Reuniting North and South Korea Would Be Almost Impossible

Summary

La reunificación de Corea del Norte y del Sur es una ambición global que, si se lograra, podría sacar a decenas de millones de personas de la pobreza y elevarlos a los estándares de vida de una de las economías más exitosas de Asia y el mundo. Sin embargo, la desvinculación de Alemania del Este y del Oeste no es un modelo directamente aplicable debido a las diferencias económicas y geopolíticas significativas entre ambas Coreas. La integración económica sería un desafío, con el costo potencial de arrastrar al sur en lugar de elevar al norte si no se maneja adecuadamente. Además, una tercera parte de la población de la nueva nación carecería de educación formal o habilidades para sobrevivir en la economía global moderna. La reunificación podría traer oportunidades, como el acceso a recursos naturales del norte y la reducción de los costos militares del sur, pero también implicaría retos económicos y sociales significativos, incluyendo la educación y el entrenamiento de la mano de obra norcoreana.

Takeaways

• 🌏 La reunificación de Corea del Norte y del Sur es un objetivo global ambicioso que podría sacar a decenas de millones de personas de la pobreza y elevar sus estándares de vida.
• 📈 La reunificación sería un desafío económico mucho mayor que el de Alemania Oriental y Occidental, debido a las disparidades económicas y la falta de educación formal en una tercera parte de la población de la nueva nación.
• 💼 Algunos economistas y un ex presidente de Corea del Sur han propuesto medidas preventivas como un impuesto de reunificación para evitar que la economía surcoreana se vea afectada económicamente.
• 🤔 A pesar de los desafíos, la reunificación podría ofrecer oportunidades inesperadas, como el acceso a recursos naturales y la integración de mano de obra joven del norte.
• 🚢 La industria de la construcción naval de Corea del Sur, una de las más grandes del mundo, podría verse afectada por la complejidad de la reunificación, debido a la dependencia de inversiones internacionales y la cadena de suministro.
• 💰 La reunificación exigiría una inversión inicial de billones de dólares y podría afectar la capacidad del país para借入 capital extranjero, especialmente si se requiere de tasas de interés altas.
• ⛰️ Los recursos naturales del norte, como combustibles fósiles y metales, podrían ser una ventaja económica significativa para la nueva Corea unificada.
• 🚂 La unificación podría mejorar la conectividad y la competitividad en el comercio con China, reduciendo los costos de transporte y mejorando las exportaciones.
• 🤝 La reducción de los gastos militares y la conscripción forzada podría liberar recursos y mano de obra para mejorar la economía y la calidad de vida de los ciudadanos.
• 👶 La población más joven de Corea del Norte podría ayudar a abordar el problema del envejecimiento de la población surcoreana, si se invierte en la educación y la capacitación laboral.
• 📚 La educación y las habilidades laborales en Corea del Norte no están a la par con las expectativas de la industria del sur, lo que podría crear desafíos en la integración laboral.

Q & A

¿Cuál es una de las mayores ambiciones globales de los políticos, economistas y estrategas en todo el mundo?

La reunificación pacífica y sostenible de Corea del Norte y del Sur.

¿Por qué la reunificación de Corea del Norte y del Sur sería un desafío a un nivel completamente diferente en comparación con la de Alemania del Este y del Oeste?

La reunificación de Corea implicaría desafíos geopolíticos y económicos mucho más grandes, incluyendo la disparidad económica y la falta de educación formal y habilidades en una parte significativa de la población de la nueva nación.

¿Qué medida preventiva sugieren algunos economistas y un ex presidente de Corea del Sur para manejar los costos económicos de la reunificación?

La propuesta de un impuesto de reunificación para recaudar casi un billón de dólares estadounidenses como fondo de emergencia.

¿Cuál fue el impacto económico inmediato de la reunificación de Alemania del Este y del Oeste?

La parte oriental inicialmente fue una gran carga que requirió una inversión significativa para evitar paralizar al país entero.

¿Cómo ayudó el capitalismo del Rin para la reunificación de Alemania?

