[Evaluation of North Korea's 5-Year Economic Development Plan] ④ Review of North Korea's 5-Year Plan and the Search for New Diplomatic Strategies: Prospects for the 9th Party Congress and the Implications of the 'Gyeongju Initiative'

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1. North Korea's Economic Plans and Diplomatic Strategies

North Korea stands at a juncture where the conclusion of the 'National Economic Development 5-Year Plan' (2025) and the start of a new phase (2026) at the 9th Congress of the Workers' Party of Korea are approaching. The 5-year plan, ratified by the Party Congress, the supreme decision-making body, is not merely a list of macroeconomic indicators. It is a blueprint of the ruling ideology presented by the Workers' Party of Korea to the people and a diagnostic report of the external environment as perceived by the regime. In the traditional socialist party-state system, the relationship between economic planning and diplomatic strategy was extremely close. Economic planning acted as a driving force defining the direction and means of diplomatic strategy, while changes in the diplomatic environment compelled revisions to the economic plan, exhibiting a mutually defining characteristic. The North Korea of the Kim Jong Un era is no exception.

The emergence of the Kim Jong Un regime can be characterized by the restoration of the party-state system. Party Congresses have been held regularly, and medium- to long-term economic plans have been reinstated as the center of state administration in line with this cycle. This marks a significant difference from the military-first politics of the Kim Jong Il era, which froze Party Congresses for 36 years. The establishment of 5-year economic plans is also noteworthy. The '5-Year Plan for National Economic Development' during the Kim Il Sung era, when the North Korean-style party-state system was established, is recorded as a legend of exceeding its targets. The current 'National Economic Development 5-Year Plan' can be seen as a revival approximately 60 years later. An evaluation of the 'National Economic Development 5-Year Plan' goes beyond a mere assessment of economic figures; it serves as a crucial indicator for gauging the future direction of the Kim Jong Un regime's diplomatic policy.

In the latter half of 2025, with the 9th Party Congress on the horizon, the Rodong Sinmun and the Korean Central News Agency have been incessantly promoting the narrative of "achieving a great victory in the 5-year plan under the banner of self-reliance." It is unclear whether Chairman Kim Jong Un intended to replicate past legends through this '5-year plan.' For now, the relative stability of rice prices in the jangmadang (informal markets) in 2025 and the exceeding of housing construction targets in Pyongyang and provincial areas are presented as material evidence of "great victory." However, at the same time, urgent slogans such as "final push" and "life-or-death struggle" are also prominently displayed. This indicates a peculiar cognitive dissonance between the propaganda of North Korea's official media and the reality on the ground. While they assess their success in securing an independent space for survival amidst sanctions and blockades, the reality appears to be far from the recovery of North Korea's intrinsic economic growth potential.

In this context, recent satellite data indicating a surge in trade volume between North Korea and Russia compared to pre-Ukraine war levels is highly significant. While it is difficult to conclude solely based on this that external support was the core driver sustaining the North Korean economy over the past two years (2024-2025), the Ukraine war provided North Korea with more than just Russian energy and food. The close ties with Russia offered new diplomatic opportunities. However, it is not difficult to anticipate that this 'special benefit' will soon disappear with the formation of a peace trend following the advent of the Trump 2.0 era. Chairman Kim Jong Un is now under time pressure to secure stable momentum for the next economic plan, which begins in 2026. How will the past five-year plan be evaluated at the 9th Party Congress, and what diplomatic strategies will be formulated to overcome these challenges? To examine this, let us first look back to the period after the 8th Party Congress.

2. Implementation of the 5-Year Plan and the Development of Diplomatic Strategies

The 'National Economic Development 5-Year Plan' adopted at the 8th Party Congress in 2021 differed in nature from the '5-Year Strategy' of the 7th Party Congress in 2016. While the 2016 'strategy' was a flexible guideline with external opening and foreign capital attraction in mind, the 2021 'plan' signaled a return to a wartime, garrison-style command economy. The Trump-Kim summits had raised expectations for unique possibilities between the top leaders. However, the breakdown of the Hanoi summit in 2019 likely taught Chairman Kim Jong Un that economic sanctions could not be lifted through dramatic diplomatic showdowns. The 8th Party Congress was convened under the premise of 'sanctions becoming a constant,' and economic targets and resource allocation had to be determined under this assumption.

