Rüdiger Frank is a Professor of East Asian Economy and Society at the University of Vienna and the Director of the European Centre for North Korean Studies (ECNK).

This essay draws on Professor Frank’s six earlier publications: North Korea's De-risking Strategy and Its Implications; North Korea's New Unification Policy: Implications and Pitfalls; The January 2025 Session of the North Korean Parliament: An Unusual Oath and the Absence of a Russia-Effect; The New North Korea: How Geopolitical Advantages and Growing Middle Class Prosperity Challenge the Next South Korean President; Navigating Multipolar Anarchy: Strategic Options for Middle Powers in a Fragmenting World; Authoritarian Leisure: North Korea's Wonsan-Kalma Tourism Project in Comparative Perspective.

North Korean leader Kim Jong Un greets the crowd at the 110th birth anniversary of Kim Il Sung in Pyongyang, North Korea | Photo: Guliver Image

The international system is undergoing a profound transformation. The post-Cold War liberal order is giving way to what I have termed multipolar anarchy—a fragmented global landscape marked by the erosion of binding rules, the rise of competing regional orders, and the return of raw power politics. In this environment of structural disruption, one regime has demonstrated unexpected strategic clarity: North Korea.

The Democratic People’s Republic of Korea (DPRK) recognized the opportunities and imperatives of this new configuration earlier than many others. While Western institutions deliberated, Pyongyang acted. Its authoritarian structure enabled policy coherence and speed that more pluralistic systems—bound by electoral cycles and institutional checks—have struggled to replicate. As European leaders debated “strategic autonomy” throughout 2022 and 2023, North Korea had already recalibrated its foreign policy architecture, deepened military cooperation with Russia, and repositioned itself within a reconfigured Eurasian order.

This article examines North Korea’s response across three dimensions: systematic risk reduction through diplomatic retrenchment and border control; abandonment of unification rhetoric in favor of a two-state framework; and an economic trajectory in which external cooperation converges with the rise of a substantial domestic middle class. The Wonsan-Kalma tourism project synthesizes these elements, revealing how Pyongyang leverages domestic consumption while maintaining control. Together, these dimensions form a coherent strategic realignment.

The broader purpose is to contribute to a better understanding of the factors behind the remarkable resilience of a state and system that has operated under enormous economic, political, and military pressure—particularly since the end of the Cold War and its loss of membership in the socialist camp. The DPRK has now existed longer than the Soviet Union and is even one year older than the People’s Republic of China.

The more immediate question we should self-critically ask ourselves, is whether North Korea’s model—although clearly not normatively desirable in the West—reveals striking parallels to the ways in which liberal democracies are adapting to a world where rules-based cooperation can no longer be taken for granted, if it ever truly existed.

 

Rethinking Order: The Logic of Multipolar Anarchy

Multipolar Anarchy refers to an international system marked by weak global rules and institutions, coupled with the existence, expansion, or emergence of relatively stable regional orders upheld by dominant actors or alliances. In essence, it describes a fragmented global landscape in which international anarchy coexists with pockets of regional order—isolated islands of stability in a wider sea of disorder.

This phase should be understood as an intermediate condition on the path toward a more stable global configuration—whether it ultimately takes the form of renewed unipolarity, a bipolar structure reminiscent of the Cold War, or a yet-to-be-defined alternative. While transitional in nature, this condition may well persist for decades. It is therefore useful to briefly examine the three core components of Multipolar Anarchy: global anarchy, regional order, and fragmented governance.

Global anarchy refers to the absence of a universally accepted authority capable of setting and enforcing rules. Multilateral institutions have lost much of their legitimacy and capacity. The WTO was absent when major economies imposed sweeping tariffs; the UN remains ineffective in addressing crises in Ukraine, Gaza, or Iran. The 2024 dissolution of the UN Panel of Experts on North Korea offers another telling example. Interstate outcomes are once again determined more by power politics than by institutional frameworks.