Proporcionó al gobierno nacional más control directo sobre la economía para tomar acciones drásticas, como aumentar las tasas de interés para atraer inversiones extranjeras y realizar inversiones masivas en el este.

¿Por qué la reunificación de Corea podría ser un desafío económico aún más grande que la de Alemania?

La economía de Corea del Sur es mucho más compleja y especializada en industrias técnicas avanzadas, lo que requiere habilidades altamente especializadas y tecnologías de vanguardia.

¿Cuáles son algunas de las oportunidades que podría presentar la reunificación de Corea?

La mayor disponibilidad de recursos naturales en el norte, la reducción de los gastos militares, y la integración de la mano de obra más joven del norte podrían ser beneficiosas para la economía de Corea del Sur.

¿Cómo podría la reunificación afectar a la industria de la construcción naval de Corea del Sur?

Una economía unificada podría generar incertidumbre en los inversores internacionales, quienes podrían buscar otras opciones en lugar de los astilleros coreanos para sus inversiones en barcos.

¿Por qué la reducción de los gastos militares podría ser beneficiosa para una Corea unificada?

Aliviaría la presión económica en ambos lados y permitiría redirigir recursos hacia el mejoramiento de la vida diaria de los ciudadanos.

¿Cómo podría la población más joven de Corea del Norte ayudar a la problemática de la población envejecida de Corea del Sur?

Los habitantes más jóvenes del norte podrían ocupar muchos empleos y contribuir a la fuerza laboral, mientras que las tasas de natalidad en ambos lados podrían mejorar.

¿Cuál es el principal desafío educativo que enfrentaría una Corea unificada?

El ajuste de las diferencias en los niveles educativos y la reeducación de una parte significativa de la población del norte para que se adapten a los estándares del sur.

¿Por qué la reunificación de Corea podría no ser una realidad a corto plazo?

Las tensiones políticas, el mantenimiento de divisiones por parte del gobierno de Corea del Norte, y los desafíos logísticos y económicos monumentales que implicaría la reunificación.

Outlines

00:00

🌏 Unificación de Corea: Ambiciones y Desafíos

El párrafo 1 explora la ambición global de la reunificación pacífica y sostenible de Corea del Norte y del Sur, destacando los beneficios potenciales para millones de personas y la mejora de sus estándares de vida. Sin embargo, se señala que la reunificación sería un desafío económico y logístico mucho mayor que el caso de Alemania Oriental y Occidental. Se menciona la propuesta no implementada de un impuesto de reunificación para recaudar 1 billón de dólares estadounidenses como fondo de emergencia, y se destaca la brecha educativa y económica entre las dos naciones.

05:01

📈 Comparación con la Reunificación de Alemania

El párrafo 2 compara la reunificación de Corea con la de Alemania, destacando las similitudes y diferencias. Se describe cómo la reunificación alemana fue un éxito económico a largo plazo, pero que enfrentó desafíos significativos, incluyendo la falta de preparación de la infraestructura y la fuerza laboral de Alemania del Este. Se discute cómo la economía de Alemania del Oeste tuvo que invertir fuertemente en el este para modernizar la industria y la infraestructura, y cómo esto aún dejó una brecha económica persistente.

10:04

💰 Oportunidades y Amenazas Económicas

El párrafo 3 aborda tanto las oportunidades como los desafíos económicos que presenta la reunificación de Corea. Se destaca que Corea del Norte, a pesar de su atraso económico, tiene recursos naturales valiosos que podrían beneficiar a la economía unificada. Se menciona la importancia de la inversión en infraestructura y la capacidad de Corea del Sur para mejorar la eficiencia de la extracción de recursos. Además, se explora cómo la reunificación podría abrir nuevas rutas comerciales y reducir los costos de transporte para el comercio con China.

