After North Korea’s sinking of a South Korean frigate, Cheonan, and shelling of Yeonpyeong Island in 2010, inter-Korean relations did not improve much in 2011.

There was limited official contact between the South and the North and between the US and the North to discuss the possible resumption of Six-Party Talks or food aid. Pyongyang also continued to decline the request from South Korea and the US to stop uranium enrichment before resuming the Six-Party Talks, a major stumbling block to the process. But the South Korean news agency Yonhap reported on 16 December that North Korea finally agreed to suspend enrichment activities. It was around that time that the US government indicated its decision to provide North Korea with nutritional assistance. These contacts and exchanges seemed to mark the end of acute tension between the two Koreas and between the US and North Korea.

Yet this small progress was overwhelmed a few days later by Kim Jong-il’s sudden death. The news shook the world and attracted great international attention, particularly regarding North Korea’s future under its new leader, Kim Jong-un. Unlike his father, Kim Jong-un — believed to be in his late twenties — received only two years of training before he inherited power.

The world may have to wait at least a year to ascertain the likely future stability of Kim Jong-un’s regime. There may be some short-term stability in a crucial period of power transition like this, but nobody knows whether Kim Jong-un will be able to build his own charisma and solidify his power base by successfully handling the many challenges which face North Korea. These issues include poor economic performance, international isolation, food shortages and changing perceptions of ordinary residents due to an ever-increasing inflow of information from the outside world. Both South Korea and the US delivered a carefully prepared message of condolence to North Korea in the hope of establishing more constructive relations following Kim Jong-il’s death. Predictably, China was the first country to express strong political support for the new leader.

The year 2011 was also an important period of change in domestic politics. South Korean voters sent a strong message of dissatisfaction to politicians from both the ruling and the opposition parties. Though South Korea’s economy performed relatively well compared to other countries in the West, many middle- and lower-class Koreans began to feel the negative impact of widening economic polarisation, convinced that the successful economic performance of big businesses had nothing to do with their own lives. Voters became frustrated by the government’s inability to handle problems such as youth unemployment due to jobless growth, an increasingly poor welfare system for low-income groups and the weakening of small- and medium-size enterprises — not to mention the opposition’s inability to offer viable alternatives.

A political backlash against the Lee government’s pursuit of neo-liberal economic policies could clearly be felt in the recent mayoral election in Seoul, held on 26 October. For the first time in history, a civic activist, Park Won-soon, defeated the ruling-party candidate and was elected as mayor.

Another political surprise for most Koreans in 2011 was the sudden appearance of a medical doctor-turned-software businessman, Ahn Chul-soo, as a very popular political figure. His influence was so substantial that the announcement of his support for Park Won-soon boosted Park’s popularity greatly and helped bring him the election victory. Nobody knows yet whether Ahn, currently a dean at Seoul National University, will run for presidency in 2012. But the phenomenon indicates how much Korean voters are dissatisfied with the political establishment.

Despite the political backlash, South Korea does not seem to have an alternative strategy to the utilisation of economic globalisation to underwrite domestic growth. For example, after a few years of delay and heated political debate in both countries, the US Congress finally ratified the Korea–US FTA in October, with the South Korean National Assembly following suit in November. Conclusion of this FTA has significant implications — not only economically, but also politically. This may be why the Chinese government, too, has been eager to conclude an FTA with South Korea in recent years.

In conclusion, the year 2011 marked an important watershed in inter-Korean relations, domestic Korean politics and Korea’s external economic strategy, but many risks and surprises still appear on the horizon.

Yoon Young-kwan is Director at the Center for International Studies, Seoul National University, and served as Minister of Foreign Affairs and Trade for the Republic of Korea from 2003–04.

This article is part of a special feature: 2011 in review and the year ahead.

1. Russia-North Korea: Denuclearisation of the Korean peninsula
2. Military spending and the arms race on the Korean Peninsula
3. Blow-out in inter-Korean relations

North Korea’s leadership succession from Kim Jong-il to Kim Jong-un has gone according to script.

The Korean Workers’ Party and the Korean People’s Army are supporting Kim Jong-un as North Korea’s new leader and North Korea’s propaganda machine has not missed a beat in announcing new titles, manufacturing accomplishments and portraying Kim Jong-un as a Great Successor worthy of the name. But despite these efforts, there are two notable missing pieces: Kim Jong-un’s brothers Kim Jong-nam and Kim Jong-chul. The failure of these brothers to publicly appear at the funeral clarifies that they are excluded from power, but their apparently differing fates raise important questions about Kim Jong-un’s power and the sustainability of his leadership.

Kim Jong-chul, in his thirties, is Kim Jong-il’s second son (the first son of Kim Jong-il’s second wife, Ko Yong-hee, who is also the mother of Kim Jong-un). Although Kim Jong-chul is Kim Jong-un’s elder brother, he is rumoured to have been dismissed by his father as a potential successor for being too effeminate. Kim Jong-chul’s absence is disturbing because it raises questions about how far Kim Jong-un might go to squelch even perceived contenders for power. North Korean purges have historically been ruthless, but family members have usually been exiled rather than executed. Kim Jong-il’s half-brother Kim Pyong-il was assigned to decades of diplomatic service abroad in Europe rather than eliminated. Kim Jong-chul’s fate may hold telling clues to the character of leadership under Kim Jong-un.

If Kim Jong-chul’s silence raises questions, Kim Jong-nam’s visibility poses even more serious challenges. Kim Jong-nam, aged 40, is Kim Jong-il’s child with his first wife, Sung Hae-rim. As Kim Jong-il’s eldest son, Kim Jong-nam is reported to have been groomed for succession until he fell out of favour in 2001, after being detained at Narita Airport in Japan with a fake passport. Since that time, he has lived in apparent exile in Macao and Beijing. Kim Jong-nam has emerged as a surprisingly voluble critic of North Korea’s leadership succession, directly challenging the legitimacy and capability of Kim Jong-un as a leader. Tokyo Shimbun journalist Yoji Gomi quoted an e-mail from Kim Jong-nam received on 3 January, in which Kim Jong-nam states that ‘I expect the existing ruling elite to follow in the footsteps of my father while keeping the young successor as a symbolic figure . . . It’s difficult to accept a third-generation succession with normal reasoning’, he added. He also said he doubted that a young successor ‘with some two years of training can retain the absolute power’. (Gomi’s book, based on several years of e-mail exchanges with Kim Jong-nam, was published a few days ago in Japanese.)

