In this country we have a form of extortion called the protection racket, where a criminal offers to "protect" someone, usually a shopkeeper, for a fee. So, Kim Jong Il is basically saying to the South, "It would be a terrible thing if youze was to have an unfortunate accident or something because of a lapsed policy."
Yeah, it's protection racket, plain and simple. That is N. Korea's main economic policy, in a nutshell.