The Cost Of Reuniting Korea

commentary

(Forbes.com)

by Charles Wolf, Jr.

March 15, 2010

Prospects for reuniting South and North Korea may be better than at any time since the demise in 1994 of North Korea's "Great Leader," Kim Il Sung. Several indicators suggest a possible move in this direction.

One indicator is the confiscatory revaluation of the Democratic People's Republic of Korea's currency in 2009. Although the new won's value was pegged at 100-times the old won, the amounts of won that could be exchanged as well as the time period (48 hours) for the exchange were sharply restricted. It's doubtless that some of the ruling elite in the military and government apparatus were severely affected by these confiscatory measures. Their loyalty to Dear Leader Kim Jong-Il's rule may be diminishing as a result....

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Charles Wolf Jr. holds the corporate chair in international economics and is senior economic advisor at the RAND Corporation. He is a senior research fellow at the Hoover Institution.

This commentary originally appeared on Forbes.com on March 15, 2010. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.