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Web-only Exclusives November 30, 2000 From Our Correspondent: Hirohito and the War A conversation with biographer Herbert Bix From Our Correspondent: A Rough Road Ahead Bad news for the Philippines - and some others From Our Correspondent: Making Enemies Indonesia needs friends. So why is it picking fights? |
When the DMZ Vanishes
The specter of sudden reunification looms
AS MORE AND MORE reports of famine and economic distress slip out of North Korea, the South is having to ponder a daunting prospect: sudden reunification. What Seoul prefers to put off for a decade or more may come upon it in a matter of years, if Pyongyang decides it is too poor and hungry to keep up the fight. "We have contingency plans in place," says a spokesperson of the South's National Unification Board. "But we don't want the North to know what preparations we have made and how much more we have to do. We are trying to prepare for all eventualities."
How bad is the situation in the North? Kim Do Kyoung, director of LG Economic Research Institute, believes most people eat just one meal a day. "Very few, only the elite, those in the military or the Communist Party, can get two," Kim says. After last year's floods the economy shrank 4.7%, by Seoul's data, but Kim contends the contraction was more like 6%. He expects another dip of 3% to 5% this year. "The economic situation in the North is likely to go from bad to worse," he says. "With more floods and crop damage this year, food shortages [currently 3.5 million tons] will get more severe and North Korea will need more aid." Indeed: "Their arable land is being depleted. They don't have tractors, proper irrigation, fertilizers, pesticides. Every year they move closer to catastrophe."
Or another forced merger like Germany's. In what many call the largest leveraged buyout in history, the West German government decided to value the East's currency at a generous two stmarks to one deutschemark. Along with the cost of retooling plants and upgrading infrastructure in the east, the two-for-one exchange probably cost the west upwards of $100 billion, with the final bill yet to come. Koh Il Dong, a fellow at the respected Korea Development Institute (KDI), thinks the impact on South Korea of reunification will be even harder than on Germany.
"It's very risky to take the German model and extrapolate from there," he says. "The west knew a lot about East Germany's economic situation, its industry, its infrastructure. We know next to nothing about North Korea. Our economic ability and strength can in no way be compared with West Germany's in 1990. Nor can North Korea compare with East Germany, which was the most developed Eastern European state in the late 1980s." Koh estimates that the burden of reunification on South Koreans would be five to 10 times that borne by Germans. The KDI scholar argues that as the South grows more prosperous and the North's economy contracts further, complementation fades. The South's industries are now at an intermediate level, which might be able to absorb basic goods from the North. But by 2000, the South will have moved further up the industrial ladder and it would be harder to integrate the North's economy.
The unspoken assumption behind these calculations, of course, is that reunification is cheaper, not to mention far preferable, than war. For that, South Koreans are prepared to bear high taxes and build up funds for the day the DMZ opens. "As taxpayers, even though we don't want unification, we may not be able to avoid it," Koh says. Nor would most Koreans want to.
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