Special

Article 4

Korean Peninsula – Geopolitical Risks
from Entrenchment of New Cold War
By Chanwoo Lee

Author Chanwoo Lee

Introduction
If we were to consider the two major events that have occurred on a
global scale since 2020, I would propose the spread of the coronavirus(Covid-19) pandemic and the decline of liberalism in international
relations. The coronavirus first appeared in the Chinese city of Wuhan,
and in no time at all had spread around the world. This had a negative
impact on globalization. In addition, with rising geopolitical risks suchas the continuing US-China confrontation and the Ukraine crisis, there
has been an increase in unilateralism and nationalism as well asprotectionism, which had been seen in the "America First” policy of the
Donald Trump administration (2017-2020) in the United States.
Liberalism, emphasizing free trade and economic cooperation on a
global basis, seems to have been on the decline. In particular, the
US-China relationship, which since the 1990s had symbolized thebenefits of the post-Cold War period of globalization and free trade, has
now become one of competition and conflict. This perceived decline ofliberalism and rise of nationalism is reminiscent of the internationalsituation in the early 20th century. We do not need to mention what
happened then, but at the same time the question of whether a return
to liberalism would be a good thing is not an easy one.
Much of the focus in the world today is on a nation’s own security.
Countries are searching more actively for how to ensure their own
economic and military security, but we can also see a subtrend ofpriority being given to “alliances” over “one’s own country”. The IndoPacific strategy being promoted by Japan and the US is one example,
and things like China’s strengthening of the Shanghai Cooperation
Organisation (SCO) alliance in Eurasia is another. Geopolitically, this isgiving rise to blocs of alliances, and confrontation among those blocs
is intensifying. We may not be able to avoid the increasing possibilityof this new “cold war” (post-post-Cold War) framework becoming
entrenched.
In the US, the period since the Sept. 11, 2001, terrorist attacks is
being called the “post-post-Cold War age”, but the Korean Peninsula inEast Asia has not even experienced a post-Cold War age with a certain
result. From 2000 to 2018 there were multiple summit meetings
between the leaders of North Korea and South Korea, and of the US
and North Korea, and there were times at which a post-Cold War age
appeared imminent, but security guarantee issues could not be
resolved and conflict intensified, bringing the region directly into a newcold war age.
In this article, I will examine the geopolitical risks presented by a
new cold war framework becoming entrenched on the Korean
34 Japan SPOTLIGHT • September / October 2022

Peninsula, along with the relationship between the North and Southand the situation in North Korea as background.

Entrenchment of New Cold War Framework on the
Korean Peninsula & Increasing Geopolitical Risks
North Korea has pursued two strategies in terms of policy
responses to the arrival of an international post-Cold War age from theearly 1990s. Examples of the first, in response to the paradigm shift,included joining the United Nations (simultaneously with South Korea)
and the conclusion of a basic agreement with South Korea (theAgreement on Reconciliation, Non-Aggression, and Exchanges andCooperation between South and North Korea), both in 1991, thecommencement (from 1991) of negotiations to normalize diplomatic
relations with South Korea, and participation in the United Nations
Development Programme-led Tumen River Area Development
Programme (TRADP; now the Greater Tumen Initiative (GTI)).
The second strategy has been to secure the regime by developing
nuclear weapons. North Korea may have thought that it would bepossible to pursue both strategies, but because of the latter, the former
failed to produce results. This is because the two amounted to a tradeoff. Except for the country’s admission to the UN, the first ended in
failure, while the development of nuclear weapons proceeded on its
own. As the post-Cold War age emerged, the international community
would not tolerate a nuclear-armed North Korea. China and Russia,
which supported North Korea, in principle objected to its nuclear
development. This put North Korea in a different position than theother nuclear-armed countries of India and Pakistan.
At the same time, the international community pursued two
approaches to the problem of North Korea. The first was todenuclearize the Korean Peninsula through dialogue and negotiation,
which produced things like the US-North Korea Geneva Agreed
Framework in 1994 and the “Six-Party Talks” comprising Japan, theUS, South Korea, China, Russia, and North Korea, from 2003 to 2009.
The second was to pressure the North to abandon nuclear weapons
through deterrence. Examples include Japan, the US, and South Korea
each implementing their own sanctions against North Korea, and the
UN Security Council passing nine resolutions from 2006 to 2017
introducing economic sanctions on North Korea in response to its
nuclear tests and missile test launches. Nevertheless, both approaches
failed to prevent North Korea from possessing nuclear weapons andballistic missiles.
Declaring that the possession of nuclear weapons was a “legitimate
https://www.jef.or.jp/journal/

