South Korea and Japan have agreed to work together to ramp up pressure on North Korea to an "extreme level" to force it to return to the negotiating table.
In a phone conversation yesterday, South Korean President Moon Jae In and Japan's Prime Minister Shinzo Abe also agreed to jointly push for a United Nations (UN) resolution with more specific and effective measures against the North.
Some experts have questioned the effectiveness of sanctions, given that seven rounds of sanctions over the past 11 years have failed to rein in the North Korean regime, which fired a missile that flew over Japan on Tuesday.
Other analysts argued that the world must be more united in enforcing sanctions against North Korea, for these to be effective.
Dr Choi Kang of the Asan Institute for Policy Studies told The Straits Times (ST) there are ways for the US and UN to squeeze Pyongyang further with sanctions.
This could include more extensive financial sanctions, cutting off the regime's oil supply and a ban on imports, he said.
The most extreme case, Dr Choi added, could be to employ electronic warfare to wipe out North Korea's currency. "But I don't think the US will use that card yet," he said, adding that sanctions that would severely affect the livelihood of North Korean people have so far been avoided.
Data is scant, but a survey of 1,000 defectors... showed that wages in the North has soared in recent years - over 250 per cent for official jobs and over 2,500 per cent for unofficial jobs in the private sector.
Despite tougher sanctions, observers said North Korea's economy has grown stronger under Mr Kim Jong Un. Since assuming power in 2011, he has aggressively pursued economic growth and even built a key residential district filled with skyscrapers that opened in Pyongyang in April.
A Financial Times report in June said that North Korea's economy is "showing signs of vitality that could make it even harder to exert leverage on Pyongyang".
Data is scant, but a survey of 1,000 defectors by South Korea's state-run Korea Development Institute showed that wages in the North has soared in recent years - over 250 per cent for official jobs and over 2,500 per cent for unofficial jobs in the private sector.
Just yesterday, the institute released a new study showing a boom in North Korea's building of shopping malls, parks, sports and cultural centres since 2011.
An expansion of the local market economy has allowed some people to amass wealth and they are now able to spend lavishly at these facilities, it added.
However, Dr Chung Eun Sook from the Sejong Institute think tank said North Korea's market systems could be "temporary".
"They can maintain it now, but it cannot last without fundamental economic reform and structural change," she told ST.
She added: "There must be united efforts in imposing sanctions, and China and Russia are both very important partners in making Kim Jong Un come to the negotiating table."