South Korea to raise $500B for unification | Hacker News Reader

South Korea to raise $500B for unification

english.yonhapnews.co.kr

149 pointsadamnemecek125 comments

I've been twice to North Korea on tours and I just don't see a true reunification happening anytime soon. This isn't like West/East Germany where both sides were still similar. North Korea is a fundamentally different country to South Korea in almost every single way. Any comparison between the two situations is stupid and naive.

There are plenty of opportunities for economic integration. But how exactly do you plan to reunify when significant parts of the North Korean government are actively against it i.e. they are doing well under the current regime. Or when the narrative has always been reunification under the DPRK banner ?

The only way any of this is happening is if China stops supporting North Korea and the UN Security Council/Agencies puts much of the government in jail for crimes against humanity. Then South Korea would effectively just take over and Pyongyang would be turned into a tourist attraction.

"One of the biggest misconceptions I think people have of North Korea is that they are simple and naive. But I feel that North Koreans as a group of people have gone through a lot of hardship, and their ability to survive in difficult situations are a lot higher that what people think. People think that unification will be a basketcase for North Koreans, but they will definitely be able to manage. People also think North Koreans will have a hard time adjusting to the market economy, but the black market is also growing under the regime’s nose, and people are used to working in this environment. North Koreans are not naive."

From recent Kang Chol Hwan AMA

https://www.reddit.com/r/IAmA/comments/2m87gi/i_spent_ten_ye...

The issue with all of this isn't the North Korea people. They are well aware of life in South Korea and elsewhere courtesy of all the black market DVDs that have been finding their way there.

It's the government filled with old socialist-era guys who surely aren't going to be so willing to just give up their power.

It's the government filled with old socialist-era guys who surely aren't going to be so willing to just give up their power

And that's what this announcement is about. $500B pays a lot of bribes (sorry, "industry reunification payments" or something). And don't think for a moment that the South Koreans will hesitate for a moment to pay them.

Won't they use the money to buy arms, etc to increase their power?

a) Obviously you structure it as payments after unification, and you let them set up up an industrial organisation like Samsung or Hyundai. That's plenty of power for most.

b) S. Korea would love to be able to fund almost any kind of opposition to the current regime in N. Korea. That's not what this $500B is for, but if there was a credible place to spend some money to undermine the regime I'm sure they'd be happy to do it.

I'm glad they're considering doing this.

However, it's going to cost a lot more than $500 billion to raise per capita GDP by ~7 fold. It'll cost $500+ billion in the first ten years in just welfare support, security, education, infrastructure, disarmament, healthcare, job training.

$50 billion per year in net drag is perhaps even far too low of a number. There are 24 million people in the north. That's a mere $2,000 per year per person. It's going to cost a lot more than that to start bringing them up to speed. I think you could easily spend $2k per person, just on the person - not counting several expensive things I listed previously.

South Korea should plan for $2 trillion over 20 years. They'll intentionally under-shoot the numbers, to avoid freaking out the tax paying public, and the cost will end up ballooning far beyond the public relations numbers.

And even if they do (impossibly) increase GDP/capita to 10,000 with that amount of money, North Korea would still be way, way, way poorer than South Korea. I wonder at this point whether reunification as was done in Germany is even possible, given the dramatic (and growing) difference between the two states. Perhaps some sort of confederation will be done.

" cost a lot more than $500 billion to raise per capita GDP by ~7 fold."

That's a good point, but remember that North Korea, in spite of being the most backward and poor nation on Earth, is full of Koreans. A strong creative drive and high levels intellectual life and potential talent and a flair for protest and organizing reform will do a lot for a nation. Most nations would be lucky to unify with 15 MM Koreans, no matter how poor. Within a generation of getting freedom, I expect them to be doing well.

Remember that it only took RoK twenty years to go from a brutal dictatorship among the poorest in the world to the 1st world nation it is.

What is so special about Koreans that your comment couldn't have used "humans" instead?

I think they would have a hard time adjusting....look at the defectors who cant fit in in south

That's a real potential problem, as is the lifetime impairment of childhood malnutrition. But I expect defectors from any regime to be the kind of entrepreneurial misfits that never quite fit in and demand their environment adapt to them.

If you look at the post WWII economic performance of South Korea, and North Korea until ~1980 or so when their leadership started to impede them, it is clear the peninsula has what you might call very high levels of latent human capital, seeing as how just about all of their physical capital had been destroyed.