15:06

👥 Demografía y Ejército: Ventajas y Desafíos

El párrafo 4 examina las implicaciones demográficas y militares de una posible reunificación. Se señala cómo la población más joven de Corea del Norte podría ayudar a Corea del Sur, que enfrenta un envejecimiento rápido y una tasa de natalidad baja. También se discute cómo la unificación podría reducir los gastos militares de ambas naciones, liberando recursos para mejorar la vida de los ciudadanos. Sin embargo, se señala la brecha educativa y la necesidad de capacitación para que los trabajadores del norte se adapten a las industrias modernas del sur.

Keywords

💡Reunificación de Corea

La reunificación de Corea se refiere a la eventual integración pacífica de Corea del Norte y Corea del Sur en un solo estado. Este concepto es central en el vídeo, ya que explora las implicaciones económicas y políticas de tal evento. La reunificación es un tema complejo que involucra la reducción de la pobreza, la mejora de los estándares de vida y la resolución de tensiones geopolíticas.

💡Desafíos económicos

Los desafíos económicos son un tema recurrente a lo largo del script, destacando los problemas financieros y logísticos que enfrentaría una eventual reunificación de Corea. Se menciona la posible creación de un impuesto de reunificación y la preocupación de que los costos puedan arrastrar a la economía surcoreana hacia abajo en lugar de elevar la del norte.

💡Educación y habilidades

La educación y las habilidades son fundamentales para la integración de la población de Corea del Norte en una economía moderna. El vídeo señala que aproximadamente un tercio de la población de la nueva nación carecería de una educación formal o habilidades relevantes, lo que podría representar un desafío significativo para la reunificación exitosa.

💡Diferencias económicas

Las diferencias económicas entre Corea del Norte y Corea del Sur son un aspecto clave del vídeo. Mientras que Corea del Sur es una de las economías más exitosas de Asia, Corea del Norte enfrenta una serie de problemas económicos y de desarrollo. Estas disparidades económicas son un obstáculo significativo para la reunificación.

💡Riesgo de inversión

El riesgo de inversión es mencionado en el contexto de la reunificación y cómo podría afectar la confianza de los inversores internacionales en las industrias coreanas, particularmente en sectores complejos como la construcción naval. La preocupación es que los compradores internacionales podrían miedo de que Corea no pueda cumplir con sus inversiones vitales a tiempo.

💡Interés de las hipotecas

El interés de las hipotecas es un factor clave que podría influir en la capacidad de una Corea reunificada para atraer capital extranjero. El vídeo sugiere que podría ser necesario ofrecer tasas de interés altas para atraer inversiones, lo que podría aumentar la dificultad de manejar la economía durante el período posterior a la reunificación.

💡Recursos naturales

Los recursos naturales son un potencial beneficio económico que se discute en el vídeo. Corea del Norte posee una gran cantidad de recursos naturales no explotados, como combustibles fósiles, metales y tierras raras, que podrían ser valorosos para la economía reunificada y mejorar las condiciones de vida de sus habitantes.

💡Envejecimiento de la población

El envejecimiento de la población es un problema demográfico en Corea del Sur que podría verse mitigado por la reunificación. La población de Corea del Norte es más joven en promedio, lo que podría ofrecer una fuente de mano de obra renovada para Corea del Sur, ayudando a abordar su problema de escasez de trabajadores jóvenes.

💡Gastos militares

Los gastos militares son una carga económica significativa tanto para Corea del Norte como para Corea del Sur. El vídeo sugiere que la reunificación podría reducir estos gastos, liberando recursos que podrían ser utilizados para mejorar la vida de los ciudadanos de ambos lados de la frontera.

💡Tensión geopolítica

La tensión geopolítica es un factor subyacente en la discusión sobre la reunificación de Corea. El vídeo menciona la oposición de países como China a una posible reunificación, debido a las implicaciones para la seguridad y la estabilidad en la región.

💡Desarrollo industrial

El desarrollo industrial es un aspecto importante de las diferencias económicas entre Corea del Norte y Corea del Sur. Mientras que Corea del Sur tiene una base industrial avanzada y diversificada, Corea del Norte se encuentra significativamente atrás en términos de desarrollo industrial, lo que representa un desafío adicional para la reunificación.

