Premature Unification Is Dangerous ①

[imText1]North Korean Democratization = The Reunification of North and South Korea (?)

Seven years ago, the work I was doing with the individual working as the Chinese superintendent at a Korean corporation became a topic of discussion. As I mentioned that I worked for North Korean human rights and democratization, the individual replied, “So you are a person that strives for ethno-unification.” I had not mentioned that my work’s purpose was for unification, and although I was momentarily bewildered and found it absurd, I was able to come across and understand the conceptual pattern of the Korean people-viewing democratization as unification. Likewise, a decade ago and even two decades ago, the formula in which the collapse of the North Korean system and North Korean democratization equaled North-South Korean unification was deeply in the minds of many Koreans.

Thus, those individuals that disliked North-South unification even came to the point where they disliked the collapse of the North Korean system. However, as people recently opened their eyes to international affairs they came to realize that the collapse of North Korea did not necessarily mean unification. In relevance to the North Korean issue, many people began to be wary of China’s existence and influence upon North Korea as well. As this atmosphere spread, the idea of enduring the hardships of premature unification was spreading.

The fact that the Korean peninsula was divided by foreigners without the participation or agreement of our nation’s constituents, the fact that our people have lived molding our nation for a long time, and the fact that our national consciousness is uniquely adamant made it acceptable that North-South unification was rightful from the very beginning. The idea that the faster unification had occurred, the better it would be also became all the more justifiable.

However, the situation has now changed. During the long term state of division, everything between North and South Korea has changed. Although some may ask what the great fuss is about a mere 60 years, it is said that those 60 years correspond to the 600 years up to the 18th century. Although North and South Korea are divided, the division does not have to be so significant because the world today is interconnected as one global community. South Korea has opened its doors to the rest of the world, but it is not the same with North Korea. Thus, as a result of division, the differences in nature between North and South Korea are magnified. In actuality, many believe that they would feel less of the difference living in places such as Japan, Australia, Canada, US, and England than in North Korea. Due to this fact and the notion of large unification expenses, the majority of the younger generation is against unification. Even amongst those that do support the unification, some are in support because they feel a sense of duty and that a unified Korea is the way it should be not because they take pleasure in it.

I will not logically discuss whether unification is the way it ought to be, or whether we must unify Korea. Many Koreans, Northern and Southern alike are genuinely desiring unification. I too would like to support the unification without questioning the different factors involved. Nevertheless, early or premature unification is not the answer.

Examine the German Unification Case

Let us examine the German unification case study here.

The most important factor regarding unification is not the expenditures for unification. Nevertheless, let us discuss this topic fist since it happens to be widely discussed.

The German government is not publicly releasing how much was spent in the process of unifying East and West Germany. However, in September of 2004, Claus Schroeder, researcher of the Berlin Freedom University released that the cost of the unification process of Germany was calculated to about 1.5 billion euros (1.8 billion dollars, 1,900 billion won). Prior to this, the German Economics Research Center (IW) had proposed that the unification process would cost about 125 billion euros, but Schroeder claimed that these calculations did not include many factors including the 1.2 billion euros reserved as retirement funds for East Germans. These calculations failed to include various social expenses. Accordingly, by including these calculations, the overall costs would only increase. By looking at these figures alone and the fact that Korea’s annual budget is about 200 billion won, we can easily see that the cost of unification is extraordinary. Even if we were to pour out 9 years worth of Korea’s budget, we would lack.

If so, what is the result of this colossal investment? Right after the unification, from 1991 up to 1996, the former East Germany region had a higher economic growth rate than its former Western counterpart. However, after that the former West Germany region had an increase in gross average by 1.3% whereas the former East Germany region had ceased at a 1.0 percent. After the latter half of the 1990s, the economic gap is only spreading. At one point the former West Germany region’s income level came as close to 80% of the former East Germany’s, but has not exceeded that point. Increase in the unemployment rate in that region has placed an increasing gap in the income levels. As globalization made an onward movement, companies began to look for lower wages and lower taxes, leading productivity in comparison to the wages, leading marketability, and profitable environments. This gave a blow to many Asian economies and many economies throughout the world, but East Germany as well.

After the German unification, Germany’s unemployment rate nearly doubled. Although it was 6.4% in 1990, presently it is at 12 percent. The former East Germany region has an unemployment rate that is doubled of the former West Germany region-secured at about 18.2 percent. It is known that the unemployment rate has even exceeded 25% especially in areas surrounding Berlin. These are regions such as Brandenburg, Mecklenburg-Vorpommern.

According to the 2004 former East Germany evaluation research report, the former East Germany region was suffering from high levels of unemployment and weak accumulation of funds. This was despite the fact that this region was given vast amounts of investment. The problem worsened as the younger and educated East Germans immigrated to West Germany. The report also feared that even West Germany’s economy would result in collapse due to the federal government’s annual support of 9~9.5 billion euros to East Germany. Research Chairman, Von Dohnayi, claimed that “2/3 of the economic downfall’s cause was East Germany’s reconstruction expenses,” and warned that at this rate all of Germany would collapse. The research committee suggested that more jobs be created rather than providing social overhead capital. Last June OECD also indicated the various issues that came about following the East-West Germany unification. The devastating outcome of East Germany can not be seen as only East Germany’s failure but rather it’s affects on Germany as a whole. Recently the German economy has become inactive and the growth rate is in a slump–1.2% (2001), 0.1% (2002), -0.2% (2003), 1.6% (2004). This year the growth rate was recorded at 0.0 percent. The unemployment rate has come as close as 12 percent. Registered unemployed individuals alone are over 4 million; early retirees included would supersede 5 million.

The vast amount invested into East Germany during the past 15 years is recorded to be the most inefficient investment throughout modern history. East Germany invested a tremendous amount but instead it resulted in higher wages, and the enterprises were burdened with social welfare expenses. Thus, competitiveness weakened and growth potential fell.

Everything happens for a reason. There is an old traditional proverb which teaches that in order for something to develop, the proper steps and procedures must be followed-trouble waits if it is forced upon. East Germany also had procedures to follow in order for it to develop and expand. However, East Germany failed to take one step at a time and neglected the proper procedures by jumping to the conclusion that vast investments would solve all problems. This only resulted in wasted capital and a weakened competitive power.
In a way, social problems are more serious than economic problems.

It is widely known that West Germans referred to the East Germans as “Ossi” (lazy and complaining East German bastards), and that East Germans referred to the West Germans as “Wessi” (arrogant and haughty West German bastards). These terms convey the complaints from both East and West Germany. West Germany disliked the fact that they were supporting East Germany, and East Germany resented being treated like an inferior state.

It is a shock to learn that 1 out of every 4 German would like the Berlin Wall to be rebuilt. Additionally, 85% of East Germans responded that they feel that they are inferior citizens of Germany.

These social problems do not stop at just that level. Rather, it feeds into politics, economy, and other realms of society.

To be continued…