This forthright public assessment of North Korea’s succession makes Kim Jong-nam the foremost external critic of Kim Jong-un’s succession and a direct challenger to the viability of Kim Jong-un’s leadership. It directly contradicts North Korean efforts to burnish Kim Jong-un’s legitimacy, and raises questions about whether sibling rivalry might be a sign of discord among Pyongyang’s elites.

External public criticism of the succession cannot be viewed as helpful to Kim Jong-un’s efforts to consolidate power, and it is presumably in Kim Jong-un’s interest to prevent his older brother from providing ongoing commentary regarding his succession, if for no other reason than that quieting Kim Jong-nam would be one means of proving that Kim Jong-un is not a puppet or ‘symbol’ of the North Korean elite.

Kim Jong-nam’s public criticisms of the succession from his base in China also raise the question of who is Kim Jong-nam’s protector, especially given rumours last year that Kim Jong-un had instigated purges against leading supporters of Kim Jong-nam in Pyongyang. China presumably sees utility in protecting Kim Jong-nam — as a reform-minded Kim family member who is indebted to China — as a potential alternative leader if Kim Jong-un’s leadership fails. A more complicated factor is that in 2002 and 2003, shortly following his exile from Pyongyang, Kim Jong-nam appeared to have an open line of communication from Beijing with his uncle Jang Sung-taek and his aunt Kim Kyong-hui, who are now critical supporters of Kim Jong-un.

It is ironic that Kim Jong-nam is able to robustly exercise his freedom of speech from his home base in China despite his presumed dependence on China to allow him permanent residency in that country. This circumstance complicates Kim Jong-un’s ability to silence Kim Jong-nam as compared to Kim Jong-chul, but it also raises a potentially awkward situation for China at a time when North Korea’s leadership surely seeks assurances that China is not hedging its support for Kim Jong-un.

Scott A. Snyder is Senior Fellow for Korea Studies and Director of the Program on US–Korea Policy at the Council on Foreign Relations.

This article was first published here on the Council on Foreign Relations Asia Unbound blog.

1. North Korea: new opportunities in a post-Kim Jong-il landscape
2. North Korea: Kim Jong-il snubs Jimmy Carter in lead up to succession
3. Power, lies and secrecy in North Korea

The grand funeral ceremony for Kim Jong-il was completed earlier this month, and North Korea’s new leader, Kim Jong-un, was officially sworn in.

The event clearly opened a new chapter in North Korea’s history.

The mass expressions of grief in North Korea witnessed throughout this time have considerable meaning — while they may seem shocking to foreigners, the displays cannot be written off as insincere. Collectivism is pervasive in North Korea, and this affects the way emotions are displayed. But to deny that North Koreans widely perceive their country’s leader as its father — in line with the Confucian tradition — and that people are indeed mourning Kim Jong-il would be unfair.

The phenomenon has its roots in the original North Korean political culture, which ascribes a special role to the country’s leader, and has a legitimising impact on Kim Jong-un’s claim to power. It is true that Kim Jong-un is very young, has a limited record of involvement in state affairs, and has only held the status of official successor for slightly over a year. Still, he learned a lot over this time, acting as his father’s apprentice, and has made no blunders in the process. Importantly, the nation actually sees him as the successor.

Obviously, both Kim Jong-un and North Korea face tough challenges. Kim’s elder peers — the stalwarts from his father’s inner entourage — will certainly do their best to help him during the initial phase of his rule, but this interaction should not be interpreted as evidence that Kim is only the nominal leader. For North Korea, combining the leader’s singular status with collectivism in top-level decision making is a long-standing tradition, though the balance between the two elements fluctuates.

Predictions that North Korea will shortly plunge into chaos and that a tide of infighting will sweep over its leadership are completely groundless. North Korea watchers are fully aware of the country’s robust political stability, and the development of organised opposition or public protests of considerable proportions are nowhere in sight.

It is natural that divisions over individual issues exist in North Korea’s administration, but the country’s constant external threats help to further cement its administration. Pyongyang is mindful of its opponents’ strategy — which focuses on inducing regime change in North Korea — and monitors the emergency military planning of the US–South Korea alliance. The two countries certainly had special plans to set in motion in the event of Kim Jong-il’s sudden death. The North Korean political elite have no illusions as to their chances of survival in the case of a regime change. And more than any ideological directive, such concerns make the elite maintain full cohesion, stay loyal to the country’s leader and ruthlessly suppress any tendencies toward internal discord.

At least in the mid-term, we should see complete continuity in North Korea’s foreign and domestic policies, with its young leader likely to emphasise allegiance to his father’s legacy. Pyongyang’s approach to key foreign policy issues, including its involvement in the Six-Party Talks over the Korean Peninsula’s nuclear problem, will therefore remain unchanged.

It should also be noted that the recent developments in North Korea opened up new opportunities for its opponents, and time will tell how these opportunities might be seized. No doubt, the US could assume the main role in rebuilding bridges with Pyongyang. The switch from a condition bordering on war to one of fruitful cooperation in the wake of Kim Il-sung’s death and the signing of the 1994 Agreed framework provide a vivid example of such flexibility. The Bush administration made a similar manoeuvre in 2007.

Hillary Clinton’s recent visit to Burma was a bold initiative, and an analogous breakthrough in relations with North Korea may yet be brewing (the precedent being Madeleine Albright’s 2000 visit to Pyongyang). In any case, the current situation offers unique opportunities to break the stalemate in US-North Korean and inter-Korean relations.

In sum, North Korea’s domestic situation remains stable, with Moscow and Beijing firmly encouraging peace and stability on the Korean Peninsula. The North Korean approach to key foreign policy issues, including its relations with Russia, will remain unchanged. The last foreign visit paid by the late Kim Jong-il was a tour of Russia, during which he met with Russian President Dimitry Medvedev in August 2011. It is a safe bet that cooperation between Russia and North Korea will continue, and that the key bilateral and multilateral economic projects — including the Russia-North Korea-South Korea gas pipe line and railroad construction — will be implemented in this same framework, as planned. 

