North Korea suffering worst downturn likely since 1990s Famine

How much are sanctions hurting Kim Jong Un? North Korea’s economy hasn’t been in such bad shape since his father was battling floods, droughts and a famine that some estimates say killed as much as 10% of the population.

While North Korea’s isolation, secrecy and dearth of official statistics make estimates difficult, the economy probably contracted more than 5% last year, according to Kim Byung-yeon, an economics professor at Seoul National University. “As long as sanctions remain, time is on the U.S. side,” said Kim. “Sanctions are the most effective means to draw North Korea into negotiations, so they should not be lifted or eased without major progress on denuclearization.” Read more

A decline of 5% would mean that international curbs on North Korean trade — measures crucially backed by China — have put the country on its weakest economic footing since 1997. (Back then, the isolated nation was reeling from policy missteps under Kim Jong Il and a famine so bad some defectors reported rumors of cannibalism.)

The Bank of Korea estimated a 3.5% contraction in 2017, leaving North Korea an economy roughly the size of the U.S. state of Vermont. The South Korean central bank’s annual report on its northern neighbor — due for release later this month — will provide a fresh look at the impact of U.S. President Donald Trump’s pressure campaign just as the two sides prepare to restart talks.

One thing sanctions aren’t doing: stopping Kim from developing the nuclear arsenal that prompted his showdown with Trump. (The cost launching the more than 30 ballistic missiles Kim Jong Un has tested since taking power in 2011 comes in at about $100 million, according to estimates by South Korea’s defense ministry.) Nevertheless, Trump is counting on the economic pressure to compel Kim to compromise.

[Bloomberg]

This entry was posted in DPRK Government, Kim Jong Un, North Korean refugee, Uncategorized by Grant Montgomery.