right to self-defense of a sovereign state”, North Korea asserted thatits nuclear development was in response to the hostile policies of the
US (according to the overseas propaganda outlet DPRK Today on Feb.
21, 2016). The country is currently focusing on a strategy of ensuring
its security by attempting to establish itself as a nuclear-armed state
while enduring economic hardships. At the 8th Congress of theWorkers’ Party of Korea (WPK), held in January 2021, General
Secretary Kim Jong Un spoke of developing “nuclear technology to ahigher level and make nuclear weapons smaller and lighter for moretactical uses”, explicitly stating that the country was working on
developing tactical nuclear weapons. This led to North Korea’s test
launches on April 16, 2022, of two short-range ballistic missiles(which North Korea called a “new-type tactical guided weapon”,
estimated by South Korea’s Ministry of National Defense to have had arange of roughly 110 kilometers, maximum altitude of roughly 25 km,
and maximum speed of Mach 4). North Korea praised the launch as
being “of great significance in drastically improving the firepower ofthe frontline long-range artillery units and enhancing the efficiency inthe operation of tactical nukes of the DPRK and diversification of theirfirepower missions” (Korean Central News Agency, April 17, 2022). In
an April 5, 2022, interview (reported by the Korean Central News
Agency), Kim’s sister and deputy general secretary of the WPK Kim Yo
Jung warned South Korea, “If South Korea, for any reason – whether
or not it is blinded by misjudgment – opts for such military action as a‘preemptive strike’, we will take the initiative in the early stages of war,
incinerate the will of the other side to wage war, prevent a prolonged
war, and mobilize our nuclear weaponry to preserve our own military
power.”
This has forced the international environment surrounding North
Korea to deal with the fact that North Korea does in fact possess
nuclear weapons and ballistic missiles. The strong likelihood that
North Korea, despite not being allowed to possess nuclear weapons by
the international community, has already deployed them, means that a
new cold war framework has become entrenched on the Korean
Peninsula. This new paradigm raises the geopolitical risk of the Korean
Peninsula.

Growing Risk from North Korea & North Korea’s
Risk Perception
North Korea’s risk perception can be analyzed from two
perspectives: the country’s siege mentality and vulnerability. First is thesiege mentality, which has continued based on an obsession with
American hostility, putting the two countries “technically in a state ofwar”. Since 2019, however, the international situation has changed,with the US being in confrontation with China and Russia, and China
and Russia deepening their strategic cooperation, creating a moreadvantageous environment for North Korea than had previously been
the case. By returning to the order of the Russia-China Eurasiancontinental bloc, North Korea has been able to use the new cold war
paradigm to emerge from being isolated and alone. At the Fifth Plenary
Meeting of the Seventh Central Committee of the WPK, convened inlate December 2019, Kim described the country’s external outlook as a

strategy of “making a breakthrough head-on” because he had
determined that North Korea would be able to receive assistance from
China and Russia. Accordingly, North Korea’s external aggression canbe seen as part of its international cooperation with China and Russia,
rather than external aggression in response to the threat posed by its
isolation.
The second perspective – vulnerability – refers to the risks from thecountry’s economic hardships and a political dictatorship, and after
decreasing until 2019, the risk has been rising since 2020. Until 2019,the country pursued a policy of partial marketization and had
maintained political stability, and with the number of defectors also
declining the risk can be seen as having decreased to some extent.
From 2020, however, North Korea’s vulnerability resurfaced on theeconomic front. Looking at the country’s trade, in addition to the fullfledged economic sanctions imposed by the Security Council in 2017,
the country closed its borders from 2020 (in response to the spread of
Covid-19), and trade dropped significantly, to a level of US$200-$300
million compared with a $6 billion level prior to the economic
sanctions. North Korea’s trade with China, which accounts for almost
all of its trade, fell to $300 million in 2021 from $5.8 billion in 2016
(Chart 1).
According to China’s and Russia’s official statistics, the Security
Council’s economic sanctions against North Korea are being observed.
Even considering that China and Russia provide North Korea withindustrial raw materials, energy, and resources through informal trade
to prevent economic instability, since 2018 North Korea’s economic
vulnerability has increased because of supply shortages. North Korea
has also discontinued its partial marketization policies and returned toan emphasis on a government-directed planned economy. This has
suppressed market activity and trade has also become centrally
managed by the government. The disruption from social
dissatisfaction has been met with censorship of thought on the people,
meaning that although the social atmosphere is not in disarray, it
appears to be depressed.
Looking at the above, North Korea’s siege mentality is diminishingsomewhat based on “cooperation within the bloc” and turning to abreakthrough head-on, and this combined with its increasing
economic vulnerability is leading to increased geopolitical risk. Morethan the risk of a sudden change in the situation as a result of
economic turmoil, the situation can currently be seen as one of a highrisk of a foreign conflict as a result of North Korea’s hard-line policy.
The geopolitical risk posed by North Korea is summarized in Chart 2.