Alexander Vorontsov is Head of the Korean and Mongolian Studies Department, the Institute of Oriental Studies, Russian Academy of Sciences.

1. Power, lies and secrecy in North Korea
2. Russia-North Korea: Denuclearisation of the Korean peninsula
3. Russia-North Korea trade

One of the more momentous changes in Asia that heralded in the New Year was the sudden death of North Korean leader, Kim Jong-il, and the succession by his son, Kim Jong-un.

Kim Jong-il’s death had long been seen by some outside observers as portent for the collapse of the North Korean regime and the announcement encouraged much comment that reflected these forebodings, including calls for calm from political leaders who should have been in the know.

Anything seemed possible.

Certainly there were anxieties about whether the assumption of the North Korean leadership by a relatively untried and youthful Kim Jong-un would be accompanied by a power struggle in the North and political instability. Cooler heads saw little immediate sign of that.

In this week’s lead Chung-in Moon and John Delury at Yonsei University urge focus on the realities that face North Korea itself and the rest of the world in dealing with the isolated state, not imagined contingencies surrounding the leadership change. Their injunction is timely. Moon was a key adviser to former South Korean President Kim Dae-jung on North Korean affairs and heavily involved in negotiations between the North and the South that saw the Sunshine policy put in place. But he is a hard-headed realist.

Delury and Moon point out that there are no signs of political ferment in North Korea. For the moment, the system is quite stable. The regime is ‘unified around the new face of North Korea, Kim Jong-un, the son of Kim Jong-il and, most importantly, the grandson of founding father Kim Il-sung. Kim Jong-un does not need charisma. In North Korea’s hierarchic ‘big leader’ suryong system, the young Kim is born to authority. His Baekdu bloodline is sufficient to endow his rule with legitimacy. And his power base is solid’. This is an hereditary system of rule as much as an authoritarian one.

Kim Jong-un’s legitimacy is secured by three inner circles. The first is the ruling family. The key sign of unity within the family is that Kim Jong-un’s aunt and her powerful husband Jang Song-taek both received promotions along with the heir-apparent at the historic Party conference last year. The second is the Korean Worker’s Party itself, which has been going through a period of resuscitation. The revitalised network of Party members — who now carry cell phones and are eager to travel abroad — see their prospects very much linked to the success of the grandson. The third is the military — the Korean People’s Army — which is the logical competitor in the power succession. But even in the army there is no sign of high-level disaffection like that seen in many Middle Eastern states. ‘The military’, Delury and Moon point out, ‘has been the primary beneficiary of the North’s ”military first politics” campaign initiated by Kim Jong-il in 1995′. The military has been co-opted through numerous incentives, and controlled through close confidants. The military has pledged loyalty to Kim Jong-un, whose highest title is Vice Chair of the Central Military Committee of the Korean Worker’s Party.

As for the 20 million or so North Koreans not in the Party, they are likely to take a wait-and-see approach to the new leadership group. Kim Jong-un bears a striking physical resemblance to his grandfather, evoking nostalgia for North Korea’s halcyon days, and people may hope his rule will see a new, better chapter for their country. Whatever the case, those who may wish to rebel have no networks or organisations through which to do so. For now, all signs confirm the state media slogans: Kim Jong-un is the ‘outstanding leader of our party, army and people’ and ‘great successor’ to his father.

In the near term, the chances of political crisis, let alone regime collapse, are remote. In the longer term, however, North Korea faces the same perennial hard choices: the dilemma, Delury and Moon call it, of mutually conflicting goals.

Pyongyang proclaims to its citizens that 2012 marks the year of North Korea’s emergence as a ‘strong and prosperous great nation’ [Gangsong Daeguk]. ‘If Kim Jong-il could claim nothing else’, say Delury and Moon, ‘he did achieve at least one thing for North Korea — the ultimate ”strength” of nuclear deterrence’.

What most outside observers of North Korean affairs miss is the importance of the goal of world standard prosperity. It was set out again post-succession in the New Year’s joint editorial in North Korea’s three main newspapers. There are unmistakable signs of a push to improve the national economy — from growing trade with and investment from China, revived plans for special economic zones and official propaganda promising to improve the people’s welfare.

The issue at stake is whether Kim Jong-un can enhance North Korea’s prosperity without undermining the source of its strength — its nuclear weapons program. ‘Comprehensive economic development will also require foreign investment, trade, and financing; all of which would require negotiation of loosening, and eventual lifting, the sanctions which surround the North Korean economy like a barbed wire fence. Getting that sanctions regime lifted will require substantive nuclear concessions on Pyongyang’s part’.

This, of course, opens opportunity for dealing between Pyongyang, Washington, Beijing and Seoul. As Delury and Moon observe, it will be in that moment, the transition from security-first to security-plus-prosperity, when the unity of the North Korean political system would come under strain. It was perhaps ever thus. ‘Elements in the military might oppose sacrificing their prize possession — nuclear weapons capability. Hardliners will argue it would be a fool’s errand to give up the ultimate weapon, leaving their country exposed to an Iraqi or Libyan fate’.

The path to getting the North over that hump needs to start now, with building constructive relationships with their new leadership, and avoiding the risk of playing into the hands of hardliners, and above all investing in the capacities now that North Koreans will need to run a prosperous and open economy and society. There are signs that this is recognised in Washington and Seoul, though unfortunately not in Canberra which had earlier played a helpful role in prosecuting just this interest — and again is positioned, because of the importance of being unimportant, to do so now.

Peter Drysdale is the Editor of the East Asia Forum.

1. North Korea’s transition: do not let contingencies distract from realities
2. North Korean quagmire a failure of analysis
3. Russia-North Korea: Denuclearisation of the Korean peninsula

Kim Jong-il’s sudden death spurred yet another round of fevered speculation over the DPRK’s imminent demise.