A ridiculously strong work ethic, leading to the longest working hours in the OECD if not the world?

http://www.vagabondjourney.com/south-korean-work-hours-highe...

Obviously working long hours isn't necessarily optimal for productively, but the average Korean certainly works harder than the average human. (And I'd wager this extends to the North too.)

RoK is South Korea?

Yes, Republic of Korea.

My expectation on the cost being far too low, was taking into account that South Korea is an excellent nation and that they may be better at fixing eg North Korea than a lot of other countries in their situation might.

Most countries in the world would simply not be able to fix North Korea, or pay for it. It would be a perpetual disaster, with the North falling back apart, languishing from quasi-dictatorship to quasi-dictatorship.

The difference between South Korea lifting itself up over 20 or 30 years, and what's going to happen with North Korea, is responsibility and imbalance. South Korea is going to end up assuming immense responsibility for the well-being of the people in the North, rather than the North existing as its own country; and the South will be massively rich by comparison, that imbalance will draw out very large sums of subsidization in the process of bringing the North up to speed to the South's standards --- there was no such scenario with the South when it originally climbed up out of poverty, no stark comparison amongst their own people essentially. It will be viewed as very unacceptable to have the people of North Korea with a per capita GDP of $10,000 after 20 years, while the South perhaps has a $50,000 per capita GDP at that time. Many in the North will not want to stay there in those conditions, and by moving to the South they will generate a significant new financial burden. Either way, it's going to be very expensive.

USA would happily pay $50B/year for 10 years to end this North Korea madness.

$2000 per person per year is probably pegged to the current gdp per capita of $1800. By doubling, the policymakers may hope to put an attainable goal on growth.

> There are 24 million people in the north. That's a mere $2,000 per year per person.

No, it's $20,000 per person, which, if spent wisely, is more than enough to give someone a decent education.

Esp. considering that NK's GDP per capita is ~$1800.

Fareed Zakaria wrote in 2010 that too few were preparing for an internal meltdown of the NK regime: http://www.washingtonpost.com/wp-dyn/content/article/2010/10...

He describes it as a black swan event that would not come on any predictable timetable, but something that would be far better managed if some preparations were made in advance.

Maybe that idea is catching on.

The notion of black swan events is rubbish. The theory makes no sense.

Even if it was a logical theory that had coherence not sure how it fits here.

We know countries unify. We know what happens. You can be sure North and South will one day unify.

Yes the only question is when. Prepare to early = big loss. Prepare to late = a loss.

It's just about creating a sensible plan on how to deal with something we don't have a timeline on.

When will a building have a fire? Who knows, just make a sensible plan for pre and post when it happens. You don't need to call it a black swan. It's just risk management.

> You can be sure North and South will one day unify.

How can we be sure? We know countries unify and we also know that countries split never to be unified again.

I'm looking forward to Brazil and Uruguay's unification.

Yugoslavia will rise again

You mean Uruguay and Argentina, right? :P

Short summary for non-uruguayans: Uruguay started out as the Spanish piece of the land on the eastern side of the river Uruguay according to the treaty of Tordesillas, and became a disupted frontier between Spain and Portugal.

During the May 1810 revolution (Argentinean revolutionaries against Spain), while the capital city was a Spanish stronghold the local leader José Artigas sided with the Argentinean insurgents and founded the United Provinces.

Artigas wanted a federal system, but the Buenos Aires leaders wanted centralism. So Uruguay actually became a province of the Federal League.

http://en.wikipedia.org/wiki/Liga_Federal

When Uruguay announced its independence from Spain, it became annexed to Argentina.

Then Brasil invaded, and it became a Brazilian province for a short time, thus the parent comment.

> We know countries unify. We know what happens. You can be sure North and South will one day unify.

Citation?

For comparison Germany unification has now cost roughly ~100billion per year for 20 years, so far. So roughly 2 trillion total. Given that the DDR was actually in relatively good shape compared to North Korea, that is there weren't any famines, it had a more or less working industry and a very good education system, I believe South Korea would have to bear much higher costs per annum.

Any idea how much the initial conversion of currency at below going rate cost?

As to my knowledge, most industries became obsolete after reunification, since they only built and developed state sanctioned products that wasn't needed after that event.

Most of the industrial production means was sold to western capital in the early 90s by the Treuhandanstalt (trust agency), and the companies were closed.

Edit: this was of course one of the biggest waves of privatization Germany has seen. The English Wikipedia has a bit more information: https://en.wikipedia.org/wiki/Treuhand

They were sold. That means they were not closed, you do not buy something and then shut it down. Some was shut down later, or repurposed.

