Unification became a top item on
the public agenda when President Park Geun Hye remarked during a
press conference that unification would be like winning the “jackpot.”
There have since been many media articles asking
whether unification would lead to economic boom or bust, and,
within the political sphere, heated competition to try and dominate
the discussion with specific policy prescriptions.
As part of an ongoing series exploring South Korean strategies and policies for unification, Daily NK sat down with Professor Emeritus Shin Chang Min of Chung-Ang
University. He was the one who coined the term “unification would be the jackpot,” and we sought to find out whether he thinks President Park’s
remarks ring true.
Shin, who received his MA in Economics from
the University of Southern California and PhD in the same subject from the
University of Claremont, offered up a platter of expert advice from an economist’s perspective, covering the cost of unification, how this might be overcome, and, of course, the potential for profit, which he expects to be considerable.
What
does the slogan “unification is the jackpot” actually mean to you?
It means that there are lots of estimates as to the price of unification, but we have the capacity to handle
these and the potential benefits and advantages could be huge. I came
up with that slogan in line with my own confidence that the return on unification would
not simply be big, it could even be enormous. Most people, when confronted
with the unification issue, say that this or that that means we will
suffer; but unification is not a matter of choice! It is something that we must
overcome and go forward with. I wrote of unification as the jackpot so as
to highlight the point that we must be confident and create a grand vision.
People
fear that unification will demand immense sums of money. They worry that if the
South absorbs the North, then the South will have to bear the brunt of the
social costs that will arise.
During the time of President Lee Myung Bak,
there was talk of a Unification Tax. Because of ideas like that, people came
to fear that unification would represent a fiscal timebomb. Frankly, there is no particular cause for concern, and I believe we ought only to worry about the aspects we are
able to handle.
Remember, these investments will not
disappear; they will remain as national wealth and bring future returns. Thus,
the cost of unification transcends mere net profit calculations.
Because the average North Korean income is
now only about 5% of the South’s, integration could not be immediate even if
unification happened. This means that for the decade following unification,
approximately 7% of current South Korean GDP would be needed to raise North Korea’s
economic strength. But I believe we would only have to give about 1% of our income
to this.
Another 2% would come from reduced military
spending. It ought to be possible to get another 1% through long-term low
interest loans from international organizations such as the World Bank and International
Bank for Reconstruction Development (IBRD) […] The remaining 3% can come from issuing bonds,
thus placing the burden on the generation that will yield the greatest benefit.
Based
on your assessment of previous government policies, as well as the vision of the
Park Geun Hye administration, what is your recommended approach to unification?
Because North Korea was actually better off
than South Korea during the Park Jung Hee era, they
had no choice but to focus on maintaining their own system. Thereafter, there was no real progress until
Roh Tae Woo, which was when the economic situation turned around and the
Korean Development Institute began looking at the cost of unification. The estimated
figure they came up with at the time was enormous—over $100 billion.
During the next presidency, that of Kim Young Sam, the
belief was that debating “unification” with the North would be fruitless. Kim Dae Jung and Roh Moo Hyun then judged that we did not have
the economic capacity to handle unification, so they concentrated on peaceful
coexistence instead.
Fortunately, it seems the current Park administration
sees unification from a basis of flexible reciprocity. I sense that she used the slogan “unification is the jackpot” because she believes that real and genuine preparation for unification requires the concentrated effort of all citizens.
The
Park administration must use nationwide empathy as the foundation for a policy designed to move the hearts of the North Korean people.
This is because political dialogue with the Kim regime is difficult, and unification is only conceivable if the hearts of
the citizens of North Korea are on our side.
The
Park government seems to be preparing for sudden change in North Korea, while also working
on international cooperation to induce change. Is it important to convince
neighbouring countries of our vision for unification?
Generally, even countries
that are friendly with the North believe that their third generation hereditary
regime was a mistake. The most important thing here is China: South Korea needs to
consistently emphasize our perspective, while stressing that a Korea-led
unification will be of benefit to them.
In the past China had North Korea as a
strategic buffer region, and thus its existence was important. But we must
highlight that in today’s society this is not valuable. Further, we must stress
that a unified Korea can grow along with China […] Russia has already concluded
that a Korea-led unification will not harm its national interest. When Japan
and others are convinced, too, and if we highlight development based on peace in Northeast Asia, then we can take the lead in the unification discussion with confidence and leadership.
North Korea’s claim that it wants peaceful
unification is a disguised attempt to maintain [the Kim] regime, and we need to make neighbouring countries well aware of this point.
Can
North Korean refugees and defectors help the unification process?
When refugees adapt well to
Korean society they become talented social leaders, and this is a big help to unification.
In preparing for a future unification, [South
Korean] society must not abandon the task of embracing and understanding
defectors. In the process of unification defectors will be of immense help. We
will have to craft policy with a perfect understanding of North Korean consciousness.
Moreover, when defectors point out and explain the contradictions
in the North Korean regime, they help to bring forward its end.