Some analysts gave the North Korean state only a matter of months to live, and renewed calls on Beijing to engage in ‘contingency planning’ with Washington and Seoul to pre-empt catastrophe when collapse finally comes. This scepticism is not without foundation. The new leader, Kim Jong-un, is young and inexperienced. He does not yet project his father’s power, let alone his grandfather’s charisma. His policy preferences are unknown, but his grooming period witnessed ill-advised initiatives on the economic and political fronts — from the botched currency reform to the tragic shelling of Yeonpyeong Island. Despite these shortcomings and questions, the succession process seems to be going smoothly. There is no evidence of near-term political crisis, confusion as to the new pecking order, popular revolt or systemic breakdown.

Why is near-term crisis unlikely? For the simple reason that the country’s political system is unified around the new face of North Korea, Kim Jong-un. He does not need to build charisma; his Baekdu bloodline is sufficient to endow his rulership with legitimacy. And his power base is solid.

Think of Kim Jong-un surrounded, and protected, by three inner circles. The first circle is the ruling family. The second is the Korean Workers’ Party itself, which has been going through a period of resuscitation in recent years. The revitalised network of Party members, who now carry cell phones and who are eager to travel abroad, see their prospects linked to the grandson’s success. The third circle is the military, which would be the logical competitor for power. But here, too, there is no sign of high-level disaffection, like that seen in many Arab Spring states. The military has been the primary beneficiary of the North’s ‘military-first politics’ campaign that Kim Jong-il initiated in 1995. And so far, the military has pledged its unfailing loyalty to Kim Jong-un.

But what, then, of the outer circle — the 20 million or so North Koreans not in the Party? Kim Jong-il was not beloved like his father, and pragmatic North Korean civilians are likely to take a wait-and-see approach to the new leadership group. Even those who may wish to rebel have no networks or organisations through which to do so.

Consequently, the chances of political crisis in the near term appear remote. But in the medium to longer term, the new leadership is likely to face a dilemma, and this should be the focal point of international responses to the transition process. It is a dilemma created by two mutually conflicting goals the regime has set for itself.

Pyongyang has been loudly promising its citizens that 2012 marks the year of North Korea’s emergence as a ‘strong and prosperous great nation’ (Gangsong Daeguk). Kim Jong-il managed to achieve at least one thing for North Korea — the ultimate ‘strength’ of nuclear deterrence. Now, it is up to his son to achieve the other half of the equation: prosperity. There have certainly been unmistakable signs of a push to improve the national economy over the past few years — from growing trade with and investment from China to revived plans for special economic zones.

But the issue at stake is whether Kim Jong-un can enhance North Korea’s prosperity without undermining the source of its strength — its nuclear weapons program. Food aid and foreign economic assistance are urgently needed to ensure a smooth path through the first year of Gangsung Daeguk. Comprehensive economic development would also require foreign investment, trade, and financing — all requiring an initial loosening and eventual lifting of the sanctions regime that surrounds the North Korean economy. Achieving this will require substantive nuclear concessions on Pyongyang’s part.

This transition from security-first to security-plus-prosperity will pose the greatest challenge to the unity of the North Korean political system. Elements in the military might oppose sacrificing their prize possession. Hardliners will argue it would leave their country exposed to an Iraqi or Libyan fate. Therefore, the path to getting the North over that hump must start now.

So, the essential question is, what should the international community do? The most prudent course for key regional players is to re-open or expand channels with Pyongyang. The better we know the new leadership, the better we can respond to events as they unfold. Seoul, Washington and Beijing should focus energies on drawing out North Korean officials as the leadership consolidates around its new core, Kim Jong-un.

Fortunately, the US has some modest positive momentum to build on in crafting this kind of proactive diplomatic outreach. The US and DPRK were engaged in substantive bilateral talks on humanitarian aid and denuclearisation on the eve of Kim Jong-il’s death. The timing is fortuitous, and Washington should make the most of these revived channels, signalling readiness to work with the new powers. US Secretary of State Hillary Clinton seems to be taking a measured, constructive approach to Kim Jong-il’s passing — an encouraging sign that the US will be persistent and proactive.

Seoul’s reaction is even more crucial, and delicate. The South Korean public is divided over inter-Korean relations, and President Lee Myung-bak takes a hit whichever way he steps. But there have been increasing signs of fatigue with a hard-line approach, and this president, who has proven his conservative credentials, is uniquely positioned for a kind of ‘Nixon-in-China’ moment. In fact, President Lee has sent a New Year’s message to Pyongyang, noting the South’s willingness to reopen talks and foster cooperation with the North. Nonetheless, Pyongyang’s response has been quite hostile.

Beijing may have the best model for handling North Korea, as Chinese realists spend less time thinking about scenarios of North Korea’s collapse, and instead keep diplomatic channels open while supporting economic engagement. China also has military-to-military ties with the North, and can exert some leverage when it comes to moderating military behaviour.

In an optimistic scenario, China, South Korea and the US could use this changing of the guard to embark on a coordinated engagement policy to normalise, and denuclearise, the Korean Peninsula. For years, political analysts and military planners have discussed ‘contingency plans’ in the event of Kim Jong-il’s death. But now, with no sign of chaos or collapse, we need prudent and realistic diplomacy that lays the foundations for progress.

John Delury is Assistant Professor of East Asian Studies at Yonsei University, Seoul, and a book-review editor for Global Asia. Chung-in Moon is Professor of Political Science at Yonsei University and Editor-in-Chief at Global Asia.

1. North Korea provokes again
2. North Korean realities
3. Dangers lurk in North Korea’s leadership transition

Kim Jong-il is no more. The state news agency KCNA reported that he died on his train on Saturday 17 December 2011. This is the official version (now doubted internationally) that observers of North Korea have actually seen under preparation for quite a while, including in works of art that were discussed here.

The public was informed rather quickly, less than two days later. Kim might in fact have died much earlier. In a system where the death of a living dictator is a taboo topic, it is questionable that all necessary arrangements had been made in advance. It takes time to agree on a detailed funeral list with 250 names in strict hierarchical order, an obituary praising the right aspects of his rule, and a precise schedule of instructions for the immediate period after the ruler’s demise. Most importantly, a far-reaching decision had to be made on how to proceed — and how to announce the successor.