> You do not buy something and then shut it down.

An ironic comment on Hacker News, of all places.

Buying something to shut it down, might work for internet business which large Internet MegaCorps wish to shut down if they are working on something similar in house.

But a country wide railway line, or a underground cable network and things like that don't just get shut down to suppress competition.

With industrial production means, I meant machines. The machines were sold, and the companies/factories shut down. Not much to produce without machines :)

I believe the majority opinion is that most of the east german industries were not competitive, as you say. Others suggest that the immediate privatisation gave western companies in the same sectors the opportunity to eliminate competition at a very low price.

North Korea also has a 50% larger population compared to East Germany at the time of reunification (~24M vs ~16M) which, it seems to me, would only increase the costs.

And it is much poorer, and far behind technologically.

Nitpick: The East Germany had indeed 16 million people at the reunification, but the West was far over 24 million! I don't know where you took your figures from, but Wikipedia says over 63 million: http://en.wikipedia.org/wiki/West_Germany#Population

The 24 million he is referring to is the population of North Korea.

I've talked to Korean friends and they don't want reunification to happen, at least the younger generation do not. After living a life seeing nothing but hatred come from the other side as well as unprovoked attacks on innocent civilians, it's not surprising that that opinion exists. Certainly, the younger generation does not remember a unified Korea at all.

It seems like the rest of the world wants them to reunite, but they don't want to.

It isn't a question of desire. If the economy of the north collapses and millions of people are on the verge of famine, the south needs a plan to maintain some sort of order.

I wouldn't think that "order" is what they'd like to maintain. But rather, keep the humanitarian crisis just past it's border from resulting in millions dying.

Not just the South, but China too. North Korean refugees are already a concern for China.[1] If the economy or the government collapses in North Korea, it's not hard to imagine chaos spilling over in to both countries.

[1] http://blogs.piie.com/nk/?p=13422

Perhaps then, the question is how much of the responsibility lies with the South after such a thing occurs. Would SK simply annex NK or would something like a joint/international humanitarian effort to help NK survive and may be start its own government be better?

Honestly, I don't have any right to say one way or the other is right because I'm not even Korean, I just think that we in the west need to stop taking as a hypothesis that if NK collapses that it is SK's responsibility. I think it is up to the South Koreans to decide whether they want that, and not us [1].

[1] And yes, that's what this article is about, the government is preparing for this contingency, but as we in the west know, our government doesn't always do what we want.

The economy of the north already collapsed in the 1990s, with on the order of 500,000 people dying from famine. But this did not break the regime.

I'm a South Korean and can only partially agree with you. Yes, some of us don't want it but definitely much more young people long for the reunification. Except some extremists, most of the naysayers oppose it because of the economic burden of it not abhorrence for them you mentioned.

Secondly, I don't know the whole opinions of the rest of the world but for the stakeholders like China, Japan and the U.S., I don't think they really want us to reunite. Korea has played a role of a bulwark for superpowers. For the U.S. and the Soviet Union in the beginning, and now China took the position of the Soviet Union. After the unification they will lose their influence on Korea. And Japan will hate its rival (industrially and historically) gaining huge resource for future advancement. I mean, no one can exactly predict the results and effects of the unification. Your opinion about the intentions of other countries' heads seems too naive for me.

To sum up, most of us want to achieve the unification as long as we carefully plan it so as to minimize the financial burden. Probably almost all Koreans agree that the unification will make the country much more powerful in the long run though it'll deteriorate the economy in the early years. However, I don't find we can achieve it in this century because of diplomatic reasons as well as internal ones. Too many world powers are related to it so it's an extremely hard problem to solve. I consider it one of the open problems in diplomacy like the ones in math.

> And Japan will hate its rival (industrially and historically) gaining huge resource for future advancement.

Just look at how much of an impact reunification had on the economy of Germany. And they were not inheriting millions of half-starved, ill-educated, brain-washed people in a country which has been living in autarky for decades. If the only thing which mattered to Japanese leadership was keeping Korea down, they would push for reunification at all cost.

germany is the current european leader also because of the reunification, and in fact many people feared this would happen before the reunification (i.e. former italian 4-times-premier Andreotti is quoted as saying "I love germany, that's why I'd prefer to have two of them").

One thing is to say that German has the best economy of the Eurozone, which is a fact we can all agree on. Another thing entirely is to attribute this to reunification, considering how the situation is in the Eastern half of Germany.

