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Watch CNN Special Report “Secret State: Inside North Korea” at 12:30 a.m. ET tonight.

(CNN) —  

The last time South Korea hosted an Olympic Games, the North went so far in its attempt to best the attention Seoul was getting that it drove its economy into perdition and its people into starvation.

This time around, however, the North has gotten the kind of publicity money can’t buy.

Yesterday, on the first official day of the Games, Kim Yo Jong, the younger sister of leader Kim Jong Un, took center stage when she met with President Moon Jae-in at South Korea’s presidential palace known as the Blue House, where she delivered an invitation to Moon to travel north and meet her brother.

Her historic visit to the South – the first of any member of the ruling Kim family – generated significant media attention, gracing news broadcasts and front pages across the world.

A festival, then disaster for North Korea’s people

But it was far different 30 years ago. Then, North Korea spent billions to put on the World Youth Festival in July 1989, a year after Seoul hosted the Summer Olympics. Pyongyang refused to attend the 1988 Games and called for an international boycott, one that was albeit ignored by its communist patrons in Beijing and Moscow.

Using the festival as an opportunity to demonstrate its doctrine of self-reliance, North Korea hosted delegates from more than 170 countries for a week of exhibitions, seminars, competitions and folk performances. It built a never-occupied 105-floor hotel, marble-lined subway stations, an Arc de Triomphe replica and a stadium seating 150,000 spectators. It imported more than 1,000 Mercedes-Benzes to accommodate the influx of foreigners.

The 105-story Ryugyong hotel in Pyongyang began construction in 1987 but remains unfinished and unoccupied.
feng li/afp/getty images
The 105-story Ryugyong hotel in Pyongyang began construction in 1987 but remains unfinished and unoccupied.

And while the Summer Games, precipitated by pro-democracy demonstrations and free elections marked a new era of success for South Korea, the 1989 festival practically bankrupted North Korea months before Berlin Wall fell, taking with it communism in much of Eastern Europe and ushering in the end of the Cold War.

The withdrawal of food subsidies in the early 1990s from China and the Soviet Union, the disastrous effects of collective farming and major flooding followed by drought all led to food shortages and a subsequent famine that killed between 2 million and 3 million North Koreans.

01:48 - Source: CNN
North Korean delegation visits Seoul

Before the Pyeongchang Olympics even began, North Korea has been part of the story.

“It’s pretty brilliant, and if it wasn’t Kim Jong Un and North Korea you’d have to admire what they’re doing, it’s pretty amazing,” said David Maxwell, associate director of the Center for Security Studies at the Walsh School for Foreign Service at Georgetown University.

“The North is masterful at getting something for nothing,” he told CNN. “They’re going to get recognition, legitimacy, resources, without giving anything up.”

From brinksmanship to one-upmanship

North Korean military parades, fantastical in their displays and sheer numbers, take months to prepare. It isn’t clear whether the one that occurred the very day before Seoul’s opening ceremony was scheduled to deliberately upstage the South’s moment in the global spotlight.

The regime usually holds parades in April to mark occasions like Army Day on April 25 and the anniversary of the birth of Kim Il Sung, the country’s founder, on April 15. Last year’s military display was on a scale experts said they’d never seen before, and included missiles that raised “questions about the size and scope of Pyongyang’s ICBM ambition.” It heralded the start of a faster-paced testing schedule for North Korea’s weapons, which included the launch of an intercontinental ballistic missile and, the regime claimed in September, a hydrogen bomb.

On February 8, military hardware was rolled out to celebrate a rarely-marked event, the day in 1948 when Kim Il Sung created the country’s armed forces out of the Korean People’s Revolutionary Army.

But this year’s parade was a subdued affair, a marked contrast to the shows North Korea put on in April 2017. While ICBMs were part of the parade, there was no new technology or missiles shown off to the audience at home or those watching from abroad.

01:01 - Source: CNN
North Korea releases video of military parade

“I think the military parade is a sideshow, I think they’re calculating the resolve of the Western powers and any chance to drive a wedge between the South Korean people is a worthy exercise,” said Joseph Siracusa, professor of human security and international diplomacy at RMIT University in Melbourne, Australia.

The North, he said, has nothing to lose with its Olympic gambit. It’s only task, he argues, is to look “normal.”

“If they come across as normal human beings, if they look normal and South Koreans treat them as normal, it’s a great diplomatic victory. It won’t solve a single problem though, as long as they continue with their nuclear weapons and ICBMs,” he told CNN.

