppose that North Korea believes effective internal control is crucial both to ensuring self-preservation and to facilitating reform. If so, the Kim Jong Il regime seems certain to continue rigorous political control to...
