The Korea Herald


[Editorial] Cost of unification


Published : Aug. 17, 2011 - 18:47

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All swans were perceived to be white in the West. But what stood this perception on its head was the discovery by a Dutch expedition that found black swans in Australia in 1697. A black swan was no longer an oxymoron.

Based on this episode, Nassim Nicholas Taleb, the author of “The Black Swan,” builds his black swan theory ― a theory which refers to unexpected events of enormous magnitude and their impact.

In his book, the author also refers to a metaphorical turkey, which gets fed and lives in peace for 1,000 days. On the 1,001st day, however, the bird that has now become smug gets killed for Thanksgiving.

North Korea’s collapse, should it come, might be better compared to the fate of the turkey on the 1,001st day than to the unforeseen discovery of black swans. Despite intermittent predictions that the days of Kim Jong-il’s Stalinist dictatorship are numbered, the communist country under his rule has been muddling through. But it does not necessarily mean that it will continue to do so indefinitely.

A conceited Kim may not be prepared for his 1,001st day. But the South Korean government cannot afford to stand idly by, given the unfathomable impact it would have on every aspect of life in the South.

According to a recent report from the Korea Economic Research Institute, the durability of North Korea as a state is nearing its limit. It may collapse anytime, the institute says. Cited as reasons for its looming breakdown are Kim Jong-il’s worsening health, the economy in a shambles, intensifying international sanctions on his regime and his ill-conceived plan to hand over power to his youngest son.

One of the dire consequences would be a mass flight of North Koreans ― 200,000 within a month of collapse and 700,000 within three months, as estimated by the private economic think tank. Most of them would undoubtedly be headed to South Korea. But it would be no easy task to shelter, feed and clothe them.

Another problem would be how to maintain public order in the North. The economic think tank says that South Korea would need up to 230,000 security personnel.

The refugee and public security problems might be the tip of the iceberg. There would be a plethora of political, economic and social disruptions in North Korea that the South would have to deal with at short notice. In other words, South Korea needs a contingency plan for the North.

But nowhere in the current debate on the cost of unifying with North Korea is any mention of the North’s sudden disintegration and its aftermath. This is truly worrisome.

Last week, the South Korean Ministry of Unification held a symposium on how to finance unification. The public debate was an outgrowth of President Lee Myung-bak’s earlier proposal to collect a unification tax. After Lee made the proposal in his Aug. 15 Liberation Day speech a year ago, the ministry commissioned domestic research institutes to estimate the cost. A decision on a unification tax is due this month.

Among the commissioned think tanks was the Korea Institute for National Unification, which said the two Koreas should be unified in 20 years in the absence of a sudden disruption in Kim Jong-il’s rule. The institute said the amount of money needed to finance the first year of unification would range from 55 trillion won to 249 trillion won. The estimate is preconditioned by North Korea’s denuclearization by 2013 and the ensuing expansion of inter-Korea exchanges.

As a panelist pointed out, however, the institute’s study was flawed because it ruled out the possibility of North Korea ceasing to function as a state all of a sudden. The North Korea expert was right to say that such a contingency should have been put at the core of the study on the unification cost.

The ministry may have concluded it was inappropriate to discuss North Korea’s unforeseen implosion in a public forum when it excluded the topic from the debate. It would be consoling if the South Korean government has a classified contingency plan for such an upheaval in place and is updating it when needed.