Foreign Affairs Outlook for 2021

Prospect of Inter-Korean Relations in 2021

Dr. YANG Un-Chul

Director of the Dept. of Unification Strategy Studies, The Sejong Institute

ucyang@sejong.org

English Abstract

In 2020, North Korea went through a rough time of economic hardship, suffering from triple distress of COVID-19, economic sanctions, and typhoon damage. Despite the exogenous shock, there were few policy measures that North Korea could take to cope with economic difficulties. In a speech at the military parade that celebrated the 75th anniversary of the foundation of the Workers’ Party of Korea on October 10, 2020, Kim Jong Un conveyed the North Korea’s facing difficulties and declared that he would present strategies and goals to realize an ideal society of revival and prosperity by the 8th Congress of the Party scheduled in January 2021. Kim Jong Un has preannounced a positive change in economic policy, but it is yet too early to expect drastic changes in North Korea’s policy. North Korea’s economic ideology remains largely within the framework of self-reliance and independence. The amendment of the Preamble to the Constitution in 2019 signifies a change in the ideology of the North Korean economic management, but it is largely absent with economic rationality and incentive system in the actual economic management method.

At this point, the improvement of inter-Korean relations is still far from being realized. In fact, various poll results confirm increasing skepticism in inter-Korean relations, which is attributable to North Korea’s unpredictable attitude. Kim Jong Un said in his speech at the military parade, “I also send this warm wish of mine to our dear fellow countrymen in the south, and hope that this health crisis would come to an end as early as possible and the day would come when the north and south take each other’s hand again,” but making this momentum is not easy. The biggest reason is that North Korea’s priority in state affairs is the prevention of COVID-19 and social security rather than economic development. Having a distant view at this point, the improvement of inter-Korean relations is possible when North Korea changes itself. If inter-Korean relations improve in 2021, the area of change is likely to be the economic sector rather than the political and military sectors. However, most inter-Korean economic cooperation agendas are related to economic sanctions, making it difficult for the North to respond properly. North Korea needs to decide to come to the stage of dialogue regardless of gains or losses to break the vicious circle of confrontation between the two Koreas.