I don't attribute it solely to reunification, I'm saying that adding 16M people to an economy helped it in making it bigger than it was before.

You're conflating your Korean friends with the entire younger generation of South Korea. That's like saying all Americans supported the Iraq War because Bush was elected twice, or that all Russians support invading Ukraine.

Yes, the trend amongst the younger generation disfavors unification, but a sizable percentage of the younger generation still supports unification (49% of twenty-somethings in 2010 [1]).

Domestic sentiments inside South Korea are very complex (as is with any country). For example, some South Koreans strongly oppose the US military presence in the peninsula, while others greatly support it (and others simply don't care). Contemporary South Korean culture is very unique, and concepts of nationalism are very strong across the age demographics. But even the various forms of nationalism that exists is complex.

>>It seems like the rest of the world wants them to reunite, but they don't want to.

This simple statement is simply not true. Or at best, it's incomplete. Once again, the region's relationships are very complex, and the desires of the various actors don't necessarily indicate a want for unification. US-China relations, US-Japan relations, Japan-Korea relations, Korea-China relations, etc. all have its nuances that make Korean unification a tricky event. It's hard to say that any one actor truly "wants" unification when they're all looking out for their self-interest (China doesn't want any more US military and influence in the region, US wants stability and prioritizes de-nuclearization of the peninsula, Japan's strategies are conflicting within their own domestic ranks, etc.)

[1] http://www.theguardian.com/world/2013/may/27/south-north-kor...

First of all, I thank you for responding and bringing statistics to this conversation. You are right that I seemed to have generalize what my friends said to all young Koreans, at least in the way I wrote it. I should have been more careful with what I said.

I think the article you linked actually gives ammunition to my claim that as time passes and memories fade with them, reunification is becoming less popular. I mean, the headline ends with the clause: "dreams of unity fade into past for young South Koreans." One of the 20-somethings interviewed here opposes unification based on economic and financial grounds. As another poster commented, though, a majority still do support reunification.

With respect to my saying the rest of the world wants them to reunite, I admit that was hyperbole. The reason I said it was that every single comment on this story so far started with the assumption that reunification was right and we want it to happen[1]. I think something closer to the truth is that a lot of us in the western world don't necessarily want to see reunification happen as much as we want the North Korean government to fail. Anyone who has heard about the famines and seen pictures of children dead in the street would want that. Reunification, of course, would be the "natural" step after that. However, it's ironic that for many South Koreans, they are simply indifferent, or outright opposed to the idea.

So, I what I was pointing to was the fact that while a lot of us in the west seem to think reunification is the end goal, a significant number of Koreans, the actual people who we are discussing, do not favor it. I felt it was fair to point that out since the conversation at the time seemed to have hinged on the assumption that it was the right thing and the South Koreans themselves wants to go along with it.

Somewhat related, but this [2] has always stuck with me. This video was aired back during the time when tensions were running high and CNN was ablaze with talk about Kim Jong-Un and the NK state-run media said this and that, etc. At that time, I was considering studying in SK for grad school, and the typical response involved some shock that I'd want to go to a warzone. It's ironic that in SK itself, people were much more interested in their pop culture, their daily lives, than the hatred spewing from up North that was littering our news articles here in the west.

[1] So by "the rest of the world", I meant, "you all in the room", the kind of hyperbole you let out when you want to say a dissenting word against the common opinion.

[2] http://www.cnn.com/video/data/2.0/video/international/2013/0...

>>I think the article you linked actually gives ammunition to my claim that as time passes and memories fade with them, reunification is becoming less popular.

Yes, that article is stating that the trend amongst younger Koreans is moving away from reunification, but that's actually been an established fact for the past couple years now. If you read the article carefully, the trend was newsworthy at the time because reunification used to be a nearly unanimous sentiment in Korea, whereas now it is merely a majority sentiment.

I wasn't refuting your statement about the trend amongst the younger generation. I was refuting your generalization that the entire younger generation doesn't want reunification. It is much more complex than that, and there is still a sizable number of younger Koreans that still do want reunification. Nationalism in Korean culture is strong and Korean nationalism usually entails a reunification aspect of it.

It is also true that the primary concerns voiced by the opposition groups to reunification is economical, and they have been very vocal about it in recent years. But being vocal doesn't mean that it is representative of an entire demographic (e.g. squeaky wheel gets the grease).

>>So, I what I was pointing to was the fact that while a lot of us in the west seem to think reunification is the end goal, a significant number of Koreans, the actual people who we are discussing, do not favor it.

