Dear editor,
I must admit I was extremely intrigued when I saw a Sept. 22 article, ``Unified Korea to Exceed G7 in 2050,'' regarding Goldman Sachs analyst Kwon Goo-hoon's projection of a possible unified Korea's GDP in 2050.
The picture portrayed by Kwon seems rosy enough, but his conclusions are based on some seriously miscalculated assumptions and Kwon himself offers a clue in the report as to why the report should be considered as ``totally misleading.''
What is the clue that I am referring to?
According to Kwon the unified Korea's GDP is somewhere in the region of $6 trillion or more. Sounds great, and how did he arrive at this figure? Oh yes, the mineral reserves lying underneath North Korea estimated to be worth 140 times North Korea's 2008 GDP figure, which is around $40 billion.
However the figure of GDP $6 trillion will be achieved only if the unified Korea manages to excavate and sell all of its minerals in one fiscal year, something no government will do since the burning question then will be ``once the minerals are gone, then what?''
But the biggest flaw in the report is the assumption that while a possible unified Korea's economy will increase six or seven fold during the next 40 years, the G7 nations' economies, with the exception of the U.S., will virtually remain constant over the same time period.
Considering the dismal state of employment in Korea for people in their 20s and 30s and the continued progression of the low birthrate, subsequently resulting in a decreased population, it would be rather hard to imagine Korea's per capita productivity to surge way past that of G7 nations, unless Korea experiences a tidal wave of inflation on prices all across the board, the kind of inflation that could crush a nation's economy.
And, finally, if natural resources such as minerals were all it took to boost an economy, it would make more sense for us to believe that Central Asian nations such as Kazakhstan or Uzbekistan, with its immense reserves of natural gas, or Africa with its oil and diamonds would suddenly take over as the world leader in GDP.
And please don't insult our intelligence by claiming that North Korea has more valuable natural resources than most countries in the world.
Lee Cheun-heui
Financial analyst
Yongsan-gu, Seoul