North Korea Faces Tough Road in 2016

North Korea may contend with a serious famine in 2016 due to a prolonged drought that failed to yield substantial crop production, according to UPI. Analysts predict that the government will have to make cuts to its nuclear program to foster economic reforms or make concessions to the international community in return for assistance, but there is a chance that leader Kim Jong-un may ramp up nuclear capabilities as the economy falters.

North Korea may contend with a serious famine in 2016 due to a prolonged drought that failed to yield substantial crop production, according to UPI. Analysts predict that the government will have to make cuts to its nuclear program to foster economic reforms or make concessions to the international community in return for assistance, but there is a chance that leader Kim Jong-un may ramp up nuclear capabilities as the economy falters.

Leaders cannot maintain such a tight hold for too long as the economy descends into turmoil. As a result, the East Asian country echoed China’s reforms during the 1980s to improve certain sectors. For instance, North Korea’s current agricultural reforms are similar to Chinese methods from the late 1970s and 1980s, allowing farmers to co-managed farmland and sell part of the profits to individual households. This offers the latest sign of North Korea’s slow liberalization across the board, whether leaders like it or not.

Despite the brutal authoritarianism, consumer products flow en masse from South Korea and elsewhere, and people have become increasingly attracted to consumerism as gadgets and other goods become a common sight around the nation. However, North Korea is far from a service-based economy, and immense structural changes need to take place before the economy will prosper. Lacking electricity is a way of life for many citizens, and the average North Korean’s life expectancy lags 12 years behind South Koreans.

The northern part of Korea already went through a severe famine during the 1990s, and the country has never fully recovered from the disaster. Authorities know another famine could lead to societal and political instability, which illustrates one reason why elites called a December meeting with leaders from the finance and banking sectors to discuss potential changes that could benefit the economy. The meeting is the first time North Korea convened over the state of the economy since 1990, and even though the details of the meeting remain scant, it is a sign that leaders grow more concerned as the economy unravels.

With that, Kim Jong-un has made small changes since his tenure began in 2011, fostering infrastructure projects, and the economy expanded in the past decade because of market-oriented changes. Moreover, many foreign investors show an eagerness to invest in the country, and the government is open to outside investment.

The problem is that authorities hate seeing money leaving the country and actively restricts the flow of capital, making North Korea one of the worst places on the planet to establish a business. Regardless of the nation’s slow transition to a market-based system, officials are not willing to make the economy more open, but they will have to adapt to a changing world or risk losing power.