The content of the 5-year plan ultimately culminated in a nuclear security-first approach: 'completing nuclear armament at the expense of the economy.' Scarce resources were prioritized for the defense industry, and strong controls were foreshadowed for the people's economy. The strategy was to prepare for a long-term conflict by aligning with the anti-US bloc centered on China and Russia, rather than rushing into negotiations with the US. This also implied an intention to defend economic isolation through bloc logic amidst the new Cold War structure between the US and China. In essence, it was about building economic trenches. Downward adjustments of economic plan targets were inevitable. 'Modernization' through growth was deferred, and maintaining the status quo through self-reliance became the de facto realistic objective. The closure of economic policy, accompanied by the sacrifice of the people's economy and regime instability, are familiar aspects of North Korea's past economic system. The 5-year plan also signifies a resolve to endure these potential risks once more.

In this regard, the comprehensive treaty on strategic partnership signed between North Korea and Russia in June 2024 implies outsourcing the risks of the 5-year plan to Russia. Firstly, Article 4 of the treaty (immediate military assistance) revived the automatic intervention clause, creating conditions for compensating for conventional military inferiority and reducing defense budgets. Furthermore, Article 16 formalized opposition to unilateral coercive measures (sanctions) and mutual non-participation. This signifies the two countries' intention to build an independent economic cooperation system against Western sanctions on North Korea and Russia. In the immediate term, it opens new avenues for securing materials and energy to achieve the final targets of the 5-year plan (housing construction, local industry). The inflow of Russian food and the dispatch of North Korean workers are significant developments. UN Security Council Resolution 2270 has effectively defined North Korea itself as an illegal entity, and 'sectoral sanctions' have directly impacted the livelihood economy.

Through military cooperation with Russia, North Korea can be said to have secured a 'veto alliance' to nullify UN Security Council sanctions. Chairman Xi Jinping's 'strategic distancing' from Chairman Kim Jong Un's military provocations also reflects Russia's growing presence in North Korea. At least during the continuation of the Ukraine war, North Korea was able to seek an escape from unilateral dependence on China. The attempts at informal contact with Japan's Kishida administration during the same period also demonstrate North Korea's expanded sphere of activity. On another front, signals have begun to be sent to the next US administration. The successive high-altitude launch of the Hwasong-19 and the disclosure of uranium enrichment facilities in the latter half of 2025, with Trump's election becoming likely, were not habitual provocations. It was a message that North Korea's nuclear capability is irreversible, and therefore, the US should engage in talks for nuclear disarmament, not denuclearization.

In this context, the 'hostile two-state theory,' which North Korea has announced it will legislate, can also be seen as a preparatory step for negotiations with the US. By establishing the logic that South Korea cannot be a party to the negotiations, it can be interpreted as a strategic move to simplify the future negotiation table with Trump into a 'nuclear-armed state versus nuclear-armed state' framework. Furthermore, it serves as a preemptive measure against potential international legal interpretation disputes regarding South Korea's participation in the peace treaty phase after a potential agreement. In this scenario, the South's insistence on the principle of being a party to the conflict or its attempts at 'mediation' would inevitably be considered obstacles to direct North Korea-US negotiations. Chairman Kim Jong Un's refusal of President Trump's surprise meeting proposal during the Gyeongju APEC meeting in November likely indicates his intention not to participate in a top-down show with the US held in South Korea. It also appears to be an opportunity to launch a major initiative for 'sanctions relief' with a completed package after the 9th Party Congress.