There is a disconnect between what the Western media portrays to its Western audience about Korean reunification and the actions and goals of the Western governments. Yes, the average US citizen might assume that the US wants Korean reunification, but the State Department and the many other various US foreign policy groups can have very different goals and strategies. First and foremost, the US will always care most about stability in the region - if maintaining the status quo means stability (i.e stability without reunification), then so be it. Furthermore, the US's current priority in Korea is denuclearization of the peninsula. Denuclearization is only tangentially related with reunification, and the strategies for denuclearization do not necessarily require reunification.[1]

>>It's ironic that in SK itself, people were much more interested in their pop culture, their daily lives

It isn't ironic at all, if you look at the history. The cycle of escalation/de-escalation by North Korea is so obvious now that most South Koreans don't even bat an eye with each provocation. Once in a while, an unfortunate event happens where there are some casualties, but most South Koreans know and believe that it won't escalate any further because an all out war would be disastrous to both sides. If you do a quick news search of North Korean provocations, there is a similar pattern since the mid-90s after Kim Jong-Il came in to power. Here's a headline [2] from 1999 that sounds like it could also be from 2002 or 2004 or 2009 or today.

I quote Dr. Jim Walsh, "I think we're just going to see more of the same, and we've been in this cycle a long time now, where we have provocation, followed by resolutions and naval exercises, military drills, and around and around it goes."[3]

It's been like this for over 20 years. The reason why it makes the news every time is because this cycle is not sustainable and will collapse one day. We just don't know when.

Actually, if you're really curious about the North Korean situation, Dr. Jim Walsh is an excellent person to start with. He's an American scholar with very good insights about the region (as well as foreign policy security, etc.)

Also, if you really want your mind blown, check out this photographer's project.[4] Yes, a lot of the craziness you hear about North Korea is true, and there is a lot of propaganda and suffering. But it's not all doom and gloom. I believe that once we stop looking at North Korea as the "other side" and start looking at them as people, we can start effectively engaging them.

[1] http://www.cfr.org/content/publications/attachments/Korean_P...

[2] http://web.archive.org/web/20041028203647/http://www.cnn.com...

[3] http://hereandnow.wbur.org/2014/04/22/north-korea-nuclear

[4] http://iamkoream.com/photographer-aram-pan-presents-a-differ...

As a South Korean, I find it hard to completely agree with the above statement. It is true that the desire for unification is not as strong as they were.. say.. 30 years ago. As you have pointed out, the younger generation in particular, have no experience of a unified korean peninsula and are not as eager for a unified Korea. But to say that Koreans "don't want" a unified Korea while the "the world wants them to unite" is a gross misrepresentation.

Just for the sake of correctness, a quick google search will reveal that a significant proportion (often majority) of the Korean population still feel that reunification should take place (as an example, according to Asan Institute this figure was at 63.5% as of April 2014). I hasten to add however that the younger generations (those that are below 40) are significantly less eager. Another thing to realise is that majority of Koreans do NOT consider North Koreans as an enemy. In fact (quoting again from the figures released by Asan Institute), 77.6% of the Korean population had either positive (43.8%) or neutral (23.8%) stance towards North Korea.

The road to Korean unification is a difficult one for sure. I cannot disagree with the comment that some of the issues regarding Korean unification lie with the South Korean attitude towards North Korea. But, as many have mentioned, there are other powers at work here too. Chinese and US interests (as well as that of Russia and Japan to a lesser extent) are major stumbling blocks that neither South Korean nor the North Korean governments can ignore.

Being a South Korean, it is my single greatest dream to see a unified Korea. It is painful to see that there are those from my own country that do not feel the same way. It is even more painful to see how powerless we are to shape our own country's destiny. Throughout history, Korea (unified or not) has often been used as a political pawn by its stronger neighbours. I hope, and pray, that things turn out somewhat differently and that both Koreas can unify peacefully to end this status quo.

Thank you. That's a very refreshing comment to hear. I don't believe I really meant to say that South Koreans see the North as an enemy but I can see it being understandable that one would feel more lukewarm about being reunited with a group that seems to hate you so much. I think that's why I really appreciate you saying this, because you dream for peace while many see and experience strife. That's very admirable.

Honestly, I personally think it would be almost romantic to see your country reunited. However, I'm not Korean, so I have no right to tell you reunion is right, or not right, and I'm concerned that sometimes, us as westerners seem to assume that this is best for this or that country, even when those in that country wish for something else. Either way, I wish you all the best.

