Kim’s renewed military confidence and Lee’s pragmatic diplomacy create the ideal conditions for a meeting.
The leaders of the two Koreas – South Korea’s President Lee Jae-myung and North Korea’s Chairman-Comrade-Secretary-General (take your pick from his many titles) Kim Jong-un – have each chalked up impressive gains in 2025.
Elected in a landslide after the debacle of his predecessor’s ill-fated move to impose martial law and a downturn in the economy, Lee moved quickly to shore up democratic structures and the high tech industry and trade that underpin South Korea’s powerhouse economy.
Lee managed early interaction with US President Donald Trump with aplomb, with rewards for both sides including Korean investment in US shipbuilding and other sectors worth some US$350 billion, and significant reduction of US tariffs on Korean imports.
After hosting 21 regional leaders for the Asia Pacific Economic Cooperation (APEC) forum – and, notably, a vaunted Trump-Xi Jinping side meeting – Lee highlighted AI and other strategic-economic drivers in an impressive APEC Declaration and bagged another ringing endorsement from the Trump White House.
The images emanating from Kim’s North Korea now stand in contrast to the North Korea I visited during the hopeful five or six years after 2000.
Meanwhile, Kim Jong-un has had a splendid year. Not only did he, the leader of a tiny impoverished country, strut a stage in Beijing with the world’s foremost dictators and their acolyte countries, but he earned billions from his renewed pact with Russia and the imprimatur of China’s President Xi.
The North Korean economy is notoriously hard to measure, though the World Bank ranks it at 135th globally with a meagre per capita income of US$1,200 and high inequality. But Kim has managed to build new theme parks and luxury villas for his loyal elites, on the back of funds from cybercrime, arms sales and remittances from North Koreans working in slavish conditions abroad – and from new Russian-North Korean joint cybercrime ventures recently observed.
The images emanating from Kim’s North Korea now stand in contrast to the North Korea that I visited during the hopeful five or six years after 2000. At that time, Kim’s father Kim Jong-il and South Korean President Kim Dae-jung were attempting to build a new era in North-South relations. In those years, we saw stunted North Korean children, rice terraces built by hand, and shabby buildings lit by candles.
South Korean experts described the Kim regime as a hereditary courtly system, some 200 families of the so-called “Mount Paektu Bloodline” living in Pyongyang – which looked surprisingly like Canberra, a planned beautiful city; but unlike Canberra, one surrounded by soldiers and barbed wire.
The first “economy” of North Korea was the Kim economy of the elite families. The second was the Korean People’s Army economy. The KPA to this day is estimated to be the world’s fourth-largest standing army. KPA soldiers – much like their diplomatic compatriots serving in North Korean embassies overseas – are self-sufficient, growing their own food and engaging in questionable forms of commerce. The third economy was the traditional command-and-control system much like that of Soviet times, which was then showing signs of dysfunction and by now may be defunct.
And the fourth economy – just beginning in 2000 – was the “grey” and “black” economy of small locally-run markets selling smuggled goods from China, Japanese television sets and used cars, and surplus food grown by North Korean farmers outside of the rigid planned state agricultural production regime. This fourth economy appears to have expanded, but judging its impact is difficult. Outside visitors cannot roam, instead only seeing its memorials, infrastructure and society from a distance.
While the Kim regime stays constant, South Korean presidents must change every five years.
The nature of North-South relations remains as it has been for 70 years – countries of identical common ethnicity and 5,000 years of written history, technically at war, with security guarantees and economic assistance provided respectively by the two great powers, divided at the 38th parallel.
While the Kim regime stays constant, South Korean presidents must change every five years. Policy towards the North vacillates according to the ideological flavour of the sitting president’s party.
South Korea’s Lee was a leftist firebrand – but his early steps as president indicate that he is forging a path that is different to those of his progressive predecessors. His first overseas visit was to Tokyo, followed by Washington, displaying the instincts of alliance-building more common in conservative leaders.
Now that Lee has secured international support and made bold moves to stabilise the South Korean economy, will he revert to type and make overtures to the North?
He has recently suggested that if and when a “peace regime” is established on the Korean Peninsula, reducing the pace and size of South Korea-US military exercises could be “beneficial”. But Lee and his unification minister Chung Dong-young speak more cautiously about approaching the North than progressives did historically.
Lee is realistic about the degree to which he might affect real change, with an aggressive, nuclear-armed Kim backed by China and Russia sustaining a feudal, isolated society. Unlike the two Kims of the early 2000s, Lee no longer imagines the Korean Peninsula as one country some day: “We have no intention of pursuing absorption unification” with the North, he stated in November.
Kim’s renewed military confidence and Lee’s pragmatic diplomacy may create the conditions for another North-South summit. But it will be one less hyped and more realistic in tone than those of the past – that is if Trump does not get in the way of the delicate strategic messaging.