This study analyzes changes in North Korea’s economic development strategy and economic management methods after the Ninth Congress of the Workers’ Party of Korea, held in February 2026 (hereafter the “Ninth Party Congress”), and, on that basis, examines the direction of South Korea’s economic cooperation policy toward the North. To explain the features and evolution of the development strategy pursued since Kim Jong Un came to power, the study introduces the concept of a “managed development strategy.” This refers to a mode of development in which the state sets economic priorities and coordinates the allocation and use of strategic resources, while enterprises and localities take charge of concrete production, management, and facility operation. In the process, the state draws on management tools such as planning, prices, public finance, banking, contracts, and information to coordinate the activities of individual economic units and link them to the operation of the national economy as a whole.

The Ninth Party Congress defined the period of the new five-year plan for national economic development (2026 to 2030) as a “stage of stabilization and consolidation and gradual qualitative development,” and set as its main tasks the stable operation of the production and living foundations built up and reinforced during the Eighth Congress period, together with improvements in productivity, quality, and technological standards. Accordingly, the managed development strategy is taking concrete shape in the Ninth Congress period around new planning methods and a recalibration of the economic management system, policies for regional and rural development, the expansion of residents’ living standards and social services, a stronger role for science, technology, and informatization, and the revitalization of the external economic sector. These changes lie along the same continuum as the economic management approach pursued since Kim Jong Un took office, which has expanded the authority and responsibility of enterprises and localities while strengthening the state’s planning and coordinating functions. At the same time, as the sustained operation of the expanded production and living foundations and the improvement of qualitative outcomes grow in importance, the focus of economic management reform is shifting from the level of individual economic units to the way the national economy as a whole is run, including planning, prices, public finance, and distribution.

The feasibility of the development strategy for the Ninth Congress period hinges on five structural conditions: the material conditions needed to keep production facilities running stably, the distribution of production outcomes and the securing of financial resources, the capacity of localities and organizations to manage an expanded set of policy projects, the state’s ability to coordinate economic activity overall, and the complementary role of the external economy. In particular, the fact that revenue growth in the 2026 budget falls well short of expenditure growth, together with the gap between the official planning and price system and actual transactions, may strain both resource mobilization and the state’s coordinating function. The external economy is gaining importance as a means of compensating for internal constraints on resources, technology, and production and management capacity, and North Korea is seeking to use it mainly in areas that are actually feasible under the sanctions environment, such as trade and tourism. However, given the changes in North Korea’s policy toward the South, the severance of inter-Korean relations, the continuation of international sanctions, and the expansion of North Korea’s economic ties with China and Russia, it is difficult to expect that a rising demand for external cooperation on the North’s side will translate directly into expanded inter-Korean economic cooperation. The South Korean government therefore needs to distinguish between the North’s economic needs and the conditions under which actual cooperation can be established, and to pursue together the creation of a policy environment conducive to cooperation, phased policy instruments and legal and institutional preparations, the analysis and accumulation of information on the North Korean economy, and the maintenance of project implementation capacity. Looking ahead, areas of cooperation linked to the North’s development needs in the Ninth Congress period include agriculture and food, health care, the environment and disaster response, tourism, and science, technology, and informatization projects. Considering the mutual benefit of both sides, an approach is called for that combines the expansion of facilities with improvements in technology, personnel, and operational capacity, as well as in quality and standards.