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Subject

The impact of sanctions on North Korea's economy.

Significance

Successive UN Security Council resolutions over the past year impose the toughest sanctions North Korea has ever faced. If implemented thoroughly, the new sanctions will have much greater impact than earlier measures. The result will be to increase political risk in North-east Asia in the medium term (2018-20).

Impacts

North Korea's leadership will not even consider denuclearisation, seeing this as tantamount to collective suicide.

The threat of domestic instability will push the elite to become more repressive at home.

If political collapse or war looked imminent, China would switch back to quietly undermining the sanctions regime.

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