How 1,000 Volvos Ended Up In North Korea — And Made A Diplomatic Difference

Dec 4, 2017
Originally published on December 4, 2017 3:30 pm

Twenty-eight years ago, U.S. journalist Urban Lehner was riding in the back seat of a speeding Volvo 144 sedan. He was on assignment for The Wall Street Journal in North Korea. The road out of Pyongyang was empty.

"The 1973 Volvo screeches around tight curves, slaloming across all five lanes of the road," he wrote in an article dated Aug. 29, 1989. "In another country it would be a suicide ride, but in North Korea so few cars ply the highways that each can often have the road to itself."

Looking back now at his two-week trip, Lehner remembers going everywhere in that Volvo. He says visiting journalists usually rode in them.

"You had an interpreter and a driver and a Volvo, and you were a family for two weeks," Lehner says. "Honestly, they were great cars. Even when you slalomed across five lanes, they were basically safe."

But how did the Volvos get to North Korea?

Lehner heard rumors from other reporters.

"We had heard the story that the North Korean [authorities] had bought these cars, then stiffed Volvo and not paid," he says. "We joked that we were riding around in stolen cars."

An ill-fated trade deal

Decades ago, when Volvo 144s — sturdy, boxy sedans that were made until 1974 — were still in production, Swedish businesses started expanding into a promising new market: North Korea.

In the mid-1970s, export companies signed huge trade contracts and shipped tons of Swedish-made industrial equipment to North Korea — including heavy mining machinery and 1,000 Volvo cars.

From the exporters' point of view, there was money to be made in North Korea's emerging economy.

"At the time, [North Korea] wasn't doing so badly," explains Jonathan D. Pollack, a senior fellow at the Brookings Institution. "After the Korean War, their economy was rebuilt, it became a functioning industrial state, still very aid-dependent — but it wouldn't have seemed like such a bad bet, under the circumstances."

Sweden shipped over $70 million worth of products. So much had been invested into North Korea that Swedish export companies — and left-leaning politicians — encouraged Sweden's Ministry for Foreign Affairs to send a diplomat there.

And so, in 1975, Sweden became the first Western country to establish an embassy in Pyongyang.

"They asked me if I would like to open this embassy in North Korea," says Erik Cornell, a veteran Swedish diplomat. "And I said, 'Yes.' "

Cornell, now 87, joined the ministry in 1958 and had served in Bonn, Warsaw and Addis Ababa, Ethiopia. He arrived in North Korea, then led by Kim Il Sung, in the winter of 1975.

"It was an empty country. Snowy, windy, cold. And we came to Pyongyang. You know, you started from scratch when you came there," says Cornell, who now lives outside Stockholm.

Cornell served as the embassy's chargé d'affaires until 1977. The capital city was sparse.

"You couldn't drop into a cafe or a restaurant because there were none," he says. Sometimes, all he could do was go out for short drives in his Volvo. "That was the conditions of life."

Cornell was tasked with making sense of North Korea's economic situation – and, as he quickly found out, the numbers weren't adding up.

Shortly after he opened the embassy in Pyongyang, the country's trade with the West came to a sudden halt. North Korea wasn't paying for the goods it imported. Payment deadlines passed, debts and interest payments mounted, and it became clear that North Korea could not afford all its investments.

North Korea had overestimated its industrial capabilities, Cornell wrote in his 2002 memoir, North Korea Under Communism: Report of an Envoy to Paradise. The country was convinced it was catching up with the developed industrial nations. In Cornell's opinion, though, North Korea didn't know how to do business outside the Communist bloc. Its economy struggled.

Cornell says the factory equipment was left to rust away in North Korean warehouses. And more than four decades later, the government has yet to pay for those 1,000 Volvos.

According to the Swedish Export Credit Agency, which insured the payments, North Korea's debt to Sweden has grown over the years to a massive $322 million. Sweden still sends twice-yearly reminders to Pyongyang, but North Korea has never upheld its end of the agreement.

Protecting power for the United States

Perhaps a fleet of 1,000 unpaid Volvos is just a cost of diplomacy. By opening an embassy in Pyongyang, Cornell managed to establish some trust with North Korean leadership. Sweden still maintains its embassy in Pyongyang, and it has taken part in humanitarian aid work and expanded its role as intermediary between North Korea and the outside world.