However, North Korea's internal situation is likely not one of ease. The outbreak and prolongation of the Ukraine war have been like a 'drip' that has revitalized the Kim Jong Un regime. Therefore, the possibility of an end to the Ukraine war, emerging with Trump's election in November 2025, conversely serves as a warning light for North Korea regarding the sustainability of its 'special benefits from Russia.' This is because the special role of Russia, which has sustained the five-year plan and created new diplomatic space, is expected to diminish. Chairman Kim Jong Un is undoubtedly aware that the special benefits derived from relations with Russia are temporary. Chairman Kim Jong Un attempted to mend relations with Chairman Xi Jinping during his visit to China for the 70th anniversary of the victory in the Fatherland Liberation War on September 3, 2025. While Chairman Xi Jinping, mindful of relations with the US, provided special protocol for Chairman Kim Jong Un, China's concerns and calculated support for North Korea's nuclear advancement remain. From the perspective of Chairman Kim Jong Un, who must present a new vision at the 9th Party Congress, the necessity of securing an environment for direct negotiations with the US is bound to increase.

<Table 1> North Korea's National Economic Development 5-Year Plan and Diplomatic/South Korea Strategy (2021-2025)

3. The 9th Party Congress: Summation of the 5-Year Plan and Prospects for a New Diplomatic Line

The 13th Plenary Meeting of the 8th Central Committee, held to prepare for the 9th Party Congress, took place from December 9 to 11, 2025. During the meeting, the justification for strengthening defense capabilities, including nuclear and missile technology, was emphasized, while agricultural production increase was presented as a crucial task. This foreshadows that the official summation of the 5-year plan to be announced at the 9th Party Congress will contain a dual evaluation. On one hand, discussions about missile advancement and the acquisition of submarine-launched capabilities will lead to the promotion of the early completion of the '5-Year Plan for National Defense Science Development and Weapon System Development' as the greatest achievement. However, on the other hand, the regime will inevitably have to acknowledge the failure to meet targets in areas of people's economy improvement, specifically agricultural and local industry development. Chairman Kim Jong Un bears the political burden of responsibility for this failure, a consequence of the increased transparency in his leadership style.

To alleviate this burden, the available political tool is personnel reshuffling. The 13th Plenary Meeting decided to recall one member and five alternate members of the Party Central Committee, and it is reported that criticism was made regarding "the ideological views and inactive and irresponsible work attitudes of some leading cadres." This signals that at the 9th Party Congress, the shortcomings of the 5-year plan will be framed as a 'management issue' rather than a 'systemic problem.' While a large-scale purge or replacement of key economic officials at the Party Congress may not occur, an internal assessment must have been made that the self-reliance efforts of the past five years have reached their limits without external support. The regime needs to build justification for a shift towards a 'foreign trade'-centered policy to replace the failed internal momentum, and to this end, personnel changes to promote new diplomatic strategies will inevitably continue even after the Party Congress.

It remains uncertain whether North Korea will formalize a new diplomatic strategy. The 13th Plenary Meeting did not confirm Chairman Kim Jong Un's perception of the current external environment or his diplomatic strategies towards South Korea, the US, and other nations. It is also unclear whether North Korea will codify the hostile two-state theory towards South Korea through amendments to the Party Charter. What is certain is that the 9th Party Congress will uphold nuclear strategy as an immutable principle. However, the existing 'nuclear-first principle' is likely to be reconfigured into a 'nuclear-based pragmatic strategy' in the discourse of diplomacy and security. The current Kim Jong Un regime has secured minimal deterrence through nuclear weapons while being in a realistic condition of needing to stably secure external momentum for its vulnerable 5-year plan. Therefore, North Korea's diplomatic moves are naturally expected to move towards establishing a new negotiation framework of 'managing current threats versus sanctions relief,' moving beyond the past paradigm of 'denuclearization versus compensation.' Whether it will announce this 'transitional diplomatic strategy' depends on the changes in the external relations environment around the 9th Party Congress.

<Table 2> Comparison of Strategies: 8th and 9th (Projected) Party Congresses of the Workers' Party of Korea

4. Changes in the External Environment and North Korea's Diplomatic Options

The short duration of the 13th Plenary Meeting, which preceded the 9th Party Congress, and the restraint in publicizing its contents likely stem from the assessment that the international order surrounding North Korea remains fluid. Above all, the resumption of North Korea-US negotiations before the 9th Party Congress is uncertain. In this regard, the end of the Ukraine war could serve as a crucial turning point, shifting Pyongyang's focus from Moscow to Washington. Even if the war ends, the treaty on comprehensive strategic partnership between North Korea and Russia will remain effective. While the wartime trade of weapons for energy may decrease, economic interests could be readjusted through North Korea's dispatch of labor for Russia's post-war reconstruction projects. However, this would not guarantee profits comparable to artillery shell exports, and the security assurance effect through troop deployment would also disappear.

