Jung-jin Park (Professor, Tsuda University) addresses North Korea's economic and security achievements and limitations as its 'Five-Year National Economic Development Plan' concludes in 2025, while forecasting the new foreign policy directions to be unveiled at the 9th Party Congress in 2026. In particular, he provides an in-depth assessment of the possibility that North Korea will transition from its existing self-reliance stance to a 'nuclear-based pragmatic strategy' amid a volatile external environment. Furthermore, Professor Park cautions against the structural isolation South Korean diplomacy may face, while proposing the strategic implications of the 'Gyeongju Initiative' to overcome these challenges.
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1. North Korea’s Economic Plan and Diplomatic Strategy
North Korea stands at a crossroads where the conclusion of the "Five-Year Plan for National Economic Development" (2025) intersects with a new beginning (2026) ahead of the 9th Congress of the Workers' Party of Korea (WPK). The 5-Year Plan, ratified by the Party Congress—the highest decision-making body—is not merely a list of macroeconomic indicators. It serves as a practical blueprint for the regime's vision and a diagnosis of reality demonstrating its perception of the external environment. In the traditional socialist party-state systems of the past, the relationship between economic planning and diplomatic strategy was very intimate. The economic plan acted as a driver defining the direction and means of diplomatic strategy, while changes in the diplomatic environment forced modifications to the economic plan, creating a mutually regulatory character. North Korea under the current Kim Jong Un era is no exception.
The review of the "Five-Year Plan for National Economic Development" goes beyond a simple evaluation of economic figures; it serves as an important indicator for gauging the future direction of the Kim Jong Un regime's diplomatic line. The emergence of the Kim Jong Un regime can be characterized by the restoration of the party-state system. The Party Congress has been held regularly, and in alignment with this cycle, mid-to-long-term economic planning has been returned to the center of state administration. This marks a significant difference from the Songun (Military-First) politics of the Kim Jong Il era, which froze the convening of Party Congresses for 36 years. The establishment of an economic plan with a 5-year cycle is also notable. The "5-Year Plan for the Development of the People's Economy" of the Kim Il Sung era, when the North Korean-style party-state system was established, is recorded as a legend of exceeding targets. The current "Five-Year Plan for National Economic Development" can be seen as a revival of that system after approximately 60 years.
In the second half of 2025, with the 9th Party Congress approaching, Rodong Sinmun and the Korean Central News Agency are continuously propagating that "under the banner of self-reliance, the great victory of the 5-Year Plan has been achieved." It is unclear whether Chairman Kim Jong Un intended to reproduce the myths of the past through this '5-Year' period. For now, the relative stability of rice prices in the jangmadang (markets) in 2025 and the overachievement of housing construction goals in Pyongyang and the provinces are being presented as material evidence. However, at the same time, desperate slogans such as "Final Assault" and "Life-or-Death Decision" are also being displayed on the front pages. This is a point where a strange cognitive dissonance is sensed between the propaganda of North Korea's official media and the reality of the economic field. While they assess themselves as having succeeded in securing an independent survival space amidst sanctions and blockades, the reality seems far from a recovery of the internal growth engines of the North Korean economy.
In this regard, satellite data indicating that the volume of goods between North Korea and Russia has exploded compared to before the Ukraine war implies a great deal. Based on this, it is difficult to conclude that the core engine sustaining the North Korean economy over the past two years (2024–2025) was solely external transfusion. However, the phase of the Ukraine war brought North Korea more than just Russian energy and food. The close relationship with Russia provided North Korea with a new space of diplomatic opportunity. Yet, with the opening of the Trump 2.0 era and the formation of a climate for ending the war, it is not difficult to predict that this special boom will soon vanish. Immediately, Chairman Kim Jong Un faces the time pressure of having to stably secure the driving force for the next economic plan, which will begin in 2026. How, then, will the past 5-Year Plan be evaluated at the 9th Party Congress, and what diplomatic strategy will be established to overcome the situation? To examine this, let us first look back to the time following the 8th Party Congress.