The matter was complicated by the fact that Kim Jong-il himself had failed to finish the succession process. This was most likely to happen next year, when the country would celebrate the 100th birthday of its founder Kim Il-sung in April 2012. The status of Kim Jong-un would have been elevated at the yet unannounced 7th Party Congress. It is fair to assume that Kim Jong-il’s death at this point in time came as a surprise for the North Korean leadership, too.

In this situation, the Worker’s Party took over. In a highly symbolic move, it acted like the Church in medieval Europe: it crowned the Emperor. The obituary, published in the Party newspaper and signed by the Central Committee, devotes its latter part to the introduction of Kim Jong-un as the next leader — as the ‘great successor’ (widaehan kyesungja). This is the first time he has been explicitly named as such. Note also that the complete sentence says he is the great successor to the revolutionary cause of chuch’e — not son’gun (Military First Policy). This is an emphasis on ideology, the realm of the Party.

The resuscitation of the Party’s leading role in society has been visible for a few years. Among the last hints was a group picture taken on 13 December 2011 during one of Kim Jong-il’s last field guidance trips. It shows a banner reading: ‘Let’s defend the Central Committee with Great Leader Kim Jong-il at its top with our lives!’

This is a remarkable deviation from earlier versions, according to which soldiers were supposed to defend only Kim Jong-il. Now it’s the Central Committee — a collective, symbolising the Party. The order of institutions signing the official obituary published by the Central News Agency supports this analysis. It lists the Central Committee of the KWP first, followed by the Central Military Commission of the KWP, the National Defence Commission, the Standing Committee of the Supreme People’s Assembly (the parliament), and the Cabinet of the DPRK. How more obvious can the real power structure be?

The big question now is will the North Korean elite and population accept the Central Committee’s decision, and will they welcome Kim Jong-un as the new leader? History teaches us that things do not always proceed according to plan or conventional wisdom. We cannot exclude the possibility of ambitious individuals testing the opportunities. With Kim Jong-il’s death, North Korea lost the Secretary General of the Worker’s Party and the Chairman of the Central Military Commission, but there still are an official Head of State; a Standing Committee of the Politburo, of which Kim Jong-un is not a member; and a National Defence Commission, also without Kim Jong-un. There are powerful individuals like Choe Yong Rim, Prime Minister; Kim Young Nam, Head of State; Jang Song Thaek, Kim Jong-il’s brother-in-law and alternate member of the Politburo, and his wife and Kim Jong-il’s sister Kim Kyong Hui who is a regular Politburo member and a General. Ri Yong Ho is a Vice Marshal. Will they back up Kim Jong-un, or try to manipulate and sideline him?

What comes next? As quickly as possible, every space on propaganda posters, in the media, and in people’s minds will be filled with Kim Jong-un until there is no other choice but to proceed with him, lest the dangerous impression of potential for change will be risked. According to Gregory Henderson, Korean politics is all about competition for control of the centre — not about competition against the centre. In other words, the key question regarding domestic politics in North Korea now is not whether Kim Jong-un will be the next leader, but what type of leader he will be.

It would also be fair to expect a wave of purges against actual or potential opponents. This happened in the past, too. In the coming months, continuity and consolidation will be the name of the game. We will see Kim Jong-il being placed next to his father — in propaganda, and probably even physically in the Kumsusan memorial palace. Kim Jong-un will emphasise how he will govern in the spirit of these two immortal leaders. To show his filial piety, he will award a posthumous title to his father and show proper mourning by not accepting any title for himself for three years. This mourning period will give the elite time to figure out how to deal with the young Kim without triggering impatience among the population. If everything remains quiet, the 7th Party Congress would be held after three years and further cement the rule of Kim Jong-un by making him the Secretary General.

In an ideal case, this will mean that Kim Jong-un becomes a leader of the Chinese type. Reform and opening Chinese style — a one Party dictatorship together with a market economy — could be the consequence. However, the risk in Kim Jong-un’s case is his young age. He will not die naturally anytime soon, and he is unlikely to give up his post easily after a few years. As he gets used to power and more experienced in the power game, his ambitions will grow. The old generation will make room for handpicked younger officials who depend entirely on Kim Jong-un. The Party is strong now; it might get weaker in the future. The classical power struggle between worldly and spiritual leaders in medieval Europe fills many volumes of books. So the Party in North Korea now has the crucial task to ensure that enough checks and balances are provided to prevent the young ruler from becoming another Kim Il-sung. This is what we will have to look at when we observe North Korea in the next months.

Many open questions remain. But one thing is obvious: North Korea, a nuclear state, now stands at a major juncture in its development.

Ruediger Frank is professor of East Asian Economy and Society at the University of Vienna.

This post first appeared here in 38 North.

1. Kim Jong Il’s death: continuity plus opportunity to engage
2. Kim Jong-un’s regime: facing up to domestic challenges, China and the US
3. Kim Jong-nam and the question of North Korea’s leadership stability

My team was finalising our 2012 program plans for North Korea exchanges — preparing to implement workshops on fiscal strategy and financial sector development, as well as discussing the potential of an economic think tank comprised of policy makers — and in close contact with our local partners shortly before Kim Jong-il’s passing.

These were all very interesting ideas because our North Korean partners were driving them, rather than us. Now, programs will be delayed and disrupted.

More broadly, we expect an immediate and short-term lockdown in North Korea with restrictions on travel and communications as authorities move to stabilise the situation in preparation for mourning. While some pundits rushed to proclaim the likelihood of instability and provocations, it is more likely that North Korean elites will try to present images of a united front in the short-term despite any backroom manoeuvrings.

We should also watch to see whether Kim Jong-un undertakes a trip to China at some point after the mourning period. Given that China is North Korea’s most important partner, who leads and who goes on this trip will say a lot about North Korea’s political order. A trip by North Korea’s next leader will also indicate that the internal situation has stabilised, and that the leader is confident a coup will not take place in his absence.

The changing political landscape will provide new opportunities to explore innovative policy options. The hope is that policy makers will also react to this situation not just defensively, but proactively, identifying opportunities in the medium term to encourage sensible and outward-looking economic policies in North Korea. In the longer run, this will support the livelihoods and aspirations of the 30 million North Koreans who want better living standards and greater interaction with the outside world.

