Life is getting worse and worse still in North Korea. From its currency devaluation last year, to the effective halt in black-market trading of food items due to a curb in foreign currency transactions, putting enough food on the table everyday has become an almost impossible task for over a third of its 24 million people.
And now, this piece of data: over the past two months, some parts of the country has experienced a 12-fold inflation in the price of rice. Twelve fold!
So first currency collapse, then mass starvation and now impending famine. How will the economy function?
Joshua Stanton think bartering is the next step. Within the coming year, he thinks the government will either allow another country’s currency to act as the de facto medium of exchange; find cash to buy food on the international market to feed its people – difficult to do considering worldwide economic sanctions; or, the most likely option, get bailed out by its wealthier neighbours.
Stanton thinks it’s China. But I think Japan, as well as South Korea will also feel compelled to open its checkbook, when taking into account the existence of nuclear weapons and the real political and economic implications of a collapsed regime in the region.