Juche 2.0? How North Korea Adapts to the Modern World

Lee Jae-Young, President of the Korea Institute for International Economic Policy (KIEP), tells about the prospects of overcoming tensions in the Korean Peninsula as part of the Valdai Club’s The Eastern Perspective project. 

The period of tensions on the Korean peninsula was followed by a detente. What are the prospects of North Korea’s denuclearization? Can a lack of progress lead to a new aggravation? 

Up to now North Korea has expressed its commitment toward denuclearization on several occasions. However, it is proving difficult for the US and North Korea to narrow their differences on how the denuclearization process should proceed. While the two sides continue in a state of tense disagreement it is a positive sign that both North Korea and the United States are expressing their willingness to negotiate. The Korean government is trying to mediate between the two countries by guiding them toward a “good enough deal” as a compromise, and is actively promoting denuclearization by forming a virtuous cycle between inter-Korean relations and North Korea-US relations. 

North Korea has declared it will consider “new paths” should the denuclearization negotiations bog down, but as of now it appears that any such new path would center more on self-reliant economic development rather than armed provocation. This indicates that North Korea, which wishes to establish itself as a normal state in the international community, is concerned it will be stigmatized as a rogue state by the international community if it again resorts to military provocation tactics. Therefore, the risk of North Korea staging further provocations seems low even if advances are not made in the denuclearization process. 

What are objectives of Kim Jong-un’s domestic and foreign policy course? What is the agenda if his economic reforms? Can North Korea become a new “Asian tiger”? 

In April 2018, North Korea adopted the objective of “socialist economic construction” as its new strategic policy line and announced it would be concentrating all national capabilities into economic development. Towards this goal, North Korea has also announced it will work closely with neighboring countries and the international community. Recently, North Korea announced its commitment to self-reliant economic development in anticipation of the sanctions against North Korea being prolonged, and announced plans to achieve this through its science and technology development policy. 

Since Kim Jong-un came into power, North Korea has taken steps to reduce the planned sectors of the national economy and strengthen the autonomy of sub-units through a series of measures it calls the “Economic Management System in Our Style.” In addition, by institutionalizing this system, the function of the market has been incorporated into the official economy. 

North Korea is located close to economic powers such as South Korea, Japan, China, and Russia, and has an abundance of natural resources and high-quality labor. If North Korea's denuclearization is accompanied by economic reform and opening policies in line with international standards, the growth potential of the North Korean economy will be quite considerable. 

What awaits the inter-Korean relations? Can they peacefully coexist as two independent states? Can they unite and if so, what model could they follow? 

The three main goals of the South Korean government are to resolve the North Korean nuclear issue and establish permanent peace, promote sustainable inter-Korean relations, and promote the New Economic Community on the Korean Peninsula. Also, the Korean government aims to guarantee the stability of North Korea and to coexist peacefully, defining its stance with the “3-Nos”: no desire for the North's collapse, no pursuit of unification by absorption, and no pursuit of unification through artificial means. The official unification plan of Korea is the Unification Plan for One National Community. In the first stage of the plan, the two Koreas resolve the current hostile and confrontational relationship through reconciliation and cooperation. In the second stage, a transitional two-system and two-government inter-Korean coalition is formed to develop the economic and social communities. The third step is to draft a unified constitution and proceed on to a single system and single government through due democratic processes. 

What are the interests of the United States, China, and Japan on the Korean peninsula? 

The pending issues for the United States in relation to its major national interests on the Korean Peninsula is to realize the denuclearization of North Korea, and ultimately maintain regional hegemony in Northeast Asia by holding China in check throughout this process. China intends to strengthen its role as a major and responsible nation in the international community by cooperating in the denuclearization process and sanctions against North Korea. At the same time, China intends to utilize North Korea as a strategic buffer zone against liberal democracies such as the United States, Japan, and Korea by stably managing North Korea. Meanwhile, Japan is actively utilizing North Korean issues, such as its nuclear armament and abduction of Japanese nationals, to distract the public away from domestic scandals and gain support for an amendment to the constitution, followed by an increase in its military power. 

What are the political and economic prospects that the changing situation on the Korean peninsula opens for Russia? 

Russia has conducted a relatively passive strategy for the denuclearization of the Korean Peninsula, but following the recent Hanoi summit, Russia has gained the opportunity to play a critical diplomatic role. Russia can utilize the issue of the Korean Peninsula’s denuclearization and inter-Korean economic cooperation as a useful strategic means on the international diplomacy stage. In addition, the importance of trade diversification as a countermeasure for sanctions against Russia has improved, and the strategic interests of Korea and Russia are falling into better alignment with each other: therefore, a progress in Korea-Russia relations can be expected. Now, the strategic implications of tripartite economic cooperation between South Korea, North Korea, and Russia, which Korea is actively pursuing, as well as the Far East Development Policy by Russia, are becoming much clearer for Russia.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.