ABSTRACT
This chapter presents the issues of domestic politics and foreign relations that the two Koreas, North and South Korea. It briefly discusses the historical legacies of the twentieth century and the divergent paths to political and economic development taken by North and South Korea. The chapter describes the challenges South Korea faces – deepening and broadening its democracy, fostering continued economic development, while building a more equitable and fair society, and designing foreign policies for peace-building on the peninsula and creating an international consensus for peaceful unification of the two Koreas. It examines the ongoing problems for North Korea, which revolve around the seemingly incompatible objectives of regime survival through isolation and armed provocations, and economic development through the termination of economic sanctions. The chapter provides a brief discussion about the prospects for peaceful unification of Korea. South Korea's economic record for the second half of the twentieth century represents the so-called East Asian economic miracle.
