Posted on 05/11/2018 8:55:23 AM PDT by 2ndDivisionVet
With a certain Donnie from Queens having just announced a historic meeting between himself and North Korean hipster dictator Kim Jong Un in a month's time, we thought we would look at the potential cost if, God willing, North and South Korea were to eventually unify.
Fortunately for us, Stephen Jen and Joana Freire of Eurizon SLJ Asset Management have beaten us to the punch. Yesterday they published a hypothetical research piece looking at the cost of unifying a peninsula, using as a guide Germany's reconstitution in 1989.
So what are their conclusions?
First, Eurizon starts by looking at the transfers from West Germany to East Germany in 1989, calculating a cost at around €1.7trn in today's euros, around 62 per cent of West Germany's current GDP, or roughly 8 per cent of the European Union's nominal GDP, according to the IMF.
The Korean populations are closer in size, with around 26m North Korean citizens compared to South Korea's 51m, a near 2-to-1 ratio versus West and East Germany's split of around 4-to-1. So all else being equal, the lack of a need for serious population flows from south to north should at least partly aid unification.
That is, until you remember East Germany still carried the legacy of the Nazis' bellicose wartime industrial efforts. From Eurizon's note:
Much of the industrial base in Germany that supported the war efforts during the 1940s were located in the former East Germany. Mercedes, BMW, VW, ThyssenKrupp, and Bosch, which are household names today, but all of them had major factories before May 1945 in support of Germany’s military operations. The industrial ‘culture’ has never disappeared in EG, even if it had faded somewhat under communist rule.
Together, these items suggest that population flows might be less of an issue....
(Excerpt) Read more at ftalphaville.ft.com ...
Those are my thoughts, too. The NKs have been brainwashed since early childhood, at least against the US, I don’t know what they are told about South Korea.
The alternative is leaving things as they are or killing the vast majority with nuclear weapons.
No one is suggesting it is. I don’t think most people here realize how prosperous South Korea is now.
Maybe.
There will be some superfund type issues, but they’ve got a ton of arable land, plenty of water, and otherwise smart people. South Korea is in great shape, and there will be all kinds of people interested in the business of bringing NK back.
The Filipinos and Indians could turn the place into paradise in 10 years like they did Dubai and those other cities.
I don’t want the alternative - I’m saying it would take a lot of work and I think some will never make it. Just saw your post about the homeless vet shelter so you know what I mean - retraining people to live in a normal society.
How many of those people have a Samsung or LG product?
South Korea is a prosperous modern economy.
North Korea is a basketcase country full of brainwashed people.
Their notions of society are completely different.
I don’t see Kim giving up being worshipped.
For the sake of the DPRK people I hope I’m wrong.
For many years I trained welfare/food stamp recipients on how to look for work. Those that wanted off the system were usually successful, but those that were happy on the dole stayed on it. And we were paying for them to go to college or trade school.
I think China has given him his marching orders.
When you free a population from socialism, you have to teach them to think creatively and to work. That is not easy.
If China has a mining agreement with them now, would we expect that to change?
It’ll be easier with Confucian Koreans than it would be with most other ethnicities I believe.
China is actually mining in Siberia.
It used to be theirs until the 19th century and thanks to sanctions, Russia can't afford to setup the mines themselves.
But a border you can walk over to a Western style democracy would be more than they would put up with.
Both Koreas want reunification - as long as they will be in charge.
I doubt that reunification is on the table - just too much for the Norks (and China) to surrender. It likely requires one side to lose, totally.
Likely it is de-nuclearization, in exchange for economic improvement in the North. Possibly a formal end to the war.
China now realizes that even with nuclear weapons, the Kim regime is likely to collapse in a few years at most and to leave an impossible and dangerous mess on China's doorstep. Kim has been told to accept China's assistance and to make a deal with the Americans and South Korea or to expect further economic pressure and likely ouster. And so we will have negotiations.
The massive North Korean mineral deposits are the dowry that makes a deal not just possible but attractive. Kim though will have to not just open up to foreign investment and exploitation of North Korea's mineral wealth, but he will also have to change his regime so that it will survive despite losing its nuclear fangs. Who better to make a deal for North Korea's mineral wealth and regime renovation than a tough businessman who made his fortune renovating and building iconic New York properties -- and then went on to become a TV star and US President?
What?
China has a one country two system policy. It coexists with democracy in HK and in Taiwan.
For Chinese leaders have able to accomodate with reality and after the collapse of the Soviet Union, China has warm relations with post-Communist Russia.
China should be able to get along with a unified democratic Korea when it happens.
They'd invade Taiwan if they could get away with it.
And there is a weird double visa policy keeping Hong Kong Chinese and mainland Chinese separated.
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