Today marks the 14^th anniversary of the death of North Korea’s late ‘Great Leader’, Kim Il Sung, who ruled for almost 50 years. What is most remarkable is that his son and chosen successor, Kim Jong Il, still leads the country, and for that matter, the country still exists. When Kim Sr died, most people expected Kim Jong Il to be deposed quickly, and the country to be absorbed by the South, paving the way for its modernisation.

Instead, North Korea sadly offers investors and social scientists a test case of the limits of economic adversity and human endurance. Since the late 1990s, the country has experienced:

• Economic depression, with GDP shrinking for 11 of the past 17 years.

• Mass starvation, with hundreds of thousands (or possibly more than a million) dying of hunger.

• The virtual collapse of industrial activities.

• Chronic electricity and energy shortages.

• Hyperinflation following tentative market-based reforms in 2002.

• Natural disasters in the form of massive floods.

In fact, it is hard to think of a country which has fared so badly for so long. Even Zimbabwe has had a better ride since 1990. And yet, North Korea has been surprisingly free of mass public unrest. The amount of refugees has been lower than would be expected, and there have been surprisingly few high-level defections.

So, how does North Korea survive? The answer is a combination of:

• Massive police state. There are 1 million army troops and multiple security agencies watching the public and senior officials.

• Isolation from the outside world. This generally keeps citizens unaware of far better living conditions in the rest of the world.

• Handouts from China, South Korea, and international agencies. This keeps at least some stomachs filled.

• Black market economy. This allows people to trade basic goods and services (particularly smuggled from China), and thus indulge in off-the-books survival strategies.

North Korea is an extreme case, since many of its conditions are now virtually unique to the country (e.g. its one-family dictatorship and its almost totally centrally-planned economy). In truth, even amid rising global fuel and food prices, and the possibility of increasingly frequent freak weather conditions amid global climate change, we doubt if any countries (with the possible exception of Myanmar) will go down the road of North Korea. Nonetheless, it demonstrates the extent to which some societies can endure food and energy shortages, hyperinflation, and natural disasters.