With this year’s New Year’s address, Kim Jong Un put in play a familiar North Korean gambit—letting the fox loose among the chickens. He unveiled policies probably planned and refined over the past several months designed to:

Create room to justify a pause or at least a slowdown in the tempo of activity in the nuclear and missile areas by declaring success in achieving an effective nuclear deterrent;

Offer the opening for dialogue that the North probably assumes the ROK Blue House had been praying for; and

Further prepare the population to cope with sanctions over an extended period.

Kim went surprisingly easy on the United States in his speech compared with the North’s routine characterizations of it since earlier this year. He did not accuse the US of posing an existential threat to the North, and made no mention of what Pyongyang had earlier portrayed as exceedingly inflammatory, threatening and insulting remarks by President Trump at the UN General Assembly in September. Kim also soft-pedaled what the North has otherwise portrayed as an accelerating pace of provocative US military exercises throughout the year. Nevertheless, by personalizing his position—asserting that the nuclear button is on “my office desk” and that the US could not provoke a war against “me and our state”—Kim made clear he isn’t yet ready to give up the spirit of the mano a mano confrontation he adopted in his unusually tough response released soon after the President’s UNGA speech. He also didn’t mention any conditions for opening talks with the US, a silence that in the context of the entire speech suggests Pyongyang is going to stay negative toward engaging Washington for now.

Kim’s was characteristically Delphic on the key issue of whether there will be additional steps in the North’s nuclear and missile programs. Assuming his words were chosen carefully—a good bet for Pyongyang if not always for other capitals—Kim’s emphasis on “mass production” of “nuclear warheads and missiles” in preparation for deployment suggests an intent to move, at least temporarily, to a new phase: consolidate or “perfect” gains rather than “bolster” the nuclear forces through development of new systems. Even if that is the case, it is unlikely to mean no launches at all. Because Kim made clear he was speaking in terms of warheads and ballistic missiles “whose might and reliability are already firmly guaranteed,” the current plan may be to keep any additional launches within already tested limits, at least for a period. The one exception here would be a space launch, which the North will insist is its right under international law.

Nod to the South. Ever since the new ROK government took office last spring, Pyongyang has carefully avoided personal invective against President Moon Jae-in, even while freely ripping into his subordinates by name. Typically, such restraint is a signal that Pyongyang is holding open the possibility of dealing with the incumbent ROK leader.

Kim offered that the North could take part in the 2018 Winter Olympics. That Pyongyang has now decided to dangle this possibility is not surprising. For many years it has been North Korean policy to take part in sports games in South Korea, either to reinforce existing dialogue or provide an opening for engagement with Seoul. In this case, Kim’s gambit might work to draw out the South. Then again, it might not. In 2014, the Park Geun-hye government managed to bobble a similar opportunity for North Korean participation in the Incheon Asian Games. On the positive side, several of President Moon’s close advisors have a record of engineering successful engagement with Pyongyang for ROK governments in the early 2000s. Nevertheless, this could well be a heavy lift because of the short time in which to hold the negotiations and the conditions each side may insist are the sine qua non for progress. Progress can’t be ruled out though. It is worth remembering that there have been times in the past when a problem with seemingly little hope for successful resolution got quickly solved because the North Koreans went into a mode of not taking “no” for an answer.

Kim wrapped his offer to take part in the Olympics within a larger initiative for inter-Korean dialogue. He went beyond a routine pro forma offer for lower-level meetings, announcing that the North would also meet with the South’s ruling party. Specifically noting a willingness to deal with the ruling party was often in the past an indication of more serious intent on Pyongyang’s part to move ahead. Reiterating a theme from his address to the Seventh Party Congress in 2016, which he had repeated in his 2017 New Year’s address, Kim also called for the two sides to take steps to lower military tension. It would not be a surprise if either or both of these—the call for broader inter-Korean engagement or for steps to reduce military tensions—were soon the subject of more detailed proposals from Pyongyang.

The domestic front. For the past several years, Kim has stressed in various public speeches the need for the country to prepare to cope with sanctions. There has been no effort by the regime over the past few years to pretend that sanctions have no impact. Indeed, in this year’s New Year’s speech, Kim acknowledged that the population faces “difficult daily lives in the midst of sanctions.” At the same time, the regime has routinely pushed the idea that through a concerted campaign it is possible to demonstrate—for both the domestic and international audiences—that the North Korean people can accept the need for sacrifice and, with enough grit and innovation, can meet the challenge.

There are some signs that Kim is going about achieving this goal at two levels, but these may not fit perfectly together. On the one hand, there is the inevitable call for sticking to the narrow road of ideological rectitude, and for guarding against “impure hostile elements.” On the other hand, judging from his New Year’s remarks, there also seems to be an effort to continue economic policy innovations Kim has implemented since coming to power.

Kim specifically mentioned the success of agricultural “work teams.” In effect, that might be an effort to signal public, high-level backing for innovations in agricultural policy, including the “plot responsibility system” introduced several years ago, and credited with keeping up production even in the face of bad weather. Kim also called for the state “to establish active measures to let the socialist responsibility management system prove its real worth in factories, enterprises, and cooperative organizations.” This is not new—it’s similar to a line he took in his 2016 Congress speech—but having it surface again in the midst of more challenging economic circumstances suggests Kim is not prepared to back off from reforms that have, at least to some extent, demonstrated their effectiveness. Overall, the picture is one of tightening ideological discipline while encouraging practical, innovative (obviously within limits) approaches at lower levels.

At some point, and it is not yet clear if that point has been reached, the North will face more starkly the question of allocation of resources. In his first public address in 2012, only months after assuming power, Kim promised that the people would no longer have to tighten their belts—a powerful image given the history of the population’s sacrifice over many decades. He backed away from that stance, but did not abandon it entirely, in his 2013 declaration of byungjin, i.e., the policy of parallel emphasis on building the economy and strengthening the nuclear deterrence. Kim’s public rationale at the time was that by creating a credible nuclear deterrent, it would be possible to save money on defense spending and create a secure external environment that would open the way for more concentrated effort on the economy. Whether Kim believes that point has been reached, or even just chooses to act as if that is the case, will become clearer over the next several months.