This opportunity will manifest itself in the medium term after an initial period in which political manoeuvring and concerns with stability drive a tightening of security measures. While Kim Jong-un is young, the team around him includes plenty of old-regime hands and that will ensure some continuity in policies. And while most pundits believe that Kim Jong-un has not had enough time to prepare his leadership credentials, so far it appears that a protocol is in place with Korean Central News Agency rapidly identifying Kim Jong-il’s youngest son as the nation’s rallying point during its announcements. But for others wishing to take up a senior position in the transition, factional jockeying — largely happening behind the scenes — could discourage bold moves. Consequently, expectations in the coming year need to be tempered. In fact, it may even prove harder to reach an agreement with the reclusive state — especially one that is adhered to — while the internal situation is in flux, regardless of whether North Korea’s leadership tries to reach out or not.

As we move further into the future, there is room to experiment with innovative approaches to North Korea as the old guard continues to be phased out. This transitional phase is the critical juncture in which governments around the world should actively reach out to a younger generation of North Koreans to let them know an open door exists for their country to engage with countries such as Australia, Canada and the US. Instead of predicting what kind of leader Kim Jong-un will be, we should focus on identifying how to encourage a new generation of leaders to be proactive in ensuring the population’s human security.

There is much to learn from Switzerland here, which has for many years sponsored capacity building programs that include economics and business training for North Koreans. These programs not only provide skills that aid economic transition, they also reinforce the message that the world is ready to accept North Koreans when the latter are ready to reach out. They equally help us understand what the next generation of North Koreans is thinking. In our workshops on economic policy, North Koreans have shared their hopes for the future, and their opinions on Obama’s ‘strategic patience’ approach, change and foreign cultural influence.

Let us hope that politics does not come in the way of innovative approaches, especially when an opportunity has presented itself. It is important for countries to reach out early and actively with a variety of programs and opportunities to offer a new generation of leaders in North Korea an ‘open path’ to positive change.

Geoffrey K. See is a Founder and Managing Director at Choson Exchange.

1. Kim Jong-nam and the question of North Korea’s leadership stability
2. North Korea: Australia’s capacity to act where others cannot
3. North Korea: Kim Jong-il snubs Jimmy Carter in lead up to succession

When North Korean leader and founding father Kim Il Sung died in July 1994, his son Kim Jong Il had effectively held the reins of power since 1981.

The problem with Kim Jong Il dying during an ‘on the spot guidance’ on December 17 — as announced by the North Korean official media on December 19 — is that not much is known about his third son and designated 27-year-old successor, Kim Jong Un. Unlike his father, Kim Jong Un has had only one year, and not 15, to prepare for leadership, although his grooming began in 2008. Before he died, Kim Jong Il had also strengthened the courtly power of his clan, by promoting his sister and her husband to create, with Kim Jong Un, a triumvirate with which to continue the dynastic succession.

Kim Jong Un is said to have studied in Switzerland, he reportedly speaks English and German, and spent time training in the artillery command of the Korean People’s Army before his rapid ascension to four star General and membership of the Central Military Commission — the voice of leadership when it comes to setting the party and military line on critical issues at key junctures, especially in confrontations with external powers.

Yet Kim Jong Un’s skills as a decisive leader, his charismatic ability to mobilise and motivate people, and his skill at manipulating the many levers of power and control in the DPRK’s pyramid of power, all remain untested, at least insofar as those outside the DPRK can determine.

Kim Jong Un did not accompany Kim Jong Il in his May 2011 visit to China, now the DPRK’s main geopolitical and economic backer. Kim Jong Un did, however, meet with a high level PLA delegation in Pyongyang on October 25, 2010 led by Colonel General Guo Boxiong, PRC Central Military Vice Chairman. At that time, Guo gave to him a framed calligraphy that read in Chinese: ‘In the Same Strain’ — an obvious reference to Kim Il Sung and which is interpreted as a blessing from the Chinese military of his succession.

This emblem of support from the military, plus the observation of China’s heavy economic investment in recent years in the physical infrastructure of North Korea in order to extract resources (chiefly coal, iron ore, and other minerals) at relatively low prices from the DPRK, suggests that China will continue to back the Kim regime under the Kim Jong Un. China’s decisive strategic support after the two major confrontations between the DPRK and South Korea — in March when the ROK warship Cheonan was sunk and November, when the North shelled Yeonpyeong Island and killed not only soldiers, but civilians for the first time since the Korean Armistice stilled the guns in 1953 — is another indicator that China’s support is likely to persist.

Now, in addition to the national celebrations of the 100th year of Kim Il Sung’s birthday in 2012, the new leader must steer the DPRK through a long period of mourning for Kim Jong Il, while focusing on improving the domestic economy.

Here, the generational factor may make a major difference to the style of decision-making, and the relative decentralisation of power in the DPRK. Already, political scientists have noted that North Korea shifted from one-man, totalitarian leadership in the person of Kim Il Sung, to a more technocratic style called authoritarian pluralism under Kim Jong Il, where he let the agencies of state — basically the military, the cabinet representing the economic line agencies, and the foreign affairs ministry — articulate different policy options before he would make a decisive move that set the cast.

However, the gerontocrats who lived through the Korean War are almost all gone; the next generation of senior leaders — the forty five to sixty year old North Koreans in senior party, military, and economic positions of power — are remarkably well-educated and often well-informed about the DPRK’s relative and absolute backwardness. Many of them are well travelled and even cosmopolitan, not unlike their South Korean counterparts, and understand the need for massive and structural change to their economy and polity. They also understand that too rapid a change could lead to chaos and disaster, so they are cautious and know what a weak hand they have to play, both against the politically conservative and socially influential military, and against the South and its many allies, especially the United States.

As a stunning example of the leading edge of this structural change, today more than 800,000 North Koreans have cell phones — a number that has grown from a few tens of thousands in just two or three years, and far more than can be monitored individually and centrally, as was the practice in the good old days of totalitarian surveillance of all telecommunications.

Kim Jong Un is likely even more conversant than even this new generation of senior leaders with the internet and networked information economies, and therefore, likely to be more open to rapid, structural change in the economy. Whether he can bring along his senior advisors in embracing the notion of structural change is another matter. But time is on his side, and he can press for change knowing that domestic and international forces will likely support him in the search for resolution of the nuclear issue.

