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Korean Reunification Cannot Follow the German Economic Model

  In the past few decades after the Korean War, the general consensus among the people in both South Korea and its American allies has been towards reunification of the long-divided Korean peninsula.  An often proposed solution was to mimic the very same model that East and West Germany implemented shortly after the fall of the Berlin Wall with many believing the fall of the Demilitarized Zone (DMZ) as the Korean equivalent.

   As optimistic as this would sound for those who have been separated from loved ones during the onset of the Korean War, simply copying and pasting this type of solution would only place a bandage on a gaping wound caused by the vast socioeconomic disparity between the two countries dwarfing that of Germany.    

  Many parallels have been drawn between the Korean peninsula and the recently reunified Germany, ranging from a country divided by political strife during the Cold War to the economic disparities that are posed due to extended periods of separation and the poverty induced as a result of living under a totalitarian regime. There are various reasons as to why this comparison is flawed; though the largest concern tends to revolve around the potential economic ruin that reunification would bring to the South.  

   Looking at the situation from a purely economic sense, the reunification of Korea would no doubt induce a heavy debt. To compare North Korea’s current economic struggle with East Germany is to massively understate the nightmarish financial crisis that currently exists.  On January 1, 2013, Reuters reported that the costs of bringing the North back to its feet would incur a staggering annual cost of seven percent of the South’s GDP for at least ten years.  Additionally, according to The Heritage Foundation as of November 11, 2014, the GDP per capita for North Korea weighs at $1,800 while South Korea stands at $32,272.  

   For comparison, the East German GDP per capita at the time of reunification was about $10,000, incurring a total debt of $1.9 trillion over a period of 20 years, also acting as one of the richest countries in the Eastern Bloc.  According to The Guardian on October 9, 2012, the East and West German GDP were $11,800 and $27,617, respectively. Thus, even with a GDP per capita approximately ten times higher than that of North Korea, East Germany still caused a fair amount of economic burden towards West Germany. 

   Even if one tried to bring this comparison over to Korea, the economic disparity coupled alongside the potential societal issues that would occur as a result of the mass exodus from the North cannot be simply ignored for the sake of simple comparisons.  Thus, one can only imagine the crash in economic activity that would occur in South Korea as a result of having to carry a stagnant economy. 

   The reason West Germany was able to endure such economic hardship in no small part due to various relations that it had with East Germany that North and South Korea simply do not possess.  According to The Diplomat on July 18, 2014, there was constant economic and social interaction between both the governments and people of East and West Germany through the Soviet Union that allowed for the transition to reunification to go smoother despite the socioeconomic hardships that occurred as a result.  North and South Korea have no such connection.  On the contrary, the current relationship between the two countries borders on a constantly aggressive front. Despite various attempts by the South to create some form of economic relations with the North, they have all been shot down on the basis on North Korea’s refusal to give up its sovereignty.        

   Cruel as it may sound, Korean policymakers cannot simply use the German economic model as an all-encompassing solution to all of their economic problems.  If anything, the Korean peninsula must find its own solutions that do not directly mirror that of the German economic reunification model.  This is not to say that economic issues would make such reunification impossible or that the German model does not have merits.  To the contrary, the German model does have its merits, though they can only be applied once North and South Korea reach a certain economic and political ratio that the German countries were able to achieve.  However, this seems unlike to pass as North Korea has yet to take the first step towards any type of economic reform and seems unwilling to budge anytime soon.

Ethan Kim  komina12345@gmail.com

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