North Korea steps up economic focus

Kim Jong Un focuses on North Korea’s economy to divert attention from its nuclear program and to compel the US to provide some sanction relief.

Background

The political and diplomatic relations between North Korea and the United States have been historically hostile, developing primarily during the Korean War. In recent years relations have been largely defined by North Korea's nuclear program resulting in American and UN sanctions on North Korea. The US has underlined that there will be no sanctions relief until "complete denuclearisation.” 2018 saw an unprecedented change in the relations between the two countries as Donald Trump and Kim Jong Un met. However, talks broke down after Mr. Trump sought complete denuclearisation without any sanctions relief.

Analysis

North Korean state media reports that Kim Jong Un seeks a “telling blow” to those that impose sanctions on the wayward state by becoming more self-reliant. Economic development has long eluded North Korea, a result of long-standing sanctions. Mr. Kim had made the policy of central importance in April 2018 and the recent call by Mr. Kim is a repetition of this policy. The April announcement at a plenary session altered focus from a two-pronged approach of economic and nuclear weapons development to economic progress and improving the lives of North Koreans. State media has, in recent days, published images and reports of Mr. Kim’s visits to a number of economic projects in concordance with the “new strategic line” announced in April.

Mr. Kim’s renewed rhetoric on economic development after months of relative economic silence comes at the heels of failed sanctions relief from international entities. It is likely North Korean authorities wrongly estimated that some sanctions relief was a given following North Korea’s approach to the negotiating table. However, Mr. Trump’s unwavering demand for complete denuclearisation without any significant American compromises, especially relating to sanctions, was likely too risky for North Korean decision-makers. As conditions deteriorate for North Koreans, Mr. Kim wants to be portrayed as actively seeking to alleviate their situation.

In addition, the comments were reported hours before Mr. Trump met his South Korean counterpart, Moon Jae-in, in Washington. Mr. Moon has suggested that sanctions be eased to allow economic engagement between the two Korea’s in return for certain nuclear concessions. The reports are likely intended to help convince the US of providing some sanctions relief. Simultaneously, North Korea is expected to convene its Supreme People’s Assembly, which will provide significant insight into whether the country intends to continue its rhetoric of economic development, moving away from its nuclear weapons program.

Assessment

Our assessment is that Mr. Kim’s renewed push on economic development must be seen in the light of the failure of North Korea to secure sanction relief. We believe that the focus on North Korea’s economy is intended to portray the nation as serious about its engagement with the US while remaining quiet about its nuclear program. We believe that the timing of the rhetoric is to affect some change within South Korean-US talks in an effort to secure sanctions relief. We believe that should this fail and the US refuses to come to some compromise, North Korea is likely to play-up its nuclear efforts once again.

Image Courtesy: https://upload.wikimedia.org/wikipedia/commons/5/5f/Laika_ac_Pyongyang_%287975203722%29.jpg, Laika ac from USA [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)]