Highlights

La reunificación de Corea del Norte y del Sur es una ambición global que podría sacar a decenas de millones de personas de la pobreza.

La reunificación sería un desafío económico y logístico a un nivel completamente diferente al de la de Alemania del Este y del Oeste.

El costo económico de la reunificación es un problema majestuoso, lo que ha llevado a sugerencias de medidas preventivas como un impuesto de reunificación.

La Corea del Norte y del Sur comparten fronteras, idioma, historia y nombre, pero económicamente son de los países más diferentes del mundo.

La reunificación podría ayudar a la economía de Corea del Norte, pero podría sacrificar la de Corea del Sur si no se maneja adecuadamente.

La Corea del Norte tiene una población sin educación formal, habilidades reales o el conocimiento general para sobrevivir en la economía global moderna.

La reunificación de Alemania del Este y del Oeste fue un éxito, pero no estuvo exento de desafíos económicos significativos.

La economía de Alemania del Este requirió una inversión significativa para no paralizar al país después de la reunificación.

La reunificación de Corea podría enfrentar desafíos aún mayores, incluidos la destrucción de infraestructuras y la participación de otras potencias internacionales.

La frontera entre Corea del Norte y del Sur es la región más militarizada del mundo, con más de un millón de minas terrestres.

La economía de Corea del Sur se centra en industrias altamente técnicas, lo que requeriría un nivel extremo de habilidades y tecnologías.

La reunificación podría afectar la capacidad de Corea para atraer capital extranjero en un momento en que necesitaría más recursos.

A largo plazo, una Corea reunificada podría presentar ventajas reales para ambas partes, incluyendo una mayor calidad de vida en el norte.

La Corea del Norte es rica en recursos naturales, lo que podría beneficiar a la economía de Corea del Sur.

La reunificación podría mejorar la competitividad de las exportaciones y reducir los costos de las importaciones de China.

La reducción de los gastos militares podría liberar recursos para mejorar la vida cotidiana de los ciudadanos.

La población más joven de Corea del Norte podría aliviar los problemas demográficos de la población envejecida de Corea del Sur.

La educación en Corea del Norte, aunque decente, no alcanza los estándares de la industria del sur, lo que podría crear desafíos laborales.

La economía no es solo sobre empleo y producción, sino sobre cómo las personas interactúan con los bienes de valor.

Transcripts

One of the biggest global ambitions of policy makers, economists and armchair

generals around the world is the peaceful and sustainable reunification of North and South

Korea. There are of course a lot of steps between the current situation on the Korean

Peninsula and reunification, but if this could be achieved it would lift tens of millions of

people out of poverty, hopefully bring them up to the living standards of not only one

of the most successful economies in all of Asia, but all of the world.

Of course, that's a big if. It's easy to look at case studies like the relatively

successful reunification of East and West Germany and be tempted to just copy that strategy.

But relinking North and South Korea would be a challenge on a completely different level,

and it's worth exploring why. Even ignoring the geopolitical and potentially even military

problems involved in making reunification a reality, even from a purely economic point of

view, there is a very real chance that such a situation would just drag the South down

instead of lifting the North up if it's not managed very effectively.

The sheer cost of such an economic project alone is a major issue that has led some economists,

and even an ex-South Korean president, to propose preemptive measures like a reunification tax

so that the country isn't economically crippled if the day ever comes that Korea becomes one again.

This plan to raise nearly 1 trillion US dollars as an emergency fund for a future that may never

happen was never implemented, and that was in no small part because South Korea itself has

its own economic problems to deal with. Even if this money was raised without decimating

the economy in the short term, successful reunification would still be far from guaranteed,

because roughly 1 third of the population of the new country would be without a formal education,

real skills, or even the general know-how of what it takes to survive in the modern global economy.

North and South Korea may share a common border, a common language, a common history,

and even a common name, but economically they are some of the most different countries in the world.

Put simply, it would be a significantly less daunting economic challenge to unify Mexico

and the USA, and to understand why we need to as always answer a few important questions.