2. Implementation of the 5-Year Plan and Deployment of Diplomatic Strategy
The "Five-Year Plan for National Economic Development" adopted at the 8th Party Congress in 2021 had a different character from the "5-Year Strategy" of the 7th Party Congress in 2016. While the 'Strategy' of 2016 was a flexible guideline mindful of external opening and attracting foreign capital, the 'Plan' of 2021 demonstrated a regression to a garrison-state style controlled economy. The Trump-Kim summits had raised hopes for special possibilities between unique top leaderships. However, the breakdown of the Hanoi summit in 2019 likely left Chairman Kim Jong Un with the lesson that lifting economic sanctions is impossible through dramatic diplomatic bargains alone. The 8th Party Congress was held under the premise of "sanctions becoming a constant," and under this premise, the setting of economic goals and the allocation of resources had to be determined.
The content of the 5-Year Plan can ultimately be summarized by nuclear security prioritization: "Completing the nuclear force even at the sacrifice of the economy." Scarce resources were allocated with top priority to the national defense industry, and strong control was heralded for the people's economy. The intent was to prepare for a long-term war by aligning with the anti-American bloc centered on China and Russia, rather than rushing negotiations with the U.S. It also contained the intention to defend against economic isolation with bloc logic by capitalizing on the structure of the New Cold War between the U.S. and China. In other words, it was the construction of an economic trench. Downward adjustment of economic plan targets was inevitable. 'Modernization' through growth was suspended, and maintaining the status quo through self-reliance was the de facto realistic goal. The closed nature of economic policy, and the accompanying sacrifice of the people's economy and regime instability, are familiar elements of the past North Korean economic system. The 5-Year Plan was an expression of the will to endure while carrying these potential risks again.
Here, the "Treaty on Comprehensive Strategic Partnership" between North Korea and Russia, signed in June 2024, carried the meaning of outsourcing the risks of the 5-Year Plan to Russia. First, the revival of the automatic intervention clause in Article 4 (Military Assistance Without Delay) created conditions that allowed for compensating for the inferiority in conventional forces and saving on the national defense budget. Furthermore, through Article 16, opposition to and mutual non-participation in unilateral coercive measures (sanctions) were codified. This meant that the two countries would build an independent economic cooperation system against Western sanctions on North Korea and Russia. In the immediate term, a new path was opened to secure materials and energy to achieve the final targets of the 5-Year Plan (housing construction, local industry). The fact that the inflow of Russian food and the dispatch of North Korean workers became possible holds significant meaning. This is because UN Security Council Resolution 2270 had effectively defined North Korea itself as an illegal entity, and 'sectoral sanctions' had been a direct blow to the people's livelihood economy.
Through military cooperation with Russia, North Korea can be said to have secured a "Veto Alliance" to neutralize UN Security Council sanctions. President Xi Jinping's 'strategic distancing' from Chairman Kim Jong Un's military provocations also reflects Russia's presence regarding North Korea. This is because, at least while the Ukraine war continues, North Korea could seek to break away from its unilateral dependence on China. Attempts at unofficial contact with Japan's Kishida cabinet during the same period also show North Korea's widened radius of activity. On the other hand, it began sending signals toward the next U.S. administration. The successive execution of the high-angle launch of the Hwasong-19 and the disclosure of uranium enrichment facilities in the second half of 2025, when Trump's election became likely, were not routine provocations. They were a message that North Korea's nuclear capabilities are irreversible, and therefore, it will face the negotiation table with the U.S. for arms reduction, not denuclearization.
In this context, the 'Hostile Two-State Theory' for which North Korea heralded legislation can be seen as groundwork for negotiations with the U.S. By securing the logic that South Korea cannot be a party to the matter, it can be interpreted as a strategic move to simplify the future negotiation table with Trump into a structure of "Nuclear Power vs. Nuclear Power." Furthermore, it also holds significance as a preemptive measure against international legal interpretation debates surrounding South Korea's participation in the phase of concluding a peace treaty after a negotiation settlement.
