North Korea Heading Towards Famine

While Kim Il Jong drinks cognac, eats lobster drives around in BMWs, and plans who to proliferate nuclear technology his country is headed for another famine. Reuters

SEOUL (Reuters) - Soaring global food prices and reluctant donors are pushing North Korea back towards famine, which could see the secretive government turn even more repressive to keep control, a paper released on Wednesday said.

"The country is in its most precarious situation since the end of the famine a decade ago," said the paper from the Washington-based Peterson Institute for International Economics.

Stephan Haggard, who wrote the paper with Marcus Noland, said the sharp increase in world prices for commodities had sent ripples through the communist state's economy.

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"The North Korean rice market is much more integrated with world markets than most people think," Haggard, a professor at the University of California, San Diego, said by telephone.

North Korea, which even in time of good harvests is about 20 percent short of what it needs, has grown more dependent on rice imported from neighboring China since a famine in the late 1990s that experts estimate killed at least 1 million people, he said.

Its limited foreign currency reserves, and poor reputation as a trade partner, mean the rice trade is being hit and ordinary North Koreans are feeling the squeeze, Haggard said.