The fading presence of Russia for North Korea brings about China's return. China's support will not replace the special benefits from Russia. However, unlike Russia, China's influence over North Korea is not temporary. The intensification of US-China confrontation in the Trump 2.0 era has already created a situation where North Korea needs to hold onto China more tightly. Particularly, at a time when strengthening negotiating power with the US is crucial, China becomes a key diplomatic asset for North Korea. However, this presents a dilemma. While China will embrace North Korea as a strategic asset to counter the US, it is difficult for China to agree to North Korea's unlimited nuclear advancement. China also cannot stand idly by while North Korea reaches a grand compromise with the US, excluding China. North Korea must solve the complex equation of skillfully managing these potential conflict factors with China while enhancing its negotiating power with the US.

Nevertheless, Chairman Kim Jong Un is in a situation where he cannot abandon approaching the US. The advent of the second Trump administration presents an opportunity for North Korea to shed the unreasonable demand for denuclearization and propose the realistic goal of nuclear disarmament. On the other hand, if President Trump also desires a compromise, it could be a much more attractive diplomatic victory for North Korea to dismantle intercontinental ballistic missiles (ICBMs) or some nuclear materials, or to freeze its nuclear program, thereby making it a manageable threat. The carrots that Trump could offer as compensation, such as conditional lifting of sanctions related to people's livelihoods, temporary suspension of ROK-US joint military exercises, and promises of investment in North Korean tourism, hold decisive significance for North Korea's economic plans and diplomatic strategies. In fact, if Trump and Kim Jong Un reach an agreement, it is highly likely to be a hypocritical compromise where North Korea is not officially recognized as a nuclear-armed state, but nuclear disarmament talks are practically conducted. This is to avoid a crack in the nuclear non-proliferation regime.

Japan holds special significance in the process of resuming North Korea-US negotiations. North Korea often views Japan as a source of colonial reparations, but this is only feasible when normalization of diplomatic relations between North Korea and Japan becomes visible. At present, North Korea's approach to Japan serves as an effective card to create cracks in the ROK-US-Japan cooperation. Especially if North Korea-US negotiations are delayed or reach an impasse, Japan could become a channel for North Korea to indirectly approach the US. In this process, South Korea would be thoroughly excluded. The effect would be amplified if ROK-Japan relations deteriorate. Meanwhile, for Japan, which is confronting China over issues such as military intervention in case of a Taiwan contingency, North Korea's strategic value is increasing. Notably, Sanae Takaichi positions herself as Abe's successor. Therefore, efforts to resolve the abduction issue are directly linked to the legitimacy of the administration. In overcoming the limitations of the newly formed coalition government, a decision to visit Pyongyang becomes a strong political temptation for Takaichi.

5. The 'Gyeongju Initiative' and Active Peaceful Coexistence

North Korea's concretization of the hostile two-state theory into a constitutional and military reality, and its attempts at direct negotiations with the US and Japan while excluding South Korea, represent the worst-case scenario. However, the potential risks facing South Korean diplomacy warrant attention, as they may not be limited to temporary marginalization. This is because complex isolation could arise, where South Korea's diplomatic space is structurally blocked due to the convergence of neighboring countries' strategic interests. In this context, an excessive emphasis on the justification of being a party to the Korean Peninsula issue could lead to deepened isolation. In a situation of imbalance with North Korea possessing nuclear weapons, merely replicating past passive balancing diplomacy is also unrealistic. South Korea must hold the decision-making power and exercise it. To this end, it must maximize its available diplomatic resources (power) and, based on this, pursue active intervention and balanced diplomacy.