"The Swedes are very good at this," says Pollack of the Brookings Institution. "The Swedes have often played that kind of a role in diplomacy of various kinds. They are seen, in some measure, as an honest broker."

After the attack on Pearl Harbor, Sweden acted as the protecting power for Japanese nationals in Hawaii during World War II. It has represented the United Kingdom as protecting power in Iran at times when diplomatic relations have been broken off.

The United States, which has no formal diplomatic relations with Pyongyang, has entrusted Sweden to serve as protecting power in North Korea — a role it has kept since 1995. (Sweden also serves as protecting power for Australia and Canada).

In cases when an American is detained in North Korea, the Swedish Embassy in Pyongyang often steps in.

American journalist Laura Ling was detained in North Korea for 140 days in 2009. Ling and her colleague Euna Lee were apprehended while filming a documentary for Current TV along the China-North Korea border.

Weeks after their capture, the Swedish embassy set up a meeting with the two. Ling still remembers the moment Sweden's ambassador at the time, Mats Foyer, walked into the drab Pyongyang hotel room.

"I just lost it. I was really overcome by emotion because I knew that he was the one person in North Korea who was working on my behalf," Ling says. "He was my lifeline."

Because of the limited nature of the protective power role, Foyer was not responsible for negotiating the release of Ling and Lee. They returned to the United States after a meeting in Pyongyang between former President Bill Clinton and Kim Jong Il, who pardoned the two American women.

But during Foyer's visits, he was able to bring Ling medication, books and letters from home — which gave her hope for her future.

"He was my connection to the outside world. He was my connection to my family," Ling says. "I thought that through his eyes, they would in turn be able to see me."

NPR Morning Edition editor Jacob Conrad contributed to this report.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

STEVE INSKEEP, HOST:

When Americans are held captive in North Korea, which happens, they cannot call the United States embassy. There is no U.S. embassy in North Korea. So another embassy in Pyongyang steps in.

(SOUNDBITE OF NEWS MONTAGE)

UNIDENTIFIED REPORTER #1: North Korea and the U.S. don't have diplomatic relations. Sweden is acting as a go-between here.

UNIDENTIFIED REPORTER #2: The U.S. does not have direct relations with the North. Sweden acts as its representative.

INSKEEP: Sweden serves as the protecting power for the U.S. OK so what are the Swedes doing in the hermit kingdom? Their presence involves a fleet of Swedish cars. NPR's Danny Hajek explains.

DANNY HAJEK, BYLINE: On August 5, 2009, two American journalists stepped off a plane in Burbank, Calif., finally home after being detained in North Korea for 140 days.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #1: That is Laura Ling and Euna Lee back on American soil.

HAJEK: Laura Ling spoke at the press conference.

(SOUNDBITE OF PRESS CONFERENCE)

LAURA LING: Euna and I would just like to express our deepest gratitude to President Clinton, President Obama.

HAJEK: And then she said this.

(SOUNDBITE OF PRESS CONFERENCE)

LING: We'd also like to thank the Swedish ambassador, Mats Foyer, and we are so happy to be home.

HAJEK: The Swedish ambassador to North Korea - he actually visited them during their captivity. Ling still remembers the moment the ambassador walked into the drab Pyongyang hotel room.

LING: I - I just lost it. I was really overcome by emotion because I knew that he was the one person in North Korea who was working on my behalf. He was my lifeline.

HAJEK: So what was Sweden in doing there in North Korea? Well, it goes back to a deal that included a small Swedish car.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN #2: The Volvo 144 Grand Luxe - one of the fastest Volvos on the road. First-class comfort. You sit on real leather.

HAJEK: The Volvo 144 is from another era - a boxy frame on small wheels, round headlights, built like a tank as they say. These cars are the remnants of North Korea diplomacy with the West.

URBAN LEHNER: Honestly, they were great cars.

HAJEK: Urban Lehner was working for The Wall Street Journal back in 1989.

So you were on a reporting assignment...

LEHNER: Yes.

HAJEK: ...In North Korea...

LEHNER: Yes.

HAJEK: ...Riding in a Volvo.

LEHNER: In a Volvo, yes. You know, every - it was the same thing. You had an interpreter and a driver and a Volvo, and you were a family for two weeks.

HAJEK: Lehner heard rumors from the other reporters.

