Events on the Korean peninsula are moving dramatically faster than ever, bringing us back to 1989 when the Berlin Wall fell and heralded the beginning of German reunification. And by which it became Europe’s largest economic power and the fourth largest among G-20 nations.
Although the conditions are different between Germany and the Koreas, there are historical, national and economic factors that contribute to bringing the two sides together. These factors push the richer and economically more powerful side to bear the cost of integration from a long-term point of view. These will herald substantial gains in the future.
This is what happened in the case of united Germany, when West Germany bore the huge costs of integration to benefit from the qualified human and natural resources of the East and bring about a stronger and more prosperous economy. The same can apply to the north and south Koreas. South Korea ranks 12th among the world’s largest economies, and its population has an average income of $32,000 a year compared to the backwardness in the north where living standards are low with a $1,400 per capita income, one of the lowest in the world.
South Korea’s gross domestic product (GDP) stood at $1.4 trillion in 2016, 86 times that of the North, which recorded $16.2 billion the same year. While South Korea is the sixth largest exporter and seventh largest importer in the world with diverse trade exchanges, the North’s trade depends mainly on the Chinese market, without which the economy would collapse completely.
As for differences in the scientific and technical fields, the North and South cannot be compared although they were at the same economic level 50 years ago, before the two adopted different approaches and which widened the gap. This was the case between east and West Germany after the World War II.
The difficulties in Korea’s case will certainly be more complex in case of any integration. The East’s mentality is quite different from that of pragmatic Europe, which means Korean unity will not be achieved straightaway but could take a long time, as was the case for Germany.
Either way, this will result in an eventual reunification of Korea, which means the birth of an economically strong country that will become one of the top 10 countries within the G20. Especially as South Korea has the economic potential to bear the burden of unity and push the new state’s unified economy towards new horizons.
Thus, the integration between a strong economy built upon advanced technical and scientific capabilities and another that has the natural resources and human capacities will be a powerful boost. The combined Korean population will rise to 76 million, very close to Germany’s 80 million, which would transform Korea into an economic power comparable to Japan on the Asian continent and to Germany, Britain and France on the European.
Although the North Korean president remains unpredictable, the recent rapprochement indicates that China is able to steer the North Korean track. It also comes immediately after Kim Jong-un’s visit to Beijing, which announced the new approach, including an abandonment of its nuclear weapons and unacceptable behaviour in international relations.
China has economic and strategic interests to maintain security and stability in this vital region, which means the final say in the unity of the Koreas. This is despite that fact that it will be a difficult process to be achieved right away. It will be determined by multiple interests, including those of the Koreas, the Chinese and Americans.
Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.