Initially, Kim Jong Un and his senior advisors are likely to seek continuity with the past as the basis for smooth sailing in 2012 while they concentrate on domestic issues. They will emphasise their relationships with China; they will continue to talk about re-engaging in the Six Party Talks on the nuclear issue, but are unlikely to actually participate given the need for clear policy lines to be articulated at the Talks; and they will avoid provocations at the DMZ in 2012 to channel the political and emotional mobilisation associated with the mourning of Kim Jong Il’s passing to merge into support for Kim Jong Un’s leadership.

Ironically, Kim Jong Il’s death may make Korea the land of the morning calm for at least a year, during which political transitions will also occur in China, South Korea, Japan, Russia, and the United States. Far from a ‘Korean Spring’ led by 27-year-old revolutionaries, while the process of domestic change has begun in the DPRK at the very top and may prove to be just as irresistible as in the Arab world, the transition is likely to start quietly.

Peter Hayes is Professor of International Relations at the Royal Melbourne Institute of Technology and Executive Director of the Nautilus Institute, San Francisco. Dr. David Von Hippel is a Nautilus Institute Senior Associate based in Eugene, Oregon. Scott Bruce is the Director of the Nautilus Institute’s US Operations, located at the University of San Francisco Center for the Pacific Rim. This is an adapted version of a longer article authored by Professor Hayes, published by the Nautilus Institute, which can be found here.

1. After Kim Jong-il: will there be change or continuity in North Korean economic policy?
2. Death of Kim Jong-il: the rise of the Party
3. Kim Jong-il goes to Beijing

Intra-elite competition for investments in North Korea, with multiple channels backed by different individuals at the highest levels of the North Korean government, has significantly increased in the last two years.

This competition appears to mark a shift towards increasing reliance on economic performance as a primary source of legitimacy for the North Korean government. This is a significant change as economic development has taken a back seat for the last two decades.

The conflict on the Korean peninsula has always been one of legitimacy; two governments both claim the right to rule the whole nation. Without continually fostering the support of their own citizens, both Koreas face a threat posed by the competing government. North Korea’s claim to legitimacy has been based on various narratives since Korea’s division in 1945. The first narrative was that the leadership was made up of genuine anti-Japanese independence activists and guerrilla fighters.

In the 1950s and 1960s, Kim Il-sung’s personal greatness was the greatest point of emphasis as well as the promise of higher living standards that communism could deliver. Then in the 1970s and 1980s as Kim Jong-il was groomed for leadership, his familial connection to the paramount leader, his filial piety and personal genius were all emphasised.

As global communism collapsed in the 1990s and North Korea’s economy nosedived, ‘Songun’ (or military-first politics) came to the fore. Legitimacy since then has appealed to the idea that all efforts needed to be channelled into protecting the DPRK from hostile, outside forces. With survival at stake, economic considerations were not made a priority.

Now, however, the development of nuclear weapons has provided the North Korean leadership with the ability to claim that the DPRK is part of an exclusive and very powerful club.

This status firmly in hand, domestic propaganda has been championing a ‘strong and prosperous’ nation going into 2012. Meanwhile, the government offers highly public exhortations on raising the material standard of living. It appears that North Korea has recently placed the delivery of economic performance as one of its claims to legitimacy once again.

There are some significant public and private signs of such a change.

First, in both 2010 and 2011, North Korea’s most important domestic policy statement — a joint editorial published each New Year by the major newspapers — spoke of ‘bring[ing] about a decisive change in the people’s lives by accelerating once again light industry and agriculture’. This is in contrast to previous years, which focused on military strength, revolution and socialism.

Second, the type of official visits and inspections carried out by Kim Jong-il seems to have shifted. He made 63 official visits in the first six months of 2011 and of these only 14 were military-related visits, the lowest number ever recorded. By contrast, 28 visits were economic-related.

Third, North Korea has recently shown greater seriousness in developing two Special Economic Zones on the Chinese border. Ground was recently broken in Hwanggumpyong, near Dandong, while Rason is seeing more infrastructure upgrades than at any time in its 20-year history.

Fourth, and perhaps most significantly, senior North Korean politicians are increasingly judged by their ability to bring in FDI. North Korean leaders associated with the National Defence Commission, the highest level policy body, have been meeting with visiting foreign investors. In 2009, the Taepung International Investment Group was re-purposed along the lines of a holding-company model as a vehicle for attracting FDI.

In July of the same year, the Joint Venture and Investment Commission (JVIC) was established. Instead of a holding-company model, JVIC is a government institution modelled as a ‘one-stop shop’ for investors — that is, JVIC is meant to ‘seek out investments and assist investors in setting up operations in North Korea’. While multiple institutions claiming to hold such authority have always existed in North Korea, many of these institutions have been merged into JVIC and long-time investors have been directed to liaise with JVIC as their primary government contact.

In August of 2010, we received credible reports that foreign investors were approached to help set up a group similar to Taepung that would be backed by another member of the National Defence Commission. Given this proposed initiative’s similarities to Taepung, the prior establishment of JVIC and that all three groups do not appear to communicate with each other, we surmise that these various groups have a competitive relationship with the support of different patrons. Investment officials with whom our colleagues have met confirm that the relationship between the agencies is ‘very competitive’. If this is the case, it is a signal that influential groups in Pyongyang sense that future power bases will require the ability to attract and deploy capital.

So, what accounts for this shift? The shift appears to be the result of interaction between broadening information environments, leadership succession and changing social attitudes. North Koreans have greater access to information from outside the country. Despite having perhaps the strictest system of censorship in the world, technology has changed the information environment significantly since the 1990s. While many analysts focus on the comparison between North and South Korea’s standard of living, interaction with Southerners is still extremely limited. China’s greater volume of exchange with North Korea and its rapid growth, despite relatively similar starting systems, are what has accentuated the lagged pace of economic development in North Korea.

Further impetus for change comes from the relative erosion of ideology, combined with a next generation of leaders that will be far removed from the original revolutionary movement. If Kim Jong-un assumes the central role in a new leadership regime, something more concrete than family ties will have to be demonstrated to inspire broad popular support. By all accounts, Kim Jong-il does not inspire the same respect his father did and there is a major concern that his son will inspire even less.