43.8 + 23.8 is 67.6, not 77.6.

good point! my bad. just checked the source. it is 53.8% and 23.8% respectively. Would make the correction on the original post but seems that it's too late for me to make the correction now.

Could someone give more background on this? Is the reunification something that's on the table now, is this just planning and hoping? It would be great to see that happen, it'd be great to hear from someone who knows more about this issue.

Nothing's on the table as far as what is publicly known. This is just the SK government trying to get prepared for the economic shock of having to absorb NK on short notice, which could happen at any time this century.

SK is also sending a message to the international society that we should all prepare for the collapse of NK, while sending a message to Kim Jong Un that "you won't last long, and we know it."

Just today, the UN General Assembly approved a resolution to refer NK leaders to the International Criminal Court for human rights violations. Totally unrealistic, to be honest, but I guess this is how political pressure works on the world stage. Timing the "we'll spend $0.5T" press release to coincide with the UN resolution is no doubt intended to increase pressure on NK -- if not directly, then at least indirectly by letting the people of NK know that $0.5T is waiting for them if they can get rid of their Dear Leader. (Yeah, the news is censored there, but I'm sure a few thousand people will have heard of it by this time next year.)

thanks - that provides some context :)

I don't see the people of North Korea ever getting rid of their Dear Leader for two reasons:

(1) A significant amount of the working population is part of the government apparatchik especially in Pyongyang which is where any uprising would need to start. (2) There is a pervasive culture of fear. Everyone is well aware of the "we will harm you and your entire family tree" approach to keeping everyone in check. There is a culture of people telling on other people and "someone always watching" which makes it hard to trust anyone.

So I think the ICC/UN will be key to all of it in particular China/Russia who need to be convinced to abstain from any resolutions. China's speech to the Australian parliament at the G20 was promising in that they are trying to be better citizens in Asia. And Russia surely doesn't want the US to be continuing to use North Korea as an excuse to build anti-missile systems in Eastern Europe.

I agree, a bottom-up uprising in NK would be difficult to kickstart.

But if Kim Jong Un's brutal execution of his own uncle is any indication, there's plenty of room for infighting within the elites, or even a full-blown civil war if things get desperate enough (more trade sactions, another massive famine, etc).

Sooner or later, one of the factions might realize that their best exit strategy is to hand the country over to SK in exchange for a guarantee of immunity and a comfy retirement in the Caribbean. If I were the leader of SK, I'd accept that deal and, several years later, arrange for their luxury yachts to have an "accident" in shark-infested waters ;)

It also sends a message to China that if the regime falls, China won't have to pay for the aftermath.

There's no indication of it happening. If it happens, it could happen quickly; it's even more unpredictable because so little is known about what goes on inside North Korea.

It would be a massive task for South Korea and the people of North Korea are very poor, brutally oppressed, and would have great immediate needs including food, security and political stability for 25 million people. Look at the consequences of political vacuums in Iraq, Afghanistan, Syria, Libya, and Somalia to see what happens when those needs aren't met: The situation can break down quickly and become unredeemable. History may depend on how quickly SK acts, which may depend on how well they are prepared.

Also, if there is chaos in NK -- on China's border -- China may decide they need to intervene for their own security, or use that as an excuse.

> China may decide they need to intervene for their own security, or use that as an excuse.

That's definitely something that SK would want to prevent. The last time China "helped" unify a divided Korea, back in the 7th century, they took all the territory north of Pyongyang for themselves. Something similar could happen again unless SK gets the situation under control very quickly. Especially since nukes are involved, and China's been in an expansionist mood lately.

Interesting history. Is there any link (wikipedia?) talking about that event?

cmon dude, it only takes one google search and a couple clicks on wiki to find http://en.wikipedia.org/wiki/Goguryeo%E2%80%93Sui_War

If you read the article on the Goguryeo-Sui war, it is clear that its cause was Goguryeo raids on the Chinese frontier (not a divided Korea) and that Sui China was defeated (which helped lead to the fall of the Sui dynasty).

I think kijin was referencing the later conflict between Tang China's intervention in Korea on behalf of Silla: https://en.wikipedia.org/wiki/Goguryeo%E2%80%93Tang_War

Yes, and the subsequent https://en.wikipedia.org/wiki/Silla%E2%80%93Tang_War

It's amazing how quickly allies can become enemies once their common enemy is defeated. US & USSR after WW2, US & Taliban after the fall of communism, etc.