How would reunification help the economy of North Korea? Would this come at the expense

of crippling South Korea? And finally, if this was to happen,

what would be the economic guidebook to making it as smooth as theoretically possible?

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A country being split apart and then brought back together after a long period of separation

is not something new. Of course, the most obvious comparison would be the reunification of East and

West Germany in 1990, which has a long list of similarities. Both of these sets of countries

were somewhat haphazardly divided by the allies following the second world war. North Korea and

East Germany both rely, or relied on a larger backer to support their domestic industries,

China and the USSR respectively, and both of them were maintained despite the economic

costs in no small part because they acted as a geographic buffer between misaligned

geopolitical interests.

Now Germany today is a highly developed economic success story. It's the fourth on track to be

the third largest economy in the world, it has a diverse industrial base, and it's a highly

respected member of the international community. So with the benefit of hindsight it's easy to see

that reunification was a success, but that was far from guaranteed. And reuniting East and West

Germany could have easily been an economic disaster that took down all of Europe. In many ways it

already kind of was. The problem was that even though East Germany was one of, if not the most

technologically and industrially advanced countries in the eastern bloc, it was still far poorer and

far less developed than the west.

When it first became apparent that reunification was happening, the government of then West

Germany, as well as most economists, were excited by the opportunity to just add on

significant manpower and industrial capacity to a western economy that was already doing quite well.

The reality was that most of the industrial capacity of the country,

from factories to transport infrastructure, was completely outdated and poorly maintained.

The workforce of the east was also not as well trained or educated as their western countrymen.

The Soviet Union, and by extension the satellite state of East Germany,

didn't collapse because their economy was doing amazingly well.

So instead of gaining a productive addition to the successful economy of the west,

the east, at least initially, was a massive burden that required significant investment

just so that it wouldn't cripple the entire country.

The new unified Germany also couldn't be slow about their efforts to lift up the east because

if left unchecked it would have caused a significant strain on unemployment and welfare services.

Even though Germany was a free-market economy, it was home to a system known as Rhine capitalism,

which in the simplest possible terms attempts to blend the best elements of free markets,

like the drive to innovate and work, with the best elements of an essentially planned economy,

like making sure that people have the resources they need to be a productive member of society

and direct control over things like industrial development.

Of course, at least that's the theory.

In practice this blended approach has actually worked quite well for Germany,

and the reason it's important as it relates to reunification,

was that it made it in some ways much easier, but in other ways a lot harder.

Harder because unless all of the new citizens of the country from the east

were specifically excluded from generous welfare support,

then a large population of suddenly unemployed workers would put a huge strain on resources.

The one redeeming aspect was that Rhine capitalism gave the new collective national

government more direct control over the economy to take the necessary drastic actions.

That drastic action was to raise interest rates to attract as much foreign investment as possible,

and use that capital to make massive investments in the east to try and get

it up to speed with the rest of the country.

It worked about as well as it could have, but it did cause other issues throughout Europe.

The high interest rates that Germany offered made them a very attractive destination for

international investors, all at the expense of all of the other European countries that

saw the value of their currencies decline, so Germany wasn't particularly popular in

Europe at this time, but historically that wasn't something they cared too much about.

Despite these drastic actions, the reunification was still a monumental challenge that was close

to failing spectacularly for almost a decade. Multiple economists that worked on reunification

said that the whole thing working as well as it did was nothing short of a miracle,

and it's still not perfect.

Even today, more than 30 years later, the east is still significantly poorer and less

productive than the west. The average east German has around one third the wealth of

the average west German, and that's despite the fact that Berlin, the country's largest and

wealthiest city, is located in the east, which means that all of the other regions surrounding

this centre are significantly further behind than even these rather dire numbers would suggest.