Finally, the era of ‘Songun’ politics coincided with a period of great hardship for North Koreans. However, putting the military first did, the government can argue, result in a successful nuclear program, effectively taking care of half of the stated goal of becoming ‘a strong and prosperous nation’. Now that the perceived external threat is held at bay by a nuclear deterrent, the citizens of North Korea can rightfully expect the government to devote more resources to achieving ‘the prosperous’ part. Continued calls to endure hardship cannot go on forever. This is recognised by policy makers as well as less-politically engaged North Koreans.

Still, there are question marks over both the ability and sustained willingness to push through changes that will raise living standards.

There is a tendency to read any new emphasis on economic performance as North Korea having a new interest in ‘economic reforms’ or ‘marketisation’. This fails to take into account what specific mix of policy measures North Korean policy makers consider effective. Over the short term, for example, policy makers might continue implementing ineffective economic policies despite a new emphasis on economic performance if they lack an understanding of what works. On one end of the spectrum are government officials whose idea of assuaging investors is to offer nothing more than promises that they are ‘powerful’ and will thus resolve any conflicts the would-be investor faces. However, there certainly are policy makers who are well-informed about why investors are hesitant to enter the North Korean market and seek to overcome these issues in pragmatic ways.

Talented investment officers will also have to overcome a number of external constraints, including sanctions, fluctuating political conditions and a legacy of mistrust by foreign investors. North Korea’s investment history is peppered with defaults and false promises. Whether there exists the will and ability to make necessary changes in policy in the face of competing interests remains to be seen.

Geoffrey See is a Managing Director and Andray Abrahamian is an Executive Director at Choson Exchange. Choson Exchange is a non-profit focused on economic policy, business and legal training for North Koreans. They most recently completed an economic and investment policy training program overseas for North Koreans.

An earlier version of this article first appeared here in the Harvard International Review.

1. North Korea-China special economic zones
2. South Korea: Disappointed expectations but hopes head north
3. Obama’s North Korea policy and the June 15 South-North Joint Declaration

President Lee Myung-bak’s October trip to the US represents an ostensible high point in the US-ROK alliance.

But there are cracks in the relationship, primarily on the American side.

Despite Lee’s speech before Congress, Americans know little about Korea compared to allies like Canada, Britain, or Israel. Americans usually see Korea’s geopolitics through the prism of North Korea and the ‘axis of evil’. The Tea Party movement especially takes a rigidly ideological and neoconservative view of South Korea as the ‘frontline of freedom,’ yet Sarah Palin notoriously needed to be taught why there are two Koreas. But ideological commitment is not in-depth public knowledge or cultural interest.

This ideologically-driven connection with the US should be of concern to South Koreans. The US is flirting with national insolvency, and this will dramatically impact all its alliances — especially with the very exposed ROK. The US is now borrowing 40 cents of every dollar it spends; the deficit is US$1.5 trillion (160 per cent of South Korea’s entire GDP); the debt is almost US$10 trillion; the IMF predicts America’s debt-to-GDP ratio will exceed 100 per cent by the end of the decade; and integrated US national security spending tops US$1.2 trillion, 25 per cent of the budget and 7 per cent of GDP. These are mind-boggling figures that all but mandate some manner of US retrenchment from its current global footprint.

Unless the US citizenry is willing to accept a noticeably lower standard of living, including major cuts in social welfare programs, then the burden of fixing America’s finances will include defence cuts. ‘Empire’ is very expensive, and soon American voters will be forced to choose between it and the welfare state — between guns and butter. Ron Paul is already voicing this issue in the Republican primary.

The recent Libyan conflict should be instructive of war in the age of austerity and budget constraints. US public opinion was hesitant for yet another conflict, so Obama provided only air support and deferred leadership to NATO. And consider what Robert Gates said before he left office: ‘any future defence secretary who recommends sending a big US army into Asia or Africa again should have his head examined’.

So America is unlikely to fight large land wars for awhile. This is especially pertinent to the Koreans, as North Korea is a far more capable opponent than Gaddafi or the Taliban. If the US were to suffer from another financial crisis akin to 2008, it is quite possible that Washington could only provide air power in the event of a war on the Korean Peninsula. Or, what if China, which funds so much of US borrowing now, suddenly pulls the plug as US involvement in a war on its border deepens?

Finally, a hard truth for South Koreans is that they need the US a lot more than the US needs them — which means that the resolutely un-discussed relative decline of US power is the real story behind Lee’s visit to Washington.

Unlike the US, South Korea exists within a particularly difficult geopolitical context. It is surrounded by large neighbours who have occasionally bullied it, and bordered by an unpredictable rogue tyranny. Given that weak, encircled countries as diverse as Poland, Paraguay, and Zaire have seen themselves plundered and divided in the past, the US alliance is a good way for South Korea to get some leverage in its tight space. But this will fade, not just as American power recedes from Asia under massive budgetary pressure, but because Seoul is no longer central to Washington’s security. The Cold War is over. Today, a North Korean defeat of South Korea, while a local tragedy, would not dramatically impact American security. This ‘asymmetric dependence’ is the reason behind Lee’s visit, Korea’s willingness to go to Iraq, and Koreans’ astonishing interest in English and the US. While the American public does in fact obsess over Israeli security, small as it is (and far more US congressmen have visited Israel than South Korea), the ROK alliance has weaker, more ideological and less tribal roots in US public  opinion.

None of this means the alliance will break soon, but the strong elite consensus for its existence should not be mistaken for a deep American popular commitment (p 6 here). America’s political and financial dysfunction will soon force a painful reprioritisation of US foreign policy. Commitments like Germany, Iraq, Afghanistan, South Korea and others will be scrutinised, and no amount of Korean-American friendship will undo a US$10 trillion debt.

Robert E. Kelly is Assistant Professor of International Relations at the Department of Political Science and Diplomacy, Pusan National University. More of his work can be found at his website, Asian Security Blog.

1. South Korea: Disappointed expectations but hopes head north
2. A Korea-Japan alliance?
3. Korea inter pares? – South Korea on the global stage