The cost of reunifying the Korean peninsula is estimated to range anywhere between 100 billion U.S. dollars to 3 trillion U.S. dollars. The wide discrepancy in the cost estimate by the experts is largely due to the inherent difficulties in quantifying...
The cost of reunifying the Korean peninsula is estimated to range anywhere between 100 billion U.S. dollars to 3 trillion U.S. dollars. The wide discrepancy in the cost estimate by the experts is largely due to the inherent difficulties in quantifying the various assumptions and variables that relate to the reunification process. Although the wide range of cost estimates does not render the quantification meaningless, it nevertheless poses a problem. Furthermore, given the domestic and foreign political conditions which must be fulfilled in orderfor the reunification to occur and the bad behavior of the North Korean government, the negative sentiment of the people in South Korea towards the assumption of the cost of reunification is on the rise. Nevertheless, the reunification will assure a brighter future for the nation in the long term.
It should be possible to procure approximately five percent (5%) of the GDP to fund the cost of the reunification from an effective combination of flexible tax mcreases, foreign loans and investments, budget cuts, mid- to long-term decreases in defense spending, and an increase in productivity of the military force.
Aside from the debate of excessive pessimism and optimism about the cost of reunification, the scope of our contact between South Korea and North Korea should be enlarged based on a steady exchange of economic cooperation with North Korea. In this effort, South Korea should apply the principle of strategic reciprocity in order to eliminate the negative sentiment stemming from the unilateralism and promote a sense of nationhood between the peoples of the north and the south and thereby not only reduce the cost of reunification but also build a national recognition that the reunification is necessary.