Unique Features of the Korean Peninsula
Increasing North Korea Risk
North-South relations
With the conservative administration of Yoon Suk Yeol having taken
office in South Korea in May 2022, the likelihood that South Korea willprioritize the North’s denuclearization and strengthen the cooperative
framework among Japan, the US, and South Korea has increased. Thismeans South Korea will take a path of international cooperation as it
pursues its policy for the Korean Peninsula going forward. For five
Japan SPOTLIGHT • September / October 2022

35

CHART 1

China-North Korea trade (China customs basis)

(Unit: US$100 million)

70.00
60.00
50.00
40.00
Total trade

30.00

Chinese exports
20.00

Chinese imports
Trade balance

10.00
0.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: Global Trade Atlas (GTA)
CHART 2internationally it was difficult to achieve a
consensus regarding the denuclearization
process for the Korean Peninsula. North
China & Russia: Compensating for North Korea’s vulnerability, in response to formation of
Korea cut off diplomatic negotiations toblocs in international relations
Common external aggressiveness resulting from hardline response
improve relations with South Korea and theUS, and the North-South relationship
Engagement + Support
became one of confrontation.
US sanctions
Declining production,
UN Security Council
Based on the lessons learned from the
supply shortages
sanctionsNorth Korea
Managing
outcomeof the Moon administration’srisk ofCooperation
Strengthening of
regimewithin bloc
policy, the new Yoon administration can be
BreakthroughEconomic
Regimestate control
collapsehead-onvulnerability
protection
expected to formulate policies that shift(thought control)
External
aggressivenesstoward security guarantees in its relations
with the North. This is outlined in Chart 3,
which shows the Yoon administration’s
Increasing confrontation
Sanctions + Dialogue => priority on sanctions
five-year policy plan. It shows that withJapan, US, South Korea: Sanctions against North Korea’s external aggressivenessincreased geopolitical risk on the Korean(nuclear and missile)
Peninsula and blocs forming in the global
Priority on denuclearization of North Korea
economy, the Yoon administration is clearly
emphasizing “liberal democratic” values
Source: Compiled by the author
and economic security. It goes without
years, the previous Moon Jae-In administration worked to improve thesaying that this is a policy that seeks to prioritize North Korea’s
country’s relations with the North primarily through a “Korean
denuclearization and strengthen international cooperation.
Peninsula peace process” led by South Korea. The Moon
North Korea’s response could turn out to be an extension of its
administration tried to restart the joint North-South projects in thepolicy toward the previous conservative administration. North Korea
Kaesong Industrial Region (in which 124 South Korean companies
might begin to intensify its offensive confrontation with South Korea.
invested in the North Korean city of Kaesong) and the Mount Kumgang
North Korea expressed its clearly hostile position toward the Yoon
Tourist Region (a tourism project that allowed South Koreans to visit
administration on July 27, 2022, and it is highly likely that
Mount Kumgang in North Korea), both of which had been abandoned
confrontation between the North and South will intensify and thatby the previous conservative administration, but these efforts failed. In
geopolitical risk on the Korean Peninsula will increase.
2021, the Moon administration proposed an “end-of-war declaration
North Korean economy
followed by denuclearization” but was unsuccessful. The fact that
North Korea has been in a state of highest alert since February 2020,
preparations were not in place in South Korea and internationally forclosing its borders as a “maximum emergency epidemic control
reconciliation with North Korea invited a conservative backlash, andConceptual diagram of North Korean geopolitical risk

