North Korean Paradoxes

Circumstances, Costs, and Consequences of Korean Unification

by Charles Wolf, Jr., Kamiljon T. Akramov

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Abstract

Analyzes the economic, political, and security issues associated with Korean unification and considers what the capital costs of unification would be under differing circumstances and assumptions The authors focus on the capital costs of doubling the North Korean GDP in a short period of time (four to five years) on the premise that such a rapid improvement could allow the embryonic unified regime to endure despite the persistence of substantial income and other disparities between North and South. They estimate that the total costs of unification could vary from about $50 billion to $670 billion. dependent on how unification would occur. The authors also compare points of relevance and nonrelevance between the German experience with unification in the 1990s and what might occur in Korea. Finally they briefly assess the problems that a unified Korea would confront relating to possession of weapons of mass destruction, its relations with neighboring countries, especially China, and its alliance with the United States.

The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center supported by the OSD, the Joint Staff, the unified commands, and the defense agencies.

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