Kim Dae Jung and the 1998 Plan to Buy a North Korean Soft Landing

By Eleanor Voss · September 14, 2026

For years, the risk of a nuclear North Korea was managed through heavy fuel oil and a fragile two-track policy that depended on a U.S. Congress that did not want to pay

Millions of people in Seoul and Pyongyang spent the winter of 1998 living under a calculated nuclear ambiguity, their survival tethered to a diplomatic gamble known as the "two-track" policy. The cost of a failure in this gamble was not a budget shortfall, but a regional war that would have rendered the Korean Peninsula a wasteland.

What we have of this period is an archival description of a December 5, 1998, cable from the U.S. embassy in Seoul to the Secretary of State, titled "Expectation and Trepidation: The ROK That Dr. Perry is Visiting." The record establishes that the atmosphere was one of fragility, where the hope for a peaceful transition was constantly colliding with the reality of a regime that viewed nuclear weapons as a currency for extortion.

Expectation and Trepidation

William Perry, the American mathematician and engineer who had served as Secretary of Defense from 1994 to 1997, arrived in Seoul to conduct a policy review. He was the envoy sent to stabilize a relationship that was drifting. The record states the government of Kim Dae Jung—the activist and statesman who served as South Korea's eighth president from 1998 to 2003—intended to use Perry’s visit to argue for a "closely coordinated policy that combined deterrence with engagement."

This was the "two-track" policy. On one track, the U.S. and South Korea would deter North Korean threats; on the other, they would engage Pyongyang to "slowly induce change." The public record shows that Bill Clinton had already endorsed this approach during a visit to Seoul a month earlier. The connection here is a matter of political leverage: Kim Dae Jung used the prestige of the American president's endorsement to shield his engagement strategy from domestic critics and to force Perry’s review toward a more unified strategic front.

However, the record captures a deep current of anxiety. South Korean leaders feared they were "hostage to North Korean provocations," worrying that a single missile test or nuclear flare-up would ignite a political firestorm in Washington and Tokyo, killing the engagement track entirely. The goal was a "soft landing" for the regime of Kim Jong Il, the dictator who led North Korea from 1994 until 2011. The public record establishes that Kim Jong Il faced a fundamental dilemma: cling to the juche ideology of self-reliance and face economic collapse, or abandon it and risk his own legitimacy.

Document imagery from nsarchive.gwu.edu From the files: nsarchive.gwu.edu

The Heavy Fuel Oil Ransom

To manage this dilemma, the U.S. and its partners relied on the KEDO mission—the Korean Peninsula Energy Development Organization, which was tasked with supplying heavy fuel oil to the North in exchange for the freeze of its nuclear reprocessing plants. The record describes this arrangement as being "carried out, albeit imperfectly."

This imperfection was a matter of money. The viability of KEDO depended entirely on the U.S. Congress approving the second tranche of funding for heavy fuel oil. The connection is a chain of financial dependency: if Congress cut the funding, the U.S. participation in KEDO would drop; if the U.S. dropped, Japan and South Korea would find it impossible to sustain their own financial contributions; if KEDO collapsed, the record warns that it would lead to "heightened tensions."

In essence, the "Agreed Framework" was not a treaty of peace, but a subscription service for regime survival. Kim Jong Il understood this. The record explicitly notes that Pyongyang viewed the nuclear threat as its "chief trump card," a tool used to "seize U.S. attention and ‘extort’ benefits." The irony is sharp: while the Kim Dae Jung government was pursuing "reciprocity," the regime in Pyongyang was practicing a form of nuclear blackmail, using the threat of the bomb to ensure the fuel oil kept flowing.

The Underground Gap

While the fuel oil flowed, a darker shadow was growing. Both Clinton and Kim Dae Jung had agreed on the "vital need to determine the true nature of the suspicious underground construction in North Korea." This phrasing—the need to determine—is where the record becomes a mask.

If the shape of this file is what it appears to be, the desk’s reading is that "the need to determine" was a diplomatic euphemism. The pattern suggests that the intelligence community likely already possessed high-confidence indicators of a nuclear breach at these underground facilities. By framing it as a point of inquiry rather than a confirmed violation, the U.S. and South Korean governments maintained the optics of the "two-track" policy. They could not admit the breach without triggering the very "sentiment against engaging" that the record says they so feared.

This deception extended to the timeline of the threat. The record states that senior South Korean officials felt a nuclear threat from the secret facility "would not materialize for several years," leaving time to establish a "high stake in peace" before the threat became "lethal."

The desk’s reading is that this assessment was a strategic sedative. By pushing the "lethal" date several years into the future, the administration lowered the perceived risk to the U.S. Congress. It was a calculation designed to ensure the approval of the second tranche of KEDO funding. They weren't reporting a timeline; they were manufacturing a window of safety to keep the money moving.

The Ghost in the Room

There is a glaring void in the cable: the total absence of the People's Republic of China. In a strategic review of North Korean regime survival, China is the only actor that matters, yet it does not appear in the record's summary of the Seoul-Washington coordination.

The pattern suggests that China was the ghost in the room. The cable frames the crisis as a management task for the U.S., South Korea, and Japan to avoid admitting that the primary leverage over Kim Jong Il actually resided in Beijing. By ignoring the Chinese variable, the record presents a fantasy of bilateral control that did not exist.

Furthermore, the record mentions that the Kim Dae Jung government was criticized for providing an "overly generous flow of benefits" to Pyongyang. The public record of the so-called Sunshine Policy indicates these benefits often involved massive, clandestine financial transfers. The desk's reading is that these transfers are omitted from the cable because they would have been too politically volatile for a formal State Department record. The "benefits" were not just fuel oil; they were cash payments intended to buy a "soft landing" that the regime had no intention of taking.

Finally, the record presents the "two-track policy" as a unified government consensus. The pattern suggests this masked a deep institutional schism. The public record shows a persistent divide between the civilian administration of Kim Dae Jung and the ROK military establishment, which viewed engagement as a dangerous delusion. The cable’s singular attribution of the strategy to the "Kim Dae Jung government" erases the internal security dissent that likely screamed warnings about the underground facilities while the diplomats were counting fuel oil barrels.

The desk's reading of this record is that the "two-track" policy was a facade for a desperate holding action. The U.S. and South Korea were not inducing change in Pyongyang; they were paying a ransom to delay a nuclear reality they already suspected had arrived. The "several years" of safety they promised Congress was a lie told to keep the KEDO funding alive, a sedative administered to a legislature that would have stopped the payments had it known the true nature of the underground construction.

In the end, the "soft landing" was a mirage. The regime didn't choose between juche and self-destruction; it chose a third path: using the engagement of the West to buy the time necessary to perfect the very weapons that made the engagement meaningless. The cost of this deception was paid by the taxpayers of three nations and the security of a peninsula that remains, to this day, a hostage to the same trump card.

Kim Dae Jung and the 1998 Plan to Buy a North Korean Soft Landing

Expectation and Trepidation

The Heavy Fuel Oil Ransom

The Underground Gap

The Ghost in the Room

Sources