It was a dubious honor, even for the most hard-line of Communist nations. But after months of negotiations, North Korea, the xenophobic workers' state run by Communist Leader Kim Il Sung, was publicly declared by capitalist bankers to be in default on its foreign debt. Reason: the Pyongyang government's failure to make payments on $770 million in obligations to two syndicates representing 140 banks. Other countries in the past have halted payment of debt but struck deals with foreign lenders, earning more favorable terms and fresh credits. In North Korea's case, says one European banker, "nobody in their right minds will...
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