Sudden reunification could be trouble for Seoul

[January 04, 2012]  SEOUL, South Korea (AP) -- A single, reunified Korea has long been a cherished dream of people on both sides of the world's most heavily fortified border. South Korea even has a Cabinet-level ministry preparing for the day.

And while Kim Jong Il's death last month has raised those hopes higher among some in Seoul, few are eager to talk about the cold reality: Sudden reunification could be traumatic for both countries.

Any North Korean collapse and hurried reunification, analysts say, could spell the end of Pyongyang's ruling class while flooding Seoul with refugees and causing huge financial burdens -- perhaps trillions of dollars -- for South Koreans who have only recently gotten used to their country's emergence as a rising Asian power.

Korea observers aren't predicting such a collapse or the kind of "big bang" reunification that happened in Germany, which saw the overnight fall of the communist side and its swift absorption into its Western neighbor. The new North Korean leader, Kim Jong Il's son Kim Jong Un, is fast consolidating power, winning key backing from the government and military.

Still, the extraordinary changes in North Korea following the Dec. 17 death of the man whose iron rule lasted 17 years have stirred up dreams of a single Korea among some in the South. And not just in those with memories of life before the country was divided into U.S.- and Soviet-occupied zones in 1945.

The Swiss-educated Kim Jong Un "is less allergic than his father was to introducing new ideas from the world. That will help ease isolation and open room for reunification," said Bae Sang-il, a 36-year-old office worker. "A generational change is meaningful in North Korea."

Many South Koreans support the idea of eventual reunification, but they seem more wary of the huge costs that will come with it.

A poll in South Korea late last year, before Kim's death, showed just over half of those interviewed believed they would eventually be better off after reunification, although more than two-thirds said the costs are bigger than the benefits.

Both countries talk about reunification, but they have very different notions of what it would be.

North Korea sees it as a two-state federation, with each state abiding by its own rules and regulations but as one Korea.

South Korea and its U.S. ally would likely balk at anything other than a Korea that's a liberal democracy, or at least moving in that direction.

From Seoul's point of view, slow and steady are crucial for any successful reunification. A sudden reunification would be a serious blow for South Korea's vibrant economy and well-ordered society.

South Korea, whose constitution enshrines the goal of reunification, will be much better off, analysts say, if it can gradually build up a North Korean economy that Seoul estimates is about one-fortieth its own size.

Officials in Seoul will be faced with a monumental set of problems, whatever happens. They will likely have to open up the North's economy to trade and investment, quickly raise the living standards of millions, control the flow of North Koreans into the South, and retrain North Korean bureaucrats so they can help run the country under new policies.

This will be very expensive.

A South Korean government-affiliated institute said recently that the cost could be up to $240 billion after a year and up to $2.4 trillion after a decade.

South Korea's president has urged his country to prepare for reunification by studying the possibility of adopting a tax aimed at raising money for the costs of integration. The idea has largely stalled for the time being.

The German model is often raised for Korea, but there are important differences.

Germans in the west largely footed the bill for reunification after the collapse of communism, bringing the overall infrastructure of the former East Germany up to a standard similar to that in the West.

North Korea's population, however, is about half the size of the South's, while East Germany's population was only a quarter of the West's, according to Erik Lueth, an economist at the Royal Bank of Scotland. East Germany, he points out, was one of the wealthiest of the Soviet affiliated states; North Korea is much poorer than the South, and there are estimates of widespread malnutrition.

Also, East Germany's ruling elite, chafing under the Soviet yoke, was not averse to the idea of uniting with West Germany and even accepting its capitalist system. North Korean leaders, analysts say, won't quickly accept a system that would take away their power and seek accountability for a rule that the United States and others say often trampled on rights.

"Reunification would be terrible for North Korea's elite and wonderful for the North Korean people, although there would be a traumatic period of adjustment," said Ralph Cossa, president of Pacific Forum CSIS, a Hawaii-based think tank. "For the top handful of North Korean leaders, reunification under Seoul would mean jail or worse."

For South Korea, reunification "will no doubt be messy and costly, even if it comes with a whimper, not a bang," Cossa said. Still, "living with a hostile, unpredictable, nuclear-armed North Korea is not much fun either."

Reunification could also provide eventual benefits for the South's economy.

Economist Marcus Noland at the Peterson Institute for International Economics describes a "peace dividend" that would come with a reduction in military tensions and the associated drop in military spending this would allow. The North also has abundant natural resources and a relatively well-educated and cheap labor force.

Predicting the future is, of course, a gamble, especially in a place as unpredictable as North Korea. That hasn't stopped people from trying: Paddy Power, an Irish betting agency, is offering odds of 12 to 1 that Korean reunification occurs before 2020.

History, however, provides some potential clues about North Korea's future. Despite famine, international isolation and outside skepticism, North Korea survived the 1994 death of Kim Il Sung, the North's founder and father of Kim Jong Il.

"Now, despite a food shortage and economic hardships, the regime will probably be able to avoid a worst-case scenario due to unity among its top officials and assistance from China," former South Korean Foreign Minister Han Sung-joo wrote recently in the Chosun Ilbo.

So reunification, at least for the time being, seems a distant dream. And that may be a good thing for Seoul.

[Associated Press; By FOSTER KLUG]

Associated Press writers Hyung-jin Kim and Sam Kim contributed to this story from Seoul. Follow AP's Korea coverage at http://twitter.com/APklug and http://twitter.com/samkim_ap.

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