LEHNER: The North Koreans had bought these cars and then stiffed Volvo and not paid. And so we joked that we were running around in stolen cars.

HAJEK: Maybe there's a little truth to that. In a country that seems so shut off, these cars somehow got in.

So you saw these Volvos too.

JONATHAN POLLACK: Yes. You couldn't help but notice them.

HAJEK: Jonathan Pollack is with the Brookings Institution. He visited North Korea in 2009.

POLLACK: My initial impulse is where did they get these cars? And the answer is they had them all along.

HAJEK: All the way back to the 1970s from Sweden.

POLLACK: Right. And Sweden, of course, had a particular role in North Korea.

HAJEK: That role - business deals. Back then, Swedish export companies were sending over tons of Swedish-made factory equipment, and those Volvos, 1,000 of them, were part of the package.

Why would Sweden ever do business with North Korea?

POLLACK: North Korea, after the Korean War, their economy was rebuilt. It became a functioning industrial state - still very aid dependent. But it wouldn't have seemed like such a bad bet under the circumstances I guess is the way I would put it.

HAJEK: Sweden ended up shipping over $70 million worth of stuff - mining equipment, the Volvos - and the export companies wanted someone on the ground keeping track of payments. So North Korea allowed Sweden to open an embassy in Pyongyang. I mean, this was unprecedented. Sweden needed one of their best, and they had just the man for the job.

ERIK CORNELL: They asked me if I would like to open this embassy in North Korea. And I said yes.

HAJEK: Erik Cornell - a veteran diplomat. He's retired now, 87 years old and lives outside Stockholm. He remembers the day he arrived in North Korea - winter 1975.

CORNELL: I remember very well. It was an empty country - snowy, windy, cold and so on. And we came to Pyongyang. You know, you started from scratch when you came there.

HAJEK: North Korean authorities provided the staff, plus a car - a Volvo 144.

CORNELL: Oh, yes, of course. So that was good for a Swedish heart to see (laughter).

HAJEK: Cornell served as the embassy's charge d'affaires up until 1977. It was a grueling assignment. He was sensing things you'd never have picked up from the outside. Here was this country spending a fortune on foreign goods, yet the capital city was sparse.

CORNELL: You couldn't drop into a cafe or a restaurant or so on because there were none.

HAJEK: Sounds like there wasn't really much of a social life at all. It was kind of lonely maybe.

CORNELL: Oh, yeah, that was the conditions of life.

HAJEK: Cornell could see the obvious. North Korea wasn't actually paying for any of the Swedish goods. They had overspent.

CORNELL: Then they could never pay back that.

HAJEK: So trading stopped. Cornell says the factory equipment was left to rust away in North Korean warehouses. And those 1,000 Volvos, all these years later, are still not paid for. According to the Swedish export credit agency, North Korea's debt to Sweden has grown to over $320 million. But Erik Cornell had managed something a lot more valuable - a small sense of trust with North Korea's leadership. Just like the volvos, the Swedish embassy is still there.

CORNELL: We have kept our confidence in this way.

HAJEK: And that's been crucial. Jonathan Pollack from Brookings says out of that ill-fated trade deal, Sweden grew to become the middleman between North Korea and the West.

POLLACK: And the Swedes are very good at this. I mean, the Swedes have often played that kind of a role - diplomacy of various kinds. They are seen in some measure as an honest broker.

HAJEK: Which is why since the '90s the U.S. has entrusted the Swedish embassy to serve as protective power in North Korea, like that time in that drab hotel conference room in Pyongyang.

LING: When Ambassador Foyer walked in - he's this tall, lanky man who has these large glasses and just the kindest expression on his face.

HAJEK: Laura Ling knew Sweden's ambassador was there for her.

LING: So I remember embracing him and just not wanting to let go.

HAJEK: Ambassador Foyer couldn't negotiate her release, but from time to time, he brought medication and letters from home.

LING: He was my connection to my family, and I thought that through his eyes they would in turn be able to see me.

HAJEK: You know, those old Volvos are still driving around North Korea. Over four decades later, Sweden is still holding out hope that one day they'll get paid back. But maybe 1,000 unpaid Volvos is just the cost of doing diplomacy. Danny Hajek, NPR News.

(SOUNDBITE OF LOSCIL'S "CLOISTER") Transcript provided by NPR, Copyright NPR.