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Gov`t sets up economic vision of unified Korea

Posted January. 14, 2014 06:34,   


The government began research on the economic vision of a unified Korea as a means to create a stable economy after unification of South and North Korea. At her New Year`s press conference last week, President Park Geun-hye presented a long-term goal of achieving per capita income of 40,000 U.S. dollars, adding, "Unification is a chance for our economy to make a huge leap." She made it clear that the economic vision of Korea after unification lies in becoming a country with per capita income of more than 40,000 dollars and population of over 80 million. Currently, only three countries - the U.S., Japan and Germany - are in such ranks.

A high-ranking government official said Monday, "The president`s idea is to make the country into a stable economic powerhouse with huge domestic demand market through innovation of economic structure and unification," adding, "The government will soon launch research on this field through collaboration among ministries."

Another official said, "The president said unification is a huge success, which means she shifted to considering unification as cost incurring to being an economic opportunity." Yet the government will carry out research unofficially and in a closed manner since it can be perceived as work that necessitates the collapse of the North Korean regime.

In 2012, Korea became a country with per capita income of 20,000 dollars and population of 50 million. It was the world`s seventh country to enter such rank. However, when it will top 40,000 dollars remains uncertain due to prolonged low growth in the wake of the global financial crisis in 2008. According to the government and private research institutes, Korea can reach 30,000 dollars by 2017 and 40,000 dollars by 2021 based on an optimistic scenario of maintaining a 4 percent range GDP growth every year. However, economic growth at 3 percent level or below will delay the country reaching 40,000 dollars for up to 10 years.

Eighty million populations can be achieved only through unification. If the two Koreas are unified, the per capita income will be reduced temporarily as North Korea`s economic level will lower the average. However, experts believe that income can recover in a short period as the economy grows based on massive supply of low-cost labor and expansion of investment demand. They say that the Park administration should prepare thoroughly in the next four years to set up the foundation of entering the ranks of countries with 40,000 dollar per capita income and population of 80 million, since the new government wasted its first year on disputes on economic democratization and delay in economic invigoration legislations.

Yoo Byung-kyu, secretary general of the National Economic Advisory Council, said, "The Korean economy is mired in numerous problems of investment, growth and job creation and there is no breakthrough," adding, "Unification will be a breakthrough to seeking renewed economic vitality." Shin Min-young, director of economic research at LG Economic Research Institute, said, "Korea will manage to reach 30,000 dollars of per capita income, but reaching 40,000 dollars will not be easy," adding, "Productive population will start declining after three years resulting in sluggish investment activities. This is the time to make quality changes in the economy."