North-South Korea Tensions Set To Increase, As Key Anniversaries Approach

Tensions are once again rising between North and South Korea, as the two countries on August 20 exchanged fire at the Demilitarized Zone (DMZ) that separates them. We expect tensions to increase, as the North prepares to mark several key anniversaries. August 25 will mark the 20th anniversary of the official announcement of the Songun ('military first') policy under former ruler Kim Jong Il. Then, on September 9, North Korea will celebrate National Day, which this year will be the 67th anniversary of the state's foundation. Of greater significance will be October 10, when the ruling Korean Workers' Party (KWP) will commemorate its 70th anniversary.

Generally speaking, North Korea makes a bigger effort to celebrate an anniversary if it is a 'round' number, i.e., divisible by five, or especially 10. This suggests that the KWP's anniversary in October will be a landmark event. This is likely to feature a grand military parade, military promotions (thereby giving a clue as to which generals are rising in favour), and possibly some sort of grandiose gesture, such as a long-range missile or nuclear test. Most of Pyongyang's previous missile or nuclear tests have coincided with dates of national importance.

That said, North Korea can act at any time. The North's sinking of the South Korean warship Cheonan in March 2010 and its shelling of Yeonpyeong island in the South in November of that year did not coincide with key anniversaries.

As things stand, we see North Korea currently experiencing an unstable period, reflected by rapid changes of top military personnel (including alleged executions). This means that its leader Kim Jong Un could seek to consolidate his authority by focusing on external threats, or, that generals will advocate aggressive policies to curry favour with Kim. Either way, a period of hawkishness is likely.

As we have warned repeatedly, the danger from all this is that the North could overplay its hand, prompting the South to respond more robustly than during previous provocations. This could lead to a major land and sea battle, resulting in scores or even hundreds of deaths.