From this perspective, the agenda proposed by President Lee Jae-myung at the ROK-US summit in Gyeongju in November 2025—the introduction of nuclear-powered submarines and the securing of nuclear potential—is highly symbolic. Regardless of its feasibility, the act of initiating and sustaining discussions on this agenda holds significant meaning. It serves as a realistic response to the security anxieties South Korea would endure when the Trump administration engages in nuclear negotiations with North Korea. Furthermore, it conveys the message that for security balance in the Indo-Pacific region, South Korea's own asymmetric deterrence capabilities are necessary in addition to US extended deterrence. In this regard, the initiative demonstrated by the South Korean government in Gyeongju also has significant implications for the future of the ROK-US alliance. The domestic consensus necessary for South Korea to accept an agreement between North Korea and the US and to pursue the next stage of peace regime building is also possible only with this vision as a prerequisite.

A concrete example of active intervention could be South Korea's policy toward Japan. It is ineffective to oppose or check Prime Minister Kishida's independent attempts at engagement with North Korea. A paradigm shift is needed to utilize progress in North Korea-Japan relations as a significant tool for South Korea's North Korea policy. Joint responses to North Korea's nuclear and missile threats are already a manual for ROK-US-Japan military cooperation, and ROK-Japan cooperation has been taken for granted within this framework. Conversely, a regular discussion table for phases of dialogue and negotiation with North Korea does not exist. The gap between South Korea's principle of being the principal party and reality, and the emergence of the term "Japan Passing," reflect this reality. In this regard, the regularization of ROK-Japan vice-ministerial meetings, agreed upon at the first summit between Lee Jae-myung and Ishiba in August 2025, was a good start. For a virtuous cycle of inter-Korean relations, North Korea-Japan relations, and North Korea-US relations, South Korea's active intervention in North Korea-Japan relations is necessary at this juncture, and for this, a stable strategic dialogue channel between South Korea and Japan must be established.

The Lee Jae-myung administration in South Korea aims for peaceful coexistence with North Korea. If this aim is a succession of the Kim Dae-jung administration's engagement policy toward North Korea, the primary principle becomes the 'prohibition of North Korea's armed provocations.' It clarifies that 'engagement' without realistic deterrence becomes 'appeasement' that tolerates changes to the status quo. This fundamentally aligns with the implications of the Gyeongju Initiative. The peaceful two-state theory, raised by some, can only be a peaceful and pragmatic approach when we hold the upper hand in power. North Korea's hostile two-state theory is a logic for separation and conflict based on its existing nuclear capabilities. Here, the 'recognition of statehood' card extended by us for coexistence could paradoxically become a diplomatic免罪符 (exemption from punishment) for North Korea to deal directly with Washington and Tokyo. To secure the international community's support without giving North Korea a pretext for provocation, it is time for a more proactive approach to peaceful coexistence, such as 'peaceful management of special relations.' 

References

1. Documents

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 9th Enlarged 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 Tasks for the Revival and Development of the Republic and the Improvement 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. Articles and Research Reports

Lim Soo-ho. 2021. "North Korea's Economic Strategy after the 8th Party Congress and Its Implications." *INSS Strategic Report*, No. 115. Institute for National Security Strategy.

Hyun Seung-soo. 2023. "Assessment and Outlook of the North Korea-Russia Summit." *Online Series*, 23-30. Korea Institute for National Unification.

Park Won-gon. 2025. "A Returning Trump: The ROK-US Alliance and North Korean Denuclearization." *Korea National Strategy*, Vol. 10.

Bank of Korea. 2024. *Estimate of North Korea's Economic Growth Rate 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 Jeong-jin. 2023. "Kim Jong-un Regime's Nuclear Strategy and Japan." In Junya Nishino (ed.), *East Asian Institute Lecture Series: Understanding the Turbulent Korean Peninsula*. Keio University Press.

Hiraiwa Shunji. 2025. "Kim Jong-un Regime's Strong Nation Policy and Diplomatic Development: Strengthening Defense Capabilities and Reconfiguring the Security Environment." *Kokusai Mondai*, 726.

■ Park Jeong-jinProfessor, Department of International Relations, Tsuda University.

■ Editor: Lee Sang-jun_EAI Research Fellow

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