Let's not forget the time China "helped" unify a divided Korea in the 20th Century.

In order to understand North Korea, you simply _must_ read Escape from Camp 14[1]. If not, then at least read the Wikipedia entry[2]. Dear lord, it's incredibly tragic...

[1]: http://www.amazon.com/dp/0143122916/ [2]: http://en.wikipedia.org/wiki/Shin_Dong-hyuk

If unification was going to happen I think maintaining two currencies until the two economies are on par would be most stable for noth Korean citizens. By stabilising the NK currency through having it managed by the SK central bank while having the currency maintain a lower value than SK's, stability can be maintained while retaining labor competitiveness. All they need to do then is open the country to foreign investment and gradually open up the border. This way minimal public funds will be required and the private sector will help the economies unify over time in the most stable and efficient way.

Germany just gave a huge gift to ever DDR citizen by trading the Mark and the DDR Mark at 1:1. With a per person limit of a few thousand marks, it wasn't that expensive and really set the unification up to succeed with popular backing.

They could do the same by just sending some amount of south korean currency to every NK mailbox (or do it more throughly through records which I'm sure NK has kept on almost every household), while maintaining two currencies to allow NK export firms to have a competitive advantage in cheaper currency, rather than suffocating them for a period of time after unification (as you can read in the link), slowing the economic recovery.

"East German currency was exchanged for West German deutsche marks at a rate of 1 to 1, although the market rate was 4 to 1, according to the FSC.

The overestimated currency conversion helped stabilize the livelihoods of workers from East Germany in the short term, but soon resulted in a sudden wage hike, which damaged the profitability of East German companies."

I wonder how much insurance companies could save through unification instead of war (* the odds of war). I have to imagine "rebuilding Seoul with 10% odds over the next 50 years" would exceed the direct costs of unification.

No way. Ever heard of a force majeure clause? If Kim Jun nukes Tokoyo or LA, Progressive and Geico are not going to cover the damage to your car. In war, all contracts are off. You're simply screwed.

War risk insurance doesn't include such a clause.

I would love to see the US devote a huge portion of foreign aid to this development. Probably going to write my senator about this. Check this to see if your senator is on the subcommittee for East Asian Affairs, and write them about spending on the unification of North and South Korea ->

http://www.foreign.senate.gov/about/subcommittees/subcommitt...

Just the US military mission in South Korea costs $1.1 billion a year. Dealing with the North Korean situation would make most of that spending completely unneeded.

Even without North Korea, I can't imagine the US giving up a military base within spitting distance of mainland China anytime soon.

More American troops are stationed in Germany than in Korea, and Germany has been united for over 20 years.

Ongoing cost of the U.S. bases in Korea isn't likely an issue. You have to house those troops somewhere and bringing them back to the U.S. would require building and/or expanding of existing domestic facilities so the economics would make keeping the existing bases ideal.

I'm not sure how it works for the US army but don't people get "mission" wages which are many times the base wage they'd get if they were at home?

They get hazardous duty pay if they are serving in a hazardous zone, I dont think they get anything extra for serving at a peaceful base, no matter where it is.

Not an expert but based on my research it doesn't seem like this is a meaningful number at an individual level or at the aggregate base level: http://www.militaryrates.com/military-pay-incentives

> I would love to see the US devote a huge portion of foreign aid to this development.

With one party in Congress opposed to almost all revenue and spending increases, and preferring the current 'sequestration' scheme, it seems there is little chance of this. The best way to help Korea is to solve our internal political problems.

EDIT: And if we don't help, China will, giving them great influence and greatly weakening ours.

It's not really in the U.S. best interest to push for unification. A unified Korea makes justifying a large military presence in Korea very difficult especially with large U.S. forces about 1200km south on Okinawa and 500km east on mainland Japan.

The situation in DPRK is a key piece of leverage in our AP policy and without it we lose some amount of influence in the at a time when the US and CN are vying for the region's economic alliances. Given China's recent run-ins over the South China Sea Islands I would also stand to reason that Japan is also not that keen on losing a large U.S. force in Korea either.

These issues will likely only amplify over time as China continues to grow both as an economic and military power -- the U.S. will need to continue to strengthen it's presence in the region and a large part of that is flexing its military clout.

>It's not really in the U.S. best interest to push for unification

Yes it is.

>A unified Korea makes justifying a large military presence in Korea very difficult

Exactly.