Now, there's a reason that we've spent so long exploring east and west Germany in a video

that's supposed to be about the reunification of countries on the opposite side of the world,

and that's because all of the challenges, close calls, and persistent ongoing issues that have

been experienced in Germany would be completely insignificant compared to what would have to

be overcome in a unified Korea. Even in a future where the countries become one in a totally

peaceful process that doesn't involve conflict, the destruction of infrastructure, or the

involvement of other international powers, the new Korean economy would still be in for a

significant uphill battle. That is also a very optimistic and possibly naive assumption.

The trillions of dollars required as an upfront cost to reunify Korea doesn't include harsh

realities like the fact that the current government in the north is unlikely to give

up its power peacefully, and even if they did, there are monumental logistical challenges to

overcome first. The border itself is the most heavily militarized region in the world,

there are more than a million landmines dividing the two countries, and cleaning those up would

be a project alone that could take hundreds of years, require trillions of dollars, and inevitably

cost the lives of many workers. All of that needs to happen before the country can really become

one unified state. But let's do what all good economists do and make wild assumptions about

everything working perfectly, just so we have an easy model to work with as a case study.

Even if the heavily militarized border just magically vanished one day,

the problems would have only just begun.

For starters, the size and complexity of economies like South Korea today are significantly beyond

what even advanced economies like West Germany were before reunification.

South Korea's economy is centered around highly technical industries like technology,

advanced manufacturing, and even shipbuilding, which require extremely high skill levels,

world-leading technologies, and the cooperation of dozens of other countries around the world

as suppliers, investors, and end-consumers.

South Korea is the second-largest shipbuilding country in the world today,

only technically being beaten out by China.

Although Chinese shipyards tend to build a high number of significantly smaller,

cheaper vessels, so the value of the South Korean shipping industry is still higher,

even though they produce fewer vessels and less total capacity overall.

Shipping is just one industry that makes up a relatively diverse economy,

but it's a great demonstration of how a large economic shock like this could

undermine a unified Korean economy.

Ordering a ship involves international shipping companies investing often hundreds of millions

of dollars for a vessel that will take years to manufacture.

The millions of components in these ships also have to be sourced from thousands of different

suppliers inside and out of the country, and new trade dynamics with countries like China,

which probably won't be happy about losing their buffer country,

or restructured labour markets trying to incorporate workers from the north will

inevitably complicate all industries, but especially those as complex as shipbuilding

to the point where international buyers may be concerned about the ability of the

country to deliver their vital investment on time, and will instead look at other

shipyards in places like Japan, Germany, or China.

It's not a perfect rule, but a more sophisticated economy tends to have more moving parts,

and with more moving parts there are more things that can go wrong,

especially with a shakeup as large as absorbing another country.

West Germany was an advanced economy by 1990 standards,

but the world has moved on significantly since then, and the role of global trade,

finance, and cooperation contributes twice as much to economic activity now as it did back then.

Beyond just making foreign investors, customers, and suppliers feel slightly

uneasy about their operations in a country going through such a radical change,

reunification would also have an impact on the country's ability to borrow

right when they need it the most.

In order to attract foreign capital following reunification,

Germany had to offer extremely high interest rates on government borrowing,

because otherwise lenders wouldn't be willing to take the risk on a country

in such an unstable position.

If Korea is going to need to invest trillions of dollars over at least a decade just to get

half of the country up to speed, it's going to need foreign loans, and if it has to pay

a high interest rate on those loans, it's going to make managing the economy even harder.

But maybe it's not all bad news.

Before addressing the most serious challenges that reunification could cause,

it's only fair to balance out this overview with some genuinely

surprising opportunities that this could present.

The disclaimer that nobody can predict the future, least of all economists,

is long overdue in this video, especially since we are exploring a completely hypothetical future.

But in the long run, a reunified Korea could present some very real advantages

to both halves of the country.

Of course, the north would benefit the most from the opportunity to live and work in a stable,

industrialized economy, and pretty much no matter how bad the economic fallout gets from what could

be a very slow and expensive reunification process, their living standards would improve significantly.

Now even though the brunt of that uplift would be funded directly or indirectly by the south,

it wouldn't be a complete charity case.

South Korea has its own economic issues that once the initial challenges are sorted out,

could be significantly helped by becoming a single country with the north again.