Regional order is emerging as the primary countervailing force. Rulemaking now occurs mainly at the regional level—through the EU, ASEAN, NATO, BRICS, the Shanghai Cooperation Organization, and others. These structures, although differing in scope, effectiveness, and cohesion, underscore the growing importance of regional frameworks.

Fragmented governance is the inevitable result. Multiple rule systems and strategic logics coexist. Regional alignments increasingly shape global developments, yet they fall short of providing overarching integration.

This phase represents an intermediate condition on the path toward a future configuration—whether renewed unipolarity, bipolarity, or an alternative. Though transitional, it may endure for decades. East Asia’s experience in the late nineteenth century demonstrates how systemic disruption generates both peril and opportunity, with outcomes determined by agency and institutional adaptability.

For middle powers, this transformation presents both risks and opportunities. They face greater exposure to coercion yet enjoy increased latitude for autonomous action. Some appear to have grasped this more quickly than others, albeit in troubling ways: according to data from the Uppsala Conflict Data Program (UCDP), the number of armed conflicts worldwide has nearly doubled since 2005.

 

North Korea’s Authoritarian Advantage

In periods of systemic change, the ability to recognize new realities and respond swiftly often proves decisive. North Korea’s authoritarian structure—while exacting severe costs in human rights and economic efficiency—confers distinct advantages in strategic adaptation. Unlike democracies, where policy shifts require public debate and legislative approval, the DPRK’s concentrated decision-making apparatus can pivot rapidly when leadership perceives strategic necessity.

This capacity enables responses to emerging threats and opportunities with a speed that pluralistic systems rarely match. As the international order fragments, such authoritarian agility has allowed the regime to recalibrate its strategies across multiple domains simultaneously. Thanks to this advantage in speed, North Korea functions as a canary in the coal mine. Kim Jong Un’s government appears to have recognized earlier than most that the liberal international order would not simply resume after temporary disruption.

Notably, Kim Jong Un has explicitly incorporated concepts such as “multipolarity” and a “new Cold War” into official discourse, and in a recent speech indicated that his country employs a “security index” to quantify the level of tensions. This strongly recalls China’s concept of “Comprehensive National Power.” By naming these structural changes, the North Korean leadership signals not only its awareness of shifting geopolitical dynamics but also a deliberate and systematic intent to position the country within them. It remains debatable whether all leaders in the West have grasped the full extent of this systemic transformation to the same degree.

 

De-risking Through Diplomatic Retrenchment and Border Control

North Korea’s first strategic response to multipolar disorder has been systematic risk reduction through defensive adaptation, manifested in three policies: tightening control of its border with China, closing diplomatic missions, and imposing severe restrictions on foreign access.

The effectiveness of border control measures is evident in migration statistics. In 2018, according to the Republic of Korea’s Ministry of Unification, 1,137 North Koreans managed to reach South Korea, most of them having left via China. By 2021, that number had plummeted to just 63. In 2024, it recovered to 236 but remains far below pre-pandemic levels. This dramatic reduction illustrates the regime’s growing perception of such movements—often labeled “defections”—as threats to its stability.

Moreover, since 2020, North Korea has closed roughly a quarter of its diplomatic missions, reducing them from 53 to 40. While initially interpreted as pandemic cost-cutting, the pattern suggests strategic rationale. Seizing what Kim Jong Un described as a “golden opportunity,” the DPRK systematically withdrew from locations offering limited benefit but carrying risks of intelligence exposure or sanctions enforcement. The timing is significant: closures accelerated as global institutions weakened and regional alignments became fluid. Rather than maintaining maximum coverage during uncertainty, North Korea chose to consolidate its presence in strategically valuable locations—reflecting confidence that in a fragmented system, depth matters more than breadth.

Parallel to diplomatic consolidation, North Korea sharply restricted Western access. The regime has shown little inclination to restore pre-pandemic levels of Western tourism even as it cautiously reopened to Chinese and Russian visitors, occasionally admitting Western friendship delegations and tourists to Rason in late February and to the Pyongyang International Marathon in mid-April 2025.

