North Korea is now engaged in diplomatic push and pull with South Korea, striving to restructure the inter-Korean relationship to meet the policy priorities of its new leadership and desires of the powerful vested interests it represents. Since Pyongyang’s motivations are not clear, below I identify three mutually exclusive alternative hypotheses explaining the North’s recent interest in engaging the South—to bind the South, to break up with Seoul, or to mollify its patron China—then assess the consistency or inconsistency of available evidence with each competing hypothesis and attempt to select the hypothesis that best fits the evidence. I assume that the North’s motivations in dealing with the South are primarily strategic, with military and domestic security factors being secondary, and economic considerations being tertiary in significance.
Transforming the Inter-Korean Relationship in the Kim Jong Un’s Era…
Under Kim Jong Un’s leadership, North Korea seeks to restructure inter-Korean ties to bind the South tightly to the North and make the inter-Korean relationship immune to adverse changes in the international situation, including additional anti-DPRK sanctions that would likely follow future missile and nuclear tests by the North. Pyongyang has recently demonstrated its readiness to absorb some financial and reputational losses in the short term in order to secure strategic gains in the long run. Since the beginning of the current “charm” offensive last May, Pyongyang has engaged Seoul in two rounds of working-level inter-governmental talks to probe the Park administration’s intentions with respect to what can be expected and done during her term in office. These meetings have been used to train the South Korean government officials in charge of the North Korea policy to be more sensitive to Pyongyang’s ways and needs, to instigate South-South conflict and foster ROK-US contradictions, and to reshape South Korean government and public perceptions of their own interests vis-à-vis the DPRK in a pro-North direction, even unbeknownst to them.
On March 31, 2013, the Workers’ Party of Korea (WPK) Central Committee adopted a new strategic policy line of parallel economic construction and nuclear weapons development. This means the DPRK will continue to test missiles and nuclear devices in the future in violation of numerous UN Security Council resolutions, which is likely to lead to further tightening of the international sanctions regime against Pyongyang. The operations of the Kaesong Industrial Complex (KIC), the sole remaining inter-Korean cooperation project, inevitably would have been subjected to greater international scrutiny, restrictions, and possible unilateral termination by the South, as Seoul hinted after the passage of UNSCR 2094 in March, following Pyongyang’s third nuclear test. To regain the diplomatic initiative and turn the tables, the North temporarily shut down the KIC in early April and forced the Park administration to renegotiate its terms of operations. It is now the ROK government—pressed by liberal groups and local businesses that have suffered critical losses due to the KIC’s closure—that demands binding assurances that neither party shall be able to shut down the KIC by unilateral action. Moreover, the South now also wants, as a guarantee, to internationalize the KIC and open it to other foreign investors, including the Chinese—a policy objective long sought by Pyongyang.
Such a change of heart in Seoul could be seen as ironic if it were not the result of the North’s long pursued efforts to strong arm the South and reshape South Korean perceptions of its own interests. In the long run, what Pyongyang wants is to ensure that Seoul cannot walk away from inter-Korean cooperation projects like the KIC or be able to abandon them unilaterally, as it did with the Mt. Kumgang Tourism project, even if the DPRK conducts another round of missile and nuclear tests, possibly as early as this fall.
In the forthcoming talks on the KIC’s future, one can expect North Korea to agree to some kind of mutually binding guarantees ensuring that once the KIC operations are normalized neither side will be able to break up its commitments unilaterally without considerable economic and reputational costs, as well as to demonstrate some interest in opening up the KIC to non-Korean investors. Under a best case scenario, if this principle sticks, the North will attempt in future inter-governmental talks to extend similar assurances to the moribund Mt. Kumgang Tourism project and other areas of joint economic cooperation suspended as a result of the ROK’s unilateral “May 24 sanctions” imposed by the Lee Myung-bak administration in 2010 in retaliation for the North’s sinking of the ROK naval corvette, Cheonan. The North’s negotiators have revealed this policy objective during both rounds of the inter-Korean working-level talks held recently. Under a worst case scenario, the North will test the South’s commitment to the new deal by testing a strategic missile in early fall and forcing Seoul to choose between its obligations under the UN Charter and US-ROK alliance and its hard-won assurances under the new North-South agreement. At that point, if the South chooses to unilaterally suspend its commitments under a new inter-Korean deal in the wake of another round of missile and nuclear tests by the North, Pyongyang will be able to claim with impunity that Seoul has violated its part of the bargain in much the same way as it claims the United States abrogated its obligations under the “Leap Day agreement” after the announcement of the North’s April 2012 satellite launch.
The bottom line is that Pyongyang wants Seoul to refrain from unilateral actions with respect to any joint inter-Korean cooperation projects as much as Seoul wants Pyongyang not to make any arbitrary single-handed moves there. For Kim Jong Un, the KIC may be the testing ground for this new approach, meant to guarantee no unilateral adverse actions under any circumstances, including continued missile and nuclear tests. Moreover, greater openness and attractiveness of the North’s special economic zones—including the KIC—to foreign investors also creates leverage against any possible South Korean abandonment of the joint investment projects in the future.
