Tongil DaebakThe Road to One Korea

Prosperity in Peace

Dr. Chan-min Shinn

Opinion Poll 2014. 2. 3. (Chosun-Ilbo)Reunification yields benefits for

me.

I get no benefit from reunifi-cation.

Gains from reunification will be greater. Cost of Reunification will be greater.

Reunification will be good for the country.

Reunification is not necessarily de-sirable.

30.9%

66.3%57.2%

39.4%31.8%

48.6%

2015, A Dramatic Change in Public Sentiment

아산정책연구원 ( 아시아경제 , 조선일보 , 2015. 1. 6. )

• Reasons for Reunification - Homogeniety (one nation, separate families) 40.8% - From economic perspectives (growth) 37.7%

• Reunification, necessary 82.6% In their 20’s 39.2% ⇒ 71.8% 40’s 57% ⇒ 81.7%, Over 60’s 58.3% ⇒ 91.9%

Reunification Costs & Required Funds

1. Crisis Management Expenses, including food supplies, clothing and medicine, the kind of supplies that will be required immediately after reunification.2. Systemic Unification Expenses, including costs associated with politics, administration and the military, education and culture, social infrastruc-ture and so on.3. Physical Capital Investment, required to grad-ually reduce the income gap between the North and South.

Estimates for Required FundsData : Bank of Korea, Major Economic Indicators, De-cember 2016

Year of In-come Ad-justment

2026 ~ 2035

2031 ~ 2040

2036 ~ 2045

Unit: US$Billion(Based on 2015 Constant Price)

1,396

1,585

1,798

Rate Compared to South Korean GDP

6.4%

6.4%

6.4%

Gains from Reunification(⇒“Daebak”)대박 !

• At the point in time of Unification: No More Expenses due to Division• 10 year period after Reunification: (Daebak!)

(South Korea) 11% Economic Growth every year In case of starting from US$32,000 per capita, a decade later GDP per capita more than US$62,000 in Unified Ko-rea (North Korea) More than 20 times of income as compared w/ that of the beginning year• Thereafter: Continuing Economic Growth ⇒ Prosperity in Peace…

Korean Reunification, Daebak! Gains from Reunification During the 10 year period

- South Korea 11% Economic Growth every year 1. Buy Korean Products Policy 5.6% of GDP 2. Trend Growth Rate 3% 3. Increase in Productivity from Released Military Duty 2.4% (* Natural resources of NK, Open path through continent, Economies of scale, …, etc. Not Included.)

__________________________________________________________________ 11%- Northern Region of Unified Korea 10 years after, More than 20 times increase in per capita GDP

Estimated GDP per capita of G7 countries10 yrs after Korean Reunification

Coun-try

G7, GDP per capita(parenthesis: Estimate in the year of Korean Re-unification)

Population(1,000) <CIA Factbook Es-timates 2014 >

USA $73,139 ($60,000)

318,892

GB 56,199 (49,000) 63,743 Ger-many

52,452 (48,000) 80,997

France 49,955 (41,000) 66,259Japan 47,457 (38,000)

127,103China < 7,855(2015) >

1,355,693Korea unified

* $62,021 (32,000)

73,892

Minimizing Costs & Accommodat-ing 1. Two Separate Economic Groups for

the 10 year period after Political Reunification

2. Buy Korean Products Policy3. Decrease in military expenditures

for the 10 year period4. Monetary Compensation to the

Owners of Land in the North - Keeping State Ownership of Real

Estate5. Direct Financing 1) Borrowing from international insti-tutions & Issuing bonds in the int’l financial mkts. 2)Taxes

Conservatives & progressives <Solution>

• Conservatives : National securities, management for keeping divi-sion,

human rights (No unification at best) + Set the final goal at Reunification itself

• Progressives : Peaceful unification (emphasizing peace not unifica-tion)

+ Set the final goal at Reunification itself- Approaching to the sentiment of North Korean people

-Two different groups emerges each other and both parties

can keep the same goal & become one entity toward Reunification itself

Reunification, Daebak! (What next?) Reunification: Possible only by the hands of the people in the North

- Along the stream of public sentiment, Deprogramming (Nonmilitary SOC, Possible penetrations of mi-crowaves, Cooperation of scientific ar-eas…)

Three Steps for Korean Reunification1. SK, National Consensus centered around “Tongil Daebak”2. Residents in NK - Understanding the gist of “Tongil Daebak” ⇒ Win the hearts and minds of NK residents (SOC investment in the North w/ seperating the economy from politics)3. NK residents themselves choose the system - Free Democracy & Market Economy -

Facts & Truths in Various Issues

1. “Puh-joogi” 6. Absorption impossible2. Reciprocity 7. Abrupt unification, 3. Nuclear Weapons “simply not the solution”

8. China & Super Powers4. Peaceful Coexistence 9. Human Rights in NK5. Anti-Communism 10. Refugees from the North& National Securities 11. Trust processes