Despite the good harvest it reaped in 2005 that bolstered the nation's confidence, North Korea's economic performance is generally poor. Food shortages have persisted over the years. North Korea discontinued its rationing system but later readopted it, a switch that testifies to the magnitude of the food problem. The financial sanctions imposed by the United States have dealt another deadly blow to the North Korean economy.

A primary reason for North Korea's drastic change of course, from conducting missile and nuclear weapons tests to agreeing to reopen the six-party talks and taking the initiative to break the impasse, is that it has to overcome the economic predicament by seeking to resolve U.S. financial sanctions. In this sense, North Korea's groundbreaking initiative seems to be a stalling tactic. However, it does have a practical need to seek a strategic change from a historical point of view.

The reasons for North Korea's economic difficulties are varied. First of all, North Korea missed an important opportunity at the end of the Cold War when it lost the economic support of the former socialist bloc. Doubtful about China's reform and opening-up policy, it focused its attention on the peaceful reunification of the Korean Peninsula. However, the nuclear issue raised by the United States not only retarded the progress of Pyongyang-Seoul contacts, but also forced Pyongyang to put security before economic development.

The signing of the Framework Agreement between the United States and North Korea in 1994 seemed to be a new opportunity. However, as the United States was slow in honoring the agreement, North Korea chose to pursue a "military-first" policy that ran counter to the strategies of its neighboring countries after its leadership transition. So, North Korea was plunged into economic difficulties largely because of the historical choice that alienated itself from the international community rather than the natural disasters it suffered in the mid-1990s.

Apart from these domestic factors, Washington's political attitude toward Pyongyang is the most important cause of North Korea's economic stagnation. North Korea demonstrated the will to change its economic status quo once again at the beginning of the new century. Three moves are particularly notable: North Korean leader Kim Jong Il paid an unofficial visit to China to study its economic achievements; North Korea actively sought diplomatic relations with European countries, highlighting its eagerness to meet the world; and some reforms were introduced. However, with the U.S. economic sanctions in place, North Korea could hardly translate its diplomatic initiatives into economic benefits.

The outbreak of the nuclear crisis in 2002 made it almost impossible for North Korea to adjust its development strategy. Since then, the nuclear issue has been a prime concern for North Korea's survival. The resolution of the nuclear issue will therefore offer a major opportunity for the country's future development, as it may bring about a positive change in its "living environment." In this sense, trading its nuclear programs for the normalization of Pyongyang-Washington relations may be a feasible strategic choice of North Korea. However, the realization of the strategic transition also depends on whether the United States is willing to give North Korea a chance.

Washington's concerns

The breakthrough made in the most recent round of the six-party talks is partly attributed to the policy adjustments of the United States. The most obvious one is that it held bilateral talks with North Korea to discuss the financial sanctions, indicating that it would lift its freeze on North Korea's money in a bank in Macao. Some may argue that this step was taken merely to coax North Korea back to the negotiating table. But the pledge the United States made in the joint document to open negotiations on establishing full diplomatic relations surely signals a strategic change.