North Korea's economy is hurting. Authoritative estimates indicate that the country experienced its worst decline in two years. This dismal performance is the result of United Nations sanctions. Yet even as they bite, there is a limit to how much such measures can achieve. Geopolitics is as important to North Korea's survival as is its economy and those winds are shifting in Pyongyang's favor.
Reliable statistics about any part of North Korea are hard to come by, but the Bank of Korea's assessment of its reclusive neighbor's economy is considered pretty good. In analysis released last week, the bank concluded that the North's GDP shrank 3.5 percent in 2017, the largest decline since 1997; at that time, its economy contracted 6.7 percent amid a famine that is estimated to have killed as much as 10 percent of the population. The bank reckons that last year, North Korea's total external trade shrank 15 percent to $5.55 billion. Exports fell nearly 37.2 percent to $1.8 billion; mineral exports are thought to have plummeted 55.7 percent.
The performance must have been a shock to North Korea's leaders, especially since the economy did so well in 2016: That year, the GDP grew 3.9 percent, the best performance in over a decade. The decline reflects tightening U.N. sanctions against North Korea imposed as a result of its nuclear weapons program that defied the will of the international community. Some experts believe that North Korean economy could shrink 5 percent in 2018 if sanctions are fully implemented.