Here, the South's proposal for 'Peaceful Coexistence' or attempts at 'Arbitration' are inevitably regarded as obstacles to a direct deal between North Korea and the U.S. Chairman Kim Jong Un's rejection of President Trump's surprise meeting proposal during the Gyeongju APEC summit in November was likely intended to avoid joining a 'Top-Down Show' with the U.S. held in South Korea. It appears as an opportunity to set up a grand stage called 'Sanctions Relief' with a completed package after the 9th Party Congress. However, North Korea's inner thoughts are likely not at ease.
The outbreak and prolongation of the Ukraine war were acted like a lifeline (or an IV drip) breathing new vitality into the Kim Jong Un regime. Therefore, in November 2025, the possibility of an end to the war in Ukraine that emerged with Trump's election conversely becomes a warning light for the sustainability of the Russia special boom for North Korea. While the cooperative relationship with Russia will not be dissolved all at once, the special role of Russia in sustaining the execution of the 5-Year Plan and creating new diplomatic space is expected to vanish. Chairman Kim Jong Un cannot be unaware that the boom brought by relations with Russia is strictly temporary. Chairman Kim Jong Un attempted to restore relations with President Xi Jinping through a visit to China for the September 3rd Victory Day anniversary in 2025. President Xi, conscious of relations with the U.S., provided special protocol to Chairman Kim, but China's concern and calculated support regarding the advancement of nuclear weapons remain unchanged. From the position of Chairman Kim Jong Un, who must present a new vision at the 9th Party Congress, the desperation to secure an environment for direct negotiations with the U.S. is bound to grow.
[Table 1] North Korea's 5-Year Plan for National Economic Development and Diplomatic & Strategy Toward the South (2021–2025)
|
Period |
5-Year Plan |
Diplomacy & Strategy Toward the South |
|
Phase 1
(2021–2023) |
[Constraint] Resource
Blocking and Control • Abandonment of
sanctions relief after Hanoi 'No Deal' • COVID blockade and
negative growth • Resource allocation
priority to defense sector and self-reliance |
[Response] Frontal
Breakthrough and Anti-Enemy Struggle • Long-term war against
the U.S. (Power-for-Power) and Bloc Diplomacy • Rejection and
blocking of humanitarian aid from the South |
|
Phase 2
(2024–2025) |
[Variable] Russia
Special • Outbreak and
prolongation of Ukraine War • Achievement of goals
through securing energy & food • Seeking economic
breakthrough by breaching sanctions net |
[Response] Raising the
stakes and Two-State Theory • Signing of North
Korea-Russia Treaty (Risk Outsourcing) • Defining South Korea
as a belligerent state (Complete Exclusion) |
3. The 9th Party Congress: Review of the 5-Year Plan and Outlook for New Diplomatic Line
The 13th Plenary Meeting of the 8th Central Committee to prepare for the 9th Congress was held from December 9 to 11, 2025. At the meeting, while the justification for the direction of enhancing national defense capabilities, such as nuclear weapons and missiles, was emphasized, increased agricultural production was presented as an important task. This allows us to foresee that the official review of the 5-Year Plan to be announced at the 9th Party Congress will contain a dual evaluation. On one hand, citing missile advancement and the securing of submarine launch capabilities, the early completion of the "5-Year Plan for National Defense Science Development and Weapon System Development" will be propagandized as the greatest achievement. However, on the other hand, in the improvement of the people's economy—namely the fields of agriculture and local industrial development—they are in a situation where they have no choice but to admit to falling short of goals. Chairman Kim Jong Un bears the political burden of having to take responsibility for this failure in exchange for increasing the transparency of his governance style.
