Fund could change views on unification: German experts
By Kim Young-jin
South Korea’s proposed fund to prepare for unification with North Korea could help change public perception of what promises to be a costly and challenging event, German experts said Sunday.
Unification Minister Yu Woo-ik visited North Gyeongsang Province Saturday to make a “unification jar” to symbolize the proposed fund, which asks for voluntary donations to ready for the eventual joining of the sides. The Lee Myung-bak administration hopes the National Assembly will soon pass a bill to implement the fund.
Analysts say that while no exact template exists, German reunification was the closest precedent for what the Koreas could one day experience.
“I think it is important to explain to the South Korean taxpayer that it is better paying a little now, rather than a lot tomorrow; that unification is not only a cost factor, but rather an investment that will yield results in the economic and the political sphere,” said Rudiger Frank, an economist focused on Asia at the University of Vienna.
Bernhard Seliger, head of the Hanns Seidel Foundation Korea Office and unification expert, agreed. “People see that money is saved for an important topic. From a political economy view a unification fund does make sense,” he said.
External experts project the cost of Korean unification to soar to between $50 and $224 billion.
Despite the daunting figures, the issue remains off the radar for many South Koreans amid the growing cultural and economic divide between the two countries.
Seliger pointed out that before East and West Germany joined, estimates of the unification costs were too modest, with many thinking privatization revenues would burden the cost. But problems including a troublesome currency union, outflows of young talent from the East and income disparities long plagued the process.
Based on that experience, he projected that for Korea, unification would consist of short term costs such as emergency food aid and securing nuclear weapons; medium-term investments such as infrastructure development and economic training; and long-term costs such as creating competitive education systems.
Such prospects prompted President Lee to float in 2010 the idea of a unification tax. After that proposal was met with apprehension, the administration developed the idea of the voluntary fund.
During annual consultations between the ministry officials and former German leaders involved in the unification process since last year, the South Korean side has been encouraged not to be overwhelmed by the costs and look at the situation with a soft eye.
“They said we have to look at the human side of it,” a Seoul official said. “So it’s not just the money that we are interested in. In the process we hope people start developing interest in national reunification. Those who donate can be proud of being part of the process. That is probably the more important issue.”
The fund has its critics and it remains to be seen whether the Assembly will pass it. Some here have called for the administration to be clearer about the usage of the funds and its vision for unification. Pyongyang has complained that Seoul is trying to hasten its collapse.
Seliger suggested the fund could get a more “neutral” name and that some of the money go toward cooperation projects to deflect disagreements. Frank advised the government to decide “early and transparently” how the funds will be used.
Still, Seliger said Korea was fortunate to have past precedence, and perhaps time, on its side.
“The government can prepare well in advance for unification, mainly by maintaining a healthy and thriving South Korean economy. A well-prepared government in Korea cannot avoid the costs of unification, but it can hopefully help reduce them and manage them in an orderly manner,” he said.