The US in the middle

Indeed the party looking most belligerent at the moment is the one Pyongyang is seeking to alienate from Seoul – the United States. Before arriving in the South to attend the Winter Games, US Vice President Mike Pence warned that Pyongyang’s charm offensive wasn’t fooling anyone.

“We will not allow North Korean propaganda to hijack the message and imagery of the Olympic Games,” Pence said after meeting with Prime Minister Shinzo Abe in Tokyo on Wednesday. “We’ll be there to cheer our athletes, but we’ll also be there to stand with our allies and remind the world that North Korea is the most tyrannical and oppressive regime on the planet.”

U.S. Vice President Mike Pence inspects a PAC-3 interceptor missile system with Japanese Defense Minister Itsunori Onodera in Tokyo.
Kiyoshi Ota/Pool/AP
U.S. Vice President Mike Pence inspects a PAC-3 interceptor missile system with Japanese Defense Minister Itsunori Onodera in Tokyo.

On Thursday he visited the Yokota Air Base in Japan, whose troops likely be among the front line in a military confrontation with North Korea.

“As the Old Book says, ‘the soldier does not bear the sword in vain,’ and we will defeat any attack and meet any use of conventional or nuclear weapons with a response that is rapid, overwhelming and effective,” he said.

He also said there were more sanctions coming for Pyongyang, but didn’t outline what they would be.

For Seoul, the possibility of a dangerous dilemma

South Korea has rolled out the red carpet for the North, keen to avoid any escalation of hostilities at a time when people are already leery of traveling to the peninsula. In its willingness to accommodate the North Koreans, the South agreed to have its athletes march with their northern neighbors under a unification flag rather than its own national standard. It also suspended joint military drills with the US for the duration of the Games. Meanwhile, in the coastal town of Gangwon on Thursday, the North Korean flag was raised alongside the Olympic standard.

South Korean President Moon Jae-in, who, during his presidential campaign, said he wanted to be the leader “who built a peaceful relationship” between the two Koreas, will face a quandary of catastrophic proportions should a member of the North Korean contingent decide to defect to the South.

02:29 - Source: CNN
Defection fears at the Winter Olympics

“The position that would put Moon in: Am I going to send that person back? That’s what the Chinese do. Or do I allow them to stay and suffer the wrath of the North?” Maxwell from Georgetown University hypothesized. “North Korea would have an excuse to scuttle any agreement, withdraw from the Olympics, accuse the South of kidnapping.”

Siracusa says the South is already on high alert. It has thousands of security forces providing protection for the Games. “They’re worried about an act of terrorism. They’re worried about a drone. They’re preparing. They’re looking for something to happen,” he told CNN. The South has mobilized at least 60,000 policemen, military and other forces to maintain security during the Games. A spokesperson for the Games told CNN that number also included 600 firefighters and 2,400 private security officers.

Parry, riposte

The stage for the next two weeks is set for more moments of one-upmanship. Pence initiated his own propaganda push while he visits South Korea for the Games. He brought along the father of Otto Warmbier, the American student who was jailed in North Korea and died upon his return to the US last year after suffering extensive brain damage. On Friday the pair met with North Korean defectors including Ji Seong-ho. Pence told the group that “we ourselves have stood and looked across that demilitarized zone, that line across which you fled. You fled to freedom.” He called Fred Warmbier “a great champion” for the freedom of the people in North Korea.

And US President Donald Trump’s daughter Ivanka is scheduled to attend the closing ceremony, bringing her own quotient of glamor and celebrity to the proceedings.

Kim Yo Jong,  sister of North Korean leader Kim Jong Un, arrives in South Korea, Friday, Feb. 9, 2018.
Ahn Young-joon/AP
Kim Yo Jong, sister of North Korean leader Kim Jong Un, arrives in South Korea, Friday, Feb. 9, 2018.

Meanwhile, the visit of Kim Yo Jong — the 30-year-old is blacklisted by Washington — is one of the most powerful people in the Hermit Kingdom.

Television footage of sporting events has been interspersed with scenes of buses pulling up and North Korea’s brightly-uniformed cheering squads and art troupes filing out.

As the Olympic program progresses, another competition plays out beside it in parallel. A charm offensive versus a propaganda drive, with nuclear ambitions at stake. What remains to be seen is whether any of the players will be ready for another round once the other Games are finished.