…Or Orchestrating KIC’s Orderly Dismantlement?
An alternative hypothesis is that North Korea is in the process of orchestrating the orderly dismantlement of the KIC and is engaging the South to extricate itself from this painful and perilous relationship like in divorce court. Looking at the July 7 agreement reached at the working-level talks in Panmunjom, any reasonable person can ask a logical question: why did North Korea agree to return all finished goods and raw materials from the KIC to the South? One can argue that if Pyongyang were truly interested in normalizing the KIC operations, it could have simply deployed the North Korean labor back to the KIC factories and allowed the ROK businessmen to return to work (not just to inspect their property, plant, and equipment at a glance) without delay or any impediment.
Pyongyang’s consent to return raw materials does not make sense if we assume the North is driven by the desire to normalize the KIC operations. Just the opposite, the North’s willingness to allow the safe repatriation of finished goods and raw materials now and apparent readiness to consider the return of the ROK-owned equipment at some point to be determined later may lend credence to the argument that the North Korean authorities decided to expedite the orderly and uneventful dismantlement of the complex. This would help ensure that the Kaesong loophole in their mosquito net is closed, that they are not held liable for any damages by the South, that no future foreign investors are frightened and discouraged by the ROK’s experience, and that they can turn the Kaesong facilities to other uses or users once the South Koreans have completed the evacuation of all of their belongings.
This alternative hypothesis is backed by the fact that the Kim regime appears to have recently stepped up personal attacks against President Park. On July 1, the Committee for Peaceful Reunification of the Fatherland (CPRF) condemned her criticisms of DPRK’s policies made during her May visit to China. On July 5 and 6, the WPK’s official daily, the Rodong Sinmun, repeated these criticisms, alleging that “she is disparaging our dignity, system and line even in alien land.” On June 27, the CPRF condemned the ROK’s release of North-South summit transcripts, questioning whether it would ever be possible to hold an inter-Korean summit with a government that cannot maintain confidentiality, and, for the second time, making the case that Park Geun-hye is even worse than Lee Myung-bak because even he did not dare to break the confidentiality of the North-South summit conversations. Subsequently, the DPRK media began to cite third parties arguing that Park had stolen the December vote with the help of the ROK National Intelligence Service (NIS), and therefore, she was not a legitimate president. These personal attacks in the run-up to the second round of working-level inter-Korean talks held on July 6-7 are in sharp contrast to the North’s efforts to court favor with her in the lead-up to the first round of working-level inter-Korean talks on June 9-10, when Pyongyang dispatched Kim Song Hye as the head of the North’s delegation. Kim is a senior female official at the CPRF who escorted Madame Park during her visit to Pyongyang in May 2002.
Engaging in a “Charm Offensive” to Placate China and Freeze Beijing-Seoul Thaw
The North Korean regime has not engaged in any provocations that could have derailed the process of either normalization or the orderly dismantlement of KIC operations since May. While the Korean People’s Army’s (KPA) Western Sector Command threatened in late June to punish the Seoul-based North Korean defectors who planned to fly anti-North balloons in Paju, there was no kinetic follow up on the ground. Nor did we see any North Korean military provocations in the West Sea, despite the fact that the crab-fishing season is in full swing. Finally, unlike in past years, there were no missile tests on the Fourth of July on the east coast this year either.
Instead, for the past three months the world got a chance to see Kim Jong Un’s diplomatic playbook in action. This led some analysts to come up with the third hypothesis. Pyongyang’s push for dialogue with Seoul may be part of its larger multi-vector diplomatic “charm offensive” which involved overtures to Tokyo, Washington, and Moscow, but was primarily aimed at mending fences with, placating, or cajoling China to be more considerate of its ally’s interests and halting the intensifying rapprochement between Beijing and Seoul. On May 22-24, Kim Jong Un dispatched his special envoy Vice Marshal Choe Ryong Hae on a high-profile mission to China to mend fences with Beijing. To win back the hearts and minds of the new Chinese leadership, the DPRK’s chief nuclear negotiator Kim Gye Gwan visited Beijing on June 18-22 to engage his Chinese counterparts in their preferred form of “strategic dialogue,” which was followed up by the WPK CC International Department Deputy Director Kim Song Nam’s working-level talks in China on July 2-6.
The first round of North-South working level talks on June 9-10, which abruptly collapsed, was held against the backdrop of this unfolding initiative. At that time, many analysts believed that Pyongyang had decided to engage Seoul primarily to mollify the Chinese leadership ahead of the Xi Jinping-Barack Obama presidential summit on June 8 and the Xi Jinping-Park Geun-hye summit on June 27, as well as to lay the groundwork for a Kim Jong Un-Xi Jinping summit before the end of this year. But the North Koreans may have realized that engaging the South in direct talks did not really help them sway Beijing in their direction and they aborted negotiations with Seoul on a technicality.