A political tool available to resolve this burden is a personnel reshuffle. At the 13th Plenary Meeting, it was decided to recall one member of the Party Central Committee and five alternate members, and "severe criticism" was levied regarding the "ideological viewpoints and inactive, irresponsible work attitudes" of some leading cadres. This heralds that the insufficient results of the 5-Year Plan will be substituted as a 'managerial issue' rather than a 'systemic failure' at the 9th Party Congress. It may not be a massive personnel reshuffle where major economic bureaucrats are purged or replaced en masse. However, an internal diagnosis that the self-reliance of the past 5 years showed limitations without external shocks would have been made. In the future, a process is needed to build justification for switching to a line centered on 'external trade' to replace the failed internal driving force, and for this, personnel reshuffles to pursue a new diplomatic strategy must inevitably continue even after the Party Congress.
It remains unknown whether North Korea will officially formalize a new diplomatic strategy. In the 13th Plenary Meeting, Chairman Kim Jong Un's perception of the current external environment and external strategies, including those toward the South and the U.S., were not mentioned. It is also unclear whether North Korea will codify the Hostile Two-State Theory regarding the South through amendments to the Party Rules.
What is certain is that at the 9th Party Congress, the immutable nuclear strategy will be adhered to as a principle. However, there is a possibility that the existing 'Nuclear Priority' will effectively be reconstructed into a diplomatic and security discourse in the form of a 'Nuclear-Based Pragmatic Strategy.' This is because the current Kim Jong Un regime is in a realistic condition where it must secure the minimum deterrence through nuclear weapons while stably securing the driving force for the fragile 5-Year Plan from the outside. Therefore, it is natural for North Korea's diplomatic moves to proceed in the direction of escaping the past yoke of "Denuclearization vs. Compensation" and constructing a new negotiation framework of "Management of Current Threats vs. Sanctions Relief." Whether this 'Transitional Diplomatic Strategy' will be declared depends on whether there are changes in the external relations environment around the time of the 9th Party Congress. [Table 2] Comparison of Strategies: 8th WPK Congress vs. 9th WPK Congress (Outlook)
4. Changes in External Environment and North Korea’s Diplomatic Options
The fact that the 13th Plenary Meeting, which heralded the 9th Party Congress, was conducted over a short period and refrained from publishing its contents likely stems from the judgment that the international order surrounding North Korea remains fluid. Above all, the resumption of North Korea-U.S. negotiations prior to the holding of the 9th Party Congress is opaque. Here, the end of the war in Ukraine could be an important turning point that shifts Pyongyang's gaze from Moscow to Washington. Of course, even if the war ends, a drastic 'de-Russification' phenomenon where North Korea severs ties with Russia will not occur. While wartime transactions of 'weapons-for-energy' will decrease, economic interests could be readjusted in the form of North Korea dispatching labor for Russia's post-war reconstruction projects. However, this does not guarantee revenue as high as artillery shell exports, and the security guarantee effect through troop deployment will also disappear.
For North Korea, the fading presence of Russia invites the return of China. China's support will not replace the Russia special boom. However, unlike Russia, China's influence on North Korea is not temporary. The intensification of the U.S.-China confrontation in the Trump 2.0 era has already created a situation where North Korea must hold on to China even more. Especially at a time when strengthening bargaining power against the U.S. is necessary, China becomes a core diplomatic asset for North Korea. However, a dilemma exists here. While China will also embrace North Korea as a strategic asset to check the U.S., it is difficult for it to agree to North Korea's unlimited nuclear advancement. Nor can it stand by and watch North Korea reach a grand compromise with the U.S. while excluding China. North Korea must solve the complex equation of sophisticatedly managing these potential conflict factors with China while increasing its bargaining power against the U.S.
Nevertheless, the situation is such that Chairman Kim Jong Un cannot give up on approaching the U.S. The emergence of the second Trump administration is an opportunity from North Korea's perspective to erase the unjust demand for denuclearization and present the realistic goal of nuclear arms reduction. Meanwhile, if President Trump wants a compromise, North Korea discarding Intercontinental Ballistic Missiles (ICBMs) or some nuclear materials, or freezing nuclear weapons to make them a manageable threat, could come across as a much more attractive diplomatic victory. Carrots that Trump could offer in return—such as the conditional lifting of livelihood-related sanctions, the temporary suspension of ROK-US joint military exercises, and investment promises for North Korean tourism projects—have decisive significance for North Korea's economic plan and diplomatic strategy. In reality, if Trump and Kim Jong Un reach an agreement, it would be a hypocritical compromise where North Korea is not officially recognized as a nuclear state, but substantially, nuclear arms reduction negotiations proceed. This is because a crack in the nuclear non-proliferation regime must be avoided.