For starters, there are simply resources.

The huge relative economic success of the south compared to the north is even more stark when

it's considered that the south of the korean peninsula is almost entirely devoid of natural

resources.

The north on the other hand is rich in fossil fuels, metals, and rare earths,

which all have massive export value or could be used in domestic industries.

At the moment, North Korea struggles to utilize its natural resources to build

national wealth because its woefully out-of-date machinery and infrastructure

just can't extract them as efficiently as advanced economies with modern mining equipment.

Even though labor is extremely cheap, or of course often free in North Korea,

the end cost of most mine commodities is only marginally impacted by the cost of labor.

The other two factors of production, land and capital, are far more important.

Land because, well, they can't extract natural resources where there aren't any,

and capital because most modern mining just can't be done with pickaxes and shovels anymore.

Modern industrial mines in advanced economies like Australia, Canada, or even Brazil

do not really employ that many workers.

Massive sites producing billions of dollars worth of resources every year are often manned by less

than a thousand on-site workers. Even when those workers are paid extremely well,

which in these advanced economies they often are,

they will still be able to extract resources more cost-efficiently overall by utilizing capital.

A large bucket-wheel excavator can move more material in one rotation than a

worker with hand tools can move in a year.

And all workers, even ones kept in terrible conditions,

still require some resources to be kept alive and working.

So the Australian fly-in fly-out miner getting paid 200 grand a year is still going to produce

more resource output for every resource input than a North Korean worker using

leftover Soviet and Mao-era machinery.

If these countries do unify, then not only would the South be able to invest

in the necessary infrastructure to efficiently harvest these valuable resources,

they would also have the global standings to be able to sell them around the world,

or just use them in their own existing resource-intensive industries.

They probably wouldn't need to move them that far either, because another advantage of

reunification would be that the world's largest resource-consuming economy would

be right on the doorstep of the new unified Korea.

At the moment, the industrial centres of South Korea, for all intents and purposes,

operate on an island.

The only way into and out of the country is on a boat or a plane,

because nothing is going through the north onto the rest of the continent.

Now, for long journeys, shipping is the most efficient way of transporting goods.

But if materials or products have to be loaded onto a truck or a train,

then unloaded and loaded onto a ship, and then unloaded back onto a truck or

a train again at the other end, the cost per mile stays in the benefit of

just a truck exclusively for quite a long range, and using a train for a longer range still.

Every loading and unloading adds cost to the journey,

which need to be made up for with the lower cost per mile of the ship.

Of course, to move stuff across the pacific to the US,

a cargo ship would still win because of the sheer distance travelled,

and well, that's not like a truck would work anyway.

But to access the market of China, cargo rail could be incredibly competitive,

and that would work to advantage the country both ways as well.

More competitive exports to China, and cheaper imports from China.

Now of course, all the geopolitical experts that we spoke to through our

team at context matters said the same thing,

which is that despite these advantages, China doesn't want this to happen,

because it puts a major potential adversary right on their border.

But the purely economic benefits would be undeniable for both countries.

Accessing more resources would be great,

but arguably the bigger win would be the resources that are not wasted.

South Korea has one of the largest and best-funded militaries in the world.

Every year it spends close to 2.7% of its GDP on military expenses,

and that's on top of the forced conscription of all South Korean men,

which takes productive labor out of the economy for 18 to 21 months.

As a somewhat humorous side note to a rather grim issue,

members of the Korean boy band BTS were also forced to do this service

at the absolute height of their popularity.

Given the huge domestic and growing international demand for Korean entertainment,

this enlistment was estimated to cost the South Korean economy

as much as the equivalent of 5 billion US dollars.

Now that may be very impressive,

and honestly good on them for not thinking they're above their fellow countrymen,

but every year hundreds of thousands of Korean men are made to do this service,

and they could be producing value for the economy,

getting an education, or starting a family.

Collectively that will be costing far more

than even the almost comical loss sustained from losing a boy band for a year and a half.