Whether China has indeed been one of the key drivers in North Korea’s motivation for the latest engagement with the South will be relatively easy to determine once we get passed the annual celebration of the so-called Korean War Victory Day in Pyongyang on July 27 and the first Kim-Xi summit. At present, the North Koreans appear to be on their best behavior in order to secure a Chinese invitation for Kim to make his maiden state visit to China and for high-level Chinese participation in the North Korean festivities, including the planned V-Day military parade. But, after the July 27 celebration and more clarity as to whether the Chinese will agree to host Kim Jong Un this year, the North may lose motivation to advance its dialogue with the South. If the inter-Korean dialogue continues regardless of DPRK-PRC interaction, it will confirm the presence of other drivers in Pyongyang’s approach to Seoul, which are more intrinsic to the inter-Korean relationship and probably related to either hypothesis one or two outlined above.
Kim Jong Un has ambitious plans aimed at modernizing the nation’s economy and improving its people’s living standards while building up the DPRK’s nuclear arsenal. To implement them, North Korea has to break out of international isolation and attract foreign investment and technology. Pyongyang probably wants to capitalize on Seoul’s leading position in the global economy and tremendous influence in the international community and use South Korea as leverage in overcoming its international isolation without compromising its status as a nuclear power. Current negotiations over the fate of Kaesong are just a gambit in the complex game Pyongyang is playing with Seoul. The North’s objective seems to be to transform the inter-Korean relationship in such a way that the perceived military threat from the South and its allies is reduced, the ROK’s economic and financial resources are mobilized for the DPRK’s economic development, and the legitimacy of Kim Jong Un and his regime are enhanced by demonstrating that he is the national leader who truly cares about unification. At the same time, Pyongyang seeks to undermine the ROK-US military alliance and curtail its own overwhelming dependence on China by exploiting the South Korean alternative. Most people believe it is a pipe dream. Kim Jong Un disagrees. Perhaps, Mao Zedong’s observation is in order: “We think too small, like the frog at the bottom of the well. He thinks the sky is only as big as the top of the well. If he surfaced, he would have an entirely different view.”
 “Park Points to Importance of Guarantee,” Daily NK, July 9, 2013, http://www.dailynk.com/english/read.php?cataId=nk00100&num=10720.
 “Kaesong complex operational safeguards key to normalization: official,” Yonhap, July 8, 2013, http://www.dailynk.com/english/read.php?cataId=nk00100&num=10720.
 “CPRK Accuses South Korean Chief Executive of Her Anti-DPRK Remarks,” KCNA, July 1, 2013, http://www.kcna.co.jp/item/2013/201305/news10/20130510-05ee.html.
 “Dependence on Outside Forces Hurting Nation’s Destiny,” Rodong Sinmun, July 5, 2013, http://www.rodong.rep.kp/en/index.php?strPageID=SF01_02_01&newsID=2013-07-05-0012&chAction=T.
 “Sophistry to Conceal Confrontation Intent,” Rodong Sinmun, July 6, 2013, http://www.rodong.rep.kp/en/index.php?strPageID=SF01_02_01&newsID=2013-07-06-0014&chAction=T.
 “South Korean Authorities Accused of Fully Opening Minutes of Inter-Korean Summit to Public,” KCNA, June 27, 2013, http://kcna.co.jp/item/2013/201306/news27/20130627-01ee.html.
 It is interesting that Pyongyang timed its proposals to hold the first and second rounds of inter-Korean talks to coincide with the 13th anniversary of the June 15 Joint Declaration and the 41st anniversary of the July 4 Joint Declaration, respectively.
 “北 김성혜, 박 대통령 2002년 방북 때 밀착수행,” Hangook Ilbo, June 11, 2013, http://news.hankooki.com/lpage/politics/201306/h2013061109544574760.htm.
 “South Korean Authorities Warned against Projected Leaflet Scattering Operation,” KCNA, June 29, 2013, http://www.kcna.co.jp/item/2013/201306/news29/20130629-01ee.html.
 To persuade the Chinese that the North is indeed interested in “any form of dialogue,” on June 16, Pyongyang knocked timidly at the US door with an olive branch offering respite from hostilities, and after no positive response from Washington, it followed up on July 3 with the Chosun Sinbo interview with Kenneth Bae pleading the United States to work harder to secure his release. On July 2-4, Kim’s nuclear point man Kim Kye Gwan made a quick exploratory visit to Russia, but without much progress to report. At the same time, Kim Jong Un made a semi-secret overture to Japan when Cabinet Secretary Advisor Isao Iijima visited Pyongyang on May 15-17, with an ostensible purpose to demonstrate to Beijing that Pyongyang did have a geopolitical alternative and could begin to lean to Tokyo’s side in its disputes with Beijing if the new Chinese leadership continued its hardball tactics with the North.
 Mao Zedong. BrainyQuote.com, Xplore Inc, 2013, http://www.brainyquote.com/quotes/quotes/m/maozedong133401.html (accessed July 11, 2013).