In fact, it remains something of a mystery why the closure did not occur earlier. Contrary to its disproportionate coverage in Western media, Western tourism contributed only marginally to North Korea’s economy—an estimated $5 to $10 million annually from roughly 5,000 visitors—while carrying outsized political risks: information leakage, espionage, reputational damage from journalists posing as tourists, and the exposure of otherwise highly isolated citizens to alternative worldviews.

The regime’s calculation appears straight forward: why assume the political and security risks of “hostile” Western tourism when “friendly” and domestic tourism—together with intensified economic cooperation with China and Russia—offers greater economic potential at much lower ideological cost? This shift reflects a refined cost-benefit calculus. Western tourism had been expanded at a time when few other options existed and the perceived damage was limited; now that the dangers are known, alternatives have emerged, and the external environment has changed, access has been sharply curtailed.

 

From Unification to a Two-State Reality

Perhaps the most striking manifestation of North Korea’s strategic adaptation has been its fundamental recalibration of policy toward South Korea—an abandonment of decades-old unification rhetoric in favor of recognizing a de facto two-state reality.

In December 2023, Kim Jong Un declared that North Korea would no longer pursue unification, instead redefining inter-Korean relations as those between “two hostile states.” This marked a watershed moment. Whereas Kim Il Sung and Kim Jong Il had championed unification—albeit on Pyongyang’s terms—as their principal objective, Kim Jong Un effectively renounced that goal. The position was reaffirmed in September 2025. While the leadership likely still harbors ambitions of eventual dominance, this objective is no longer articulated explicitly.

One possible motive: as long as North Korea defined itself through eventual unification, its legitimacy remained contingent upon an unattained objective. By redefining inter-Korean relations, the regime now grounds legitimacy in preserving sovereignty and advancing domestic development—a far more attainable benchmark.

Tangible measures soon followed. The United Front Department was dissolved, and the Arch of Reunification in Pyongyang was demolished. Road and rail links to South Korea were severed. The Kaesong Industrial Zone—once a symbol of inter-Korean economic cooperation since its opening in 2004—has remained closed since its suspension by the South Korean side in 2016. North Korea blew up several of the zone’s administrative buildings and broadcast the footage through state media. The official language underwent a “cleansing” process to eliminate unification-related expressions, including Samch’ŏlli—a synonym for the Korean Peninsula and the model name of a North Korean car.

Whether this shift will ultimately backfire remains uncertain. Abandoning such a powerful narrative—and effectively ceding it to South Korea—recalls East Germany’s trajectory from the 1960s onward, with well-known consequences. Nor is it clear whether North Koreans will truly accept the loss of a deeply emotional goal that had been both the regime’s and the population’s top priority for three generations. For now, there is no evidence of domestic resistance.

South Korea’s apparent unwillingness to seize this opportunity and become the sole custodian of the “one Korean nation” narrative is striking. Recent indications even suggest that the Lee Jae-myung administration may be tilting toward cautious acceptance of two-state rhetoric. It is walking a fine line between pragmatic state-to-state interaction and the constitutional risk of appearing to renounce sovereignty over the entire peninsula.

This shift positions North Korea advantageously within emerging regional dynamics and reduces South Korean and American leverage. As long as Pyongyang maintained unification as official policy, Seoul and Washington could invoke this objective to justify proposals for engagement and confidence-building. By abandoning unification discourse, North Korea has effectively closed this diplomatic avenue. Yet paradoxically, by defining itself as a separate sovereign state, it can now—at least in theory—pursue normal diplomatic and economic relations with South Korea on a state-to-state basis, although this path is not currently being explored. China, Russia, and even Japan, along with other countries traditionally aligned with the West, can now engage without appearing to favor either side in the reunification debate, enabling economic cooperation to proceed on straightforward bilateral terms, free from the complications of unification politics.

 

The Imperative for External Cooperation

While North Korea’s risk-reduction measures and policy recalibration have drawn considerable attention, perhaps the most consequential dimension of its adaptation lies in economic strategy. The North Korean economy has reached a critical juncture: further growth requires external cooperation while nurturing a domestic market capable of sustaining development—the familiar playbook of the East Asian Developmental State.