Of course the reason they don't do away with this practice despite its huge economic costs

is because the country is still technically at war with its nuclear-armed neighbor to the north.

Heightened military readiness also costs the comparatively

far smaller North Korean economy a much larger relative share of their total output.

The small disclaimer here is that reliable sources are much harder to come by for

North Korean economic and military figures,

but their defense force conservatively accounts for 33% of their total economic output,

similar to the expenditure of Ukraine,

which is currently involved in an all-out war with a much larger military power.

If these countries were unified, things like forced conscription and crippling defense spending

could be reduced to rates in line with their international peers,

leaving a lot left over to improve the everyday lives of the country's citizens.

Again this is assuming that these current military

tensions wouldn't just be traded for tensions along a slightly more northern border.

Now another advantage is simply manpower, which in a way would be the biggest opportunity

and the biggest threat to the potential future where North and South Korea come together.

South Korea has a rapidly aging population and the lowest birth rate in the world.

The country also hasn't been very attractive to migration,

because not many migrants looking for a new place to live and work know Korean,

the opportunities there are not as attractive as other major advanced economies,

and historically the government has been quite resistant to migration anyway.

North Korea could offer a boost to the south in this area because their population is a lot younger.

Unfortunately of course the reason their population skews younger is in no small

part due to malnutrition, poor sanitation, lack of access to healthcare,

and of course the role of the state.

As tragic as the reasons are, bringing the two countries together could potentially

solve two of the most existential problems in the north and the south,

extreme poverty and an aging population respectively.

The average age of a North Korean is nearly a decade younger than the south,

which means that they could take over a lot of jobs as people in the south get

too old to work or look after themselves.

The necessary investment needed to get North Korea up to a point where it wouldn't be a

drain on the south would be massive, but from this perspective it could almost be

seen as a retirement plan for the rapidly aging population.

Birth rates in both halves of the country would also likely improve as people in the

north have to worry less about where their next meal is coming from, they'll have more time and

resources to safely start a family, and people in the south will be helped along by the new

opportunities that will come with an economic project this vast.

But unfortunately that positive note reveals the biggest issue of all.

East and West Germany struggled to equalize a population that was already

far more equal than North and South Korea.

The population in the north may be significantly younger than the south,

but they're more than a decade behind on average in education levels.

East and West Germany had that gap as well, but the east was still an industrial economy

thanks to a strong focus on heavy industry,

perhaps at the expense of everything else that the soviet economies had.

Workers in the east could be given updated tools and some basic training and pretty

much get straight to work doing what they were doing before.

Of course that's massively oversimplifying things,

but at the time they were both basically just manufacturing economies in different

stages of development.

South Korea by contrast currently has hundreds of thousands of young workers with advanced

degrees in educational levels that put most people in the world to shame,

that are struggling to get even basic jobs.

North Korean education is surprisingly decent,

but it's not at the standards that would be expected in most major industries in the south.

Should a doctor with a degree from Kim Il-sung University Medical School be

allowed to operate in a country famous for its medical prowess?

If they are, what happens to one of the largest export industries in

the country if they badly hurt or kill a patient?

If they are not, then the new country will have a third of its population

unemployed while they retrain, which is a process that could take decades

and completely undo any of the demographic advantages of bringing the countries together.

Now of course economics is an important consideration for this issue,

but it must be remembered that economics at its core is not about employment,

budgets, debts, trade deals, or even productive output.

Those are all very important, but ultimately just a means to an end.

Economics is really about how people interact with things of value,

and hopefully the world sees the opportunity to end one of the fiercest global tensions

fueling an unimaginable human suffering as a worthwhile endeavour,

even if it does come at a financial cost.

But unfortunately it's unlikely to be a reality that's useful for

anything other than an economic case study anytime soon.

While putting this video together we worked with geopolitical experts from our new sister

channel context matters in conjunction with a video that they had been working on for a while,

which tragically explains in great detail why the north can maintain the current division

almost indefinitely and you should be able to click to that video on your screen now.

Thanks for watching mate, bye.