On the road to the resumption of North Korea-U.S. negotiations, Japan holds special significance. For North Korea, Japan is commonly understood as a payer of colonial reparations, but this is a story only possible when the normalization of North Korea-Japan relations becomes visible. At the current point, an approach to Japan becomes an effective card for North Korea to cause cracks in the ROK-US-Japan coordination. If North Korea-U.S. negotiations are delayed or deadlocked, Japan could become a channel for North Korea to approach the U.S. via a detour. In this process, they will seek to thoroughly exclude South Korea. If South Korea-Japan relations worsen, the effect doubles. On the other hand, for Japan, which is setting up a confrontation angle with China, the strategic value of North Korea is also rising. Prime Minister Sanae Takaichi envisions herself as Abe's successor. Therefore, efforts to resolve the abduction issue are directly linked to the legitimacy of the regime. Furthermore, in the process of the newly formed coalition government overcoming its limitations, a decision to visit Pyongyang becomes a powerful political temptation for Takaichi.
5. The 'Gyeongju Initiative' and Active Peaceful Coexistence
The possibility of North Korea concretizing the Hostile Two-State Theory into a constitutional and military reality and attempting a direct deal with the U.S. and Japan while excluding South Korea is, to the end, a worst-case scenario. However, we must pay attention to the fact that the potential danger facing South Korean diplomacy may not be temporary alienation. This is because a complex isolation, where South Korea's diplomatic space is structurally blocked as the strategic interests of surrounding countries interlock, could be brought about. Here, excessively emphasizing and appealing that we are a party to the Korean Peninsula issue could deepen isolation. In an asymmetric situation where North Korea possesses nuclear forces, following the passive balancing diplomacy of the past is also unrealistic. South Korea must possess the power of decision and must exercise it.
To this end, active intervention based on diplomatic resources (power) is needed, and through this, an active balance must be pursued. In this view, the agenda of introducing nuclear-powered submarines and securing nuclear potential, presented by President Lee Jae-myung at the Gyeongju APEC ROK-US Summit in November 2025, is highly symbolic. Regardless of the feasibility of realization, leading and sustaining the discussion on this agenda itself holds important meaning. Once the Trump administration proceeds with nuclear negotiations with North Korea, it operates as a realistic counter-logic to the security anxiety that South Korea will endure. Furthermore, beyond a relationship relying on U.S. security commitments, it signifies that South Korea will equip itself with independent asymmetric deterrence potential, becoming a message of a ROK-US relationship that evolves while complementing each other. The initiative South Korea demonstrated in Gyeongju also has significant implications for the future of the ROK-US alliance. The domestic consensus required for South Korea to accept an agreement between North Korea and the U.S. and to promote the next stage—the establishment of a peace regime—is only possible when such a vision is premised.
A specific example of active intervention could be policy toward Japan. Opposing or checking Prime Minister Takaichi's independent attempts to approach North Korea is ineffective. A paradigm shift is needed to use the progress of North Korea-Japan relations as an important means of South Korea's policy toward North Korea. Until now, joint response to North Korea's nuclear and missile threats has been the manual for ROK-US-Japan military defense cooperation. Within this framework, ROK-Japan cooperation has been taken for granted. Conversely, there is no regular discussion table assuming a phase of dialogue and negotiation with North Korea. The gap between South Korea's principle of being a concerned party and reality—the so-called 'Japan Passing'—reflects this reality. In this regard, the regularization of the ROK-Japan Vice-Ministerial Meeting agreed upon at the first summit between Lee Jae-myung and Ishiba in August 2025 was a good start. For the virtuous cycle of inter-Korean relations, North Korea-Japan relations, and North Korea-U.S. relations, South Korea's active intervention in North Korea-Japan relations is necessary at this point, and for this, a strategic dialogue channel between South Korea and Japan must be stably established.
