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What are the economic implications of a possible/eventual/inevitable reunification scenario that just become a bit more realistic? South Korea is already an eco
by cloudkj 8y ago
What are the economic implications of a possible/eventual/inevitable reunification scenario that just become a bit more realistic? South Korea is already an economic powerhouse in its own right. I'm wondering more from the point of view of an investor - the public markets don't appear to be particularly swayed by the prospects, probably because the scenario is still farfetched and decades away, if possible.
- pm90 8y agoYou can take a look at what happened after German unification to get an idea of what it would look like. To be sure, this is a frequent topic of discussion in South Korea, and this precise situation has been studied in some detail. The consensus seems to be to NOT do what the Germans did: It has been economically prohibitive, and East Germany is still noticeably behind the West in economic development. And the economic difference between the two Koreas at the moment is far, far greater today than the difference between the two Germany's in the 1990's. There are also cultural factors: North Korean workers are used to working under Communism, will they accept working under a capitalist elite? That being said, a thought experiment with a Unified Korea is rather interesting. North Korean labor would perhaps be cheaper; South Korean companies could outsource manufacturing to the North instead of to China and still remain globally competitive. The North has vast mineral resources which could be exploited. A land route to China would increase Korean-Chinese trade immensely. So generally it would look very good economically.