Kim Jong-un’s mid-July shake-up of his military top brass occasioned a spate of media speculation about a transformation in North Korea. Yet Kim’s abrupt move only showed he was firmly enough in charge to fire the general whom his father had promoted to chief of staff. From what little we know about North Korea, it did not portend dramatic economic reform.

Potentially more significant, a widely anticipated third nuclear test by the North has not taken place. Preparations for such a test were under way when Kim’s father died. Kim’s restraint may signal that he wants to reengage with the United States, Japan and South Korea. That in turn could foster the more tranquil external environment he needs to turn his full attention to improving his economy.

Calm Borders

Kim’s speeches have hinted at economic change afoot, but those hints are inconclusive. If he implements plans to experiment with expanded private farming and allows farmers to keep more of the proceeds, it could ease chronic food shortages in the North. And tinkering with greater autonomy for industrial managers could improve resource allocation in notoriously inefficient sectors.

Yet no substantial change of course in North Korea is likely without a more conducive international climate, which would allow Kim to reallocate industrial production from military to civilian use, open the way to investment from outside and reduce his growing dependence on China.

North Korea has gone down this road before, Kim knows. When his father embarked on economic reform in 2002, he reached out to South Korea and Japan, only to be stymied by U.S. efforts to impede the allies’ engagement. That history makes Kim unlikely to risk reform without clear evidence of rapprochement with all three countries. If so, he will have to curb his nuclear and missile programs.

Such restraint seemed in the offing at bilateral talks in Beijing on February 29 when Pyongyang committed itself, among other things, to a moratorium on nuclear- and longer-range missile tests and a suspension of uranium enrichment at Yongbyon under international monitoring. Washington, in turn, committed itself to improving bilateral relations as well as providing food aid, which the North asked for as a “confidence-building measure.”

Left unresolved was whether the moratorium on missile tests precluded satellite launches. That matters because the first two stages of the rocket North Korea uses to put a satellite into orbit are indistinguishable from a longer-range missile to deliver a nuclear warhead. The North’s negotiators insisted it had a sovereign right to launch satellites despite a U.N. Security Council ban. U.S. negotiators responded that a satellite launch would be a deal breaker.

A Tougher Negotiating Stance

The North’s failed attempt to launch a satellite so soon after February 29 was a break with the past. Pyongyang had long followed a tit-for-tat strategy—cooperate when Washington was cooperating and retaliate when Washington reneged, in an effort to end enmity—what Pyongyang calls U.S. “hostile policy.” Given the lack of trust between the two countries, Pyongyang also had insisted on reciprocal steps by Washington—action for action—to build confidence.

Pyongyang had no reason to conclude that Washington would not keep its commitments this time. Instead, it was demanding that Washington first clear a higher hurdle: tolerate its satellite launch in order to curb its nuclear programs.

On August 31, Pyongyang made its tougher negotiating stance explicit, demanding that the United States move first to reassure it: “The 20 year-long history of the talks between the DPRK and the U.S. has shown that even the principle of simultaneous action steps is not workable unless the hostile concept of the U.S. towards the DPRK is removed.”

The failed satellite launch may have revealed little about the new leader’s intentions, however. Both those actions were set in motion by his father, North Korean officials say. They insist that the “new generation” in power wants improved relations with Washington.

There is some evidence for their contention. The February 29 commitments were originally to have been formalized at a bilateral meeting in December, the week that Kim’s father died. Preparations for both the rocket launch and a nuclear test were both under way by then. In announcing the test launch, moreover, North Korea’s media referred repeatedly to his father, not him.

Repeated references to Kim Jong-il’s military-first legacy, however, seemed to suggest the North would conduct a nuclear test as well, purportedly to retaliate for new sanctions imposed after the satellite launch.

Why the Nuclear Test Matters

That dog has not barked. According to a DPRK Foreign Ministry spokesman’s statement on May 22, Pyongyang told Washington it would not conduct a nuclear test:

Several weeks ago, we informed the U.S. side of the fact that we are restraining ourselves in real actions though we are no longer bound to the February 29 DPRK-U.S. agreement, taking the concerns voiced by the U.S. into consideration for the purpose of ensuring the peace and stability of the Korean Peninsula necessary for focusing every effort on the peaceful development. From the beginning, we did not envisage such a military measure as a nuclear test as we planned to launch a scientific and technical satellite for peaceful purposes.

Nuclear restraint by Kim would have profound military and political significance. Militarily, a successful test could demonstrate a new thermonuclear device that North Korea officials say it has, one capable of being delivered by missile. That could alter the regional balance of power to the detriment of everyone’s security.

Politically, the test would cross the Rubicon in terms of relations with the outside, with major implications for the North’s economic policy. Pyongyang has been setting up a strategic alternative to rapprochement with Washington. The first sign of this change in strategy came in a widely publicized trip by Kim Jong-il to Russia last year, when the elder Kim opened the way to playing off Russia against China, much as his father did during the Cold War.

At the same time, Pyongyang was counting on Seoul to resume economic engagement, no matter who is elected president there this December. Seoul has learned the hard way that disengagement failed to check mounting tensions on the Korean Peninsula. Economic isolation and sanctions also have failed to prevent North Korea’s arming or curtail its expanding trade. Engagement is the only way to foster change inside North Korea.

Probing for Nuclear Restraint

Nuclear restraint, by contrast, would suggest that North Korea still wants to improve relations with the United States, Japan and South Korea and is prepared to restrain its nuclear and missile programs in return.

Washington has hinted it would reciprocate. On May 22, the same day as the DPRK Foreign Ministry spokesman’s statement, U.S. negotiator Glyn Davies told reporters in Beijing, “we would like very much to get back to the provision of nutritional assistance.” Washington wants to confirm that North Korea is “serious about fulfilling their promises, their undertakings, in particular the promises that they made in the September 2005 Joint Statement of the Six-Party Talks.”

Of course, no one should underestimate the political damage done to nuclear diplomacy by North Korea’s satellite launch. Nevertheless, Washington, Tokyo and Seoul have a stake in probing Kim Jong-un’s intentions.

No talks are likely before this year’s elections in the United States and South Korea, but continued North Korean restraint could lead to their resumption, especially after Seoul revives engagement.

At that point the aim would be, first, for the North to implement its commitment to freeze its nuclear and missile programs. If denuclearization is to move beyond temporary suspension to permanent dismantlement, reassuring Pyongyang will be essential. That will take more far-reaching reciprocal steps, including a peace process and steps toward full political and economic normalization.

As of now, however, the North is continuing to enrich uranium, and it can restart its plutonium production at any time. It is constructing a new light-water reactor to generate power, which (like all power plants) also will create plutonium as a by-product of fission. It has yet to test two longer-range missiles it has shown in parades. It is one thing for the North to have a handful of nuclear devices best delivered by container ship and another for it to have dozens deliverable by missile. Renewed negotiations are essential if those developments are to be forestalled.

Leon V. Sigal is director of the Northeast Asia Cooperative Security Project at the Social Science Research Council in New York and author of Disarming Strangers: Nuclear Diplomacy with North Korea.

Image: Petersnoopy