HONOLULU — The unmaking of a hero is never pretty, but the fall of South Korean President Kim Dae Jung has been especially ugly. The statesman leaves behind a shredded legacy and he, like many of his predecessors, is but one step ahead of the prosecutor. Even his Nobel Peace Price has been tarnished: his crowning achievement, the historic June 2000 summit between the two Korean leaders, appears to have been bought.

Kim deserves applause for his readiness to challenge the old order and take risks. Unfortunately, he must also be faulted for not acknowledging the failure of his vision. His “sunshine policy” permanently altered the terms of Korean engagement, but Pyongyang exploited that policy every chance it could. The refusal to recognize the limits of the sunshine policy guarantees that more mistakes will be made in the future.

Kim came to power determined to end the stalemate on the Korean Peninsula. He announced that his government would renounce the hostility toward the North pursued by his predecessors and attempt to moderate North Korean behavior through engagement. His sunshine policy had three pillars: no toleration of North Korean armed provocations, no attempt to overthrow or absorb the North, and the promotion of reconciliation of the two Koreas. While Kim didn’t abandon the goal of reunification, that objective was kicked down the road.

Originally, the sunshine policy demanded strict reciprocity: That was quickly dismissed by the North as “horse trading.” Seoul then decided to pursue “flexible reciprocity,” accepting that, as the more successful nation, it could afford to be magnanimous in anticipation of a bigger payoff in the future.

The problem was that the future looked ever more distant. Only when Kim appeared to be in real trouble — facing parliamentary votes of confidence or a national election — did North Korea respond. But by then, Pyongyang appeared to be trying to influence South Korean domestic politics — as when the North agreed to the June 2000 inter-Korean summit just before a South Korean national election.

Thanks to recent confessions, the world now knows that there was more to North Korean thinking than an attempt to manipulate South Korean politics or repayment of the considerable debt to Kim that it had incurred.

Chung Mong Hun, head of the Hyundai Group, has acknowledged that his company gave $500 million to North Korea, which he said made possible the June 2000 summit. Kim himself apologized to his country when he admitted that his government allowed an illegal $200 million payment from Hyundai to the North four days before the meeting, but maintained that the payment was made to promote peace. A top adviser to the president has said that he helped transfer the funds.

Questions remain. Kim and his adviser admit to having facilitated the $200 million transfer, but that leaves $300 million unaccounted for. There is speculation that the money might have gone to North Korean leader Kim Jong Il himself; there are rumors of a holdup in the transfer of the funds, which accounts for the one-day delay just before the meeting was to take place.

There is more to this tawdry episode than titillating glimpses of South Korean politics. President-elect Roh Moo Hyun takes office Feb, 25, and he has pledged to continue the sunshine policy. As the new administration takes office, a clear-eyed assessment of the policy is absolutely necessary.

Kim and his defenders argue that sunshine has yielded results. They point to the diminished tensions on the Peninsula, which allowed South Korea to stage the World Cup and the Asian Games. The North’s international isolation has lessened (at least it had until the latest nuclear crisis emerged), family reunions have taken place, foreign investment in the North has risen and a cross-border road has been opened. There is a stronger sense of solidarity between the two Koreas than has perhaps ever existed before.

Those benefits must be balanced by the strains that have emerged in the U.S.-South Korean alliance. There is now more distrust between the two capitals than has ever existed. Even more troubling, there appears to be an opportunity for the North to exploit that distrust and deepen the wedge between Washington and Seoul. A rising number of Koreans now question whether the U.S. is a stabilizing element on the Peninsula and whether it would permit reunification.

The strains have been produced by the sunshine policy; not because of what it does, but because it appears to have become an end in itself. Observers believe that the perpetuation and justification of the policy have become more important than what it actually achieves. Domestically, that has encouraged the politicization of unification policy. A recent study by two RAND scholars concludes that Kim Dae Jung “used his sunshine policy overtly and intentionally to improve both his personal political position and his party’s electoral prospects. . .”

The inclination to protect sunshine at all costs has foreign-policy implications too. Seoul has been encouraged to overlook North Korean transgressions and to withhold the discipline that is necessary if sunshine is to have any credibility. This encourages North Korean brinkmanship at a time when the margin for error is shrinking.

President Kim understands the sunshine policy is part of a two-pronged strategy. When he launched his policy, he predicated it on a strong alliance with the U.S. and said that engagement was not equivalent to appeasement. The record of the past five years shows that when South Korea draws a line, the North respects it. Unfortunately, Seoul has been unwilling to draw that line short of armed clashes.

There is no sign that the new administration understands the danger of such a policy. Roh has declared that he will not tolerate a nuclear-armed North Korea, but there is no clear understanding of what that means. Thus far, attempts to pin down the limits of Seoul’s tolerance have had no results. If South Korea does not tie a credible “cost” to North Korean proliferation, there is little chance that Pyongyang will restrain itself.

Unless the sunshine policy is reassessed, Kim Dae Jung’s legacy could be a nuclear-armed North Korea and a U.S.-South Korean alliance in tatters.

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