Pressures on Pyongyang raise risk of regime collapse

Significance On April 4, supreme leader Kim Jong-un called this “the worst-ever situation in which we have to overcome unprecedentedly numerous challenges”. Much hinges on how soon trade with China resumes. If that happens this month, as Chinese businesses near the border expect (though other reports are sceptical), then some North Koreans will experience some relief. However, other sources of discontent are brewing. Impacts Economic failure is inevitable without market reforms, but the regime is moving in the opposite direction. Scapegoating and purging the nomenklatura for economic failures will breed resentment among the elite. North Korea needs China, but that fact is widely resented.

Subject North Korea's worsening economic situation. Significance A change of premier and increased stress by supreme leader Kim Jong-un on self-reliance both suggest that tentative market reforms are stalled. Pyongyang is appealing for food aid, with the UN and others warning of a risk of famine. Leaked internal documents reveal unrealistic targets for GDP growth, and an equally impossible wish to lessen trade and other dependence on China. Impacts Despite Kim’s bonhomie with President Vladimir Putin in Vladivostok, Russia can offer little economic support. South Korea’s government wants economic cooperation, but, to Pyongyang’s anger, will not defy UN sanctions. Washington will not agree to ease sanctions without material concessions by Kim. China remains Kim’s bulwark, uncomfortably for both; Beijing cannot openly defy sanctions, but will not risk collapse on its borders.


Subject The first summit between Chinese President Xi Jinping and North Korean supreme leader Kim Jong-un. Significance On March 26-27 Kim Jong-un, North Korea's supreme leader, paid an unexpected two-day visit to Beijing for a summit with Chinese President Xi Jinping. The visit's goal was to secure Chinese support for the coming summits with the presidents of South Korea and the United States and to soften up the hard-line stance China has taken towards North Korea over the past year. Impacts Pyongyang will pay lip service to eventual denuclearisation, but keep at least some of its arsenal under any conditions. Pyongyang's rejection of US demands for immediate and complete denuclearisation could lead to a new, more dangerous, nuclear crisis. Trade-related tensions between Washington and Beijing work in Pyongyang's favour.


Subject Developments in North Korean politics and foreign policy following the Party Congress. Significance On May 6-9, the ruling Workers' Party of Korea held its Seventh Congress, 36 years after the sixth in 1980. Kim Jong-un gained a new title as Party chairman; hitherto he was 'first secretary'. Stage-managed in typical Pyongyang fashion, the Congress reaffirmed pursuit of both nuclear weapons and economic development. A new five-year plan was announced, but no details were given, nor any hint of market reforms. Impacts Kim Jong-un's position as leader is now both fully formalised and more firmly secured. The Party's leading role has been reaffirmed, while the military's power is being reined in. Despite some promotions of new blood, North Korea remains a gerontocracy (Kim aside). Nuclear defiance apart, few concrete policy clues were offered in any direction.


Subject North Korea-US relations. Significance The ruling Workers’ Party of Korea (WPK) held a Plenum on December 28-31. Supreme leader Kim Jong-un’s uncompromising keynote speech included an explicit abrogation of his two-year moratorium on nuclear and intercontinental ballistic missile (ICBM) tests, plus a pledge to reveal an unspecified “new strategic weapon” soon. Personnel changes, both announced and apparent, also suggest a turn away from diplomacy. Impacts Chinese economic support will be vital for North Korea, despite Kim’s rhetoric of self-reliance. Nuclear testing would anger Beijing, whose cooperation Kim needs, so an ICBM launch is likelier. South Korea, unmentioned in Kim’s speech, will be sidelined; President Moon Jae-in’s peace process is in tatters.


Subject Prospects for North Korea in 2018. Significance 2018 will be Kim Jong-un’s seventh year as supreme leader, a role he inherited on the death of his father Kim Jong-il in December 2011. Turning 34 in January, he has consolidated power and has no known rivals, but he faces grave challenges of his own making: how far and fast to push ahead with nuclear weapons and ballistic missile testing in the face of US threats.


Subject North Korea's nuclear weapons programme. Significance North Korea crossed a threshold this month with the successful test of what is believed to be its first intercontinental ballistic missile (ICBM), a weapon capable of hitting Alaska. Within the next five years, the country will probably develop and deploy a missile capable of hitting anywhere in the US mainland with a nuclear warhead. Impacts Washington will expand secondary sanctions on firms and people that deal with North Korea, most of which are Chinese. North Korea's economic growth is likely to continue despite incremental tightening of Chinese sanctions, due to internal market reforms. Even comprehensive Chinese sanctions may not break Pyongyang's resolve; it may prefer famine to disarmament. A collapse of the North Korean regime would pose a physical threat to neighbouring countries.


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Headline NORTH KOREA: Kim will double down on nuclear deterrent


Significance His government is in an impasse with the conservative parliament over the draft budget for the new fiscal year beginning on March 21. Rouhani needs the US sanctions to be lifted fast and a COVID-19 vaccination campaign to allow for an exit from the pandemic in order to meet his economic promises. Impacts The supreme leader will become even more closely involved in shaping economic policy, with the autarkic ‘resistance’ narrative dominant. Khamenei may seek a new ‘jihadi manager’ president, linked to the Islamic Revolution Guard Corps (IRGC), who follows his economic vision. Progress with vaccinations, which began on February 8, will likely be slow, as supplies have become highly politicised.


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Headline NORTH KOREA: Halting trade again will prevent recovery


Significance Pyongyang does not publish figures, but data and estimates produced in Seoul show that North Korea’s GDP shrank by 4.5% last year, its worst fall for 23 years, and trade hit a 30-year low. In June, supreme leader Kim Jong-un called the food situation “tense” and in August he dispatched troops to help deal with flooding. Impacts Small signs of fence-mending and lack of weapons tests may imply sufficient desperation for Kim to start, or feign, denuclearisation talks. Kim's choice to halt to all foreign trade is an overreaction to COVID-19; a second wave in China will fuel this paranoia. Kim's explicit rejection of foreign aid will be hard to reverse, but not impossible if he is desperate and a face-saving mechanism is found.


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