36 Japan SPOTLIGHT • September / October 2022

Congress of the Workers’ Party of Korea, held inJanuary 2021, called the policy “the path to constructa socialist economy through self-reliance”.
Nevertheless, North Korea does not have sufficienteconomic capacity to be self-sufficient. Even if it relies
SectorIssue
Details
on domestic production for things like coal, steel, and• Denuclearization of• Stronger international cooperation
Normalization
North Korea• Creation of channel for 3-party securityof North-Southcement, it has to import oil, industrial resources, anddialogue among US, South Korea, North
relations, peacefulparts and materials, and imports of things in short
Korea
Korean Peninsula
supply like fertilizer and food are also lacking. Even
• Normalization North- • Economic support and promotion of joint
North-South economic development plan inSouth relations
with North Korea giving priority to domestic
line with progress in denuclearization• Peacefulproduction, it can be seen as relying on unofficial trade• Mutual openness, communication, andreunification based
exchangeon people’s consent
with China for items that it still needs to import.
• Resolution of North- • Unconditional humanitarian assistanceIn the agricultural sector, however, the UN Food and• Resolution of POW, abductee, andSouth humanitarian
Agriculture
Organization (FAO) estimates that grain
separated family issues
issues• Response to North Korea’s human rights
production in 2020 totaled 4.89 million tons (milledissuesgrain basis; 5.56 million tons on a gross, pre-milling• Strengthening of comprehensive US-South• Diplomacy in East
Global prosperity
basis), meaning that the average level since the 2010s
Korea strategic alliance
Asia based onwith liberal• Achievement of mutually respectful Chinaliberal-democratic
democratic values
was maintained (Chart 4). The estimate from SouthSouth Korea relationshipvalues and common
Korea’s Rural Development Administration, a• Creation of Japan-South Korea relationshipinterests
for future cooperation in line with common
government agency, is lower than the FAO’s but doesinterests and values
not point to a worsening in the food situation, with an• Construction of Russia-South Korea
estimated increase of roughly 300,000 tons in 2021
relationship based on international norms
compared with 2020.
• Network for regional • Stronger cooperation with ASEAN andcooperation
expansion into Indo-Pacific region
In terms of North Korea’s food situation, analysis• Economic security• Creation of government response systemshows that rice prices have been relatively low for
diplomacy
for new security threats
more than three years, since 2019 (Chart 5). Since theSource:‘Yoon Administration’s 110 Major National Issues,’ Office of the 20th President (https://www.president.
beginning of 2022, however, droughts and othergo.kr/ko/task_new.php), May 2022; viewed on June 26, 2022
factors have led to a rise in food prices, and prices for
system” to prevent an influx of the coronavirus. Covid-19 has been
general consumer goods appear to be rising as well. The country may
spreading, however; since the end of April 2022 the number of “people
be at a crossroads in terms of whether or not its economic
with fever” (presumed to have Covid-19) has been as high as 200,000
vulnerability will materialize.
per day, and although this had fallen to 11 by July 27 the total has
Responding to North Korea Risks
reached approximately 4.77 million (19% of the country’s populationof roughly 25 million, according to the July 28, 2022, Rodong
Even if North Korea’s economic vulnerability were to materialize, theSinmun). To combat the 2022 Covid-19 pandemic, which Kim has
likelihood of being able to contain it is greater than the likelihood of it
called the “greatest upheaval since the founding of the country”,
leading to a collapse of the regime. The regime’s survival since thefreight train operations between China and North Korea that had
1990s has proven this. In terms of foreign policy, therefore, it waspartially resumed in January were halted and Chinese-style regional
more difficult for North Korea to pursue an aggressive hard-line
lockdowns were implemented, severely curtailing people’s economic
foreign policy because of the post-Cold War period’s cooperation
activity. North Korea proclaimed victory in the anti-Covid war at the
between China and the US and South Korea’s “Northern Policy”
National Meeting of Reviewing Emergency Anti-Epidemic Work on(improved relations and economic cooperation with former socialistAug. 10, 2022.
bloc countries). During that time, North Korea’s hard-line foreign
With its borders closed for roughly three years in addition to thepolicy that resulted from its siege mentality could be seen as ainternational economic sanctions in place since 2017, North Korea’s
defensive policy to preserve the regime’s stability. This is evidenced bysupplies of imported energy, raw materials, and machinery andthe country’s nuclear development and diplomatic negotiations.
equipment have fallen significantly. In response, the country appears
North Korea’s hard-line foreign policy in 2022, however, has become
to be reemphasizing the traditional policy of “self-reliance”, which has
more aggressively hard because of the entrenchment of the new cold
been in place since the country’s founding and involves building the
war framework internationally and China’s and Russia’s backing of
economy based on internal resources. The Rodong Sinmun declared
North Korea. The large numbers of ballistic missile test launches,
the self-rehabilitation policy to be correct, explaining, “The current
deployment of tactical nuclear weapons, and nuclear tests that havetotal lockdown is a great opportunity to increase our internal strength
been carried out in 2022 are proof of this. In response to North Korea’s
and development to the maximum using our own raw materials andintentional change in position to a “high-risk Korean Peninsula”,
resources” (October 17, 2020). The revised bylaws passed at the 8th
CHART 3