North Korea has long pursued economic self-reliance under its Juche ideology, which literally means “self-reliance” or “autonomy” and serves as the guiding principle of the Workers’ Party of Korea. Yet economic realities increasingly constrain this approach. The economy has achieved moderate but steady growth in recent years. Using the state budget as a proxy in what remains a centrally planned command economy, annual growth rates over the past two decades have averaged roughly 5.8 percent—equivalent to a threefold increase in GDP.

Sustaining this trajectory requires access to resources, technology, and markets that North Korea cannot provide domestically. The mining industry holds valuable rare earth elements and minerals but lacks the technology and capital for efficient exploitation. Manufacturing and light industries such as textiles need export markets to grow. Agriculture depends on fertilizers and equipment available only through trade—especially crude oil. The energy sector has made progress, yet nuclear power remains a distant prospect despite longstanding interest, exemplified by the unfulfilled 1994 Agreed Framework. Whether Russia will assist in realizing this ambition remains to be seen.

Initially, North Korea responded to changing geopolitical realities with a dramatic reorientation of its trade. The magnitude of this shift becomes clear in historical perspective. In 2001, Japan was North Korea’s largest trading partner. Two decades later, more than 95 percent of the country’s foreign trade is conducted with China alone.

Recognizing the dangers of such dependency early on, the regime made considerable efforts to diversify its trading relationships. Over the past decades, dozens of special economic zones have been designated and investment laws repeatedly revised. Yet geoeconomic isolation under sanctions has prevented any tangible results.

North Korea’s economic adaptation to multipolar anarchy continues. It no longer seeks integration into Western-dominated institutions. Instead, it pursues targeted cooperation with partners in the Sino-Russian sphere, who impose fewer political constraints. Sanctions remain an obstacle, but as global institutions weaken, enforcement becomes increasingly selective—perhaps eventually irrelevant. This makes North Korea’s rhetoric—“We do not care about sanctions”—increasingly credible.

The elevated status of this alignment was on full display during China’s Victory Day celebrations on September 3rd, 2025. Kim Jong Un stood alongside China’s President Xi Jinping and Russian President Vladimir Putin at the reviewing stand—visibly distinguished from other attending heads of state. This symbolic positioning reflected not merely diplomatic courtesy but a substantive reconfiguration of regional power relations. North Korea has secured recognition as a valued partner within an emerging bloc that increasingly operates outside Western-dominated frameworks.

North Korea’s support for Russia’s war against Ukraine fits this logic. At a comparable stage of development, South Korea benefited from aligning with the United States during the Vietnam War, deploying some 300,000 troops and receiving hundreds of millions of dollars in compensation, along with market access and foreign investment. A decade earlier, the Korean War had similarly stimulating effects on Japan’s postwar economy.

While the details of Pyongyang’s arrangement with Moscow remain unknown, a similar exchange likely underpins the relationship. By providing military support, North Korea secures economic and political benefits—energy supplies, technology transfers, and diplomatic backing—that enhance its resilience at a decisive stage of its trajectory. Not least, closer economic cooperation with Russia helps to ease the regime’s heavy and uncomfortable dependency on China.

North Korea may also seek additional sources of development support. South Korea’s 1965 normalization treaty with Japan provided a massive economic boost at a crucial stage. In 2002, Kim Jong Il and Koizumi Junichiro came close to concluding a similar agreement, but U.S. intervention and the reemergence of the nuclear issue caused the process to collapse. However, the world has changed. The abduction issue is gradually fading from Japanese public attention, and a renewed rapprochement could exert subtle pressure on Seoul—potentially welcome in Tokyo. Moreover, Japan now appears to have greater freedom to maneuver vis-à-vis Washington—perhaps even tacit encouragement from U.S. President Donald Trump, who is said to harbor a certain sympathy for Kim Jong Un.

 

The Emergence of a Domestic Middle Class

Parallel to these transformations, North Korea has witnessed the rise of a substantial middle class. Modest by international standards, it nonetheless represents a profound shift in the country’s social and economic structure—one largely overlooked by outside observers and underappreciated in its strategic significance.