South Korea's Lee Jae-myung administration aims for peaceful coexistence with North Korea. If this aim is to succeed the Kim Dae-jung administration's Engagement Policy, the first principle becomes "No Tolerance for Armed Provocations" by North Korea. It clarifies that engagement without the premise of superiority in power and deterrence becomes appeasement that tolerates changes to the status quo. Fundamentally, this connects with the implications of the Gyeongju Initiative. The peaceful two-state theory raised in some quarters can only be a peaceful and pragmatic approach based on realistic recognition when we are in a position of superior power. However, North Korea's Hostile Two-State Theory is not a declaration for coexistence, but a logic for severance and warfare based on nuclear force. Here, the 'State Recognition' card we offered for coexistence could paradoxically become a diplomatic indulgence allowing North Korea to deal directly with Washington and Tokyo. It is time for a more active approach of peaceful coexistence called "Peaceful Management of Special Relations" to secure international support without giving North Korea a justification to provoke. ■
References
1. Materials
Kim Jong Un. 2016. "Report on the Work of the Central Committee at the 7th Congress of the Workers' Party of Korea." Rodong Sinmun. May 8.
Kim Jong Un. 2021. "Report on the Work of the Central Committee at the 8th Congress of the Workers' Party of Korea." Rodong Sinmun. January 6.
Kim Jong Un. 2023. "Conclusion at the Enlarged Meeting of the 9th Plenary Meeting of the 8th Central Committee of the Workers' Party of Korea: On the Direction of Struggle for 2024." Rodong Sinmun.
Kim Jong Un. 2024. "Policy Speech at the 10th Session of the 14th Supreme People's Assembly of the Democratic People's Republic of Korea: On the Immediate Direction of Struggle for the Revival and Development of the Republic and the Promotion of the People's Welfare." Rodong Sinmun. January 16.
Korean Central News Agency. 2024. "Treaty on Comprehensive Strategic Partnership between the Democratic People's Republic of Korea and the Russian Federation." June 20.
2. Papers and Research Reports
Im Soo-ho. 2021. "Key Tone of North Korea's Economic Strategy After the 8th Party Congress and Implications." INSS Strategy Report, No. 115. Institute for National Security Strategy.
Hyun Seung-soo. 2023. "Evaluation and Outlook of the North Korea-Russia Summit." Online Series, 23-30. Korea Institute for National Unification.
Park Won-gon. 2025. "Trump Returns: The ROK-US Alliance and North Korean Denuclearization." Korea National Strategy, Vol. 10.
Bank of Korea. 2024. Results of Estimated Economic Growth Rate of North Korea in 2023. Seoul: Bank of Korea.
KOTRA. 2024. Trends in North Korea's Foreign Trade in 2023. Seoul: KOTRA.
Carlin, Robert L., and Hecker, Siegfried S. 2024. "Is Kim Jong Un Preparing for War?". 38 North (January 11, 2024).
Cha, Victor, and Kim, L. 2024. "The Russia-North Korea Axis: A New Strategic Threat in Asia". CSIS Beyond Parallel.
Park Jung-jin. 2023. "The Kim Jong Un Regime's Nuclear Strategy and Japan." In Nishino Junya, Reading the Turbulent Korean Peninsula: East Asia Institute Lectures. Keio University Press.
Hiraiwa Shunji. 2025. "The Kim Jong Un Regime's Strong Nation Policy and Diplomatic Deployment: Strengthening Defense Power and Restructuring the Security Environment." Kokusai Mondai (International Affairs), 726.
■ Jung-jin PARK is a Professor at the Department of International Relations, Tsuda University.
■ Translated and edited by Inhwan OH, EAI Senior Research Fellow; Sangjun LEE, EAI Research Associate
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