Isn't this basically the premise of "The Mouse That Roared"?

[Fire Walk With Me]

I haven't read it in decades...

http://news.yahoo.com/s/ap/20070928/ap_on_go_pr_wh/us_nkorea

"WASHINGTON - The United States on Friday announced it would spend up to $25 million to pay for 50,000 tons of heavy fuel oil for North Korea — part of an agreement the communist regime made with the U.S. and other nations pushing it to dismantle its nuclear program."

[BrklynLib at work]

1. Yep. 1959 Guess Sellers was prescient..between this and Dr. Strangelove.

The Duchy of Grand Fenwick decides that the only way to get out of their economic woes is to declare war on the United States, lose and accept foreign aid. They send an invasion force to New York (armed with longbows) which arrives during a nuclear drill that has cleared the streets. Wandering about to find someone to surrender to, they discover a scientist with a special ultimate weapon that can destroy the Earth. When they capture him and his bomb they are faced with a new possibility: What do you do when you win a war?

The best laid plans of mice and men ... A cold war satire emphasising the new emerged American Superpower's use of foreign aid to buy friends and keep then away from the USSR's influence. Peter Sellers, as the scheming Prime Minister of Grand Fenwick, plots with Peter Sellers, as the scheming Grand Duchess, to declare war on the USA, lose and get that foreign aid. Unfortunately, they forget to tell Peter Sellers, as Tully Bascombe, commander of their mediaeval army. This honourable man does his best for his country and through a series of unbelievable circumstances (well, this is a comedy) to win. Now, who has to give aid to whom?

[Jed Dilligan]

3. Great flick

Thank you and the OP for reminding me!

[Mme. Defarge]

2. The Duchy of North Korea ...

but of course!