Until roughly 30 years ago, North Korea’s middle class consisted almost exclusively of state-affiliated elites: party officials, military officers, and privileged technocrats. This “old” middle class derived its status from political position rather than economic activity. What has emerged since the late 1990s is fundamentally different: a “new” middle class whose wealth and social standing rest on market participation rather than state employment.

Market-oriented adjustments have created new economic space. What began with the easing of regulations on farmers’ markets during the famine years has evolved into an institutionalized market economy operating alongside the state sector. A stratum of merchants, traders, and service providers has accumulated wealth and developed consumption patterns far beyond subsistence. The state’s recent efforts to reassert tighter oversight of these markets—without attempting to dismantle them—underscore their systemic importance.

This new middle class—estimated at roughly 7 million people, concentrated in Pyongyang but increasingly visible in other major cities as well—embodies both opportunity and risk for the regime. Its consumption fuels growth, stimulates domestic demand, provides employment opportunities, and reduces dependence on foreign trade.

Yet advancing beyond subsistence brings rising expectations. Those who earn money also wish to spend it—on better housing, more consumer goods, and improved services. To meet these demands, the state must sustain growth and deliver tangible improvements. This creates an inherent tension: maintaining legitimacy through prosperity and upward social mobility while upholding an ideological commitment to self-reliance.

The regime has responded with a strategic initiative known as Regional Development 20×10—a framework that designates development zones across the country and sets explicit growth targets. The policy signals recognition that economic activity must expand beyond Pyongyang and a handful of special zones. The initiative is somewhat reminiscent of South Korea’s “New Village Movement” (Saemaŭl Undong) of the 1970s. By channeling investment and consumption into provincial centers, the state seeks to distribute both economic opportunity and political loyalty more evenly across the country.

However, the diffusion of wealth poses two additional challenges: creating sufficient outlets for spending and containing inflationary pressures arising from excess demand and structural scarcity in an underdeveloped and isolated economy suffering from what economist János Kornai famously described as a “chronic shortage.”

If managed successfully, North Korea’s limited domestic market strategy could position the country advantageously within a world of multipolar anarchy. By cultivating domestic consumption capacity, it can reduce vulnerability to external pressure, offer a sense of optimism about the future to the more ambitious segments of its population, and lay the foundations for more sustainable growth.

 

Authoritarian Leisure and the Turn to Domestic Tourism

The Wonsan-Kalma Coastal Tourist Zone epitomizes North Korea’s adaptation to multipolar anarchy. It fuses risk management, economic development, and middle-class cultivation into a single coherent project.

Announced in 2015 and officially opened in 2025, the complex on the country’s scenic eastern coast has a capacity of around 20,000 beds—remarkably matching the scale of the Nazi-era project in Prora on Germany’s island of Rügen. Contrary to early assumptions that it would primarily cater to foreign visitors, Wonsan-Kalma appears designed chiefly for domestic tourists, particularly the emerging middle class, while retaining limited capacity for foreign guests—so far mainly from Russia.

The project is a textbook example of authoritarian leisure. It rewards loyalty, reinforces social hierarchy, and provides a tangible expression of modernity—all within politically controlled boundaries. Access to Wonsan-Kalma is regulated, with most visits organized through state-affiliated bodies such as the Korean Federation of Trade Unions—recalling the regimented holiday systems of the Soviet Union and East Germany, and even evoking aspects of Hitler’s “Kraft durch Freude” program.

Wonsan-Kalma also reflects a broader strategy for managing the rise of the middle class. Rather than suppressing consumption, the regime channels it. The resort provides an outlet for aspiration that reinforces, rather than undermines, political control. North Korea integrates consumption directly into state structures, turning leisure into a controlled social safety valve.

At the same time, Wonsan-Kalma is well positioned to attract Chinese tourism once conditions permit. With its new airport and proximity—less than 1,000 kilometers from Beijing—the resort could appeal to visitors seeking novelty within a politically safe setting. The infrastructure thus serves both immediate domestic needs and longer-term regional ambitions.