The article talks about numbers, finance, GDP and economy without explaining the politics of it. How are they going to attempt reunifying with a country which is run by an autocratic regime that has essentially brain washed its citizens into hating the south? Is there going to be military intervention? What about north's nuclear arsenal? Or is it going to be an open reunification where the north government decides to stop ruling and handover the country to the south?

"has essentially brain washed its citizens into hating the south"

I've been to DPRK a few years ago, and as far I could see, their state propaganda is not aimed at southern ordinary citizens, but on the government of South Korea. They consider it to be a puppet government in the hands of USA. (There is actually more than that, but I think this reduction is accurate enough.) Overall, they are very open to the idea of having the entire Korea united, and in a lot of instances you can even find maps and logos depicting their country as the entire Korean peninsula.

The unspoken assumption throughout the article that the essentially globally failed model of central-bank inflationary capitalism (on someone else's terms) is the de-facto result of de-facto desirable reunification is, I think, the elephant in the room.

Is there a reason for this planning? Is this government or private enterprise? Maybe this is the south sending a signal to the north? Or private enterprise in the south with government backing? I swear Korean politics is more confusing than the east-west Cold War.

Reunification went well in Germany. Although even now there are vast differences between the east and west, the east is fully integrated. Think of it as the poor southern US vs the east coast.

I don't fully understand the politics either, but this is a clear signal that the South wants the North to flourish. Everyone wins when capitalism is injected into an economy. The South's private sector gains would be big because of the cheap labor, and the population of the North would have incredible wage growth. The effects of injecting capitalism would be magnified relative to the fall of East Germany because the differences in GDP are enormous.

If this happens, it would be the biggest win for capitalism/democracy I've seen in my lifetime (I'm born after the fall of ussr)

>Is there a reason for this planning? Is this government or private enterprise? Maybe this is the south sending a signal to the north? Or private enterprise in the south with government backing? I swear Korean politics is more confusing than the east-west Cold War.

The South Korean government expects the North to collapse at some point. North Korea only survives as a country because the Chinese give them oil and other countries give them food periodically. Nearly 100% of the country's economic output goes to the maintenance of the state.

>Reunification went well in Germany. Although even now there are vast differences between the east and west, the east is fully integrated. Think of it as the poor southern US vs the east coast.

That's ridiculous. Germany is a very wealthy country and it paid a huge price to reintegrate the East. A process that's not complete, by the way.

South Korea is not as wealthy as West Germany was, and North Korea is far worse off than East Germany. Reunification will break the South, economically.

It is a good idea to plan ahead. The East German gorvernment of 1988 looked at least as secure as the NK government looks now. The West German military draft was extended in 1988 'because the commies are stronger than ever'. When the East German regime fell, it fell so quickly that nobody had the time to make a well-thought out plan.

The West German government didn't have any plan in 1989, despite all the Sunday speeches dreaming of re-unification. In hindsight, many things could have been done better, eg the rules about ownership of nationalized property. Unresolved ownership questions were a huge roadblock for economic development.

There should be scholarships for a phalanx of Korean economists to go to Germany and study the world's best example. Maybe we'd get some new answers about what's going on with the old DDR's economic malaise, too.

It also noted that currency conversion is the most sophisticated issue in unification as the exchange rate would be largely conditioned on political negotiations and social consensus.

Somehow I doubt that currency conversion is the most sophisticated issue. The nuclear-powered dictatorship is also going to require a few brainstorm sessions.

shouldn't they, the north koreans accept reunification first?

I wonder if there is some non public intelligence about north korea that is pushing them to do this.

Why did Eric Schmidt visit North Korea (and Assange on a separate occasion)?

The North Koreans already accept reunification.

Except that they assume South Korea will be unified into the DPRK under the leadership of Kim Jong Un.

Unification is about the only thing the Koreas do agree on: https://en.wikipedia.org/wiki/Korean_Unification_Flag

But the devil is very much in the details! (And in this case even the broad strokes: capitalist democracy vs communist dictatorship, etc.)

>I wonder if there is some non public intelligence about north korea that is pushing them to do this.

First that and then this: https://www.irishtimes.com/news/world/asia-pacific/north-kor...

Something seems to be going on behind the scenes.

There's no way the North Korean military will allow unification to happen. They're much farther advanced, technologically and militarily than South Korea so in any war, they will squash them.

Just watch this video of North Korean might: http://www.youtube.com/watch?v=O-hyVzTVDLg

Hahaha. Everyone that downvoted me has no idea of the sarcasm here... The video is hilarious, btw.

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