Survival Mode? With his economy in tatters and international pressure rising, Kim Jong Il may be running out of options.

Byline: Hideko Takayama and Christian Caryl (With B. J. Lee in Seoul)

You have to give credit to Kim Jong Il for one thing--he knows the score. The North Korean leader's subjects may be largely ignorant of the bleak situation in their country, owing to the country's all-encompassing propaganda machine, but Kim himself clearly has no illusions. Shortly after the revolutions that toppled half-a-dozen communist dictatorships in Eastern Europe back in 1989, according to Japanese journalist and North Korea watcher Ryo Hagiwara, Kim informed members of his ruling circle that he and they could easily end up like deposed Romanian leader Nicolae Ceausescu if they didn't watch their step. For a full week in early 1990, Kim forced North Korean officials to watch multiple video showings of Ceausescu's bloody death at the hands of an angry mob and warned his colleagues of the dangers of losing control. One defector told Hagiwara that he recalled Kim obsessively repeating, "We will be killed by the people."

The North Korean dictator remains isolated and obsessive, by all accounts, but he may be more concerned nowadays about gathering international pressure, led by a hawkish U.S. government, than an uprising by his mistreated people. For one thing, the incoming U.S. secretary of State, Condoleezza Rice, is apt to take a sharper line with Pyongyang than her predecessor. Kim may be sensing that. In one account related to NEWSWEEK, a recent visitor to Pyongyang got a candid take from the North Korean leader himself. Kim confessed that the North could not give up its nuclear weapons because his conventional weapons were hopelessly outmoded and ineffective--leaving him at the mercy of the U.S. military.

For Kim, the next few months could be critical. Domestically, he must deal with the short-term fallout from the limited economic reforms he introduced two years ago. A recent report by the World Food Program states that they've caused even more problems for North Korea's people. By cutting state subsidies and freeing prices, Kim has sent inflation through the roof--making basic foodstuffs catastrophically expensive. Says one recent North Korean defector: "One third of the population can eat rice and meat soup. One third can manage to eat corn. And one third is waiting to die with water-thin porridge."

Perhaps as a result, the flow of refugees and defectors out of the country continues unabated--and so do the inevitable rumors of internal dissension. Remedies might be found on the international front--but it's precisely there that Kim faces some of his biggest challenges. In the coming weeks Kim will come under intense pressure to return to the negotiating table for six-party talks aimed at dismantling his nuclear arsenal. If he continues to stonewall, he could find himself jettisoned by putative friends like Russia and China.

Some conservatives in Washington argue that the Bush administration should be pushing China and South Korea to ratchet up the pressure on Pyongyang. "I think we need a stronger coalition," says Nicholas Eberstadt, a researcher at the American Enterprise Institute in Washington. "We will not get a less dangerous North Korea without more outside pressure." He says that China's North Korea policy has been, effectively, to "kick the can down the road," while South Korea's government is "implacably anti-American and reflexively pro-appeasement toward Pyongyang."

But giving in on negotiations could spell trouble for Kim, too. He'll have to deal with Americans and Japanese who are being less understanding of Pyongyang's demands than ever before. "I think Kim doesn't know which way to move now," says Lee Young Hwa, a North Korea analyst at Japan's Kansai University. "His options are getting narrow."