Ultimately, Wonsan-Kalma encapsulates North Korea’s adaptation to a fragmented international order. The project reduces exposure to Western tourism while deepening ties with allies, stimulates domestic demand to strengthen internal resilience, and reinforces political legitimacy through tangible achievements.

It also signals growing confidence—that North Korea can pursue development despite sanctions, manage a nascent middle class without losing control, and navigate multipolar competition through selective alignments. Whether this confidence is justified remains to be seen, but the strategic logic is clear and coherent.

Lessons on Adaptation

North Korea’s multifaceted response to multipolar anarchy reveals a regime displaying strategic foresight, policy coherence, and adaptive capacity. While the system imposes severe costs on its population, its adjustment to a fragmenting international order warrants serious analytical attention.

The regime has reduced risk through diplomatic consolidation and selective border control; recalibrated inter-Korean policy by abandoning unification rhetoric in favor of a two-state framework; and reached an economic juncture where external cooperation with China and Russia converges with the rise of a domestic middle class that brings both opportunity and constraint. Wonsan-Kalma synthesizes these elements—leveraging domestic consumption for growth and legitimacy while maintaining political control and preparing for selective international engagement.

North Korea is one of the few countries that, in the age of multipolar anarchy, has found itself in a significantly stronger strategic position. This does not imply that North Korea’s political model is either desirable or sustainable. Its human rights record remains abysmal, its nuclear program destabilizing, and its economy structurally constrained. Yet the North Korean case demonstrates how an authoritarian regime recognized the onset of a major geopolitical shift early and adjusted accordingly—through diplomatic risk management, policy innovation, and economic restructuring.

So far, so good. But is this really a model to emulate? The irony is striking: before the onset of multipolar anarchy, the West expected North Korea to liberalize and integrate—in other words, to become more like us. Now, we find ourselves adopting strategies that, though divergent in intent and scale, share a common logic of strategic withdrawal. We may not call it autarky or Juche, but concepts such as supply-chain resilience, strategic autonomy, friend-shoring, and geo-economic realignment reveal uncomfortable similarities with North Korea’s long-standing strategic approach.

If there is one thing we can indeed learn from North Korea’s case, it is the importance of rapid adaptation. As Mikhail Gorbachev famously warned East Germany’s Erich Honecker on the eve of the Berlin Wall’s collapse: “Those who are late are punished by life itself.” The contrast between North Korea’s swift and decisive response to new geopolitical realities and the West’s—especially Europe’s—hesitant and often indecisive reaction is striking. This should prompt serious reflection on the adaptability of democratic institutions in fast-moving geopolitical environments.

Needless to say, there is a categorical difference between democratic societies making strategic adjustments under electoral accountability and an authoritarian regime operating without constraint. The question is not whether the West needs to adapt—it clearly does—but whether such adaptation requires abandoning the core principles that enabled its success. Excessive inward orientation, state-directed economic models, and the instrumentalization of security concerns to restrict open discourse are historical dead ends, not paths to resilience.

Paradoxically, North Korea’s trajectory itself contradicts isolationist impulses. Pyongyang’s ability to extract concessions and expand its relevance stems precisely from its willingness to negotiate, maneuver, and exploit divisions among major powers. The Bush administration’s refusal to engage with what it termed the “axis of evil”—epitomized by the phrase “we do not negotiate with evil; we destroy it”—proved counterproductive. North Korea today is far stronger—politically, economically, and militarily—than it was two decades ago. In a fragmented international system, maintaining channels of communication and selective cooperation—even with adversaries—is not idealism but an expression of strategic realism and prudent statecraft.

The challenge for liberal democracies is to rebuild resilience without sacrificing openness, to strengthen sovereignty without retreating into autarky, and to defend core values without weaponizing them into rigid ideological barriers. We may need to redefine the architecture of liberalism for a multipolar age, but abandoning its foundational commitments would be a cure worse than the disease.

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