Outreach could bring economic rewards to North Korea
Subject The outlook for North Korea's economy. Significance North Korean state media today called for the United States to ease sanctions in recognition of Pyongyang's 'good-faith' steps toward denuclearisation. Stronger sanctions and drought are cited as main causes of North Korean GDP contracting by 3.5% last year, its worst performance since a 6.5% fall amid famine in 1997, according to annual estimates by South Korea’s central bank, published on July 20. Pyongyang’s total trade fell by 15.0%, with exports plunging by 37.2%. Impacts Strong economic motives, intensified by drought's officially acknowledged toll on the economy will sustain Pyongyang's diplomatic outreach. Laws are being adapted to the new realities, but much greater transparency is needed for a market economy to flourish. The economy may have become stronger than the South Korean data acknowledge, but last year's downturn is not in doubt. If reforms are deepened and sanctions eased, North Korea's mineral resources and educated, disciplined workforce will be valuable assets.