Korean Peninsula-related portion of Yoon
administration’s ‘National Policy
Implementation Plan’ for South Korea

Japan SPOTLIGHT • September / October 2022

37

CHART 4

North Korea’s grain production

(unit: 10,000 tons)

Grain production

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

As announced by North Korea(pre-milling)

543

569

565

514

589

545

495

665

525

―

As announced by FAO(milled)

484.6

497.6

508.2

480.1

515.5

472.2

417.0

542.6

488.9

―

South Korea’s Rural
Development Administration
estimate (milled)

467.6

480.6

480.2

451.2

482.3

470.1

455.8

464.0

439.8

469.2

Sources: OCHA,“NEEDS AND PRIORITIES 2020” 2020.4.22., “DPRK Voluntary National Review”2021.7
FAO, Food Supply and Demand Outlook in 2020/21; North Korea Statistics Portal, KOSIS KOrean Statistical Information Service (https://kosis.kr/bukhan/statisticsList/statistics)
CHART 5

Average price of rice in North Korea

(unit: NK won / kilogram)

Rice price

6,000
5,000
4,000
3,000
2,000
1,000
0
2019
1/8

2019
3/8

2019
5/8

2019
7/8

2019
9/8

2019
11/8

2020
1/8

2020
3/8

2020
5/8

2020
7/8

2020
9/8

2020
11/8

2021
1/8

2021
3/8

2021
5/8

2021
7/8

2021
9/8

2021
11/8

2022
1/8

2022
3/8

2022
5/8

Source: ‘North Korea Market Trends’, Daily NK website (https://www.dailynk.com), viewed on July 8, 2022

policies to ensure continuous peace and stability on the Korean
Peninsula become even more urgent. Not addressing the issue until acrisis situation emerges on the Korean Peninsula will cause significant
harm to the East Asia region. The best policy for addressing this risk is
to develop preventive measures that will defuse the risk.
The main players for the achievement of these measures are thecountries that have stakes in the Korean Peninsula, with the US, China,
and Japan having particularly large roles to play. The US needs tocontinue to negotiate with China from a neutral standpoint with regard
to the North Korea problem. Japan must maintain and further develop
the two three-country frameworks – Japan, China and South Korea,
and Japan, the US and South Korea – and make them recognize therisk of foreign aggression posed by North Korea. In addition, Japanneeds to restart bilateral negotiations with North Korea and make it
consider Japan’s counterproposal for resolving problems throughdialogue. The parties need to rein in the risk posed by North Korea bydeveloping a stricter policy of “dialogue and pressure”.

Conclusion
The geopolitical risk posed by North Korea is greater than it was
three or four years ago. If the risk is not eliminated through the
38 Japan SPOTLIGHT • September / October 2022

“denuclearization of the Korean Peninsula”, it will continue to reappear.
The international community has tried to achieve this goal for the past
30 years, but has been unable to prevent North Korea from possessing
nuclear weapons. Despite the use of various types of “carrots andsticks”, North Korea’s capacity for external aggression has steadily
increased. Japan’s diplomatic strength is now being called into
question more than ever. A framework for sharing information andjoint responses needs to be created to strengthen the framework forinternational cooperation in response to North Korea. As an approachthat would make it possible to engage in a barter transaction that
denuclearizes North Korea while preserving the regime, it would bedesirable for Japan to restart negotiations with North Korea as a set ofissues that includes the normalization of ties, the resolution of theabduction issue and other pending issues with Japan, anddenuclearization. The risk posed by North Korea is not just an issue ofJapan’s security; the time has come to reconsider an approachthrough which the resolution of these issues would spur Japan’s
peaceful development.
Chanwoo Lee is an associate professor at the department of contemporary
business at Teikyo University, Junior College. He researches economic
cooperation in the Northeast Asian region, including the Korean Peninsula
issue.